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Executive Summary
India is a country that is rapidly growing, economically. A number of MNEs are settling in this
developing country that is soon to become one of the economic giants in the world due to its
increasing population and GDP. As the middle class within India is quickly expanding, the
standard of living of the people of India is equally increasing. Since India is becoming a
globalized and liberalized country, technology is rapidly advancing and the values of the people
are slowly shifting. The Indian government is becoming increasingly open to foreign investment
through freetrade and reducedtariff agreements with other countries. The people of India are
starting to catch up to the American trend of emphasizing health and fitness, as the Indian
government is starting to educate their citizens of the benefits of exercising and healthy eating.
However, the prices of the gyms in India are hardly reasonable and only those in the upper class
could afford to pay for expensive membership fees. There is also a lack of fitness retail and
healthy eateries within India.
Due to all of these factors, our team decided to create a plan in which we would bring 24 Hour
Fitness to India by marketing the brand as one that stresses affordability, accessibility, flexibility,
while providing diverse services. By bringing 24 Hour Fitness to India, not only are we
proposing on opening a fitness facility that is affordable for the growing middle class, but we are
also taking advantage of the needs for more fitness retail and healthy foods in India by expanding
to other points of sales that may help the company profit greatly. We believe that by offering
diverse services that other local and foreign gyms in India do not have at the fraction of the price
compared to that of its competitors, 24 Hour Fitness can successfully penetrate the fitness market
within India.
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Mission Statement
Our mission is to help individuals improve their life through fitness because we realize that there
is an athlete in each and every one of us, regardless of shape or fitness level. We recognize that
each person has their own goals and unique definition of what fitness means to them, and we
want to provide a safe environment for all people to accomplish these goals with affordability
and accessibility. We are dedicated to change the lives of individuals around the world and help
them reach their individual fitness goals, and continue to look for positive ways to promote
health and wellbeing through programs, education, and research.
Company Background
24 Hour Fitness was established in 1983 as a oneclub operation by Mark Mastrov and Leonard
Schlemm, called 24 Hour Nautilus. In 1994, 24 Hour Nautilus acquired Southern
Californiabased Family Fitness Centers chain and renamed the company 24Hour Fitness.
Because 24 Hour Fitness became a more established firm, Mastrov and Schlemm wanted to
further the company by hiring marketing managers who created campaigns with famous
celebrities such as, Pamela Anderson, Arnold Schwarzenegger, and Mike Tyson in order to
promote the fitness centers. These campaigns fared well for the company, increasing
membership and sales greatly. The company ended up being sold to AEA investors, Ontario
Teachers’ Pension Plan, and Fitness Capital Partners in 2014 for $1.84 billion, and Mark Smith
became the CEO and Frank Napolitano became the President. To further promote the brand, 24
Hour Fitness has formed strategic partnerships with global consumer brands such as Nike and
CocaCola and became a sponsor of the US Olympics teams from 2004 to 2008. 24 Hour Fitness
has also worked with NBC to develop the nationallyacclaimed TV show, The Biggest Loser.
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Headquartered in San Ramon, CA, 24 Hour Fitness currently has over 400 clubs across the
United States and 15 clubs in Singapore, Hong Kong, and China through a wholly owned
subsidiary name California Fitness. 24 Hour Fitness serves over 4,000,000 members and has
over 20,000 team members in the United States. Its standard fitness centers offer members a
wide range of workout activities, including: aerobic, cardiovascular, weightlifting equipment;
squash, racquetball, basketball courts; swimming pools; steam and sauna rooms; tanning rooms;
whirlpools. Just as the name implies, 24 Hour Fitness is one of the the only fitness chains that is
accessible to its customers 24 hours a day. Apart from fitness facilities, 24 Hour Fitness also
owns a nutritional supplement company called Apex Fitness Group and its call centers are
located in the Philippines and Las Vegas, NV.
Core Global Competencies
24 Hour Fitness has many core global competencies that give it a competitive advantage
compared to its competitors.
Diverse Services
Not only can club members meet their fitness goals through its weightlifting, cardiovascular,
and aerobic fitness equipment, but 24 Hour Fitness also offers the opportunity to train with
internationally certified fitness coaches and a number of fitness classes such as, zumba,
kickboxing, cycling, etc. Other services that 24 Hour Fitness also offers are nutritional
supplements through its company, Apex Fitness Group.
Affordability
24 Hour Fitness also stresses affordability, by offering lower and competitive prices compared to
its competitors. It allows customers from all different income levels to be able to afford the
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membership rates by offering prices that are within a reasonable range, provided the large
amount of services that are included in the package when purchasing a membership: access to a
wide variety of fitness equipment, pool and jacuzzi services, racquetball and basketball courts,
personal trainers, fitness classes, etc.
Accessibility
Just as the company’s name suggests, 24 Hour Fitness is extremely accessible to its customers
since not only does the company itself have hundreds of branches across the United States, but it
is open 24 hours a day, 7 days a week. 24 Hour Fitness facilities are located in many states
within the United States and customers who have busy schedules that need flexibility can count
on 24 Hour Fitness to mold its services to them. Its amenities are available to its customers no
matter what the time is, whether it is 4:00pm in the afternoon or 4:00am at night.
Flexibility
Everything about 24 Hour Fitness fulfills its mission statement of molding their services to its
customers, allowing customers to personalize their own fitness goals based on their own needs
without any restrictions or limitations, while 24 Hour Fitness helps them fulfill these goals. 24
Hour Fitness does not set a strict formula that standardizes itself to all of its customers, but is
flexible in its services and adapts itself in order to provide a safe, comfortable, and efficient
environment, in which the customers can work to fulfill their individual fitness goals.
SWOT Analysis
Our team took a look at the strengths, weaknesses, opportunities, and threats, for 24 Hour Fitness
if it were to decide on opening a branch in the urban areas of India.
Strengths
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Some of the strengths of this company is that it has multiple locations within the United States,
expanding 24 Hour Fitness as a brand and gaining brand exposure. Each of these branches
provide diverse services to its customers through personalized fitness plans that adapts to the
customer’s individual fitness goals. Because it is open 24 hours a day, 7 days a week, this serves
as another personalization to its services because customers can choose when they want to work
out since the facilities are accessible for them to use at any time. Each facility does not contain
average gym equipment, but 24 Hour Fitness provides a wide range of top notch worldclass
exercise equipment. All of the personal trainers at 24 Hour Fitness are internationally certified,
which guarantees the credibility it their training and that they will provide an effective but safe
work out for customers. 24 Hour Fitness’ main strength that it is an organization that
acknowledges the needs of its customers and molds itself to those needs. It is a brand that is
known for its customeroriented business model, in which the organization develops its goals
based on the goals of its customers and functions as an aid for customers to achieve their
personal fitness objectives.
Weaknesses
Because 24 Hour Fitness is open 24 hours a day, 7 days a week, this can be a downfall of the
company because it will have higher operating costs in order to run its facilities, compared to the
average gym. The electricity, water, and other utility bills will add up, since the machines,
equipment, pools, showers, and the facility as a whole is running 24 hours a day, and each gym
needs to hire more employees in order to work obscurelytimed shifts. 24 Hour Fitness also has a
lack of brand loyalty, in which customers have no problem switching their memberships to
another gym. This causes 24 Hour Fitness to have a low retention rate and the risk of losing
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Not only is there a need for more health and fitness services and products, but there is also a need
for more affordable gyms in India. Most of the existing gyms within India are extremely
expensive, even with U.S. standards, and only those in the upper class can afford memberships
there. Because there is an increasing middle class, which now makes up the majority population
in India, the need for reasonably affordable gyms are in high demand. By pricing the
membership rates that match the affordability for India’s middle class, 24 Hour Fitness will gain
competitive advantage.
Threats
One of the threats that 24 Hour Fitness faces if it opens a facility in India, is that with the
increasing awareness of the benefits of health and fitness, other methods of working out, other
than going to the gym, have been opened up to the general public. Individuals can purchase
fitness DVDs in the stores and work out in the comfort of their own homes in front of a TV
screen. There is no need to leave the house and walk to a gym. Because India has low wages,
private trainers can also be hired for an inexpensive rate, and instead of seeking out a method of
working out, the workout is brought to the customer’s homes by the trainers. There is also the
threat of local gyms, as well as other foreign gyms, that are available for the public within India,
and customers may be satisfied in paying a discounted rate at a local gym that offers the bare
necessities for a decent workout. 24 Hour Fitness also faces the threat of deterioration of its
facilities since the people in India tend to care less about properties that are not considered their
own. So having to account for broken fitness equipment and rapid deterioration of assets and
property, will add up and become costly.
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Environmental Scan
Social
India is located in south Asia, bordering Bangladesh, Burma, China, Nepal and Pakistan and it’s
capital is New Delhi. The weather is mostly hot during the year but it varies from state to state.
The coolest weather is from the end of November to the beginning of March and the hottest
weather is between March and June. Along with being the seventh largest country in the world,
India also has a population of over 1.27 billion people. Although there are 22 official languages
in India, English and Hindi are the most commonly spoken.
Fitness in India started with celebrations and functions, when people would go to their
neighbor’s house and have dance festivals, it then continued to the sports industry, with fitness
only being for athletes. The fitness industry today is growing because of many reasons. The first
reason is because the Bollywood industry sets goals for people to follow. People in India really
look up to actors and actresses. They consider them as their idol, so when they have perfect and
fit bodies, the people of India also want it. The feel good factor is really important and everyone
wants to look the best and imitate the Bollywood stars. The girls look up to actresses like
Bipasha Basu, Deepka Padukone, Katrina Kaif and the guys look up to actors like Hritik Roshan,
John Abraham, and Salman Khan along with others. Another reason for the growth in the fitness
industry is illness like heart diseases and obesity. Since many people have heart problems, their
doctors advise them to work out and run on the treadmill. There is also a social status attached to
the gym. Since the gym during the past decade was targeting for the elite, the rich people wear
expensive gym attire and use it as a method to look good in the society. The fitness industry
mostly constitutes of age group of 2040 years starting form college students to their professional
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workers, it is mainly to look good. The people after the age of 40 usually work out because of
health reasons or they have been told by their doctor to gym to fight diseases. Although,
previously the fitness industry was dominated by the male population, today there are 45 percent
of female members. Education and access to the internet has changed this over time.
Gym membership is very expensive in India and over the past few years there is a growing
awareness among the middle class, as they constitute for most of the population. Another
problem is that people in India are very busy, the men work all day to night and the women are
busy with nurturing their family and taking care of the house and kids. There is a very important
need for an affordable gym membership along with flexible hours that is why 24hour fitness
would be perfect for a country like India. This is because not only are we planning to target the
middle class instead of the elite, the gym will also be open for 24 hours, which would give the
people with busy schedules more flexibility.
Economic
The Gross Domestic Product (GDP) in India was 1876.80 billion US dollars in 2013. The GDP
value of India represents 3.03 percent of the world economy. The currency of India is Indian
rupee. Total retail market for fitness category is worth US$ 0.76 billion growing at 1618 per
cent and is expected to cross US$ 1.18 billion by 2017. It is seen that People spend on an average
45 hours a day on recreational activities be it leisure or sport. The time spent depends on the age
group, gender and employment status. One of the economic reasons why the fitness industry is
blooming in India is because globalization and liberalization caused many fast food chains like
McDonalds, Pizza hut, Dominos to enter India. Due to the increasing consumption of fast food,
people need to go to fitness centers to burn off the extra calories they put on. Since the middle
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India is the largest democracy in the world. The government constitutes of Federal republic,
Constitutional republic and Parliamentary system. Elections occur every 5 years. The current
President of India is Pranab Mukherjee and the prime minister is Narendra Modi, who belongs
with the Bharatiya Janta Party (BJP). The most popular political parties in India over the last
three decades have been the Indian National Congress (INC) and the Bharatiya Janta Party
(BJP). The Indian political system includes three branches executive, legislative, and judiciary.
The executive branch is made up of the president, the prime minister and his council of
ministers. Two houses perform the legislative functions; the first one is Lok Sabha, which is the
house of people and the second one is Rajya Sabha, which is the council of states. The judiciary
branch includes the Supreme Court, 23 High courts and other lower courts. The Indian law flows
the British law. The wellness industry is of strategic importance to the Indian Government as it
generates over three million jobs initiating measure to stimulate growth. There the 24 Hour
Fitness gym would be welcomed with the Indian government, as they many jobs will be
generated for the huge population of people in the country.
Regulatory
Many mom and pop gyms majorly dominate the fitness industry in India. The organized fitness
services account for only 25 percent of the overall fitness industry. The first challenge is the lack
of education about the benefits of exercise and fitness, and the second challenge is the
unregulated opening of gyms. These gyms are not equipped or staffed well to have a safe
exercise environment. These gyms start with good opening but end up giving discounts, as they
are not able to build a healthy membership. However today, the fitness industry has over $24
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billion of the franchise industry and is expanding even more as there are international and
domestic firms setting up their businesses in India.
Natural
One of the main environmental challenges facing India today is the pollution, which a very
serious issue in India. Mainly fuel wood and biomass burning, fuel adulteration, vehicle emission
and traffic congestion cause the pollution. This could play positively fitness as because of the
pollution many people would not do any outdoor fitness activities and would be drawn to the
gyms. There are also many floods in Mumbai as it borders the Indian ocean, the floods get so
intense the there is water all over the roads, the roads get blocked and the cars get submerged in
the water because of this many people would not want to travel to the gym. In New Delhi, there
is a big problem of heat waves and traffic. It gets really hot during May to June and people get
agitated and this could be one of the reasons why people would not want to go to the gym in the
heat and traffic and would rather stay home in an air conditioned atmosphere.
Competitive
The two biggest global competitors for 24hour fitness are Gold gym and fitness first. These are
very popular gyms in India and offer similar service of what 24hour fitness is offering.
However, 24hour fitness will a much cheaper gym membership; these global gyms charge
around $100120 per month and 24hour fitness is planning to charge their customers half of that
($5060 per month). In addition, our gym will also provide a health café and fitness clothing
stores. According to the survey our group conducted with the help of around 30 respondents
from India, we concluded that other locally known competitors would be RDX, Talwalkars,
energie and three graces. Even though these gyms are reasonably priced for the middle class,
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their instructors are not as well qualified and they do not offer fitness classes like zumba,
kickboxing, and yoga along with others.
International Marketing Plan Objectives
Financial Goals
After analyzing our initial costs and projected revenues, we have set a targeted breakeven point
of one year after opening. At 5,00010,000 square feet, our gyms will be able to accommodate a
memberbase of over 5,000 people. Our monthly membership rate, at $60USD per month, will
generate annual revenue of at least $3,600,000. After deducting about $1,603,000 in startup
costs, we will breakeven after one year.
In each consecutive year, we plan on reporting net incomes of $2 million USD or greater.
NonFinancial Goals
While the Health & Fitness Club Industry is in its initial phase in India, we hope to occupy a
large market share. Specifically, we aim to occupy at least 4% of the market by the end of our
third year in India. Additionally, we aim to maintain a company growth rate that is higher than
the market growth rate for all foreseeable years. Per 5,00010,000 square foot gym, we aim to
enroll 5,000 members. The motives will help us lead to the opening of additional gyms
throughout India.
Hofstede’s Cultural Dimensions: India
In order to further our understanding of the social behavior and culture in India, our team took a
look at the Hofstede’s cultural dimension measurements for India, compared to the United
States, in order to analyze the proper steps to be taken in order to effectively establish a 24 Hour
Fitness branch in India.
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Power Distance: 77
As opposed to the United States, where equality and an even distribution of power is
emphasized, India possesses a culture that values hierarchy and a centralized, or topdown, type
of structure within society, whether it is related to family dynamics or company organizations.
Power is distributed unevenly on the social ladder and those on the top are the decision makers
that possess the most power. There is a great deal of control by leaders for their subordinates,
and the level of respect is concentrated at the top. Communication is directed from the top to the
bottom and employees do not have any decision making power but are dependent on the
executives.
Individualism: 48
Rather than sharing a strong set of individualistic values as the United States has with a score of
91, India has a more collectivist society in which decisions are usually made as a group. Rather
than forming opinions based upon one’s own values, individuals are influenced by the values
that are held by the majority and conform to the norm. Individuals are defined by their affiliation
rather than their own personalities. Loyalty and community is a major emphasis within Indian
culture, and relationships play a major role in decisionmaking. This cultural influence of an
emphasis on collectivist society is a result of Hinduism, where they believe an individual’s life is
dependent on how the individual that lived before them lead their lives.
Masculinity: 56
India and the United States have a relatively close masculinity scores, which shows that they are
both relatively driven by competition, achievement, and success. They both value the display of
success and power, wanting to be perceived as the best. Because work is very important, it
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becomes the center of an individual’s life and are naturally inclined to work hard with the
incentive of success.
Uncertainty Avoidance: 40
India has a relatively low uncertainty avoidance score, which means they are fine with not
knowing the future. They willingly accept imperfection and spontaneity, not needing to plan for
the future and are unthreatened by unknown situations. Because situations are not planned out,
India is very flexible to whatever the future holds.
Longterm Orientation: 51
Because India has a score that is higher, this means they prefer a more practical and long term
oriented. They are more lenient on punctuality and are comfortable with reacting as they go,
rather than following an exact plan. India is more focused on preparing for the future rather than
planning out their future.
Target Market and Market Segmentation
After considering all these factors of India that were presented above, our team decided to focus
on a target market consisted of Indians between the ages of 1830 years old who are considered
to be in the uppermiddle to middle class, living in the urban areas of India. We decided this
based on the demographic, geographic, psychographic, and behavioral market segmentations.
Demographic
Approximately 58% of India’s population are within the bracket of 1840 years old and there are
more males than females. Because the majority of India’s population is on the younger side,
there are more unmarried and single people in India. Because the population is generally younger
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and are unmarried, an assumption that they have more time to participate in leisure activities,
such as going to the gym, can be made.
Geographic
The majority of India’s population dwell in the urban areas, such as Mumbai and New Delhi.
There is a more concentrated number of people that live in the cities rather than the rural areas in
India.
Psychographic
India’s culture is heavily based on Hindu influences since that is the major religion in India.
People are very familyoriented and are very hard working, so having a gym that operates 24
hours a day will be very convenient for individuals to fit a workout in their busy schedules.
Many in India are very conservative in their ideologies, however they welcome progress. There
is an increase in the awareness of health and fitness in India which can prove to be beneficial for
24 Hour Fitness as a business.
Behavioral
After conducting a survey, our team found that most people in India exercise two to four days a
week. When it came to gym facilities, the aspects that they value the most are the assortment of
fitness equipment, as well as the variety of fitness classes available in the gym. For fitness
clothing, the survey showed that most people in India shopped for traditional American fitness
clothing brands such as Nike and Adidas, but had little knowledge about the up and coming
fitness brands such as Lorna Jane and Lululemon.
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wellness than ever before, and this trend is especially
prevalent in older generations. We have decided to offer
core products and services instead of luxury and
activityspecific amenities (such as swimming pools,
saunas, steam rooms, etc.…) in order to cut costs and
provide the highest quality experience at an affordable
price.
24 Hour Fitness possesses 4.9% of the industry market in the United States, which is the
largest market share in the industry. This market share has been steady over the past ten years.
In regards to the Business growth rate vs. Market Share growth rate table, 24 Hour Fitness is in a
“Star” stage.
Product Market Analysis
Within the Gym, Health, & Fitness Club industry, 65% of the product and services segmentation
belongs to the Gyms and Fitness Centers sector. To follow along with 24 Hour Fitness’ mission,
we will also aim to dominate this sector.
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International Marketing Mix Strategies
Product
Services (intangibles): Fitness Courses will be offered to members. We will be implementing
courses that can be found at existing 24 Hour Fitness locations while adapting to the Indian
culture through the addition of specialized courses. We plan to offer Zumba, kickboxing, power
yoga, meditation, nutrition counseling, personal training, and access to cardiovascular and
weighttraining equipment.
Products (tangibles): A retail center will be located within the confines of each gym, offering
highend fitness clothing. Brands such as Lululemon, Lorna Jane, and Nike will be available in
order to provide luxury workout clothing that would not otherwise be available. Additionally, a
cafe serving organic food will be in operation during certain hours. Finally, a vitamin and
nutrition center will offer products with expertise knowledge from onstaff nutritionists.
Price
Memberships will be available on a monthly or semiannual basis with an average pricing not to
exceed $60 per month. Student pricing will be offered to attract a younger clientele.
Additionally, the public may purchase from the retail store and nutrition center to avoid
competition on a retail basis. A market penetration strategy will be used at first in order to
introduce the idea of an affordable health and fitness club. The price will later be adjusted based
on operating costs.
Place (Distribution)
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★ Trade Shows: Representatives from 24 Hour Fitness will attend International fitness
lifestyle trade shows in order to prove a substantial standing in the international industry.
★ Personal Selling: Referral rewards will be given to any existing client who successfully
refers friends or family members to 24 Hour Fitness.
Positioning:
Our extension of 24 Hour Fitness into India will fill a niche market that exists in India currently.
The niche market consists of middle class young adults, who as of right now do not have an
affordable gym to work out in. Not only will this gym be affordable to middleclass Indians, it
will cater to their needs and wants within a gym because we are adapting to their culture. We
also offer services that are new to India and not offered at any other gym. This facility brings
trendy retail clothing, nutritious food options and topnotch fitness classes to young middle class
Indians, while remaining affordable.
Tariffs, Transfer Costs, and Global Supply Chain
Tariffs in India are in decline due to the liberalization of the economy. This is the perfect time to
invest in the developing industry, as there is only a 15% tax on nonagricultural items. Further,
there is no restriction on the quantity of items that may be imported.
Free trade agreements currently exist between India and SriLanka, and other trade agreements
exist with Bangladesh, Bhutan, Maldives, China and South Korea. As these nations are known
for manufacturing, we plan to import equipment and supplies directly from this list in order to
reduce transfer costs. Trade agreements are expected to be finalized soon between India and the
United States.
International Resources Required
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We decided a departmental structure should be how the management of 24 hour fitness in India
would best be organized. This structure is optimum when extending a branch internationally
because we included key management positions such as VPBusiness Development, VP
International marketing, Senior VP Construction and design, Senior VP club experience, and
Senior VP Fitness in the structure. As this 24 hour fitness location gains momentum, we will
bring in more international management positions in order to increase profit and continuously
adapt to Indian culture. This organizational chart should be more than effective enough to
successfully launch the 24 hour fitness location and market to local consumers.
Evaluation & Control
To evaluate the performance of the business we will use Quantifiable Metrics. These are
measurable data such as: number of customers joining each month, how many of those
customers are retained, how often they show up, what times they specifically show up at, etc,
how much profit we are bringing in each month, and how many gym members utilize the
additional services we offer. These measurable observations will give us knowledge on where we
can cut costs to save money and what areas we can focus on to boost profits.
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Another key factor in our evaluation plan is using Qualitative factors to measure customer
satisfaction. For the first six months, we will survey our members at the gym once a month so we
know how to better adapt to their needs/wants and better serve them. This will help customer
retention as well as our word of mouth reputation, which will bring in more customers. Some
international data we will be monitoring is growth rates, sales, retention rates and facility
expenses. We expect our growth rate to increase by 20% per year, our retail sales to increase by
15% per year, and continually increase profit 8%13% per year. If we do not meet these goals
when we expect to, we will make modifications to our marketing strategy and management
techniques. These modifications may include reducing operating costs such as electricity and
reducing the amount staff members working. We also have the option of altering our
promotional techniques, if they prove unsuccessful. We will be able to meet our goals by further
getting to know the customers needs and wants through our customer satisfaction surveys, as
well as bringing in marketing experts that will help us better adapt to the local culture.
Conclusion
We aim to provide an personalized, affordable, and healthy lifestyle for the middleclass citizens
of India through 24 Hour Fitness’ diversified services and products, because we strongly believe
that there is an athlete in every one of us.
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