BSBMKG506 Plan market research( prof. Xavier)

State

Total Health Clubs

Total Members

NSW

38

98,800

QLD

10

26,000

VIC

9

23,400

SA

4

10,400

ACT

3

7,800

WA

3

7,800

TAS

2

5,200

NT

1

2,600

Grand Total

70

182,000

Quality

Accountability

Energy

Mutual Respect

Diversity

Enthusiasm

Integrity

Accountability

Care

Honesty

Responsibility

Professionalism

Internal

Strengths

Weaknesses

· Excellent brand awareness, strong brand image and market leadership with current target segments

· Superior technology, cutting-edge equipment and world-class recreational facilities embedded in health and wellbeing programs

· Innovative culture supported by high-class trainers and nutritionists

· Omnipresence in major geographical areas

· Executive Management commitment and expertise

· Availability of high number of equipment, classes and trainers during peak hours

· Specialised fitness and health programs tailored for specific needs that are unique to individual clients and corporate businesses

· Special classes for the elderly and children allowing parents work out freely – no other health clubs offer this feature including First Class Fitness

· Existence of nationally recognised former professional sportsmen and sportswomen in the executive team

· Lack of direct distribution in international markets

· High cost structure including service delivery, labour and maintenance

· Weak online presence

· Difficulty in finding high quality and experienced personal trainers

· Clients who don’t necessarily want to pay for the well-located and well-known chains

· Lack of on-site extras such as a health bar that competitors provide

· Higher pricing structure attracts less international students than competitors

· Current operating hours limit the use of the club (Mon-Fri: 6am-9pm, Sat: 7am-9pm, Sun: 7am-7pm) as compared to other competitors

External

Opportunities

Threats

· There are only a limited number of direct competitors in our current and new target markets

· 63% of Australian adults are overweight or obese and is the second highest contributor to disease

· Australian Government public awareness programs on smoking, obesity and many other health illnesses have had significant impact on changing the culture of our people towards living a healthy lifestyle, which has stimulated public’s willingness to exercise regularly and follow a balanced diet

· The availability of substitute fitness centres

· Lower cost competitors

· 7/24 open fitness clubs

· Projected success is likely to attract the interest of larger (global) competitors such as First Class Fitness

· Seasonal customers may be reluctant to pay during summer when outdoor sports are more popular

· Fast-growing health, fitness and wellbeing related IT gadgets and apps

· Availability of wide range of free health and wellbeing resources on the Internet that teach people how to exercise and eat properly without paying anything

Market Growth Rate

(Cash Usage)

High

Relative Market Share

(Cash Generation)

High

Low

Stars

Question Marks (new markets)

· Children exercise programs

· Elderly exercise and diet programs

· BodyPump

· FatBurner

· BodyAttack

· Zumba

· To be analysed?

Low

Cash Cows

Dogs

· Personalised weight lifting programs

· One-on-one training sessions

· Martial arts

· Boxing

· Pilates

· Yoga

· Cycle spinning

· Full Body Lift

· Kendo

Political

Social

· The following elements must be closely monitored as they change regularly and will have an influence on delivering nationally accredited courses:

· VET Fee-Help loan scheme

· Smart and Skilled government-subsidised training (in NSW)

· Changes in national standards

· Updates in training packages.

· Compliance with Work Health and Safety Act 2011 and Work Health and Safety Regulations 2011 through launching the mandatory web-based training to provide all staff easy access to simple templates and resources to apply to FitLife club environment.

· The Australian Consumer Law:

· unfair contract terms

· misleading communication

· sales tactics.

· Privacy Act 1988: privacy and confidentiality of client information.

· Australia is the fifth most obese country in the world, with about 24.6 percent of its citizens considered obese. If the current trend is not slowed down or reversed, it is estimated that almost three out of four Australians will be obese or overweight in 2025.

· The popularity of weight loss reality TV shows, efforts by the government to promote healthy living and weight loss, and the household outsourcing trend are some of the factors that have contributed to the increase in demand for fitness services and products (Close, 2013).

· According to the Fitness Industry Survey 2015 (EZYPAY, 2015, p. 33), the most significant growth areas for the Australian industry are:

· 24-hour clubs 50.4%

· Seniors market 37.4%

· Adult obesity 30.0% and Child obesity 22.6%

· It was indicated that personality (71.5%), qualifications (71.0%) and experience (70.0%) are the most important qualities when choosing a PT for the club (EZYPAY, 2015, p. 35).

Economic

Technological

· The fitness industry has been growing steadily over the past few years. The Australian government is making a significant effort to encourage Australians to adopt a healthier lifestyle, resulting in a greater demand for fitness products and services.

· The fitness industry in Australia generates an average of about one billion dollars in revenue on an annual basis. There altogether 2,856 gyms and fitness centres across the country, which collectively provide employment for more than 17,000 people. In 2013, about 3.3 million Australians used a professional exercise service (Close, 2013).

· Decrease in discretionary household income can shift consumers to cheaper alternatives.

· According to the Department of Employment, projected employment growth five years to 2019:

· Sports and Physical Recreation Activities industry will increase by 13.6%

· Skills Level 3 (Certificate III or IV) will increase by 8.3% whereas Skills Level 2 (Diploma) will increase by 10.4% (Department of Employment, 2015).

· According to the Fitness Industry Survey 2015 (EZYPAY, 2015), 26.3% of people use apps to track runs, log calories and find healthy recipes, 13.5% use social media to keep up with diet and fitness blogs and 8.5% use devices that transmit their stats to their smartphone.

· Although the use of apps is quite a popular way to track health and fitness progress, 67.4% of Australian survey respondents didn’t use them. 27.4% of those who did opted for free apps, while 5.1% chose paid apps.

· It was highlighted in the survey that 35.7% of Australian clubs intended to invest on staff training specifically to delivery exceptional customer service (EZYPAY, 2015, p. 42).

· Embedding technology in our products and services is vital. There has been an increasing trend on using gym gadgets, particularly wireless enabled wearable technology devices such as Fitbit Tracker. However, FitLife doesn’t have the internal competency to develop such products.

Ecological Environment

· Environmental factors are not expected to immensely alter FitLife’s trade and profit generation as these factors affect agri-businesses much more directly.

Wearable Health and Fitness Devices and Apps

Wireless enabled wearable technology devices and apps assist in losing weight, increasing physical activity or improving overall health. These devices are able to collect data on your physical lifestyle (such as eating habits, sleeping patterns, calories burnt, etc.) and paired with a companion web account or mobile app. Some famous devices include smartwatches, activity trackers, wristlets, lightweight GPS enabled clip-on trackers, etc.

Bootcamp Health and Fitness Holidays

Health and fitness holidays for people who enjoy time abroad whilst also improving their health. Major competitors are Thailand Fitness Boot Camp, Health and Fitness Travel, International Fitness Holidays, and CruiseFit.

Group Training Programs

Customised group fitness classes for niche groups including pregnant women, seniors, children, cyclists, kettlebell lovers, post-birth mums, yoga with babies and toddlers, aqua fitness, High Intensity Interval Training (HIIT), body-mind-spirit (yoga, Tai Chi, Hatha, Pilates, etc.), dance and fitness, aqua Zumba, and boxing workouts to name a few.

Customised Daily Meal Delivery

Meals plans designed specifically for weight loss but can also be used for the convenience by people who live a busy lifestyle. Customers order weekly meals fully customised in accordance to their goals. Major competitors are Life n’ Easy, Eat Fit Food, Jenny Craig, and Ultra Lite Australia.

Health Bar

Located in the health club premises, health bars offer freshly made healthy meals, snacks, organic protein shakes, juices, etc. The health bars can also provide handpicked some of the finest organic health products on the market, which can also be extended for online shopping to generate additional revenue.

Training and Employment

To ensure the best quality customer service experience, in-house built training programs can be delivered. The national qualification to become a fitness instructor is the Certificate III in Fitness. When registered as a RTO, a wide range of qualifications can be issued. Promising students can be offered further employment. Theory classes can be delivered online to encourage flexible learning and reduce training costs whereas practical sessions can be conducted in real business premises to foster the teaching experience.

Physio-Gym Culture

Located in the health club premises, physiotherapy service can be offered to diagnose, rehabilitate and improve people with movement disorders. Diagnostic techniques provide targeted treatments which can be integrated into individual exercise program. The service can also be offered to non-members.

Online Health Coaching

The popularity of online health coaching is rising rapidly allowing people to get one-on-one personalised nutrition and training support through remote communication methods which may include Skype, email, etc.

Wearable Health and Fitness Devices and Apps

Bootcamp Health and Fitness Holidays

17% interested

12% interested

Group Training Programs

Customised Daily Meal Delivery

74% interested

23% interested

Health Bar

Training and Employment

88% interested

92% of staff interested

Physio-Gym Culture

Online Health Coaching

84% interested

78% interested

Figure 1: Distribution of member count by age group

Figure 2: Distribution of member count by marital status

Figure 3: Distribution of member count based on state and major NSW regions

Competitor

Financial Performance

(%, ’11-15)

Market share

(‘15-‘16)

Value to customers

Strengths

Weaknesses

First Class Fitness

-12.3

%23.4%

· Quality staff

· Good equipment and facilities

The largest health club in the world

· High cost structure

· Locking contracts

· Operating hours

Zen and Chi Lifestyle

-2.6

14.2%

· Cheaper option for First Class Fitness

· Family-friendly

· Modern facilities

· Strong public image

· Unstaffed gyms

· Most dominant in QLD, SA and WA

· 24-hour access

· Press presence (The Biggest Loser)

· Locking contracts

· Operating hours

· Weak coverage in NSW

24/7 Fitness

+162.2

12.9%

· Low-budget

· 24-hour access

· Wide presence

· Strong public image

· Unstaffed gyms

· 24-hour access

· Proven franchise model

· Limited facilities

· Staff unavailability

· Only focus on gyms

· Not family oriented

Fitness 365

+170.8

8.1%

· Low-budget

· 24-hour access

· Wide presence

· Strong public image

· Unstaffed gyms

· 24-hour access

· Limited facilities

· Staff unavailability

· Only focus on gyms

· Not family oriented

· Costly franchise model

Dynamite Gym & Club

+27.0

7.2%

· Family-friendly

· Low-budget

· Teen gym

· Pools

· Programs for disabilities

· Community focused

· Strong public image

· Wide presence

· Diverse exercise programs

· No nutrition programs

· Religion imposed

· Operating hours

· Not classy outlook

· Outdated equipment

· Too crowded

Rise and Shine Women Health Clubs

-9.3

6.1%

· Women only

· Wide presence

· Niche market

· Strong public image

· Customised programs exclusive to women

· Pregnancy support

· Nutrition programs

· Threatened by emerging female oriented health clubs

· Unisex gyms with women-only sections capturing the market

Go Active Sports

+145.6

4.9%

· Customer-centric approach

· Diversity in nutrition and exercise programs

· High quality image

· Flexible membership

· Child minding

· Classy gym and fitness centre experience

· Weak online presence

· Operating hours

· More gym focused

· No seniors programs

Revenue

Annual Growth 2010-2015

Annual Growth 2015-2020

$2.2bn

3.5%

5.2%

Profit

Employment

Health Clubs

$265m

32,000

3265

Products & Services

Main Age Group Interested

Total Member Interest

Male Breakdown

Female Breakdown

Martial Arts

15-35

32%

26%

6%

Nutrition Program

20-60

76%

41%

35%

Boxing

18-30

18%

17%

1%

Kendo

25-35

3%

2%

1%

Mums and Bubs Yoga

25-38

32%

0%

32%

Body-Mind-Spirit

18-65

38%

6%

32%

Children Programs

4-14

29%

18%

11%

BodyPump

18-45

27%

7%

20%

FatBurner

18-45

33%

17%

16%

Zumba

18-45

19%

1%

18%

BodyAttack

18-45

21%

5%

16%

Gym - Weightlifting

15-50

88%

56%

32%

Gym - Cardio

15-50

88%

48%

40%

State

Number of Clubs

Population

Member/Club ratio

State Supply

NSW

1123

6996071

6230

34.4%

VIC

776

5449419

7022

23.8%

QLD

654

4447871

6801

20.0%

WA

412

2421494

5877

12.6%

SA

156

1553457

9958

4.8%

ACT

77

366662

4762

2.4%

TAS

49

475953

9713

1.5%

NT

18

239766

13320

0.6%

Grand Total

3265

21950693

 6723

100%

State

Region

Health Clubs

Members

Annual Gross Revenue

NSW

Sydney Central

6

21736

$24,779,040

NSW

Sydney Eastern Suburbs

4

15808

$18,021,120

NSW

Sydney North Shore

4

13832

$15,768,480

NSW

Sydney North West

4

12844

$14,642,160

NSW

Sydney South

4

11856

$13,515,840

NSW

Sydney West

4

9880

$11,263,200

VIC

Melbourne South East

4

9435

$10,755,900

QLD

Brisbane Central

2

6785

$7,734,900

SA

Adelaide

2

6547

$7,463,580

VIC

Melbourne Central

2

5973

$6,809,220

QLD

Gold Coast

2

5698

$6,495,720

ACT

Canberra City

2

5468

$6,233,520

TAS

Hobart

2

5200

$5,928,000

WA

Perth

2

4876

$5,558,640

QLD

Brisbane North

2

4678

$5,332,920

QLD

Brisbane South

2

4227

$4,818,780

SA

Mount Gambier

2

3853

$4,392,420

NSW

Sydney Northern Beaches

3

3755

$4,280,700

VIC

Ballarat

1

3687

$4,203,180

WA

Albany

1

2924

$3,333,360

NT

Darwin

1

2600

$2,964,000

QLD

Brisbane West

1

2354

$2,683,560

ACT

Deakin

1

2332

$2,658,480

QLD

Sunshine Coast

1

2258

$2,574,120

NSW

Wollongong

2

2243

$2,557,020

VIC

Melbourne East

1

2236

$2,549,040

NSW

Central Coast

2

2100

$2,394,000

VIC

Geelong

1

2069

$2,358,660

NSW

Newcastle

2

1945

$2,217,300

NSW

Wagga Wagga

2

1676

$1,910,640

NSW

Dubbo

1

1125

$1,282,500

Grand Total

70

182000

$207,480,000

State

Annual Gross Revenue

NSW

$112,632,000

QLD

$29,640,000

VIC

$26,676,000

SA

$11,856,000

ACT

$8,892,000

WA

$8,892,000

TAS

$5,928,000

NT

$2,964,000

Grand Total

$207,480,000

State

Region

Branch

Members

Annual Gross Revenue

NSW

Sydney Central

North Sydney

9129

$10,407,060

NSW

Sydney Eastern Suburbs

Randwick

6639

$7,568,460

NSW

Sydney North Shore

Chatswood

5809

$6,622,260

NSW

Sydney South

Rockdale

5394

$6,149,160

NSW

Sydney West

Parramatta

4980

$5,677,200

VIC

Melbourne South East

Bayside

4150

$4,731,000

QLD

Brisbane Central

Brisbane CBD

3963

$4,517,820

SA

Greater Adelaide

The City

2850

$3,249,000

QLD

Gold Coast

Gold Coast City

2750

$3,135,000

WA

Perth

Perth CBD

2509

$2,860,260

Grand Total

48173

$54,917,220

Strategic Review

20 September 2016

Page 18 of 18