Capital Fitness Corporate office: 15 North Butler Street Madison, WI Local office: H. No. 4-12-254/1, Subhadra Nagar Road, Bhagyalatha Colony, Vanasthalipuram Hyderabad India Local Phone: 040-27764429 12/1/2012 Capital Fitness Corporate office: 15 North Butler Street Madison, WI Local office: H. No. 4-12-254/1, Subhadra Nagar Road, Bhagyalatha Colony, Vanasthalipuram Hyderabad India Local Phone: 040-27764429 12/1/2012 Jay Castle As a marketing product manager for Capital Fitness I was assigned the responsibility of increasing the sales of our products and our personal training services.
As a company we have decided to expand by going international; focusing on the booming population of fitness professionals in India. Jay Castle As a marketing product manager for Capital Fitness I was assigned the responsibility of increasing the sales of our products and our personal training services. As a company we have decided to expand by going international; focusing on the booming population of fitness professionals in India. At Capital Fitness we believe that working out is fun and should be a part of everybody’s day to day life.
Because there is so much more to fitness than just rippling muscles and six pack abs. It makes the mind sharper, the body respond to stress better and it simply brings on a lighter mood. The idea of fitness is on the rise, not just in America but globally; this is due to the lifestyles of the individuals in our culture. Americans started by outsourcing our jobs to India and now we are outsourcing obesity. As developing countries go through rapid stages of growth, fast food companies and companies that provide quick pre-packaged meals have pounced on the opportunity to take advantage of the situation.
Now it is our turn to pounce on the opportunity of taking our fitness center globally, to India. As the world’s second most populous nation, with more than one billion people, India is projected to become one of its biggest economies. As a business it’s important to expand and continue to grow our market share. The only way this can be done is if we can keep our investors happy by staying profitable. So its important to carefully weigh the risks and rewards for growth.
America is past its growing stage and India is just at the beginning of its maturity stage that’s why it is imperative we have a strategy set in place for marketing our Capital Fitness brand in India Before just rushing to enter the Indian marketplace, it needs to be recognized that the country is in a very different proposition than we are in the states – both in terms of business practices and consumer preferences – and must be treated accordingly. It must be addressed that we cannot expect to enter into the Indian marketplace by simply dusting off the old equipment in the basement. Our market is in many ways different than that of India’s.
Indian consumers are also very different – enormously value conscious and very finicky with who they do business with. If Capital Fitness is to thrive in India we must customize our products and services to the particular preferences of Indian consumers. After all of my research I have come to the conclusion that the key to succeeding in India is to be prepared by tapping into the networks and resources available. Those resources (local gyms and entrepreneurs) can provide information to us regarding pricing, logistics and even the local culture. Thereby we would be going in with realistic expectations. “Feed Your Mind Some Body! This quote/mission is how we explain our purpose and our relevance in our members lives – it speaks volumes to our philosophy. There is much more to working out then just moving weights around or running on a treadmill; one must be thoughtful and strategic when deciding to stay healthy. That’s where Capital Fitness comes in, providing a place to exercise mind, body ; spirit. Capital Fitness started up in 1987 with the dream of becoming the best fitness center located around the capital square in Madison, Wisconsin. It has since found a way to do just that thanks to such a lucrative and growing industry.
From the one floor office space in 87’ with 3 employees to the now five story building filled with top of the line equipment and 25 employees, capital fitness has taken advantage of many great opportunities to grow. Capital Fitness has been no stranger to quick growth and increasing market share. This report will be presenting a new opportunity to the Vice President of Marketing Cheri Baker. There are many products and services available to a Capital Fitness member. Each one of those members is supported on their journey to optimal health by offering a full spectrum of programs and services to enhance their lifestyle.
Including but not limited to more than 100 fitness classes, massage therapy, physical therapy, muscle activation techniques, nutritional and behavior modification instructions, Pilates/Yoga classes, personal training and health education seminars. Capital fitness strives to provide the best fitness equipment for our members. Currently our facility features Cybex strength training equipment, free weights and Precor cardio equipment, also aerobics, Pilates and Yoga studios. This equipment is universal and is world renown so we will be able to keep the same suppliers as we expand to India; meaning we can still receive our company discount.
Together our staff of exercise physiologists, licensed nutrition experts and personal trainers provide a wealth of expertise and support that our members have learned to be able to count on. Many of our staff members have college degrees in the exercise science field, with certifications in various specialties. The staff has expressed to me the desire to expand to another country. It is my firm belief that our staff could design an exercise and nutrition plan for anyone in any country. In 2010, Money Magazine surveyed readers to learn what they would not sacrifice in the recession.
Nearly half said they would not give up their health club membership – ahead of categories such as eating out or big vacations. Because of this even in the midst of the economic downturn, the fitness industry has maintained steady growth, with membership rates growing consistently and profit remaining solid. Despite a crippling recession, the fitness industry has continued to flourish. Many factors play a part in fueling the success of this largely recession-proof industry; not the least of which is the growing trend among the 80 million plus baby boomers who are willing to part with their money to stay fit and healthy.
It is now a fact that buying’ fitness is no longer perceived as a luxury item but a fundamental part of our everyday lives. Simply put, the industry is strong and healthy, and there are not enough clubs to serve the current and fast growing gym member population. This is not just the case here in America; the fitness industry is growing worldwide. It is because of this fact that Capital fitness is looking to expand its services even further. The fitness industry will continue to be a favorable market opportunity for small businesses and entrepreneurs so long as our economy and lifestyles remain the same.
I say this because if you look back in time or at an underdeveloped country there is never a need for a fitness center, this is due to the lifestyle of those human beings in that situation. As Americans we live in the most fitness-conscious civilization ever known. The proliferation of gyms, popular exercise regimens, videos and yoga studios has made the idea of fitness a multimillion-dollar business. Whereas if you moved to a part of the world where there were no cars, no escalators, no UPS – say, Mongolia – maybe you wouldn’t need an exercise program and there would be no purpose for a gym.
The reason for this is the people that live in Mongolia live in a society where your lifestyle required a greater range of daily physical activity. Certainly preceding generations did not. But because the amount of activity required of most people today is so minimal, and the time available to exercise is so tightly circumscribed by work, family, civic, and other obligations, most people need to be precise with the precious time they do commit to fitness.
In looking at ideas of how to expand Capital Fitness as a company I have been exploring many different opportunities none of which have looked as bright as the idea of opening a fitness center in India. When reading the New York Times this year I came across an article titled “How India Became America”. With this project fresh on my mind I couldn’t help but wonder if the fitness industry in India would go through the same boom that we have seen here in America. I was willing to make the leap and say that since India is turning into such an economic powerhouse like America once was that they are only headed down he same path as we are. Sure enough as I looked into it more, my theory was correct. The major cities in India have at least 5 fitness centers, with some cities having up to 15 different fitness related facilities. Economically speaking the rest of the world looks up to America with all of its luxuries and commodities – India is no exception. With the two countries being the largest democracies in the world and having such strong growing business relationships, similar strategic interests and huge cultural similarities, it’s hard not to believe that India is on a very similar path as the United States.
Globally, there is a greater focus on health and fitness and a strong demand for a branded fitness center with international standards of service. With this serge in the field it would be a great time to enter into India’s marketplace. In this study we will first look at India and their economic placement as a whole, then move onto looking at the specific fitness industry. In this step of the process the local and regional environment of India must be assessed to evaluate the country and target market. First and foremost I want to clarify any confusion or false inquisitions you may have – India is an emerging economic powerhouse!
With a GDP of $4. 5 Trillion to back it up and a growth rate of 6. 8% to keep it going for many years to come. India’s economic success story began in the 1990’s with the liberalization of its economy. India is now being looked up as one of the major world powers. The boom in the Indian economy has led to the rise of a new middle and upper-middle class who have a large spending power. It is also home to a rising number of billionaires. That’s where Capital Fitness has been able to excel here in Madison; we have just as many high end clienteles as we do normal community members.
The reason to evaluate this information is to determine the extent to which investing in the country constitutes a sound decision. In doing my research on India’s economy nothing stuck out to me like the growth rate of the country. According to About. com, India’s population is currently number two in size and is on course to surpass China by 2030. India is currently home to about 1. 21 billion people, representing a full 17% of the earth’s population. Just with these population numbers alone that would be enough information for me to “go all in” with the idea of expanding to India.
There are many more factors that we will have to look at before we can all feel completely comfortable with the idea of expanding. One of those factors is going to be the language. India is comprised of many different languages most of which is Hindi. Ever since the Indian Independence in 1947 English has become widely used; making this transition that much smoother. We will require our trainers and management staff to take language and cultural understanding courses in order to relate better with their clientele.
As a company we will have to adapt our products, services and marketing mix strategy to meet the local needs and wants (both things we are unable to change). Just by doing a little research online it is clear to see that the opportunities of doing business in India has led to great success for a multitude of companies in many different industries, but has presented several challenges as well. To understand these challenges and to learn how to effectively do business in India, it is important first to learn how Indian firms and their managers conduct business.
Business, as practiced in India, provides a useful model for Western organizations planning to enter India’s marketplace. In contrast to many Western transnational corporations with high technology capabilities and proprietary product systems, many Indian managers rely extensively upon long-term relationship building in their international business encounters. In such a richly diverse and complex country as India it is difficult to come to generic conclusions that can be used by those doing business there. Regionalism, religion and language are all factors that need to be taken into account when doing business in India.
Behavior, etiquette and approach are all modified depending on whom you are addressing and the context in which they are being addressed. I have created a list of different things to consider when doing business in India: 1. Meeting etiquette requires a handshake. However, Indians themselves use the Namaste’. This is where the palms are brought together at chest level with a slight bow of the head. 2. Business cards should be exchanged at the first meeting. 3. Doing business in India involves building relationships. 4. Meetings should be arranged well in advance.
This should be done in writing and confirmed by phone. 5. Always exercise patience, show good character and never exhibit frustration or anger. 6. When negotiating avoid high pressure tactics. Do not be confrontational or forceful. Basic marketing concepts tell us that we will sell more of a product if we aim to meet the needs of our target market. In international markets this will involve taking into consideration a number of different factors including consumer’s cultural backgrounds, religion, buying habits and levels of personal disposable income.
India is experiencing growth in more ways than just its marketplace it is also expanding its waist line. Using that to our advantage is going to be the best way to navigate through such a complex market. Members of modern Indian society, much like Americans, are struggling with an increase in the rise of obesity, heart disease and diabetes. Like Americans, they are looking for better ways to take care of their own health and well-being. India is going to need the recourses in order to accomplish this, i. e. ; Capital Fitness.
The Indian healthcare market, and medical technology, is estimated at a huge $34 billion and growing at 15% annually, according to the Technopak analysis. It won’t be long before our competitors want a piece of that pie. Considering we already have a successful business plan to bring to the marketplace it is very important to evaluate the product/services we offer and the related marketing mix in the light of the different regional and local target markets. This product research will start out with product testing. Testing things like our style of yoga and training.
Starting with face-to-face meetings, phone conversations, and e-mail survey contacts with people from a range of industries, company sizes, and functional areas provide a means to (1) build relationships with prospective customers, (2) understand customer needs, and (3) ensure alignment between Capital Fitness’s product and customer preferences. India has approximately 250 million middle-class people with various Western tastes in the selection of products and services. The Indian middle-class culture, however, is still very much Eastern in its ideologies.
This poses complex marketing challenges for our planning within India’s expanding marketplace. It will be up to us to understand and relate to their culture. The biggest struggle I foresee will be the transition of customs and key cultural issues. That is why most of my time and effort in researching for this project has been spent trying to make sure we coincide with India’s cultural and religious beliefs. Because India is such a spiritual place it would be disrespectful of us to not have a full understanding of their belief system. In India, individual ursuit of fitness was discouraged as the religious beliefs of Buddhism and Hinduism emphasized spirituality and has a tendency to neglect development of the body. Consequently, the importance of fitness within society in general was relatively low. However, an exercise program has been developed that conforms to religious beliefs, known as Yoga. Yoga means union, and refers to one of the classic systems of Hindu philosophy that strives to bring together and personally develop the mind, body and spirit. Yoga was originally developed by Hindu priests who lived frugal lifestyles characterized by discipline and meditation.
A big part of what Capital fitness does is within its Yoga program. We already have the knowledge and resources in order to make Yoga at our new facility top of the line and up to par with the rest of the surrounding fitness centers. Keeping in mind that India’s population is mostly between the ages of 15 and 26 we will offer much more than just Yoga and weights for people to lift. We will keep it fun and exciting by offering many of the same group fitness classes that we offer here in the States; from boot camp to body pump there really are no limitations as to what classes we can offer due to the open mindedness of the Indian people.
It will be very important to design classes that incorporate the Indian culture such as belly dancing and Bollywood fusion classes. Capital Fitness in Madison is known for its great location and facilities and this expansion to will be no exception. Whirlpools, saunas and steam rooms will just be the beginning for getting the people of India excited for our arrival. Radio will be our best way of building that excitement and adding to our market share. According to a BBC article India’s internet penetration is among the highest of all developing countries and is only looking to get bigger. Capitalfitness. et will continue to run its specials and will change its pricing over to the rupee for its clientele in India.
This article also states that there are more than 898 million mobile subscribers in India, 292 million of these living in rural areas. Converting our current mobile app over to support the 3G signal in India is a must if we are to tap into that ever growing mobile market. The right personnel for the right position will be very influential in crafting brand identity. Our staff helps select the membership plan that is right for each individual creating value; allowing us to get a client and retain them.
In the case of going international it will be very beneficial for us to hire locals in order to build trust in the community. At the same time sending some of our skilled trainers over to instill our company values will be crucial to our success. The positioning of our gym may very well be the most important decision we have to make. Where to locate is a crucial decision because this will have an important impact on profits. We should seek a location that maximizes revenues and minimizes costs. High revenue – Low cost = High profit.
Through my preliminary research I have found that Hyderabad, the land of unlimited business opportunities has evolved as one of the most preferred business destinations. Hyderabad offers an abundant skilled and trained manpower, world-class infrastructure, business-friendly government policies with simplified procedures and good global connectivity. The infrastructure alone is enough of a reason for us to locate in Hyderabad. The location of the gym is right next to a train station, not just any train station; one of the new state of the art metro railway stations.
The project to build this new high speed railway started in 2009 and there is no doubt in my mind that it will help our business prosper. According to the report titled Doing Business in South Asia by the World Bank, “Hyderabad has the most business-friendly regulations in India. ” By that they mean the ease of receiving credit for opening and maintaining businesses. This will be extremely valuable for getting the gym off the ground. Pricing research can easily be accomplished by creating some sales forecasts and cost benefit analysis.
Which can be done once we are able to partner up with some local gyms in Hyderabad and view some of their membership numbers; until then we will use our pricing from here in the states and convert it to the rupee. A lot rides on setting the right price for the right market; accordingly the following numbers are by no means set in stone and are subject to change once further research can be done. Startup costs consist primarily of building development ($300,000), equipment purchasing ($100,000), legal representation ($20,000) and general overhead ($100,000).
After the gym opens, the cost structure will consist of sales agent salaries, general and administrative costs, and marketing. In the first year, marketing expenses are projected to be $20,000 per month. The launch of capital fitness will use a phased approach, beginning with building brand awareness. Brand awareness will be developed through the founder’s visible presence at professional events, online searches, networking and strategic alliances with other local gyms. This visibility will help gain investment capital. During the first six months of commercial availability, the primary objective is to expand our memberships to 1,000 members.
It is important that we take into account the standard of living in India. Holding too high of a price point could be fatal for business, as Indian consumers have less capacity to pay than Western consumers. But by making our products affordable to the mass market, we put them within reach of hundreds of millions of potential consumers. I cannot analyze all the factors relevant in making this business plan work. There are so many moving parts–it’s nearly impossible to know every solution or possibility and that’s why we need your help and cooperation so we can make this as smooth of a transition as possible.
