Page 12 - CIMA MCS Workbook August 2018 - Day 2 Suggested Solution

CIMA NOVEMBER 2018 – OPERATIONAL CASE STUDY

Fixed term membership could also be an option some may go for, whereby they can save e.g. up
to 10% on their membership when they pay in advance. This would make budgeting easier for
both members and GymFit if some members were to pay in advance for access for 6, 9 or 12
months. They could cancel their fixed-term membership at any time, getting a refund of e.g. 50%
of the remaining credit on the account from the day they contact us.

Although the marketing team advise on pricing strategies, the ability of gym managers to set
membership fees locally, somewhat at their discretion, leads to an inconsistency that must be
addressed. Furthermore, if it is the case that regular discounts are given in order to meet
member targets (bonus targets are linked to gym performance), this could harm the profitability
of the company overall.

Place

Growth of the company is dependent on finding suitable sites for more gyms. Properties need to
be large enough to accommodate the fitness equipment and offer studio space for exercise
classes, over a maximum of two floors. Properties need to be either located within a dense
population catchment area to ensure sufficient potential local members or in highly visible
locations with easy car parking facilities or access to major transport hubs. As there is limited
need for on-site presence, perhaps we can also explore the suitability of locations outside
Celtland.

Other than changing/ adding to the number of locations of our gyms, there is little GymFit can do
to vary ‘place’ in terms of where customers access our services. However, under ‘place’ we can
also consider the channels through which members buy our services. At the moment, members
can sign up and pay for classes online via our website but there is scope to develop a mobile app
to enable e.g. more convenient booking/ payment for classes.

Promotion

GymFit has no in-gym sales or marketing personnel. Whilst brand awareness is high, due to
regular (both internal and external) marketing campaigns directed at both existing members and
new members, there is scope for more in this respect.

As it stands, the website provides news of member offers to try and ensure member retention but
GymFit could also use direct marketing via email. Also, the website might allow consumers to
offer reviews of GymFit’s services that will hopefully allow members, both existing and current, to
be more confident that what is being claimed by the marketing material is true. There are various
avenues to explore such as advertising campaigns in magazines that sell to our target market, the
production of leaflets/ brochures as well as the use of social media. The recent campaign
featuring leading a leading Olympian has demonstrated just how effective marketing campaigns
can be.

68 KAPLAN PUBLISHING