I.

Strategic Situation Summary

The RRR Fitness Center is one of the most visited gyms in City Homes Resort Ville

Dasmariñas Cavite. We decided to create a service marketing plan for the business to be able to

gain more profit since there is a lot of new competitors who offers almost the same service and

promotion and this is why their sale was declined for the past years. RRR fitness center was

established on October 2011. Their tools and equipment still on a good running condition but

since technology evolves they also need to cope up with it. RRR fitness center provides their

customer’s great relaxing experience when you enter the gym and also provides an affordable

price. You can enjoy working out the whole day for only PHP40 a day but you also have option

to have their promotion for one month subscription and 15 days for only PHP200 to PHP400.

The owner of the Gym Mr. Rommel Giunucod allows us to gather information that we can use

for creating new marketing strategies that can also help his business in the future. One of the

things that RRR fitness center need to do is to make sure all the tools and equipment are always

in a good running condition. Make Renovations for the establishment and adding new tools and

equipment that can capture the attention of perfective customer. RRR fitness center needs to

create awareness to their customer by promoting their business with the use of social media. In

order to accomplish all this things we come up with the budget that is needed and create a sales

forecast for the next two years since we will be having new promotions and strategy that can

help the business to more competitive with its competitors.

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1.1 Organizational Structure

RRR Fitness Center is one of the oldest gym at City Homes Resort Ville Dasmarinas

Cavite. It managed by Mr. Rommel Guinucod a former manager of Star City for 17 years. RRR

stands for “Rommel, Ron and Roy”. Rommel is an alumnus of Polytechnic University of the

Philippines, also took accountancy major in E-Commerce. In 2011 to 2013 the owner decided to

hire staffs to manage the business since he’s still working at that time. The staffs are responsible

for the cleanliness of the center as well the maintenance of the equipment’s, staffs before also

assisting the client’s concerns. Then in 2014 he decided to run the business by himself and with

the help of his family.

Owner
Mr. Guinucod

Staff 1 Staff 2

Figure 1: Organizational Chart of RRR Fitness Center (2011 to 2013)

1.2 PR Program

Public Relations (PR) is an important field that every businesses and companies use

strategically to connect with their consumers. PR involves maintaining the relationship with the

customers/public to promote the business and creating a good communication as well. RRR

Fitness Center is a goal oriented center that is designed to help the clients achieve their goals

through exercise. Maintaining relationship with the clients can create harmonious environment.

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Communication is key to success, through communication, relationship between the clients and

the business will establish at the same time, clients feel they are important. As part of the

campaign of the center they help the beginners, the owner himself is the one who assisting the

new clients especially for first timers. The center also has water dispensers for the clients at the

same time fitness magazine and poster for their guide. By this kind of campaigns, it involves

understanding the clients and providing their simple needs.

II. Target Market Description

2.1 Customer Profiles

The city of Dasmariñas is one of the fastest growing local government units in the province of

Cavite. By the fast growing of economy in the province, business are very visible and different

establishments like malls and shopping centers can be found.

The figures below show the demographic profile of customers in Dasmariñas

Gender Age Groups

0-
65+ 14
yea yea
rs rs
4% 29
%
Female; Male;
331,419 327,600
; 50% ; 50%
15-
64
yea
rs
67
%

Gender Age Group

Male 327,600 0-14 years 192,261
Female 331,419 15-64 years 443,626
As the Total 659,019 figures show 65+ 23,132

above, the

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population of genders are equally divided based on 2015 Census for Dasmariñas and with

regards with the age group, 15 to 64 years old occupies 67% of the total population. This

segment will be the target market of RRR Fitness Center since this segment can categorized as

young adults and professionals. RRR Fitness can cater the market since its open for all ages.

Strategically, we can take advantage the wide span of the segment since we can cater different

ages of fitness enthusiast.

2.2 Customer Preference

Customer has their own reason why they go to a fitness center, every customer has their

own goals and objectives, usually of them wants to stay fit and healthy, and others are aiming to

lose weight or gain friends. Here are some reasons and preferences of every customer why they

go to a fitness center.

Physical Environment

The ambiance is one of the factors that they considered, having a peaceful place to exercise is a

big factor to have a peace of mind, and People usually go to the gym because they want to

relieve their stress while exercising.

Equipment’s

Gym equipment’s are also one of the preferences of customers in a fitness center. Complete

equipment’s and tools are assets that can attract more customers, having this equipment’s

complete, they tend to maximize everything and find a value for their money. Well maintained

equipment’s can be also considered since all the customers are using it. It can be additional score

for the quality of the service of the center.

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Staffs

Having a friendly staff is the biggest asset of a fitness center, Staff maintain the good

relationship with the clients and building connection with them. Maintaining the clients is the

biggest challenge in every fitness center because of the competition thru out the market, but by

the help of the staffs it will be an asset to the center since their retaining existing customers and

by the help of word of mouth, existing clients can recommend the center for the outstanding

service.

Promos and Deals

Everyone loves promos and discounts, by strategically planning, promos and deals can lead to

profit and loyalty for every client. Attracting new customers using deals and membership are

very challenging since everyone is doing it. The big challenge here is how we will be unique to

others. Promos and deals are not only for profit but it also increases brand awareness and it

builds the brand identity.

2.3 Buying Habits

Loyal customers

In the trend today people are more conscious regarding health and fitness on this from

that specific point Gym, Fitness centers and the likes have open up various options for the

growing market. From its own ground the patrons will just look for an addition to this to make it

a whole package to seal the deal. From the already known offers of our business it would lure

more customers by having package deals for example (free gym necessities like towels,

tumblers, sweat bands, baller) that has the insignia of our establishment to also serve as a

marketing toll for annual patrons. Annual challenges can also be implemented that will target

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again our loyal customers that will help them game prizes and an additional boost to their goals.

It could also serve as a merchandise that we can sell off our shelves.

Referral discounts

We can also offer referral discounts that will have a certain quota so that customers

would be able to get more while paying less than the already low price that we have. Enhancing

our tools and equipment is essential so that we can go head to head with the prime names in

fitness. This is to better ourselves to better serve our customers’ needs so that they can follow the

latest trend in fitness. From all the layers that we discussed above we need to also match it with

man power what are tools, equipment’s and customers if they wouldn’t be able to maximize the

benefits. Additional gym instructor/ fitness trainers to guide our customers to harness their skills

this is to just meet the demands from the part that we lured additional customers to gain more

income.

2.4 Size and Growth Estimates

From the previous numbers that we have up to this day from and if all the said above would be

implemented or at least some of them since acquiring additional tools or equipment would be a

bit on a long term improvement. The projected increase in the number of patrons that we would

have will be around 15 to 19 persons. That will be roughly around 25 % increase to the daily

traffic that we will be able to accommodate.

CU STOMER
CUSTOMER
20
15
10 6|Page
5
0
Current Forecast
2.5 Distribution Channels

Membership Marketing. Those clients who prefer to have a membership so that they don’t need

to pay every time they visit the gym.

Blogging. This is done by two or more persons. One will take a video and one will discuss about

what in it on the fitness center, how the gym can boost someone’s confidence and how the

blogger can influence prospect clients.

Facebook Marketing. We will create a Facebook page showing all the list of discounts that the

customer can get. This includes the membership fee, loyalty discounts and referral discounts and

freebies. The information will be disseminated to the public at real time. This has a big part as

well a web page under Facebook will be a great deal a prime medium to exhibit the members

pictures to co-members and those who are interested to join. Members will also have the right to

post and tag their love ones, friends, families or even just acquaintances. From this, we would be

able to answer inquiries so that we can cater our prospects.

Word of Mouth. This is much related to loyal customers because they will serve as the medium

of the information regarding their best gym experience.

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2.5 Analysis of key competitors

Name of Competitor Products and Services

30PHP Per session
Deza Gym
400PHP Monthly
50PHP Per session
Carry on Gym
500PHP Monthly
40PHP Per session
Volet’s Gym
500PHP Monthly

Table #3: Table of Direct Competitors

2.7 Guidelines of Positioning Strategy

RRR Fitness Center is one of the most visited fitness center in City Homes RV

Dasmarinas Cavite. They are providing service to their customer for students, professionals and

you who is physical conscious.by using their tools and equipment. RRR Fitness Center

positioned them as individual gym that is accessible, affordable fitness center and with

approachable coaches located in the residential area.

III. Objectives for Target Market

The RRR Fitness Center is one of the most visited gyms in City Homes Resort Ville

Dasmariñas Cavite. The company provide a great relaxing and convenient service to those who

wanted to work out and stay fit in a very affordable price for the customers. They are committed

to maintain clean facility, both inside and out, that makes people want to use it because nobody

wants to work out in a dirty gym.

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 In order for the RRR Fitness Center to succeed over its competitors and attain

dominance, the following objectives were enumerated to attract more customers and build

reputation and credibility in gym services to generate more profit:

1. Position RRR Fitness Center to the market as a gym that provides clean facility and provide

unique programs in a very affordable price.

2. Create strategies that will make RRR Fitness Center ahead over its competitors.

3. Attract many health conscious people who find their value in working out their body and

staying fit, who will regularly visit the gym.

4. Constantly seek improvement and upgrade tools and equipment to attract more customers.

5. Create awareness by means of promotions on a different channel, particularly in social

media.

IV. Marketing Program Positioning Strategy

4.1 Product Strategy

Supplements

Selling supplements such as whey protein, creatine, mass, and amino for those people

who need to have faster improvement that can also be a source of additional income to the

business

Tools and Equipment’s

Additional tools and equipment’s like treadmills, training ropes and Swiss balls that can

capture the market of women’s.

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4.2 Distribution Strategy

The current distribution channel of RRR Fitness Center are through direct sales which

allows you to contact customers without any intermediaries through visits personally the gym

which is the service factory. Implementing a deeper focus of plans about building relationships

with people and offering them a high level of service and personal attention is recommended for

RRR Fitness Center. The current direct selling of the company is performing good outcome and

doesn’t need to change.

4.3 Price Strategy

Student Discount. Available for students 18years old and above. The student can get 10%

discount on their monthly subscription. They also need to provide proof that they are currently

enrolled by providing ID’s, and Certificate of Registration.

4.4 Promotion Strategy

Membership Card. Every member can choose to avail the membership card cost PHP 100 on the

top of the monthly subscription (one-time charge, valid for 1 year on the day of purchase) by

using this card, every member is entitled to get 10% discount on their monthly subscription, it

can also add up with other promotional offers.

Reward Members for Referrals

For every referral, members can get 10% discount for their monthly subscriptions.

Criteria: Referrals should be enrolled also on regular monthly subscriptions.

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4.5 Marketing Research

This specifies the information required to address some issues, collect information, manage and

implement the data that gathered, analyze results, and communicates the findings and execution.

The table below shows the allotted budget for the entire renovation and upgrade

including promotions. Upgrade for tools and equipment’s including promotion and renovation

are based on the current market price.

Activities Description Amount

 Thread mills

PHP 10,720 x 2 =

21,440
 2 Thread mills
 Exercise Bike
 3 Exercise Bike
PHP 2,679 x 3 =
Upgrade  2 Gym Balls
8,037
 1 Punching Bag  Gym Balls

PHP 398 x 2 = 796

 Punching Bag

PHP 1,300

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 Expansion and Renovation  Estimated Cost

for 1st and 2nd floor PHP 30,000

Renovation
15 days estimated  Labor

completion PHP 15,000

Promotion Tarpaulin and Membership PHP 5,000

Card
Total PHP 81,573

Table #8: Budget Table

Activities Q1 Q2 Q3 Q4 Total
Equipment

Maintenance

(Cable Wires PHP 1,000 PHP 1,000 PHP 1,000 PHP 1,000 PHP 4,000

and Cleaning

Materials)
Freebies PHP 1,000 PHP 1,000 PHP 1,000 PHP 1,000 PHP 4,000
Events - PHP 10,000 - PHP 5,000 PHP 15,000
Total PHP 2,000 PHP 12,000 PHP 2,000 PHP 7,000 PHP 23,000

Table #9: Quarterly Budget Table

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Executing

Issues and Risk

Marketing Responsible
Date Due Resolution Plan
Activities Personnel
or Escalation
2 weeks

allowance before

the soft opening

June 15, 2018 for Renovation Team
Expansion and just in case of
July 1, 2018 re- and Business
Renovation other
opening Owner
circumstances

(weather

condition)

4.6 Coordination with other Business Functions

Marketing Department

Marketing department will be in charge to make sure current strategies will be effective

and can reach the target market. They are the one in charge to launch and monitor promotions to

increase brand awareness and attract more customers. They also need to provide some marketing

materials to help promote the company and they will be getting in touch and work with finance

team for the budget.

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Operation Management

Operation management are responsible for upgrading tools and equipment. Having a

good working tool and equipment will help to attract more customers since it will be more

convenient to use and effective for their working out routine. They are also in charge with the

renovation and expansion of the area. They need a proper planning and budget for the better

result and later on can have a return of investment. They are also the one who will be in charge

of maintenance Proper of the facility and equipment.

V. Forecast and Budgets

According to the 2015 census, the total City Population is 659,019. Male population of the City

is 327,600. People ages 12 to 64 years old is equivalent to 443,626. More precisely, 20-29 years

old are 126,538 and 30-39 years old are 95,554.

Description Number of Population Percentage

Population 659,019 100%

Male 327,600 49.71%

Ages 20-39 222,092 33.70%

Willing to go to Fitness 177,673 80%

Center
Can afford to go to 142,138 80%

Fitness Center
Market Share 142,138* 21.55%

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There will be 80% estimated historical demand from the previous year. Market share of 142,138

divided by 80 percent multiplied by an hundred is equivalent to the estimated demand for the

year 2016 of 113,710 and so on.

5.1 Historical Demand

The Table 1 shows that in RRR Fitness Center’s historical demand there is an enormous increase

between their previous years in operating the business in year 2015 up to 2017. In year 2015 the

total number of customers demand is 4,549 while in the year 2017 the demand increases in a

total of 7,107.

Table 1
Historical Demand

Year Population 5% Price Total

2017 142,138 7,107 40 284,280

2016 113,710 5,685 40 227,440

2015 90,968 4,547 40 181,876

5.2 Projected Demand

Table 2 shows that there would be a projected demand of RRR Fitness Center services in the

year 2018 up to 2020. The average prices of the product is P40.00. By year, 2020 it was assumed

that RRR Fitness Center coffee would be having 9,824,601 total demand of their service.

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 Table 2

Projected Demand

Year Util Price Total

2020 254,615 40 9,824,601

2019 204,679 40 8,187,160

2018 170,566 40 6,822,640

5.3 Historical Supply

Table 3 shows that in year 2017 the supply of RRR Fitness Center reached the total of

504,576. And in the year 2016, the company got 8,760 supplies of their product. In the year

2015, 350,400 is the total supply of Figaro Coffee.

Hours Employee Day Total

12 Hours 2 Staff 365 8,760

Table 3

Historical Supply

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 Year Util Price Total

2017 12,614 40 504,576

2016 10,512 40 420,480

2015 8,760 40 350,400

5.4 Projected Supply

Table 4 shows the projected supply of RRR Fitness Center in year 2018 up to 2020 having

P40.00 average price of a service. In year 2017, the total projected supply would be 504,576 and

it will increase its supply in year 2020 in total of 871,880.

Table 4
Projected Supply
Year Util Price Total

2020 21,797 40 871,880

2019 18,164 40 726,560

2018 15,137 40 605,480

5.5 Demand and Supply

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Table 5 shows the supply and demand of RRR Fitness Center considering its gap, target share in

percentage and target share per session. In year, 2018 the supply and demand of RRR Fitness

Center is 77,715.Thus, in year 2020 the target share increases in 116,409.

Year Demand Supply Gap Target Target

Share (%) Share

2020 254,615 21,797 232,818 50% 116,409

2019 204,679 18,164 186,515 50% 93,258

2018 170,566 15,137 155,429 50% 77,715

5.6 Sales Forecast

Daily Subscription Previous Year 2019 Forecast 2020 Forecast

Q1 61,200 64,260 67,473
Q2 32,400 34,020 35,721
Q3 36,000 37,800 39,690
Q4 28,800 30,240 31,752
Table #4: Daily Subscription Forecast

The data above shows the forecast for the next two years of the sales of RRR fitness center.

We come up with the data buy the use of the head count of the customer on the daily basis.

We are expecting 5% increase of the sales per quarter for the next two years.

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 Daily Forecast
Previous Year 2018 Forecast 2019 Forecast

67,473
64,260
61,200

39,690
37,800
36,000
35,721
34,020
32,400

31,752
30,240
28,800
1

4
Q1 Q2 Q3 Q4

The graph shows the trend of sales for the daily subscription, Q1 which is January,

February and March are considered as a peak season for the center since this is the months that

people wants to achieve summer body.

Monthly Subscription Previous Year 2019 Forecast 2020 Forecast

Q1 19,200 21,120 23,232
Q2 15,600 17,160 18,876
Q3 14,400 15,840 17,424
Q4 15,600 17,160 18,876
Table #5: Monthly Subscription Forecast

The data above shows the forecast for the next two years of the sales of RRR fitness

center. We come up with the data buy the use of the head count of the customer on the monthly

basis. We are expecting 10% increase of the sales per quarter for the next two years.

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 Monthly Subscripti on
Previous Year 2018 Forecast 2019 Forecast

23,232
21,120
19,200

18,876

18,876
17,424
17,160

17,160
15,840
15,600

15,600
14,400
Q1 Q2 Q3 Q4

Trend for the monthly subscription for quarter 1 is going up comparing to the previous

sales, we expect an increase for the next year by the helped of our promotional campaigns.

Total Revenue Previous Year 2019 Forecast 2020 Forecast

Q1 80,400 85,380 90,705
Q2 48,000 51,180 54,597
Q3 50,400 53,640 57,114
Q4 44,400 47,400 50,628
Table #6: Revenue Forecast

We expect 15% increase by the next two years in the total revenue of the center. As the

data shows above, still quarter one is considered as peak season. By continuing the promotional

initiatives, the other quarters also increased compared in the previous sales.

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 Total Revenue
Previous Year 2018 Forecast 2019 Forecast

90,705
85,380
80,400

57,114
54,597

53,640
51,180

50,628
50,400
48,000

47,400
44,400
Q1 Q2 Q3 Q4

A rapid increase of sales for the total revenue for the next two years are obviously shows

on the graph above. The revenue of the fitness center depends in the season, quarter four consist

of BER months is the lowest revenue for the projection since majority of the people enjoying

holiday season.

5.7 INCOME FORECAST (Year 2018)

Revenue 223,200

Cost of sales (100,000)

Gross Margin 123,200

Operating expenses (104,573)

Upgrade 31,573

Expansion and Renovation 45,000

Promotion 5,000

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 Activities 23,000

Electric bill 5,000

Water bill 2,200

Operating Income 18,627

Income tax expense (5,000)

Net income 13,627

The information above shows the Income forecast of RRR fitness Center in the year

2018. It shows operating expenses a total of 104,573; Upgrade; 31,573 consist of upgrading the

tools; 2 Thread mills for 21,440, 3 exercise bikes for 8.037, 2 gym balls for 796 and 1 punching

bag for 1,300. Expansion and Renovation for 1 st and 2nd floor; 15 days estimated completion for

45,000 consist of the materials to be used and labor cost. Promotions; Tarpaulin and Membership

Card for 5,000.

5.8 PROFITABILITY ANALYSIS

Gross Margin Profit Ratio

= Gross profit/Sales revenue x100

= 123,200/223,200 x100

= 0.55 x100

= 55% of sales revenue remains to meet the other expenses and required profit; 45% of

sales revenue went to purchase or create the inventory.

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Operating Profit Margin

= Operating Income/Sales revenue x100

= 18,627/223,200 x100

= 0.0835 x100

= 8.35%

Net Profit Margin

= Net income/Sales revenue x100

= 13,627/223,200 x 100

= 0.0611 x100

= 6.11%

5.9 CONTIGENCY PLAN

In every business there’s always a risk that may encounter. Especially in the fitness center,

large equipment’s and heavy plates can be a caused of a serious accident and may lead to a bad

impression in the business. Here are the courses of action that can be applied in the fitness center

to reduce the risk.

 Availability of First Aid Kit

First Aid Kit should always be readily available in case of some accidents happens.

 Direct contact to emergency hotlines

List of numbers for emergency hotlines to be contact immediately in case of accidents.

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 Implementing standard operating procedures

Businesses should have SOP’s (Standard Operating Procedures) to be followed for the

safety of the customers. Example: Wearing proper attire and proper used of tools and

equipment’s

 Posting visual guides for proper workout procedures

Visual guidelines for proper workout procedure for the customer to be knowledgeable in

using the equipment.

 Preventive maintenance in all equipment’s before the center opens

 Sanitizing and cleaning the equipment’s to reduce communicable diseases.

VI. Appendices

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REFERENCE

http://www.planprojections.com/projections/income-statement-forecast/

Essays, Fitness Business Retrieved from

http://thefitmancollective.com/fitness-business/gym-business-models/

Slideshows, Fitness Industry Analysis Retrieved from

https://www.slideshare.net/tinaelaine/fitness-industry-analysis-3053375

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Reports, Industry Reports retrieved from

https://www.franchisehelp.com/industry-reports/fitness-industry-analysis-2018-cost-trends/

Essays, UK. (November 2013). Fitness Business Analysis. Retrieved from

http://www.ukessays.com/essays/sports/fitness-express.php?vref=1

Essays, Fernwood Personal Training retrieved from

https://www.fernwoodfitness.com.au/personal-training-short-courses

Equipment’s, Toby’s Sports retrieved from

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