Page 13 - CIMA MCS Workbook August 2018 - Day 1 Tasks

GYMFIT FAMILIARISATION

However, the people that members are going to have to most personal interaction with are
fitness instructors but these individuals work as freelancers, have zero hours contracts, are paid
low hourly rates and are expected to boost their income by arranging additional coaching
sessions. Furthermore instructors are also expected to do basic maintenance and safety checks as
well as refilling water machines and vending machines. There is a risk that some fitness instructors
may feel undervalued and demotivated resulting in reduced quality, safety, maintenance and a
poorer customer experience. In extreme cases instructors may move gyms with the probably
result that some loyal members will move with them. Make sure you can discuss how to retain
and motivate fitness instructors, even considering whether they should be full time employees.
Sourcing strategy

GymFiT uses competitive tendering to reduce fit out costs on gyms. You consider the arguments
for and against switching to a national sole supplier strategy, such as economies of scale, national
standardisation, brand consistency, and so on.

In addition, GymFiT currently outsources maintenance, cleaning and security so you could revise
and apply the arguments surrounding outsourcing v in-house provision, in terms of cost, quality,
risk and flexibility. You should also revise the use of SLAs (service level agreements) to manage
external suppliers.

Marketing – brand management
The company’s brand is critical to its marketing strategy and customer retention. Given this, tasks
relating to managing the brand are likely to come up. Make sure you can discuss how to
strengthen and position the brand effectively and consider how you would respond if events
arose that could threaten the brand, such as quality problems (e.g. members have an accident
when the gym is unstaffed) or ethical issues (e.g. the use of zero hours contracts for fitness
instructors). With such tasks it is vital that you relate your comments to the specific circumstances
of GymFiT.
Marketing – pricing
Currently GymFiT managers can set their own prices, resulting in variations between towns and
cities and between normal members and students. This could lead to inconsistencies between
gyms (even in the same city) making performance appraisal challenging but also resulting in
inconsistencies. Make sure you can discuss pricing in detail, using the 4Cs (Costs, Customers,
Competitors and Corporate objectives) as a possible model.

P1
The environment
The eco-friendly nature of gym equipment is emphasised in the pre-seen and it is reasonable to
assume that younger members are becoming increasingly concerned about sustainability. Make
sure you revise both the E1 and P1 aspects of CSR and environmental accounting to discuss how
GymFiT could measure and improve its green footprint.
Quality
While offering low fees, the company emphasises the high quality of equipment used and wants
to improve the customer experience. Given this there could be an exam task that focusses on
assessing the costs of quality (P1) and discussing whether TQM (E1 and P1) should be adopted by
GymFiT.

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