Objectives and Summary
DIG CYCLE's goal as a company is to give their customers an intense workout, while
providing them with an experience like no other. This business will be positioned on providing
interactive classes, intense workouts, and fun experiences. This positioning will attract men and
women from the ages of 30 to 45 who want to reach their fitness goals while having fun.
DIG CYCLE will implement two types of classes, standard cycling and TRX training.
Standard cycling will provide members with motivating music and lighting systems that will
blow your mind. TRX training involves the majority of your body’s muscles and will increase
your strength and endurance. This all sounds intense, but DIG CYCLE will assure that
instructors will be properly trained to make classes feel more welcoming to members who are
shy and timid.
To attract more potential members, DIG CYCLE will make an effort to appropriately
promote their business to their target market through social media. While focusing on advertising
through social media, DIG CYCLE will also give out promotions (e.g., guest passes, free
merchandise, free classes, etc.) to attract potential members. As word gets out about the
advertisement and promotions, DIG CYCLE’s clientele will increase and the business will
continue to grow.
Segmentation and Target Market
Trying to implement a new routine into your life is very difficult. One specific routine
that people have trouble with is maintaining a consistent workout routine. Many people become
motivated to work out, but then discover the difficulties of it. It is hard for them to make time,
have discipline, or even stay consistent with it. More than 90% of people who start going to the
gym stop after three months (Wuest, 2022). There are many different types of workouts (e.g.
running, weight training, yoga, etc.), but the one that is the most interactive is cycling. DIG
CYCLE takes traditional cycling and turns it into an experience for the customer. They make
sure the customer leaves the session with a good time and a good workout. DIG CYCLE’s goal
as of right now is to gain more customers. DIG CYCLE has to target more people to make them
potential customers.
Targeting consumers as a whole is very difficult. There are different groups of consumers
that enjoy different things. They have different wants and needs that cannot be targeted all at
once. To look at a handful of groups that share the same interests our team will use segmentation.
Segmentation is used to determine who the consumers are and what type of consumers they are.
Different segments have different wants and needs. Based on the type of business DIG CYCLE
is, our team will look at specific segments that should be targeted.
Demographic
The candidate DIG CYCLE will target is:
● Age: Millennials (30-41) and Generation X (41-45)
● Gender: Any
● Occupation: Does not matter
● Average Household Income: < $225,000
● Median Household Income: $136,000
Geographic
The geographic segmentation to consider are:
● Calabasas and surrounding cities (Agoura Hills, Westlake, Thousand Oaks)
Psychographic
Segmentation for psychographics:
● Those who enjoy cycling outside or going on bike rides
● Frequent gym-goers who are looking for a good source of cardio
● People who want to get in shape and want to lose weight
● Want to feel apart of a workout group that is about free judgment and acceptance
Behavioral
● Those who want to start working out but do not know where to start
● People that are intimidated by the gym
Positioning
DIG CYCLE has many competitors around them that offer the same type of classes, but
are very different. DIG CYCLE is known to be a smaller business compared to their competitors.
But instead of this being a disadvantage, our group looks at this as an advantage. Having a bigger
clientele is good for business because it means more money for the business. This is not what
marketing is about; it is about knowing the customer value and their wants and needs. With a
larger clientele it is harder for the customers to get a more unique experience. It is also harder for
them to connect to employees on a more personal level. This is important because it gives the
customer a sense of belonging and a sense of friendship. Many people connect with smaller
businesses because of the relationships they can build.
Since DIG CYCLE is a smaller business compared to their competitors, it gives them the
opportunity to have more loyal customers. It is easier to give customers more individualized
attention which means more interaction with the instructor. It is proven that having smaller
classes, no matter the type of class, gives the learners a better experience. Even having smaller
classes in school have helped the students learn more, get less distracted, connect with the
teacher more, and participate more (Chen, 2022). Many Millennials and Gen Xers feel timid or
scared when going to the gym to exercise; DIG CYCLE can help them overcome that fear and
give them the sense of belonging. DIG CYCLE should promote the idea that having smaller
classes gives a better experience to the customers and that the customers will not get the same
experience elsewhere.
Product
We propose two potential products for DigCycle to pursue based on our desired target segment
and position: Standard Cycling and TRX strength.
Standard Cycling within Studio 1 will provide an immersive experience of fitness with
energizing music and theatrical lighting systems for those looking to spice things up. A wide
variety of trainers will guide you through a workout as you ride a stationary bike. The pace and
speed of the workout will fluctuate throughout, with some sections requiring fast speed and
others slow, standing pedaling.
TRX strength also referred to as Total Body Resistance Exercise is a whole other
experience. It is a type of training that utilizes exercises you can do with just your body weight
while enhancing your strength, flexibility, and core stability. Rope work and dumbbell exercises
are essential components of this type of training. People can improve their strength and
endurance for daily activities through these exercises.
DigCycle has developed a small community within the Calabasas neighborhood, in
contrast to other fitness facilities creating a service differentiation. Their demanding workouts
have inspired customers to persevere and find motivation. They have an amazing studio and
top-notch trainers, according to many Yelp reviewers. A unique selling point for the business can
be created by highlighting their reasonable prices in comparison to other gyms in the
neighborhood. Due to the recent concerns about COVID-19, it is also beneficial to discuss their
clean and modern facilities with a ventilation system where the room is kept cold to keep germs
out.
In order to be a more successful company, Dig Cycle should allow instructors to
foster a positive workout environment. According to the Exercise trends of 2021 by Sara
Nettesheim “gyms must make their spaces more welcoming to all consumers , since consumers
are hungry for social interaction, giving the communities attached to in-person facilities an
elevated appeal” (Nettesheim 2021) So, they can add small details to make classes unique and
memorable . For instance, to make people feel included and to foster a close-knit community,
offer each customer a bottle of water before the class begins and ask for song suggestions. When
clients compliment the studio or the instructors on Yelp or other review sites, bonuses and gifts
can be given to the instructors (employees) to motivate them.
Pricing Strategy
Dig Cycle has already been using the pricing strategy, competition based pricing due to
its well known and main competitor, Soul Cycle. Dig Cycle already provides a service that has a
great value compared to its competitors Soul Cycle. Dig Cycle has provided a fair price of $25
for a single session for the customers choice of either a cycling OR TRX class. However, its
competitor only offers cycling for any package they offer. Besides TRX training and cycling
classes, Dig Cycle offers private training sessions along with different monthly session packages
that do not expire. Along with multiple different monthly session packages, Dig Cycle also offers
to its customers a discount if the individual is either an enrolled student and/or a teacher.
Dig Cycle should implement a referral program to its members, which can get the
member 10-20% off their next few sessions or 10-20% off the next month's membership fee. Dig
Cycle can convey this through their weekly newsletter that is sent via email, or through a
payment confirmation email that is billed to each member. Dig Cycle may also implement a
rewards system and/or a birthday incentive program for their customers, which may consist of
cycling a certain amount of miles or minutes per session. The birthday incentive includes a free
private training session with an instructor of choice or a session of the persons choosing. With its
growth back to its pre pandemic phase, Dig Cycle may be able to reimplement its Dig Duo
session, which can be 30 minutes each of cycling and TRX training, or 30 minutes each of TRX
Training and boxing.
Implementing different incentive/referral programs will motivate members to continue to
attend multiple classes, due to the members being able to attend classes with their referred friend
or family member. For many individuals, it is motivating to attend any workout regimen
knowing there is a person that will have the same experience that they would. Along with the
incentives of a person’s membership, they would also benefit from the experience with their
loved one.
In an oligopolistic market, a market that is dominated by a few sellers, Dig Cycle may be
able to take advantage of the circumstances. Since there are a few main competitors, Dig Cycle is
able to implement new services to compete with its competitors which add to the value of the
session. Another pricing strategy that Dig Cycle may implement/have already implemented are
price bundles. Dig Cycle has already created bundles, for example the Dig Duo, which was
available pre pandemic. There may also be other bundles, for example a purchased set of 10
sessions per month can be half cycling and half TRX training or can be up to the members
choice. Due to the Dig’s well know competitor Soul Cycle, Dig Cycle has already implemented
the reference pricing strategy. Dig Cycle has already provided fair prices to its competitor, along
with the option that the sessions do not expire.
Place/Distribution Strategy
Understanding your target market is one of the most important aspects of your business.
You must use the proper distribution strategy to recruit the target audience. Direct distribution
will be the most profitable because they will control their finances and market because the DIG
Cycle is a small business. The company can control their costs by not having paying distributors
or third parties for their products and advertising. The marketing style would help target the
audience as well as potential buyers who may be interested. While direct marketing is a great
strategy for the small business you would also need other factors to entice more customers.
Direct marketing and digital marketing are both expanding methods of reaching out to
customers. Advertisements can be placed on popular social media apps using digital direct
marketing. Digital direct marketing are forms of communication to a target audience by using
social media. Advertisements for Dig Cycle can be targeted on popular social media sites as well
as more personal media like email.They can also place ads on popular social media sites such as
Google. The advertisements will inform customers about the fitness center and its products, as
well as attract new customers and inform them about Dig Cycle. Ads can be used to inform and
market new additions to their business if added as well. Users can easily buy and search for
products and services on social media, making them more accessible. Because so many people
use social media nowadays, targeting social media advertisements is critical. It is used in people's
day-to-day life and many ads run and rely on social media. A Forbes article written by Joseph
Lustberg shows an example of how many people truly are active users of media.
“As of January 2022, there are approximately 270 million active social media users in
the U.S.” (Lustberg, 2022). This means that when ads are placed on social media, they can
reach a wide range of people and have an impact on the business's profitability. As the majority
of the younger generation becomes more involved in social media, digital marketing will become
increasingly important for future businesses. While attracting customers, the advertisements
should consider the benefits they offer. The advertisements should highlight what distinguishes
them from other cycling businesses while attracting new customers' interest. Dig Cycle's price
point is lower compared to other cycling businesses which gives more accessibility to those who
would like to try cycling. Highlighting these aspects and other key features they provide can
entice returning customers and new ones. The ads will serve as a portal for customers to learn
more about the company. DIG Cycle will gain more customers by aligning their position and
information for their advertisements.
​Promotion
DIG Cycle must use advertising to create customer value. They should consider four
important decisions: setting advertising objectives, setting the advertising budget, developing
advertising strategy, and evaluating advertising effectiveness. Their advertising objectives are
persuasive advertising to attract new customers and reminder advertising to encourage customers
that left during the Covid-19 crisis to return. It’s important to set an advertising budget. 2-5% of
DIG Cycle’s sales revenue should be spent on advertising. In addition, the advertising strategy
should consist of DIG Cycle’s motto, “Dig the Freedom. Dig the Results. Dig the Difference”
which is the advertising message and can be presented through the execution style because DIG
Cycle’s services can fit in a healthy lifestyle and the media types that should be used are online
advertisements and direct mail. Ads on Facebook, Instagram, and Google can target all kinds of
potential customers. The ads should include the motto, their website for more information along
with a picture of a class working out. In the report, “Digital Advertising” by Mintel, it is stated
that, “Social media ads are by far the most effective, at 20%. Social media ads are of course more
commonly seen by younger people who are more open to advertising in general and are in their
peak years of consumption” (Mintel, 2022). In other words, social media ads can target young
customers which is the group that DIG Cycle has failed to target. Furthermore, it is necessary to
remind old customers that left during the Covid-19 crisis about DIG Cycle’s services through
direct mail. Since most of them are in their 30s to 50s, they should use mass mailing by using the
Postal Service’s mailing feature. They should include the same information as the online ads
along with discounts, deals, challenges, and advertising specialities that are available to
purchase. The message that is being conveyed through these advertising is motivation. These
advertisements will portray service differentiation through authenticity and accessibility. Lastly,
DIG Cycle should evaluate their advertisement effectiveness by analyzing what media types
were effective and the sales and profit impact that they had in the business.
Moreover, sales promotions are appropriate for this business to introduce potential
customers and encourage the old ones to return. DIG Cycle should offer promotions at their
physical location to convey attractiveness. Suggested promotions are:
● Bringing a guest for free for a period of a month.
●
Offer a one on one free class with a personal trainer to customers that sign up for
a 3 month membership.
● If people win a losing weight challenge, they should be rewarded with a 25%
discount for their next month membership.
● Those that attend for 6 months, should get a free T-shirt/ other advertising
speciality.
● Sell advertising specialties such as T-shirts and other apparel, calendars, key
rings, tote bags, and cups and also use them as prizes for challenges.
The message conveyed by these promotions will be encouragement. People will be encouraged
to give DIG Cycle an opportunity as they can bring a guest with them and they can enjoy a free
class with a trainer, receive coupons and prizes. Service differentiation will be conveyed through
convenience and excellent personal service.
Finally, digital and social media marketing are essential to target customers of all ages.
Besides social media ads mentioned above, emails are another opportunity as “Encouraging
members of this segment to register after making purchases with the promise of special discounts
could be a valuable strategy” (Mintel, 2022). It is evident that emails can attract customers.
Emails should be sent to old and existing customers about current challenges, deals, discounts,
and advertising specialties. In addition, more content should be added to their social media
accounts such as Facebook, and Instagram. Their current content is good but more videos
featuring more clients should be posted. For example, they should record a class while
performing challenging workouts. However, people from all age groups should be included in
order to target a larger audience. This will catch viewer’s attention and make them want to find
out more about DIG Cycle. It is stated that, “Social media is playing an increasingly important
role in consumers’ lives, making it important to understand social media to understand digital
advertising drivers. While Facebook remains the most popular social media platform, with 61%
using it daily, YouTube, Instagram, TikTok and Snapchat have seen more increases in usage over
the past several years'' (Mintel, 2022). DIG Cycle must invest in social media because it is the
most effective way to attract customers. The message conveyed will be confidence because of
how many people choose to be part of DIG Cycle and are happy with their services. This content
will convey service differentiation by emphasizing diversity.
References
Chen, G. (2022, May). Smaller Classes: Pros and Cons. Public School Review.
https://www.publicschoolreview.com/blog/smaller-class-sizes-pros-and-cons
Lustberg, J. (2022, September 16). Council post: Why small businesses should focus on social
media marketing. Forbes.
https://www.forbes.com/sites/forbesfinancecouncil/2022/09/15/why-small-businesses-should-foc
us-on-social-media-marketing/amp/
Nettesheim, Sara. (2021). Exercise Trends US. Mintel.
https://reports-mintel-com.libproxy.csun.edu/display/1044791/#
O'Donnell, Finna. (2020). Digital Advertising US. Mintel.
https://reports.mintel.com/display/1100997/#
Wuest, F. (2022, June). 90% of People Quit After 3 Months of Hitting the Gym, Here’s How to
Be the Exception. Life Hack.
https://www.lifehack.org/649556/90-of-people-quit-after-3-months-of-hitting-the-gym-heres-ho
w-to-be-the-exception
https://www.point2homes.com/US/Neighborhood/CA/Calabasas-Demographics.html