Strategic Marketing Review

Version 2.0

Sync-in Consultancy

Confidential
Table of Contents
Executive Summary.........................................................................................................................................................1
1 About Emu Fitness........................................................................................................................................................2
2 Core Values.................................................................................................................................................................. 2
3 Goals and Objectives....................................................................................................................................................3
3.1 Goals......................................................................................................................................................................3
3.2 General Objectives................................................................................................................................................3
3.3 Marketing Objective..............................................................................................................................................3
4 Situation Analysis.........................................................................................................................................................4
4.1 PESTE Analysis.......................................................................................................................................................4
4.2 SWOT Analysis.......................................................................................................................................................5
4.3 Product Portfolio – BCG Boston Matrix.................................................................................................................7
4.4 Trend Analysis.......................................................................................................................................................8
Fitness Trends in the Industry.................................................................................................................................8
The Fitness Market Outlook....................................................................................................................................9
Health in Australia...................................................................................................................................................9
Product Usage.........................................................................................................................................................9
Survey Results.......................................................................................................................................................10
5 Market Segmentation.................................................................................................................................................12
5.1 Demographic and Geographic Segmentation......................................................................................................12
5.2 Psychographic and Socio-Cultural Segmentation................................................................................................13
6 Competitor Analysis...................................................................................................................................................14
7 Financials of Emu Fitness............................................................................................................................................16
Executive Summary
Emu Fitness is a privately-owned health club chain operating within Sydney with 15 health clubs and 15,000 active
members. Emu Fitness serves as a minor player in the sport and fitness segment.

The health and wellbeing industry is a dynamic sector and plays a critical role in the Australian economy. The
industry has grown substantially within the last decade, generating $2.2billion revenue on an annual basis (with 3.5%
annual growth rate) through 3265 health clubs housing 32,875 employment opportunities across the country. The
industry also plays a key role in improving the health and fitness of Australians; however, Emu Fitness has always
struggled to hold market share since its establishment in 2005. Despite of the organisation’s struggle, it has relatively
good operating margins which this is mainly because to the low wages and poor facilities and equipment. The
Company is well aware that it now needs to develop marketing opportunities if it is to sustain long term
competitiveness.

This report is prepared by an external agency called Sync-In Consultancy.

An evaluation of the company’s internal strengths and weaknesses, external opportunities and threats, market trend
analysis, and macro environment study established a groundwork to prepare this strategic review. The main
motivation is to develop new market opportunities targeted to specific customer niches.

Strategic Marketing Review Page 1 of 16

1 About Emu Fitness
Emu Fitness is a privately-owned health club chain with 15 health clubs and approximately 1,000 active members in
each centre. Emu Fitness serves as a minor player in the sport and fitness segment.

Emu Fitness has its base of operations in North Sydney (Health Club and Head Office), Sydney and operates in both
the CBD and Sydney region. The operating hours are 6am to 10pm, everyday across the year.

Each health club offers the following facilities and services:

 Gym for weightlifting and cardio

 Martial arts, boxing and kendo
 Classes (Pilates, Yoga, BodyPump, Cycle, BodyAttack, Full Body Lift, and FatBurner).

2 Core Values
Our mission, in engagement with the community, is to provide innovative health clubs delivering cutting-edge fitness
and lifestyle programs that will motivate people of all ages, backgrounds and abilities to lead active, healthy lives.

Our vision is to be regarded as a premier provider of quality fitness and wellness through innovative programs and
services that result in measurable and transformational changes in the lives of those we serve.

We are passionate for promoting the quality of life for everyone on the basis of the following values and attitudes in
all of our staff, members and the community:

Quality Honesty Integrity

Responsibility Care Enthusiasm

Awareness Diversity Nourishment

Strategic Marketing Review Page 2 of 16

3 Goals and Objectives
3.1 Goals
The goal of Emu Fitness for this financial year will be:

 to introduce innovative fitness and lifestyle products or services to include new markets
 to reposition the image of Emu to that of a “Tiger”
 to grow their employees for the future

3.2 General Objectives

 Achieve a minimum ROI of 20% in each investment area.
 Achieve a minimum gross margin percentage of 30%.
 Increase membership count by 10% in each health and fitness club every year within the next five years.
 Achieve 5% improvement in customer retention rates every year within the next five years.
 Enrich the brand cultivating the organisational image as a premier health and wellness provider.

3.3 Marketing Objective

 Develop a minimum of two innovative fitness and wellbeing products or services within the next twelve months.
 These two new innovative offerings to increase gross revenue count by 10% in each fitness centre over the next
12 months.

Strategic Marketing Review Page 3 of 16

4 Situation Analysis
4.1 PESTE Analysis
Political
 The following elements must be closely monitored as they change regularly and will have an influence on
delivering nationally accredited courses:
- VET Fee-Help loan scheme
- Smart and Skilled government-subsidised training (in NSW)
- Changes in national standards
- Updates in training packages.
 Compliance with Work Health and Safety Act 2011 and Work Health and Safety Regulations 2011 through
launching the mandatory web-based training to provide all staff easy access to simple templates and
resources to apply to Emu Fitness club environment.
 The Australian Consumer Law:
- unfair contract terms
- misleading communication
- sales tactics.
 Privacy Act 1988: privacy and confidentiality of client information.
Social
 Australia is the fifth most obese country in the world, with about 24.6 percent of its citizens considered obese.
If the current trend is not slowed down or reversed, it is estimated that almost three out of four Australians
will be obese or overweight in the next ten years.
 The popularity of weight loss reality TV shows, efforts by the government to promote healthy living and
weight loss, and the household outsourcing trend are some of the factors that have contributed to the
increase in demand for fitness services and products.
 According to a recent fitness and wellbeing industry survey, the most significant growth areas for the
Australian industry are:
- 24-hour clubs 50.4%
- Seniors market 37.4%
- Adult obesity 30.0% and Child obesity 22.6%
 It was indicated that personality (71.5%), qualifications (71.0%) and experience (70.0%) are the most
important qualities when choosing a PT for the club.
Economic
 The fitness industry has been growing steadily over the past few years. The Australian government is making a
significant effort to encourage Australians to adopt a healthier lifestyle, resulting in a greater demand for
fitness products and services.
 The fitness industry in Australia generates an average of about one billion dollars in revenue on an annual
basis. There altogether 2,856 gyms and fitness centres across the country, which collectively provide
employment for more than 17,000 people. Last year, about 3.3 million Australians used a professional exercise
service.
 Decrease in discretionary household income can shift consumers to cheaper alternatives.
 According to the Department of Employment, projected employment growth in the next five years is as
follows:
- Sports and Physical Recreation Activities industry will increase by 13.6%

Strategic Marketing Review Page 4 of 16

 - Skills Level 3 (Certificate III or IV) will increase by 8.3% whereas Skills Level 2 (Diploma) will increase by
10.4%.
Technological
 According to another recent fitness and wellbeing industry survey, 26.3% of people use apps to track runs, log
calories and find healthy recipes, 13.5% use social media to keep up with diet and fitness blogs and 8.5% use
devices that transmit their stats to their smartphone.
 Although the use of apps is quite a popular way to track health and fitness progress, 67.4% of Australian
survey respondents didn’t use them. 27.4% of those who did opted for free apps, while 5.1% chose paid apps.
 It was highlighted in the survey that 35.7% of Australian clubs intended to invest on staff training specifically
to delivery exceptional customer service.
 Embedding technology in our products and services is vital. There has been an increasing trend on using gym
gadgets, particularly wireless enabled wearable technology devices such as Fitbit Tracker. However, Emu
Fitness doesn’t have the internal competency to develop such products.
Ecological Environment
 Environmental factors are not expected to immensely alter Emu Fitness’s trade and profit generation as these
factors affect agri-businesses much more directly.

4.2 SWOT Analysis

Strengths
 each staff has a professional development program to maintain customer service satisfaction and to provide
opportunities for growth with their careers
 presence in major geographical areas of Sydney
 all Managers are meant to be held accountable for achieving the challenging performance targets
 availability of high number of equipment, classes, and trainers during peak hours
 specialised fitness and health programs tailored for specific needs that are unique to individual clients and
corporate businesses
 special classes for the elderly and children allowing parents work out freely
 low cost structure including service delivery, labour and maintenance
Opportunities
 improved quality assurance through accessing the VET qualifications for trainers
 distance coaching
 product and services expansion
 there are only a limited number of direct competitors in our current marketspace at our level
 potential for including physiotherapy services to attract non-members
 Australian Government public awareness programs on smoking, obesity, and many other health illnesses have
had significant impact on changing the culture of our people towards living a healthy lifestyle, which has
stimulated public’s willingness to exercise regularly and follow a balanced diet
Weaknesses
 low brand awareness and low brand image with current target segments
 low technology and low-grade recreational facilities
 a culture of distrust with continuous improvement where staff don’t perceive the value or importance of
improvement
 an attitude of distrust where by staff tend not to support each other to achieve team key performance
indicators
 though staff have a professional development program to maintain customer service satisfaction and to

Strategic Marketing Review Page 5 of 16

 provide opportunities for growth with their careers, this is not current, and most staff have not followed up on
this initiative
 Executive Management lack commitment and expertise with most by not possessing tertiary qualifications and
or a proven track record in management
 Managers have not had active performance management in the past few years and many are now
underperforming
 weak online presence
 difficulty in finding high quality and experienced personal trainers
 high number of classes at times is difficult to provide available trainers
 a number of classes contain low user numbers
 clients who don’t believe that they are getting value for money
 lack of on-site extras such as a health bar that competitors provide
 higher pricing structure attracts fewer international students than competitors
 current operating hours limit the use of the club (Mon-Fri: 6am-9pm, Sat: 7am-9pm, Sun: 7am-7pm) as
compared to other competitors
 competitors become active in price war
 the availability of substitute fitness centres
 7/24 open fitness clubs
Threats
 customer dissatisfaction
 low staff morale leading to poor customer service
 lack of maintenance with equipment and facilities
 poor attitude by some Managers
 seasonal customers may be reluctant to pay during summer when outdoor sports are more popular
 fast-growing health, fitness, and wellbeing related IT gadgets and apps
 availability of wide range of free health and wellbeing resources on the Internet that teach people how to
exercise and eat properly without paying anything

Strategic Marketing Review Page 6 of 16

4.3 Product Portfolio – BCG Boston Matrix
Using the BCG growth-share matrix below, Emu Fitness’s offering portfolio for the next year is outlined:

Relative Market Share

(Cash Generation)
High Low
Stars Question Marks (new markets)
High

 BodyPump
 FatBurner  Wearable tech
Market Growth Rate

 BodyAttack  Bootcamp
 Zumba  Group training programs
 Customised meal delivery
 Health Bar
 Physio-gym
 Distance coaching
(Cash Usage)

Cash Cows Dogs

Low

 Personalised weight lifting programs

 One-on-one training sessions  Kendo
 Martial arts  Pilates
 Boxing  Yoga
 Cycle
 Full Body Lift

Strategic Marketing Review Page 7 of 16

4.4 Trend Analysis
Fitness Trends in the Industry
Wearable Health and Fitness Devices and Apps
Wireless enabled wearable technology devices and apps assist in losing weight, increasing physical
activity or improving overall health. These devices are able to collect data on your physical lifestyle
(such as eating habits, sleeping patterns, calories burnt, etc.) and paired with a companion web
account or mobile app. Some famous devices include smartwatches, activity trackers, wristlets,
lightweight GPS enabled clip-on trackers, etc.
Bootcamp Health and Fitness Holidays
Health and fitness holidays for people who enjoy time abroad whilst also improving their health.
Major competitors are Thailand Fitness Boot Camp, Health and Fitness Travel, International
Fitness Holidays, and CruiseFit.

Group Training Programs

Customised group fitness classes for niche groups including pregnant women, seniors, children,
cyclists, kettlebell lovers, post-birth mums, yoga with babies and toddlers, aqua fitness, High
Intensity Interval Training (HIIT), body-mind-spirit (yoga, Tai Chi, Hatha, Pilates, etc.), dance and
fitness, aqua Zumba, and boxing workouts to name a few.

Customised Daily Meal Delivery

Meals plans designed specifically for weight loss but can also be used for the convenience by
people who live a busy lifestyle. Customers order weekly meals fully customised in accordance to
their goals.

Health Bar
Located in health club premises, health bars offer freshly made healthy meals, snacks, organic
protein shakes, juices, etc. Health bars can also provide handpicked some of the finest organic
health products on the market, which can also be extended for online shopping to generate
additional revenue.

Training and Employment

To ensure the best quality customer service experience, in-house built training programs can be
delivered. The national qualification to become a fitness instructor is the Certificate III in Fitness.
When registered as a RTO, a wide range of qualifications can be issued. Promising students can be
offered further employment. Theory classes can be delivered online to encourage flexible learning
and reduce training costs whereas practical sessions can be conducted in real business premises to
foster the teaching experience.
Physio-Gym Culture
Located in the health club premises, physiotherapy service can be offered to diagnose,
rehabilitate, and improve people with movement disorders. Diagnostic techniques provide
targeted treatments which can be integrated into individual exercise program. The service can also
be offered to non-members.
Online Health Coaching
The popularity of online health coaching is rising rapidly allowing people to get one-on-one
personalised nutrition and training support through remote communication methods which may
include Skype, email, Zoom, etc.

Strategic Marketing Review Page 8 of 16

The Fitness Market Outlook
Revenue Annual Growth (past five year) Annual Growth (next five years)

$2.2bn 3.5% 5.2%

Profit Employment Health Clubs

$265m 22,000 3,265

Figure 1: The current outlook of Fitness Industry in Australia

Health in Australia
Australian adults are overweight or obese More adults are overweight or obese than 1995

63% 10%
Australian children are overweight or obese 2nd highest contributor to burden of disease in Down
Under

25% Overweight and obesity

More people living in outer regional and remote areas are overweight or obese than people living in major cities

15%
Figure 2: Data on obesity and overweight people

Product Usage
Products & Services Member Age Groups Current Usage Male Members Female Members
Martial Arts 15-35 32% 26% 6%
Boxing 18-30 18% 17% 1%
Kendo 25-35 3% 2% 1%
Cyclo-Spin 16-45 42% 28% 14%
Mums and Bubs Yoga 25-38 32% 0% 32%
Body-Mind-Spirit 18-65 38% 6% 32%
Children Programs 4-14 29% 18% 11%
BodyPump 18-45 27% 7% 20%
FatBurner 18-45 33% 17% 16%
Zumba 18-45 19% 1% 18%
BodyAttack 18-45 21% 5% 16%
Gym - Weightlifting 15-50 88% 56% 32%
Gym - Cardio 15-50 88% 48% 40%
Figure 3: Utilisation of products based on gender and age groups

Strategic Marketing Review Page 9 of 16

Survey Results
Survey results were based on Emu Fitness staff and 3,245 members. The confidence level for this sample size is 85%,
as the results were true representation of the total membership because these surveys were readily available at
reception and key locations within the centre.

Intention Survey
Wearable Health and Fitness Devices and Apps Bootcamp Health and Fitness Holidays

84% interested 82% interested

Group Training Programs Customised Daily Meal Delivery

74% interested 56% interested

Health Bar Training and professional development

88% interested 92% interested

Physio-Gym Culture Online Health Coaching

64% interested 78% interested

Figure 4: Intention Survey showing the individual intention to adopt a new innovative marketing opportunity

Strategic Marketing Review Page 10 of 16

Customer Satisfaction

Figure 5: Survey results on customer satisfaction

Strategic Marketing Review Page 11 of 16

Employee Satisfaction

Figure 6: Survey results on employee satisfaction

Strategic Marketing Review Page 12 of 16

5 Market Segmentation
5.1 Demographic and Geographic Segmentation
Gender:  Male/Female
Age:  [8-16]: martial arts, boxing and kendo
[16-60]: all programs including nutrition assistance
Marital [Married, no dependants]: group classes
Status:  [Married, pregnant]: yoga
[Married, with dependants]: all programs and nutrition assistance
[Other]: all programs and nutrition assistance
Religion All inclusive. Emu Fitness values diversity regardless of national origin, colour, religion,
Ethnicity/Race socioeconomic stratum, sexual orientation, etc. Mutual respect, integrity, diversity, and care are part
Nationality:  of Emu Fitness’s core values.
Generation:  [Builders/Traditionals]: not targeted
[Baby Boomers, Generation X and Generation Y]: all programs including nutrition assistance
[Generation Z]: not targeted.
Income Level:  Medium-high income

Strategic Marketing Review Page 13 of 16

 Figure 7: Distribution of member count by age group Figure 8: Distribution of member count by marital status

Figure 9: Distribution of member count across Sydney regions

Strategic Marketing Review Page 14 of 16

5.2 Psychographic and Socio-Cultural Segmentation 
Activities:  Gym, nutrition sessions, weight-lifting, running, cycling, cardio, martial arts, boxing, kendo, Pilates,
yoga, and group classes
Benefits Healthy lifestyle, convenience (location – omnipresence), entertainment, relaxation, stress reduction,
Sought:  balanced diet, weight control, increase body mass, social interaction, and value for money
Lifestyle:  Hobbies and leisure activities  entertainment
 sports
Health and wellbeing  exercise
 nutrition
 losing weight
 muscle building
 cardio
Peak performers  busy lifestyle
 highly motivated and self-motivated
Sports focus  performance maintenance and enhancement
 people who are beginners and have moderate fitness levels
Social Class:  Have clients from the following social groups:
Upper Middle Class: higher managerial, administrative or professional 
Middle Class: intermediate managerial, administrative or professional 
Lower Middle Class: supervisory, clerical, junior administrative or professional
However, the facilities are dominated by Middle and Lower Middle-Class clients.
Interests:  Maintain a healthy lifestyle and uplift health conditions
 Lose weight and body-muscle toning
 Cutting-edge equipment and facilities
 Have recreational and recovery activities
 Individual/team sports programs including fitness, swimming, weightlifting, gymnastics, etc.
 Have a balanced diet and nutrition program
 Personalised classes for different needs and age groups
 Self-fulfilment
VALs Current target segment:
Framework   generally, low-resource group
Main target group:
 motivated by others
 Believers
 values practical products
 Makers
 conservative consumers
 Strivers
 has modest incomes
 influenced by the success of their peers.

Strategic Marketing Review Page 15 of 16

6 Competitor Analysis
Financial Current
Competitor Performance Market Value to customers Strengths Weaknesses
(%, 5 yrs) share
 The largest health club
in Australia
 Quality staff  Celebrity members  High cost
First World  Top-notch  Well-differentiated structure
+9.7% 22.5%
Fitness equipment and outlook  Locking contracts
facilities  Strong infrastructure  Operating hours
 High profile
management
 Family-friendly  Locking contracts
 Lifestyle support
 Calming  Operating hours
 Health diagnosis
Ying Yang facilities  Weak coverage
+14.4% 17.8% programs
Lifestyle  Remedial in NSW
 Press presence (The
services  Highly traditional
Biggest Loser)
 Japanese Baths approaches
 Limited facilities
 Convenience  Staff
 Low-budget  Unstaffed gyms unavailability
360 Fitness +40.2% 14.4%  24-hour access  24-hour access  Only focus on
 Wide presence  Proven franchise gyms
model  Not family
oriented
 24-hour access  Rich facilities including
 Wide presence indoor and outdoor
 Family-friendly including a semi-
 Expensive
Fitness as  Pools Olympic gymnasium
+11.1% 11.4% membership
easy as 123  Programs for  Public programs
 Limited location
disabilities attract high number of
 Community people
focused  Family oriented
 Strong public image
 Teen gym  Operating hours
 Wide presence
 Lifting focused  Too crowded
 Diverse exercise
 Explosive  Expensive
Gelignite programs
results  High waiting
Gym & +40.9% 8.4%  Nutrition support
 Professional time to access an
Club  Classy outlook
fighting equipment
 High-end equipment
 Competitive during peak
 Ability to adopt and
environment hours
adapt industry needs
 Threatened by
emerging female
House of  Niche market
oriented health
the rising  Strong public image
clubs
sun  Women only  Customised programs
-37.5% 7.5%  Unisex gyms with
Women  Wide presence exclusive to women
women-only
Health  Pregnancy support
sections
Clubs  Nutrition programs
capturing the
market
Strategic Marketing Review Page 16 of 16
 Financial Current
Competitor Performance Market Value to customers Strengths Weaknesses
(%, 5 yrs) share
 Customer-
 High quality image  Weak online
centric
 Flexible membership presence
approach
 Excellent facilities  Fixed operating
Workout  Diversity in
+62.1% 5.3%  High-end equipment hours
Sports nutrition and
 Classy gym and fitness  More gym
exercise
centre experience focused
programs
 Agile organisation  Lock-in contracts
 Innovativeness
Table 1: Comparison of major competitors

Figure 10: Current market share by major competitors for the Sydney Region

Strategic Marketing Review Page 17 of 16

7 Financials of Emu Fitness
Annual Gross Total Costs Gross Margin
Region Clubs Members
Revenue
Sydney Central 2 1820 $1,310,400 $930,384 29%
Sydney Eastern Suburbs 3 3825 $2,754,000 $1,900,260 31%
Sydney North Shore 2 2875 $2,070,000 $1,407,600 32%
Sydney North West 1 700 $504,000 $312,480 38%
Sydney South 2 1795 $1,292,400 $788,364 39%
Sydney West 5 4076 $2,934,720 $1,731,484 41%
Grand Total 15 0 $10,865,520 $7,070,573 34.9%
Figure 11: Revenue for recent financial year by region

Marketing opportunities estimates:

Estimations based on the following costs and revenues:

 trainer labour is @ $40 per hour

 admin labour is @$25 per hour
 physio labour is @$60 per hour
 dietician labour is @$60 per hour
 gadget cost is @$175 per unit
 health shop items (includes dry and wet products) have a margin of 30% per item
 shop fittings (structure and equipment) per club centre is @$150,000 (one off cost).

Strategic Marketing Review Page 18 of 16