HEALTHCARE SERVICES MARKETING

BODY POWER
CASE ANALYSIS SUBMISSION

2010-11
Products and Brands 2010-11 Market Growth Market Share Market Relative share of Market Largest Share Competitors 17.53% 25.15% 0.70 23.37% 19.06% 19.30% 0.00% 0.00% 23.21% 21.83% 21.74% 29.46% 31.85% 28.98% 22.17% 1.07 0.88 0.66 0.00 0.00 1.05

Selectorized Equipments (SE) Plate Loaded equipments (PLE) Multi Gym equipments (MGE) Benches and rack equipment (BRE) Cardio fitness equipment Spa Fitness accessories (FA)

4.00% 12.00% 12.00% 3.00% 14.00% 11.00% 5.00%

BCG matrix -2010-11

Market growth rate

STAR

20.00% 18.00% 16.00% 14.00% 12.00% 10.00% MGE

QUESTION MARK

PL
Relative market share 2.00 1.50 1.00

0.50 8.00% 6.00% 4.00% SE BRE 2.00%

0.00

DOG

FA CASH

0.00%

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2009-10
Products and Brands 2009-10 Selectorized Equipments (SE) Plate Loaded equipments (PLE) Multi Gym equipments (MGE) Benches and rack equipment (BRE) Cardio fitness equipment Spa Fitness accessories (FA) Market Growth 4% 12% 12% 3% 14% 11% 5% Market Share Market share Relative of Largest Market Competitors Share 34.23% 47.19% 0.73 40.47% 36.12% 37.62% 0.00% 0.00% 41.86% 44.78% 39.92% 56.39% 67.06% 56.60% 41.44% 0.90 0.90 0.67 0.00 0.00 1.01

BCG matrix 2009-10

Growth rate %

STAR

20%

QUESTION MARK
18% 16% 14% PLE, MGE 12%

relative market share 10% 2.00 1.50 1.00 8% 6% 4% 2% 0.50 0.00

FA

SE BRE DOG

CASH COWS
0%

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1. Which are the 2 best candidate product lines for new product launch? Plate loaded equipments (STAR) According to the BCG matrix, Plate Loaded is equipment has entered the Star quadrant and thus should be maintained at that.They are generating large sums of revenues because of their strong relative market share, but at the same time they would also consume large amounts of investments because of their high growth rate. Therefore the company should focus on this product so that when the market is declining it can convert this product into cash cows.

Fitness Accessories (CASH COW) As leaders in a mature market, this segment is exhibiting a return on assets that is greater than the market growth rate so they would be generating more revenues than they would consume. Sales of fitness category is the highest in its product category compared to the competitor brands. The company should hold on this product line as it has huge market share relative to competitors .As there is not much growth in the market there is less competition resulting the monopoly of this company in the market. The company can increase its presence across India in this segment.

2.

From which all product lines will you launch the 5 new product types? Plate loaded equipment: Body shape should launch new product types within this category. It has the maximum market share. The sales growth in this product category along with the market growth makes it the best suited option to launch new products. Also going by the PwC report the revenues in fitness and wellness market will double in coming years. As this product comes under fitness category it has substantial potential to grow in future.

i)

ii) Multi Gym Equipments: Body Power is third in this segment and has a with a growth rate of 12%. The company should invest and modify this category to reap maximum potential in terms of revenue.

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3.

Should they go national with all products? If not, with which all and why? They shouldnt go national with all products as potential customers in each of the segment would definitely be different in different states. They should target the following states only in their first phase:

States

Number of customers

Maharashtra Delhi Karnataka AP TN UP West Bengal Gujarat Goa Punjab

TOTAL

563 495 415 398 390 349 320 309 282 271
3792

The reason is that these states have highest number of potential customers for existing pro MTG type of products (60% of the customers are in these states). Even if 30% of these are converted, as indicated by the market research team (3792*0.3), 1138 customers will be targeted in first year. The sales growth for Plate loaded equipment and Fitness accessories is highest while market growth is highest for Plate loaded equipment and Multi gym equipment. Hence, these are the products that can be positioned as national products. Apart from this MHG can also be planned launched in these states.

4.

Which strategies will you suggest to each of the product lines of Body Shape?

Plate Loaded Equipments (INVEST): The growth is highest for the company compared to that of other competitors. The products in this product line are star 5|Page

products where BPL has the maximum market share of 45.5%. This line should be strengthened more with good investment.

Multi Gym Equipments (BUILD): Question marks are brands which grow rapidly and consume large amount of cash. The result is that the net cash consumption is high. The company also has a good market share. This sector is thus promising and some investment could be done on it.

Selectorized Equipments (DIVEST): It has a low market share as compared to other players. Also the market growth has been slow in this segment. Investment on this product line should be minimal so as to increase investment in other more prospective product lines.

Benches and Rack Equipments (DIVEST): This may be a dog segment, but the market share of the company is second behind Health Works. But the growth in the segment is small. Small investment or retrenchment strategy should be applied in this segment.

Fitness Accessories (HARVEST): This product line is a cash cow for the company, with huge returns and less investments. Although the growth rate is less in this category, company has the maximum market share in this segment. This product line should be maintained with the right marketing strategies and value adding products to bring better contributions to the company.

5. Will you advise BPL to launch products in a. Cardio b. Spa There is heavy competition with the market leader having a market share of 32 %, with the second biggest player following suite. Therefore, entry barriers are high. However, the sales of the two major players Muscle Fitness and Fit king have reduced compared to the previous year. Thus, company can plan to invest some amount in the fitness category keeping in mind the overall growth of the segment.

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The Rejuvenation market which consists of the Spa is estimated to be around 10 Billion Dollars. This is around 1.1 % of the total wellness industry. The market is growing at the rate of 11% and the PWC report shows that the Rejuvenation category is going to grow double the size from 2010. This seems to be an opportunity for the company. The company can step in to rule this product line with less investment as competition is not high in this segment.

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