California WOW Xperience Public Company Limited (CAWOW) is at first known as Thailand’s leading fitness center operating with 9 branch locations and 35,000 square meters of fitness facilities serving more than 80,000 members. CAWOW came into Thai market since the year 2000, first known as California Fitness Centers, the most complete and modern fitness center in Thailand. The company formed by Fitness Holdings International Corporation which is the company under 24 Hour Fitness Worldwide Inc, America, administrate by Eric Mark Levine.
The first branch opened at Liberty Tower on Silom road since midyear of 2000.
During the first three year, the number of club members reached about 12,000 people. Mr. Eric Mark Levine, CAWOW’s CEO and founder, a global fitness executive with more than 30 years of proven experience developing and building fitness companies. As CAWOW’s Founder, Chairman of the Board of Directors and Chief Executive Officer, Eric has developed a unique “Exertainment” (Exercise+Entertainment) concept combining fitness, fashion and entertainment within state of the art fitness centers that exude high levels of positive energy.
CAWOW joined forces with Major Cineplex Group Public Company Limited (Major Cineplex) Thailand’s leading total lifestyle entertainment company which has strength in being the Entertainment Complex or Lifestyle Center not just cinema business like before, in 2003, 51% share holding by Mr. Eric group and 49% holding by Major Cineplex Group and change the name from Fitness Holdings International Corporation to Elite Power Holdings Inc. and FDE of the World Co. , Ltd. by Eric Mark Levine and also change the trademark from ‘California Fitness Centers’ to ‘California WOW Xperience Public Company Limited’ (CAWOW).
This strategic partnership has enabled CAWOW to leverage the marketing and property development expertise of the Major Group to become Thailand’s leading Fitness Company. SITUATION ANALYSIS Market Analysis 1) STP Segmentation Demographically, CAWOW segments customers mainly according to their ages, which mostly categorizes as university students and working people in various ages. Psychographically, CAWOW segments customers focusing on lifestyle, mainly young people who are health conscious, interested in exercising, and care about their body image. Targeting
CAWOW’s target group is the people of age 21-40 years old which can be categorize as university student and office people who looking to take care of their health. The target group also required to have a medium to high purchasing power in order to be able to afford the club fees. Apart from that, in tern of lifestyle, the target group of CAWOW is those people who care about putting up an appearance and health through exercising. Each branch also target on people who live around the area so the target group for the brand will be differ from place to place.
As they segment according to the type of lifestyle, the age group leading the similar lifestyle will have different paths home and will have different locations in which they pass by. For university level target groups will have more focus upon classes like that of dance, and perhaps Yoga etc. however, in terms of first jobbers are those that have been working for a period of time, their focus will be upon Yoga and Pilates to maintain their healthy sense of mind and body. Positioning
The positioning of CAWOW is the worlds’ number one fitness center, and the number one fitness center in Thailand. 2) Marketing Mix Product CAWOW’s fitness centers offer members hundreds of Group Exercise Classes per week, such as Body Balance, Body Jam, Body Combat, Step, Tai-Chi, Spinning, etc. They also offer Personal Training, Yoga and Pilates. Personal Training is a one-on-one service helping each member design the appropriate program to reach their fitness goals. Yoga is the highest growth service among these three services.
CAWOW offers 2 forms of Yoga; Bikram Yoga and Planet Yoga with hundreds of Yoga classes offered per week. They also offer Pilates, the ultimate physical and mental conditioning program. They also provide lockers, sauna, and steam rooms for their members. Price Their prices are mainly determined according to both the degree of need of exercise and the qualities of a customer. The company uses the free floating membership price system which means that it does not have the published prices and there is no information on their website about pricing as well.
The only way for customer who wants to know the price is physically going to their club and talk to their sales. The membership price will be different for each of customers. Some people may pay a cheaper or a higher price for the same membership that may receive variety of service package, being able to bargain with CAWOW salesperson. Place CAWOW has opened their branches in the high traffic point in Bangkok including Siam paragon, Silom, Chanegwattana, Pinklao, Sukumvit23, Sukumvit31, Ratchayothin, and Ratchada.
After joining with Major Cineplex, they try to expand the branch into Major branch to save the cost under the fact that the company expects to gain more sales revenue in opening each new branch, especially in the first two year from opening. Since the contract of membership is at least one year, most of customers do not renew the contract and the customers who plan to play for long term paid for life membership so that a great way to gain the money is to find new customers is by opening new branch.
Also, the location they choose are all able to see through glass windows so that other people can be able to see them working out. Promotion Their promotions are normally changing from time to time. They have weekly promotion that will change every week, and within the week also have another promotion which will give the customers more benefits such as free Yoga, free one time personal trainer, etc. The most common one is that if you pay for long term membership you will pay cheaper for each month. CAWOW also offers the member privilege; for example, discount for some spa and restaurants.
Their promotion activities vary to make sure that it can effectively access to customers. These promotion activities include; Advertising – Mass media: As a health, fitness and lifestyle company, CAWOW promotes their benefits to fitness enthusiasts’ via media channels thus increasing brand awareness and health consciousness in Thailand. The Company has launched the “Yoga For All” TV Series and their “California WOW 20 Minute Workout” broadcast on Chic Channel – True Vision, UBC which can target directly on the potential customers, as well as creating chic image for the brand. Magazine: CAWOW has launched the “WOW” Fitness Magazine with 50,000 copies circulated to their members and on newsstands each month to help promoting the brand and also create the health conscious trend. Personal selling Sales person offers several promotions to all the guests and current members either by phone or face to face. This kind of promotion is often be found after free trial of the current member’s guest where the sales person will offer special promotion for them and if they do not sign for membership that day, the sales person will continually calling them to offer more promotion and benefits.
Website One of the tools that CAWOW often used to communicate to their current customers and other potential customers is through their website. CAWOW official website provides all sort of the company’s news, and any all other information about CAWOW. 3) SWOT Analysis Strengths •Experience and reputation The founder of CAWOW is an experienced professional that has worked in the health and fitness industry for over 30 years. He, Mr. Eric Mark Levine is both the founder and the CEO and has intensive knowledge about the industry. Indeed, CAWOW is a well-known brand that expose in several countries. First-mover advantage In Thailand, the firm is the longest established fitness center. With their advertising and their locations, they have the highest brand visibility in terms of time frame. Their long establishment will also help building up a foundation in providing fitness services to their clients. In addition, the fact that they were established first helps them grab and maintain a substantial amount of this industry’s market share due to the constant strong brand awareness. •Benefit from alliance with Major Cineplex group CAWOW also entered into a beneficial joint venture with The Major Group.
This provided several benefits for CAWOW as it helped increase the total amount of new customers for the fitness center. In addition, their fixed costs will have decreased because their cost on rent is shared with the Major group and its facilities. •High level of brand awareness Since CAWOW choose “Lukked Metinee Kingpayom”, the famous star and super model as a presenter, it can create high level of brand awareness and image of good body shape and entertainment. As with most of the trends that come by into society, it is usually led by a celebrity.
For Thailand, this famous celebrity is thought of to be a trendsetter in many ways, and is constantly kept in the spotlight. With her as the brand presenter will allow an optimal amount of attention to be fixated upon CAWOW. Not only will this help increase in the brand awareness but it may also lead to an increase in total consumers. This may result from the self-fulfillment of a self-concept by consumers that look to be like this celebrity. Hence, they will correlate the look and to be her as including CAWOW in their life day to day activities. •Variety of exercises
CAWOW offers members hundreds of Group Exercise Classes per week, such as Body Balance, Body Jam, Body Combat, Step, Tai-Chi, Spinning, etc. They also offer Personal Training, Yoga and Pilates for customer can choose the class they like. As the trend nowadays tends to lean towards exercise types that many of the celebrities take—Yoga and Pilates—CAWOW offers a substantial amount of classes. The main benefit of variety is that it can accommodate the need of members. •High-quality equipment CAWOW’s facilities are well taken care of so that the equipment is not only easy to use, but also appealing to their consumers. Long opening hours CAWOW provides long opening period for their members. This longer period of opening time helps CAWOW as a categorical point of parity. This is because all CAWOW fitness centers are opening at all times of the day and night to cater to the needs of their different consumers. With longer working hours, it allows their consumers to use the club whenever they want. Weaknesses •Aggressive Sales person CAWOW’s sales persons are famous in selling their member packages too aggressively. That makes customers annoyed and potential customers who know about this behavior may avoid to talk to CAWOW’s sales persons.
This also create bad image of the company when the customer feels like they are forced to buy the package that they do not need. •Low customer service (After sales) Many customers complain that after sale service is not as good as before they buy the package. They think that the sales persons ignore them because they already paid for the package fee then it is not essential to take care them any more. In contrast, the trainers who can still get advantage from taking care of customers still keep calling them to go to the club and use the personal trainer service which they have to pay extra money. •High-cost personal trainers
CAWOW’s members have to pay extra money for personal trainer who will give suggestion to use the equipment in the most effective way. The fee is many times said to be too expensive that may make customers think that it is not worth to pay. •Busy during peak hours During peak hours for CAWOW which is 18. 00-21. 00, the fitness centers are extremely crowded; for example, it is normal during peak hour to see people lining up in front of the lift. In addition, over crowdedness and lack of personal space within the fitness center will lead to less privacy which is not a preference that most consumers have.
They prefer a substantial amount of proximity between one another, and to not waste more time lining up then actually working out. Opportunities •Unsaturated Market From CAWOW’s research conclude that the ratio of Thai people who is fitness member is still much less than neighbor country such as Japan 4. 5% of the people is the fitness member, Hong Kong 4%, Taiwan and Korea 3%, while ,Thailand only has 1% of people who is fitness member. It is show that there is much chance for fitness industry to grow more than now. Health Conscious Trend Nowadays, people are becoming more concerned about their health. Therefore, exercising tend to become more popular among various activities during free time to satisfy the trend. Threats •High competitive market CAWOW is the first in the fitness center market after that is Fitness First which expands their branches to the high traffic points of Bangkok and some branches near CAWOW branches which means that they target more or less the same group of customers around those locations.
In addition, fitness centers like that of Fitness First seems to be a higher positioned fitness center. They also seem to have targeted a lot of CAWOW’s weaknesses. For example, their congested fitness center during peak hours is controlled by a slightly higher price. When one first applies to be a member of Fitness First, they give you a free personal trainer to help you get to know the equipment and to work out a suitable work out routine that is adapted to your personal needs.
After that, there are a series of trainers around that remember you buy name and remember the type of activities that you need to complete in your routine and they help you out often providing service in after you’ve subscribed to be a member. •Substitute activities For exercising there is much more substitute ways to do, especially those exercises that cost less that fitness center such as jogging in the park, riding a bicycle, or swimming.