Recommend and justify a marketing strategy that Andy might use to increase sales at AHC AHC is a health club known for its excellent health facilities which benefit their members with a wide range of exercises as well as facilities such as their cafe and beauty salon. However, the owner, Andy has come to realise that if his business ever were to expand, it couldn’t satisfy everyone and cater to each individual’s needs. AHC has many opportunities for further development and becoming an even more established health club with a wider target market but its competitors (other health clubs) pose as a threat towards them in pricing and facilities.
AHC’s main objective is to increase their sales and to do that, they will need to consider each of the four functional areas within the marketing mix, and along with that, they may also need to conduct extensive market research to ensure that their aim to gain revenue is met. First of all, AHC will have to look at the services they provide to members of the health club as well as potential new consumers, to see how well the business is performing and whether the services the business offers satisfy consumers.
Also by doing this, AHC will be able to use market segmentation, which will divide consumers into groups so that a better customer base is established and more customers can be gained. Also , when looking at the services they provide, AHC may need to think about their products and how they differentiate from their competitors, for example, AHC may want to consider their option C which involved building more squash courts or a larger fitness studio. By increasing their services, AHC will attract more members of the public and gain more sales from members who will want to use the additional services provided.
AHC could also look into the pricing of their products. Andy is currently considering other pricing approaches such as price discrimination which can enable higher prices at more demanding times of the day, depending on consumer demand. This could also attract more consumers who will want to use the services at the health club more at off-peak times due to cheaper prices. This can ensure that at ‘peak’ times of the day, AHC will be making more revenue, but there may also be an increase during ‘off peak’ times.
AHC must also make sure that because of the higher prices, they don’t face a loss of consumers if they do decide to use price discrimination. Option A displays such pricing in which additional charges may be given, however if AHC wishes to maintain its customer base, as well as attract more while prices are being raised, they may need to offer consumers extra services, discounts or deals such as ‘ 3 Pilates classes for the price of 2’ for women which will help maintain good relationships and loyalty with members in the long term.
AHC have limited amounts of promotion for its business and currently only rely on its website as well as word of mouth which could realistically only attract a certain number of consumers however if Andy wishes to expand or even increase the number of sales, alternative methods of advertising should be taken into account, for example, below the line promotion such as posters, local radio advertisements, local newspapers and magazines to make people aware of the business, and this way, AHC can widen their market. Andy knows that some facilities offered only target specific people, e.g. the beauty salon is aimed at mostly female members so instead of advertising within the mass market, he could implement personal selling to allow customers to receive personal and individual attention from the business. Also, as Andy sees increased competition as a threat, advertising on a larger scale within the local area can help to increase the number of consumers which can help the increase in sales because even though it is a competitive market, promoting the business can impact a lot and possibly attract consumers from similar businesses due to prices and services offered.
In AHC’s current business position, they do not have the necessary capital to expand as it can only just about afford one of the facilities in option C, but if in the long term, the business will be able to build extra facilities for the health club or maybe open up another health club in a neighbouring area. Andy should continue to run his business and put into practice ways to help the business grow. AHC can definitely do this by differentiating the services they provide because it will maintain customer loyalty and help gain more consumers because of the new services which make them different to every other health club in the Midlands.
Also, they could adapt new pricing strategies to see what kind of price consumers are willing to pay, whether high or low depending on how many sales are made. An increase in promotion could also benefit the business very well as it can help aid consumers through awareness of the health club, adding to a more well- rounded reputation. It would be ideal to carry out further research on the aspects of the marketing mix, and produce short term tactical objectives in which they can achieve and in the long run, can end with the business being able to achieve an increase in sales.