Bally Total Fitness Marketing AuditBally Total Fitness is the largest, and only nationwide, commercial operator of fitness centers. Bally's has approximately four million members and 420 facilities across the United States and around the globe. (ballyfitness.com, 2004) A marketing audit was performed on the company in order to assess their total marketing program to see what was and was not working to increase business. The following will summarize key findings of environmental aspects and marketing. Finally, any recommended actions that may be considered for future planning will be discussed. The environmental aspects that were considered for the Bally Total Fitness audit were demographics, markets and competition. Demographic trends have shown that the older segments of the United States (ages 45-65+) are growing the fastest. Bally Total Fitness would be wise to consider marketing towards this age group as their needs change. An estimated 50 million people will be members to a fitness center in just six years, the year 2010. This is due to an increased desire towards healthy living. The general population is becoming more aware of the benefits of exercise to promote health and wellness. The Markets part of the audit shows that there is three major trends that health clubs should be attentive of. These major trends are insurance paid weight-loss, a global battle against obesity and an end to low-carb confusion. Health clubs are part of the solution and should promote themselves as such. Bally Total Fitness can be a guide towards losing weight and increased education on obesity and to guide people through the low-carb confusion. 24 Hour Fitness and Gold's Gym are Bally's top two competitors. While both companies have been successful, Bally Total Fitness still boasts more members and more facilities than either one. However, both competitors of Bally's are not too far behind. Bally's should strive hard to stay on top of the competition. This can be achieved by analyzing the competitors' strengths and weaknesses. If any similar weaknesses exist, changes can be made to improve on those to differentiate Bally's from the rest. Bally's has an excellent product. It is something that all people, no matter what their size or shape, can benefit from. The current "Every Body Needs Something" campaign is an excellent idea to get this message across. Also, growing the Marketing Department by adding seasoned executives was a good choice. Since many of these executives are highly experienced they can all collaborate and ultimately come up with sound ideas that will help the company grow. Bally Total Fitness' objectives are reasonable and go along with their mission statement of being a Total Fitness Resource. It is important that all levels of the company are aware of the objectives and strategies that are being used to meet those objectives. While Bally's has been doing well at this, they should never get complacent and always be attentive to what is going on with all of their staff and all of their members. Effective training and constant evaluation of staff members will insure top-notch customer service. In short, Bally Total Fitness has been faring well in the fitness industry. First quarter results of 2004 have shown that net revenue has increased from the previous year's first quarter but by only 2%. By more aggressive marketing this number can increase more by the next year. Both a market penetration strategy and a market expansion strategy should be utilized to further this objective. These strategies will ensure that current and potential consumers will be aware of the product Bally Total Fitness has to offer. The current campaign says it best, "Every Body Needs Something" and Bally Total Fitness has just what that body needs. TABLE OF CONTENTSEnvironmental Aspects DEMOGRAPHICS p. 5 MARKET p. 5 COMPETITION p. 7Marketing OBJECTIVES p. 8 STRATEGIES p. 9 TACTICS p. 11 4PS p. 12 SALES p. 14Conclusion p. 15Works Cited p. 16 Environmental AspectsDEMOGRAPHICS Of an estimated 30 million members to fitness centers in the United States, one out of five belongs to Bally's. Bally Total Fitness mainly targets the 18-49 year old range with a male to female ration of 1:1. The average household income of their members is $52,000 a year. 76% of Bally members are Internet enabled. (ballyfitness.com, 2004) According to the International Health, Racquet and Sportsclub Association (IHRSA), there are approximately 30 million adult members of fitness centers in the United States. By the year 2010, this number is likely to grow to 50 million. This is due in large part to the increasing awareness amongst the population of the importance of exercise to promote health and wellness. This trend coupled with the major demographic shifts should produce an increased demand for fitness services and products. Although Bally Total Fitness mainly targets the 18-49 year old range, knowledge of a major trend should be brought into consideration. The "graying of America" is a trend in the United States where the oldest segments of the population (45-65+) are growing fastest. (Churchill, Jr. and Peter 296) Since people's needs and tastes changes as they get older, Bally Total Fitness can capitalize on the Baby Boomers. More of this will be discussed in the Markets segment of the audit. MARKETS According to an IHRSA trend report, there are three major milestones that may be of major interest to health clubs. These three things are:· Insurance paid weight loss· Global battle against obesity· End to low-carb confusion"Americans strongly support action by health insurance providers, employers and government to promote physical fitness and a healthy lifestyle, according to a January 2004 survey conducted for IHRSA by Ketchum Global Research Network." (IHRSA.com, 2004) The Workforce Health Improvement Program, or WHIP, would be a step in the right direction. If Congress passes WHIP, it would allow employers to deduct the cost of providing or subsidizing health club benefits to their workers. The study also indicates that 61% of Americans would like to see Congress do more to control obesity, as it is at an all-time high with an estimated 64% of Americans considered overweight or obese. Considering this year to be a Presidential election year, over half of the American population believes that candidates should have a position on obesity.Bally Total Fitness has already signed on with the President's Council on Physical Fitness and Sports to sponsor the Presidential Active Lifestyle Award (PALA). The "Fitness Runs in the Family" program was created to encourage Americans to take the President's Challenge and work towards the PALA. (ballyfitness.com, 2004) By promoting towards the parents of the younger generation, it may create role models for youth. If the younger generation sees the benefits of exercise, they may remain loyal customers for years to come and will pass this on to the next generations.Health clubs should also heavily consider the other two major milestones, the global battle against obesity and an end to low-carb confusion. Worldwide, people are increasingly aware of the obesity factor and so there will be increased international efforts to curb this problem. Health clubs are part of the solution and could promote themselves as such. As for the low-carb confusion, there are so many food companies that are jumping on the low-carb bandwagon. Health clubs could provide guidelines or "helpful hints" to help members with the confusion of the entire different low-carb lingo that appears on different packaging. (IHRSA.com, 2004)COMPETITIONBally Total Fitness's top two competitors are 24 Hour Fitness and Gold's Gym. 24 Hour Fitness started as a one-club operation in 1983. Today, it has more than 2.7 million members and 300 gyms worldwide. 24 Hour Fitness is the largest privately owned and operated fitness center chain in the United States and world. (24hourfitness.com, 2004) Gold's Gym was founded in 1965 in Venice, California and was deemed "the Mecca of Bodybuilding". Today, Gold's Gym still maintains its core weight lifting tradition but has expanded its profile by adding services such as group exercise, personal training and cardiovascular equipment. Gold's Gym boasts 2.5 million members worldwide and is the largest co-ed gym chain in the world with over 550 facilities in 43 states and 25 countries. (goldsgym.com,2004)24 Hour Fitness offers their services and facilities 24 hours a day, seven days a week. Centers are located in 16 states in the US as well as in Asia and Europe. 24 recently announced their sponsorship of the 2004 U.S. Olympic Team and are also participating in a program called Get Active America!, similar to the program Bally undertook with the President's Council and the PALA. 24 Hour Fitness' latest advertisements have pushed the Xpress Zone, series of exercises designed in a specific order to maximize a full-body workout in a short amount of time. This was brought about due to Americans being at their most obese, but also their busiest. (24hourfitness.com, 2004)Gold's Gym is famous for originating at the site of America's most famous muscle beach and being featured in the movie "Pumping Iron" starring Arnold Schwarzenegger and Lou Ferrigno. Gold's Gym is currently in rapid growth phase, and are pushing for expanding their current portfolio by buying smaller regional health clubs and converting them to Gold's Gym. The company also licenses the Gold's Gym name for products such as fitness equipment and accessories, sports luggage, t-shirts, and men's and women's sportswear. Gold's Gym boasts instant brand awareness, 39 years of achievement and recognition in the fitness industry and award winning local & national marketing and advertising programs. The company was recently named in Entrepreneur Magazine's "Franchise 500", which ranks the top franchising companies in the world. (goldsgym.com, 2004)Both 24 Hour Fitness and Gold's Gym are certainly qualified top competitors. However, according to www.epinions.com, a website that offers pros and cons of certain establishments, 24 Hour Fitness has a problem with overcrowding as well as high membership prices. Also some have complained that 24 Hour Fitness is a "meat market" which makes it uncomfortable to work out in. The same site states that members of Gold's Gym dislike that the gym is more targeted to people already in shape and accustomed to using a gym facility. Due to this, some members feel it is an intimidating atmosphere. Bally Total Fitness should look into concerns such as these and make any changes if members are making similar complaints about their gym.MarketingOBJECTIVESBally Total Fitness mission statement is as follows: To be your Total Fitness Resource by providing quality service, outstanding facilities and effective nutrition products to help you achieve quick and long term results your way. Only Bally Total Fitness combines: · Dynamic Personal TrainingSM · Rapid Results® Diet System · Our new Weight Management Program to create a fitness program specifically for you Bally is the best fitness value available anywhere.Let us help you choose the fitness membership program that is right for you. (ballyfitness.com, 2004)According to a press release, Bally's objectives are continuing the momentum in new membership sales, generating free cash flow, increasing products and service revenue and becoming a superior customer service company. Bally's would also like to focus greater attention on controlling costs."Corporate objectives are established for many areas, but the most visible tend to be financial objectives" (Bearden, Ingram, and LaForge 58). One of Bally's biggest concerns is membership sales. Bally's would like to turn-around the downward sales trends over the past few years.STRATEGIES Before delving into strategies, a SWOT analysis of Bally Total Fitness will be discussed. Strengths of Bally Total Fitness include its brand name. In addition to gym facilities, Bally's also offers workout apparel, accessories, and their own brand of equipment and nutritional supplements. Another strength of Bally's was the decision to grow the marketing department. Bally's is pushing a "Best In Class" approach to their marketing. Bally Total Fitness has excellent corporate partners. Some of these partners include Gatorade, Kraft, Pepsi and Dove. One of the biggest weaknesses of Bally Total Fitness is the many complaints regarding their customer relations. Also the company is facing a class action lawsuit. The lawsuit charges Bally Total Fitness and certain of its officers and directors with harming investors by misrepresenting the Company's financial results. (biz.yahoo.com, 2004) Many opportunities abound for Bally Total Fitness. In a press release statement, Chairman and CEO Paul Toback mentioned opportunities to reduce overhead, which would ultimately lower costs to their patrons. Bally's can also take advantage of the Baby Boomer market as well as the more health conscious consumer. The greatest threat to Bally Total Fitness is an increase in competition, especially since the consumer is more health conscious and many other companies are jumping on this opportunity. While their top two competitors, 24 Hour Fitness and Gold's Gym, have already been previously discussed, Bally's must also compete with other food companies since Bally's offers their own brand of supplements. Other competition of Bally's includes makers of workout apparel and equipment such as jump ropes and free weights.Since Bally's wishes to control costs, they should implement a cost focus strategy. "A cost focus strategy involves controlling expenses and, in turn, lowering prices, in a narrow range of market segments." (Kerin et al. 590) However, this is just a broad generic strategy. It is a great opportunity to capitalize on the importance of exercise and its health benefits. Many consumers are aware of this, but need more motivation towards the product. A "market expansion strategy entails marketing existing products to new markets. A market penetration strategy represents a decision to achieve corporate growth objectives with existing products within existing markets." (Bearden, Ingram and LaForge 59) Both of these strategies would target their current customers as well as expand to new potential consumers.TACTICS "Tactical planning is the creation of objectives and strategies aimed at attaining goals for specific divisions or departments over a medium-range time frame". (Churchill Jr., Peter 122) Some tactics utilized by Bally Total Fitness have been successful. The first quarter results of 2004 show a 21% increase in gross committed revenue and a 33% increase in new members joining. (ballyfitness.com, 2004) This was due to a favorable response to new pricing, marketing and customer initiatives that began towards the end of 2003. Other tactics consisted of a $5 million investment in additional sales compensation and towards increased advertising. The investment helped generate a $66 million increase in gross committed revenue. (ballyfitness.com, 2004) However, the strongest tactic that was employed was growing the marketing department. "We are building a responsive, innovative organization that is geared up to meet the needs of today's realities, where we must be very consumer focused, and where creativity must combine with technology, and national brand strategy must combine with local field marketing," said Martin Pazzani, Chief Marketing Officer at Bally Total Fitness. (ballyfitness.com, 2004) Alison Kal, who had former marketing roles with International House of Pancakes and Hilton Hotel Corporation, joins as Managing Director, Brand Management. Michael Marasco was the former General Manager of the Chicago branch of Digitas. He joins the company as Managing Director, Customer Relationship Management. Kelly Hundt was the previous Vice President of advertising at Bally. She has rejoined as Managing Director, Field Marketing and Promotions. Also onboard for the growing marketing department are Steve Tucker, Marketing Controller; Cindy Wojdyla, Creative Director; and Monique Goffinet, Account Director. (ballyfitness.com, 2004) Growing the marketing department is a step in the right direction. The structure of the department will certainly be conducive in producing growth for the company. The marketing team consists of seasoned individuals that will only bring about new and innovative ideas to the table to benefit Bally Total Fitness.4Ps – PRODUCT, PRICE, PLACE PROMOTION Since Bally Total Fitness wishes to increase membership sales, it will be the product focus for this audit. So far, Bally's is on the right course of offering a diverse selection of membership plans to fit individual's needs. There are currently eight different membership plans. The most basic plan is the Fitness Membership plan. This plan offers use of the facility that was enrolled in, a new member first workout with a certified personal trainer, and unlimited access of group exercise classes. The next step up is the Platinum Membership. This plan is like the Fitness plan, except all local Bally facilities can be used instead of just the one where enrollment occurred. This plan also offers family add-on discounts. Premier Membership allows access to all Bally facilities in North America, racquetball courts and childcare programs. Premier Personal Training Membership offers three one-on-one dynamic personal training sessions with a certified personal trainer. Premier Plus Membership offers the same benefits as the Premier Membership, with an additional one-time transfer privilege. The next step up is the Premier Plus Personal Training Membership. This is similar to the Premier Personal Training Membership, but with the addition of the one-time transfer privilege. Then there is the Deluxe Personal Training Membership. This membership offers six one-on-one dynamic personal training sessions with a certified personal trainer, a Bally Nutrition Start-Up pack and a pre and post body composition analysis along with the other benefits of the other memberships. Finally there is the Ultra Personal Training Membership. This membership is exactly like the Deluxe Membership except it offers twelve one-on-one dynamic personal training sessions. A benefit of being a member to a Bally Total Fitness Center is that membership cards can be used to receive discounts at certain retailers, for instance, a 10% discount at Best Buy. (ballyfitness.com, 2004) Prices of these memberships vary from different locations as well as different promotional offers. For example, at the Mira Mesa Bally Total Fitness Center, a Platinum Membership is $75 down and $36 a month. Just over the Memorial Day Weekend, they offered a family add-on special. Bally Total Fitness also offers special rates and discounts. There is a Student Summer Membership as well as Corporate Memberships. Bally's also has an offer of the month. One of the biggest complaints pertaining to Bally's memberships and that of the competition is that it is too expensive and they do not like the contract. This should be put into consideration if Bally's might want to adjust membership prices. There are numerous facilities across the nation as well as several clubs worldwide. This past April, Bally's opened a fitness center in Monterey, Mexico. In San Diego, California alone there are four facilities as well as a facility in nearby cities Vista and San Marcos. Also, Bally brand name products sold in retail stores contain an offer for a free two-week membership to try out a facility nearby. Bally Total Fitness has a website at www.ballyfitness.com with a club locator, an online store and all information regarding Bally's membership plans and offers. Bally Total Fitness is exceptional when it comes to promotion. Bally's has numerous advertisements on television, Internet, radio and print. Bally Total Fitness is currently doing a campaign called "Every Body Needs Something". The campaign reinforces the fact that only Bally has the widest range of fitness products and services for consumers' ever-growing health and wellness needs. It also reflects the Bally philosophy that only a combination of proper nutrition and diet instruction, along with a regular fitness routine tailored to your body's specific needs, will produce effective and lasting results. (ballyfitness.com, 2004) Bally's also utilizes their Personal Relations. An example of this would be undertaking the President's Challenge. Recent promotion has been beneficial to the company. According to the first quarter of 2004 results, revenue has increased 2% from the previous year's first quarter.SALES Bally Total Fitness considers it's staff a sales force. There are 23,500 on-site staff members, 6,700 group exercise instructors and 3,500 personal trainers. As the dominant brand in fitness, Bally Total Fitness enjoys several significant advantages such as the company's extensive back-office infrastructure that allows it to efficiently support ongoing relationships with members. Also, Bally's strategic marketing programs, unique administrative infrastructure, unified national training programs and regional management structure result in consistent delivery of services and significant economies of scale. (ballyfitness.com, 2004) Bally Total Fitness also has a Sports Medicine Advisory Board consisting of 16 fitness experts including Doug Heir, a highly decorated gold medallist. The Board members meet four times a year to advise and assist Bally Total Fitness in the development of programs and services focusing on all segments of the population. (ballyfitness.com, 2004) Bally Total Fitness has a knowledgeable and competent staff. Bally's should continue to employ people of this caliber and continue to motivate their staff to keep top performers. Conclusion This marketing audit shows that the Bally Total Fitness marketing program has been somewhat successful so far. This is demonstrated in their first quarter of 2004 results as net revenue has gone up, but only slightly. However, due to the matter of the pending class action lawsuit Bally's is facing, it is possible that numbers have been misrepresented. That situation can prove disastrous for Bally's, as it may create dissension between the company and their shareholders. It may also stir up bad publicity for the company. Bally Total Fitness should make use of Public Relations to handle this situation to dispel of any uneasiness that has resulted from this lawsuit being brought to light. Other than the lawsuit situation, Bally Total Fitness has good, innovative ideas and a great product. However, there is still much room for improvement. The company should continue with their "Every Body Needs Something" campaign. The campaign should be pushed more aggressively as this tag line envelops different kinds of people of every size and shape. This campaign can also be effective towards marketing towards the different age spectrums, both young and old. Bally Total Fitness can capitalize on the Baby Boomers as well as set the tone for the younger generation that being active is beneficial to both body and mind. Works Cited24 Hour Fitness. May 2004. http://www.24hourfitness.comBally Total Fitness. May, June 2004. http://www.ballyfitness.comBearden, William O., Thomas N. Ingram, and Raymond W. LaForge. Marketing: Principles & Perspectives, third edition. Boston: McGraw-Hill, 2001.Churchill, Jr., Gilbert A., and J. Paul Peter. Marketing: Creating Value for Customers. Burr Ridge: Austen Press, 1995.Epinions. May 2004. http://www.epinions.comGold's Gym. May 2004. http://goldsgym.com

Bally Total Fitness Bally Total Fitness started with a different competitive strategy than they currently have. Bally began with a differentiation competitive strategy. Bally would sign clients to a 36 month contract, charge an initiation fee between 49 and 99 dollars, and then charge a monthly membership fee between 19 and 39 dollars. Bally’s differentiation strategy worked early on because of them being the US leader in the membership fitness industry. Also, Bally could charge a premium and sign customers to longer contract agreements because of their size, facilities, exercise products, and nutritional products offered. But, in 2004, Bally started to receive negative customer feedback in concerns to competitive and pricing strategies. Customers no longer wanted to sign and commit to a 3 year contract, but to have something more short-term. So, to adapt to customer needs, Bally changed their competitive strategy. Bally’s changed their competitive strategy to more of a cost leadership, by implementing a pay-as-you-go membership program. Bally’s pay-as-you-go membership program freed up members from signing a 3 year contract and showed considerable acceptance among members and new members.CompetitionYMCA YMCA’s competitive business strategy is cost leadership. Each YMCA is independent and sets its own membership fees. For the most part YMCA’s are considered non-profit organizations and their goal is to help out the community rather than earn huge profits. Therefore, some YMCAs wouldn’t have set membership fees; they would base their fees off of individual or family income to make it affordable to the surrounding community.Gold’s Gym Gold’s Gym has more of a differentiation competitive strategy. Though it doesn’t mention membership prices in the text, Gold’s received a lot of national attention. In the 1970’s Gold’s was nicknamed “The Mecca of Bodybuilding”, and was featured in the 1977 movie Pumping Iron starring Arnold Schwarzenegger. Gold’s Gym has since expanded its services to include more of the fitness community, besides the heavy lifters and bodybuilders, by incorporating exercise groups, personal trainers, cardio equipment, Pilates, and yoga.24 Hour Fitness 24 Hour Fitness has a competitive strategy of cost leadership. The aim and goal for 24 Hour is to serve the 87% of the public that didn’t already belong to a health club. 24 Hour Fitness adapted to the geographical regions and its customers by offering different sized facilities (depending on the region), different initiation fees and ongoing monthly fees (based on the surrounding income), and also offered a pay-as-you-go program (for members who wanted month to month). With these different options you could say that 24 Hour Fitness has some differentiation competitive strategies, but for the most part they want to keep costs low for the customers, to influence more members to join.