Mcs 2020 Pbl Assignment 1 Gaia Fitness

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Problem Statement

The problem in this situation is that major competitor, Cali Fitness, has announced its official closure in four months and Gaia Fitness can greatly capitalize on this opportunity with the open market share that will become available. The budget to advertise and market Gaia Fitness is limited which will make it difficult for the business to market itself effectively to the new potential members. However, if Gaia Fitness is able to attract this new client base, they can keep in competition with other major competitors emerging in the city. The following are recommendations on how to solve this problem.

Recommendations

1.Buy the Clientele List



Our first recommendation is to make a deal to buy the clientele list of Cali Fitness. Using their client list we would use the client’s phone numbers and email addresses to communicate to their members directly to offer a discount on membership and to emphasize the same community and programs that Cali Fitness offered. To minimize the fact that most gym memberships are not renewed past trials and first year memberships, we would only buy the client list that has the loyal long-term memberships (A member for greater than a year). This way we can attract the loyal customers that are lost to Cali Fitness and attract them to Gaia Fitness. 


2. Start Using More Social Media
Our second recommendation for Gaia Fitness is to start using more social media promotion in addition with their strong presence on Facebook. People from all over the world do not only use Facebook on a daily basis, but also use Twitter, YouTube, LinkedIn, blogs, Google+, etc. If Gaia Fitness can start using these other popular social media hubs to do their advertisements/promotions, then it will be a successful marketing strategy to increase publicity and word of mouth buzz, which will ultimately increase sales. Social media can also be used to create polls and open forum boards that can give crucial feedback and could help Gaia Fitness to better-fit market trends. By using more social media, Gaia Fitness will be a bigger threat in the fitness industry.

3.Refer A Friend

Our third recommendation is to create a “Refer-A-Friend” campaign, which would be open to our new and current members. This campaign would be very effective in attracting new members because it will entice not only new members but also current members to want to invite their friends to join their gym. With the strong presence on Facebook already and the publicity from word of mouth, getting the word out on membership discounts for new and current members would be no problem. Not only is this method easy and simple but it is cost effective and feasible.

4.Technological Potential

We recommend that Gaia Fitness update their database with security features and software to remain competitive and to refrain from becoming a laggard in the industry. Having an effective database can have significant cost savings to the company and is a practical solution to the unnecessary amount of resources currently being dedicated to managing membership files. The database can be established so that there are features to aid in the process of managing memberships by automatically billing each customer each month. The updated database can also improve marketing research, clientele payments, as well as day-to-day operations.

Discussions

1.Buy the Clientele List



Using Cali Fitness’ client list, we can attract the long-term members from Cali and transfer the loyalty and membership over to Gaia Fitness. The reason we are attracting the long-term members, is that for members that are on a trial basis or still a short-term membership only approximately 60% of the members are retained (Watts, 2008). Thus if we only contact members that have shown to have cross the trial basis barrier before, we can reduce the risk that we attract members that will not become long term members. Upon research of clientele lists...
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