Promotion looks at the advertising, in the last 4 weeks I have not encountered one advert of Hayes pool in the local newspaper they do not advertise via any other forms of media and the only form of communication to the public is a small sign placed outside the leisure centre. They need to get involved in the media a bit more if they are to expand their business and generate more customers a simple advert in the local newspaper highlighting low prices and discounts as well as special offers could see the start of vast improvements.
Public relations of the pool must be quite good considering the friendly and helpful nature of the staff so in my analytical opinion a lot of the promotion must be done by word of mouth from current members of the leisure centre. The budget has been described as quite poor as explained before the pool lies outside the fundable territory so any enhancements to the pool have to be made by profit that they generate in excess of their revenue which as we found out is hardly substantial to change the face of the centre. Hayes pool is not a leading name in leisure centres it is merely providing a cheap alternative to more costly gyms. Hayes Pool only provides the basic equipment required in order to establish itself as a leisure centre. This is one of the reasons it had problems encouraging people to join. Hayes pool are aware of the fact that they do not possess sufficient profit in order to expand and glamorise the centre, most of the revenue is spent on maintaining the building paying salary and other technicalities and credentials that have to be met, such as keeping the pool water clean. However because it is a pool based leisure centre this means that they should attract a lot of people wanting to use a swimming facility as there are few other pools in the area, as well as this the leisure centre incorporates ample parking and as mentioned before friendly staff. The interior of the building has been well maintained and has a friendly atmosphere. They could boost their profit by targeting customer needs and using surveys to find out specific needs.
Marketing is essential to the success of any business. Marketing involves advertising the product in the best possible way to target customers. The primary aim of marketing is to enable businesses to meet the needs of their actual and potential customers whether or not they are making profit from it. If a business marketing is to be successful then, it must:
- Understand the customer’s needs.
- Keep ahead of the competition.
- Keep in touch with the customers in order to satisfy their expectations.
- Co-ordinate its functions in order to achieve marketing aims.
- Be aware of any constraints on marketing activities.
Whilst I am devising my marketing strategy I will need to keep all these points in mind. I will need to find the requirements of the potential customers including any services they will need. I will need to market the product in such a way that as wide as an audience is reached. Once the leisure centre has been launched it will have to have the right combination of the four P’s
From my market research of task 1 I can see that out of the percentage of people that I surveyed the age categories of, ‘16-20’ and ‘ ‘30+’ have the highest rate of non gym members. This can be linked to the fact that out of the total percentage of non gym members over 85 percent of them were only willing to travel between 1-5 miles in order to reach the gym if they had to go to one. The marketing strategy will have to target both the youth age group and the older age range. As well as this it will have to be situated in such a location where people who aren’t willing to travel greater than about 6-7 miles can reach it. I will need to have late openings, special discounts for certain groups such as OAP’s and students. These are the main points that I will have to look at in order to attract new customers in order to achieve this effectively I will need to devise a marketing strategy.
Since there is already so much competition around from other leisure centres and gyms I will have to use the market penetration strategy. I have generated this from the ansoff matrix. The Ansoff matrix helps businesses to decide their product and market growth strategy. The output I receive from the matrix will suggest the growth of strategy that set the direction for the business.
As you already know I am looking to launch an existing product into an existing market so the right strategy is market penetration according to the matrix.
Market penetration is the name given to a growth strategy where the business in my case a leisure centre will focus on selling existing products into an existing market.
After all of this I have made four conclusions about how
There are four main objectives in the market penetration scheme:
- Maintain or increase the market share of current leisure centre facilities- this can be achieved by a combination of competitive pricing strategies, advertising, sales promotion and perhaps more resources dedicated to personal selling.
- Secure dominance of growth markets. E.g. try to stay at the top by using persuasive advertising which should encourage as many people to use their facilities as opposed to other facilities available in the area.
- Restructure a mature market by driving out competitors; this would require aggressive campaigning and heavy advertising and a pricing strategy that could make the market seen an unattractive prospect for competitors to participate in.
- Once we have customers increase usage from them by introducing loyalty cards this will hopefully maintain goodwill amongst the customers.
The external factors that are going to affect how the product is marketed are:
- rivalry between existing competitors;
- the threat of new entrants;
- the threat of substitutes;
- the bargaining power of buyers and;
- the bargaining power of suppliers.
These factors have worked examples below
- Intensity of rivalry between existing competitors may be linked to determinants such as the number of competitors, marketing power, brand identity, product differences and cost structure. The rivalry will extend to the seeking of new markets and new products;
- The threat of new entrants will be affected by determinants such as the barriers to entry and the expected reaction from existing firms. New entrants will incur high capital costs of entry plus experience costs of developing expertise and the costs of brand identity development;
- the threat of substitutes may be determined by the level of innovation of existing producers, the ability of existing competitors to finance responses to the threat (switching costs) and the propensity of buyers to substitute, possibly because of price considerations;
- The bargaining power of buyers may be linked to buyer concentration. Where there are many buyers (e.g. of chocolate bars) they have little direct ability to negotiate the price of the product. Where there are few buyers (e.g. of aircraft fleets) they are likely to have a much greater level of bargaining power in relation to price;
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The bargaining power of suppliers may be viewed in a similar context to that of buyers. Supplier power and impact on costs will be greater where there are few of them. This principle may be viewed in the context of individual inputs for materials, labour and services.
PEST is an external factor. This acronym stands for Political, Social, Economic and Technological factors.
Identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.
Many business decisions are influenced by political, legal and fiscal factors. These influences include:
- Changes in the tax structure
- Privatisation
- Trade unions
- Changes in the availability of raw materials
- Duties and levies
- Regulatory constraints such as labelling, quality, safety.
The political factors that relate to the leisure centre are that the elections are to take place soon so this could have an effect on the tax people have to pay having a knock on effect as to how much people are willing to pay for membership and costs (could also be mentioned under a economic factor). Due to the fact that the elections are going to take place the new government may not authorise the construction of another leisure centre an external reason. Changes in the availability of raw materials would mean that the construction of the building could be altered somewhat. Safety is an important issue and the building as well as the goods inside will have to pass the safety checks and British standard checks. Another legality would be that we have to build the leisure centre in such an area that it can be funded or at least generate grant from the government, because in the case of Hayes pool it lies jus outside of the government funded zone and therefore they are suffering heavy losses in development simply because they cannot gather sufficient profit from their sales revenue so I will need to make sure that my leisure centre is located within a government funded area.
Economic factors are mainly dependant on world economic trends. Economic influences include:
- Inflation
- Unemployment
- Energy prices
- Price volatility
We can relate these factors to the leisure centre because, if there is an inflation in the currency then for the same amount of money that people spent before on their leisure facilities will not be able to get them as far now because of the inflation. This might mean that instead of using a gym people will purchase their own equipment and exercise from home to save money in the long term. However I don’t believe there will be an inflation in the economy seeing as the pound is going strong. The unemployment rate isn’t too bad it will never be perfect but it isn’t a problem for the leisure centre as for customers we will be using low prices because of our marketing strategy and the unemployment rate works in our favour when looking for staff to hire. Energy prices all have to be taken into account because we will need to know the cost of running and maintaining the site. However the companies that provide these resources will offer discount for businesses and should offer special business packages.
Social/cultural factors in order to analyse the social and cultural factors I will need to closely analyse the society demographic changes such as, population growth; movement’s and age distribution as well as changes in cultural values and social trends.
These factors include:
- Consumer lifestyles
- Environmental issues
- Demographic issues
- Education
- Immigration/emigration
- Religion
These social factors also have an effect on the leisure centre, for instance consumer lifestyles will determine whether or not certain groups of people continue to go to the gym or even join it based on whether going to the gym has become a trend or not. I will need to analyse the consumer behaviour and buying patterns. Environmental issues is quite an important factor as the land that will be used to build the gym will have to be chosen carefully so that no nature reserves, wildlife etc will be disturbed triggering protests and campaigners. I will need to acquire some statistics about the demographics of the circumference that I will be looking to target when opening the leisure centre; this will give me an indication of how the population is distributed. It will also tell me the employment conditions in the area and the main working hours is an important factor.
Technological factors
When marketing goods and services organisations should be aware of the current developments in technology as modern technology has become the back bone to marketing. However this technology can prove quite expensive and the company has to look at the cost of their product and determine whether it will be cost effective using the latest technology to market their products.
Factors include:
- New technological processes
- Energy saving techniques
- New materials and substitutes for existing materials
- Better equipment
- New product developments.
New technological processes mean that we have the ability to market our product in more than one media form. The use of internet is probably one of few ways to advertise products to all over the world, this may not seem relevant to our purpose seeing as we are setting up a leisure centre but in fact if someone planning to come on a long stay holiday in England reads about our gym on the internet they may want to use it when they get here. Energy saving techniques could start from basic principles of installing energy saving bulbs into each room as in an internal point but also we could use less resources such as paper by not advertising on billboards and leaflets but by using more conventional methods such as internet, email newsletters, advertisements and newspaper adverts. Better equipment would attract consumers because we are only using the best equipment around and customers like to know that they are dealing with the best also products change all the time at a rapid rate it should be our strategy to keep up with the product development and update the stock as soon as possible.
SWOT analysis is a quick and easy way to consider the relationship between an organisation and its environment. A SWOT analysis sets out to focus upon the strengths, weaknesses, opportunities and threats. SWOT analysis contains both an internal and external element. The internal aspects include the strengths and weaknesses. The external element looks at the opportunities and threats present in the environment in which the organisation operates.
A simplified version of the SWOT analysis would look at the following :
Strengths
- Good product
- Good relationship with customers
- Good management team.
Strengths of my leisure centre: there are not many leisure centres in the area and what’s more there are not very few leisure centres in the area which comprise if a swimming complex. Located near a residential area which should boost the customer percentage. There are many local newspapers being delivered free of each charge near enough everyday so in order to reach a wider group of potential customers I could start advertising in these newspapers. I intend to employ the best staff possible staff at my leisure centre who are very friendly and always seem keen to help which creates a good impression about the environment meaning that new customers will not feel threatened in an alien environment.
Weaknesses
- Operates on a small scale
- Regular cash flow problems
- Deals in a limited market.
Although my leisure centre is located near a residential area it may not be easy to access for people who are new to the area. The signage currently directing people to the area of Hayes town in which my leisure centre is located is very poor and only . The building lies just outside of the government fundable area which means that it is hard for them to generate sufficient revenue in order to expand and improve the facilities. The gym facilities are very basic and would probably only satisfy needs of those who just want a quick workout I need to look into adding more facilities and this can be achieved by researching what other competitors are offering in the area.
Opportunities
- New and rapidly growing markets
- Changing tastes of consumers
- Could diversify into a number of product lines.
I have found that my leisure centre can be shifted across the road which would mean that it lies in the zone that is funded by the government; this means that they could give the pool a complete makeover and really build up the facilities. Also if the leisure centre was to move across the road a route from central avenue could be made allowing easier access to the leisure centre for residents of the road that falls on central avenue, east holme, orchard road and coldharbour lane.
Threats
- Growing competition from rivals
- Recession leading to poor demand in the economy
- Development of foreign competitors
A new leisure centre has recently opened up in the area and is offering all the benefits of the leading gym centres but at lower prices. Within a year the local elections will take place again and if the current government is voted of the chair the next government may not allow funding for my leisure centre.
