Fast Fitness Marketing Audit of 2005 - a sample marketing plan

Fast Fitness Marketing Audit of 2005

Table of content:

I. Objectives of the Fast Fitness Marketing Audit

II. Environment

II/a. External Environment

A. Macro-environment

- Economic

- Political/Legal

- Social/Cultural

- Technological

B. Task Environment

- Distribution systems

- Support systems

C. Market Environment

- Markets

- Target segments

- Competitors

- Five force analysis

D. Publics Environment

II/b. Internal Environment

E. Marketing Strategy audit

- Business mission/vision/goals

- Marketing objectives and goals

- Strategy

F. Marketing organisation Audit

G. Marketing System Audit

H. Marketing Productivity Audit

J. Conclusion/Recommendation

I. Objectives of the Fast Fitness Marketing Audit

The objective of this present Marketing Audit is to gather systematically all the comprehensive business relevant data of Fast Fitness’s environment, objectives, strategies and activities. The Audit’s goal is to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing performance. As this audit is done at the firs quarter of 2006, here we check the last year(s) accomplishments, and double check of the 2006 plan details.

II. Environment

II/a. External Environment

A. Macro-environment

- Economic

Since 2002 by 2005 the global economic climate was quite well performing, slowly but steadily growing. Australia appears in some statistics as the world’s 3^rd best performing economy, so it is reasonable to expect that fitness is a good business opportunity here, as even average people can afford to spend on their own health.

- Political/Legal

Phil Murray gained personal training qualifications through the Australian Council of Health and Physical Education and Recreation organisation. Thanks to this the company has a legal basis for operating, and is belonging under the law organisation protecting fitness providers against unreasonable civil lawsuits. Therefore there hasn’t been any serious complaint in past years, and there is no action required at the moment, unless some environmental changes don’t indicate that.

- Social/Cultural

Healthy mindset is becoming more popular between all the various aged people, more and more fitness opportunities are required year to year. The “Fat Nations” want to loose their unhealthy fat stocks these days. Because of today sport is not only for the young generations, Fast Fitness is utilising smart on a new target market.

- Technological

Since fitness is on the scene since decades, there are all the best exercising equipments, food on supplements and vitamins already the market, and Fast Fitness has the resources to get all the newest tools in work for the personal trainings.

B. Task Environment

- Distribution systems

There is some missing information in the marketing plan about the distribution channels, since we know that we have 4 good locations with parking available, but we don’t know how many members can be served maximum by each location, and we don’t know if we exceed it in 2006 or not. Immediate data is needed about that, and should be included in the plan the next facility extension date.

- Support systems

Should include details in the marketing plan, and monitor continuously, if Fast Fitness is owning the 4 facilities or renting them, what is their financial cost per month, what changes can be expected (changes in ownership or rental circumstances), and if there is any plan to manage these questions or not. Need to be defined as soon as possible.

C. Market Environment

- Markets

In Australia the fitness industry memberships were grown from 702000 to 969000 by yearly 6% to 15% during 2002 to 2005. For Sydney North and South where Fast Fitness is operating it meant $46M-$64M in sales. Based on these, the planned 2,52% market share increase and the 498 memberships resulting $514727 net operating profit seems to be a realistic goal.

- Target segments

I didn’t find much about surveys and customer satisfaction related data, so I suggest making effective steps to get some information about average customer opinion and suggestion about the prices and services. It is not top urgent, since the company is operating profitably, but can happen that a few simple changes in operations or pricing would result in doubled membership accounts.

- Competitors

Competitors of Fast Fitness can be divided into 3 major groups:

- large gyms with 30% market share in business numbers (much bigger in member’s %)

- personal fitness with 20% share in business nr.

- personal trainers with 50% share in business nr.

These and further analysis through Figure1-2, and Table 2 in the 2005 marketing plan is giving good enough details to get ourselves positioned in the marketplace and have reasonable findings for the following year.

- Five force analysis

The threat of a new competitor enters the market is not significant, as there is 330 businesses already, although have to have a plan how to react, if the new provider becomes a main competitor, of which there are only 3 at the moment.

If we count the 60% of personal trainer businesses into the rivalry competitors group, than the intensity of “fight” is more than measurable.

Regarding that there are many substitute products, Fast Fitness has to prepare to broaden its services spectrum.

D. Publics Environment

As in the SWOT analysis part of the marketing plan it is mentioned as an opportunity, there is a need for nutritional and dietary solutions from customers side, so the website development mentioned elsewhere has to include this part, as an important tool to keep the general public informed. Dietary advices sponsored by Fast Fitness also should have already appeared in local fitness magazines, so corrective steps and responsible persons must be addressed.

II/b. Internal Environment

E. Marketing Strategy audit

- Business mission/vision/goals

Regarding that the business is relatively small as an organisation, Phil can easily talk to anyone and deliver the business mission, what was developed by himself. As a good manager he is continuously maintaining his business vision and delivering to all employees.

- Marketing objectives and goals

All the marketing and the financial goals are clearly stated, no modifications are needed, just need to follow the path.

-Strategy

Clear as crystal, action plan is monthly detailed and arranged. Good job have been done here.

F. Marketing organisation Audit

Founder and main coach is Phil Murray. Business operation started in year 2000. Before Fast Fitness was lunched, he was working as a personal trainer, and in the meantime he developed strong marketing knowledge and business skills. Still he is writing the marketing plans with a good result. For a while this simple marketing organisation is good enough, change will needed later if business grows over a simple handle able size.

G. Marketing System Audit

- Marketing information system

The marketing intelligent system is producing accurate and sufficient information about developments in the marketplace, manager’s eyes are kept on new areas of fitness – like Cardio Yoga – and are under investigation if to build in the value offer or not. Decision date is suggested to have.

- Marketing-planning system

Sales forecasting and market-potential measurement was effective in previous years, work has to be maintained at same intensity for continuous evaluation and adjustment.

- Marketing control system

Although the 2006 plan is detailed well month by month, I didn’t find any control part in the plan which should clearly define who, when and how will check if the monthly plans were fulfilled correctly or not. Have to update the 2006 plan with these information.

- New product development system

The manager and the trainers are responsible to monitor the overall national and international trends, competitors and customer needs, so they have to sit and put on paper all new product development ideas every quarter.

H. Marketing Productivity Audit

Marketing expenditure was planned to be the 1.6-3.9% of revenue, following the competitor’s best practices. There wasn’t any excessive expenditures, the profitability was as planned, so everything seems to be fine if this practice will be continued, although if there are plenty of resources, it would worth a test if higher marketing spending would bring more advantage or not.

I. Marketing Mix Audit

- 7 Ps

Place: The company is operating in 3 locations across Sydney, near to Northern and Southern beaches. Focus remains on these areas for 2006. A survey should be taken to find out how much are the customers satisfied with current locations, or what could they imagine to suit more their demand.

Product: More personalised training than large companies, where people has to develop their own trainings. Phone booking and decision about location is not necessary, gyms are at good locations. The product seems to be competitive as the business manages growing since many years, but other exercise elements should be tested to find out what supporting services would bring higher customer satisfaction and value.

Price: Below the average personal trainers, around 80 AUD / week (it means usually 3 sessions, GST is included in price). This price is very friendly, compare to personal trainers, who charge 65-90 AUD/ hour. A test marketing campaign is suggested to find out if the market would accept a higher price for the same service (maybe in a survey form, not for the current, but for potential customers), so profitability might be improved.

Distribution: Analysing the yearly membership growth rate, it seems that Fast Fitness is still in the Growth Phase of the product life cycle figure, but sooner or later because of the limited number of people on the current area there will be the maturity phase reached. It is suggested to have expectations for that when is it going to happen, and produce in advance the necessary funding and plans to be prepared when further growth can be only achieved by opening gyms at new locations.

Promotion: The open days at every week seems to be a good promotion idea. It has almost zero extra cost, as the lessons are held anyway for current members, but has a new customer attracting potential. However it still means some extra effort from instructors side, so has to be regularly checked if this really has the effect of getting new customers in a profitably way. Also has to carefully analyse the cost benefit relation for all the actions during each months plan, and have notes available if something was worth to do or not, or what modifications are recommended (for example website campaigns etc.)

Sales Analysis: The year 2005 was closed with a good 370932$ net operating profit, but regarding that it was smaller than the previous two year’s, the 2006 plan looks a bit over estimated with its 514727$. Check that what actions are thought to cause this huge extra estimated profit, and check every month the numbers, otherwise expectations might be false and never reached, causing a disappointment and financial problems about planning something to do with the money, what is not sure that will be achieved.

Cash flow projection: moreover what was mentioned in the previous paragraph, Fast Fitness needs to check the relationships with its present financial provider, have expectations about the external financial environment, and maybe apply a financial planner expert, who could also give advices about investments, or to switching for other financial providers for some extra benefits.

J. Conclusion/Recommendation

In conclusion we can say that most of the objectives, strategies and activities are well maintained and regularly checked at Fast Fitness, therefore the profitable operation is well grounded. However there are some missing elements from the plans and activities, so “who when what how” needs to be addressed as soon as possible to carry out satisfying actions to fix those shortcomings. Maintaining quarterly audits seems to be a good procedure to keep the company on the track of improvement.