INDEX 1. Executive summary 2 2. Mission 3 3. Environment 3 4. Competition 4 5. Analysis market 4 6. Objectives 5 7. Specific objectives 5 8. Goals 5 9. Strategy 6 10. Tactics 6 11. Marketing Mix 7 11.1 Prices 7 11.2 Place 7 11.3 Product 7 11.4 Promotion 8 12. SWOT−analysis 8 12.1 Strengths 8 12.2 Opportunities 9 12.3 Weaknesses 9 12.4 Threats 10 13. Profile of the clients 10 14. Conclusion 11 15. Bibliography 12 1. Executive summary

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The doctor Alfredo Cabello started Dynamic gym in 1985. It started out as a rehabilitation center for his patients, but then he noticed that his patients wanted to continue to use the equipment even after the rehabilitation. He also saw a growing need in the nearby population for these kind of services and decided to expand the gym so it would be available for everyone. Now it is a fitness and aerobic complex whose mission is to provide the best programs for the members. Dynamic gym focuses on the population of the nearby neighborhood, it's a underdeveloped market witch gives the Dynamic gym the opportunity to grow. In this area two other gyms are established: Sports city and Fitness gym. But Dynamic gym can handle this competition since they have some competitive advantage for example they can provide instant medical attention if needed. Dynamic gym has many strengths and some opportunities that they develop further, but we have also identified some weaknesses and threats that has the capacity to hinder the development of the company if not handled correctly 2. Mission Dynamic Gym is a fitness and aerobics complex that is used by the residents of Mexico city, and surrounding communities. The mission is to provide the best programs, staff, and equipment, to fully meet the various sports and fitness needs of the members, while generating a profit for the owners and investors. Dynamic Gym is determined to create a healthy and sporty atmosphere for all the members as well as for the employees to enjoy. Dedicated to the community, Dynamic Gym strives to support, sponsor, and host community events whenever possible. The company tries to offer a pleasant place with the best equipment in where the clients can improve their physical health with the aid of personnel enabled in the matter. Dynamic gym also offers other services and comforts to the client, like solar beds, sauna, massages, that cover the necessities of the clients. 3. Environment The knowledge of the environment allows the company to be prepared for big changes that can affect the business in a direct or indirect way. The company has to take into consideration the changes in technology, political economy and socio−culture. To understand the environmental situation in Mexico City, it is essential to understand the social situation in Mexico City. First of all Mexico City differs from the rest of the country, because it has a population of about 30 million people and it is the biggest city in the world. There are a big differences in the social classes, since there are large gaps between the poor people and the rich people. 80% of the population are poor, while only 15% are medium rich and 5% are very rich. In Mexico the social classes are divided into: A. Very rich people B. Rich people C+. Medium high people C. Medium people 2

C−. Medium low people • Poor people Dynamic Gym is located in a zone that is consists of class C people (in general this zone consists of C+. C .C−) the zone is very big and is called Nueva Sinatel. With respect to the changes of the technological type, Dynamic Gym must have knowledge of the last technologies with regard to the innovations and modifications of the gymnastics apparatuses. For example Dynamic gym can invest in better tapes, that run better than the previous ones (with inclination capacity to simulate slopes, with computers that takes the heart rate, the run pulsation's, time, kilometers). This is done in order to be able to offer the best service and to cover the needs of the client in a superior way. In the market of apparatuses and machines for gymnastics a permanent change with constant innovations in the machines and also in the gymnastics techniques is seen nowadays. Looking at the macroeconomic environment nowadays one can observe that the economy is in recession and there are not many expectations of improvement in the short term. Due to the prolonged recession and to the change of government, economic tendencies have been developed political to reduce the fiscal deficit of the government. For example changes in the tributary system that might harm the business in a direct or indirect way. Also, constant modifications of the business economy must be made. In the analysis of the legal surroundings at present time, laws do not exist to regulate the activities that the gymnasiums conduct. As far as the sociocultural tendencies, it is possible to say that there has been a change of life style that cares more about a healthy a natural way of life. This kind of thinking quickly expands throughout the world. This can be refereed to as the so−called light culture and favors the expectations of a great growth of the market. New ways of exercising are introduced through television, this trend can quickly change the tastes and preferences of the population. Therefor Dynamic Gym must be prepared to take care of the new demands and necessities of the market. 4. Competition Dynamic Gym competes with three nearby companies. These are Sports City, Fitness Gym and small gymnasiums. These gymnasiums are located in strategic points, they are very big and have only a few franchises. Sports City is the market leader and not very far behind the market leading Sports city, we find Fitness gym with a great variety of activities and last but not least we have the small gymnasiums that offer almost the same benefits as Dynamic. We think that they have a strong competitive advantage because of the qualified personnel that are very well educated in physical education. The company has a policy of only employing people who have a degree in physical education. As far as for the indirect competitors, a great amount of televising publicity and sport halls can be observed supplying apparatuses of gymnastics for home. This have had a growth the group of people who do not have time to go to the gym and who are wealthy. What can be added is that the high−class people are often members of their own private sports clubs. 5. Analysis of the market: The market that the company focuses on is the neighborhood population, Nueva Sinatel and close localities. 3

The potential market is very big since there is a great population and the market is underdeveloped. The segment Dynamic Gym turns to the medium class population and medium−low class population (C+, C, C−), who are between the ages of 15 and 65 years. Within this specific segment Dynamic Gym are trying to attract housewives, people who are rehabilitating themselves from knee operations or other problems. This market was chosen for several reasons, because the location is in a highly populated zone, where the market that they are in predominates. Another factor in selecting a market was the fact that Dynamic Gym saw a great growth in the tendencies toward a healthier style of life in the specific segment. The people that goes to the gymnasiums are affected by the seasons of the year. September, October and November are the months of greater activity in the market. In the months of March, April, May, June, July and half−full of August the market drains, and the activity in the gym is lowered by between 40% and 50%, to increase again in the months of December, January and February. 6. Objectives: Mid−term and long−term objectives to fulfill. These objectives are approximated and depend on the fluctuations of the market. • In the mid term Dynamic Gym hopes to continue catching clients and to turn them into frequent customers. Also, they will focus in retaining and make present clients loyal by offering greater quantity and quality of services. • In the long term Dynamic Gym hopes to reach the leadership in this target. 7. Specific objectives To increase the quota of market. To achieve this the company aims to increase the activities in the hour strip between 9 to 17, for which they must put emphasis in making them know to the potential clients available in this time segment (housewives, pensioners, students, etc.). Try to catch that segment of the market constituted by clients with rehabilitation necessities, traumatology, physiotherapeutic, etc. To keep the clients whose primary objective is to rehabilitate even after the treatment. This would be the result of the perception of the high value provided to the client derived from the high qualification of the professionals, good treatment, climate, clean space, etc Dynamic Gym will try to maintain a stable average of customer during the year. 8. Goals • During the first three months of the implementation of the marketing plan, Dynamic Gym hopes to get more customers between 9 and 17. Increase customer rate by 25% due to a reduction of the fees. • By the end of the first semester Dynamic gym wants to increase the clients who are rehabilitating by 10% • Increase the total of the customers 20%, during the first three months.

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• To reduce the number of customers who are leaving the company by 5%, during the first three months. 9. Strategy It will be based on the differentiation of complementary services. Some of them are not given by the competitors for example; nutrition, massages, emergency rooms, special rehabilitation. Dynamic will also try to increase the quality of the service by the competence of the employees. In order to sustain this strategy, they must put emphasis on getting the right personnel. They also have to dedicate own resources and make efforts to educate their current employees, order to give a higher value for the clients. Giving high value services is not only about providing the customer with the apparatuses, but also to give high quality service and aid. In this sense it will be required that the personnel offers a personalized service in order to manage a differentiated attention and therefor generating the idea in each user that he/she receives benefits made only for him/her. 10. Tactics We will describe the different tools that can be used to achieve the strategy of Dynamic Gym. Promotion: different forms should be used in order to attract the possible clients to the gymnasium. We've listed three main ways of attracting or keeping customers that we think would be appropriate in this particular situation: − Free classes of test, discounts to bring another person, etc. • Flatteries: T−shirts, key chains with the logo of the company. • System of points. Most of the promotional activities will have a duration of 3 months, the greater objective in this aspect will be the one to retain the greatest possible amount of people who have started training in the gym because of the promotions. Prices: Decrease the cost for the clients using the gym between 9 and 17. This could be an important factor to stimulate potential clients to use the gym in−between these hours. Publicity: Dynamic Gym has to investigate what motivates and what demotivates people to train in the gym in order to carry out an effective promotion campaign. Since there's already some existing gymnasiums in the market, dynamic Gym must niche themselves in a distinctive way to separate them from the other gyms. In order to make Dynamic known to the general public, we suggest that they use publications through brochures and average graphs, they also have the possibility to use the local radio for announcements. • Publications of announcements in free magazines (for the receiver) of local circulation. • Local radio: announcements could be made during a sport program two times per week • Brochures distribution: This activity will be developed once per week (can be Saturday) in strategic points. 11. Marketing Mix • 11.1 Prices: The price is very accessible, because the zone where it is located does not allow high prices because of the socio−economic level. So we see it as a competitive advantage, to focus on the 5

low cost strategy which attracts the medium class population and the medium−low class population. Another reason, by which it was decided to take this strategy, is because the strongest competitors, like the Fitness Gym and the Sports City, have higher fees to comparison of Dynamic Gym. • 11.2 Place: The zone in where the Gymnasium is located, allows the development of the business because there is very high potential market, so the idea of having a gymnasium in this place had not been though on before. When seeing the success that was to being an orthopaedic rehabilitation centre, the doors were opened to the public. There was a clear need of a gym, because there hasn't been one in the zone or if there has been, the quality was very low. Due to the location, the number of customers has been growing and is now the most popular and known gymnasium in the zone Nueva Sinatel. Thus we conclude that the location is a competitive advantage that the gym have to complement with the strategy of price, promotion and the granted service. • 11.3 Product: Here we make a comparison of the services that the Gym offers: Activities

Dynamic Gym X X X X

Aerobics Step Apparatuses Physical Training Rehabilitation X Therapies Advanced Aerobics Solarium Sauna Bar Massages Nutrition X Emergency services X Swimming Pool

Sport City

Fitness Gym

Small Gyms

X X X X

X X X X

X X X X

X X X

X X

X

X X X

X X X X

• 11.4 Promotion: The effects to carry out an effective publicity we must study the motivations that cause the concurrence to a gymnasium as Dynamic and to see as the demotivations. Since they already exist some positioned gymnasiums in the market we must introduce in the mind of a prospect the distinguishing characteristics that Dynamic Gym do different from of the others. With the objective to make know the virtues of Dynamic Gym as services, personnel, equipment, etc will use publications through average graphs, brochures, and one local radio. Thus, we will resort to: • Publications of announcements in free magazines (for the receiver) of local circulation. • Local radio: where announcements were made during a sport program two times per week to which it supports is Dynamic Gym. • Brochures distribution: This activity will be developed once per week (can be Saturday) in strategic points. Different forms were used to approach the characteristics of the gymnasium for possible clients through: • Free classes of test, discounts to bring another person, etc. 6

• Flatteries: T−shirts, key chains with the logo of the company. • System of points. Most of the promotional activities will have a duration of 3 months, the greater objective in this aspect will be the one to retain the greater possible amount of people who have concurred induced by anyone of the promotions. 12. SWOT−analysis 12.1 Strengths: • Qualification of the Human Resources: Personnel highly enabled with the qualifying title of Physical Educator, unlike the rest of the gymnasiums that have solely simple instructors. • Activities: Existence of a variety of activities that can be offered to the clients, and also the modern equipment. • Comforts: Rooms especially designed for each one of the activities. For example where the classes of aerobic take place, the room has a unique floating wood floor, specially designed for high impact activities. The walls are also covered with sound insulators, which prevents the music from distracting the other activities that take place outside the room • Infrastructure: the establishment allows for the double amount of customers that are currently received. Dynamic's structure turns out to be one of most functional in comparison to the competitors structure. Each one of the activities and services are isolated from each other to minimize disturbance so that the activities can be developed in an effective way • Low costs in acquisition of equipment: Dynamic Gym has an agreement with a supplier of high technology apparatuses that the supplier imports at a low price and without tariffs. • Comfort of payments: Dynamic has a system that allows to directly debit the cost from the customers account, instead of handling cash every month. 12.2 Opportunities • Culture of Life: Dynamic Gym is immersed in a market in total expansion, because the society of today are more aware of the importance of increasing the quality of life by living healthier. Dynamic Gym is in symbiosis with this, and offers the most modern services to satisfy the needs of the customer. • Day−care center: A good opportunity would be to offer a service of day−care center for those mothers who do not have opportunity to develop this type of activities, this service could be provided without taking any extra fees. • Social works: Agreements with doctors, who send their clients to the gym to rehabilitate. For this reason the gym would do wisely if they invested in personnel specialized in kinesiology. 12.3 Weaknesses: The location: the gym is located in a centric zone, it is far away from a commercial place. Schedule: An important weakness is that it is not open Sundays like the competitors are. This can result in the loss of customers that wants to exercise in the weekend because they do not have time on the weekdays. Diffusion: no type of advertising campaign or activities of promotion, therefor people do not really comprehend what the gym is all about. Tariffs: Dynamic Gym has the same fees regardless of if you attend the gym one day of the week or seven 7

days of the week. This turns out to be a weakness because there are other gymnasiums that offer discounts depending on the times of attendance. Hygiene: last month there were cases of users who contracted fungi and athlete's foot within the gymnasium. Participation in events: the gymnasium does not participate in very many events. For example, they could participate in activities arranged by the Municipality of Nueva Sinatel. By attending, the gym gets an excellent opportunity to show themselves and to get more clients. Sign: It does not have any sign in the entrance that calls the attention to the gymnasium, the gym is unnoticed. Bad focused: They must improve the illumination, music and environment. Because there are parts in the gym that are dark and quiet, and for these kind of sports, people need a joyous atmosphere. 12.4 Threats: Present competition: Two great gymnasiums are established close to the Dynamic gym, these two gyms make big investments and they are not very likely to lose their market shares. Future competition: competitors can offer new services that Dynamic gym cannot offer which it would incline them to lose their clients. Tariffs: the competitors may lower their prices. The competitors have more customers, and bigger market share, so they can offer lower prices than Dynamic gym can offer. Change of the life style in the future: Possible change in the mentality of the people who might loose interest, or simply just don't have enough time for these kinds of activities. 13. Profile of the clients In the clientele of the Dynamic gym we can distinguish five major groups: Sportsmen: People who practice a particular sport and use the facilities of the single gymnasium as a complement to their regular training. Young people: People who look for a healthier life and they worry about their looks. This type of clients turns out to be the majority and they tend to use the gym more in the spring time, in order to be fit for the bathing suit season. Middle aged people: They are the minority, only attend to carry out activities of little impact. Bodybuilding people: People who use the services of the gymnasium in a more frequent form. Although they are a reduced number, the number of people is increasing. People under rehabilitation: People who are rehabilitating and follow their therapies and after finished with the therapy they can still belonging to the gym. 14. Conclution In our point of view, Dynamic is a company that fights against the great competitors trying to find its niche and its target, in a market that begins to be very competitive and where the differentiation is the key to attract clients. 8

The social classes play a big part in the market for Dynamic gym. It is interesting to look at different gyms in Mexico City because many of them are focusing on the higher classes or the lower classes. The gyms that are focusing on the higher classes have the ability to take very high fees, and the middle class has not the capacity to pay these fees. On the other hand the gyms that are focusing on the lower classes offer lower fees but not a good quality. We think that the reason why Dynamic gym is growing very quickly is because of two factors. Firstly the middle class is an unexplored market, and the other gyms are forgetting about this market, but Dynamic gym has understood the need in this market. Secondly, Dynamic gym offers a high quality that differs from the other gyms. With high quality we mean not only the quality of the equipment, but also the high quality service offered in Dynamic gym. But we also found that Dynamic Gym has a few weaknesses and threats, accordingly to the SWOT−analysis, and it would be good to pay some extra attention to these factors. There are some weaknesses that could be easily modified: Firstly the sign problem. Dynamic gym does not have a sign that indicates that the gym exists in that particular place, this can result in that Dynamic gym loses potential customers. This is a problem that could easily be solved by just putting up a Dynamic gym sign. Secondly, Dynamic gym does not participate in public events that take place in the community. This could also result in that the gym loses potential customers. Thirdly, Dynamic gym is closed on Sundays, this is a major weakness factor that causes severe problems for the gym, it is possible that the gym loses a lot of customers because of this. Again, this is a problem that can be easily solved by opening the doors even on Sundays, if even for a couple of hours. If Dynamic gym takes care of the weaknesses facing them, they do in fact have a bright future ahead of them, considering that they are focusing on an unexplored market; the middle class. 15. Bibliography • Marketing Management, Kotler Philip, Last international edition, Prentice Hall. • Service Management and Marketing, Grönroos.2 ed, Wiley, 2000. References • E−mail interview with Dr. Alfredo Cabello, owner of Dynamic gym 1 1

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