¶ … Marketing Plan Over the last several years, many Americans have become more health conscious. This is because the obesity epidemic is having a dramatic impact on everyone's thinking. Evidence of this can be seen by looking no further than a study that was conducted by International Health, Racquet & Sports Club Association (IHRSA). They determined that 16% of the U.S. population is currently members of health clubs. However, in the past three years the total number of enrollments has increased by 10% to 50.2 million members. Moreover, three out of every ten Americans is planning on renewing their membership or joining a health club within the next year. This is illustrating how demand for these services has increased dramatically and will continue to rise in the future. ("Health Club Trends for 2012," 2012)

For Hoffman Estates, Illinois; there are tremendous opportunities in being able to successfully operate this business in the community. This is because the town is considered to be an upper middle class area with a growing population. Evidence of this can be seen in the below table which is showing the demographics of the community.

Hoffman Estates Demographics Profile

Total Population

51,895

Median Age

38 years old

Per Capita Income

$33,314

Household Income

$76,831

Person Per Household

2.82

Median Home Value

$316,400

("Village of Hoffman Estates," 2012)

These figures are illustrating how the community is: young, economically mobile and has higher amounts of disposable income. This means that opening a health club inside the city will provide significant benefits to stakeholders. At the same time, the profit margins will be higher in contrast with other areas because these factors. To determine if opening a health club is economically feasible requires conducting: a situational analysis, market summary, SWOT analysis, evaluating the competition, examining the products / services, studying the keys to success and critical issues. Together these different elements will highlight the potential benefits and risks of opening this type of business inside the community.

Situational Analysis

When opening a health club there a number of critical issues that must be considered to include: financial, legal, equipment related challenges and training. The financial risks are the costs of opening and maintaining the health club. This is because, the facility will operate 7 days a week and there will be tremendous amounts of utilities used during the process (i.e. electric and water costs). Moreover, the location must be in a place that is large enough to: provide numerous programs and it needs to be convenient for the members. This will require more upfront investment capital. (Brown, 2012)

The legal challenges will occur in providing an environment that is safe for everyone and it must be in compliance with different regulations. The equipment needs require that state of the art technology is utilized. Trainers must be used to supervise members working with the equipment and prevent injuries. The combination of these factors is showing the potential challenges of opening a health club. (Brown, 2012)

At the same time, the economy has remained stagnant which is placing pressure on consumer spending. However, according to the IHRSA demand for these services is continuing to increase despite these issues. The reason why is from consumers becoming more health conscious. As a result, this will help to provide an increase in memberships with more people focusing on improving this aspect of their lives. The challenge will be to encourage everyone to join when they are dealing with economic issues (despite the rising trends for the industry). (Brown, 2012) ("Health Club Trends for 2012," 2012)

The capabilities for the company are to create a unique environment that is supportive of stakeholders. The way that this can be achieved is through offering a wide variety of programs with some of the most state of the art equipment. At the same time, the costs for joining should be lower in comparison with other facilities. This will help the club to stand out and offer greater value to consumers. (Brown, 2012)

Market Summary

The market will be defined by focusing on different demographics and income levels inside the community. The potential size is approximately 15,568 customers. For Hoffman Estates, the market is growing in line with the industry average of 3.33% a year. The relevant trends are focused on providing something for everyone. This means that there must be a series of programs, classes and equipment that are designed to address these needs. ("Health Club Trends for 2012," 2012) (Craknell, 2011, pp. 26 -- 32)

This will help to attract more customers by giving them greater value. The weaknesses include: the inability of staff members to provide better service to clients, little to no oversight of their activities and increased amount of competition. This can hurt the reputation of the health club and its image in the community. The external opportunities are: the increasing number of people who are using these services, the higher income levels and household demographics. This will help to attract more customers (who are looking for programs that will address their specific needs and interests). The possible threats are the large number of facilities in the region. This will make it more challenging for the company to market itself to select demographics of the population. (Torriero, 2000) ("Health Club Trends for 2012," 2012) (Craknell, 2011, pp. 26 -- 32)
Competition

There are a total of two gyms in Hoffman Estates these include: the Prairie Stone & Wellness Center and Multiform Fitness. In the case of the Prairie Stone & Wellness Center, they have a number of different amenities / programs available to include: weight training / cardio vascular, tennis, palliates, aerobics and kickboxing just to name a few. At the same time, they have personal trainers who can work with members to create customizable solutions that will address their underlying needs. ("Gyms Hoffman Estates," 2012) ("Prairies Stone & Wellness Center," 2012) ("Multiform Fitness," 2012)

While, Multiform Fitness has considerably less amenities to include: weight / cardio training, personal trainers and onsite lockers rooms. Moreover, there was a fraud alert issued on the club through the Better Business Bureau. As a result, the Prairie Stone & Wellness Center is controlling the number one position in the market. In this case, they are offering more to members and have a much better rating for the products / services they are providing. ("Gyms Hoffman Estates," 2012) ("Prairies Stone & Wellness Center," 2012) ("Multiform Fitness," 2012)

Product / Service Offering

The basic needs the club will address include: dealing with the growing demands for state of the art health facilities, providing a larger number of programs / services to the general public, offering cliental enormous discounts and educating members about the how to safely use the various pieces of equipment. The product offering is focused on giving consumers more than what they are currently receiving. The way that this can be achieved is by working with different organizations that will promote an: active lifestyle, sponsoring community health orientated events and giving everyone lower membership fees for these services. This will provide consumers with greater selection. Over the course of time, this helps to address their basic needs and then it goes beyond them. When this happens, customers will realize that the club has more to offer in comparison with other facilities in the area. (Torriero, 2000) ("Health Club Trends for 2012," 2012) (Craknell, 2011, pp. 26 -- 32)

Keys to Success

The most important factors for the success of the club will be based upon: value, convenience and offering more options than competitors. These different elements will give consumers greater choices and it reduces their costs of using these kinds of facilities. Over the course of time, these factors will be used to make a difference in how the club is able to market itself to potential customers. This is the point that there will be a transformation in the kinds of programs and services that are provided to everyone (with more of an emphasis on giving cliental greater choices and value). (Torriero, 2000) ("Health Club Trends for 2012," 2012) (Craknell, 2011, pp. 26 -- 32)

Critical Issues

The way the products and services will be delivered to the customer is through offering everyone a free trial membership. This will take place by sending out a mass mailing that will provide certificates (which can be redeemed at the club for up to one year). At the same time, the club will partner with different nonprofits, sports organizations, athletic clubs and community groups. The basic idea is to offer these individuals a discount and help them to see how the club can be of a benefit to them. (Torriero, 2000) ("Health Club Trends for 2012," 2012) (Craknell, 2011, pp. 26 -- 32)

As a result, there will be a focus on working with different intermediaries to promote the facility to everyone. Moreover, an aggressive campaign will be used to endorse the club through: online and traditional marketing tools. This will help the facility to standout in the mind of stakeholders. When this occurs, they will be more…