Page 71 - OSEP Management Module 5_Neat

Pricing
To ensure that the pricing strategies for all services offered by the Hervey Bay
Health, Fitness and Testing Centre were appropriate, a range of factors were
considered, which included:

Break-even analysis
Staff salaries, equipment costs, general maintenance, student numbers in diploma
and certificate courses, corporate members and staff development were all taken
into account in this analysis. The Hervey Bay Health, Fitness and Testing Centre is
fortunate at this stage, in that all commercial activities supplement the state-based
budget that is allocated to the department.

Market research demonstrated that current and past members of the centre
and the general community are not averaging high incomes and this was also
considered.

The price charged by the centre’s direct competitors was also researched. It was
discovered that both Otto’s Fitness World and Newhaven Fitness Centre were
quite expensive considering the marketplace. The operational costs for these
commercial centres are far greater than those of the Hervey Bay Health, Fitness
and Testing Centre. The Hervey Bay Police–Citizens Youth Centre is comparable
with the prices of the Hervey Bay Health, Fitness and Testing Centre, although the
services offered do not compare in quality.

Profit predictions were also studied which, in combination with the above factors,
allowed the staff of the centre to develop prices for all services offered. These
prices are flexible, in that members can pay 1, 3, 6 and 12-month memberships.

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