3. Pricing Strategy of the gyms
3.3. The Survey
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Furthermore, what will determine the most effective pricing strategy for the gyms? The optimal pricing strategy will depend on the type of gym and its potential customers. For example, if you are considered to having a premium brand – cutting price could be perceived as disastrous as you lose brand image, and fail to increase sales. For the services, it might be better to maintain premium pricing and optional pricing. For the brands, with firms looking to increase market share and gain more market dominance, it is more important to offer competitive prices, through strategies such as penetration pricing and even loss leaders.
3.3. The Survey
The purpose of the questionnaire is aim to know the preference of potential and existing gym customers and what factors will determine the most effective pricing strategy for them. Total online responses are 209. In the end, the valid questionnaires are 184 due to the target
interviewees need to be the citizens from Taipei and New Taipei City on 1st question and have willingness to choose a paid gym, which need to be answered on no12. There is the basic analysis of the valid 184 questionnaires. Some significant basic information in first part.
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Figure 7: The limitation in Taipei and New Taipei City Citizens
Figure 8: Gender proportion
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Figure 9: Age distribution
125 females (67.9%) and 59 males (32.1%) responds in the survey. The mainly age falls in 31-40 year-old is 101 (54.9%) , 20-30 year-old is 62 (33.7%) and 41-50 year-old is 62(33.7%).
Figure 10: Occupation Distribution
The interviewees occupation distributes on information technology related (22.3%),Service (17.4%), Sports related (14.1%), Others (10.9%) , media related (10.3%) , Freelancer (9.8%) ,
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government employee (4.9%) , finance related (6%) ,medical related (3.3%) and students.
(1.1%)
Figure 11: The exercising frequency of the interviewees
Most interviewees exercise once per two week (24.5%), 20.1% interviewees exercise 2 times a week, 14.7% exercise once a month ,13.6% exercise once a week ,12% exercise 3-4 times a week, 3.8% exercise 4-5times a week and 10.9% exercise almost every day.
Figure 12: What is your main motive to think about going to a paid gym?
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The main motive for a pad gym is to be more fit or gain the muscles (59.2%), 21.7%
interviewees are for the health and 12.5% want to develop the exercising habit.
Figure 13: How much are you willing to pay on exercising every month?
47 people (25.5%) are willing to pay $1501-2000NTD , 43 people (23.4%) are willing to pay
$1001-1500NTD and 36 people (19.6%) are willing to pay $501-$1000 NTD every month.
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Figure 14: Price in the priority of choices
The following figures shows the majority of interviewees take exercising as an important part of daily life. 109 people (52.2%) take the paid gym into consideration for being more fit or gaining the muscles. 40 people (21.7%)are for the health. 23 people (12.5%) want to develop exercising habits.
Figure 15: Information source
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49.2% interviewees search the gym information on internet or social media and 29.5% hear from friends or peer group. Only 16.4% directly go to the gym to ask.
Figure 16: The main criteria of choosing a paid gym
The main criteria of choosing a paid gym are location or traffic convenience (62%), The quality of the equipment and the environment (14.7%) and the quality of the class and the coaches.(13.6%) Only 3.3% people view “the price” as the main criteria of choices.
Figure 17: What are the exercising items in a paid gym offer you might have interested in?
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45 people (24.5%) people are interesting in professional weight training equipment. 114 people (62%) are interested the group classes, which there is the coach instruct the members such as, Yoga, dance, boxing, TRX, fitness training. 17 people (9.2%) are interested in one on one personal coach class. The other items are filled in swimming, group sports and Barre.
Figure 18: The filter between existing and potential customers
The second and third parts are separately designed the scenarios for the “existing” and
“potential” customer answers which are determined by the 12th question. 94 valid
interviewees (51 %)answers “Yes, I go to a paid gym now” (existing gym members) and 90
valid interviewees (49%) “No, but I am considering to choose.(potential customers)” who both show the willingness to choose a paid gym.
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Different payment package distributes in existing group. Among 5 of 22.4 %, who checked other, fill in “ pay the monthly fixed fee and go anytime with the month.”
Figure 19: The distribution of gym payment from existing group
About the satisfaction of the existing customers toward gym payment ,60.4% are satisfied with the payment package which mainly fall in “pay the member fee and charge by actual use hours or classes.” and pay the year or monthly fee then go anytime within the duration.
Figure 20: The satisfaction of the existing group toward gym payment
In potential customers, the majority (54.5 %) are seeking pay by actual use by hour or classes.
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Figure 21: The potential customer preferred payment
Figure 22: How to search the gym information
In following part, there is the comparison analysis between 2 group interviewees: existing and potential customers.
Go to the gym directly (16.4%) Internet or social media ( 29.2%) Friend recommends (29.5%) Free trial or experience DM or magazine
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Figure 23: The most attractive benefits from existing 94 and potential 90
In comparison, most of both groups show the similarity on top 3 benefit preference. 49.2% of existing customers and 44.3% of potential customers seek for no membership contract
limitation on their dealings. 22% of existing customers and 32.8% of potential customers hope the direct benefit which is member fee free or 10% off. 8.5% of existing customers and 8.2 % of potential customers are seeking the quantity benefit. The Figure 16 shows the phenomenon that the customers, no matter existing or potential, are seeking simple payment and direct benefits on gym package. They don’t want to bundle by the year contract with tons of limitations.
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Figure 24: Which bundling package you are willing to pay more?
For existing group, who already went to the gym, 31.4% of them are not willing to pay more.
“Advanced workshop or coach”(23.5%) and “one-on-one coach”(21.5%) are the potential
items for them.
For potential group, who just search but not go to the gym yet, are willing to pay more for small group class. (30.3%) and “advanced workshop or coach. “(23%) Still, there are 23%
seeking the reasonable price and not willing pay more.
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Above all, there are some significant phenomenon and connection behind the data.
1.High frequency of exercising (more than 3 times a week) people not necessarily go to a paid gym and pay more but they might be willing to choosing bundle package of one-on-one coach class which are more customized their own needs.
2. The customers, who are willing to pay more than market average (more than $3000 NTD) , seek for the advance class and one-on-one personal coach.
3. For those whose exercising purpose is mainly to get fit and more muscle(which is 60% of all), 30% of them are willing to pay $1501-$2000 and only 6.6% are willing to pay over $3000.
For most of Taipei citizens, there is a pricing ceiling which is $3000 for exercising they don’t want to pay more per month.