Vision Consulting for Ventura Gym, New South Wales, Australia - Research Proposal Example

Management and Organizational Consulting A case-based scenario proposal for Ventura Gym, New South Wales, Australia   Consulting Agency: Vision Consulting Core areas: Business and Management Consultancy Core expertise: Highly professional and expertise team of Business and Management Consultants, who have the skills to turn small size enterprises into large-scale, up market profit-making ventures. Table of Contents A case-based scenario proposal for Ventura Gym, New South Wales, Australia 1 Table of Contents 1 Case Scenario 2 Vision Consulting Proposal 2 Proposal 3 Background 3 Problem 3 Objectives 3 Scope 4 Operational Plan 4 Appendix 8 Reference List 17 Case Scenario Ventura Gym is located in New South Wales, Australia, and started its operations in January this year. It is a scientifically equipped gymnasium, has well trained staff, dietician, consultant and even a swimming pool. The gym was opened with an aim to reduce the obesity rate among the middle age group. It is all-men gym to meet the health needs of the men who in their bid to build their career generally ignore their health. The natures of services of the gymnasium include, but are not limited to providing all modern facilities to the men according to their body requirement. The gym has well laid out plans for the men falling under different weight categories and their health requirements. They are prescribed the plan and diet according to their weight, health and body requirement. The gym is privately owned by Mr. Daniel who is ambitious to get the men particularly of the busy nature into the fitness regime. Since it started its operations, it has 45 members but now would like to have more members as Mr. Daniel included more space and bought new machines and increased the gym timings to permit more members to join. The gym targets a customer base of around 500 men in the first quarter following recommendations by Vision Consulting. Vision Consulting Proposal Vision Consulting is proposing a marketing strategy for Mr. Daniel’s help in order to increase his customer base by encouraging more memberships and thus boost sales. The target is to have at least 500 men enroll in the first quarter after proposal comes into force. We are suggesting promotional strategies and recommendations which would be most effective for the gym keeping Mr. Daniel’s budget into consideration. Besides our proposal also hopes to increase the network to get productive and useful contacts for the future projects linked to the gym. Our proposal will entail establishing alliances with the corporate companies to attract customers, free offers to the new members, sending invitations through pamphlets, word of mouth publicity, providing different referral programs, advertising in newsletters and considering trainers as potential clients. Proposal Background Mr. Daniel’s gym is a new one in the area. Even though replete with all modern amenities, equipment and trained staff in an ambient premises, the gym hasn’t been able to move beyond the first 25 customers who enrolled themselves in the first two weeks of its opening six months back. Given the potential of the place to attract gym-seekers, Mr. Daniel’s gym hasn’t really been able to do well. The city, on the other hand, has a potential to offer more in as far as physical fitness is concerned, and distraught obese patients who fail to contain the problem get under the knife find gyms as the last resort. Problem The gym is not able to gain any further customer base, and also not doing much in terms of incentives for the existing customers who could do word of mouth publicity. A positive point, however, is that existing customers are very happy about the services offered in the gym. Objectives Venture Gym will: provide body workout and related health care services offer services at reasonable cost to all segments of customers tap the low income market segment which is ignored by key competitors increase awareness among obesity and heart disease patients which will act as a driving forces for growth Scope There are around 50 gyms with a 50 mile radius of where Ventura Gym is located. Only 7 of these gyms match the infrastructure that Mr. Daniel has created for Ventura Gym, and they are doing pretty fine. Others are catering to stray customers, and not permanent ones, and cannot be counted as customers. Ventura Gym, if marketed well, thus holds a promise to deliver. Operational Plan Forging Alliances with the Corporate The gym should forge an alliance with the corporate offices near your area with the best presentation of your gym showing the success rates of the members, building up health consciousness among them. The companies can be incited to pay for their employees fully or discounted rates for the benefit of the employees. The hospitals can also be visited inciting doctors to recommend their patients as per their condition. In fact even the doctors can be asked to join the gym. Giving them Free Trials As a part of your anniversary celebration, new members can be given incentives by providing them with free trials for few days. It is obvious if they like it they will definitely become permanent members. Sending Invitations through Pamphlets The pamphlets are the most cost effective medium of publicity. As the gym is located in the populous area of the city, so the pamphlets need to be distributed in that particular area showing how since opening of the gym, men have joined it in large numbers reducing their weight, becoming more healthy and socializing with the other members too. Here you can be different- You can give to the members various discount offers under different weight categories and also give them the privilege to use the gym when it is closed too. Show to your prospective clients how much caring you are by displaying the picture of training taking proper care of the members while they are exercising. Tell your clients you have dietician and very well experienced consultant to guide you all through your weight reduction or health program. Word of Mouth Program No marketing strategy is better than the word of mouth as you can come up with the referral program that will certainly meet your budget and fulfill your aim too. Give your members few days free for exercises if they bring at least one referral for their one year membership. Along with this that person should also be given few days free trial period to see if the exercise regime is suitable for him or not? This will sure entice your members to increase your reputation by publicizing about you in front of their friends and family. To have the word of mouth referrals keep on coming, present these members with a gift of your acknowledgment, and appreciation. These members can get a free training session or one massage if they get any one new client. This way they will feel themselves important and be motivated to bring more clients. You can also have more and more of fliers coming in. Offering Different Membership Packages Offer your new members with different membership packages. The longer the period is, less they need to pay by telling them the benefits of joining for a longer period. To have people remained for longer period is better as there is no need to worry about them leaving your gym just after one month or so. If the member joins for longer period then they can pay less for the overall period. This is the best way to incite the members to join for the longer period. Establish Different Referral Programs Setting up different referral programs though bonuses or rewards can bring in new members. People like to recruit new members so it is always better to provide them with different incentives to accomplish the task. You can also increase your marketing programs by including public relations and distributing press releases as an announcement for new offers or discount schemes. Advertising in Newsletters The communities or neighborhoods these days have different kind of community newsletters which are distributed to the residents every month (Griffin, 2010, p. 504). Advertisement of the gym can be given in this newsletter for making the people aware of about your gym and about your special offers. The rates of these advertisements are also considerably less and can be considered as the best marketing tool for your health club gym and that too for great price. Your Trainers are Your Potential Clients Get the experienced and the best trainers in your gym. Allow them to use the gym free of cost in their free time. They too can bring many people to your gym, ultimately becoming the most profitable asset for you. As they are the trainers themselves so they can induce their known ones to join your gym by introducing them with several health benefits. Appendix The proposed plan is initiated after giving considerable thought-out marketing plan enabling the gym to get maximum members in their prescribed speculated period of time. The preparation of the proposed plan is undertaken after keeping in mind the scope of the business, location of the gym, its potential customers, and gym’s potentialities including its feasibility and facilities and finally the financial status. The first and foremost step on part of the consulting agency towards the gym achieving its targets would be identifying the problem, evaluating and institutionalizing it, discuss with the client and develop a foolproof focus. This would be keeping in view Freedman’s and Zackrsion’s (2001, pp 44-48) organizational development and change. The marketing plan needs to be formulated after taking into account the company’s limited budget, and taking into consideration the fact that marketing projection is not exceeding the budget and is most effective too. The plan is being considered carefully since on account of being professional practitioners in the field, because as professional we can articulate more than what we seem to be knowing. In keeping up with Schon’s belief, we will be allowing ourselves to experience puzzlement, surprise, or confusion in a situation which is fraught with uncertainties or are of unique nature and beyond client’s capability to comprehend (Schön 1983, p. 68). Secondly we have also taken into consideration the financial and social status of the targeted clients who particularly belong to the middle or high strata of society. Thirdly gym is at close proximity to the commercial area where there many corporate houses, business establishments and commercial enterprises which means gym can have more clients from offices and business establishments. In this context we have to convince the client that he shouldn’t be discouraged by the initial lukewarm response to his gym, as these may just be teething troubles. Recently courage as a factor to succeed has been debated widely and now is considered a virtue in managing a business. Eileen Shapiro mentions this factor in her book and referes to it as an attribute for a superior management performance (Shapiro, 1995). My proposal aims at attracting more and more people to join the gym and what steps should be taken that can meet the marketing criteria of the gym. The suggested theory is the forging alliance with the corporate sector (Knoote-Parke, 2009, p.155). The strategic alliances as suggested by Fredrick J Contractor are, “interfirm corporative arrangements aimed at achieving the strategic objectives of the partners” (2002, p. 439). In this era of globalisation, the companies need collaboration of the external sources to accomplish their marketing goals. It is argued that consultants are hired not primarily because of the knowledge they have but because of th fact that they “know” the intricacies of the organizations. When an attribute to “know” is put together with practice-based theories of organizational knowledge, we will be capable to penetrate deeper into the key aspects of the client’s problem, participation into it and transfer of our expertise for the benefit of his business (Poulfelt, Greiner, and Bhambri, 2005, pp. 3–22). There is ample evidence of the high tech industries and even traditional ones entering into alliance with their counterparts to set up their marketing objectives. This strategic move is subjected but not limited to “transaction cost economies, game theory, bargaining theory, resource dependence theory, resource based view and strategic behaviour theory” (Contractor, 2002, p. 440). Further Contractor states that “from the sociological perspective, strategic alliances represent a type of interorganisational relations that closely integrates partner firms” (2002, p. 440). In other words, social exchange means retrospectively voluntary actions of the companies which are motivated to help others in expectation of returns whether in form of the monetary gains or in kind. In contrast to the economic exchange, social exchange is less formal as the latter does not depend upon the particular contracts or agreements and typically involves longer time frame but ultimately proves to be most effective. Patterson, Richard A. Spreng, (1997) urge relationship modelling between perceived value, degree of satisfaction and intentions to repurchase in a services, business-to-business context. In a professional services setup, this works as a path framework in a empirical scenario. Social exchange theory can be most beneficially construed as the best strategic move. As this is all men’s gym and belonging to middle strata of the society, this means maximum of them are working employees in the corporate sector so potentialities of getting members from the companies increases. Several health studies reveal the fact that companies hardly get time to look after their health so they can become the target area for the gym to deliver them the benefits of the health and induce them to join the gym for their benefits. Financially too it will be beneficial for the members as the companies with the mutual corporation with the gym can sponsor their health. Another aspect to it is forging partnership alliance with the other gyms too in the area for mutual business goals. Forming the policy of strategic referrals is another best strategic move as it is considered as the most pertinent sales agenda. The studies have cited that as much as 60 per cent of the new membership sales are initiated through these strategic referrals as per the industry reports (Bates 2008, p. 128). As a consequence, majority of the club operators incorporate this move in their strategic plans. This referral plan involves word of mouth and written form as a means to publicise a firm or an industry. A.F.T. Payne formulated taxonomy of referral types, which can be broadly divided into two parts: customer referrals and non-customer referrals (Buttle, 1998, p. 245). Customer referrals originate from the customers who are currently the members of the gym. They are very satisfied with their experiences and are excited to induce their friends or relatives to also use the services of the gym. They, as said by Payne, are known as unpaid advocates (Buttle, 1998, p. 245). A number of companies are trying to utilise this strategy by providing various incentives for referring friends and family. Then reciprocal referrals can also be initiated to cross refer the customers (Buttle, 1998, p. 245) and equally profitable form is a referral from the trainer. For the success of the referral system, members can be given particular guest passes or incentive gifts to those who get them maximum referrals. These passes should be attractive and lucrative enough for the members to get motivated to get the referrals for the gym. This is considered as the cheapest way to meet the target rate. Ultimately the sales team should also have an ability to give the most motivated presentation and communicate with the clients in an exciting and lucrative way. As a part of the word of the mouth strategy, human tendency of easily believing others can be easily exploited with great dexterity. This activity can also be achieved by organising some interesting events for the members from time to time like organising health camps or showing a movie. These events are the good opportunities to allow the people to talk with each other and ultimately leading to the publicity of gym. All along the discussions the client has to be kept involved in our “real professionalism” in consulting than ordinary consulting and the difference between the two has to be put across clearly. The client must be all ears to us as we will be to him. We must be able to convey that our high level of professionalism is not just based on analytical skills and technical qualifications that w have earned for ourselves, but adjectives that have been bestowed on us (Maister, 1997). The Word of Mouth strategy also constitutes two variables like Interpersonal variables which mean states or processes that are linked either with the “seeking input WOM or precipitating output WOM” (Buttle, 1998, p. 247) and Extrapersonal variables which are called as contextual conditions which can “seek input WOM or the production of the output WOM” (Buttle, 1998, p. 247). This concept thought as a theoretical presumption is widely considered to be the result of the experiences of customer towards the services or products. This is stated as the disconfirmation paradigm of customer satisfaction/dissatisfaction predictions. In the commercial context, this means when the expectations of the consumers are met they will feel satisfied, and when the expectations are not fully met they will feel dissatisfied and when expectations are more than expected, customers are sure to be delighted. Satisfaction instills confidence in the customer which has a direct impact on the future business of an organization (Oliver, 1981. pp. 25–48) Both ‘delight’ and ‘satisfaction’ are the biggest motivating factors for the customers and indicating positive outcome in the WOM strategy. Service sector industry is the one in which the buyer determines the perceived value of a offering more by the service rendered than the product offered (Zeithaml, Bitner, & Gremler, 2009). Some of the evidences have also been found that ‘delight’ is not directly or least linked with “right first time service” (Buttle, 1998, p. 247) in contrast to the excellent service if provided after their failure. It has been estimated here that the management can make their investment twice to increase the profit margin from the recovery of the unsatisfied customer. On the same hand negative WOM can also be seen as a result of the imbalance that can be created between what has been expected and what has been perceived actually. In this context, Woodruff formulated much constructed version of the reasonable expectation as “dubbed the zone of indifference” (Buttle, 1998, p. 247). On the other hand Swan and Oliver suggest that effectiveness of WOM increases as the satisfaction of the consumers increase. As consumers believe in what others say, this makes WOM strategy as the best medium and free too for the publicity of the gym. In short, the companies generally make use of the different marketing strategies from those as suggested by the traditional marketing theory (Stokes, Wilson, & Mador, 2010, p. 266). They find out their target markets from the grass root level, in other words, bottom-up experience in the market instead of top-down segmentation and at the same time targeting and positioning the clients. This word of mouth thereby then becomes the most effective means which is formalised by gathering informal information through the process which is called networking and is absolutely a free way of publicity. In one of the articles in “Marketing to Men”, Rodman Sims (1994, p.4) suggests advertisers that there are only three things which are of main concern to men. The first one is sex, second mechanical toys and third their freedom. To achieve the targeted clients and marketing criteria, marketing gurus suggest their promotional advocacies should incorporate these three themes in their advertisement and promotional activities. The two biggest examples can be given are of shop-tool calendars and beer commercials. In almost all these commercial advertisements can be seen beautiful women wearing sexy outfits and bikinis. These advertisements profoundly attract men in their vivified and commercialised patterns seducing them towards their products or services. In fact even the toys, gadgets or machineries are the men’s prodigy as they are often seen obsessed with these items. And when it comes to the freedom which is men’s third biggest desire, the commercialised advertisements make men feel related to these images as these advertisements signify their way of expressing their freedom. This way of contriving their freedom is profoundly expressed as the confluence of interactive network theory as a part of the Anglo Australian approach to amalgamate the contemporary theories of quality management, services marketing, and customer relationship. All these three put together lead to profitable customers and prevent unprofitable customers from being created. Gronroos (2007) believes that it is the company’s bad customer management that gives birth to unprofitable customers. There is nothing as such as a bad customer, but there could be a bad strategy that leads to one. These advertisements become the most adequate ways of feeling associated with the customers. They are explained if they join the gym, they can enjoy the freedom of their choice and that too with their great body and great mind and with pangs of youth. As their daily working schedule tears them down therefore they want to find someplace where they could find recluse from their day to day activities and feel themselves near the loveliest women by the sea. It is a gym that can provide them with these loveliest moments of their lives. Here the gym has to face the biggest challenge as now they have to attract men but cannot offend women. The best strategy in this case for them is to maintain a balance approach, giving men their share of enjoyment while also maintaining respect for women. Trainers of the gym make the best clients as they are themselves health conscious so they can easily motivate others to join the gym to give them healthy body and healthy mind. These men can be explained about the health benefits and thus induce them to join. Through the trainers, other programs can also be initiated like organizing team meetings, initiating role playing, involving in communication memos, team get together and parties and continuous education (Coffman, 2007 p.67). In today’s world, where thoughtless indulgence is predominant, much popular marketing strategy lies in identifying opinion leaders. Though this form of strategic move is decades old yet is the most profound and successful marketing strategy. Word of mouth, consumer referrals, and viral marketing are considered as some of the strategies which are associated with the opinion leadership. This form of leadership increases the credibility of the potential consumers towards the company’s services and brands. Opinion leadership is also involved in the informal conversation of one consumer considered as a leader to another consumer. Besides many more incentives, having a relaxation room is really a booster. Men after their hard exercises can relax for half an hour or so in the room which can become a great social meeting place too. Socialising has been men’s impressive entreaty since centuries and therefore by having a separate room for these men means to make them relax, and socialise in their own profound freedom and peace. In the communication and consumer behaviour, it is a mood too that plays the most important. The client, under such a scenario, can be communicated the effect of a consultant. While in the western economies, consulting was one of the most growing branches in the past (Buono, 2001b: vii; McKenna, 1995: 51), the client would most certainly be undeniable in his stance that now not only has it outgrown to a level of high importance, but also has an influence over the economies of regions and businesses (Fincham & Clark, 2002: 3). Many of the companies dealing in perfume, fashion and liquor have objectively focused their advertisements and marketing strategy that would directly hit on the emotions and feelings of the consumers and generate their positive mood. This mood has most positive effect on the consumers and can increase the chances of the clients to get attracted towards the advertisements to a greater degree. The content of the advertisements should also be very impressive so that it has a direct impact on the mood of the customer It becomes, therefore, obligatory for the gym marketing team to focus their attention towards particular population and which are here obviously men. The marketing trend should involve making these men feel important about themselves and know the value of healthy body, healthy mind and healthy spirit, after all the men are the bread winners, protectors and supporters of their family. Such behaviour in the gym can stem from healthy organisational dynamics, which has been a recent focus of service industry businesses where marketing and services are delicately linked with and compliment each other (Booms and Bitner, 1981, pp 47-51). Marketing means making brand positioning and allowing the people around you to know more about you and what you can provide to them. Marketing exactly involves everything how you talk, how you behave, what clothes you wear, what you do and the way you act, treat and be treated. Beneath all these, it is the subtle strategic marketing moves that make a lot of difference and here I am to give those strategic moves to the gym which can really prove beneficial. In the entire proposal, promises are also imparted to the clients for the great customer services. No business can be retained for a longer period of time if it does not give adequate customer services to them. The clients would never like to stake on their purchases and if something goes wrong then they should have the capability and capacity to return it too. They want to stand in high esteem by the sales people, and thus for the gyms and health club this is very important indeed. Hereby they would also require complete commitment for their utmost personal care. As Robert F Gerson pinpoints, “Yet not everyone delivers on these promises, Talking the talk is no longer enough. Again, customers are too smart. You must walk the walk. Otherwise, members will walk away from the club and go somewhere else” (1999, p. ix). Each gym is no doubt capable to provide adequate training facility, proper equipments, the best consultants and dieticians but what make them different are their customer service and their orientation towards their clients. In all the above marketing strategies, the point customer service and the best relationship management should be focused upon (Cooper & Argyris, 1998, p. 550). Their potential clients should be made aware that they will be taken care of and get what they have been promised. The proposals reflected above if implied in letter and spirit can easily gain our client Ventura Gym their targeted customers and that too in as minimum budget as possible. Reference List Allen, KR, 2009, Launching new ventures: an entrepreneurial approach, Houghton Mifflin Company, Boston, MA. Booms, BH & Bitner, MJ 1981, ‘Marketing strategies and organisation structure for service firms’, in JH Donnelly & WR George (eds), Marketing Services, American Marketing Assn, Chicago, pp. 47–51. Bates, M 2008, Health fitness management: a comprehensive resource for managing and operating programs and facilities, Human Kinetics, Lower Mitcham, South Australia. Buttle, FA 1998, ‘Word of mouth: understanding and managing referral marketing’, Journal of Strategic Marketing, vol. 6, pp. 241-254. 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