Importance of Marketing to a Leisure and Fitness Centre
Table of Content
1.2 Customer Relationship Management 4
3.2 Customer Satisfaction and loyalty_ 8
Introduction
Marketing has been described by various professional and marketing specialists in different ways but all have a particular focus: to generate revenue and satisfy customers using marketing tools and processes. Generating revenues is very important for businesses, be it a manufacturing or service company. This can only be achieved by retaining and attracting new customers. Therefore, the importance of customer service is an aspect that needs to be taken into consideration when operating a business.
This report will give the concept of customer focus in marketing in relationship with marketing tools and generating revenues for business. It also looks at a detailed definition of marketing and the aspect of customer relationship management as derived from the definition. A clearly looks at some marketing tools and concepts that could be used by a leisure and fitness centre to create a customer focus business to maintain their customers and why not attract new ones. The main tool to be used includes the marketing Mix (Product, Price, Promotion, and Place). This will lead to the importance of providing good service to customers or being customer focused. A final conclusion of this report will be given to answer the question as to why it is important for a leisure and fitness centre to be customer focused.
1. The concept of customer focus in marketing
1.1 Marketing Definition
Marketing has been defined by a lot of scholars, and professionals. The American Marketing Association defines marketing as“…an organisational function and a set of processes for creating, communicating and delivering values to customers and for managing customer relationships in ways that benefit the organisation and its stake holders” (Kotler and Keller, 2006).
The importance of maintaining that relationship with customers has been identified in the definition, which results to benefits the business and stake holders will gain if the relationship is well managed.
Relationship Marketing is tool that is used by businesses to manage and keep enduring long-term relationships with it customers, both internal and eternal customers, who directly or indirectly affect the success of a business’ marketing activities (Kotler and Keller, 2006). The main purpose of customer focus is to create customer value, which are the services a company provides in association with the goods, and therefore should be maximised (Kotler and Keller, 2006)
In order for a company to carry out effective eternal customer service, they need to be able to manage and maintain good internal customer service, which is catering for its internal employees (Harrison, 2006). Internal customer respond could be seen in changes in their quality of work, feedback from eternal customers, communication within the organisation and teamwork.
1.2 Customer Relationship Management
This is a process of managing and maintaining detailed information of a company’s customers using technology and the internet to maximise and enhance customer satisfaction and loyalty with the company (Kotler and Armstrong, 2001). A well managed customer relationship leads to a successful business and customer satisfaction and loyalty. This can be used by service companies where specific information is matched with a specific customer’s needs (Grönroos, 2000). The concept of customer relationship management is also about those strategies a company will use to create a stronger relationship with customers by understanding customers’ behaviour and needs (Grönroos, 2000). This concept helps companies to understand changes in customers’ purchasing habit, preferences and style in order to modify their operations to meet these changes by providing best services available (Grönroos, 2000). A fitness centre should use this to match customers’ specific needs
to their services. Some members of a gym work out to loose weight while others go there to keep fit or because the doctors recommended. These needs are matched to the specific equipment and services to be used. The concept applies in a leisure centre where customers’ specific needs with their offers.
2. Integrating marketing with customer service
Integrated marketing deals with marketers integrating marketing programs and activities to create good communication with its customers and deliver value goods and service to these customers (Kotler and Keller, 2006). This function can be made effective by integrating the marketing tools also known as the 4P’s (product, price, place and promotion) (Kotler and Keller, 2006)
2.1 The Marketing Mix
2.1.1 Product
The leisure and fitness industry provide services to its customers. In order for a company to provide good service to its customers and maintain them, they have to fix their services to match their target customers and not the other way round. Once the company has identified their target customers, they have to create products and service that will fit their customers’ needs and not customers to fit the product features offered by the company. Product comprise of its features, style, size and attributes (Kotler and Keller, 2006). The features of a fitness centre should fit target customers expectation. If a leisure centre decides to target kids between the ages of five and twelve, they should be able to provide those services that are suitable for this target market. Technology has brought about a frequent change in customer behaviour and style. A fitness and leisure centre should be able to monitor the product and service life cycle to know when to
improve on their current service or change them for the most recent that matches customers’ needs. This trend also helps company to determine when to diversify their services and when to move into a new market For example, in Fitness-first for women, their target customers are women from sixteen and above. They make fitness equipments that are suitable not just for people in that age range, but also for women. This gives them a focus on what kind of fitness equipments will suit their customers’ needs.
2.1.2 Price
Price is what customers have to pay for services provided to them and is the most tangible way for a customer to compare various providers of that same service (Kotler and Keller 2006; Heath 2004). Prices of services might be determined by the number of competitors in the market, the cost of setting up the services and the value customers put on the company’s service compared to what other competitors offer (Hisrich, 2000)
Price is basically made up of what is known as the three Cs; consumer, cost and competition (Hisrich, 2000). Most customers use price as a strong indicator of the value of the service provided to them or the level of desirability of the service, therefore, service providers should be able to provide services to create customer value.
The price concept includes discounts, payment periods, credit terms and allowances to customers (Kotler and Keller, 2006). These forms of pricing can also be applied in a leisure and fitness centre. After determining what products to match customer’s needs, leisure centres also have to determine the various prices that would suit these services and of which customers are willing to pay. Most payment periods are made at the beginning of the month. This is done by most fitness companies to allow members to receive their monthly salaries before any deductions are made. This is done mostly by means of direct debit to make it more convenient and easy for companies and customers.
2.1.3 Promotion
This answers the questions as to how the company can communicate its products and services and price to its target customers (Kotler and Armstrong, 2001). This consists of public relations, special promotional offers, advertisement and personal selling (Kotler and Armstrong, 2001). Communication means between companies and their customers has changed in the past twenty years with the use of internet being one of the top means of communication. There is the use of websites for advertisements and YouTube for public relations and advertisements as well. Word of mouth is also very important in promotion. Leisure and fitness centres should encourage customers to tell their friends and families about their good services. They can carry out public relations by getting involved in programs like the annual race to support cancer patients. A well focused leisure and fitness centre should be able to know the various means of communication to get to its target
customers. The main aim of promotion is to tell customers how different the company is from other companies in terms of product price, satisfaction gained and to persuade them to buy their services (Kotler and Armstrong, 2001). A leisure and fitness centre can carry out promotion by meeting customers on the streets and telling them about their services and offers. These offers may sometimes come with price reductions. For example, excluding membership fee for a fitness centre and reducing prices when groups and families visit a leisure centre
2.1.4 Place
The last of the marketing mix gives answers to questions as to where customers can get access to products and services provided by the company (Kotler and Armstrong, 2001). A lot of service companies find it difficult to distribute their services. A fitness centre can make their services available at their gyms where customers can come to work out. They can also provide personal training at home for customers who would like privacy and for those who can not make it to their gyms. A leisure centre can also make available the purchase of their services through agents and the internet.
The whole concept of creating a customer focus company is to create a good positioning of the company and the brand in the customer’s mind.
3. Importance of Customer Service
A well managed and customer focused company leads to a number of positive outcomes in the company as a whole. Being customer focused helps most company to develop its internal customers and create a good relationship with eternal customers leaving both parties satisfied.
3.1 Image and Reputation
Image is created by the positioning of a company in the minds of customers and the way they perceive the company with its products and services (Kotler and Keller, 2006). This image comes as a result of a company’s reputation which is the perception customers have concerning the quality of products and services the company offers (Andreassen and Lindestad, 1998).
Word-of-mouth is a very important aspect that should be taken in to consideration in companies. This could give a company a good image or diminish its reputation. The level of customer service determines the kind of feedback and message customers will transfer to other potential customers. A satisfied customer will carry out a positive word-of-mouth, spreading the goodwill of the company and therefore attracting new customers. Internal customers (employees) also play a big role in spreading information about a company. Therefore, satisfied employees will spread a positive word-of-mouth. Most members of Fitness First like to introduce a friend because of their reputable classes offered to members and also what members gain from introducing a friend. Park Resort limited has a reputation of providing cheap holiday accommodation to customers with a good service and therefore creating an image for the company. Families who have stayed in their resorts tell other
families and friend and the message goes round. Reputation is very important to a company because it keeps it in business.
3.2 Customer Satisfaction and loyalty
Customer royalty comes as a result of customer satisfaction due to the good services provided to them as a result of the purchase (Hallowell, 1996). Customer satisfaction is a psychological concept which is described as a customer’s perception of the quality of service they have received, compared to other competitors, in relationship to what they have paid for in order to get those services (Hallowell, 1996). Customer satisfaction can be measured by the quality of product the company provides to its customers compared with the price and also by providing questionnaires for customers to answer (Hallowell, 1996). If the customer is willing to pay the price set for the services every time they make a purchase, then they are satisfied with what they are being offered. On the other hand, if the company realises that at least 25% of customers try to bargain for a better price, then actions should be taken concerning their prices or what they offer their customers.
Customer royalty is measure on the bases of the length (how long the company manages to keep or retain a certain customer) and depth (how much the customer pays for the services offered) of the relationship that exist between the company and its customers (Hallowell, 1996).
A leisure and fitness centre that has well trained employees to handle what ever situations customers face will always experience a high level of customer satisfaction. Customers are always looking for the best result in an industry like this. Fitness First for Women all over the UK provides free diet advice to its members, a service that might be charged separately is a local gym. They also provide free classes to members and summer boot camps fitness programs at reasonable prices. By focusing on customers, they are able to identify what services customers need apart from just going to the gym. This has given the company a good positioning in the market. There are some customers who are loyal to Fitness First because of the small side services they offer to their member which end up making their money spent valuable.
3.3 Profitability
Profitability is very important for a company to stay in business and this can only be done if the company is generating revenue that is above its total cost and expenses. There is a strong relationship that exists between customer satisfaction and loyalty with customer profitability. Any company that is focused to provide customers with the best services and products is likely to make profits. If the revenue derived from a particular customer as a result of a good customer service, is greater than the cost of incurred from providing that service to the customer, then the company is making what is known as customer profit (Söderlund and Vilgon, 1999). Satisfied customers become loyal to the company and purchase more from the company because of the experience and bond they have developed with the company. In a company like Fitness First, loyal customers keep upgrading their packages and go for new offers. For example, members sign for personal training at
the gym, they take summer boot camp fitness programs. This may result to increase in revenue of the company as a whole. These members are already confident with the services provided by the company and therefore know they are well valued.
3.4 Employee Turnover
High employee turnover has a negative impact of to the company’s reputation and customer service plays a big role in this. This is the measurement of the rate at which employees leave a company in relationship to its services and training (Mullins, 2002).
When the customer service of a company is good and there are little complains coming in, it indicates the employees are satisfied (Pletcher, 2005). There is also a close relationship between customer satisfaction and employee turnover where low customer satisfaction give rise to high employee turnover and high customer satisfaction gives rise to low employee turnover (Pletcher, 2005). In order to reduce employee turn over, companies have to provide training to their employees and give them the opportunity to meet new challenges through empowering them. A satisfied employee will be happy to work in a company and help to provide the best information ever concerning the services offered. Employees should also be provided with training and information necessary to carryout their duties. Job satisfaction to internal customers is very important as they tend to stay longer therefore reducing employee turnover and cost of employing a new person. This also helps in creating a strong reputation of excellent service in to the company.
Conclusion
This report has looked at the definition of marketing which involved the processes and tools needed to create a good customer relationship. From the definition a number to tools and concepts were derived to create a customer focused environment in a fitness and leisure centre. The report looked at customer relationship management as a tool to manage and maintain a close relationship with its customers. It also looked at the most important tools of marketing which is the 4P’s also known as marketing mix, used by companies to deliver valuable goods to its customers and they include; product, price, promotion and place. They all focused on matching the right service with the identified target market. The report finally looked at the importance of a good customer service and why company should focus on customers and what they need rather than fit customers around their products.
In conclusion, customer focus is very important to companies be it a service provider of a retailer. This is very beneficial to companies to generate revenue. Customers are very important to a business and should be taken care of. Both internal and eternal customers play a very vital role to a business as they can easily communicate the goodwill about the company to others by word of mouth. The most important questions companies should ask themselves are; are their customers satisfied with what they offer? Do customers keep coming back to buy their products of services no matter the set prices? And do they create service to match customers’ needs of match customers’ need to what they can offer? These questions are very important to answer for a very customer focused business.
References
Andreassen, W. and Lindestad, B. (1998). Customer loyalty and complex services; International Journal of Service Industry Management, Volume 9, pp.7-23
Grönroos, C. (2000). Service management and marketing: a customer relationship management approach, New York
Hallowell, R. (1996). The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study; International Journal of Service Industry Management. Volume 7, pp. 27-42
Harrison, C. (2006) How Poor Internal Customer Service Negatively Impacts External Customers; Turning Customer Service Inside Out!
Heath, R. L. (2004) Encyclopedia of Public Relations; Vol 2
Hisrich, R. D (2000) Marketing; Second Edition, Barron
Kotler, P. and G Armstrong (2001). Principles of Marketing, Ninth Edition, New Jersey, Prentice Hall
Kotler, P and Keller, K. (2006). Marketing Management: twelfth edition, Upper Saddle River, New Jersey, Prentice Hall
Mullins, L. J. (2002). Management and Organisational Behaviour; Sixth Edition, Prentice Hall
Pletcher, L. (2005). Satisfying customers lowers employee turnover http://www.vbjusa.com/stories/2005-10-14/satisfying_customers_lowers_employee_turnover.htmlaccessed 25/04/09