Strategic brief

Strategic brief

Version 1.1
28 July 2019

Table of Contents
1 About LifeTime Fitness 1
1.1 Background to the Organisation 1
1.2 Mission, Vision and Values 1
1.3 Background to the Business 2
2 Organisational Goals and Objectives 3
2.1 Goals 3
2.2 General Objectives 3
2.3 Specific Marketing Objectives 3
3 Marketing Communication 4
3.1 Objectives 4
3.2 Message 4
4 Target Audience Characteristics 5
4.1 Demographic and Geographic Segmentation 5
4.2 Psychographic, Socio-Cultural and Behaviouristic Segmentation 6
4.3 Readiness Stage and User Status 7
5 Marketing Mix Strategy 8
6 Future Value Offers 9
7 Past Media Performance 10

1 About LifeTime Fitness
1.1 Background to the Organisation
LifeTime Fitness is a privately owned Sydney based Australian health club chain with 70 health clubs and 182,000 active members in Australia. LifeTime Fitness serves as one of the industry leaders in the sport and fitness segment providing multi-purpose fitness venues across the country providing state of the art health clubs to swimming pools, sport clubs, squash courts, and many other facilities.
LifeTime Fitness has its base of operations in Parramatta (Health Club and Head Office), Sydney and operates in each state:
State Total Health Clubs Total Members
NSW 38 98,800
QLD 10 26,000
VIC 9 23,400
SA 4 10,400
ACT 3 7,800
WA 3 7,800
TAS 2 5,200
NT 1 2,600
Grand Total 70 182,000
Each health club offers the following facilities and services:
• Swimming
­ 50 metre outdoor pool
­ 25 metre indoor pool
• Gym for weightlifting and cardio
• Gymnastics hall (martial arts, boxing and kendo)
• Recreation hall (squash, basketball, table tennis, badminton, and netball)
• Classes (Pilates, Yoga, BodyPump, Cycle, BodyAttack, Full Body Lift, and FatBurner).
1.2 Mission, Vision and Values
Our mission, in engagement with the community, is to provide innovative health clubs delivering cutting-edge fitness and lifestyle programs that will motivate people of all ages, backgrounds and abilities to lead active, healthy lives.
Our vision is to be regarded as a premier provider of quality fitness, gymnastics and wellness through innovative programs and services that result in measurable and transformational changes in the lives of those we serve.
We are passionate for promoting the quality of life for everyone on the basis of the following values and attitudes in all of our staff, members and the community:
Quality Accountability Energy

Mutual Respect Diversity Enthusiasm

Integrity Accountability Care

Honesty Responsibility Professionalism

1.3 Background to the Business
LifeTime Fitness is a privately owned Sydney based Australian health club chain with 70 health clubs and 182,000 active members in Australia. LifeTime Fitness serves as one of the industry leaders in the sport and fitness segment providing multi-purpose fitness venues across the country providing state of the art health clubs to swimming pools, sport clubs, squash courts, and many other facilities.
The health and wellbeing industry is a dynamic sector and plays a critical role in the Australian economy. The industry has grown substantially within the last decade, generating $2.2billion revenue on an annual basis (with 3.5% annual growth rate) through 3265 health clubs housing 32,875 employment opportunities across the country. The industry also plays a key role in improving the health and fitness of Australians.
An evaluation of the company’s internal strengths and weaknesses, external opportunities and threats, market trend analysis, and macroenvironment study established a groundwork to prepare this strategic analysis and marketing plan. The main motivation is to mine and develop new market opportunities targeted to specific customer niches.
For the present situation, the following key drivers shape the health and wellbeing industry:
 health consciousness
 real household discretionary income
 availability (time)
 accessibility (location, budget and operating hours)
 levels of obesity
 education
 household savings ratio.
Analysis on current market trends have yielded the following opportunities:
 Wearable Health and Fitness Devices and Apps
 Bootcamp Health and Fitness Holidays
 Group Training Programs
 Customised Daily Meal Delivery
 Health Bar
 Training and Employment
 Physio-Gym Culture
 Online Health Coaching.
The Parramattaoutlet (seven branches) located in the Sydney Central region has the highest potential to research and develop new market opportunities due to having the highest lead generation potential. Therefore, the Executive Management has decided to research and develop new market opportunities for the Parramatta branch.
The breakeven point for the Parramattaoutlet is 2739 members based on last year’s lead generated, 9129 members in total. Due to its healthy outlook, the Executive Management has allocated a total of $1,061,059 budget to research and implement new market opportunities, where the budget includes the costs for research and development, distribution, promotion, training, equipment, labour, and any other operational costs to develop and implement opportunities for new markets.


2 Organisational Goals and Objectives
2.1 Goals
The goal of LifeTime Fitness over the next few years will be:
 to support the differentiation and focus strategy
 to maintain premium pricing and differentiation of core products
 to introduce innovative fitness and lifestyle programs to include new markets
 to grow our own employees of the future
 to develop the retail part of the business
 to build a physio-gym culture.
2.2 General Objectives
 Achieve a minimum ROI of 20% in each investment area.
 Achieve a minimum gross margin percentage of 30%.
 Increase membership count by 10% in each health and fitness club every year within the next five years.
 Achieve a ratio of 2:1 of current assets to current liabilities.
 Achieve a ratio of 1:1 of owner’s equity to borrowed funds.
 Achieve 5% improvement in customer retention rates every year within the next five years.
 Enrich the brand in a national scale cultivating the organisational image as the premier health and wellness provider.
2.3 Specific Marketing Objectives
 Develop a minimum of two innovative fitness and wellbeing programs within the next twelve months.
 Introduce the Health Bar in the most revenue generating and competitive health club within the next six months.
 Develop a system in the next nine months to provide health and wellbeing services to prospective clients who demand offsite support.
 Open the physiotherapy facility in the next twelve months, having two physiotherapists ready to provide a dynamic physiotherapy practice to all members and non-members.
 Register as a Registered Training Organisation (RTO) to upskill and grow employees internally through providing a customised and nationally recognised qualifications, including:
­ Certificate III in Fitness
­ Certificate III in Sport and Recreation
­ Certificate III in Sports Trainer
­ Certificate IV in Fitness
­ Certificate IV in Sport Coaching
­ Certificate IV in Sport Development
­ Diploma of Fitness
­ Diploma of Sport Coaching
­ Diploma of Sport Development
 Introduce Iron Man loyalty card program in the next three months. This will be implemented in all our stores, nationwide, to give 10% discount on all purchases to our regular customers.

3 Marketing Communication
3.1 Objectives
This marketing communication initiative aims to achieve the following objectives for the Parramatta branch:
• to create and maintain an ongoing mental climate favourable to sales
• to retain current customers
• to increase awareness about future services so as to develop the consumer’s understanding of how these changes can add value (see Section 6 for more information)
• to convey a brand-differentiating message in order to create differentiation of our brand with others through displaying our competitive advantage.
3.2 Message
The communication message must be informative about the new value offerings. It must contain a reason for our customers to be interested in the new offerings which often means the media mix will emphasise the benefits obtained from using these products and services.
The message must be persuasive and aim to regain customer loyalty. This is to lead additional behavioural responses, such as eliminating aversion and promoting advocacy for the brand,and boosting word-of-mouth referrals.
The communication message must contribute to brand equity: it is transformed into something that differentiates itself from other products in the category by virtue of its identity and image. The intention is for the brand to become the first choice of those consumers rather than everybody’s second choice.
The message must ensure to help position theseofferings in customers’ minds and distinguish it from our rivals’ offerings. Advertisements will contain a word or phrase that is repeated across several different messages and different media outlets.

4Target Audience Characteristics
4.1 Demographic and Geographic Segmentation
Gender: Male/Female
Age: [0-4]: Mums and Bubs Yoga
[4-16]: swimming classes, martial arts, special children programs, etc.
[16-60]: all programs including nutrition assistance
[60 and above]: seniors programs
Marital Status: [Married, no dependants]: couple classes
[Married, pregnant]: aqua exercise programs
[Married, with dependants]: Mums and Bubs Yoga, special children programs, etc.
[Other]: all programs and nutrition assistance
Religion
Ethnicity/Race
Nationality: All inclusive. LifeTime Fitness values diversity regardless of national origin, colour, religion, socioeconomic stratum, sexual orientation, etc. Mutual respect, integrity, diversity, and care are part of LifeTime Fitness’s core values.
Generation: [Builders/Traditionals]: seniors programs
[Baby Boomers, Generation X and Generation Y]: all programs including nutrition assistance
[Generation Z]: swimming classes, martial arts, special children programs, etc.
Education Mostly higher education (Bachelor 82%, Postgraduate 51%, Doctoral 21%)
Income Level: Medium-high income

Figure 1: Distribution of member count by age group

Figure 2: Distribution of member count by marital status

State Number of Clubs Population Member/Club ratio State Supply
NSW 1123 6996071 6230 34.4%
VIC 776 5449419 7022 23.8%
QLD 654 4447871 6801 20.0%
WA 412 2421494 5877 12.6%
SA 156 1553457 9958 4.8%
ACT 77 366662 4762 2.4%
TAS 49 475953 9713 1.5%
NT 18 239766 13320 0.6%
Grand Total 3265 21950693 6723 100%
Figure 3: Number of clubs and their distribution across each state’s population (Australian Bureau of Statistics, 2015)


4.2 Psychographic, Socio-Cultural and Behaviouristic Segmentation
Activities: Swimming, gym, nutrition sessions, weight-lifting, running, cycling, cardio, martial arts, boxing, kendo, squash, basketball, table tennis, badminton, netball, Pilates, yoga, and group classes
Benefits Sought: Healthy lifestyle, convenience (location – omnipresence), entertainment, relaxation, stress reduction, balanced diet, weight control, increase body mass, social interaction, and value for money
Loyalty: Regulars, premium loyalty
Lifestyle: Hobbies and leisure activities • entertainment
• sports
Health and wellbeing • exercise
• nutrition
• losing weight
• muscle building
• cardio
Peak performers • busy lifestyle
• highly motivated and self-motivated
Sports focus • performance maintenance and enhancement
• more than average or competitive level
Social Class: Upper Middle Class: higher managerial, administrative or professional
Middle Class:intermediate managerial, administrative or professional
Lower Middle Class:supervisory, clerical, junior administrative or professional
Interests: • Maintain a healthy lifestyle and uplift health conditions
• Lose weight and body-muscle toning
• Cutting-edge equipment and facilities
• Have recreational and recovery activities
• Individual/team sports programs including fitness, swimming, weightlifting, gymnastics, etc.
• Have a balanced diet and nutrition program
• Personalised classes for different needs and age groups
• Self-fulfilment
VALs Framework Main target group:
• Innovators
• Achievers
• Experiencers Current target segment:
• is, generally, high-resource group
• enjoys the finer things
• is receptive to new products and services

Figure 4Perceptual Map mapping the benefits and client satisfaction


Products & Services Main Age Group Interested Total Member Interest Male Breakdown Female Breakdown
Aqua Programs 45-54 24% 1% 23%
Martial Arts 15-35 32% 26% 6%
Pool 8-65 64% 30% 34%
Nutrition Program 20-60 76% 41% 35%
Boxing 18-30 18% 17% 1%
Kendo 25-35 3% 2% 1%
Recreational Gymnastics 6-45 42% 28% 14%
Mums and Bubs Yoga 25-38 32% 0% 32%
Body-Mind-Spirit 18-65 38% 6% 32%
Children Programs 4-14 29% 18% 11%
BodyPump 18-45 27% 7% 20%
FatBurner 18-45 33% 17% 16%
Zumba 18-45 19% 1% 18%
BodyAttack 18-45 21% 5% 16%
Gym – Weightlifting 15-50 88% 56% 32%
Gym – Cardio 15-50 88% 48% 40%
Figure 5: Utilisation of products & services based on gender and age groups
4.3 Readiness Stage and User Status
Refer to Section 6 to get more information about these offerings.
Wearable Health and Fitness Devices and Apps Bootcamp Health and Fitness Holidays
17% interested 92% interested
Group Training Programs Customised Daily Meal Delivery
74% interested 23% interested
Health Bar Training and Employment
38% interested 82% of staff interested
Physio-Gym Culture Online Health Coaching
54% interested 78% interested
Figure 6: Customer Survey results including 85,000 LifeTime Fitness members and staff

5Marketing Mix Strategy
LifeTime Fitness’s marketing mix is comprised of the following approaches to product, pricing, promotion and distribution.
• Product:
Quality fitness service. This is ensured through implementing quality assurance programs and standardising the quality of service across nationwide fitness centres including trainers, facilities, equipment, etc.
A wide range of fitness programs are offered to gain competitive advantage in which these programs are customised for our customer profiles. Our value offers include the following:
• Swimming
­ 50 metre outdoor pool
­ 25 metre indoor pool
• Gym for weightlifting and cardio
• Gymnastics hall (martial arts, boxing and kendo)
• Recreation hall (squash, basketball, table tennis, badminton, and netball)
• Classes (Pilates, Yoga, BodyPump, Cycle, BodyAttack, Full Body Lift, and FatBurner).
• Pricing:
Premium pricing is used to reflect the exclusiveness of our services.
LifeTime Fitness is currently charging higher for similar services than other competitors out there as we are offering state of the art facilities, top-notch equipment and high-cost personal trainers who have a reputable background in their field.
Based on a market research conducted recently, it was found out that our fee structure is 30% higher than the average market prices.
Nevertheless, there are special price offerings and arrangements for loyal customers, corporate clients and other special client segments.
• Promotion:
The following promotional activities and materials have been in actively in use:

  • printed material including flyers, newspapers and various fitness magazines
  • main contributor in national fitness fairs
  • advertising in industry specific magazines (such as Men’s Health)
  • advertising in Women’s Weekly
  • customer loyalty programs
  • word of mouth.
    • Placement:
    LifeTime Fitness is a health club chain with 70 health clubs and 182,000 active members in Australia. We provide multi-purpose fitness venues across the country providing state of the art health clubs to swimming pools, sport clubs, squash courts, and many other facilities.
    Distribution of our quality services occur through these nationwide fitness centres.

    6Future Value Offers
    Wearable Health and Fitness Devices and Apps
    Wireless enabled wearable technology devices and apps assist in losing weight, increasing physical activity or improving overall health. These devices are able to collect data on your physical lifestyle (such as eating habits, sleeping patterns, calories burnt, etc.) and paired with a companion web account or mobile app. Some famous devices include smartwatches, activity trackers, wristlets, lightweight GPS enabled clip-on trackers, etc.

Bootcamp Health and Fitness Holidays
Health and fitness holidays for people who enjoy time abroad whilst also improving their health. Major competitors are Thailand Fitness Boot Camp, Health and Fitness Travel, International Fitness Holidays, and CruiseFit.

Group Training Programs

 Customised group fitness classes for niche groups including pregnant women, seniors, children, cyclists, kettlebell lovers, post-birth mums, yoga with babies and toddlers, aqua fitness, High Intensity Interval Training (HIIT), body-mind-spirit (yoga, Tai Chi, Hatha, Pilates, etc.), dance and fitness, aqua Zumba, and boxing workouts to name a few.

Customised Daily Meal Delivery

 Meals plans designed specifically for weight loss but can also be used for the convenience by people who live a busy lifestyle. Customers order weekly meals fully customised in accordance to their goals. Major competitors are Life n’ Easy, Eat Fit Food, Jenny Craig, and Ultra Lite Australia.

Health Bar

 Located in the health club premises, health bars offer freshly made healthy meals, snacks, organic protein shakes, juices, etc. The health bars can also provide handpicked some of the finest organic health products on the market, which can also be extended for online shopping to generate additional revenue.

Training and Employment
To ensure the best quality customer service experience, in-house built training programs can be delivered. The national qualification to become a fitness instructor is the Certificate III in Fitness. When registered as a RTO, a wide range of qualifications can be issued. Promising students can be offered further employment. Theory classes can be delivered online to encourage flexible learning and reduce training costs whereas practical sessions can be conducted in real business premises to foster the teaching experience.

Physio-Gym Culture

 Located in the health club premises, physiotherapy service can be offered to diagnose, rehabilitate and improve people with movement disorders. Diagnostic techniques provide targeted treatments which can be integrated into individual exercise program. The service can also be offered to non-members.

Online Health Coaching
The popularity of online health coaching is rising rapidly allowing people to get one-on-one personalised nutrition and training support through remote communication methods which may include Skype, email, etc.

7 Past Media Performance
Advertising Objective Media Vehicle Used Outcome Achieved Factors Media Consumption – exposure to the message
To promote new products in local community Radio Yes Very cost effective. High frequency was achieved easily. High influence
TV No Too expensive. Continuity of the advertising message required high budget. Low influence
To retain current customers Email Direct Response Yes Follow-up activities established trust with customers, which created brand loyalty and developed favourable attitudes towards our future value offers. Extremely high influence
To offer discounts in order to attract more customers Flyer No People did not seem to be interested in reading the flyers. One major competitor placed a billboard instead which captured the market. Extremely low influence
To boost brand name in the market Being a main contributor in national fitness fairs Yes/No Yes: established a good name for people who are in this market and serious athletes.

No: regular people did not attend these fairs, hence, were not exposed to the advertising message. Moderate influence
To release discount promotions to attract more customers Local newspaper No Young people did not read the local newspapers, hence, missed the media audience. • 9.2% of young consumers
• 52.4% middle-aged group
• 34% of seniors
To strengthen the brand image Advertising full page in Women’s Weekly and Men’s Health using celebrities Yes It was a huge national success. Motivated the youth, especially young-new mothers and young males aged between 25-35. Allowed to a high reach for a specialised media audience. Extremely high influence
To capture attention to new products and services Billboard Yes Kept the message simple and memorable giving a clear call to action. Resulted in driving more views on our website which were converted into leads. The only downside was it took longer time to capture attention which increased our cost base. High influence

The chart below is generated based on all customers surveyed at the time of when the media vehicle was used.
This chart shows the rate of media consumed by each age group in order to give an indication of their preferred sources of media.

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