We believe that traditional approaches to the current health care crisis are misdirected. These traditional efforts are what we call reactive–that is, they wait until after the worker has been stricken with illness or injury, and then pay for the necessary reattempts. Our approach, which emphasizes prevention and good health promotion, is much more proactive. By helping employees change their behavior patterns and choose more healthy lifestyles, BOUNCE will lower companies’ health care expenditures, while raising worker productivity.
Health care expenditures will decrease due to reduced medical insurance premiums, reduced absenteeism, reduced turnover rates, reduced worker’s compensation claims, reduced tardiness, shorter hospital stays, etc. The state of America’s health care crisis, coupled with current demographic changes, threaten to not only exacerbate the crisis, but further rode worker productivity as well. These environmental factors coupled with the local competitive situation signal a favorable opportunity in this market. We feel the time is right for Bounce Fitness.
Situation Analysis Bounce Fitness is entering their second year of business. The business model has been well received and marketing is especially important to maintain growth and market penetration. In addition to offering fitness facilities for Seattle corporations, Bounce Fitness’ main activity is the creation and implementation of wellness programs. The basic market need is the reduction of Bounce costs and the increase n employee efficiency that can be achieved through long-term wellness programs.
Market Summary Bounce Fitness possesses good information about the market and knows a great deal be leveraged to better understand who is served, their specific needs, and how Bounce Fitness can better communicate with them. Market Demographics The profile for Bounce Fitness’ customer consists of the following geographic, demographic, and behavior factors: Geographies The immediate geographic target is the city of Seattle. A 35 mile radius is in need of the services. The total targeted population is 15,800 employees. Demographic 51%:49% male: female.
The individual income range is 67% of the customers are single, 33% are married. For the manufacturing customers, 43% have some undergraduate course work. For the Bounce customers, 83% have some undergraduate coursework, 16% have undertaken graduate coursework. Behavior Factors Recognize the need to have physical activity in their lives. Have unbounded some sort of exercise program in their daily/ weekly routine for the last several years. Are willing to utilize fringe benefits that are offered by their employer as part of their compensation package. Market Needs
Bounce Fitness is providing their customers with a health care cost management program for employees that will increase employee productivity and decrease overall business costs. Bounce Fitness seeks to fulfill the following benefits that are important to their customers: Customization- BOUNCE will offer a totally customized solution for each company as well as each employee within the company. Convenience- Customers will not use the service if it is not convenient. BOUNCE recognizes this and strives to make their services as convenient as possible for the targeted customer groups.
Results-orientated strategy- BOUNCE will need to improve a company’s bottom line in order to attract and maintain customers. While BOUNCE will strive to address all of the their customer’s needs, the reality is that they must indeed provide significant value for the companies themselves in order to grow their market share. Market Trends There have been two significant market trends in the last five years. Increased usage of fitness facilities on behalf of individuals. Exercising and “working out” has become a more mainstream activity in American’s lives over the last decade.
Five to ten years ago there were widespread reports about an impeding health crisis, obesity. Americans, relative to their Western European counterparts have higher incidents of obesity. To a large degree, this is correlated to American’s unhealthy diet of fast food, and generally poor food choices, especially fried foods. The poor diet is not the only factor however. Americans were fairly inactive, with only 19% of people age 20-40 exercising three times a week. Luckily, that has changed over the last 10 years. The percentage of active people has increased to 43% as of 2002.
More and more people are going to the gym after work or are incorporating some sort of outdoor activity into their daily routine. The incorporation of fitness memberships within the “basket of benefits,” a part of the total compensation package. As fitness memberships have become a more common element in the working American’s lives, for employees. This has occurred for at least two reasons. One reason is a flexible method to compensate employees. The second reason is that is has a positive effect on a company’s bottom line.
Study after study supports the contention that a physically fit employee is happier, healthier, and more productive. For no other reason, offering fitness club memberships to employees is a smart cost-benefit decision. SOOT Analysts The following SOOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing BOUNCE. Strengths Results-orientated approach to attracting and maintaining customers. A well- researched, detailed health wellness program that is long-term in focus.
Intensively trained staff. Weaknesses High costs associated with customized, personal service. The inability to work on a high volume business model. The costs of attracting a large Bounce client. Opportunities Participation within a growing market. The large increase in clients that follows with the acceptance of BOUNCE’s program y a single company. The ability to leverage future quantitative analysis that supports the contention that long-term wellness programs have a significant, positive impact on a company’s bottom line.
Threats Lack of immunity to an economic downturn. Potential competition from larger, well established competitors. A change in society where the individual begins to take far more responsibility for his/her health maintenance. Competition The three main competitors for Bounce Fitness are: YMCA-market is lower-income families and/or students who want accessibility and affordability of fitness facilities. Gold’s Gym-services are targeted toward those motivated and dedicated individuals who workout five to seven times per week.
Better Bodies-aimed at casual fitness-seekers who do not workout with a high intensity but still desire the status and recognition. Service Offering Bounce Fitness provides wellness strategies/programs to businesses in the downtown Seattle area. A wellness strategy is a long-term effort, combining both health-promotion and exercise-related activities designed to facilitate positive lifestyle changes in members off company’s work force. Bounce Fitness will work tit a company’s senior management to help it develop a mission statement for its wellness program.
The client company’s employees will undergo a health-risk analysis, following which each employee will be given the opportunity to meet with a health professional to design a personalized health program. Finally, Bounce Fitness will furnish employee progress reports to senior management with which to carry out the incentive program and generally monitor changes in the behavior of its work force. Keys to Success Marketing services to companies and individuals. Recruitment of experienced managerial talent.
Dedication and hard work of the founders. Raising productivity. Lowering overall costs. Critical Issues Bounce Fitness faces several critical issues: Sign up a sufficient number of medium-sized companies. It is more cost effective for them to service a couple medium-sized companies than many small companies. Continue to drive down the costs associated with serving a customer. Marketing Strategy Bounce Fitness will begin by targeting small- to medium-sized businesses in the downtown Seattle area.
The first task is to convince senior executives of the benefits and needs of wellness programs. This will be accomplished by aggressively pursuing interaction and relationships with business professionals who would profit from using this service. Once a strong image is established, Bounce Fitness will use similar strategies to market its services to larger corporations in Seattle and other areas of expansion. Mission Bounce Fitness is a health service that helps businesses and individual workers attain one of the greatest gifts of all–that of good health.
Personal gains, such as improved self-esteem and self-motivation, combined with measurable benefits will create tremendous advantages for both the employer and the employee. Marketing Objectives 1. Generate a 10% yearly increase in sales. 2. Increase market penetration every quarter. 3. Continue to cultivate BOUNCE’s image as the premier long-term wellness program provider. Financial Objectives 1. Decrease customer acquisition costs by 4% every two quarters. 2. Lower the cost of service delivery by 1% a quarter. 3. Holding spending, as a percentage of sales, at a steady rate.
Target Markets The market for Bounce fitness is not particularly segmented, as potential customers include all downtown businesses that offer their employees some type of medical unifies, are experiencing escalating health care costs, and wish to more effectively manage those costs. Bounce Fitness, however, segments its services for individual organizations. Bounce Fitness works with senior management to develop mission statements and provide incentive plans, and with employees to design personalized health and fitness programs.
The targeted customers are Bounce employees and manufacturing employees. Positioning Bounce Fitness will position them selves as the most effective wellness strategy and program developer. This positioning will be supported by statistics indicating an increase in worker productivity and a decrease in business operation expenses from the implementation of Bounce wellness programs. Strategy Pyramids The single objective is to position BOUNCE as the most proficient wellness program provider in the Seattle area.
The marketing strategy will seek to develop customer toward building customer loyalty. The message that BOUNCE seeks to announce is that they can have a dramatic effect on the bottom line. This message will be communicate d through various methods. The first method will be the production and disbursement of printed materials. The printed materials will describe all of the revise offered and will give prospective customers some insight into BOUNCE’s past successes. BOUNCE will also rely on presentations to company’s HER departments.
These presentations will allow BOUNCE to personally address any concerns or “pains” that companies have and indicate how a wellness program/ strategy can help service their needs. BOUNCE will also rely on advertisements in the Business Journal of Seattle for increasing visibility and interest in BOUNCE’s services among Seattle- based companies. Lastly, Bounce Fitness will use a website as a source for disseminating information. Marketing Mix Bounce Fitness’ marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.
Pricing- Prices for using Bounce Fitness’ services are comparable to those of higher-end fitness centers. An employee choosing to utilize a Bounce Fitness center will pay a $100 monthly fee. For each employee enrolled in the general wellness program, regardless of whether or not they use the fitness facility, the employer will pay $1 50 annually. The prices reflect the quality of the equipment and service. Distribution- This will occur both at he company’s worksheet as well as at BOUNCE’s facilities.
Advertising and Promotion- Printed material, presentations, advertising in industry specific Journals and a comprehensive website will be used. Customer Service- Bounce Fitness will operate on the principle that it is imperative to achieve total customer satisfaction if the business is going to succeed. Marketing Research Two types of market research were used when BOUNCE was collecting market research. The first type of research was focus groups. The focus groups were collections of seven to nine people who were asked a series of predetermined questions with the responses recorded and discussed among the group members.
In addition to the pre-established questions, there was a free-flow discussion format toward the end of the focus group that provided flexibility in allowing the participants to share information and insight with BOUNCE. Additionally, questionnaires were used to collect market information from perspective customers. The questionnaires were submitted too total of 100 HER professionals. The response rate was 43, higher than expected. The validity and usefulness of the questionnaire was ensured by utilizing a graduate statistics student to develop the questionnaire.