MARKETING STRATEGIES FOR SUCCESS Analysing Market Data Analyse

MARKETING STRATEGIES FOR SUCCESS

Analysing Market Data

Analyse the usefulness of marketing information to support Stan Todd’s decision to acquire the Total Sports Fitness Division

Identify two pieces of evidence which (1) support and (2) argue against Stan Todd buying the Total Sports Fitness Division 1. Look at the data 2. What does it show? 3. Cause? 4. Evidence provides support or argument?

Summary Marketing Evidence IN FAVOUR of the acquisition Marketing Evidence AGAINST the acquisition 1. % Sales growth increased for three main competitors 2006 – 2008 • Virgin Active 3. 3% • Bannatynes 41. 5% • David Lloyd 10. 39% Spend on subscriptions fell by 2. 7% from 2004 – 2008 • Fall in Demand? • Prices falling due to increase in competition could lead to pressure on margins and necessity to cut costs 2. Number of new memberships in new facilities and like for like increase in memberships. • Positive, although like for like increase is minimal Number of new clubs opening Increase in competition in an already highly competitive market. Possible response from competition to maintain market share in a saturated market

Remember to use the information within the case study. • Rising levels of obesity as indicated by Stan Todd – correlation with growth in spending on sports and fitness • Start of 2009, Target Fitness clubs generating operating profits of £ 22. 9 million (compare to Virgin £(1. 7), Bannatynes £ 14. 1 m and David Lloyd 39. 6. Target Fitness had annual revenues of £ 138. 7 million.

Usefulness of the data Depends on • Accuracy, source and validity of data – table 2 does not indicate source. • Ability of STL’s management to interpret and use data Additional Information • % Sales Growth for Target Sports, how does it relate to competition • Consumer Spending forecasts on Fitness Industry for next 5 years • Qualitative information