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BUSI 2208
Lindsay J Mc Shane

CARLETON UNIVERSITY Aradia Fitness London BUSI 2208 Introduction to Marketing Winter 2014 Thursday, 27 Feburary, 2014 Assignment 1: Individual Case Study Student name: Amna Saeed Khan Student Number: 100883518 Professor Lindsay McShane Thursday, February 27, 2014 Contents I. Executive Summary Andrea Tierney is an owner and operator of Aradia Fitness Club London, a pole-dancing fitness studio. During October, 2013 Andrea started reflecting on introducing a new fitness complementary routine called TRX classes alongside the existing pole dancing program offered in her studio. Tierney wanted to expand Aradia’s market, keeping the current customer base 2 while potentially expand and attract new customers in order to improve the fitness club. She was figuring out a way to implement the new program into her marketing plan keeping factors such as price, competition, promotional campaign, SWOT analysis of the current market in mind. Aradia is not a mature company, the recent increasing attribution rate has greatly threatened the brand image and customer base. There are three option to help it expand the market and improve the distribution. The first one is offering a common co-ed TRX class , the second one is offering a more progressive TRX class and the third one is Implement a 20 minute TRX class before each pole dancing session. The third one is to expand the market as much as possible by offering classes to both males and females regardless of the age factor. The last one is the best because it not only maintains Aradia’s strength but also attracts more potential customers following the current non-traditional means of fitness. II. Problem Statement With the shortage of time and hope to tackle the sky rocketing attrition rate, that resulted from the inablility of the students to attain flexibility,Andrea Tierny decided to incorporate a complementary TRX program. III. Macroenvironment :Exerternal Analaysis Demographic forces London has been named as one of the most fastest growing economies in Canada. The fastest growing household spending categories are healthcare and education. While aging is inevitable, the propotion of Ontario’s aging population living longer and following a healthy 3 lifestyle has never been greater. According to the 2011 census, London had a population of 366,151 people which is a 3.9% increase than in 2006. (Statistics Canada 2011) The age sector of Aradia Fitness’s customers are is between 20-30 but the program is designed for ages between 20-65 years old. In 2011 the percentage of working population aged between 14-64 in London was 69.9%, which is the major portion of the population distribution. The median age in London was 40 years. There is a versatile mix of ethnic groups but the majority of it consists of White ethnicity, which takes up around 82% of the population, and the rest are other cultural diversities. This could make the marketers face a less challenging task to understanding the culture, value and spending patterns of these groups and can easily figure out the best way to communicate and serve them (London Economic Development Cooperation 2011). Majority of the population in the area are female which are 68.4% of the population concentrated on. Aradia Fitness is focusing on the female population by providing mostly female only classes that could potentially become a threat to the business so an opportunity to accessing the male proportion of the population could make a lot of profit. (Statisics Canada 2011) One major trend in this fitness industry is the changes in demographics of those who use fitness centers-memberships used to be concentrated fairly highly on the 20-64-age sector, but the popularity of this fitness routine of Aradia Fitness was among customers between the ages of 20-30. Appealing to customers aging demographic will be essential for the studio. One way to appeal to this audience is to add amenities such as health maintenance and monitoring like checks for blood sugar, blood pressure and bone density. Aradia Fitness can meet an opportunity in terms of the population distribution and the customers’ needs to have a healthy life style and long life expectancy rate growing in the area. 4 Healthcare and physical activity is 3rd largest industrial sector in London and covers around 13% of the industrial sector, it continues to grow so targeting the other half of the population in London that is not exercising can potentially grow customer base and increase revenue for Aradia (Data 2011). Economic Forces There is merely $5.5 Trillion in the global health club market and is still growing quickly (Plunkett Research, Ltd. 2010); The Conferene Board of Canada has forecasted London to be the 3rd fastest growing economy in Ontario, and 6th in Canada. (London Inernational Airport 2014). The real GDP in London is expected to grow by 1.9 percent in 2013, improvement over the 2012 growth rate of 1.2 percent. Over the next few years London’s economy will continue to post economic growth below it’s pre-recession average. (The Conference Board of Canada 2013) See Table in Appendix A In Canada, the Health club industry was held steady in 2012, although successful club operators reported improved performance. According to IHRSA ( The international Health Racquet & Sports Club Association) The Canadian Fitness Industry generates $2,568,000,000 billion in revenue each and every year. 5.7 million Canadian’s currently have some form of fitness memberships belonged to 6242 fitness facilities in Canada. Sources: U.S. - IHRSA analysis; Canada - Estimates by industry experts; (The International Health Racquet & Sports Club association 2010). The total health and sports club memberships, recorded strong performance indicators in 2010 relative to 2005. Overall revenue was expected to grow at an annual rate of 2.3% over the next few years as more Canadians strove to lead a healthy lifestyle. 5 Low membership penetration rates and increasing health awareness present opportunities for industry growth in Canada. The Canadian Society for Exercise physiology (CSEP) recommended a minimum of 150 minutes per week of moderate to vigorous activity for adults. On average about 53% of Canadians who are physically active, it was estimated that physical inactivity cost Canadian taxpayers $7 billion in 2009 which is around 3.7% of the country’s health-care costs (As stated in the case). Club operators in Canada are uniquely positioned to address inactivity, rising obesity rates, stress and other lifestyle indicators. The development of economy still gives uncertainity. In detail, the world economy has moved differently. Canadians are increasingly concerned in how they can improve their own health. They acknowledge the fact that appropriate exercise can reduce risks of developing several choronic diseases this could become a srength for Aradia by potentially increase memberships atAradia. Technological forces In this age of techonology with a large population of Canadians using internets and electronincs, people track their physical activity and results using smartphone applications, online websites and various other electronic devices, so these technological development allow for at-home physical exercise plans. About 97% of Canadian living in Urban areas have connection to Internet (Canadian Radio-Television Telecommunication Commission 2013). People using these internet and electronic devices can use social networking sites to spread awarness about the Aradia program this could be an opportunity to attract many more customers. There is another opportunity of offering online classes or fitness videos offered to customers who are unable to attend the classes in person because of the busy schedule and time clashes. The 6 threat of using these technologies could be the competitors use this medium to spread negitive reviews about the program offered byAradia. Cultural/social forces Niche fitness is becoming more popular so Aradia can find an opportunity and capitalize on the popularity of this growing trend. Major part of the older population may not be interested in pole dancing and may come just for the TRX fitness so there is another opportunity to capture a bigger market through TRX. The threat to Aradia through the intimate pole dancing may consider it inappropriate as it could bring negative effects to the cultural heritage. Another weakness could be that Aradia’s as a pole-dancing and female dominated customers being the primary customer base could disturb the power-relation between men and females because men are suppose to be more expressive when it comes to sensuality they might feel intimadated. Microenvironment -Internal analysis : Company Aradia Fitness was launched in 2003 and this fitness club was the only unique pole- dancing fitness studio for females ever introduced in Canada. Andrea Tierney, owner and franchisse of Aradia Fitness London wants to expand her market share and customer base . The majority income of the fitness club is to offer pole daning classes to the local London branches. The problem that Tierney is facing is making a decision on how to implement a marketing plan by promoting the new TRX suspension program with a reasonable price which could increase profit, retain current pole exercise customers and also possibly attract new ones. The strength of Aradia is that it may offer more intimate services with a variety of different with a unique dancing fitness program, which are female only mostly. The weakness of the company is that it has a much smaller clientele with only 41 customers currently and drop out rate is increasing due 7 to the students believing that they dont have the capability to handle the next level in the advanced schedule. And another major weakness could be that Aradia having only two small locations where each class cannot handle more than 10 people, lack of space can withdraw alot of customers from being interested. The Weakness: drop out rate is increasing due to the students believing that they dont have the capability to handle the next level in the advanced schedule. Marketing Aradia is a different concept of fitness club with it’s pole dancing routine which is different from the traditional workout programs, some females are uncomfortable exposing to males. Aradia provides an all female pole dancing classes, one-on-one classes these could be the strengths. Whereas, weakness isAradia lacks good advertising strategy for increasing awareness. Operations ( Production/Service Process): Aradia’s offers a unique professional pole-dancing class which are one of the first ever in Canada. Strenth:One-on-one class,Weekness: Drop in Classes are less restrictive, May Require Franchise approval. Financial Customers typically attended pole fitness classes as a complement to their existing fitness program.Aradia fitness pol program is a six week long program which is priced at $159.99. No fees paid for advertising, free ads on kijiji and the ads on Google are paid by the Aradia Franchisee. The Strength could be that they have a competitive pricing which are cheaper than 8 other fitness clubs offering TRX program. However, the weakness of Aradia is that it has less financial resources Technology In terms of the demand from other regions, Aradia can open a website to offer membership. Customers are able to join online classes and follow the schdule and ask any related questions to membership immediately. The website can also offer exercise videos for missed classes so you can keep up with the current class. Supply chain The first strength that Aradia has is that it is a Canadia base fitness club which makes it a local brand. It has 21 other franchises in North America out of which 14 are located around Canada. The weakness is that it has only two club locations in London and the space in them are very small. On the other hand, the weakness of Aradia could be that it might require franchise approval before introducing any new TRX program. Aradia also has a smaller space in it’s club to fit more than 10 people which makes it less accessible and convinent for customers to join and clashes could occur. Marketing intermediaries Araida uses direct customer membership selling strategy to improve the club’s loyalty and brand value. As the expansion of distribution for Aradia, intermediaries join the company and expand in their own marketing areas in Canada. Competition 9 There are several different types of fitness organiazations in London, Ontario, including personal training studios, yoga studios, Pilate’s studios, and dance studios. Aradia Fitness has competition with a few major fitness centers in London where increased competition is dominating the Canadian Fitness industry. However, in regard to standard fitness facilities there are a number of variations, which consumers should consider before purchasing a membership. Aradia’s strength is that it offeres a more personal and smaller classes which creates a sense of community amoung the members. It offers expertise and convience for females by giving a comfortable environment where they are free from any stress from surronding. And the price for offering classes with TRX are another strength which makes it a real competitor in the fitness industry market in London. However, the weakness that Aradia has is brand name or brand identity problem, other competitors have been in the market for years and already made a customer base which is really hard to target and attract Aradia has to improve and increase brand awareness in order to attract more customers and increase market share. Publics Initially, this club targets females who are interested in non traditional fitness in order to sell Momentum. Although it has a good reputation and brand loyalty amoung current customers. Most people think that this club is for pole-dancing and cant join this level of progressiveness. The threat could be the competitors can spread negative views about the fitness club through negative word of mouth through their existing members. Customers: The major target customers are pole-dacning students and outsiders who value non- traditional form of fitness. Participants are ranged from 16 to 60 years old but majority of the customer base are aged around 20-30 years olds. The strength is that most customers are students 10 so the fitness program offered are reasonably priced and are more small and personal so it makes it attractive. However, the weakness of Aradia overweigh than the strength in this sector, the increase in attribution rate as the difficulty level isnt met with the level people are flexible with. Other weaknesses are that most of the customers are females, the male proportion of the population is not targeted at all. Drop in classes are less restrictive so can create clashes between customer schdules./ it has a much smaller clientele (41 customers). These issues can be delt with a proper marketing and implementation plan. IV. Segmentation Analysis In the fitness business market, the healthy people market is targeted. Customer market should be segmented by age based on their age, gender and income. Recent exercise and club membership trends are niche fitness which a non-traditional fitness routine. Additionaly, health and wellness of people aging is influenced by the fitness club industry. Consumer segmentation has a larger size in terms of number of customers. However, for Aradia, business segmentation has a bigger share with respect to club membership. The gym & fitness industry industry is dominated by some large companies such as Goodlife, Athletic Club and Just Sweat Which occupy majority of the market. They mainly offer personal training, yoga, Pilate’s routine, and dance studios. Hence, as Aradia they own a smaller market share in the competition and comapnion activity market. Then, for high performace level of membersh
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