INTRODUCTION

Significance of the Study

Total care of the customer can only be achieved when the need of the
internal as well as external customers is considered. A good customer service
meet customers’ expectation which is influenced by such factors as competitive
pricing, employees courtesy and behavior, good value, service quality. However,
a good employee tries with heart and mind to ensure the best possible service for
the customer. The purpose of the thesis therefore was to investigate the factors
affecting the level of customer satisfaction and thereby improving the quality of
services and products.
A Fitness Center is a place that houses exercise equipment for the
purpose of physical exercise. Most fitness center employs personal trainers who
are accessible to members for training/fitness/nutrition/health advice and
consultation. Personal trainers can devise a customized fitness routine,
sometimes including a nutrition plan, to help clients achieve their goals. They can
also monitor and train with members. More often than not, access to personal
trainers involves an additional hourly fee. Fitness professionals and enthusiasts
contribute to the growth in the fitness industry by becoming entrepreneurs,
managers, and club owners.
With technological and social changes exercise is becoming less and less
part of our day to day activities. Our cultures have moved from physically intense
work over to working mostly in offices all day long. This has led people to seek
out alternative in exercises like attending courses or training at fitness centers. In
these past years health consciousness has also been increasing and awareness
of the benefits of a healthy lifestyle have further increased the demand from the
society for more exercise options, some options for everybody (Stern, 2011).
According to Stern, people are too busy working and exercise is becoming
less and less part of their day to day activities. This has led people to seek out
alternatives in exercises like attending courses or training at fitness center.
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 Health is very important for everybody. This is the source and foundation
of every action we make in our daily lives. Being a health conscious person is a
positive and a good attitude that we must be. And good thing to know that we,
Filipinos, are a health conscious people. We must take good care of our health in
order for us to do all the things we want in our life (Sassatelli, 2010).
According to Sassatelli, we Filipinos are health conscious people. We
really take good care of our body and our health in order for us to do all the
things we want in our life. Mostly Filipinos are workers and they have to take care
of their body as their capital to work and earn money.
There are many ways on how to be a healthy and physically fit person.
One of those is engaging in any sports activities. Enrolling yourself in a fitness
gym is also a way of living in a healthy lifestyle (Ritzer, 2011).
According to Ritzer, engaging many sports activities and enrolling in a
fitness gym is a way of living in a healthy lifestyle, so many people in need of
Fitness Center.

Objectives

The research aims to answer the following questions:

1. To determine sociographic profile of the respondents as of their:
a. Age
b. Gender
c. Employment Status
d. Monthly Income/Allowance
2. To determine the satisfaction level of the respondents in Fitness Center in
terms of:
a. Services
b. Place
c. Promotion

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 MARKET ENVIRONMENT

In the Philippines, fitness and wellness professionals likewise note a

growing trend among Filipinos to conscientiously observe a lifestyle of fitness,
health and sustainability. The trend indicates that the country is entering the so-
called “experience economy,” one where market value is based on creating
experiences that are relevant to consumers’ needs (Martin, 2009).
Just like spas and health clubs, fitness gyms aim to create the best
experience for their customers, who not only want to get fit but also want to feel
good while doing it.
This is one major reason why the fitness industry expects to see
continuing growth this year and beyond. This gives entrepreneurs a wealth of
new business opportunities anchored on the “health is wealth” theme and
promising relief from the many discomforts of daily life.

Product/Services
In marketing, a product is anything that can be offered to a market that
might satisfy a want or need. In retailing, products are called merchandise. In
manufacturing, products are bought as raw materials and sold as finished goods.
A service is another common product type which is useful labor that does not
produce tangible commodity.

Product Knowledge
Product knowledge is an essential sales skill. Understanding your
products' features allows you to present their benefits accurately and
persuasively. Customers respond to enthusiastic sales staff who are passionate
about their products and eager to share the benefits with them.
Knowledge is power and for your sales force, product knowledge can be
the vehicle to increased sales. We have already discussed the reasons why
product knowledge is important to your business, but the list below highlights the
benefits of product knowledge—as they directly relate to your sale team.

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 Strengthen Communication Skills – A thorough and wider understanding
of a product enables a salesperson to use different techniques and methods of
presenting a product to various types of customers. Stronger communication
skills empower a salesperson to suitably adapt a sales presentation for greater
impact.
Boosts Enthusiasm - Armed with deep product knowledge, a display of
enthusiasm and belief in the product may generate excitement among your
customers and alleviate uncertainty about the solution that the product provides
for the customer.
Grows Confidence - If a customer isn’t fully committed to completing a
sale, the difference may simply be the presence (or lack) of credibility or
confidence a salesperson has towards the product. Becoming educated in the
product and its uses will help cement that confidence.
Assists in Overcoming Objections – Factual information gained from
product knowledge, may be used to strike down objections voiced by customers.
Solid knowledge about your product coupled with parallel information about
similar products sold by your competitors—gives you that added advantage to
easily counter objections.

Customer Service
Customer service is the act of taking care of the customer's needs by
providing and delivering professional, helpful, high quality service and assistance
before, during, and after the customer's requirements are met. Customer service
is meeting the needs and desires of any customer. Some characteristics of good
customer service include:
Promptness: Promises for delivery of products must be on time. Delays
and cancellations of products should be avoided.
Politeness: Politeness is almost a lost art. Saying 'hello,' 'good afternoon,'
'sir,' and 'thank you very much' are a part of good customer service. For any
business, using good manners is appropriate whether the customer makes a
purchase or not.

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 Professionalism: All customers should be treated professionally, which
means the use of competence or skill expected of the professional.
Professionalism shows the customer they're cared for.
Personalization: Using the customer’s name is very effective in producing
loyalty. Customers like the idea that whom they do business with knows them on
a personal level.
The purpose of Fitness Center is to provide fitness programs to our
members located in Davao City area. The Fitness Center will promote long term
lifestyle changes for our patrons through exercise and nutrition for their all around
wellbeing.
The Fitness Center is a state of the art facility equipped with televisions in
the main fitness area as well as the area designated to cardiovascular
equipment. The Fitness Center will also offer a wireless remote system for the
televisions and radio stations attached to each cardiovascular machine that
allows our patrons to choose their own desired television/radio station. The
Fitness Center will also offers an aesthetic appearance in conjunction with
mirrored interior walls in the weight lifting area and cardiovascular. In the future,
the Fitness Center will plan to feature a large gymnasium with a full length
basketball court, volleyball courts, and badminton courts. Fitness Center will also
offer a variety of fitness programs and classes.
The Gym, Health and Fitness Clubs industry offers a wide array of
services across a variety of facilities, including gyms, tennis centers, ice skating
rinks and swimming pools. The industry is generally divided based on facility
type, but can also be separated by function or payment. Industry operators
generate income from membership dues, admissions, rentals, merchandise, food
and beverage sales and other services. Health and fitness clubs typically derive
a large portion of their revenue from membership fees, followed by admissions to
additional facilities, such as pools, courts, rinks and fitness class studios (Turk,
2010).

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 According to Turk, the breakdown will vary considerably between different
types of industry establishments, depending on their operations and services
offered.
Most health clubs have a main workout area, which primarily consists of
free weights including dumbbells and barbells and the stands and benches used
with these items and exercise machines, which use gears, cables and other
mechanisms to guide the user's exercise. This area often includes mirrors so that
exercisers can monitor and maintain correct posture during their workout. A gym
that predominantly or exclusively consists of free weights (dumbbells and
barbells), as opposed to exercise machines, is sometimes referred to as a black-
iron gym, after the traditional color of weight plates (Buck, 2011).
According to Buck, fitness and gym mostly composed main workout area
which the basic facility of a fitness center.
Some health clubs offer a number of facilities and services with different
price points for different levels of services. Some services have differently-priced
levels or tiers, such as regular, pro, platinum and gold facilities or packages.
Some of the health and fitness facilities use cardio equipment, fitness screening,
resistance-building equipment, pro shops, artificial sun-beds, health spas and
saunas. These health clubs, especially in the United States, are equipped with a
range of facilities and provide personal trainer support (Scott, 2011).

Scott explained that fitness center and health clubs vary in services and
product in different level. The price also varies from each fitness center or health
clubs.
Newer health clubs generally include health-shops selling equipment,
snack bars, restaurants, child-care facilities, member lounges and cafes. Some
clubs have a sauna, steam room, or swimming pool or alternative medicine
wellness facilities or offices to be present. Health clubs generally charge a fee to
allow visitors to use the equipment, courses, and other provided services. In the
2010s, some clubs have is eco-friendly health clubs which incorporate principles
of "green living" in its fitness regimen, into the design of the centre (e.g., zero
waste) or both.

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 Currently, the Fitness Center is only planning on including personal
training classes, aerobic and other fitness classes, free weights, cardio
equipment (Stairmasters, elliptical, and treadmills).
Equipment

Equipment Description Price

Fully equipped with
Treadmill performance-tuned hardware
and intelligent, fitness-tracking
technology. The dependable all- P125,000.00
steel frame provide perfect
running conditions for any
workout, mile after mile. Plus,
the spacious, 20” x 60” running
surface is supported by 8
compression shocks
Chest Press Chest Press provides the ideal
range of motion that ensures a
natural feeling of movement for
the user. This is accomplished P114,000.00
with the overhead pivot system,
specifically designed with
human biomechanics in mind.

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 Exercise Bike The features include a quick-
touch button layout, fore and aft
quick release seat adjustment,
heavy gauge grip with contact
heart rate monitoring, magnetic P63,000.0
resistance and electronic control
brake, built-in transport handle
and oversized wheels, and wide
orthopedic pedals with quick
release straps.
Elliptical Machine The machine offers a natural,
smooth, low-impact workout that
tones muscles and builds
cardio. P112,000.00

Flat Utility Bench Get into different exercise

positions with Flat Utility Bench
Get three exercise positions in P9,000.00
one by adjusting the folding flat
bench to be either flat, at an
incline, or in the step position.

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Flat Incline Bench The Flat/Incline Bench features
reinforced pivot points that help
create a sturdy, solid feel in P23,500.00
every position. The seat and
back pads are intentionally
connected in order to provide
the correct spacing between
pads at all adjustment angles.

Curl Bar Curl Bar allows you to create a

functional and versatile barbell
system that eliminates the need
for multiple dumbbell and
barbell sets. P6,975.00

Kettlebells Kettlebells are ideal for squats,

throws, cleans, jerks, snatches
and rotational swings. These
kettlebells feature ultra P1,035.00
comfortable handles, and the
iron bells are fully vinyl-coated
to help protect floors.

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 Mini Ab Bench The mini ab bench will keep you
secure while you perform sit-
ups, crunches, and plenty of
other decline exercises. P13,900.00

Weight Tree Weight Tree is designed to fit

visually with equipment for a
cohesive, professional look.
With six weight storage pegs P20,000.00
weighing just 63 lbs (29 kg) and
designed to be compact at 35" x
25" x 54" (89 cm x 64 cm x 137
cm), the Weight Tree is ideal for
anyone of any fitness level.
Dumbbell Rack Tray The 3-Tier Tray Dumbbell Rack
provides an ideal storage
solution. With its distinctive 3- P53,500.00
tier tray design, this rack makes
it possible to store Dumbbells in
a way that maximizes space
while still providing convenient
access.

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 Smith Machine The walk-through design makes
it simple to roll in benches for
additional flexibility. Designed to
be accessible to users of all
experience and ability, and to be
adaptable for a wide variety of
exercises with a generous path P198,000.00
of motion, also features 18
adjustable catch hooks – and all
of this fits into an efficient and
space-saving 54" x 84" x 84"
(137cm x 213cm x 213cm) and
just 380lbs (173kg)
Table 1. List of Equipment

Dietary

PRODUCT NUTRITION FACTS BENEFITS

Apple Less than 100 calories in a Apples are extremely rich
medium-sized apple. Apples in important antioxidants,
are free of fat, sodium and flavanoids, and dietary
cholesterol. That same fiber. The phytonutrients
medium-sized apple contains and antioxidants in apples
4 grams of dietary fiber, may help reduce the risk of
which is 17% of the daily developing cancer,
recommended value for hypertension, diabetes,
Americans. ... Your skin and heart disease. This
benefits when you eat article provides a nutritional
apples, thanks to a few B profile of the fruit and its
vitamins and also vitamin C. possible health benefits.
Granola Bar Granola is carried by people Granola's oats deliver
who are hiking, camping, or impressive numbers in
backpacking because it is fiber and iron, while nuts
nutritious, lightweight, high in and seeds add heart-
calories, and easy to store. healthy unsaturated fats
As a snack, it is often and some protein, she
combined with honey or corn says. But along with these
syrup and condensed into a benefits, granola can be
bar form that makes it easy very high in calories, oils
to carry for packed lunches, you don't need, and

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 hiking, or other outdoor contain scoops of sugar
activities. with healthy-sounding
names.
Yogurt The majority of yogurt sold in Yogurt eaters will get a
the US is either low-fat or fat- dose of animal protein
free (2). The fat content can (about 9 grams per 6-
range from 0.4% in non-fat ounce serving), plus
yogurt (8) to 3.3% or more in several other nutrients
full-fat yogurt (1). The found in dairy foods, like
majority of fat in yogurt is calcium, vitamin B-2, B-12,
saturated (70%), but it also potassium, and
contains a fair amount of magnesium
monounsaturated fat
Wheat Bread Basic Nutrition. According to Whole wheat bread packs
the U.S. Department of the nutrition of all three
Agriculture National Nutrient components of the wheat
Database for Standard kernel. The outer rough
Reference, one slice of layer of the grain -- the
commercially prepared bran -- is valuable for its
whole grain bread provides fiber; the wheat germ of the
69 calories, 8 of which come seed is high in nutrients;
from fat. One slice also and the majority of the
provides 4 g of protein, 132 grain, called the
mg of sodium, 12 g of endosperm, is a good
carbohydrates and 2 g of source of carbohydrates.
sugars.
Peanut Butter Peanut butter is a rich Peanut butter has protein
source (20% or more of the as well as potassium —
Daily Value, DV) of dietary which lowers the risk of
fiber, vitamin E, pantothenic high blood pressure, stroke
acid, niacin, and vitamin B6. and heart disease. It also
Also high in content are the contains fiber for your
dietary minerals manganese, bowel health, healthy fats,
magnesium, phosphorus, magnesium to fortify your
zinc, and copper. Peanut bones and muscles,
butter is a moderate source Vitamin E and antioxidants.
(10–19% DV) of thiamin,
iron, and potassium.
Table 2. List of Dietary Snacks

Dietary is the kind and amount of food available to or eaten by an

individual, group or population or relating to a diet or to the rules of a diet. On the

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other hand, snacks refers to food eaten between regular meals and also food
suitable for snacking.

Dietary snacks is important food source of nutrients and vitamins needed

for physically active persons. It is recommended by dietitian to take your dietary
snacks before or after your physical fitness work outs. Dietary snacks help supply
your body energy, nutrients and vitamins to boost your exercise and helps supply
your body energy, nutrients and vitamins to boost your exercise endurance, help
your body strengthen the bones, muscles, cartilage, healthy skin hair, blood
pressure.

Industry

An industry is a classification that refers to groups of companies that are

related based on their primary business activities. In modern economies, there
are dozens of industry classifications, which are typically grouped into larger
categories called sectors, with individual companies being classified into an
industry based on their largest sources of revenue.

Personal fitness training today is becoming an industry which is growing

fast, attracting people in large numbers. This is occurring due to the high
pressure life styles that we have and the stress it puts on our bodies and brains.
These fast paced times require us to be fit both mentally and physically. When
you don’t take good care of yourself, it leads to issues related to the heart and
diabetes. These problems occur because people are overweight. This is why
professional fitness trainers come into the picture

The history of fitness industry is a global story of the development of an

extensive, international, and commercial business sector. As earlier stated, we
are witnessing, during a quite short historical period of time from the 1970s until
today, a rather drastic rise in the numbers of commercial fitness gyms, private
fitness clubs, franchised chains, international fitness magazines, professional
trainers, and so forth (Stern, 2011).

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 According to Stern, Fitness Industry nowadays dramatically rise globally.
Members of commercial fitness gym, private fitness club, international fitness
magazines, professional train trainees, and so forth. This statement tells that
fitness industry is in demand.

The modern roots of this culture can be traced back to the early 19th
century European Turnhalle (gymnasium) and Friedrich Ludwig Jahn’s turnkunst
and to the methods for exercise developed by, for example, the Swedish teacher
Per Henrik Ling and Niels Bukh in Denmark. Furthermore, the interest in muscles
also was attached to a fascination for the grotesque. In the late 1800s and early
1900s, for example, there was a growing interest in so-called strongmen who
performed in circuses and elsewhere in the United States (Kimmel, 2007).

According to Kimmel, the modern root of this culture can be traced back to
the early 19th century. Male had interest in developing body muscles.

It is possible, of course, to find earlier roots in ancient Greece and Rome.

Consequently, there are a number of influences leading successively to
contemporary gym and fitness culture. Furthermore, building muscles and
devoting time to strengthening the body has been mainly a male preoccupation
closely related to warfare, violence, and later on to the building of nation-states—
thus, a practice that could be related clearly to what Mosse (2007) refers to as
the masculine stereotype.

According to Mosse, from early roots in ancient Greece and Rome, there
are a number influences leading successively to contemporary gym and fitness
culture, building muscles and devoting time to strengthening the body has been
mainly a male preoccupation.

In the late-19th century the development of physical culture and especially

of new techniques used to develop and form a strong, muscular, and masculine
body gradually was located in the United States. But this was also an
international and especially Western phenomenon, where scientists from
different countries turned their attention towards physical culture and physical

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education. Using influences from the German, Swedish, and Danish gymnastic
movement, for example, scientists developed techniques and methods for
improving health and strength. The general concern with health and bodies was
connected at this time to industrialization and the need for physically capable
male bodies. At the beginning of the 1900s, sport and physical culture thereby
gradually became a preoccupation for not only the aristocracy, but also workers.
This was especially obvious in the totalitarian states of Germany, Italy, and the
Soviet Union (Grant, 2013).

According to Grant, scientist developed techniques and methods for

improving health and strength. The general concern with health and bodies was
connected at this time to industrialization and the need for physically capable
male bodies.

The rapid growth of physical culture and the interest in shaping and
sculpting the body must be understood in relation to drastic changes in capitalist
societies and the millennium shift. Class roles were changing, and there was a
promise of subsuming class differences and transgressing traditional positions. In
the midst of this changing social and cultural landscape, urban turmoil, and
vibrant commercial culture, the promise of changing one’s body and becoming a
different and maybe ‘better’ person attracted both men and women. Physical
culture welded together elements of commercial culture and nationalist and
imperial ideologies. Social Darwinism and racism melted unproblematic together
with promises of individual happiness and possibilities of looking young and fit. At
this time physical culture was strongly connected to religion. Training and
exercising the body was seen as a way of taking care of God’s gift. Within the
movement called Muscular Christianity, physical culture was seen as a way to
develop a healthy, religious, and morally righteous lifestyle (Putney, 2011).

According to Putney, training and exercising the body was seen as a way
of taking care of God’s gift. Physical culture was seen as a way to develop a
healthy, religious and morally righteous lifestyle.

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 In the Philippines, revenue in the fitness industry amounts to US$83m at
the end of 2017. Revenue is expected to show an annual growth rate (CAGR
2018-2022) of 15.2 % resulting in a market volume of US$146m in 2022. The
market's largest segment is the segment "Wearables" with a market volume of
US$49m in 2018. From a global comparison perspective it is shown that most
revenue is generated in China (US$3,276m in 2017) (Statista Portal, 2018).

The Gemmalyn Crosby Sports Festival/ proudly presents the Philippine

Fitness and Wellness Expo (2016) www.philippinefitnessexpo.com (9/13/16).

Founded by Ms Gemmalyn Crosby— a celebrity athlete, fitness enthusiast

and bodybuilder superstar in the USA and the Philippines, an IFBB Professional
Athlete & Businesswoman, model, actress, she has a very productive
professional career and celebrity guestings and media spots- Gemmalyn is
foremost an amazing wife and mother based in Florida, USA. At the top of her
many passions is to promite Fitness & Wellness in her beloved hometown- the
Philippines!

The EXPO is a multi-sport event featuring various exciting sports:

Bodybuilding Championships, Karatedo Championships, Arnis Best of the Best of
the Philippines, Filipino Martial Arts, Table Tennis Games & Exhibitions, Yoga
Classes, Boxing, Zumba and so much more!

The Philippine Fitness & Wellness Expo have partnered with the best in
the fitness and sports industry featuring Gemmalyn Crosby Bodybuilding
Championships, Boxing Champion Gerry Penalosa for Boxing, Ms Regine
Tolentino for Zumba, Philippine Karatedo League for Karatedo Championships,
Philippine Table Tennis Federation for Table Tennis, Filipino Martial Arts & Arnis
Championships and so much more!

According to Ms. Gemmalyn Crosby, the EXPO will feature the best in the
Fitness, Sports and Wellness industry as they promote the latest trends in the
industry. Athletes and Sports Enthusiasts and Celebrity Guests from all around
the Philippines and the world will be there to participate and grace the event.

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 Coming from the success of last year’s event, this year’s event is
designed for the whole family- it just keeps getting bigger and better. An
extensive media coverage and promotion online, print, radio, TV and digital
media- the Philippine Fitness & Wellness Expo presented by Gemmalyn Crosby
Sports Festival aims to promote sports, fitness and wellness to the Filipino of all
ages.

Top Trends in Fitness on 2017 by BusinessMirror (1/5/2017) Sek Llanos

Effectivity of personal training, with economical sensibility of a group

session. Group Personal Workouts are a thing in rising fitness disciplines with
trainers being more creative in presenting training packages in varying markets
and demands.

The fitness industry is no longer just for the adolescents and the Yuppies.
Fitness disciplines on 2017 are now turning pivot to tap the Baby Boomers of the
80s who are now enjoying retirement, with time and resources of disposal. With
programming universally scalable for different ages and skills, disciplines like
CrossFit are best to try in 2017.

Intended Market Environment

The market environment is a marketing term and refers to factors and

forces that affect a firm's ability to build and maintain successful customer
relationships. The three levels of the environment are: Micro (internal)
environment – small forces within the company that affect its ability to serve its
customers. Internal environment – can be controlled, however, it can't influence
an external environment . Macro (external) environment – larger societal forces
that affect the microenvironment.

The Fitness Center will quench the thirst of those demanding a new and
better fitness center in Davao City. The main idea is to combine both Fitness and
Sports. By running these two centers in a unified harmony the hope is that each
center will weight up for the cons of the other. The Fitness Center will be fully

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equipped and able to serve as many as 70 to 80 people at a time. Instructors will
be located at the fitness center to give advice and help those that need to get
started.

The fitness industry exists to serve humanity. Fitness, we assert, is an

essential component of health, well-being and longevity and the industry’s
overall mission has been described as ‘making the world healthier through
regular exercise and fitness promotion. This compelling message has led to
impressive growth for the global fitness industry. In the United States, club
attendance has grown by more than half in the last 20 years; clubs’ membership
revenues in the United Kingdom grew by 3% in the year to March 2015, with
growth also measured in both the public and private sectors in overall demand
and new facilities (The Leisure Database Company, 2015).

According to the Leisure Database Company, making the world healthier

through regular exercise and fitness promotion. This compelling message had
led to impressive growth for the global fitness industry.

Yet there are signs that, on its current model, the industry’s popularity and
contributions to human wellness are not reaching their potential: In the developed
world, no more than 17% of adults belong to health clubs in any single country,
and market penetration of 10.5% is enough to be among the top ten of all
countries. In the US, a rising proportion of health-club visits are from ‘casual’
patrons who attend their club less than once every two weeks. The health-club
industry has significant difficulty keeping the members it has. In the US, about 15
million new memberships are sold each year, but ‘for every 15 million members
that walk in the industry’s front doors, 12 million exit its back doors.’ Nearly one in
four leave their club within the first year of joining. Despite the preventive and
healing power of fitness, the rates of obesity and obesity-related diseases such
as diabetes are climbing (IHRSA, 2014).

According to IHRSA, in the US, a rising proportion of health club visits are
from casual patrons who attend their club less than one every two weeks.

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Healthclub industry has significant difficulty keeping the members. Despite the
preventive and healing powers of fitness, the rates of obesity and obesity related
diseases such as diabetes are climbing.

The current fitness industry is about high-energy, beautiful people having

fun. Yet the number of members who actually turn up are low, service standards
are low, and there is still a product mentality. The industry needs to find new
ways to keep people active and deliver health improvements in more affordable
and accessible ways. There needs to be a mindset change (Anstiss, 2012).

According to Anstiss, the industry needs to find new ways, image to keep
people active and deliver health improvements in more affordable and accessible
ways.

Fitness center target market has been increasing over the past decade
(Statistic Davao City, 2011). There has also been an increased awakening
among the Dabawenyo government about bad physical state of its citizens and
increase healthcare cost as a result. It is the author’s opinion, which can be
derived from all the new fitness centers that have been opening up in Davao City,
that Fitness Center attendance is increasing year by year thus a possible
opportunity on the market to open up another opportunity in Davao City. But
because this is a highly competitive marketplace it is hard to gather data from
this matter thus attendance can only be speculated.

Davao City, reputedly the largest city in the world, has an area of 244,000
hectares, or 8 per cent of the land area of Southern Mindanao Region or Region
XI. It is divided into 3 congressional districts and furthermore divided into 11
administrative districts. Poblacion and Talomo Districts comprised District I,
meanwhile District II is composed of the following districts, namely: Agdao,
Buhangin, Bunawan and Paquibato, District III includes Toril, Tugbok, Calinan,
Baguio and Marilog.

Davao City is located in the southeastern part of Mindanao, lying in the

grid squares of 6 58′ to 7 34′ N latitude, and 125 14′ to 125 40′ E longitude . It is

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bounded on the north by Davao Province; on the east partly by Davao Province
and Davao Gulf; on the south by Davao del Sur; and on the west by North
Cotabato. Davao City Proper is approximately 946 aerial kilometers or 588
statute miles, southeast of Manila. Because of its strategic location, Davao City
was developed as a regional trade center for Southern Mindanao; international
trade center to the Southern Pacific; and Southern Gateway more particularly to
and from the neighboring countries like Indonesia, Malaysia, Brunei, Australia,
among others.

Indicator Number Percentage

2015 Projected Population, OCPDC 1,632,991 -

Male 811,433 49.69
Female 821558 50.31
Average Annual Growth Rate, 2000-2015 - 2.30
Working Age Population (18 – 64 y.o.), 2015 Actual,
879,989
NSO
Male 436,738 49.63
Female 443,251 50.37
Old Population (65-over), 2015, CPDO 68,335 -
Male 30,784 45.05
Female 37,551 54.95
Overall Dependency Ratio, 2017 Actual, NSO 74 -
Young (0 – 17 y.o.) 68 -
Old (65 – over) 6 -
Source: National Statistics Office, Region XI, Davao City

There are 182 barangays in Davao City, Barangay 9-A us part of it and
located at the heart of the city. The proposed Fitness Center will be built in
Barangay 9-A, Davao City, Philippines, specifically along F. Torres St. Barangay
9-A nowadays is a booming and strategic area for new entrant in business. Many
establishments put up their business in this location such as school, restaurants,

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pension houses, hotels, bakeries, fitness centers, salon, spas, tailoring shops,
laundry shops, car wash, internet cafes and other commercial establishments.
According to the information from Barangay 9-A office, most of the businesses
here have sustainable incomes and in good level of economic stability.

Figure 1. Proposed location for Fitness Center

Population

The proposed fitness center will have an age limit of 18 years. Therefor
the market size is all of those that live in Davao City from the age of 18 and over.
From the year of 2015 the population of 18 years old and older in Davao City
have 879,989 people, 436,738 or 49.63% are male, 443,251 or 50.37% are
female. According to the NSO, average annual growth rate from 2000 – 2015 is
increasing to 2.30% of population. From this it is possible to draw the conclusion
that at the end of this marketing plan, which is five years, the market size would
could be increase to 11.5% (101,198) individuals as can be seen on the graph
population in Davao City who 18 years old and older here below. Year 2015 to
2017 are estimations based on 1.7% increase a year.

In this industry, like many others, the market demand is seasonal. Every
January there is a boom in sales of membership cards at health clubs due to

21
weight gaining over the holidays and New Year’s resolutions. Then sales
decrease somewhat and then pick back up around April those that bought annual
cards in January and have not been using them start coming again and new
members join as well. Over the summer business is usually slow and customers
use substitute activities instead of going to the gym like football, basketball,
bicycling, motocross, mountain climbing etc. Then in September there is another
boom in sales of fitness cards which slowly decreases until they pick back up in
January.

Competition

Competition is, in general, a contest or rivalry between two or more

entities, organisms, animals, individuals, economic groups or social groups, etc.,
for territory, a niche, for scarce resources, goods, for mates, for prestige,
recognition, for awards, for group or social status, or for leadership and profit. It
arises whenever at least two parties strive for a goal which cannot be shared,
where one's gain is the other's loss.
Of all human powers operating on the affairs of mankind, none is greater
than that of competition. (Henry Clay, Brainy Quote.com, 2013)
According Henry Clay, without competition, you’d be on control with no
worries in the world. This makes you vulnerable and prone for mistakes that can
be costly. With competition around, you are more likely to keep your eyes open
and capture every detail along the way so that you remain on top of your game.
Why competition is good? If you pay attention, your competition can teach
you the biggest lessons (Saltzman, 2014).
According to Saltzman, we should open our window into what your
competitor doing and learn what works and what doesn’t. You can learned lesson
on how to scale the business properly, what material to use, the use of space,
etc. Using this as advantage, we can benefit of picking and choosing what we
want to offer and not sacrificing our time and money to do research and
development. The lessons we learn from our competition are priceless as long as
we are willing to listen, learn, and implement.

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 In economics, competition is the rivalry among sellers trying to achieve
such goals as increasing profits, market share and sales volume by varying the
elements of the marketing mix: price, product, distribution and promotion (Smith,
2017).
According to Smith, competition describe as the exercise of allocating
productive resources to their most highly valued used and encouraging
efficiency.

Direct Competition
Direct competition is a situation in which two or more businesses offer
products or services that are essentially the same; as such, the businesses are
competing for the same potential market.
Market leaders dominate the other factors and have the initiative to
change prices, to innovate services and products, distribution, communication,
promotion physical evidence, personnel or processes. However, they must
remain alert at all times to competitors᾿ actions that could threaten their market
position (Dunning 2008).
As what Dunning said, market leaders always monitor, observe what their
competitors doing. Market leaders are ready to innovate to maintain market
share.
In a business environment subject to the trend of internationalization of
investors. They can resort to the expansion of the total market by attracting new
customers who do not practice sports for various reasons, such as high prices,
inadequate location or hours of operation, or to attract non-practitioners. They
can increase the frequency of use through existing or new services and facilities.
They may also try to protect the current market share through good defensive
and offensive actions or to increase their market share – by introducing new
services, facilities or locations and innovative ways of distribution, price
adjustments etc. (Kotler & Kettler, 2012).

23
 According to Kotler & Kettler, expand and innovate new services to attract
new customers. Expand your market to new services, facilities, location, price
adjustments to increase market share.
Among the strategies challengers can use are the attacks on the leader,
on the similar size companies that have financial problems or of other kind
(prices too high, obsolete facilities, amenities or services), or on smaller firms.
Follower's strategy is to imitate the leader. The obvious advantage of this
strategy is that it minimizes the costs with innovation and familiarization of buyers
and the associated risks. Specialists᾿ strategies refer to adequate management
of the narrow market segments they approach. Thus, their tasks refer to the
creation, expansion or protection of niches, taking advantage of the good
knowledge of their consumers. Whatever position held, differentiation from
competitors through any element of the marketing mix remains a key strategy for
long-term success of any fitness gym (Cheben, 2009).
According to Cheben, maintaining your position from competitors, you
must be unique in any element of the marketing mix to stay long-term success of
any fitness gym.
The following are the direct competition of the proposed fitness center:
1. Holiday Spa and Fitness Center – Holiday Spa is tops because customers
have no worry about where to park and don’t have to climb two flights of stairs to
do what they want. Holiday upgraded all their machines which makes the whole
experience a pleasure. They’ve got a nice 225-meter running track, a pool, a
boxing ring and badminton courts. Payments are not as flexible as the other two.
It costs P1,500 for a month’s membership, but that goes down if you pay 2, 3 or 6
months in advance. They have lifetime membership, which is great because
customers will only have to pay P900 a month and don’t have to pay anything
else. Holiday easily stands out as the best place to work out in Davao City.
Location: Holiday Spa and Fitness Center is located at F. Torres Street,
Davao City.

24
 Figure 2. Holiday Spa

2. MetroLifestyle – they say, it’s where all the attractive, “sosyal” people work
out. Customer will notice how big the gym had become after expanding to the
new annex building. It’s nice, it even has a second floor lounge area that doubles
as a running track. But the gym equipment aren’t as nice as that of Holiday’s.
Holiday uses those sexy Lifestyle Fitness machines, Metro uses Cybex Eagle,
which a kind of clunky. Their free weights are kind of rusty too. Monthly fee is
relatively high at P1,200, but no membership fee required.
Location: MetroLifestyle is located at F. Torres Street, Davao City.

Figure 3. Metro Lifestyle Fitness Center

3. Smashville – You may find Smashville’s location quite odd. When you enter
the building, a flurry of Chinese immigrants are busy selling their wares to
bargain hunters. The gym is fortunately on the second floor, where it’s more quiet
and conducive to exercising. You’ll find out why it’s called Smashville upon
seeing the eight badminton courts near the lobby. The courts are usually full on
Wednesdays and the weekends. The cardio area is quite spacious, replete of
treadmills of different sorts and sizes, even a mini-theater that helps you burn
calories without minding the time. The workout machines are on a higher floor.

25
Going up the stairs itself is an exercise. Once you’re up, you can’t help but notice
how big the place is. There’s ample space for doing stretches, abdominal
exercises and aerobics. It isn’t crammed like other gyms in the city. The
instructors is very helpful and courteous. The downside to Smashville is its
location. It’s on Magsaysay Avenue, not the most accessible address there is.
Parking is a chore. Customer sometimes have to do 3-4 rounds before they can
park their car.
Location: Smashville is located at AGL Building, R. Magsaysay Avenue,
Davao City.

Figure 4. Smashville Fitness Center

Direct Competition SWOT Analysis

1. Holiday SPA and Fitness Center
Strength: Ample parking. New, clean machines that are well-maintained.
Outdoor running track is a big, big plus. Full day schedule for yoga,
aerobics, pilates and dance sessions available for members at no extra
cost. No preference for cash or card payments!
Weaknesses: Workout, cardio, boxing areas are crammed in one mid-
sized gym. Too many staff that sit around. Little to no space to do ab
exercises. No stretching machines.
Opportunities: Open for expansions.
Threat: New player

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 2. MetroLifestyle
Strenth: New expansive cardio and workout areas plus running track.
Several nice establishments to hangout after exercising. There’s enough
parking for everyone. Has lots of potential for improvement.
Weaknesses: Cardio has only three televisions with no earphone jacks.
Free weights are old and rusty. Locker rooms are shared with spa clients.
Opportunities: Looking for new ways to create demand by changing or
upgrading services.
Threat: high staff turnover and some unmotivated instructors

3. Smasville
Strength: Ridiculously spacious. Free Internet access. Friendly staff.
Cheap.
Weaknesses: Little to no parking space. Televisions in cardio area have
no earphone jacks and takes a while before you find the one and only
remote to switch channels. You can hear what the other 15 people people
are watching. Some equipments are noticeably old. Locker rooms are so-
so. Monthly fees are cheap but not for credit card holders. Found it
annoying to hear about promos but never availed coz they apply only to
cash.
Opportunities: they can create positive perception of their brand,
Threat: increased competition, a focus on indoor activities

Indirect Competition

Indirect competition are business whose products or services are not the
same with the proposed fitness center but that could satisfy the same consumer
need. The term contrasts with direct competition, in which businesses are selling
products or services that are essentially the same.

During recent years, gyms have started using computerized reservation

systems, in addition to the existing staff. The promotion budget of fitness gyms is
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linked to their size. The small, local sports gyms must rely on word of mouth
promotion and other guerrilla promotion activities (flyers, social networks pages,
visibility brought by a good commercial venue, own webpages, sports TV shows),
point of sale advertising, promotions. Sports gyms are trying to acquire
professional equipment, to design a pleasant and functional space, to provide
proper ambient conditions (temperature, lighting, humidity, smell, sound), to
properly signal internal and external spaces. The “servicescape” is decisive in
defining quality of a fitness facility (Nickson et al 2012).

Nickson et al. statement is true nowadays, all business used social media
as their promotion, have wifi establishment to attract customers, have state of the
art equipment and facilities to make customers convenient in the gym.

We need to develop a strategy for combating indirect competition. A

common marketing saying is, “Think benefits, not features.” What benefits do we
provide our customers, or what problems do we solve for them? After we list all
the benefits we provide, we should think of and list the other products and
services that provide the same benefits to our customers. These products and
services are our indirect competitors. For example, to be healthier, people can
join a new fitness center near their workplace. But they can also buy an
inexpensive pair of athletic shoes and go walking with their dog or a
neighbor. They can take a fitness class at the local community college, buy
nutritional supplements, or try a new diet in an attempt to boost energy or feel
healthier. All the above choices are tough competition for the fitness center
owner (Sharma & Karub 2014).

According to Sharma & Karub, to combat indirect competition, we should

think benefits, not features, what benefits do we provide our customers, do we
solve customer’s problem, this will provide customer satisfaction.

Rubio & Aragon (2009) conclude that small fitness gym managers focus
on personnel management and technology, innovation and quality to get the
estimated results. Strategy decisively influences the performance of small and

28
medium enterprises. Whatever the strategy chosen, or whether it is independent
or a combination, gyms must constantly monitor the market situation and adjust,
if necessary, their strategy. The chosen strategy must be supported by the
available resources.

According to Rubio & Aragon, gym must constantly monitor the market
situation and adjust their strategy in personnel management, technology,
innovation and quality of available resources to maintain performance.

The following are the indirect competition of the proposed fitness center.

1. Anytime Fitness Abreeza - For those who have tight or irregular

schedules, this gym is a godsend. Open 24/7, Anytime Fitness
Abreeza features all the amenities we come to expect of top-notch
fitness clubs, including a spacious training area, top-of-the-line workout
equipment, and personal trainers ready to help out.
SWOT:
S – 24 hours operation.
W – Few personnel during night time.
O – Open for new branches.
T – Strong brand name of competitors.
2. Felcris Centrale - a fitness studio at the second floor of Felcris
Centrale features a wide range of workouts. The most popular classes
feature hybrid exercises, such as yochilates (yoga, tai chi, pilates) and
piloxing (pilates and boxing). These help improve physical strength and
flexibility, while the integration of meditation into the routine helps
develop mental awareness.
SWOT:
S – Keeping cost below competitors.
W – Unknown brand to the consumers, lack of promotional
advertisement.

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 O – Increasing demand of their unique services (yoga, taichi, boxing).
T – New player.
3. Deftac Davao School of Jiu-jitsu (DDSJJ) – those who are looking
for something unique and practical, Deftac Davao School of Jiu-jitsu
(DDSJJ), which is located within a food and fitness complex, The Dojo
+ The Kitchn. Jiu-jitsu teaches students the combat skills they need to
defend themselves against assailants of any size. And if you do
particularly well during your sparring sessions, we highly recommend
treating yourself to the specialty hot wings at TD+TK. It’s the perfect
combo!
SWOT:
S – Higher responsiveness to customer’s demand.
W – High cost of building rental.
O – Seasonal high demand of service.
T – New competitor open same service in a nearby location.

Competitive Advantage

Competitive advantages have been studied as one of the most

controversial and challenging topics in the field of strategic management the
dimensions and different approaches. Spite of extensive efforts to explain the
concept, can stated that it is the still one of the most mysterious expressions
used in the management literature especially in relation to the industry is based
on advanced technology. In this article researcher with review existing literature
in the field theories competitive advantage and based industries advanced
technologies, following explain the theory of competitive advantage introducing
methods and features distinguishing advanced technology based industries from
other industries, compare the theory with based industries advanced
technologies and finally introduced and choose the theory of competitive
advantage in this area.

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 To ensure profitability, all businesses need to adapt and respond to the
dynamics and competitiveness of their market. This is especially challenging for
SMEs, and the majority of fitness gyms belong to this category, due to the
scarcity of financial and time resources (Jones 2007).

According to Jones, small-medium enterprises must adapt and respond to

the dynamics and competiveness of their market, they have to adapt what is
trend to ensure profitability.

For this reason, managers or owners must be creative in adapting

traditional marketing theory to market and their companies’ realities. Literature
evaluates that one of the most valuable resources of SMEs is innovation. The
observation made lead to the same conclusion, since the equipment in gyms are
new and extremely well maintained (Gilmore 2011).

According to Gilmore, managers or owners of small-medium enterprises

must be creative and innovative in marketing their companies to have profitable
market.

The research shows that gyms follow a complex strategy that focuses on
the synergy between a carefully weighed service policies, friendly and caring
personnel, attractive prices accompanied by special offers for different target
customer segments, sustained communication, and the participation in various
events, contests and/ or fairs. Providing customized training tips, combined with
a balanced nutrition are relevant elements that gyms use to enhance their image,
to attract customers and to keep them loyal (Luo & Chang 2011).

According to Luo & Chang, to keep your customers loyal, you must have
good service policies, customer care, attractive prices, promotion, training tips
with balance nutrition.

The following are the competitive advantage of the fitness center:

1. Modern equipment and technology. The fitness industry is responding

to this generation's perceptions by thinking differently, as well. We

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 need to make group fitness interesting to the Millennial generation.
They grew up with Wii and Xbox, and they are looking for a form of
exercise that shares those experiences. They think about studio fitness
as something that their moms were doing.
2. Highly trained staff and trainers. Our staff and trainers will be trained to
the highest standards to deliver a quality focussed service to
customers and patients. We will take pride in the work we do and
continuously improve every day.
3. Affordable and reasonable price in the market. We will have a price
that is fair, good, considerable and makes sense. It doesn't have to be
used only with money, either. In relation to money, it means that it
costs what you think it should, and it is a fair price that you can
understand. Almost like pretty good.

SWOT Analysis

For business it is important to know your surrounding environment from

internal and external point of view. Therefore it is important to evaluate
environment opportunities in relation to the strengths and weaknesses of the
organization's resources, and in relation to the organizational culture.

Strengths, weaknesses, opportunities and threats (SWOT) analysis is a

device that helps business managers to evaluate the strengths, weaknesses,
opportunities and threats involved in any business enterprise. A SWOT analysis
can help them gain insights into the past and think of possible solutions to
existing or potential problems, either for an existing business or for a new venture
(Nouri et al., 2008).

According to Nouri et al., the SWOT is very important for a business to

help them gain insights to identify potential problems whether you are an existing
business or new player.

Specifically, SWOT is a basic and candid model that assesses what a

business can and cannot do, as well as its potential opportunities and threats.

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The method of SWOT analysis is to take the information from an environmental
analysis and separate it into internal (strengths and weaknesses) and external
issues (opportunities and threats). Once this is completed, SWOT analysis
determines what may assist the firm in accomplishing its objectives, and what
obstacles must be overcome or minimized to achieve the desired results (Singh,
2010).

According to Singh, SWOT is the very basic in business ventures. This will
help identify what to do and what not to do. It takes information from an
environmental issues which is opportunities and threats. And once completed,
they must overcome the obstacles and minimized the desired results.

Strengths, weaknesses, opportunities and threats (SWOT) analysis

indicates a framework for helping the researchers or planners to identify and
prioritize the business goals, and to further identify the strategies of achieving
them. SWOT analysis is a technique used to analyze the strengths, weaknesses,
opportunities and threats of businesses. In all countries, farming practices play a
vital role in food security. Population growth is the major reason for increased
food demands and it puts additional pressure on the natural resource (Ommani,
2011).

Ommani testified that SWOT analysis is widely used framework for

helping researchers or planners to identify and prioritize the business goals, and
to further identify strategies to help achieve the goals.

The following information summarizes the SWOT analysis. SWOT stands

for strengths, weaknesses, opportunities and threats. A SWOT analysis is a
method for strategic planning that evaluates these four elements as they relate to
the business objectives.

Strengths

 Committed owner.
 Will be a unique one of a kind experience in its location.

33
  Targeted, specific focus on its customers creates a memorable
experience for its patrons resulting in repeat business.

Weaknesses

 Very specific target market – if the target market was broader the
owners could increase market share in the segment that was the
strongest.
 High turnover in fitness center industry– many fitness center are here
today and gone tomorrow.
 Relatively hard entry and high capital outlay.

Opportunities
 Opportunity to obtain a big share of market.

Threats

 Another new entrant could potentially hurt market share; competition is

fierce.

Barriers to Entry

Barriers to entry are the existence of high startup costs or other obstacles
that prevent new competitors from easily entering an industry or area of
business. Barriers to entry benefit existing firms already operating in an industry
because they protect an established company's revenues and profits from being
whittled away by new competitors. Common barriers to entry include special tax
benefits to existing firms, patents, strong brand identity or customer loyalty, and
high customer switching costs.

Entering into the fitness market is not that easy. There are a few key
barriers to entry that make entering the industry difficult. Fitness centers have
high costs in functional areas. The cost of the building and equipment can be

34
very pricey. Also, firms have to take into account the cost for insurance and
attorney fees to ensure that they will not be sued if a member is injured. Finding
specialized trainers to work with the athletes can range from one-hundred to two-
hundred dollars an hour minimum. In addition, the business will need to
trademark and patent techniques and concepts that are used to train the
athletes, which can range from several thousands of dollars. Location is
important when starting a business in the fitness industry. The economy these
days has created less disposable income for individuals to spend on
memberships and expensive training programs. Competing against established
gyms can be challenging unless there are different membership costs offered.

Firms entering into the Health and Wellness sector have reasonable
capital expenditure in terms of fixed costs. This is relatively significant for Fitness
providers, Fitness products, Beauty and Cosmetic products which require
investment in infrastructure and equipment. This is compounded by inflation and
rising costs associated with rent, manpower and consumables. The costs
associated with a wellness service player is very high. However a new entrants
can overcome these costs by franchising, acquiring loans (since the investments
is within the reach of loans) and personal funding. However, For the Beauty
Products and services market International firms such as Unilever invest heavily
in product innovation and brand recognition. This would be a potential threat to a
new entrant. Entering the market requires significant capital investment in terms
of machineries and factories (Vorzak, 2009).

According to Vorzak, to reach into top of competition, you have to invest

heavily in product/service innovation and promotion like other international
companies does.

A large base of consumers earns a higher revenue for the service

provider. This is true for Health and wellness products whose profitability would
increase with increasing consumer base. Haircare products are sold in high
volume, suggesting economies of scale is essential to retain margins for players.
Until a consumer base is created, a new incumbent would be affected in terms of

35
profitability. The Switching costs associated with consumers are very low owing
to the availability of large number of service providers. As a result, a new entrant
cannot expected a dedicated consumer base. This stands true for Fitness
providers and Beauty products. However if the new entrant is able to provide a
differentiated service, he could acquire a dedicated consumer base (Sharma,
2014).

According to Sharma, higher revenue for the service provider when there
is a large base of consumers. Fitness providers and beauty products have
differentiated service dedicated customer base will increase.

Existing market penetration of the health and wellness sector in terms of

services and products can be classified as low. Indians are becoming aware of
being health conscious. However, Fitness and Health has still not become ‘a way
of life’ as in foreign countries. This present large opportunities for the incumbent
player to gain market share since the industry has still not reached maturity
stage. The chief advantage for the existing providers is their established
operations and brand equity which enables them to possess low marginal costs.
It would take significant time for an incumbent to develop reasonable brand
equity and lower marginal costs (Payne et al., 2009).

According to Payne, Fitness and Health business have few investors and
has not reached maturity, so its advantage for existing providers to gain market
share.

The following are the barriers to entry of the proposed fitness center:

Customer switching cost. Customer switching costs are the costs that a
consumer incurs as a result of changing brands, suppliers or products. Although
most prevalent switching costs are monetary in nature, there are also
psychological, effort- and time-based switching costs.

Existing market penetration. This refers to the existing gym and fitness
center who are successful in selling of their product or service in the market, and

36
it is measured by the amount of sales volume of an existing good or service
compared to the total target market for that product or service.

Restrictive zoning laws. Exclusionary zoning is the utilization of zoning

ordinances to exclude certain types of land uses from a given community.
Fitness centers and gym are not exempted where government sometimes
enforces restriction on certain areas.

Lengthy permit processes. This refers to red tape in the government

where processing of permits and licenses are taking too long to process.

Shortage of appropriate real estate. Since fitness center requires large

area of land, this will hinder in acquiring good area to start the fitness business.

High cost and long-term nature of brand reputation. Maintaining the brand
reputation of a fitness center is costly. It requires money for promotions and
advertising and it takes time to establish a good brand recognition.

Market and Sales Strategy

A marketing strategy is a coherent and agreed upon process formed with

the aim of increased revenue and market share. Broadly speaking, marketing
strategies refer to the set of actions designed to meet your business goals.

Building step-by-step close and trustful relationships with a customer

becomes an essential part of achieving success in business. Creating a value for
customers is all about engagement with a community. It seems to be easy to
understand, but not that easy to do: saying the right things is not enough, these
things have to be heard by the community. Fitness industry still remains quite
uncovered by this techniques.

In comparison with retention, customer loyalty is a micro concept that is

defined customer by customer. It does not show for how long an active or
inactive customer was in a company’s life, like retention does; or it does not let to

37
know how many customers stayed «active» and continued purchasing, as
customer retention rate does. In other words, retention rate gives an outline for
the status for the entire customer audience, while customer loyalty evaluates the
performance of individual customers. Meanwhile, behavior of loyal customers are
the ones who are more likely to make frequent purchases. Summing up this
complicated explanation, the author proposes that retention rate is a relatively
easy number to measure that helps to assess the overall company’s
performance (Cohen et al., 2009).

According to Cohen at al., customer retention management can be

effective in case it is measurable. It sounds so simple but any improvements will
be seen only if there is a certain way to calculate them.

It was described as emphasizing one that when a company develops its

brand and markets its services/products, customers ultimately determine how to
interpret and react to marketing messages. Companies spend significant time
researching the market to get a sense of how customers think and feel (Maynard,
2010).

According to Maynard, perceived customer value is related to brand and

marketing management that indicates that success of a service stands on
customers’ perceptions if it satisfies their needs or not.

According to Berry and Parasuraman (2008), service quality is the basis

for services marketing, because customers’ quality satisfaction depends on how
well a service is performed. The researchers suggest five core dimensions that
have influence on customers’ evaluation of quality, where the first one, reliability,
is considered to be the paramount criteria.

Berry and Parasuraman attested that there is a direct relation between

service quality level and pricing, but these are not the only elements as
customers’ price sensitiveness and quality demand are also important factors to
consider.

38
The following are the marketing strategy of the Fitness Center:

 Unique selling point (USP): Your USP is vital as it will help to

differentiate you from your competitors and highlight to customers
where the value of your product lies. How you articulate and define
your USP will be one of the most important tasks in your marketing
strategy.
 Pricing: Pricing is a critical element of your marketing strategy.
Deciding on a suitable price for your product will have an effect on your
positioning, promotion, and even the features you offer. Before you
decide on a price, you must consider the price of rival product
offerings, your target customer’s willingness to pay, your own
company’s objectives, and how you plan to position your product e.g. if
you plan to promote your product as the best in its class then a low
price might harm your product.
 Positioning: Positioning is related to pricing but is an important
consideration in its own right. You must consider whether to make a
play for a segment of an established market, going head to head with
established rivals in the process or whether you want to try and carve
out a niche market for a new product.
 Promotion: How you promote your product is another key
consideration. Does it make sense for your product to go down the
route of paid advertising, or should you handle the promotion in-house
with a series of blog posts and social media activities.
 PR: Good PR can bring enormous benefits to your company. For early
stage companies PR can be especially valuable helping to put their
product on the map.
 Referral Strategy: One of the best ways to win new business can be a
referral by an existing customer. Look at ways you can stimulate
referrals. You should take the time to draw a list of existing clients who
may be willing to, or have already referred clients to your company.

39
 From here, you should look to develop a referral follow up and
conversion strategy. Don’t leave this important area to chance.

Promotion

Marketing strategies like tarpaulins, banners and pre-opening promos are

appropriate for advertising the business in the market.

The Fitness Center target market is based on serving the health

enthusiasts such as students, employees and the local residents. We want a
variety of customers and will make sure everybody can enjoy the Fitness Center
experience. The opening date will be a couple weeks before the grand opening
and this will allow the employees to become familiar with the operations and
customer interaction. The grand opening will be advertised in the local papers
and on the radio. Once the newness of the Fitness Center has subsided, the
proposed Fitness Center will pursue an ongoing marketing campaign targeted at
the local market.

The Fitness Center will implement various marketing efforts to attract

customers including:

The Company will build and optimize its web site to attract prospective
customers. The web site will be attractive and easy to navigate. It will also
provide testimonials of satisfied customers.

The company will utilize signage and posters that will be displayed at local
sites to promote the Company and establish name recognition.

The fitness center will distribute flyers door to door in the immediate area.
The Fitness center will implement and manage programs that reward a customer
for repeat business with the Company.

The business will develop referral programs whereby existing customers

receive incentives to refer friends or associates as customers. Other promotion
includes student discount and free wifi.

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 METHODOLOGY

Methodology refers to a system of methods used in a particular area of

study or activity. Theoretical analysis of the methods applied to a field of study.

The concept of methodology and method is explained as a science of

methods and the relationship between them. Methodology is understood as
technique. Methodology is a science of activity organization. Methodology is
understood as a justification of scientific research (Gintalas, 2011)

According to Gintalas, manner, instrument, operation, procedure,

approach, each of this concept has a different meaning as in order to understood
what method means. It is necessary to understand the level of these concepts.

A research method represents technical steps involved in conducting

research. Details about the method focus on characterizing and defining them,
but also explaining your chosen techniques, and providing a full account on the
procedures used for selecting , collecting and analyzing data (Sprint Investify,
2017).

The methodology section or methods section tells you how the author
went about doing their research. It should let you know what method they used to
gather data (library.oregon.edu, 2017).

According to Oregon State Library, the methodology section should be

detailed enough that another researcher could replicate the study described,
when you read the methodology or methods section. A good researcher will
always let you know about the limitations of his/her research.

The nature of the research determines that both primary research and
secondary research should be conducted to collect information needed for the
feasibility study. Observational research method will be used to collect the
information regarding competition and site selection, and a survey will be
conducted to collect information concerning consumer's spending pattern. In view

41
of the different research methods, this chapter will include information about how
research subjects will be selected, what data collection instrument will be used to
conduct the survey and the observational research, what procedures will be
followed to collect the data, and what sample selection criteria will be applied,
and how the collected data will be analyzed. Limitations of method, sample and
procedures will also be addressed at the end of the discussion.

Research Design

The study used the descriptive, methods of research. The study

specifically, using survey method design studies of sampling of individual units
from a population and the associated survey data collection. The study utilized
in-depth interview, discussions and questionnaire instrument to catch up the
satisfaction, idea, thoughts, beliefs and views of the participants (Bandioler,
2007), regarding the marketability of fitness center. According to Will G.
Hopkins descriptive, a method of research is all about quantifying relationships
between variables. Variables are things like weight, performance, time and
treatment. You measure your variables on a sample subjects which can be
tissues, cells, animals or humans. You express the relationship between variable
using effect statistics, such as correlations, relative frequencies, or differences
between means and stated in the same reference that your objective in
descriptive, method of research is to find out the relationship between one thing
(an independent variable) and another (a dependent or outcome variable) in a
population (Hopkins, 2007), and generates numerical data or that can be
converted into numbers (Bandioler, 2007).

According to the authors above, descriptive research methods are pretty

much as they sound — they describe situations. They do not make accurate
predictions, and they do not determine cause and effect. There are three main
types of descriptive methods: observational methods, case-study methods and
survey methods.

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Subject Selection and Description:

Observational research method will be used to conduct the competition

and site selection research. Direct competitors and indirect competitors will be
identified, and observational research will be conducted in the direct competitors'
restaurant, and information such as location, turnover rate, operation hours, and
average check price will be collected.. Surveys will be conducted to collect
consumer spending pattern and market potential data. The subjects of the survey
will be passers-by at the intersection near the proposed location. Passers-by will
be chosen based on a five-minute interval.

Research Instrument

Research instruments refer to devices used to collect data such as

questionnaires, tests, structured interview schedules and checklists. A
questionnaire as “a method of gathering information from respondents about
attitudes, knowledge, beliefs and feelings”. The questionnaire was designed to
gather information about adolescent mothers’ knowledge, attitudes and beliefs
regarding contraceptives (Seaman, 2011).

According to Seaman, a research instrument refers to any devices that

used to collect or gather data.

Brink and Wood (2008) state that the following aspects characterize a
questionnaire: each participant enters his/her responses on the questionnaire,
saving the researcher’s time, compared to the time required to conduct personal
interviews; it is less expensive than conducting personal interviews; respondents
feel that they remain anonymous and can express themselves in their own words
without fear of identification. This aspect was very important in this study where
adolescent mothers might not have wished their mothers, friends or health care
workers to know about their knowledge, attitudes and beliefs concerning
contraception; data on a broad range of topics may be collected within a limited

43
period; the format is standard for all subjects and is independent of the
interviewer’s mood.

According Brink and Woord, a survey questionnaire which is one of the

most widely use research instrument should be precise and concise on its form.

Reliability refers to the degree of consistency or accuracy with which an

instrument measures the attribute it is designed to measure. If a study and its
results are reliable, it means that the same results would be obtained if the study
were to be replicated by other researchers using the same method. A pretest
utilising adolescent mothers, excluded from the actual research, with similar
characteristics to the study sample was conducted to determine the clarity of the
items and consistency of the responses. The major anomaly detected was some
respondents’ apparent unfamiliarity with some contraceptive terms in the Zulu
language. In order to enhance the reliability of the instrument the appropriate
English terms were added to the Zulu questionnaire to facilitate the respondents’
comprehension of these terms (Polit & Hungler, 2007).

Polit and Hungler discussed the importance of reliability test on the

research instrument to determine the degree of consistency and accuracy of the
instrument.

In this study, site selection criteria checklist and survey questionnaire will
be used to collect research information. The questionnaire was created by the
researcher for the sole purpose of this study.

A survey is defined as the measure of opinions or experiences of a group

of people through asking of questions. A questionnaire which is defined as a set
of printed written questions with a choice of answers, devised for the purpose of
the survey questionnaire is to determine sociographic profile of the respondents
as of their age, gender, employment status, monthly income and allowance. To
determine the satisfaction level of the respondents in Fitness Center in terms of
services/product, place and promotion.

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Operational Definition of the Study

 Age – the amount of time during which a person has lived.

 Gender – the state of being male of female
 Monthly Income– gross income essentially refers to your total
compensation before taxes or other deductions.
 Allowance – the amount of something that is permitted, especially
within a set of regulations or for a specified purpose.
 Occupation - the work that a person does, a person’s job or
profession.
 Service – the act of helping of assisting someone, help or support.
 Product – something that is the result of a process.
 Place – the building or area that is used for particular purpose.
 Promotion – something such as advertising that is done to make
people aware of something and increase its sales or popularity.

Sample Size

150 respondents will be approached to provide their satisfaction towards

traditional market. They are randomly asked on what services they prefer in a
Fitness Center so that will be guided on the things and services we going to offer.

Sampling Procedure

Sampling is a process or technique of choosing a sub-group from a

population to participate in the study; it is the process of selecting a number of
individuals for a study in such a way that the individuals selected represent the
large group from which they were selected.

45
 To draw a simple random sample without introducing researcher bias,
computerized sampling programs and random number tables are used to
impartially select the members of the population to be sampled. Subjects in the
population are sampled by a random process, using either a random number
generator or a random number table, so that each person remaining in the
population has the same probability of being selected for the sample (Friedrichs,
2008).

According to Friedrichs, in order to get an unbiased result, the need to use

computerized sampling programs and table is essential.

On the other hand, a researcher may choose to conduct a systematic

sample instead of a simple random sample for several reasons. Firstly,
systematic samples tend to be easier to draw and execute, secondly, the
researcher does not have to go back and forth through the sampling frame to
draw the members to be sampled, thirdly, a systematic sample may spread the
members selected for measurement more evenly across the entire population
than simple random sampling. Therefore, in some cases, systematic sampling
may be more representative of the population and more precise (Groves et al.,
2008).

According to Groves et al., systematic samples tend to be easier to draw

and execute and the researcher does not have to go back through sampling
frame to draw the members to sampled and may spread the members selected
for more evenly across entire population.

Non probability sampling is used in some situations, where the population

may not be well defined. In other situations, there may not be great interest in
drawing inferences from the sample to the population. The most common reason
for using non probability sampling procedure is that it is less expensive than
probability sampling procedure and can often be implemented more quickly. It
includes purposive, convenience and quota sampling procedures (Michael,
2011).

46
 According to Michael, whenever the situation arises where population may
not be well defined, a non probability sampling is best suited for the research.

The sampling procedure will be used is the random sampling in which the
respondents are going to answer the survey questionnaire in a certain area
where the business is located. The respondent will be chosen randomly either
through a random number table or listing all their names.

Table show the sampling procedure of respondents which could be either

male or female and the total number of population of the respondents.

Respondents Total Population Total number

Population
Male 75 75
Female 75 75
Total 150 150
Table 3. Survey data sampling

Data Analysis

A number of statistical analyses will be used in this consumer spending

pattern study and market potential study. The Statistical Program for Social
Sciences,(SPSS, 2008) will be used to analyze the data. Due to the nominal
nature of all the questions on the questionnaire, only descriptive statistics
analysis will be made to find out the consumer spending pattern and market
potential data.

Rating Scale Qualitative Information

1 Need Improvement
2 Not Satisfied
3 Good
4 Satisfied
5 Very Satisfied

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 The table below show the interpretation of the responses:

Rating Scale Interpretation

1 This means that the terms on customer satisfaction of the
fitness center were rarely manifested.
2 This means that the terms on customer satisfaction of the
fitness center were not manifested at all.
3 This means that the terms on customer satisfaction of the
fitness center were sometimes manifested
4 This means that the terms on customer satisfaction of the
fitness center were oftentimes manifested.
5 This means that the terms on customer satisfaction of the
fitness center were manifested at all times
For the interpretation, a statistical analysis will be used.

Statistical Analysis

Descriptive methods such as frequency counts, percentage and weighted

means were used. The frequency counts and percentage were used to describe
the socio-economic profile of the respondents. Weighted means was used to
analyze the customer satisfaction, behavior and awareness on the types, forms,
benefits and risks of service.

The following mean ranges and quantitative interpretation on the

respondent level or awareness on the type and forms of service were used:

Rating Quantitative Interpretation

1.0-1.50 Not aware

1.51-2.50 Less aware

2.51-3.50 Aware

3.51-4.00 Very Aware

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 The following mean ranges and qualitative interpretation on the
respondent level or awareness on the type and forms of service were used:

Rating Qualitative Interpretation

1.0-1.50 Strongly disagree

1.51-2.50 Disagree

2.51-3.50 Agree

3.51-4.00 Strongly Agree

The following mean ranges and qualitative interpretation on the

respondent behavior towards fitness center services sold in were used:

Rating Qualitative Interpretation

1.0-1.50 Not at all

1.51-2.50 Seldom

2.51-3.50 Sometimes

3.51-4.00 Often

4.51-5.00 Always

Limitations

The limitation of the research includes the following two points:

a. The way that the survey will be conducted, which is that the researcher
gives out the survey, stand by the selected subject, and wait until the
survey is completed might make the subject very conscious of
themselves.
b. Again, due to the fact that the researcher will stand by to wait until the
selected subject finish their survey, asking about family income will make
the subjects more aware of security issue when revealing their family

49
income. As a result, asking about income is asked in a very discreet
manner.

50
 SURVEY QUESTIONNAIRE
CUSTOMER SATISFACTION ON FITNESS CENTER
IN BRGY. 9-A F. TORRES ST., DAVAO CITY

Instruction: Kindly lend your valuable time in answering the questionnaire.

Please check the appropriate answer.

Age:  18 y/o below  19-25 y/o Mo. Income:  5,000 below

 26-30 y/o  31-35 y/o /Allowance  5,000-10,000
 36 y/o and above  10,000-15,000
 15,000 and above
Gender:  Male  Female Occupation :  Student
 Full Time Employee
 Part Time Employee
 Retired
 Others
Pls. specify:

Instruction: Please put a check in the box  that corresponds to your answer
using the scale below. Please answer the question properly.

5 – Very Satisfied
4 – Satisfied
3 – Good
2 – Not Satisfied
1 – Needs improvement

DATA LEVEL
SERVICE/PRODUCT 5 4 3 2 1
1. Customer Service
2. Product Knowledge
3. Dietary Snacks
PLACE
1. Sanitation
2. Accessibility
3. Spacious parking area.
4. Safety and security
5. Ambience
PROMOTION
1. 10% Discount for Students
2. Free internet wifi
3. Incentives for members who has referrals
4. Loyalty card priority
5. Lifetime membership

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