(California Fitness) Marketing Mix Strategy

8.0. Marketing Mix Strategy

8.1 Price

California Fitness has currently implemented product line pricing for its one product with various class distinctions. S$408 is the price implied on its gold class membership and S$648 for its platinum membership in Singapore. Additionally, it has also surprisingly introduced a price penetration strategy of S$49 membership program in 2011. Hence, it is feasible strategy in Indonesia of implying both price techniques as its price penetration can be used to attract and increase awareness amongst different target markets to lure or persuade them to join. Once they have joined to California Fitness, the product line pricing strategy may be adopted for special price with requirements of joining California Fitness through its S$49 program. Of course, in Indonesia, it shall lower its price due to the lower GDP per capita for Indonesia population. Furthermore, dual pricing can be implemented here in Indonesia whereby it is cheaper to apply a full access membership in Indonesia and this should include overseas California Fitness access as well. Thus, students from Indonesia can apply full access membership which can be used when they study overseas in Singapore with cheaper monthly fees due to different currencies. Therefore, it can also be considered as price discrimination.

California Fitness may also consider market-based pricing where it competes with competitors of fitness centers in Indonesia such as Fitness First and Celebrity Fitness. With this type of pricing, California Fitness has to pay attention to what competitors are offering and price its products at either slightly above or lower depending on the brand image of California Fitness in the perception of consumers.

Generally, it appears not feasible to apply ethnocentric, geocentric, polycentric and transfer pricing strategy for California Fitness in Indonesia.

8.2 Product

Standardizations is the process whereby California Fitness maintain its methods and equipments as constant as they can in order to be consistent when it establishes a fitness center in Indonesia. This is demonstrated through the example of consistency and indifferent overview, options, classes, trainings and layout of California Fitness’s website when existing and potential customers visit its website country region in Singapore and Hong Kong. Hence, it ensures that individuals are being assessed under same parameters and not influenced by different conditions. As a result, it is a practice that uniformly is implemented throughout California Fitness worldwide.

California Fitness has established a quite well known and one of the early start brand of fitness center. Furthermore, it is a wholly owned subsidiary of 24 hour fitness worldwide which almost has about 400 clubs provides to more than 3 million members. Nevertheless, California Fitness brand is more heard in Asia amongst other continents since it focuses its expansion in Asia. The first California Fitness brand was established in 1996 in the business district of Hong Kong. Currently, trademarks of California Fitness are most probably the California Fitness Group X program where it compromises energetic, motivating, charismatic, internationally-acclaimed instructor teams that offers many workout class options in group exercise and each instructor focus to a few selected formats. Thus, making them experts in the group exercise class they are leading and better able to address target market needs.

Its latest product development and diffusion is again the group x superstars program which is the new idea accepted by the market and this can be adopted as well in Indonesia potential market since it has become its trademark  amongst its competitors. The diffusion may happen through simultaneous idea where competitors also adopt California Fitness idea at similar time period because it is a very competitive market where competitors are aware of each other movements and techniques. Moreover, it is spread through radio broadcasting, viral (its current updates on Facebook, Twitter followers) and most importantly through word of mouth. Additionally, adoption by California Fitness has been shown through its world class exercise equipments from world leading brands such as Life fitness, Star Trac, Technogym, Stairmaster and Iron Grip. Thus, its adoption of new products has made a pleasure experience for customers.

California fitness has executed several brand extensions through its Les Mills programs whereby it offers Body Combat, Body Pump, Body Jam and Body Balance. As a result, it has widen the range of services and is capable of maximizing use of additional sales. Its Les Mills programs have shown similar elements of group exercise classes with music and choreography.

California Fitness has diversify its brand which is a bold and expensive move with potential for great rewards as it is capable of diversifying into new market through its varieties of programs such as Cardio Fitness, Indoor cycling, Body toning and Shaping, Dance Classes, Yoga and Mind Body, Les Mills programs and group X superstars with the aim of growth of profits and stability. Since it is capable of targeting larger market, California fitness will experience independent earning fluctuations and the varieties of brand extension can guarantee a greater awareness of California Fitness. This brand extension strategy that has been successful in Asia can be implemented in Indonesia as well to target different segments. Although California Fitness is a wholly owned subsidiary to 24 hour fitness, it is considered by society as co branding at several occasions.

8.3 Promotion

Promotion of California Fitness has been executed through direct and indirect methods.

Direct promotions that California Fitness has applied and should be adopted in Indonesia is price promotion whereby a discount to the normal price of the programs are offered due to special events like New Year Resolution or it could also add more access and benefits to the same amount of price. In other words, additional values are incorporated. However, California Fitness needs to be aware of the possible expense of loss in profit due to increase sales gain from price promotions.

Coupons are another versatile way where it can be adopted in several ways such as coupons pack which encourages customers to actually increase repetitive visits to California Fitness. It is also possible that coupons are printed in associated health magazines or local newspaper in Indonesia to allow customers to redeem the coupons printed. This is to maximize the redemption rate and it is the best way for new programs or to encourage sales of existing saturated programs.

Advertising has been done by California Fitness virally through Facebook, tweeter, its websites and social media. This is satisfactory as Indonesian individuals are connected through social media already. Furthermore, advertising campaign with health related awareness such as osteoporosis, cholesterol-free, men’s health or other activities can be carried out as well. Moreover, the advertising campaign may include healthy food or healthy recipes in order to stay fit and healthy.

There is also another common promotional method of gift with purchase so that customers get for example, 15% discount at healthy boost juice stall if they sign up with California Fitness. Money refunds may also be a potential factor for sales promotional in order for customers to confide to California Fitness if they are not satisfied with the guaranteed conditions.

California Fitness might also be socially responsible to society by giving back to health related institutions that focuses on obesity, alcohol/drugs rehabilitation, cancers and others as well to increase publicity of California Fitness in Indonesia and gain awareness and capture attention of potential customers and making existing customers feel that they are a part of the giving back activities which gives them positive attitude towards California Fitness. Consequently, good word of mouth can be spread automatically without increasing efforts and this is effective as promotional strategy that brings us to indirect marketing.

Some methods of indirect marketing include the use of text messaging, instant messaging to remind and inform existing customers and potential customers of the current updates and offers. This will make customers feel that they are special and are paid attention to by California Fitness. Emails, telemarketing, blogs and social media are viral marketing that they can do to increase its promotional efforts.

All of the promotional strategies mentioned above might be used by California Fitness when they establish their brand in Indonesia. Nevertheless, the end result may not always evolve into sales. Each of those methods that has been implemented by California Fitness in Asia and perhaps in Indonesia later, has its strengths and challenges and both can prove fruitful in the long run. It is always better to combine different promotional techniques to help California Fitness to build their business the way they would like to. As some of the techniques and methods may involve interactive marketing, it is always in the best of interest by the employees to respond and reflect on the behalf of California Fitness since their helps, answers, interactions may be considered as how positive or negative the whole California Fitness acts.

8.4 Place and distribution

To extend their service in Indonesia, California Fitness should aware to where they are going to open their branch. It is suggested to California Fitness to open their branches on the city area, specifically in malls, shopping centre, and nearby office areas. Since California Fitness’ target markets are working people, office area is suggested location.

The market entry of California Fitness for Indonesia is suitable to be in the form of franchising. By being the franchisor, California Fitness benefits from the ‘royalty fee’ without taking a big risk. Moreover, what the franchisee gets is a ready-made ‘package’ that just needs to run with all the support in terms of marketing, customer relations, accounting, staff training, and operational activities. This way California Fitness has more power in determining the location, the area square feet, design, themes, equipments, assigning trainers and many others. It is beneficial to California Fitness as they can decide what the franchisee need and how many they need which in a way sets up a cost that can be played by the franchisor (California Fitness). Once, the franchisee is in, they will not have any power to negotiate whenever California Fitness decides to increase its fees due to ‘reasons’. Obviously, the franchisee will also benefits under these costs as everything is provided and by being a part of the global network of California Fitness, the franchisee has many advantages such as brand awareness, brand knowledge, market research, supply chain management system, customer relationship management system, etc. The risks will be collective and not individual as in other business models. Furthermore, California Fitness and its franchisee will make decisions and perform based on both best of interest in mind as the franchisor does not want to hurt the franchise’s name of California Fitness which the franchisor has built with efforts for years. Although the major franchisor California Fitness has more power, control and authority over the franchisee, it will not do things that will hurt its brand name in the long run as it realizes that more losses will arise compared to the benefits by ‘extorting’ the franchisee.

Communications and marketing supports are required importantly as other factors in franchise of California Fitness. Although the franchisor is willing to give guidance, assist in preparing, launching promotional campaign and marketing the franchise locally, the franchisor will not spoon feed the franchisee just like that because the California Fitness franchisor has also many things to worry about as well as handling and managing all the well established fitness centers throughout Asia.