Project report on gym

SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL FULFILLMENT OF GRADUATE DEGREE IN BACHELOR OF BUSSINESS ADMINISTRATION WITH COMPUTER AIDED

MANAGEMENT

SUBMITTED BY:Aditya Srivastava

BBA (CAM) (2007-2010)044151907

INDUSTRY GUIDE FACULTY GUIDEMr. MAYANK SEHGAL AREA HEAD MARKETING MBS GYMKHANA LTD

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UNDERSTANDING CONSUMER BEHAVIOUR FOR BRAND

DEVELOPMENT

TO WHOM IT MAY CONCERN

This is to certify that ADITYA SRIVASTAVA, undertook training on

UNDERSTANDING CONSUMER BEHAVIOUR FOR BRAND

DEVELOPMENT from 4th June 2009 to 30th July 2009.

Ms. Shikha Gupta has successfully completed the projects under the guidance of

Mr. Mayank Sehgal and Nikita Singh. She is a sincere and hard-working student

with pleasant manners.

We wish all success in her/him future endeavors.

Signature

NIKITA SINGH

CORPORATE MARKETING HEAD

Signature

MAYANK SEHGAL

AREA HEAD MARKETING

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CERTIFICATE OF ORIGIN

This is to certify that Mr. ADITYA SRIVASTAVA, a student of Graduate Degree

in BBA (CAM), Chanderprabhujain College of higher studies, Narela has worked

in the MBS GYMKHANA LTD, under the able guidance and supervision of

MR. MAYANK SEHGAL, AREA HEAD MARKETING, MBS GYMKHANA

LTD.

The period for which she was on training was for 8 weeks, starting from 4th.june

2009 to 30th.July 2009. This Summer Internship report has the requisite standard

for the partial fulfillment the Graduate Degree in BBA (CAM). To the best of our,

knowledge no part of this report has been reproduced from any other report and the

contents are based on his experience.

Signature

(Ms. ANCHAL CHHABRA)

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ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Mayank Sehgal, Area

Head Marketing, MBS Gymkhana Ltd, for his able guidance, continuous

support and cooperation throughout my project, without which the present work

would not have been possible.

I would also like to thank the entire team of MBS Gymkhana Ltd., for the constant

support and help in the successful completion of my project.

Also, I am thankful to my faculty guide Ms. Anchal Chhabra of my institute, for

her continued guidance and invaluable encouragement.

Signature

ADITYA

SRIVASTAVA

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TABLE OF CONTENTS

Chapter No. Subject Page No.

1 Executive Summary 7

2 Overviewa. Objectivesb. Research methodology

81012

3

4

Background to the problem

Review of literature

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19

5 Marketing strategies 26

6 Industry Profile 30

7 Major Players 36

8 Company Overview 43

9 SWOT analysis 61

10 Findings and Analysis 68

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EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

Training at Addiction-India Health & Fitness Club has given me thorough insight into the Indian

Health industry sector. Addiction is a chain of fitness centres spanned over the Delhi and Noida

region.

I was assigned to work in the MANAGEMENT department which looks after the sales,

memberships and corporate services of the Addiction club in Kaushambi. Under Marketing

division there has been a further subdivision into various groups which handle the different

marketing solutions provided by the organization.

As a part of my training I was required to find out the “Understanding of consumer behavior

for Brand development”

The significance of this dissertation is four-fold:

To provide a snapshot of the health club market in Delhi and Noida, India.

To reveal trends in the health and wellness industry with special reference to Addiction-

India fitness centre.

To identify the demography of the users of Addiction-India fitness centers.

To define marketing strategies to be used by ‘Addiction-India health club’

I covered four areas in the duration of two - months internship, as follows:

1. Personal Marketing/Relationship Marketing/Corporate Marketing

2. Cold calling/Customer Relationship Management

3. Responsibility as a Manager

4. Drafting a Case / Presentation7

OVERVIEW

Addiction is a chain of unique and premier health club in Delhi and Noida. Addiction promises a

healthy and balanced life to you. In a short span from its launch of services, Addiction is one of

the most respected names in the Indian Fitness sector and has acquired an enviable list of

customers.

Our mission is to provide fitness solutions to people by using our team of expert trainers and

dieticians. Spread in thousands of square feet in approved commercial premises with

extraordinary ambience, Addiction is the only club with a combination of luxury and

professionalism. Excellent interiors with state-of-the-art infrastructure and highly advanced

equipments have contributed to the success of our Brand.

With exotic spas and sauna facilities, Addiction guarantees a more relaxed and fit you.

Relationship marketing is a valuable element when it comes to a successful business. This

marketing type focuses on the fact that customer retention and the overall satisfaction of those

customers as a whole is an essential component to the overall success of a business. There were a

number of marketing campaigns conducted in the decade of the sixties and the eighties which

implemented the use of direct responses in order to confirm the basis of the relationship

marketing practice.

The scope of relationship marketing is to zoom in on a particular audience when it comes the

promotion of certain services and various products. This form of marketing takes the interests of

the people that it is seeking to appeal to, and uses that information in order to appeal to the

senses of these people. Relationship marketing is a key component to creating, and building long

term relationships that can be productive, beneficial, and long lasting to all of the individuals,

clients, and businesses involved.

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Addiction health and fitness club is the place to relax, retreat, and re-connect. With seven

running centers and two other centers in the pipeline. The staff makes sure you have everything

you need to be perfectly comfortable.

It Provides facilities & services for:

Main workout area

Cardio Area/ Theatre

Group Exercises Classes

Aerobics

Gymnasium & SPA

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OBJECTIVES

It is well evident that work experience is an indispensable part of every professional course. In

the same manner practical training in any organization is must for each and every individual who

is undergoing management course.

Without the practical exposure one cannot consider himself or herself as a qualified capable

manager. During the training period the student learn through his own experience, the real

situation of the corporate world and to put his theoretical knowledge into practice. This

experience is very valuable for the student and plays a leading and an important role in the career

of the student.

Hence to fulfill this requirement, I had completed my two months Training in MBS Gymkhana

Limited , Sector 16-A, Film city, Noida-201301

Entering in an organization is like a stepping into altogether a new world. At first everything

seems to be strange and unheard but at the same time when the time passes one understands the

concept and working of the organization and thereby developed professional relationship.

Initially, it felt as if classroom study was irrelevant and it is useless in any concerns working but

gradually it is realized that all the basic fundamental concepts studies and linked in one or the

other ways to the organization. But how and what can be done with fundamentals depend upon

the intellectual and applicability of the individuals. It is just a matter to modify the theory so as

to apply it to given practical solution.

I worked on all the Practice Areas as a trainee with the Management team in the company. My

foremost objective was for gaining maximum experience and exposure in the company. It always

was a goal for me to complete the given Projects with in the Time constraints and with full

efficiency.

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I covered four areas in the duration of two - months internship, as follows:

1. Personal Marketing/Relationship Marketing/Corporate Marketing

2. Cold calling/Customer Relationship Management

3. Responsibility as a Manager

4. Drafting a Case / Presentation

I sincerely believe that there is no better place to learn this practical side of management than the

industry itself.

I once again thank all the employees of the MBS Group who have helped me out in the

preparation of the project report and have exposed me into the industry.

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Research Methodology

Primary Objectives:

To provide a snapshot of the health club market in Delhi and Noida, India

To reveal trends in the health and wellness industry with special reference to Addiction-India

fitness centre

To identify the demography of the users of Addiction-India fitness centers.

To define marketing strategies to be used by ‘Addiction-India health club’

Secondary Objectives:

Personal Marketing/Relationship Marketing/Corporate Marketing

Cold calling/Customer Relationship Management/Direct Marketing

Responsibility as a Manager

Drafting a Case / Presentation12

METHODOLOGY

Choice of research design

Despite the difficulty of establishing an entirely satisfactory classification system, it is helpful to

classify marketing research on the basis of the fundamental objectives of the research.

Consideration of the different types, their applicability, their strengths, and their weakness will

help the student to select the type best suited to a specific problem.

The three general types of research are as follows:

1). FUNDAMENTAL RESEARCH

2) ANALYTICAL RESEARCH

3) DESCRIPTIVE RESEARCH

Descriptive research includes surveys and fact finding enquiries of different kinds. The major

purpose of descriptive research is description of the state of affairs as it exists at present. In

social science and business research we quiet often use the tern ex post facto research for

descriptive research studies. I have used this research in order to accomplish my project. What I

did in my project report is explained below.

First, I had to know about Addiction Gym and its branches all over Delhi and NCR. Before

doing the survey I had to know about the competitors available. Since marketing is a important

issue that is mostly look after by the managers hence I had to trace the market and segment.

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SAMPLING TECHNIQUE USED & SAMPLE SIZE - WHY?

Sample design is a definite plan of obtaining some items from the whole population. The sample design used in this project is two state sampling i.e. Cluster and convenience. In the probability sampling methods, each items in the sample is chosen one at a time from a complete list of universe elements. In marketing research practice, it will sometimes be more expedient to select clusters or groups of universe elements, rather than to choose sample items individually.

SAMPLING METHOD

Sample design is a definite plan of obtaining some items from the whole population. The sample design used in this project is two state sampling i.e. cluster sampling and convenience sampling. The whole city was divided into some geographical areas and I have chosen East Patel Nagar, Shalimar Bagh, Vikas Puri, Noida, South Extension, Janak Puri, and Kaushambi.

CLUSTER SAMPLING

Here the whole area is divided into some geographical area and a definite number of consumers were to be surveyed.

AREA SAMPLING

Area sampling is a sampling technique in which the work is divided according to area. My mentor has given me a eastern area of new Delhi in which I visited various retailers to know the market standing of Addiction Health Club.

CONVINIENCE SAMPLING

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This type of sampling is chosen purely on the basis of convenience and according to convenience. I visited malls and some customers. This technique comes under non probability sampling.

SAMPLING

1. Sampling Technique : Non probability sampling

(A non probability sampling technique is

That in which each element in the

Population does not have an equal

Chance of getting selected)

2. Sample Unit : people who work in Gym.

3. Sample size : 8

4. Method : Direct interview through questionnaire.

5. Data analysis method : Graphical method.

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6. Area of survey : Kaushambi (Ghaziabad).

7. Timing of survey : 09:00 am to 06:00 pm

DATA COLLECTION TOOLS

Primary data . The major source of primary data was the information and questionnaire collected from the journal and the customers. The information collected from the journals and the trainer can also be referred to as the primary data.

Secondary data . The major source of secondary data was the reference books and company’s website. The company’s articles and magazines were also referred to for the information.

GYM ACTIVITY- METHOD USED FOR DATA COLLECTION

I. Questionnaire was prepared keeping the objective of project in mind.

II. Questions were asked to respondents as regards to there willingness to join the Gym.

III. The help of questionnaires conducted direct interviews, in order to get accurate information.

IV. Customer has approached me for accurate information about the Gym.

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BACKGROUND OF THE PROBLEM

Brands are some of the most valuable assets companies own. The overall goal of this is to

analyze the brand management decisions that must be made to build, measure, and manage a

brand. Particular emphasis is placed on understanding psychological principles at the consumer

or customer level that will improve managerial decision-making with respect to brands

“Addiction” is a new brand that has entered the health industries in past three years. Consumers

and retirement homes have turned brain-fitness games and exercises into commercial hits, so

now some consumers and employers are incorporating them into wellness programs that promote

health for the mind as well as the body. As there are many health and fitness clubs that are

already major players in this market. Addiction has to create its brand awareness in the mind of

the customers.

Upon completion of the project we

have to attain a thorough understanding consumers develop brand attitudes and

behaviors,

know the issues, techniques, and decision options in analyzing, planning and managing

brands,

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be able to apply the acquired knowledge to make informed and more successful decisions

in real-world branding problems.

Consumer behavior is the fundamental to marketing as marketing is concerned with supplying

and anticipating customer requirements; therefore understanding how customers behave is at the

very heart of the marketing concept. To understand the consumer behavior was the main aim as

the behavior of the consumer differ according the demography. Like the quarterly charges for the

Kaushambi branch was Rs 5000/- whereas the same scheme was worth Rs 12000/- in the south

extension part of the Delhi and Rs 9000/- in the Noida branch.

The major players with Addiction in the market were Gold gym which is an internationally

acclaimed gym, second is Fitness First which is again an international player and has over 50

centres in India. Thirdly Talwalkar’s which started from Mumbai and now has 18 centres across

India.

To develop brand name “Addiction” and creating its brand awareness was the main goal.

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LITERATURE REVIEW

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LITERATURE REVIEW

CONSUMER BEHAVIOR

Consumer behavior (in consumer business context) is referred to as the study of when, why,

how, where and what people do or do not buy products. It blends elements from psychology,

sociology, social psychology, anthropology and economics. It attempts to understand the buyer

decision making process, both individually and in groups. It studies characteristics of individual

consumers such as demographics and behavioral variables in an attempt to understand people's

wants. It also tries to assess influences on the consumer from groups such as family, friends,

reference groups, and society in general .Customer behavior study is based on consumer buying

behavior, with the customer playing the three distinct roles of user, payer and buyer.

Relationship marketing is an influential asset for customer behavior analysis as it has a keen

interest in the re-discovery of the true meaning of marketing through the re-affirmation of the

importance of the customer or buyer. A greater importance is also placed on consumer retention,

customer relationship management, personalization, customization and one-to-one marketing.

In Addiction our main motive was to study the consumer behavior of the clients in respect to

demographics. According to demography Kaushambi (Ghaziabad) is not high locality area where

people can afford an annual gym worth 30000 thousands. So according to the area the annual

gym scheme was offered at 15000 which was quite reasonable according to the locality whereas

in south extension branch the same scheme was offered at 45000 thousands which people can

afford easily.

Consumer behavior as 'the process and activities people engage in when searching for, selecting,

purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs

and desires'.

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Consumer behavior yesterday, today and tomorrow

The individual-oriented consumer behavior of the post will change a more collective style in the

1990s.

As the new decade creeped in and the new century approached, a time has come to reflect upon

and predict the consumer's behavior in the marketplace. Many things have changed since the end

of mass marketing and the beginning of market segmentation.

In the past females never carved for gymnasiums, but which the changing environment females

want fitness programmes to keep them fit.

Addiction according to the changing consumer behavior designed special female fitness

programmes. Contrary to popular belief, weight and resistance training is very important

for women of all ages. Instructed properly under the tutelage of Addiction's trainers, the

risk of injury is mitigated to non-existent levels.

To address the other concern or inhibition as it may be appropriately described. Weight training

programs at Addiction are not designed to make you look like "masculine". Strength training

programs for women ensure well-balanced, injury free lifestyles for modern living.

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MARKING YOUR MARK - BRANDING THE GYM

If we think only big corporate names need to think about things like brand names, think again.

Our brand says a lot about us and our business, and that's as true for a local gymnastics gym as it

is for a multi-national conglomerate. In this we look at how creating a strong brand for our

business can help us set ourselves apart and lay the right foundation for the growth of our

business.

Our brand is more than just our business name or the logo on the newspaper ad. It is our

corporate identity. An effective brand tells people who you are, what you do and how you do it,

while at the same time establishing your relevance to your customers.

Your brand is how your business is perceived by customers. If your brand has a high perceived

value, you enjoy many advantages over your competition, especially when it comes to pricing.

Why do you think people are prepared to pay exorbitant money for brand items? Perceived

value; perceived value as a result of very effective brand promotion resulting in high recognition.

.

As the Addiction logo reflects in its punch line “Discover a new you in YOU”. This suggests that

Addiction promises you the results and changes in your activities and stamina.

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The main reason for creating our own brand is to differentiate ourselves from your competition.

Gymnastics programs can be located blocks apart from each other. You need to constantly be

looking for ways to set yourself apart from your competition. Our brand can do that for us.

Another good reason for creating our own brand is to make our marketing more effective and

efficient. You don't have to spend your time with a new client explaining who you are, what you

do and how you do it. Our brand can already communicate that for us. You can spend your time

focusing on students rather than educating your customers about your business.

Your brand needs to say who you are, what you do and how you do it. It needs to do all these

things at the same time as establishing your relevance to your prospective customers. It is

absolutely essential as you build your own brand, that you have a firm grasp of who you are.

A good place to begin thinking about your mission is to put yourself in the shoes of your

customers. If you're in the market for a gymnastics club, what things are important to you?

Different people will be looking for different benefits but you can bet that they want their child

to be safe and well cared for. Cost is also likely to be high on the list as is the training they will

receive. These things will be highly important to some and less important to others. So focus on

the benefits that are likely to be highly relevant to the majority of your target market.

Your mission statement might read something like "Discover a new you in YOU” That's a pretty

general statement and if you decide to focus on a particular niche of the gymnastics market.

When we created our brand, we kept the who, what and how firmly in mind but also use the

brand to establish our relevance to our target market and build credibility with that market.

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BRAND AWARENESS OF “ADDICTION”AMONG CUSTOMERS BY FORMULATION OF DIFFERENT SCHEMES

Increasing brand awareness is one of the major goals of the company. Addiction also to increase

the brand awareness and their clientale launched different schemes according to demography. As

on 3rd of may 2009 Addiction opened its new centres at Kaushambi and Janakpuri introducing an

inaugural offer scheme “BUY 2 QUARTERS GET 2 QUARTERS FREE”. In a month’s time

Kaushambi branch had a sale of Rs12 lakh in its first month. The members who joined in the

first month were around 200. The inaugural scheme was a great success. It was more than what

the company had expected. The marketing strategies used by the company was advertising in the

leading newspapers like Hindustan times and Times of India.

Gradually in the month of June first 15 days the sale dropped from 12 lakh to 4.5 lakh the reason

being the availability of the schemes. Their was only one scheme running in the month of June

that was 25% discount on any scheme you take let it be a quarterly scheme, half yearly, annual or

lifetime membership. The marketing team was questioned by the Heads of the departments. One

reason which could be thought for this downfall was less availability of schemes and weak brand

awareness.

Addiction marketing team, as I was also a part of it designed some new schemes. We started

with Happy hours (11:00am-17:00pm) in which the charges were less. This scheme was

basically to tap the Ladies/females who were home makers. Their was a difference of rupees

1500 in happy hours and regular hours.

Another scheme that was introduced was rupees 35/- per day for an annual gym. It came out to

be rupees 12775/- for a year.

A monthly scheme was also introduced in which the member could avail gym facility in just

rupees 1999/-.

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To increase the brand awareness of the company the marketing strategies adopted by the

company were:

Direct marketing

Telemarketing

Couponing

Corporate marketing (corporate tie ups)

Co branding

Door to door leaflet marketing

Advertising in newspapers

Direct mails.

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MARKETING

STRATEGIES

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MARKETING STRATEGIES – “ADDICTION”

DIRECT MARKETING

Direct marketing was a sub-discipline and type of marketing. There were two main definitional

characteristics which distinguished it from other types of marketing. The first was that it attempts

to send its messages directly to consumers, without the use of intervening media. This involved

commercial communication (direct mail, e-mail, telemarketing) with consumers or businesses,

usually unsolicited. The second characteristic was that it focused on driving a specific "call-to-

action." This aspect of direct marketing involved an emphasis on trackable, measurable positive

(but not negative) responses from consumers (known simply as "response" in the industry)

regardless of medium.

Direct marketing is attractive to many marketers, because in many cases its positive effect (but

not negative results) were measured directly. For example, we send out five thousand

solicitations by mail, and three thousand customers were tracked as having responded to the

promotion, we could say with some confidence that the campaign led directly to the responses.

The number of recipients who are offended by the junk mail/spam, however, were not easily

measured.

CHANNELS

We also used media such as door hangers, package inserts, magazines, newspapers, radio,

television, email, internet banner ads, digital campaigns, billboards.

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TELEMARKETING

The second most common form of direct marketing used was telemarketing in which we

contacted consumers by phone. By this process many of the consumers were informed about the

different schemes.

People interested could register on the phone also to avail the special schemes.

COUPONING

Coupons in newspapers and magazines cannot be considered direct marketing, since the

marketer incurs the cost of supporting a third-party medium (the newspaper or magazine);

coupons were designed specifying different schemes available for the month of July. Coupon

were the most effective way to increase the brand awareness and sales of the company

CORPORATE MARKETING

Addiction had corporate tie ups with Ienegizer, Rock man search group. We customized our

schemes for different branches and offered special discounts to the employees of both these

organizations.

CO BRANDING

To put in the words of inter-brand definition, "Co-branding is a form of co-operation, in which

all the participants' brand names are retained."

Co-branding as, "two or more well-known brands combined in an offer" like Addiction and

Kazo (the apparel brand) and each brand sponsors expect that the other brand name will

strengthen the brand preference or purchase intention and hope to reach a new audience. 28

Most companies have explored co-branding at one time or another. But few have realized its full

potential. While there are many forms of co-branding; before a company can decide which

option makes the most sense for its situation, it must fully explore four main types of co-

branding.

DOOR TO DOOR LEAFLET MARKETING

Leaflet Distribution services were used extensively by the health industries, and many other

business focusing on a local catchment Business to consumer business model, similar to direct

mail marketing, this method is targeted purely by area.

DIRECT MAILS

The most common form of direct marketing is direct mails sometimes called junk mail, used by

advertisers who send paper mail to all postal customers in an area or to all customers on a list.

Any low-budget medium that can be used to deliver a communication to a customer can be

employed in direct marketing. Probably the most commonly used medium for direct marketing is

mail, in which marketing communications are sent to customers using the postal service. The

term direct mail is used in the direct marketing industry to refer to communication deliveries by

the Post Office, which may also be referred to as "junk mail" or "ad mail" or "crap mail" and

may involve bulk mail.

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INDUSTRY PROFILE

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INDUSTRY PROFILE

BUSINESS OF GOOD HEALTH

A modern day gym is a facility where you work out, meditate doing some yoga, feel good with

some aerobics exercise, and relax your senses with a day spa and then look good by grooming at

the saloon. Personal trainers get more and more professional and gyms make sure your follow

the diet prescribed by providing the meals at your doorstep! This industry combines luxury and

exclusivity to the experience of a fitness centre with a professional approach to help individuals

develop to the best of their needs.

Not many years ago a plump Sridevi or a flabby Rishi Kapoor were accepted as superstars

by their fans. Things have changed now and today, the badshaahs of the in dustry require six-

pack abs and the queens need lissome charms to woo their fans. A well-toned body is not

merely a requirement but an obsession. The craze among the Bollywood stars is only a reflection

of the society that is getting serious about battling the bulge. Encashing this trend are the

modern gymnasiums that are adopting a comprehensive approach to the health and well being of

its members.

Gymnasiums have thrived for long in small apartments converted into exercise dens. However,

with popular international health chains entering the country and domestic players getting

organized, this new base of theirs is becoming a haven for the fitness freaks. Largely referred as

'fitness or health centers’, these are no less than 10,000 sq ft in area and include a work out area,

yoga studios, aerobics studios, sauna and steam rooms, day spas, swimming pools, massage

centres, food courts serving holistic food and even DVD libraries ensuring relaxation and

entertainment!

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As per recent estimates, the fitness and wellness segment in India can be valued at Rs 2,500

crore. The growing segment and increasing number of health conscious Indians is attracting

global players. For instance, Fitness First, UK's popular international chain of health dubs,

recently made its debut in India. Vikram Aditya Bhatia, the managing director of Fitness First

India Private Ltd, describes the facility as a large-format gym.

Apart from modern equipment and machines, members can avail free beverages and DVD

library. "The idea is to create a place other than the place to love and work. The comfortable

ambience would encourage people to spend quality time here," says Bhatia. The first center has

come up in Gurgaon and next will open soon in Connaught Place in New Delhi. It will be spread

over 24,000 square feet. The company plans to invest Rs 12-16 crore in each dub and Rs 200

crore over the next three years in India. The center promises to provide five-star fitness at afford-

able prices. The membership is available at Rs 3000 per month exclusive of taxes. If one opts for

a personal trainer, Fitness First offers a wide variety of packages ranging between Rs 600 to Rs

1,500 per session. Another popular international chain Gold Gym already has its presence in

India. It offers the latest equipment and services including group exercises, personal training,

cardiovascular equipment, spinning and yoga, while maintaining its core weight lifting tradition.

Additional facilities include steam, luxury massages and a juice bar.

The idea of complete fitness centre has attracted many entrepreneurs as well. Take for instance,

the two IIM Ahmedabad graduates Nikhil Vaswani and Rohit Shankar. Their brainchild

Wellocity is a ‘wellness centre’ offering programs customized to your requirements. The USP of

this centre is to focus on “helping you implement the programs” essential for your fitness. Our

extensive service lines ensure that the requirements of your wellness programs are fulfilled and

obstacles experienced in your path to wellness are minimized.

It is well known that a healthy diet plays a significant role in keeping your body fit. Yet

maintaining that diet is the biggest obstacle given the modern hectic lifestyles and temptations of

fast food. A side from gymnasium that offers a customized workout package. Addiction offers an

aerobic studio, a yoga studio, a kickboxing center, a day spa and saloon. The centre takes care of

providing the right atmosphere to exercise. While live DJ creates lively ambience at the

gymnasium, peppy music provides an ideal setting for aerobics workouts.

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A healthy mind is vital for attaining a healthy body. What better way to unwind your mind

through yoga or may be a relaxing massage.

THE RISE OF THE GYM THROUGH HISTORY

Many of us have gym membership or attend classes at a local gym on a frequent basis: in India,

gyms are a million industry, and it's estimated that 12% of the population regularly attend the

gym.

But fifty years ago, gyms as we know them today just didn't exist.

Ancient Greece: The First Gyms

The word "gym" is a contraction of "gymnasium" - derived from the ancient Greek word

gymnasion. The ancient Greek gymnasiums were places where athletes trained for public games

such as the Olympics. Many had libraries (going a bit further than the traditional stack of

magazines in modern gyms...)

19th Century Gyms: Schools, Colleges, YMCA and Turners

After the ancient Greeks, gyms disappeared for centuries. Medieval and Renaissance life was

physically arduous enough, and ordinary people got all the exercise they needed working on the

land and carrying out chores.

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By the 19th century, though, schools and colleges were building gymnasiums (and even today,

the word "gym" means "school gym class" to many people). The YMCA also built a number of

gyms for physical exercise and social sports and games.

During the mid 19th century, the Turnvereins (gymnastics unions) movement led to the founding

of Turners, German-American gymnastics clubs. These had a political as well as an athletic

element.

1930s - Boxing Gyms

A form of gym known as the "boxing gym" began to appear in the 1930s, with the founding of

Cus D'Amanto's Gramercy Gym in Manhattan in 1939.These gyms were to train fighters and

boxers - not places for general exercise.

1960s and 1970s - Early Gym Chains

Gold's gym chain, still going to day, was founded by Joe Gold in 1965 in Venice, California,

which became a landmark for bodybuilders (despite the dirty state of its equipment). Joe Gold

founded the World Gym chain in 1977.

1980s - Corporate Gyms

More and more gym chains were founded during the 1980s, including 24 Hour Fitness (1983)

and LA Fitness (1984).

Do you work in an office building with its own gym? The trend of corporate gyms began in the

1980s, too, as employers began to take on a greater responsibility for employee's health

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Try This Today? If you work for a company without a gym, ask your boss about getting

corporate membership with a local chain - or get together with a bunch of colleagues and

approach the gym yourself.

1990s onwards - Mass Popularization

Today, lots of people are or have been gym members - people who would never call themselves

"bodybuilders", "fighters" or even especially sporty. New gym chains have sprung up over the

past couple of decades; Lifetime Fitness in 1990, Equinox Fitness in 1991, and Virgin Active in

1999.

Widespread celebrity gym-going has encouraged the boon in gym membership, and gyms look

set to be popular for decades to come.

Try This Today? If you've thought about joining a gym, or going to an exercise class, give it a go

(most gyms offer free trials). You don't have to be "sporty", fit or co-ordinated to enjoy modern

gyms.

35

MAJOR PLAYERS

36

MAJOR PLAYERS IN INDIAN HEALTH CLUB INDUSTRY

GOLD GYM

Gold’s Gym started in Venice California in 1965, and soon became the hotbed for the

development of training techniques, equipment and nutritional concepts that formed the

foundation for the modern fitness revolution. In 1975, Gold’s Gym received international

attention when it was featured in the major motion picture, ‘Pumping Iron’. It was thus

effectively established as the ‘Mecca of Bodybuilding’.

Today, Gold’s Gym has over 680 facilities. It is the largest international gym chain in the world

recognized for its passion, unique heritage, and experience as the final authority in fitness and

lifestyle.

The India chapter of Gold’s Gym started in 2002, when the first Gold’s Gym India branch was

set up at Nepean Sea Road, Mumbai. In the next few years this number grew, and today Gold’s

Gym has cut out for itself 18 gym facilities in various cities of the country in Mumbai - at

Nepean Sea Road, Bandra, Worli, Santacruz, Andheri, Chembur, Mulund and Vashi and outside

Mumbai at Chennai, Ahmedabad, Baroda, Surat, Bangalore, Pune, Noida, Ludhiana, Kolkata,

Jaipur, Jalandhar and outside India in Dhaka, Bangladesh.

Gold’s Gym India has slowly and steadily carved its name in the Indian market and built a

reputation to reckon with.

37

FITNESS FIRST

Fitness First Gym & Health Club started as a single health and fitness club in Bournemouth, UK

in 1992.

Since then, it has grown quite a bit - we're now the largest gym, health and fitness club group in

the world with more than 1.5 million Fitness First members in over 550 clubs worldwide. In Asia

Pacific alone, we have over 140 clubs! But we still keep that Fitness First one-health club

mentality - every single Fitness First member counts.

It has a motto at Fitness First that sets us apart – Real People, Real Results. We're proud to say

that more people achieve their health and fitness goals with Fitness First than at any other fitness

club!

As the fastest growing fitness chain club, it will continue to deliver on its promise of guaranteed

value and its aim is to help you achieve your fitness goals - a simple formula with a proven track

record of success!18 countries, over 500 clubs, 1.4 million members and growing worldwide.

38

POWERHOUSE GYM

Powerhouse gym India is brought to you by Q’s Fitness Studio. Q’s Fitness Studio was started in

the year 1999. It was in the year 2005 when Q’s Fitness Studio brought Powerhouse Gym to

India. Powerhouse Gym had a launch of its Indian operation on 26th November 2005 with state

of art 6000 sq ft area facility at Concorde Co-op Housing Society, Ns Road No 10, Juhu.

Two existing braches running under Q’s Fitness Studio are now called Powerhouse Gym.

Powerhouse Gym India is a Ltd Company concern of Powerhouse Fitness Ltd, the chairperson,

Ashok Gupta who has a Master Franchisee for SAARC Countries (India, Nepal, Bhutan,

Pakistan, Bangladesh, Srilanka and Maldives).Powerhouse Gym India has state of art facilities,

be it equipments, technology and fitness programs that are required to get the desired results for

the members.

39

TALWALKAR’S

Established in 1932, Talwalkar’s Better Value Pvt Ltd (TBVF), commonly famous as

Talwalkar’s, is India's largest chain of health centres. It has 45 ultramodern branches across

major cities in the country, with 50,000 members.

Talwalkar’s' phenomenal growth can be attributed directly to the trust our customers have in us,

and the benefits they derive from our expert advice, personalized supervision, on-going facility

upgrades, result-oriented approach, and above all from Talwalkar’s' immense know-how and

experience in this field over 75 years of existence.

Talwalkar’s was founded by the late V.R.Talwalkar in 1932, as a single one-room facility in City

light, Mumbai. Son Madhukar Talwalkar’s gave the business a new direction by imparting a

scientific, disciplined and customer-friendly perspective to the fitness and health regimes offered

at the gyms. Today, Talwalkar’s gyms are perceived not as a meeting place for boisterous

bodybuilders, but as a health centre where customer health priorities are managed with

sensitivity and care. The user-friendly environs and world-class facilities make the Talwalkar’s'

experience wholesome and encouraging.

40

CELEBRITY FITNESS

Celebrity Fitness was founded by John Franklin in 2003, and commenced operations in

February 2004 with the opening of Jakarta's groundbreaking EX club. The Celebrity Fitness

name was chosen for a reason: it is meant to convey each member can exercise as if they are a

celebrity as the clubs are designed with Hollywood and Beverly Hills' standards in mind, to

pamper and give first quality service to our members. Staying true to the entertainment

ambiance, Celebrity Fitness' venues are exclusive malls so that members can conveniently shop,

dine-in and go to the cinema after working out in the gym.

Celebrity Fitness pioneered the concept of combining a fitness center and entertainment

ambiance in Indonesia. Moreover, Celebrity Fitness contributes tremendously to the increased

awareness of health and fitness in its operating markets today. Celebrity's gym experience proved

hugely popular, prompting the group to expand its gym network in Jakarta and grow overseas

(starting in 2005 with the 1 Utama club in Kuala Lumpur). As the premier regional fitness center,

Celebrity Fitness constantly pushes to provide the best service to its members by tailoring

programs and offerings for our members' satisfaction.

In December 2007, Navis Capital Partners ("Navis") partnered with Celebrity Fitness. Navis

41

will bring its various resources to assist Celebrity Fitness to expand its product offering in its

existing markets, as well as internationally.

Celebrity Fitness is the fastest growing fitness company in Asia with 41,000 active members

just in Jakarta alone. The branches in Surabaya, Kuala Lumpur and Penang have been getting

enthusiastic, positive feedback from members. Celebrity Fitness enjoys its image as trendy

destinations for the vigorous, urban and cosmopolitan community and will continue to strive to

provide the best fitness experience possible. Celebrity Fitness launched India with the club at

JMD Mall Gurgaon, and expects to open more clubs in its existing markets in the near future.

42

COMPANY OVERVIEW

43

INTRODUCTION (Company overview)

“Experience the best moments of life”

LIST OF SEPARATE ENTITIES OF MBS GROUP

Club 61 Inc

Club 61 Inc is the oldest branch of MBS group which is the service provider of gym and spa.

Addiction gym and spa

MBS Group runs its gymnasium by the brand name of “Addiction”. It has 8 branches all over Delhi and NCR.

MBS Securities

MBS Securities deals with shares and stock market

MBS PROPERTIES

MBS has a real estate business.

44

COMPANY PROFILE

History

Addiction was known by the name of Club 61 when Mr. Manmohan Daga, Brijmohan Daga

and Shreemohan Daga opened this health club. Later when they recognized some significant

efficiency in the company they thought of expanding and sharing the business knowledge.  All

manner of business people (corporate trainees, fund managers, venture capitalists, management

consultants) need to get up to speed quickly regarding companies, industries, sectors,

technologies, regulations.  In the dynamic economy and environment that we inhabit, these needs

arise frequently and their fulfillment is important for people to make the right business decisions

and decisions for their healthy life. 

They learned – through various previous experiences – how most business people go about this

learning process: hunting down articles on the Internet, calling friends of friends and making

people aware about the need of health fitness after a hectic corporate life.  We decided that we

would help to solve this problem for customers of knowledge by publishing guides and articles

that explained how health industries functioned. We spent around a year and half putting

together these primers before we were ready to begin selling them.

As they began talking to potential customers – primarily those of the higher income groups who

could invest money for fitness programs – we heard a good response. These potential customers

explained that it was a great idea to keep yourself fit and active. We realized the need of the

people and came up with different schemes and packages according to the different income

groups. As of a good response from the customer level we came up with another branch in South

extension and slowly and gradually in Janakpuri, Vikaspuri, East patel nagar, Shalimar Bagh

with the intention of connecting people to our firm who would become our clients.   Hence, the

brand name ADDICTION was born.

45

MBS GROUP (Addiction Health Fitness Club)

MBS Group, is an independent primary health firm providing the customers with customized

tools and services to accurately meet their physical fitness needs, markets and industries. It

manages Delhi and NCR’s leading chain of health clubs.

The Addiction Gym Trademark is associated with service and quality. Addiction has one of the

largest expert training team who support this constantly growing health chain.

Addiction is a chain of unique and premier health club in Delhi and Noida. Addiction promises a

healthy and balanced life to you. In a short span from our launch of services, Addiction is one of

the most respected names in the Indian Fitness sector and has acquired an enviable list of

customers.

Our mission is to provide fitness solutions to people by using our team of expert trainers and

dieticians. Spread in thousands of square feet in approved commercial premises with

extraordinary ambience, Addiction is the only club with a combination of luxury and

46

professionalism. Excellent interiors with state-of-the-art infrastructure and highly advanced

equipments have contributed to the success of our Brand.

It Provides solution for:

Physical fitness

gymnasiums

backaches

weight reduction programs

Aerobics

Massages

Group exercise classes

47

ADDICTION “the brand”

Strong consumer base of approximately 19000 people belonging to the upper class of our

society.

Fitness industry has been experiencing an unprecedented building and branding boom.

Our vision is to provide fitness solutions to people by using our team of expert trainers and

dieticians

Our mission is to become the largest chain of fitness center in India.

We take up our corporate responsibility to work for people of society to make them Healthy and

Health – risk free.

ADDICTION “the uniqueness”

Addiction’s corporate goal is to continue strengthening its leadership position in the fitness

industry through the persistent development of products, while continuing to set the standards for

quality excellence, customer satisfaction and product support.

We are Different.

We are Unique.

48

We are Addiction.

MARKET PRESENCE

8 CENTERS TODAY

5 CENTERS UNDER DEVELOPMENT

20 ADDITIONAL SITES IDENTIFIED49

BUSINESS DIVISIONS

Gymnasium service: Addiction offers health services in all the 8 centres in Delhi and

NCR and 3 centres in Jaipur and it is one of the leading health service industries, based

on the number of customers

Spa service: The group offers steam, sauna and showers services with the time duration

of one hour prior to appointments

Massage service: It offers service for full body massage for the time span of one hour

subject prior to appointments

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ADDICTION CLUB VALUES…

Innovation

Addiction will be generating and implementing entrepreneurial and innovative ideas,

which will create new growth engines.

Customer First

Addiction is committed to deliver services beyond the expectations of the customer in

order to satisfy the customer.

Performance culture

Addiction compares its processes and performances against world class standards. It

distinguishes between performers and non performers by valuing achievement at the

individual and team level.

Valuing Partnership

Addiction is committed to build exemplary relationship with its partners, which stand on

the principles of mutual trust and mutual growth

Valuing people

Addiction nurtures an environment where people are respected and their uniqueness is

valued. They believe that their employees are the key differences.

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Responsible Corporate Citizenship

Addiction is committed to make a positive and pre active contribution to the society. As a

responsible corporate citizen, it abides by all the environmental and legal norms

Ethical Practices

The highest ethical standards are maintained in all internal and external relationships.

Misuse or misinterpretation of any kind is not entertained

ADDICTION VISION STATEMENT & BRAND POSITIONING

In the upcoming years Addiction will be the most admired brand in India:

Loved by more customers

Targeted by top talent

Benchmarked by more business

“In a service industry like fitness, people live a brand 24X7. It’s all about

experience and for Addiction ‘Brand consumer experience’ says Director,

Brijmohan Daga, MBS group ltd.

That’s now, but when fitness industries began in India a decade ago, the brand

was all about aspiration. That’s understandable, an annual gym package costs

about Rs 30000/- .

Naturally, the target customer was clearly defined: elite, up market professionals

and entrepreneurs. “We positioned Addiction as an aspirational and lifestyle

brand, in a way that trivialized the price in the mind of the consumer. It was

52

pitched not merely as a health service, but as something that gave him a badge

value”

Addiction was on a power trip: logo was black, uppercase bold lettering, and the

base line was “experience the best moments of life”. From day one, it was decided

that the brand should always connote leadership- be it in services, innovations or

offerings.

This was also a time when customers needed to be educated: interest levels were high, but

customers exposure to the fitness world was limited. Addiction took out full and half ads in

newspapers, answering queries like “how to keep fit?”, “how to reduce weight?”

In 2007, the rules of game changed. The focus now was on the endless possibilities of

technology to make life good and healthy and advertising became two pronged, a service driven

that showcased new offerings like the Spouse membership, students membership that showed an

emotional communication that showed younger people.

The following year Addiction adopted the “Discover a new you in YOU” positioning, which

is also the current tagline. Now, the emotional angle was predominant- and stark, black and

white imagery to stand out in what was becoming a highly commoditized, crowded market.

“Customer service would prove more critical, We were very clear that Addiction will be a

service led brand” says director.

RELATIONSHIP MANAGEMENT

Accordingly, Addiction was the one of the fitness service providers to start customer centres,

where customers could pay their bills, apply for new memberships.

53

The way to the future, though, seems to be through scheme innovations such as pay for two

quarters get two quarters free, spouse membership in which second one gets 50% off, corporate

memberships.

The customer care centres, too, are metamorphosing into “relationship centres”, where members

cannot only pay their bills and have their queries answered. “what matters is what the customer

wants”, points out Area head.

Based on there vision statement their product Promotion strategy and Ad campaign is based.

Addiction is an successful brand. It has visible advertising.

Promotions, whose need is increasingly being felt by the surging services sector, will click if

they realize marketing objectives and reinforce brand values.

Other precautions too need to be taken in the case of promotions. For instance, too many

promotions can be detrimental to the health of a brand.

A brand, which is perpetually on price off, would not only lose key brand attributes but

also consumer interest. The consumer’s reasoning being if a product is cheaper now, does it

mean I was being overcharged earlier?

Similarly, if a brand is always doling out freebies, sales would be affected when there are no

freebies on offer. Marketers agree that no matter the market segment, for any promotion to be

successful it has to be a part of an overall marketing strategy and not a one-off sales driving

initiative.

54

ADDICTION CLUB: A FACT FILE

Name: MBS Group Limited

Business Description

Provides health services, aerobics, yoga, machinery and services to corporate) already defined above.

Established July 07, 2006, as a Private Limited Company

Highlights

Market leader with a market share of Delhi subscribers at 23.6%. Highest addition of 500 customers in a single quarter.

Cash Profit of Rs. 12.75 lakh in one month Net Income of Rs. 15.25 lakh

Operational Network

Provides Gym and spa services in all the 8 centres in Delhi.

OrganisationStructure

As an outcome of a restructuring exercise conducted within the company; a new integrated

organizational structure has emerged; with realigned roles, responsibilities and reporting

relationships of Addiction’s key team players.

INCREASING MEMBERS RATIO WITH INCREASING BRAND AWARENESS

55

MAJOR PARTICIPANTS

MANAGEMENT STRUCTURE

56

ADDICTION EXPANDS BUSINESS IN INDIA

57

SHREEMOHAN DAGA

DIRECTOR ,MBS

VIKASPURI

MANAGER

TARUN

SHALIMAR BAGH

MANAGER

TARUN

JANAKPURI

MANAGER

TARUN

SHOPPRIX MALL

MANAGER

NIKITA

SECTOR-25

MANAGER

NIKITA

EAST PATEL NAGAR

MANAGER

MAYANK

SOUTH EXTENSION

MANAGER

MAYANK

KAUSHAMBI

MANAGER

MAYANK

BRIJMOHAN DAGA

DIRECTOR,MBS

MANMOHAN

DAGA DIRECTOR,MBS

ADDICTION INDIA’S one of the largest chain of health centres, has intensified the pace of its

expansion spree with the inauguration of eight new health centres across Delhi in a record span

of one year. In continuation with their mission of creating a healthier India, new Addiction health

centres are now fully operational in Jaipur, Delhi, Noida. With an investment of over Rs 4 crore

each Addiction health centres comes equipped with a gymnasium, counseling room, weight

loss/gain programs, cardio, spinning, resistance and free-weight training equipment. The

company plans to reach the 18 centres mark by this year-end. 

Elucidating the rationale behind opening eight new centres together, Brijmohan Daga, managing

director, MBS group said, “Lately, the fitness industry is seeing a paradigm shift with people

aspiring for complete wellness rather than just staying fit. At Addiction, we are completely in

sync with consumer’s needs. Besides opening new health centres in cities and smaller towns, our

effort has been to introduce new services/facilities on a regular basis to help provide a complete

wellness package to our members.” 

Speaking about the company’s focus on corporate membership aspect, Brij explains, “Corporate

membership will be a new focus area for us this year. With surging work pressure and stress

related ailments rampant amongst the corporate crowd, we felt the need to offer specialized

fitness packages to them at a discounted fee. We already have few large corporate firms availing

this service.”

Spacious and well-designed areas, elegant interiors, clear demarcation of space for different

types of work-out and state-of-the-art fitness equipments. Besides every centre has trained

personnel, which includes personal trainers, dieticians, physiotherapists and masseurs. The

instructors and nutritionists undergo intensive training prior to assuming their role. The trainers

secure high level certification after undergoing the training. Addiction soon plans to start the

hitherto untouched field of clinical exercises

KEY DEVELOPMENTS IN THE COMPANY

58

MBS Group and Ienegizer announced an agreement for the employees of Ienegizer for corporate

tie ups. Addiction customized special schemes for the employees of Ienegizer. Through this

collaboration, Ienegizer clients will be able to leverage Addiction’s functional expertise in help

to keep them healthy. The partnership represents a new and strengthened way of providing

employees a good way to keep themselves healthy.

MBS group was looking forward for the tie up with Kazo. It was a cross promotional activity, to

promote both the brands.

MBS group and Big Cinemas also announced an agreement for co branding. The privileged

customers of Addiction were offered special discounts at Big cinemas and likewise customers of

Big cinema who purchased tickets worth 1000/- were given 25% discount on addiction’s annual

schemes.

MBS Group and the Rock man search company announced a collaborative agreement designed

to strengthen the access to lead a healthy life after a hectic corporate life.

MBS group said, “Lately, the fitness industry is seeing a paradigm shift with people aspiring for

complete wellness rather than just staying fit. At Addiction, we are completely in sync with

consumer’s needs. Besides opening new health centres in cities and smaller towns, our effort has

been to introduce new services/facilities on a regular basis to help provide a complete wellness

package to our members.”

MBS Group announced to open 5 centres more by the end of 2009.

FRANCHISES

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East Patel Nagar- 9/14, New Delhi - 110008

Shalimar Bagh - Unit No. 226-227 (Second Floor), 'Shop In Park'

Vikas Puri - #MF-2, Sonia Complex, 2nd Floor, Delhi-110018

Noida- 2nd Floor, Shopprix Mall, Sector-61.

South Extension - #E-17, NDSE Market, Part II, Delhi-110049

Janakpuri – Lower Ground Floor, C 3/11 , Janakpuri

Kaushambi – LGF, Pacific Mall, Kaushambi

60

SWOT ANALYSIS

ANALYSIS61

SWOT ANALYSIS

Following is the SWOT Analysis for ADDICTION

STRENGTH WEAKNESS

OPPORTUNITIES THREATS

STRENGTH

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it’s fastit has different schemes at best affordable pricesit has special offers for spouse membershipit has national and international certified trainersits membership schemes varies according to the demography

Price Competition from Powerhouse and Talwalkar’s

Untapped central region of Delhi market

It can be difficult to understand the

different market Structure.

Latest technology and low cost advantage.Huge market. National and international expansion and ExposureRichness of facilities for target customers Usage of best machines and technology of the future.

Competition from upcoming health industries.High customer churn.

VERY FOCUSED ON FITNESS : Addiction is largely focused on the fitness of the

consumers; around 73% of the revenue comes from the gymnasiums

EXCELLENT SCHEMES IN BEST AFFORDABLE PRICES: It has been found

that majority of the customers look for suitable schemes and this is one of its major

strength.

PRICING ACCORDING TO DEMOGRAPHY : Prices of all the branches varies

according to the locations. It is like a healthy contribution from our side.

CUSTOMER CARE SERVICES : Customer care services of Addiction have been found

excellent by all its users. 90% of the respondents are satisfied by its customer care services.

WEAKNESS

PRICE COMPETITION FROM POWERHOUSE AND TALWALKAR’S :

Addiction is facing tough competition from the service providers like POWERHOUSE and

TALWALKARS as these two are offering services at a low rate.

UNTAPPED CENTRAL REGION OF DELHI . Although Addiction have strong

Presence throughout the Delhi but still they are far away from the central part and generally this

part is covered by Fitness First and Gold gym so indirectly Addiction is loosing revenue from the

central region.

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OPPORTUNITIES

LATEST TECHNOLOGY AND LOW COST ADVANTAGE The costs of

introducing health services for Addiction are marginal in nature, as it needs only to

augment its equipment capacity and increase the number of base stations. The number of

machinery it has covered already works to its advantage as putting more base stations for

the full coverage. Besides such cost advantages, it has also other cost advantages for the

latest machine technology. As a late entrant into the market, it has dual advantage of

latest technology with modern features, unlike other private gym operators who started

their service more than 4-5 years back.

HUGE MARKET The market for health industries is presently expanding at a

phenomenal / whopping rate every year and there is still vast scope for Addiction to

enter /expand in this market. Many customers are looking towards Addiction for

providing the service to them. With its wide and extensive presence in all the areas,

Addiction poised to gain a big market share in this segment when it expands its services.

THREATS

COMPETITION FROM OTHER UPCOMING HEALTH INDUSTRIES It is time

for Powerhouse gym to improve/expand its services. Fierce and cut-throat competition is

already in place with the markets ever abuzz with several reductions and announcement

of attractive packages, trying to grab most of the ‘mind share’ of the ‘king’ - ‘the

consumer’, whose benefits are increasing with passing of everyday. If Powerhouse is not

innovative and agile, its service will be a flop. It needs to be proactive with attractive

64

packaging, pricing and marketing policies lest its presence in the market be treated with

disdain by the private companies.

HIGH CUSTOMER CHURN There is high customer churn i.e. they can come and go

as they please resulting in bad debts.

THE FUTURE OF THE HEALTH FITNESS INDUSTRY

65

Building fitness for the future

Health and fitness has always been a key driver to increasing participation in the India

encouraging people to improve their personal fitness levels through regular visits to health and

fitness facilities including gymnasiums, health clubs and fitness suites.

With the current focus on healthy, active lifestyles and the government’s increasing concern

about inactivity levels and obesity, what are the innovative opportunities to be explored for the

health and fitness industry?

In ‘building fitness for the future’ this seminar will reveal the findings of the first-ever National

Audit of Fitness Consumers, profiling users and identifying future fitness trends. To drive up

participation rates the industry will require professional well trained staff to provide high quality

services. What skills are required and what training opportunities are available to inspire and

motivate staff to be the best?

Find out about the latest health and fitness initiatives and campaigns, partnerships and projects as

well as hearing from national award winners who are leading the way in setting standards for the

future of the fitness industry.

The results of the first-ever National Audit of Fitness Consumers – a profile of more that 1.8

million health and fitness club users have been revealed.

This, the largest survey to date, will have far reaching consequences for health and fitness

operators and local authorities in the future provision of health and fitness services and the

government in tackling national initiatives such as obesity.

Data was collected from some 668 public and private leisure centres, health clubs and fitness

centres giving an insight into fitness participation in the UK. The survey profiled 1.8 million

health and fitness consumers, providing a valuable source of business intelligence for health

clubs and sport centres.

66

Managing health and fitness gymnasiums and clubs requires special skills and knowledge across

a broad range of areas. Does the industry have the necessary resources, skills and training

opportunities required to build fitness for the future? Are employees positive about remaining in

the fitness industry? Are they happy with their employers, degree of responsibility, hours of

work, job security, remuneration packages and career development prospects? A recent salaries

survey claimed fitness industry wages are rising – is this the case, and is it sufficient to motivate

and retain staff?

With the government now looking towards the active sport and recreation sector to help achieve

its physical activity targets, the industry must make sure it is providing a high quality service

using well trained and professional staff.

67

FINDINGS AND ANALYSIS

68

FINDINGS AND ANALYSIS

a) In the month of May when Addiction came up with its inaugural scheme then the

clientale raised to 200 in which following was the distribution of members according

to the type of schemes.

Quarterly membership – 110

Yearly membership – 60

Spouse membership - 30

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b) In the following 15 days the number of clientale reduced as there was no scheme applicable. The

number of new members dropped to 62. The membership distribution was

Quarterly membership –32

Yearly membership – 12

Spouse membership -18

70

c) Addiction adopted different marketing strategies to increase its brand awareness and study the

consumer behavior. It came up with different schemes which a person can easily afford. After the

introduction of these schemes the clientale again raised to 305.

1. Monthly membership @ Rs 1500/- in sunny hours (11:00am -17:00pm)

2. Rs 35/- per day for an annual gym

3. Couple membership @ 50%

4. Monthly membership @ Rs 2400/- in regular hours (6:00am -10:00pm)

5. Buy a Quarter gym get a month absolutely free

With increasing brand awareness and introduction of new schemes lead to increase in the number

of the clientale.

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CONCLUSIONS

72

CONCLUSION

Addiction is the one of the market leaders in Delhi. There are number of customers

who are using service of more than one health service provider. But Addiction is the

most preferred brand in Delhi according to its reasonable prices. It is the most

preferred gym in Delhi. Addiction plans to have a wide with more than 100 sites so

their service is being used by people living in inner parts of the area.

In case of Addiction the customers who have traveling jobs, finds Addiction network

strong in other cities also.

In case of Powerhouse gym, again the problem is maintenance and variability in

schemes and there is lot of congestion, therefore the customer prefers Addiction

where our clientale is limited and each customer get the machinery.

As with the introduction of Spa business with respect to Gym operators is not up to

the mark but Spa business is still growing. The operators are opting it keeping in view

it as a side business.

There is huge scope for Addiction to have gym operators opt for massage services.

Majority of customers are happy with after sales services of Addiction

Addiction has a very strong distribution network with almost 75% of the centres in

Delhi are associated with Addiction brand while as the distribution network of

Powerhouse gym is on a lower scale.

73

.

RECOMMENDATIONS

74

RECOMMENDATIONS

Addiction branding is good in more than half of the centres and the remaining needs

attention, such as big glow sign boards, banners and they require more visibility and

to match with the big brand image of Addiction.

The company should focus on its operations in central Delhi areas.

80% of the sales is because of formulation of good schemes. So that has to be

managed.

The company must focus on creating awareness about latest schemes related to gym

and spa services

75

BIBLIOGRAPHY

76

BIBLIOGRAPHY

BOOKS:

International marketing by Kotler

WEBSITES:

www.addictionindia.com

www.gymnasium.com

www.fitnessworld.com

www.healthindia.com

www.google.com

NEWSPAPERS:

Economic Times May-2008

The Hindustan times

The Times of India

77

ANNEXURE

(CASE STUDY)

78

Case study Addiction Health Clubs

Addiction was formed in 2006 and is now one of the Delhi and NCR’s leading health club

operators with an impressive expansion schedule. Addiction comprises of large out of town multi

facility health and clubs and smaller city centre fitness units, branded 'club 61'.

Whilst Gymnasium, SPA and Aerobics play an important part in the multi facility units, fitness is

central. Usually featuring an indoor and outdoor pool, with all new clubs benefiting from a

separate Aerobics hall, Addiction members can expect the highest standards of exercise

technology at affordable prices.

Already with 8 centres across the Delhi and NCR and 3 in Jaipur (Shopprix mall, Noida,

Vikaspuri, Shalimar bagh, Kaushambi, South Extension, East Patel Nagar, Janakpuri) Addiction

plans to increase this number and to open a club in Sector-25 and Expressway sector- 93, Noida

opening at the end of the year.

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The Issues

The fitness industry is renowned for its rapid growth in the Delhi and NCR. Most places in the

Delhi now have at least one facility either Gym or Spa. The intensity of the industry means that

the larger leisure companies are having to look closely at their marketing programmes to

overcome high competition and ensure effective training methods are in place. Many have

implemented training and retention programmes to increase customer retention and also enable

staff to move up the career ladder within their own company.

To meet increasing member requirements and to avoid high levels of complaints. Customer

turnover is also an issue for most leisure focused companies, fast paced membership programmes

and hectic lifestyles mean that companies can be constantly promoted or left. Realizing that

individual customers behaved differently under different demography. Addiction wanted to

investigate this further to maximize potential and focus ability on strong demographical

characteristics and marketing programmes to retain the members and for further new

enrollments.

Group Training Manager for Addiction Health Clubs comments, "It is common to find young

and vibrant staff in senior roles in our clubs, but the speed of promotion can mean awareness of

management styles and procedures are not properly developed. We need to be aware of our

customers behaviors’ in order to understand their motivators and assist them in different

membership programmes."

The Solution

In 2009 Addiction introduced different membership schemes according to the demography as

part of their marketing and retention programme and to compliment the company's forward

thinking and 'issue aware' management style.

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The company assesses an individual’s behavior in the work environment. The test poses a series

of questions, taking no more than seven minutes to complete. The test is used to trace behavioral

patterns of the customers and predict likely capacity to invest.

Addiction have profiled all of the different roles within the company to establish behavioral

differences and preferred requirements of each role. The manager creates a profile of a position

against which a candidate can be compared.

Director comments "Using the test from day one has enabled both senior management and

employees to get involved. Working together with staff and management teams has enabled us to

compare customer requirements to daily capabilities to ensure we have a well rounded and

accurate services."

Customers are requested to complete the test process starting with the verbal process. The result

helps the management to understand customer’s strengths and weaknesses and clarify their

requirements. It generates awareness by charting customer’s likely behavior and operating styles

and provides an indication of how their behavior could be modified for their own and the

company’s best interests.

The results from the test has enabled centre management teams to generate competency profiles

and establish attitudes, knowledge and skill levels.

"The decision for a more comprehensive HR plan followed the growth of the company. The tools

have complimented and enhanced the process of requirements of the customer and gives the

knowledge to plan for the future "The increased knowledge has made them more aware of the

needs of our customer and the requirements . This will have a positive impact on the business."

One example of this was highlighted at the Kaushambi centre when a young business graduate,

completed the test. The results indicated that she wanted more schemes which were less

expensive and time consuming to reduce the body fat and cholesterol.

Addiction used the test as a questioning tool to investigate her goals in more detail. Addiction

addressed this and she is now receiving further training in the gym at rupees 35 per day under the

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subscription of Annual gym. Addiction has many plans of working with the management team to

plan for the expansion of the business.

“The test has complemented and enhanced the process of understanding ‘consumer

behaviour’ and given us knowledge to plan for the future”

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Questionnaire

1. What is the average age of customers?

(a) 16- 20 (b) 21-25 (c) 2 6-30

(d) 31-35 (e) 36 and above

2. What is the best priority?

(a) Gymnasium (b) Spa

(c) Body massages (d) Cardio

3. Why Addiction Gym is famous?

(a) Affordable fees (b) Trained Coaches

(c) Best Equipments (d) Others

4. Is Addiction Gym is a perfect Health Club?

(a) Yes (b) No

5. Is Addiction Gym is affordable for middle class people?

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(a) Yes (b) No

6. Was the environment suitable for workout?

(a) Yes (b) No

7. How many average people workout daily?

(a) 20-30 (b) 31-40

(c) 41-50 (d) 50 and above.

8. Have you come across any complaint?

(a) Yes (b) No

9. Are you satisfied with the services provided?

(a) Yes (b) No

10. Do you suggest any suggestions?

(a) Yes (b) No

11. If yes then what can it be?

(a) Better Coaches (b) Fees

(c) Quality (d) Inner Management.

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Summary

Addiction consistent growth over the past 2 years has enabled them to introduce the test.

The policies have enabled Addiction Training Department to implement procedures that

encourage customers and management teams to get involved with personal and corporate

development.

"As the industry continues to grow and becomes more competitive, having the right scheme for

the right customer is critical. However it is essential to ensure that the staff is happy and that

management teams adopt a style that compliments the consumer behavior in order to achieve

maximum results. It has given us a better understanding of what motivates members to enable us

to continue our aim to improve personal, team and corporate goals.”

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