BIG JIM'S GYM

Big Jim has been in the body building business for many years in Glendale, California. His
gymnasium, originally for men, now consists of separate facilities for men and women located
beneath a pizza parlor in downtown Glendale. Jim's view the primary task for his business is
"providing a full range of body building and weight reduction services for upper and middle-class
men, women, and children in the Glendale area."

Currently, he has 20 employees who work with the customers in designing their health programs. At
present, his gym has separate weight-lifting and exercise rooms for men and women, a pool, a sauna
bath, and a small running track behind the building. While Jim states that every customer is
different, he makes men go through his 23-step conditioning course and women follow the diet in
"Big Jim's Energy Diet" pamphlet. (Customers are usually enrolled in a ten-week introductory
course and then left to advance at their own pace.)

The gym is modeled after the one; Jim first managed in an army camp in Pennsylvania "right down
to the olive-drab walls." Jim maintains that the spartan atmosphere is necessary "to build physical
and mental toughness." With some pride, Jim notes that he has all of the latest barbells and slant
board apparatus. Jim has always viewed his major inventory items as liniments and bandages, which
are ordered periodically from a wholesaler or are purchased from a nearby drugstore if stockouts
occur. (Other items are purchased from a local sporting goods store.)

Jim is very concerned about keeping all of his staff busy and keeping the equipment in constant use
so he requires that customers follow a specific hour-by-hour schedule on equipment use. If the
equipment is scheduled to capacity, he requests that his customers come at slow periods during the
day or evening. (This procedure has met with some resistance on the part of customers, but Jim tells
them that that is the price they must pay if he is to provide the most up-to-date health center
services.)

Jim has done a survey of the prices charged by the other four health centers in the area and his fees
are about average.* The other health centers have about the same number of employees, although
two of them used licensed beauty consultants. Jim considers this an "unnecessary frill" and tells all
of its customers that anybody who works for him is an expert on all aspects of body maintenance.
Jim has instituted a policy of job rotation whereby each member of the staff, with the exemption of
the clerk-typist, changes activities each hour. Employees are paid by the hour and are primarily
college graduates who are interested in athletics. Turnover has not been a problem, even though Jim
pays only slightly more than the minimum wage.

Although Jim's capacity is fully utilized, the number of memberships has dropped from 500 to about
300 in the last six months, and profits have dropped proportionately. His accountant is looking into
the possibility of raising membership fees.

*With in this market segment, Jim is competing, among others, with the Glendale Athletic
Club. GACs facilities include ten handball-racquetball courts, eight tennis courts, 50-meter
pool, sauna and steam rooms, a weight room with five S5,000 Nautilus weight lifting machines,
and a fully equipped health bar. GACs staff includes a trainer, five masseuses, five instructors,
and ten other staff members.

________________________________________________________________________________
This case has been prepared for class discussion rather than to illustrate either effective or ineffective handling
of an administrative situation. Any part of this case cannot be reproduced without prior permission of XLRI.
Questions to be answered:

1.What is the Target Market for the Gym in this case?

2.What is the Market Positioning of Big Jim’s Gym ?
3.What are the probable reasons for membership going down?
4.What solutions you would propose for Big Jim’s Gym

Note: Remember answers should be precise and by no chance should exceed 150 words for each question.
You are free to make assumptions but they should be reasonable and must be mentioned while writing your
answers.