24 Hour Fitness Marketing Plan Final Paper t5s1f

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24 Hour Fitness Marketing Plan Karena Busch, Katharine White, Kenneth Johnson, Kimberly Craig, Jennifer Cataquiz MKt/421 August 19, 2013 Gary Crum

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24 Hour Fitness Marketing Plan 24 Hour Fitness: Phase I Seeking to maintain growth and profitability, 24-Hour Fitness is considering a new approach to improve hip access to services and attract potential . Opening 24-Hour Fitness satellite gyms and health centers in airports for travelers during layovers and delays to burn off steam or revive after a long flight. However, before 24-Hour Fitness goes ahead with the plan, the company must first consider how to market the idea, identify the strengths and weaknesses of the idea, and perform market research to see if the idea is feasible and profitable. Overview of 24-Hour Fitness “Helping people to improve their lives through fitness.” has been 24-Hour Fitness’ mission for over 30 years, “by making clubs affordable and accessible to a variety of people, of different abilities and fitness levels, because here at 24 Hour Fitness, we believe there is an athlete in each and every one of us!” (24-Hour Fitness). 24-Hour Fitness opened their first club in 1979 in California and has successfully grown over the years, by establishing leadership in the West Coast and expanding their operations across 18 states. The company is headquartered in San Ramon, California and serves almost 4 million , in more than 400 clubs across the United States (24-Hour Fitness). The company is dedicated to helping in reaching their fitness goals and changing their lives, by having each club location offer personal training services, innovative group exercise classes, and a variety of strength, cardio, and functional training equipment. Due to the dedication 24-Hour Fitness has, they are ed by the U.S. Olympic Committee and the many U.S. National Governing Bodies (NGBs) of sports. 24-Hour Fitness is the largest

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er for amateur athletics, all over the world and country, in which they serve as the Official Fitness Center Sponsor of the U.S. Olympic and Paralympic teams (24-Hour Fitness). The company was sold to a New York based private equity firm, Forstmann Little & Co., in 2005, but continues to be committed in being a good neighbor within communities, by being charitable and giving in-kind donations, to groups that are focused on helping Americans to get healthy, stay healthy, and improving youth fitness (24-Hour Fitness). This company has become successful and remains this way, “due to the company’s national accreditation from the BBB, which includes A+ ratings for all club locations across the U.S., and demonstrates the organization’s ongoing commitment to member satisfaction” (24-Hour Fitness). The company offers personal and GT24 group training. The personal training consist of 25-50 minute one-on-one training with hands-on instruction from a certified trainer and the GT24 group training consist of 50 minute group workout sessions, including hands-on instruction from a certified trainer, becoming inspired by tackling challenges as a team, and 50 minute group workout sessions, that build in intensity (24-Hour Fitness Training). The company also offers a variety of clubs and classes, of all shapes and sizes, to meet the fitness goals and lifestyles, for all their . These clubs include the Ultra-Sport, SuperSport, Sport, and Active Level and include the cardio, boot camp, cycling, dance, kickboxing and martial arts, mind and body, active aging, strength, aqua, and zumba classes (24-Hour Fitness Clubs). In addition, 24-Hour Fitness sponsors the 24-Hour Fitness Helping Hands Foundation, Jessica’s Hope Project, and MDA Augie’s Quest. The 24-Hour Fitness Helping Hands Foundation was established in 2011 and “provides financial relief grants to team (employees) of 24-Hour Fitness USA, Inc. and their spouses who experience significant and

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unavoidable hardship” (24-Hour Fitness Helping Hands Foundation). Products & Services Services and products offered by 24-Hour Fitness to provide satellite facilities to those who have long layovers on their way to destinations. The facilities will be a scaled down version of a full size facility and will include state-of-the-art workout machines, free weights, disposable workout clothes, mini juice bar, gender locker rooms, and unisex sauna room. The top machines include bikes, treills, free weights, elliptical, and stairs. can purchase basic 24Hour branded shirts and bottoms. The mini juice bar will have a wide selection of drinks made of vegetables and fruits. The facilities will be separate gender lockers with sinks, lockers, showers, and bathrooms. The sauna room will have a maximum capacity of 8 people. This purpose of the facility is to give travelers the opportunity to stretch out his or her muscles after long hours of flying or waiting hours for connecting flights. The idea of the satellite gyms is to give the consumer no excuses to neglect his or her health and body. Traveling can take a toll on one’s body, and 24-Hour gives an individual the opportunity to relieve stress, stretch, tone or relax his or her body. There will always be a certified trainer onsite to guide the individual to work in a power work out. You don’t have to be a member at local 24-Hour Fitness facilities, a small fee of $10 to any non-. Marketing Mix To turn a good idea into a profitable reality, 24-Hour Fitness must aptly market its idea to capture sales. Marketing is the essential process that will help 24-Hour Fitness make this endeavor possible and profitable by considering the marketing mix or the four P’s of marketing (Perreault, Cannon, & MaCarthy, 2009). Price

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Price is a driving factor in the success of the marketing endeavor. Setting the price too high may deter customers while setting the price too low could lose the company money; ideally, the price needs to be low enough to attract customers but high enough to make the idea profitable. Place Where the gyms are within the airport is an important factor as space within many airports is limited. With the expressed point behind the idea, the gyms must be convenient to attract customers. Many airports may not have the space required for a gym and 24-Hour Fitness must consider how this will affect the marketing plan. Promotion Promotion is how a company encourages customers to use its products and services, and incite new potential customers. 24-Hour Fitness must design a number of promotional activities, such as ments to promote airport gyms, offer discounts to existing , and new hip bonuses. Product The airport gyms need to be effectual and useful to a variety of different ; likewise, the benefit of the airport gyms must be apparent to customers. 24-Hour Fitness must entail what services and gym equipment will available at the gym and how this service will fulfill customers’ needs. SWOTT Analysis 24-Hour Fitness offering gym services in airports will help ease jet lag and frustrations about having delays, while waiting for your flight. The SWOTT analysis will help decide if this expenditure is going to be profitable for 24-Hour fitness.

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Strengthso Ease stress from delays at the airport o Can gain new customers once they return home o Can encourage airport employees hips o Help parents ease their stress with children o In the airport, not 10-15 minutes away Weaknesses o If in the main concourse people would have to go through security again o Limited space o Could cause a missed flight o Not having access to all of the amenities that full service health clubs offer o Language barriers (for international airports) Opportunities o Expanding business o Gaining future clients o Can expand into more countries Threats o Health department issues o Sanitary conditions (especially with international flights) o Regulations of airport and security o Amount of space, depending on the airport Trends o Bring more health centers to the airport

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o Promotes healthy traveling

The SWOTT analysis shows that it is very likely that consumers will use this service at the airport while waiting on delayed or layover flights. This will also allow us to expand our client base by offering a free trial hip once they return home so they can try all of the amenities that 24-Hour Fitness has to offer. A few issues would have to be addressed just like in any location for example, making sure these locations uphold the standards and reputation of 24Hour Fitness. The amount of weaknesses does not outweigh the potential growth, so it is recommended to continue to investigate and secure locations that would allow our expansions. Market Research Marketing research is a vital step when creating a new product, or in this case, a service. There are two steps of marketing research that will help determine the success of satellite gyms in major airports. The first step is to research how long the average lay-over is between domestic and international flights. With this information 24-Hour Fitness can determine if it is feasible for a traveler to exercise and wash-up without worry of missing a connecting flight. The information collected from this research can yield the ideal airport location of the satellite gym and the operating hours. The second step is to survey current 24-Hour Fitness customers and frequent travelers to determine the likelihood that the facilities would be used during travel. Some questions the survey would include are, how likely are you to work-out during an extended airport lay-over? How many times a year do you travel? How often do you exercise? How much time do you spend exercising? How much would you pay to exercise in a facility that provides clean exercise clothing and shower facilities? If this were offered as a part of a 24-Hour Fitness national gym hip, would you ? The questions would consist of dichotomous, multiple choice, and

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importance scale (Kotler & Keller, 2012). The questionnaires would be available to current 24-Hour gym and at airports for travelers to fill out. The best way to collect survey data would be to set up a booth at target airports and at select gym locations. Current 24-Hour Fitness employees can man the booths and can be there to answer questions and record any ideas or information that surveyors may have. Conclusion In conclusion, 24-Hour Fitness has a great opportunity to extend its successful business model into unchartered territories. By opening miniature versions of their already successful facilities in airports, 24-Hour can become the first health club to revolutionize airport lay-overs. Travelers will no longer have to bide time staring at arrival and departure screens; rather, they can improve their health and wellbeing by exercising in-between flights. Research has proven over and over again that exercise improves mood and health, and what better place to do this than in a stressful airport environment. 24 Hour Fitness: Phase II In an ever-growing industry as health fitness centers continue to open around the United States, 24-Hour Fitness must find new ideas and opportunities to maintain its comparative advantage over its direct and indirect competitors. Recently, 24-Hour Fitness has been considering the idea of opening health centers in airports for travelers during layovers and delays to burn off steam or revive after a long flight. However, before 24-Hour Fitness can start, the organization must perform market research to identify the target market, competitive landscape, factors that influence consumer purchases and additional factors that could influence the marketing strategy. Identifying the Marketing Segmentation Criteria

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The three target markets to identify for 24-Hour Fitness facilities within airports are frequent travelers, airline and airport employees, and walk-in customers with long layovers. Each target market is divided into multiple target markets. All three groups are broken down into frequent exercisers and infrequent exercisers. The criteria that these target markets need to meet are homogenous, heterogeneous, substantial, and operational (Perrault Jr., Cannon, & McCarthy, 2011). The homogenous group would be frequent exercises within each target market. The heterogeneous group would be infrequent exercisers and walk-in customers because they do not meet the criteria of the homogeneous group. The substantial group would be frequent travelers and airline and airport employee groups because they would be the groups most likely to use the facilities on a regular basis. The operational segment would look at demographics, such as income, age, and sex. It is important to determine the different groups that would be utilizing the facilities to discover if there are enough potential customers to make this endeavor successful. The groups that will make the gyms successful are frequent travelers and airline and airport employees who are also frequent exercisers. Identifying Target Market According to ACRP Report 28: Marketing Guidebook for Small Airports, “Identifying the target audience is important because small airports have limited resources and must effectively reach the right people. Identifying the right message is critical because without the right message, even the most precisely targeted campaign will not be effective” (Marketing Guidebook for Small Airports, p. 34). Headquartered in San Ramon, California, 24-Hour Fitness has other fitness centers in Los Angeles, San

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Francisco, and Santa Ana, which are near the Long Beach, Los Angeles, San Francisco, and John Wayne International Airports. The target market would consist of adolescents (11-17), Adults (18-64), and Older Adults (65 and over) and a subset group of s, such as pilots, engers, local businesses, aviation specialists, tenants, or prospects (Marketing Guidebook for Small Airports, p. 34). The median household income for California residents is $61,632, with occupations in the manufacturing, wholesale, retail, and food service industry (U.S. Census, 2013). Location and accessibility is a crucial factor for 24-Hour Fitness and their , because hip to a fitness center requires a financial and time commitment, and with limited free time are less likely or motivated to drive long distances to reach a fitness center. This is why 24-Hour Fitness has responded to their member’s concerns and has placed fitness centers nearby or in local airports. The growth of 24-Hour Fitness is dependent on consumer demand, which correlates with a growing target market and an increase nationally, in physical health and fitness awareness. The fitness center industry age range is 11-65 and by offering specific age services, such as teen kick boxing, martial arts, and dance classes, adult cardio, cycling, and strength classes, to seniors active aging and yoga classes will further expand the consumer age range at 24-Hour Fitness. Organizational Buyers and Factors that Influence Purchasing Decisions “Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale” (Kerin, Hartley, & Berkowitz, 2011, p. 140). 24-Hour Fitness would have to bid for rental on the airport property, the retailer with the highest bid will win rights to use the space on the property; this is not like

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renting space in a strip mall ("Orlando International Airport/concession Opportunities," N.N.). The things 24-Hour Fitness needs to consider when putting together a bid to acquire space in the airport terminal. The organization would also need to put in proposal with the airlines, and let them know the benefits for their engers. If 24-Hour Fitness can get the airlines to accept its and how it benefits there engers, especially if there is a delay due to weather, or mechanical failure. The less stressful the enger, it makes the airline employees job easier to handle the engers. To help convince both the airline and the airport that this is beneficial, 24-Hour Fitness could allow free es to the flight crew who would also suffer stress due to flight delays. This would allow the airport authority to see the benefits of a health fitness center available on the airport property should give the organization the edge when bidding for space in the terminal. The issues with once the enger are through security how to help the engers get back over to the terminals. Once the engers have checked-in on the airside with the airline, a delay is announced they can receive a port of some type to let them go through the quick line in security. This will be beneficial to both the airline and airport, increasing travelers’ satisfaction and the likelihood that they will tell others how accommodating the airport is to travelers. Factors Affecting Marketing Strategy The 24-Hour Fitness marketing strategy is to not let consumers neglect their health. As part of the marketing team, it is our responsibility to provide services to everywhere they are. 24-Hour Fitness is a global company and provides various tiers to fit each individual’s needs. The facilities will be a fitness level gym. The purpose of the satellite gyms at the airport is to have access to services and products available compared to regular fitness locations, in addition to providing stress free environments. Team will be on site to provide stress

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free techniques and exercises that are helpful recovering from traveling. Many engers find themselves on delayed flights and can stress over what to do during hours and hours of sitting around or eating expensive airport food. 24-Hour Fitness is here to influence the importance of health. Instead of sitting and stressing over long overlays, engers can get a quick workout, take a class, or use spa features. The satellite gyms are very beneficial to pilots and flight attendants. This will help them relax and stretch out their muscles from long flights and keep them alert and awake with energy. The satellite gyms can be accessed with a current boarding or current hip. The team goal is to encourage non- to become at their home locations and keep up with their health. The strategy is to get travelers out of his or her stress zone. Instead of binging from long hours of waiting around, travelers can put time into making themselves feel good and look amazing. Analyzing Current Competitors and Competitive Landscape The next step in the marketing plan is to analyze current competitors and examine the competitive landscape. To do this, 24-Hour Fitness will use competitive marketing intelligence to develop an analysis that will help the company succeed in its marketing plan (Armstrong & Kotler, 2009). Without proper consideration to its competitive landscape, 24-Hour Fitness will have little knowledge about the threats and obstacles the marketing plan is facing; making highly unlikely that the marketing plan will be successful. In a constantly growing and highly competitive industry, 24-Hour Fitness faces a number of health fitness competitors, such as L.A. Fitness, Anytime Fitness, and Bally Total Fitness, who are also willing and able to follow 24-Hour Fitness airport health center marketing plan. Other forms of competition come from smaller health fitness businesses that offer training

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programs or small travel-sized exercise devices. Likewise, competition exists from potential customers and who would rather take care of their health needs in on a more basic level, such as walking and avoiding conveniences like conveyor walkways and stairs (Trejos, 2012). Last, the airports themselves represent competition as the health fitness craze increases, leading to airports developing and implementing their own health fitness centers for travelers without charge or at a small cost. The airport competition is further advanced with those close to or coned with hotels; this permits the airport and travelers to make use of the hotels’ health fitness facilities (Villano, 2006). Conclusion To market goods in a competitive industry successfully, 24-Hour Fitness must find not only consider multiple possible ideas and opportunities to increase profits but also perform thorough market research to decide if any of the ideas or opportunities are viable. Without adequate information about their target market, competitors, factors influencing consumer purchases, and additional factors that could influence the marketing strategy, 24-Hour Fitness will find it difficult to market anything. However, as the research has shown, by establishing health centers in airports, 24-Hour Fitness will take large strides toward staying ahead of competitors while increasing brand recognition and fulfilling consumer demand. 24 Hour Fitness: Phase III Travelers have busy schedules. Health gets neglected. 24-Hour Fitness is taking on the responsibility to provide wellness back into the lives of individuals who are always on the road. Major airports throughout the world will provide satellite gyms that will have full service accommodations of offering full services and products to bring out the stress and tune in good health to travelers and airline employees.

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An attribute many companies can benefit from is having healthy individuals which lead to happy and more productive employees. 24-Hour Fitness has strategized and identified the position of its products and services to those who can easily blame having a busy scheduled to forget about health and the well- being of a more productive employee. Service Attributes By obtaining financial security, 24-Hour Fitness has been able to expand their fitness centers and offer valuable attributes to their . 24-Hour Fitness has a variety of clubs and classes that match the distinct fitness goals and lifestyles of each and every member of their centers; along with amenities they can enjoy, before or after their exercise (24-Hour Fitness, 2013). The attributes 24-Hour Fitness offers, is the operation of five clubs and 11 group exercise classes. The five clubs include the Ultra-Sport, with group cycling and personal training available, the Super-Sport, which offers towel service, plenty of equipment, functional training areas, and viewing screens on cardio equipment, the Sport, with a variety of classes and fitness equipment, along with being equipped with a sauna, steam room, and whirlpool, and the Active and Express Club, which provides cardio equipment, strength machines, and free weights (24Hour Fitness: Health Clubs, 2013). The 11 classes that 24 Hour Fitness offers is the Cardio, Cycling, Dance, Kick Boxing, Martial Arts, Les Mills, Mind and Body, Active Aging, Strength, Aqua, and Zumba classes, which involve exercising within a group setting (24-Hour Fitness: Classes, 2013). In addition to these clubs and classes, 24-Hour Fitness offers unique amenities to help their to reach their specific fitness goals. These amenities include a kid’s club, personal

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training, weight and cardio equipment, group exercise classes, a sauna, steam room, whirlpool, basketball and racquetball court, and swimming pool (24 Hour Fitness: Amenities, 2013). In conjunction with other corporations, 24-Hour Fitness has implemented the “Corporate Fitness” program. Corporations all over the world believe that, “wellness programs are the way of the future for companies that want to protect their most valuable asset-their employees” (Synergy Fitness, 2013). This is why 24-Hour Fitness believes that, “when health management becomes a business priority, it can create healthier, happier, and more productive employees, while increasing the company’s bottom line” (Synergy Fitness, 2013). 24-Hour Fitness aids in helping a company’s workforce in making significant health improvements by reducing absenteeism from employees, improving the morale of each employee, increasing productivity within the company, reduces stress within the workforce, enables the company to educate their employees about the benefits of implementing and maintaining an active lifestyle, improves employees strength and endurance, and increases their self-confidence (24-Hour Fitness: hip-Corporate Fitness, 2013). Product Life Cycle and Factors Affecting Marketing The four stages of the product life cycle are market introduction, market growth, market maturity, and sales decline (Perrault Jr., Cannon, & McCarthy, 2011). During the first phase, market introduction, 24-Hour Fitness must spread the word about the new satellite gyms located within major airports. In this phase the product is new and few consumers are aware of its existence. 24-Hour Fitness will need to spend a lot of money marketing the product. This phase should be as short as possible due to the sheer cost of marketing the new gyms and should take six months to a year to graduate to stage two, market growth.

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During the second stage, market growth, 24-Hour Fitness will be g up new or selling day es to travelers. If the market introduction phase is successful, new customers will seek out the gyms during their travels and frequent travelers will use the gyms regularly. This phase should take two to three years to complete. The market growth stage will determine the success of the airport gyms and if this stage is successful, the airport satellite gyms will move into phase three, market maturity. During the market maturity stage, 24-Hour Fitness will have established gyms with consistent usage from existing and walk-in s. The income will be steady with some growth and revenue increases every year. This stage should last for at least three years as the competition begins to develop their marketing plans. The final stage, sales decline, will occur five to seven years into the life of 24-Hour Fitness airport health centers. During this stage, competition will begin to pop up with their versions of satellite gyms. New ideas will be developed and will be more exciting and interesting to consumers. 24-Hour Fitness will need to keep up with the competition by maintaining facilities with the newest equipment and offerings. Positioning and Differentiation Strategies Understanding customer’s views and using positioning techniques are ways to promote our services to engers and airline employees. The stress of traveling is already high; it only amplifies when a delay or layover occurs. 24-Hour Fitness wants to provide a service to the engers, and airline employees. Once 24-Hour Fitness has established itself into the airport they will in the terminals themselves. One positioning strategy to help promote their expansion is advertising in all aspects related to travel and fitness. That is the target audience 24Hour Fitness is trying to entertain in their establishments. Travelers will read how exercise will help reduce stress and jet lag especially during lengthy delays.

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The differentiation strategy is to state how 24-Hour Fitness is thinking about their clients and their health especially during traveling whether it is business or pleasure 24-Hour Fitness has their client’s best interest at heart. The use of the word heart can be used as a version of health, when advertising the play on the word heart can provide many ways to push traveling and health. 24-Hour Fitness will be setting the standard for other fitness clubs to help expand toward their clients traveling, keeping the health of the engers as the basis of their expansion. The strategy to ensure that 24-Hour Fitness stays on top of the health club industry is expansion into a market that is not on airport facilities. Explain to their current and potential customers how exercising during layovers and delays can ease stress and jet lag. 24-Hour Fitness is proving that they have the engers fitness is their focus and concern. Price Strategy for the Service Before considering an appropriate pricing strategy, 24-Hour Fitness must consider the value of its services from the perspective of the customers and their needs. Likewise, the organization will need to decide upon the pricing objectives of the strategy; whether to maximize profit, sales, or maintain status quo (Perreault, Cannon, & McCarthy, 2009). In the competitive health fitness center industry, the majority of companies sells hips to customers and adopts a price relative to the time-horizon of the hip, open access to multiple centers or just one, and additional amenities. However, these prices for hip, in the customers’ perspective, are rather homogenous; along with the services and amenities provided at each health fitness center (Young, 2010). This perspective will play a significant factor in how customers will view the overall value of the services provided by the airport health fitness centers. Furthermore, with the competitive nature of the health fitness industry and customer

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perspectives, 24-Hour Fitness must focus on a sales-based pricing objective to capture as much of the market share as it can. As the services and amenities offered at the airport health fitness centers are not completely on par with a full-sized establishment, 24-Hour Fitness should adopt a flexible pricing policy that targets several customers. While established with open access to 24Hour Fitness health fitness centers can use the facility without additional cost, 24-Hour Fitness should create a hip status just for the airport centers that is significantly lower than the regular one-center hip. Then, for those who are not interested in hip and want to use the facility, 24-Hour Fitness may change a small flat fee per individual per use. Conclusion The targeted audience of travelers who experience flight delays or long layovers in major airports across the world, have been given an opportunity to give themselves a great chance to release stress or enhance his or her health at one of the 24-Hour Fitness satellite gyms at competitive and flexible prices. Employers will be more pleased with team players having good health and energy. Travelers will feel less stressed, maintain an active lifestyle, build strength and endurance, and build self-confidence. Member, non-member or walk-in s for 24-Hour Fitness, team are appreciated to those who take on the step to promoting good health. There are no excuses to neglecting his or her well-being.

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