Marketing Plan by John, Jennifer, and Shawna
New Era Health & Fitness
Our Mission
New Era Health & Fitness will be recognized as an all-encompassing
health club dedicated primarily to the health, happiness, and well
being of our senior members, both physically and emotionally while
maintaining an atmosphere that benefits all our customers. New Era
will strive to provide only the best, most affordable and premier
quality service that health minded people in their senior years should
expect to receive. Our goal is to grow our membership in conjunction
with the increase of our population’s maturity, while providing a fair
and equitable return to our stockholders and employees. It is our
hope that the people who have given so much of their lives will come
to view New Era as a trusted health and fitness partner dedicated to
fulfilling their retirement needs.
New Era Health & Fitness
Strengths
-New idea/business- gives new customer appeal
-Nature of business
-Fits customer (aging population) need
-New promotions available
-New facility
-New equipment/specialized programs
-Competitive price
-Recumbent cycles are used at senior fitness clubs
which a more back friendly for older Americans
–Hand weights rather than more strenuous barbells are
also senior friendly
New Era Health & Fitness
Weaknesses
-Start up Capital
-New business-awareness issues
-Product Life Cycle- entering a mature market, may lose
money in beginning, competition is intense
-Market Exposure is weak
New Era Health & Fitness
External Opportunities
-Senior population is increasing-Baby Boomers
retiring
-Timing of Business-The need is great
-The environment at conventional health clubs is
intimidating to seniors because programs and
services are geared towards younger adults
rather than seniors
-Seniors benefit from exercising to prevent
heart disease, stroke, cancer, diabetes
New Era Health & Fitness
External Opportunities cont.
-Centers provide entertainment and relationship building
-Prevention of Alzheimer’s 60% less chance
-Seniors can maintain their independence with proper
fitness
-Senior fitness centers use low impact equipment and slow,
controlled strength training
-Allows seniors to save millions in health costs
New Era Health & Fitness
Market size
New Era is geared toward the baby boomer generation and
older Montanans. Billings Montana and the surrounding
area will be the market for our first health club. Although
other Montana cities are experiencing a larger increase in
population it is believed that Billings holds the most
opportunity because it has population base of
approximately 150,000 and is growing at a steady rate
while maintaining a median household income above the
other cities. Other faster growing cities like Bozeman and
Missoula may be prime targets for future expansion.
New Era Health & Fitness
Market Determination
People Quick Facts
Billings Bozeman Butte Great Falls Helena Missoula
Population 2005
% change 2000-05
% change 1990-00
Median Income
Persons over 18
Persons over 65
Females %
95,220
3.9
10.3
$35147
72367
14092
51.9
30,753 32519 56155
11.3
-4.1
-1.0
21.1
1.9
2.4
$32156 $ 30516 $32436
24264 24811 42172
4920
7707
8116
47.4
50.6
51.5
Source U.S. Census Bureau: State and County QuickFacts
New Era Health & Fitness
26718
60752
3.3
6.1
2.8
17.8
$34416 $ 30366
20733
48759
3713
6315
52.4
50.3
Billings
95,220 (Billings pop.) x 75 (% over 18) = 71415 (people over 18)
71415 x 15.43(% joining health clubs) = 11019 members
11019 x 5% (market share) = 550 New Era members
Surrounding Area
50,000(area pop.) x 75 (% over 18) = 37500 (people over 18)
37,500 x 15.43 (%joining health clubs) = 5786 members
5786 x 5% (market share) = 290 New Era Members
Total Projected Membership
550 + 290 = 840 New Era Members from Billings and vicinity
New Era Health & Fitness
Threats
Qualified Employees
-There may be difficulties in hiring an
adequate number of qualified trainers who can
work with senior issues.
-Billings College Nursing programs will help
alleviate this problem.
-Billings College Sports Medicine and Therapy
Programs could also provide employees.
New Era Health & Fitness
Competitors
Bally Total Fitness
Billings Athletic Club
Curves for Women (2 Billings & Laurel)
Curves
Club Rocky
24 Hour Fitness
Powerhouse Gym
Circuit the Women In Fitness (2 Billings & Laurel)
Yellowstone Racquet & Health
La Tone Fitness
Locomotion Fitness Center
CHR Fitness Center
YMCA
Evolution LLC
Plaza Fitness
New Era Market Share 5% (1/20th)
New Era Health & Fitness
Seeking Competitive Advantage
-Similar health club chains only offer a circuit training 30minute workout center.
-New Era will also focus on the benefits of low impact
water classes as well as weights, machines, and aerobic
classes designed to be low impact and easy on joints.
-New Era will also take it a step further offering on-site
health evaluations to ensure that customers are in good
health.
--New Era will separate itself from other clubs by
offering a better value to its customers through service
and imaginative programs.
New Era Health & Fitness
Price Competition
Member Types
Regular
Corporate
Family (3)
Couple
Junior
Senior
Average Enrollment Fee
Median Values
Enrollment
150.00
97.50
66.33
100.00
99.00
100.00
102.14
Monthly Dues
55.00
48.00
34.00
44.50
39.00
44.62
44.19 (Average Dues)
$102/12months = $8.50 + $44.19 = Average Monthly Fee $52.69
$52.69 X 12 months x 840 members = $531,115 Annual Gross Revenue
at current projected membership
New Era Health & Fitness
Product Life Cycle
Members joining the new senior type fitness club will arrive at a
slow rate at introduction until awareness materializes. Promotion
costs will need to be high at this time to promote awareness. Since
the industry is already in a mature market stage competition is
intense. The exponential increase in the number of people reaching
senior status and the increased awareness of the benefits of
fitness on health issues related to seniors as well the desire to
attend a unique club that caters to seniors should cause a
substantial market growth after a few months. This growth should
increase substantially over the next 10-25 years due mainly to the
aging of the population. Market saturation and an eventual decline
in the number of aged clients will materialize. Eventually
membership will decline to a level that can be maintained by the
relative age of the population and combined competitions. I do not
see the product life cycle as declining completely because we will
always have an aging population with needs for health benefits
associated with fitness.
New Era Health & Fitness
Montana Population 18 and over
Montana: Population Distribution by Age, States (2004-2005), U.S. 2005
Adults 18-65
Adults 65+
558,790
129,500
61%
14%
75%
558,790+129,500 = 688290 Population 18-75+
61+14 = 75 % of Population 18-75+ years of age
Sources: Urban Institute and Kaiser Commission
New Era Health & Fitness
Percentage of People Who Join Health Clubs – 15.43
New Era Health & Fitness
Population Projection
Montana: Change in Total Population and Population 65 and Older, 2000 to 2030
State
Montana
Change in
total
population
Number
142,703
Source: U.S. Census Bureau, April 21, 2005
New Era Health & Fitness
Change in
total
population
Percent
15.8%
Change in
Age 65
and older
Number
148,609
Change
in Age
65 and
older
Percent
122.9%
41.3 -17.3 = 24/18 (years) = 1.33% growth/year in U.S.
New Era Health & Fitness
Future Projected Membership
840 x 15.8% = 973 members by 2030 due to
population growth
1.33% membership growth X 30 years = 39.9 %
growth X 973 = 1361 Members by 2030
Total projected growth = 1361 members by 2030
or 62% growth in 30 years = 2.07 % a year
Projected annual membership growth 2.07%
New Era Health & Fitness
Growth of Membership due to aging population
145220 Billings area population x 14% = 20330(65+) x
122.9% = 25000 new 65+ years of age
If only 10% joined Health Clubs it would be 2500 new
members or 125(Additional Market Share)
Total projected market share could be 2155 members by
2030 or 7.68 % increase
New Era Health & Fitness
Source: American Business Information, Inc
New Era Health & Fitness
Growth of Competition (Health Clubs)
29069 clubs in 2005 minus 11,804 clubs in
1987=17265
17265/18years = 168% in 30 years or 5.6 % / year
or about 1 new Health Club in Billings every year
based on national average.
Growth in membership due to ageing population should
remain at 2.5% to 3% even arrival of new competition.
New Era Health & Fitness
Target Audience
Dimensions
Age
Although all ages benefit from the use of health clubs New Era will
establish a marketing mix that will attract customers 18 years of age
and older with emphasis on the 40+ age range.
Ability
New Era will work to meet the needs of all ability ranges from those
with disabilities (low impact needs) to those who want most extreme
and rigorous conditioning programs.
Education-Occupation-Social class
Persons of all education levels, social class, and occupations need to
be encouraged to use this health club so that we are able to obtain a
substantial market in a sparsely populated region.
New Era Health & Fitness
Dimensions Cont’d.
Region
New Era will work to attract mainly local residents and
those in the immediate outlying areas but hopes to
attract tourists, visitors, and groups that come to town
on occasion by offering group, corporate, and drop in
rates that are competitive.
Income
It is important that programs are designed to meet all
income levels and those people on strict budgets so that
more people have access to heath and fitness programs.
New Era Health & Fitness
Dimensions Cont’d
Customer type
-Both social and privacy oriented customers
- Both genders and all ethnic groups (esp. Native Americans)
-Combined target approach so as to maintain substantial
market numbers as need for health and fitness is
homogenous
-Adequate equipment and trained professionals to meet a
variety of needs
-Emphasis on attracting corporations, business groups, local
clubs (ex. Red Hat Society, Pheasants Forever), government
agencies and tribal affiliations
New Era Health & Fitness
Dimensions Cont’d.
Location
New Era will be located for ease of access and
awareness close to the interstate highway in
Billings. We will provide adequate parking, lighting,
and security to meet our customer’s needs.
New Era Health & Fitness
Decisions
Reasons for Not Joining:
-Too Crowded
-Don’t know how to use equipment
-People think they are the only ones not in shape
-Rude behavior by other members
-Afraid to ask questions
New Era Health & Fitness
Decisions Cont’d.
Reasons to Join:
Psychological
-See a need for health and fitness
-Preparation for alternatives like hunting, sports,
walking and exploring
Purchase Situation
-Health club is in close proximity to home or work.
-Awareness created through advertising in Local
Media, Signage, and Promotions
New Era Health & Fitness
Decisions Cont’d.
-New Era is perceived to avoid high pressure sales and
gives a fair representation of facilities, staff and
equipment
-Need for fitness to accommodate ageing process
Social Influence
-Reference Group, Peers and similar age groups are enjoying New
Era
New Era Health & Fitness
Product
Brand Positioning
New Era Health and Fitness must differentiate itself from
the other clubs in the area when it comes to meeting the
needs of the maturing or graying community.
Methods:
-Offer lower impact workouts
-Equipment needs for older clients
-Trainers that are qualified in older clients needs
-Private or less conspicuous workouts
New Era Health & Fitness
Product (Cont)
Economy of Scale
-New Era needs enough clients to be profitable,
conventional as well as ageing clients should be targeted
Life Cycle Management
-New Era needs to stay current with equipment technology,
medical discovery and modern training methods to
compete in mature or declining market
-Maintain quality service, be innovative
-Conduct surveys to judge customer satisfaction
New Era Health & Fitness
Perceptual map
High Cost
Powerhouse Gym
Bally Total Fitness
Curves
Senior Members
Low Satisfaction
New Era
Yellowstone Racquet & Health
Billings Athletic Club
CHR Fitness Center
YMCA
24 Hour Fitness
Low Cost
New Era Health & Fitness
Senior Members
High Satisfaction
Price
Profit Oriented
-Target Return
-Break even with investment capital in the first two years
-Maximize Profits
-By managing New Era ourselves we will save payroll costs,
cater to our customers needs in order to retain them thus
maximizing profits
New Era Health & Fitness
Price (Cont.)
Price Flexibility
-Flexible Price Policy
-Because New Era caters to those 40 years old and older
we will offer discount memberships to those in that age
group.
-Discounts to couples
-Discounts to groups and organizations
-Discounts to entice patronage in slower season
-Sale prices to get attention or attract new clients
New Era Health & Fitness
-Flexible Price Levels over Product Life Cycle
Penetration Pricing Policy
-New Era is the first of its kind in Billings, so there may be
copy cat companies that emerge
-The elite market that would pay an initial higher price in
Billings is low
Reference Pricing
Health club dues are less expensive than doctor’s bills
New Era Health & Fitness
Price (cont.)
Discounts and Allowances
Set the prices as follows:
18-39
$45/month
$540/year
Initiation Fee
$100
40+
$35/month
$420/year
Initiation Fee
$75
40+ couple
$55/month
$660/year
Initiation Fee
$100
5% discount when paid in full for the year
Competitions Average Monthly Fee $52.69
New Era Health & Fitness
Place
-Direct to start
-No middleman or franchise
-Suited the customers needs
-New Era is self-managed for better quality control
-New Era=Direct sales of memberships=final customer
Location
Clubs will be strategically placed for ease of access, near
population centers or in high traffic areas with client’s
convenience in mind
New Era Health & Fitness
Place (Cont.)
Customer Service
-Our management team will do the best it can to ensure
that each and every customer is receiving the highest level
of customer service.
-During the first few months of business we will do
periodic customer service surveys to see what we can do to
improve the customers work out experience
-Remain aware that too much service can price the
product out of the consumers reach or above the
competition
New Era Health & Fitness
Promotion
-Offer right product at right place at the right time
-Increasing population of an ageing generation needs to
meet their of health and fitness needs in the growing
Billings area at an affordable price.
Advertising
-Local media-newspaper, radio, television
-use brochures to contact senior centers, sports outlets
-provide coupons or discounts in retirement magazines and
newspapers that are distributed locally
-use Yellowpages and daily paper for consistent
advertising
New Era Health & Fitness
Promotion (Cont.)
-Persuade and remind by having a grand opening to attract
attention, give tours, and trial memberships
-Attract attention with advertising showing healthy,
graying individuals enjoying life
Complementary Products
-Offer free apparel (sweatshirts, t-shirts, etc.) with New
Era advertising on it with memberships
-Discounts to present members who sign up new members
-Realize that during market maturity clients must be
continually reminded that New Era is a better health and
fitness club
New Era Health & Fitness
Promotion (Cont)
Means end chain
Great workout climate
-New Era is professionally managed, has qualified trainers
and client’s privacy is prioritized
-value pricing & client satisfaction
Physical well being
-Health benefits
-Savings in medical costs
-Improved lifestyle
New Era Health & Fitness
Promotion (Cont)
Means End Chain (cont.)
Psychological Factors
-Less Stress
-Happier lives
-Better relationships
Value
-Makes life more meaningful
New Era Health & Fitness
Research Sources
American Business Information, Inc
http://cms.ihrsa.org/IHRSA/viewPage.cfm?pageId=804
American Council on Exercise
http://sportsmedicine.about.com/od/tipsandtricks/a/crowdedgyms.htm
America Online, Copyright 2006
http://yellowpages.aol.com/fitness-and-weight-loss/health-clubs-and-gyms/mt/billings/
Consumer Protection Division, Revised November 10, 2004
http://www.atg.wa.gov/consumer/health.shtml
Diabetic Lifestyle, copyright 1997-2000
http://www.diabetic-lifestyle.com/articles/feb04_burni_1.htm
IHRSA / American Sports Data Health Club Trend Report 2005
http://cms.ihrsa.org/IHRSA/viewPage.cfm?pageId=626
IHRSA/American Sports Data Health Club Trend Report 1987-2005
http://209.117.96.104/trendreport/10_2003.pdf
New Era Health & Fitness
Research Sources Cont’d.
Local.Com Corporation, 2006
http://www.local.com/results.aspx?keyword=category%3ahealth+clubs&location=Billings%2c+MT&cid=211&utm_
source=yahoo&utm_medium=pi&utm_term=health+clubs&GID=Fitness_and_Beauty
Milbank Memorial Fund, National Association of State Budget Officers, and The Reforming States Group. 20022003 State Health Care Expenditure Report, Table 14, Milbank Memorial Fund, Copyright 2005.
http://www.milbank.org/reports/05NASBO/nasbotable14.pdf
National Health Expenditure Data, Health Expenditures by State, Centers for Medicare and Medicaid Services,
Office of the Actuary, National Health Statistics Group, released June 2, 2006; available at
http://www.cms.hhs.gov/NationalHealthExpendData/05_NationalHealthAccountsStateHealthAccounts.asp#TopOf
Page.
Population Division, U.S. Census Bureau, December 22, 2005
http://ceic.commerce.state.mt.us/Demog/estimate/pop/State/allstates_est_2005.htm
New Era Health & Fitness
Resources Cont’d.
The Henry J. Kaiser Family Foundation
http://www.statehealthfacts.org/cgibin/healthfacts.cgi?action=profile&area=Montana&category=Health+Costs+%26+Budgets&subcategory=Health+Care
+Expenditures&topic=Avg%2e+Annual+%25+Growth%2c+FY1980%2d2004
U.S. Census Bureau: State and County QuickFacts. Data derived from Population Estimates, 2000 Census of
Population and Housing, 1990 Census of Population and Housing, Small Area Income and Poverty Estimates, County
Business Patterns, 1997 Economic Census, Minority- and Women-Owned Business, Building Permits, Consolidated
Federal Funds Report, 1997 Census of Governments
Last Revised: Thursday, 08-Jun-2006 09:33:17 EDT
http://quickfacts.census.gov/cgi-bin/qfd/demolink?30
U.S. Census Bureau, Population Division, Interim State Population Projections,
http://www.census.gov/population/www/projections/projectionsagesex.html
New Era Health & Fitness
Resources Cont’d.
The Henry J. Kaiser Family Foundation
http://www.statehealthfacts.org/cgibin/healthfacts.cgi?action=profile&area=Montana&category=Health+Costs+%26+Budgets&subcategory=H
ealth+Care+Expenditures&topic=Avg%2e+Annual+%25+Growth%2c+FY1980%2d2004
U.S. Census Bureau: State and County QuickFacts. Data derived from Population Estimates, 2000
Census of Population and Housing, 1990 Census of Population and Housing, Small Area Income and
Poverty Estimates, County Business Patterns, 1997 Economic Census, Minority- and Women-Owned
Business, Building Permits, Consolidated Federal Funds Report, 1997 Census of Governments
Last Revised: Thursday, 08-Jun-2006 09:33:17 EDT
http://quickfacts.census.gov/cgi-bin/qfd/demolink?30
U.S. Census Bureau, Population Division, Interim State Population Projections,
http://www.census.gov/population/www/projections/projectionsagesex.html
New Era Health & Fitness