City Yoga

Bove Consulting [SERVICES MARKETING 325-662]

1 Executive Summary | University of Melbourne

BOVE

University of Melbourne Faculty of Economics and Commerce Bove Consulting

SERVICES MARKETING 325-662

Service Audit – City Yoga



1 Executive Summary

Yoga is a rapidly growing area of the health and fitness industry in which

dedicated studios generally compete on the basis of instructor expertise and

augmented service offerings. City Yoga, located in Melbourne’s inner-city, is a

sole proprietor managed studio specialising in the Shadow form of Hatha

Yoga.

The studio effectively uses physical evidence such as ornate furniture, incense,

open space and light to create a pleasant and positive mood amongst

customers, influencing a positive service evaluation across its four different

class streams. The studio currently enjoys optimum demand in a range of

classes and a group of loyal and devout customers.

City Yoga’s strategic priority is to maintain its market share, with a desire to

retain more of its Beginner’s course participants as regular attendees. The

facilities and sole-instructor pose the most challenging aspects for analysis

and growth of the business, with associated issues relating to supply and

demand management, brand image and continuity of service.

Through an analysis of City Yoga’s current service offering, respective to the

competitive environment, customer feedback and growth potential, Bove

Consulting recommends that City Yoga prioritises relationship marketing and

differentiating service offerings as a means for retaining customers and seeks

alternative forms of supply (instructors) to ensure continuity of service in the

sole-proprietor run business. In the longer term, City Yoga would be wise to

consider diversifying its service offering to include related fitness or spiritual

services, to enhance the brand value to customers, maximise available space

and generate additional revenue.

Bove Consulting gratefully acknowledges Mr Peter Ujvari, the owner and

proprietor of City Yoga, for generously provided his time via a series of

interviews, customer surveys and participation in yoga classes.



Table of Contents

1 Executive Summary................................................................................................2

2 Introduction............................................................................................................5

3 Situation Analysis ...................................................................................................6

3.1 Industry Trends .............................................................................................6

3.2 Competitor Analysis.......................................................................................6

3.2.1 Direct Competitors.....................................................................................6

3.2.2 Indirect Competitors..................................................................................7

4 Customers...............................................................................................................8

4.1 Target Market ................................................................................................8

4.2 Consumer behaviour......................................................................................8

4.3 Service-Product Strategy ............................................................................. 10

5 Positioning Analysis ............................................................................................. 13

5.1 Brand Identity.............................................................................................. 13

5.2 Brand Image................................................................................................. 13

5.3 Differentiation ............................................................................................. 13

5.4 Recommendations ....................................................................................... 15

6 Service Blueprint .................................................................................................. 16


7 Physical Evidence ................................................................................................. 19

7.1 Ambience ..................................................................................................... 19

7.2 Space ............................................................................................................ 19

7.3 Signs, symbols and artefacts........................................................................ 19

7.4 Response to Physical Evidence .................................................................... 19

7.5 Competitive Advantage through Physical Evidence ....................................20

7.6 Recommendations .......................................................................................20

8 The role of the Proprietor / Instructor ................................................................. 21


9 Current Pricing Strategy.......................................................................................22

9.1 Competitor Pricing.......................................................................................22

9.2 Pricing Strategies .........................................................................................23


10 Promotional strategy .......................................................................................24




11 Customer Quality, Satisfaction and Retention Efforts.........................................26

11.1 Customer Survey Outcomes.........................................................................26

11.2 Customer retention strategies .....................................................................26


12 How supply and demand is managed..............................................................28


13 Concluding Recommendations........................................................................30

13.1 Short-term – 0-6 months ............................................................................30

13.2 Long-term – 1-3 years.................................................................................. 31

14 References........................................................................................................32

15 Appendices.......................................................................................................33

Appendix 1 - Competitor Analysis............................................................................34

Appendix 2 – Recommended strategies to reduce perceived risk...........................39

Appendix 3 - Sample Customer Survey.................................................................... 41

Appendix 4 - Customer Survey analysis...................................................................45

Table 1 - City Yoga’s Service Offering ............................................................................5

Table 2 - Segment Analysis ............................................................................................8

Table 3 - Current methods of risk reduction at City Yoga ........................................... 10

Table 4 – Supplementary Services at City Yoga .......................................................... 12

Table 5 - Competitor Pricing Structures......................................................................23

Table 6 - City Yoga - Current Promotional Strategies .................................................25

Table 7 - City Yoga supply and demand conditions (a) ...............................................28

Table 8 - City Yoga supply and demand conditions (b)...............................................28

Figure 1 - Service – Product Continuum ......................................................................11

Figure 2 - Perceptual Map ........................................................................................... 14


5 Introduction | University of Melbourne

2 Introduction

City Yoga is an independently owned and operated yoga studio located in

inner-Melbourne. The Director of City Yoga, Peter Ujvari, is the only

instructor at the studio and teaches the specialised form of Shadow Yoga. Its

origins have come from martial arts helping to differentiate the studio from

competitors. The studio conducts 12 classes per week, outlined in Table 1.

Class Type Description Frequency per week

Beginner’s • 8 weeks duration

• Requires pre-booking

• 3 classes

General • Designed for customers

wanting to learn more about

prelude forms of yoga

• 5 classes

Experienced • Experienced students only

• Requires pre-booking

• 3 classes

Self-Practice • For customers wanting to

practice individually

• 2 classes

Table 1 - City Yoga’s Service Offering

Yoga is high in experience and credence qualities, making it difficult for

customers to assess service quality. Participants generally have a high degree

of involvement in the service and must commit both physical and mental

effort to complete the class, in which they co-create value. It has been

identified by Ujvari that his main goal for City Yoga is participant retention,

particularly those completing the Beginner’s course.


6 Situation Analysis | University of Melbourne

3 Situation Analysis

3.1 Industry Trends

Yoga has a long-established history and has recently become a major growth

sector in the fitness and health industry. It is estimated that 10 million people

worldwide frequently participate in yoga (Troy, 2003) and this trend is set to

continue as yoga has become an accepted and popular part of a mainstream

lifestyle. Troy (2003) believes that yoga will maintain its popularity because it

has a “broad appeal due to health benefits”, as well as its spiritual nature.

Indeed, an increasing number of private heath insurance funds are now

recognising yoga as a form of health-care.

Data from Euromonitor International (2007) suggests that over 50% of the

adult Australian population is physically active, which should support the

growth and popularity of yoga. Statistical data suggests that yoga will

continue its popularity within Australia, as the “typical” demographics of a

yoga customer increase, including:

• Females aged 25-34 who hold considerable purchasing power as they

now delay children and marriage to focus on goal attainments and

lifestyle

• Baby Boomers who are looking towards alternative healthcare and

leisure activities in their retirement

• Young Adults with large disposable incomes, open to new trends and

like to ‘look good’

However, industry growth may be inhibited by the time-poor population, as

people may forgo the opportunity to partake in yoga classes or may instead

opt to practice yoga at home through self teaching videos and DVDs.

3.2 Competitor Analysis

3.2.1 Direct Competitors

There are a number of yoga studios located within and around the Melbourne

CBD with similar core service offerings and pricing strategies, considered


7 Situation Analysis | University of Melbourne

direct competitors to City Yoga. Appendix 1 provides a detailed table

describing three direct competitors chosen for analysis.

Breathe Wellbeing:

The breadth of styles offered have a broad appeal, making the studio more

accessible to beginners. An extensive timetable offers a wide choice of class

times, helping to keep class numbers small and ensure personalised service.

The main point of differentiation is their hospitality, providing a relaxation

lounge and a range of free organic fruits and teas.

Yoga Arts Academy (YAA):

A dedicated yoga studio that teaches one style only, YAA is branching out into

other forms of Eastern exercise. The instructors also provide more extensive

teachings in the spirituality of Yoga which allows them to differentiate their

offering. The “no frills” studio is only open during class times.

Matrix Pilates and Yoga:

Matrix also specialises in only the one form of yoga, but is more commonly

renowned for their Pilates classes. Small classes and individual attention is the

focus and little emphasis is placed on spiritual elements. Matrix is able to offer

a wide variety of class times which may be a drawing card for busy city

workers and residents.

3.2.2 Indirect Competitors

As City Yoga operates in the Health and Fitness industry one of the largest

indirect competitors would include independent and franchised gyms that are

located in the city, in particular those that offer yoga classes. Less time-

consuming methods to practice yoga without attending classes such as self

practice through at home DVDs and self-directed exercise (walking,

swimming, running) also form indirect competition.


8 Customers | University of Melbourne

4 Customers

4.1 Target Market

The following market segmentation is based on customer survey information

and identifies how City Yoga competes on theses aspects1. In summary, the

market City Yoga is seeking to attract are University students and local

workers who prefer to attend classes in the before or after work, seeking

fitness and wellbeing along with a high quality service.

Attributes City Yoga’s Performance

Aged between 25-55 • City Yoga is well represented in this area and

has a distributed spread of participants

Employed • Reflected in the ability to purchase passes or

“bulk” visits.

• Evident in City Yoga’s class times and those of

its competitors

Value high service

quality

• Evident throughout the customer survey

(Appendix 4) and the growing value-add

services that competitors are providing

Seeking low impact

physical fitness and

therapy

• Yoga is considered a low impact exercise

compared to other contact and non-contact

sports and athletics

Relatively time poor • As the majority of these consumers are

employed they are considered time-poor as

there are limiting factors as to when they can

attend classes and the distance they can travel

to obtain the service.

Cost sensitive • Although these consumers are employed they

are sensitive of the perceived cost and value of

the service that they are consuming.

Table 2 - Segment Analysis

4.2 Consumer behaviour

Customers’ perceived risk in the choice of yoga studios is escalated because of

its intangibility and inseparability and its experience and credence properties.

1 Note: no differentiation has been made between male and female, it is acknowledged that there is a

bias towards female consumers



Table 3 outlines possible perceived risks current strategies employed by City

Yoga to reduce them.

Promotional materials presently provide the most benefit in reducing

perceived risk. Physical evidence (Section 7) and service delivery (Section 6)

also involve methods of reassuring and socialising participants.

Recommendations to further reduce perceived risk are integrated within this

report, also fully outlined in Appendix 2.

Perceived Risk Current risk-reduction strategies

Financial

• Will I gain full value from a multi class pass?

• What happens when I cannot attend a class?

• Can I gain a refund for classes I did not use?

• Information is provided so that each

customer knows that multi-session

passes are non-transferable and non-

refundable.

Functional

• Will I gain the benefits I am after (stress relief, physical conditioning)

• Will I be taught the appropriate methods of yoga?

• The style of yoga practiced at City Yoga

is explained in promotional materials

• A brief description of the instructor’s

yoga history and teaching

qualifications are also provided in

promotional material.

• Tangible cues such as the physical

space give credible evidence that the

studio will provide the promised

service

Physical

• Will I cause harm to my body through practising yoga?

• Will I injure myself during a Yoga class?

• How will I feel the day after a yoga class?

• Classes have been customised to

different levels of difficulty and

expertise

• Smaller class sizes means the

instructor has a greater capacity to

offer individual help, reducing the risk

of personal injury

• The instructor’s script and the posture

examples ensure that students know

what to do and how to do it

• Throughout the classes the instructor

encourages students to go at their own

pace

• Photos show students relaxed and

comfortable.

Social

• Will my friends approve of yoga?

• What will my friends think of City Yoga?

• Promotional material depicts the

benefits of practicing yoga at City Yoga

to alleviate anxiety



Perceived Risk Current risk-reduction strategies

• How is yoga perceived these days – is it outdated?

• The use of proxies of different ages

and gender in the promotional

material allay social fears

Psychological

• Will I be able to perform the

poses in this class?

• Will the other participants judge me?

• Will the instructor make me feel uncomfortable?

• Will I fit into the culture of this studio?



expertise




of personal injury






pace


comfortable

Table 3 - Current methods of risk reduction at City Yoga

4.3 Service-Product Strategy Shadow Yoga provides a more physical workout than the more common forms

offered by competitors. City Yoga caters to a niche market as this form of yoga

has a larger appeal to men and customers who are seeking strong physical

health benefits. Participants in City Yoga’s small classes receive highly

individualised attention. Such service would not be possible in a yoga studio

that aims for high volume class sizes.

On the service-product continuum (Figure 1), City Yoga is positioned as a pure

service, relying very little on technology or equipment in delivering the

service. Physical evidence and quality of personnel are the key elements in

providing customer satisfaction.



Figure 1 - Service – Product Continuum

The following service properties impact considerably on City Yoga’s

management of the service provision and overall customer satisfaction.

High Intangibility: It is difficult for customers to evaluate a yoga class before

experiencing it. Intangibility raises perceived risks for customers and

therefore tangible cues and service information are provided to alleviate fears.

Moderate Heterogeneity: With only one instructor, heterogeneity from a

personnel perspective will be minimal. Variations in the service will still occur

depending on the class size and participants, possibly impacting on service

quality and the customer experience.

High Perishability: The service can only be enjoyed if customers physically

participate in classes. As customers do not have to pre-book for many of the

classes it is difficult to predict demand, carrying the risk of needing to turn

customers away without notice should classes fill to capacity.

High Inseparability: The majority of the time a customer spends at City Yoga

is spent receiving and participating in the core yoga service. The instructor

plays a crucial role in the experience and overall quality and satisfaction of the

service, without him the classes could not be provided.



City Yoga’s core service is the teaching of yoga, the element where customers

derive and co-create the most value from the service experience. A selection of

facilitating and supplementary services in Table 4 add value to the service,

although opportunity exists for City Yoga to enhance its hospitality to match

or innovate from that offered by competitors, in particular Breathe Wellbeing.

Furthermore, ability to handle exceptions relating to expiry dates on multi-

session passes is required.

Facilitating

Service

Value-add to customer

Information • Brochures, website and helpful instructor provide

information to customers to reduce mental effort

Order-taking • Bookings are taken for Beginner’s and Experienced

classes

Payment • Cash-only business may be inconvenient for customers

who prefer to use EFTPOS, Credit Card or direct debit

and may reduce sales of expensive multi-session passes

Supporting

Services

Value-add to customer

Consultation • Instructor is available for discussion about aspects of

yoga and spiritualism

Safekeeping • Customers place their belongings into large wooden

pigeon holes for safekeeping during the class

Opportunities to add value with other Supporting Services

Hospitality • Enhance waiting area presentation and warmth with

couch, water cooler, urn with tea, fresh fruit

Exceptions • Restitution strategy in place when instructor is ill and

cannot take the class (refer also to section 8.1)

• Ability to extend expiry date on multi-session classes in

special circumstances (injury, medical reasons,

holidays) Table 4 – Supplementary Services at City Yoga


13 Positioning Analysis | University of Melbourne

5 Positioning Analysis

5.1 Brand Identity

City Yoga is positioned as a boutique yoga studio offering a specialised style to

small classes, to differentiate from competitors. This message is consistent in

promotional materials and in how the service is delivered.

Physical evidence and promotional material focus on the instructor Peter

Ujvari as the brand identity (his image dominates promotional material),

supported in the customer research which clearly identifies that City Yoga was

chosen for the instructor and the majority would not continue using the

service if Ujvari was no longer the instructor.

5.2 Brand Image

Concern exists that the majority of participants associate the brand with

Ujvari and not with the establishment, implying that even if additional

instructors were sought to deliver the service (discussed in section 8)

participants would not attribute the same qualities to City Yoga nor the new

teacher. Key elements of City Yoga’s brand image, derived from survey results,

are:

• A highly specialised service offering, delivered with a passionate

interest and high quality service

• High level of trust and confidence in the service provider

• Personalised service delivery with attention to ensuring that

participants are able to access the full benefit of the service

5.3 Differentiation

As described in section 3.2, yoga studios use the following points of

differentiation:

• Specialised service provision – where one type of yoga is taught

• Augmented offerings – where additional core and supporting services

are provided in addition to yoga classes



• Multiple service providers within the same location - where multiple

classes can be held with multiple teachers.

City Yoga competes as a high quality and high personalisation service

provider, with indirect competitors such as Fitness First providing a very low

quality and personalised service in regards to Yoga classes. The perceptual

map below attempts to position City Yoga in respect to its competitors. This is

created using perceived quality and status against personalisation of service,

attributes that City Yoga and its competitors compete to provide.

Figure 2 - Perceptual Map

It could be considered that as the competitive market matures City Yoga’s

position may become untenable. There appears to be a trend in the market for

service providers to augment their service offering by providing a variety of

experiences including other forms of exercise, communal areas, multiple

classes and multiple teachers. “Some firms create a value proposition by

featuring many related product lines” (Kolter, Jain C, & Maesincee, 2002), so



this growing trend, coupled with the high price point could eventually erode

City Yoga’s market share.

5.4 Recommendations

• Establish a branding-building strategy that places more focus on the

service and establishment than on the instructor

• Increase share of the male segment with a dedicated class for men, or

consider partnering with a martial arts instructor as a complementary

service

• Augmenting the service offering with additional services and evaluating

the cost versus the overall perceived value should be considered


16 Service Blueprint | University of Melbourne

6 Service Blueprint

A service blueprint applicable for City Yoga’s Beginner’s, General and

Experienced classes is seen below. Given the high level of customer

involvement and high requirements of customisation of each class, City Yoga

operates under a reciprocal service design (Larsson and Bowen, 1989), with

very few elements of self-service.

Customers arrive at City Yoga either on an ad hoc basis or after booking into a

course. Cash-only payment occurs upon arrival or following the class. The

instructor asks new participants whether they have done yoga before, then

briefly explains the format and the studio’s facilities, reducing perceived

functional risk. Participants place their belongings in pigeon holes, enter the

large class area and await the instructor’s arrival.

The instruction comprises the bulk of the service process (approximately 55

minutes) and is where value is co-created and defined by participants. The

instructor is positioned in front of the class and at times walks around the

room offering personal feedback and instruction. High divergence exists in

this step of the process, as every session and group of participants will be

different. Such divergence is important in retaining participant interest in the

class, to provide variety in the lessons and to build on skills already developed.

City Yoga’s service production and delivery actively engages both customers

and the instructor at all steps of the process. The participation of others can

affect overall enjoyment and satisfaction: if the room is too crowded, if others

are breathing heavily or have poor personal hygiene. The social interaction

between participants before and after the class may result in extra-role

behaviours, such as providing advice to new participants, advising them where

to put away their belongings, a form of informal socialisation.

Few bottlenecks exist in the service delivery and no steps are recommended to

be replaced by self-service. Wait-time may occur whilst customers are waiting

to pay for the class or to find space to put their belongings away. Given the

short amount of time taken to complete these steps, combined with the small



class sizes, such bottlenecks are not identified as a major problem for City

Yoga.

City Yoga’s service delivery is of low complexity. Whilst encompassing a large

number of steps in the process, these are largely customer-driven and not

intricate. The two critical incidents in the service delivery are when customers

arrive at City Yoga and the instruction itself. Recommendations for

improvements to the physical evidence are made in section 7.6.

City Yoga should enhance its value proposition by diversifying and

augmenting in the area in which customers co-create value: the instruction

component. By “providing service co-production opportunities and resources

consistent with the customer’s desired level of involvement leads to improved

competitive advantage through enhanced customer experience" (Lusch, Vargo

& O’Brien 2007:13), and further recommendations for diversification are

outlined in section 13.

6.1 Recommendations

• Standardise payment time to occur before class to reduce risk of

customers leaving without paying

• Include more payment options such as EFTPOS or Credit Card,

reducing effort for customers to upgrade to a pass

• Provide receipts to customers for health insurance claims



Customer books

into course

(Beginner or

Experienced only)

Customer arrives

at City Yoga

Pay for Class

(optional)

Put away

belongingsWait for instructor Yoga instruction Question Time Collect belongings

Pay for class

(optional)

Av 0.5

Tol 2

Av 0.5

Tol 2

Av 0.5

Tol 1

Av 1

Tol 3

Av 55

Tol 55

No

Av 0.5 Tol 2

Instructor’s advice

Line of Visibility

Maintain booking

record

Production of multi

Class Pass

Maintain records

of passholders

Yes

City Yoga Service Blueprint

Legend

Y = Yes

N = No

Av = Average time taken

Tol = Maximum tolerable time for customer

Customer / Participant

Instructor

Divergence

Av 0.5 Tol 2

Maintain

Accounting

Records

Cleaning of City

Yoga facilities

Production of

promotional

materials

Leave City Yoga

Av 0.5 Tol 2

Respond to

telephone

enquiries

Respond to email

enquiries


19 Physical Evidence | University of Melbourne

7 Physical Evidence

The servicescape of City Yoga is an essential element of the interpersonal service

delivery and value proposition, playing an important role reducing perceived risks

and influencing participant retention. The role of physical evidence is also crucial as

customers will rely on the tangible evidence to form their evaluations of the service.

7.1 Ambience

Upon entrance to the bright and airy studio, participants are greeted with the smell

of incense, which is both attention and effect-creating, putting them in a pleasant

mood and thus facilitating a more positive evaluation of the service. Substantial noise

from the traffic and crossing outside is very apparent during classes, which may

create a negative service evaluation, and possibly an incentive to switch studios.

7.2 Space Functional elements such as a desk and pigeon holes are tangible elements of the

service delivery which facilitate the service flow and help socialise the customers as

to their role, whilst non-functional furnishings (wooden panels, statues, fireplace)

convey an image of authenticity and reliability, enhancing customer mood and

increasing their level of perceived control. The first-floor location may inhibit access

for customers with mobility problems. Bathrooms on the ground floor are unsigned

and do not have mirrors, potentially reducing comfort levels for customers.

7.3 Signs, symbols and artefacts

Outdoor signage provides comprehensive information about class times, the

Beginner’s course and take-away brochures, increasing levels of perceived control to

potential customers. The personal artefacts that characterise the studio, as described

above, send quality cues to participants.

7.4 Response to Physical Evidence

Using the Stimulus-Organism-Response model (Hoffman & Bateson, 2002) as a

framework, participants respond to the stimuli of City Yoga’s environment in

different ways. Cognitively, participants are likely to form positive evaluations of the

pleasant service environment. The use of incense may create a warm emotional

response as they feel more relaxed. Physiologically, customers will respond with

great variety, depending on their yoga experience, exertion and expertise. Crowded

Bove Consulting SERVICES MARKETING 325-662

20 Physical Evidence | University of Melbourne

classes or temperature extremes may cause customers discomfort. Behaviourally,

social interaction between participants is possible prior to the commencement of the

class. Social bonds that form between customers and with the instructor may form a

switching barrier for participants. The physical evidence is designed to encourage

approach behaviours, to return and attend multiple classes each week, to interact

with other participants and the instructor.

7.5 Competitive Advantage through Physical Evidence

Firms in the industry can use physical evidence as a means of differentiation and to

gain a competitive advantage. The weakness of City Yoga’s physical evidence is that it

is not rare nor inimitable by competing firms, therefore it cannot form a sustainable

competitive advantage. Customers may choose City Yoga because of its attractive

servicescape, but it is unlikely to be an enduring factor in customer retention. As a

service with high experience and credence qualities, perceptions of service quality are

likely to be strongly influenced by customers’ experience of the service delivery

rather than physical evidence, as evidenced in our customer surveys.

7.6 Recommendations

• Display the instructor’s qualifications in the studio, reducing perceived

functional risk

• Double-glazed windows would significantly reduce traffic noise and create a

more pleasant atmosphere

• Affix signage to bathrooms to avoid customer embarrassment in asking

directions and include mirrors for enhanced comfort


21 The role of the Proprietor / Instructor | University of Melbourne

8 The role of the Proprietor / Instructor

As an owner-operated business with no other staff, City Yoga faces severe limitations.

In the case of sickness and holidays, the studio currently has no other teacher that

can cover the classes. However, given the high degree of importance that current

participants place on the instructor (Appendix 4), an emergency or stand-in teacher

may even damage the brand and affect customer loyalty. This form of operation also

means that the business cannot be sold. City Yoga must consider this issue and take

appropriate steps to ensure loyal customers are not lost to competing firms when

classes cannot be delivered.

8.1 Recommendations

• Select or train a stand-in teacher who can be on call for emergencies

• Ensure a customer database exists for pass-holders, so an SMS service can

notify them if a class will be cancelled

• Offer a free class to those who are inconvenienced by a cancelled class

• If the studio will be closed over a holiday period, display signage in the front

window and within the studio up to 6 weeks prior, to ensure customers have

greater perceived control and feel valued by the firm


22 Current Pricing Strategy | University of Melbourne

9 Current Pricing Strategy

City Yoga offers customers a casual fee ($18 or $15 concession) or a discounted rate if

purchasing a multi-session pass for either 10 or 20 classes. These passes are

structured such that they have a 5 or 10 week validity, enforcing participants to

attend classes twice a week on average, in order not to forfeit the pass. This is a

method of using pricing to control supply and demand.

City Yoga’s pricing objectives are profit-seeking and cost-covering and therefore a

revenue–oriented pricing strategy is in use. This is evident in that prices are fixed

and not varied based on market supply and demand nor are they patronage based

where service cost is calculated on minimum revenues with differing price points for

various segments and diversity in the payment methods (E.g. Direct Debit, Credit

Card, EFTPOS)

This pricing strategy is currently effective as a sole proprietor delivering the service

from one location, but if growth is required then a patronage-oriented pricing model

may be better suited. This model is being used by City Yoga’s direct competitors

where alternate payment methods are available.

9.1 Competitor Pricing

Table 5 outlines competitors’ pricing structures. Yoga Arts Academy has a similar

structure for multi-session passes with an expiry date. It can be assumed that

demand for casual classes is inelastic as prices across providers are very similar.


23 Current Pricing Strategy | University of Melbourne

Provider Casual 10 Class Card 20 Class Card Beginner’s Course

City Yoga $18 ($15 conc.)

$130 ($115 conc.) - 2 sessions per week

$200 ($190 conc.) - 2 sessions per week

$100

Provider Casual 10 Class Card Regular (6 pw) Unlimited

Breathe Wellbeing

$18 $160 $36 per week, $100 start up

$42 per week, $100 start up

Provider Casual 8 sessions per month Card

12 sessions per month

16 Sessions per month

20 Sessions per month

Yoga Arts Academy

Midday - $15 ($13 conc.) Evening - $17 ($15 conc.)

$185 - 2 sessions per week

$240 – 3 sessions per week

$285 – 4 sessions per week

$320 – 5 session per week

Provider Casual 10 Class Card

Matrix Pilates and Yoga

$20 $150

Table 5 - Competitor Pricing Structures

9.2 Pricing Strategies City Yoga’s multi-session passes can be considered bundled offers and the Beginner’s

courses a special offer, components of satisfaction-based pricing that directly benefit

customers by reducing payment time and cost. These bundles are also similar to the

components of relationship pricing, however presently there are no benefits to

customers for patronage over long periods of time, or complimentary offers, rebates

or rewards for long-term patronage.

9.3 Recommendations

• Focus on relationship pricing strategies, by creating offers that reward

participants for patronage over a longer period of time such as membership

payments

• Extend the time period in which the participant is able to use the passes,

reducing perceived financial risk

• Provide clauses which extend the expiry date if a participant is unable to use

the pass due to medical reasons.


24 Promotional strategy | University of Melbourne

10 Promotional strategy

Table 6 evaluates the scope of City Yoga’s IMC activities and their reach and visibility

to the target market. The strategies in place aim to eliminate the Market

Communications gap to ensure what is promised to customers is in fact delivered,

whilst attempting to reach potential customers both via electronic and print vehicles.

Its various strategies educate customers as to what is expected, gives a sense of

credibility and confidence in the instructor and creates tangible images of the

environment.

City Yoga produces brochures which outline the experience and yoga technique;

referencing the dynamic and physical nature of the shadow style, and instructor’s

expertise, thus reducing perceptions of functional and physiological risk through

describing the service offering to the potential customer. Proxies are used to display

the target customers, both males and females of varying ages.

Brochures and posters are widely distributed in the local area but opportunities exist

for City Yoga to increase its physical visibility to the high levels of pedestrian and

road traffic that pass by.

IMC

Element

Description Reach / Visibility

Web page

• Includes description of yoga style, staff experience, timetable, pricing and contact information.

• Pictorial evidence on site adds credibility and reduces perceived risks.

• Second entry listed in Google when searching for “City Yoga”

Store-front

• Well presented store front

• Quality sign writing and brand symbol and element displayed on windows

• Difficult to clearly see from a distance

• Store-front is partially covered by tree on foot path.

Brochures

• DWL fold out style

• Photos of participants and the furniture of the studio (proxies) tangibilise the service.

• Distributed to local Café’s, restaurants and ‘new age’ businesses in the local area where permission has been granted.

• Flyer stand at the front of the store.

Flyers/ • Display new offers, • City Yoga store front


25 Promotional strategy | University of Melbourne

IMC

Element

Description Reach / Visibility

Posters

particularly the beginner’s course basic yoga style and business description, dates, times and prices.

• Noticeboards and windows of local businesses with permission.

• University notice boards in CBD

Word of mouth

• Generated through positive service offering experience and customer satisfaction

• Where ever City Yoga customers move, interact and discuss the City Yoga Experience.

Pricing discounts / offers

• Multi-session passes

• Concession rates

• Discounted offer for Beginner’s course

• Available at point of sale

• Listed on the website and in printed material.

Table 6 - City Yoga - Current Promotional Strategies

10.1 Recommendations

• Emphasise key messages of convenient location and class times, small classes,

experienced instructor in promotional materials

• Add a location map and downloadable timetable to City Yoga website to

reduce customer effort in seeking such information

• Include customer testimonials on website and brochure to reduce perceived

functional risk and provide credibility

• Place an A-Frame sign outside building during class times to attract passers-

by and increase visibility

• Increase awareness by paid targeted flyer distribution through company such

as ‘avant card’ and to doctors’ surgeries, clinics, kindergartens/ child care

centres

• Add video clips of classes onto the website to give potential customers a better

feel and greater understanding of City Yoga, reducing psychological risk.

• Begin referral promotions whereby discounts are given when participants

refer new customers. This will help encourage positive word of mouth and

drive further demand.


26 Customer Quality, Satisfaction and Retention Efforts | University of Melbourne

11 Customer Quality, Satisfaction and Retention Efforts

Promotional materials and physical evidence influence assessments of service

quality, however satisfaction is experience dependent and focuses on the specific

service encounter, primarily in the instruction phase of the service blueprint.

Currently, no mechanism is in place to measure customer satisfaction, feedback or

complaints, other than comments provided by customers directly to the instructor.

Collating such information from customers is imperative for City Yoga in order to

monitor the Management Perception Gap, to ensure that customer desires and

expectations are understood and acted upon.

11.1 Customer Survey Outcomes

The current level of perceived service quality among customers of City Yoga is very

high with all respondents to a survey (Appendices 3 & 4) indicating City Yoga met

their expectations, with four indicating the City Yoga experience exceeded their

previous experiences. Results suggest this can be attributed to City Yoga’s

personalised experience, experienced instructor, convenient location and class

timetable, quality facilities and small class sizes.

All customers surveyed purchase the multi-session pass. The high incidence

purchase could reflect the ‘Bargain’ concept to the customer, propagating a feeling of

reduced financial risk and post-purchase satisfaction when combined with the

quality service delivery. All respondents said they would recommend City Yoga to a

friend and 80% of current customers were referred to City Yoga by a friend.

11.2 Customer retention strategies

City Yoga offers a highly customer-centric service, focusing on a relationship

marketing approach rather than transactional marketing to its customers. This is

reflected in the survey results and the indication of strong loyalty to the instructor,

respondents’ main reason for choosing and continuing at City Yoga.

City Yoga builds customer loyalty through the personal service offering, as the

instructor takes care to learn participants’ names and customise the offering to their

level of experience. This nurturing customer-centric service assists in establishing

rapport and fostering customer referrals. This also facilitates the development of


27 Customer Quality, Satisfaction and Retention Efforts | University of Melbourne

attitudinal loyalty to the studio and citizenship behaviours such as positive word-of-

mouth and socialising new participants.


• Conduct a customer survey at the commencement and completion of each

Beginner’s course to measure customer expectations and service quality

• Establish a mechanism for feedback in foyer of studio, with a ‘Suggestions’

box. This private area may encourage more frequent and honest feedback.

• Help retain beginner’s class attendance by utilising a SMS reminder service of

class times.

• Establish a mailing list of those with multi-session passes to notify customers

of new courses, date and times, send birthday greetings


28 How supply and demand is managed | University of Melbourne

12 How supply and demand is managed

There is minimal supply and demand management at City Yoga, despite the

proprietor’s aim is to retain Beginner’s attendees in the general or advanced classes.

Impacts of service supply and demand can be analysed for each of the main offerings

and supply elements in Tables 7 and 8:

City Yoga

Service Offering

Supply Relationship

to demand

Issues

Beginner’s Class Optimum

Supply

Demand and

Supply are well

balanced

• Resources utilized at an ideal rate

• Service Quality delivered

• No delays

• Pleasant amount of crowding

General Class Less than

Optimum

Supply

Lower demand

than optimal

supply levels

• Customers receive excellent individual service

• No waiting

• Lack of customers could create negative image or atmosphere

Advanced Class Optimum

Supply

Demand and

Supply are well

balanced

• Resources utilized at an ideal rate

• Service Quality delivered

• No delays

• Pleasant amount of crowding Table 7 - City Yoga supply and demand conditions (a)

Supply Elements Current State

Facilities • Inflexible

• No possibility to expand (rented facility) or conduct

simultaneous classes

Process of Service

Delivery

• Demand measured by sales of multi-session passes

• If classes were booked in advance (reservation system)

this would assist in predicability of class sizes.

Labour • There is limited if any capacity to vary the service

provision by manipulating the labour provided as the

service is non-transferable

Time • Current instructor has limited resources, so cannot

presently supply additional classes himself

Promotion • Current strategies are not specifically targeting

participants to favour any particular time slots

• No incentives provided to change supply and demand

(ie cheaper classes during off-peak times)

Table 8 - City Yoga supply and demand conditions (b)

Whilst supply and demand are well balanced in the Beginner’s and Experienced

classes, the general class is over-supplied. In an attempt to level supply and demand,

City Yoga has implemented a pass where customers bulk purchase classes. This

method is used successfully by sports centres and gymnasiums to maintain revenues


29 How supply and demand is managed | University of Melbourne

that allow for economies of scale but does not provide regular attendance. Current

levels of supply however cannot be altered greatly, as only one instructor and limited

facilities are available.


• Whilst the current facility meets current demand levels, it does not provide

the flexibility for expansion or multiple classes. Either a larger alternate

location, or one that allows for partitioning, could be sought.

• If additional Beginner’s classes were run (by an additional instructor), this

may positively impact the demand for the General classes.

• Reducing the cost of multi-session passes to those people who have attended

the Beginner’s class would possibly increase the volume of participants

converting from Beginner to General.

• Charge a cheaper rate for off-peak classes to shift demand to classes with less

than optimal supply

• Targeted promotions at certain market segments can increase demand in that

segment


30 Concluding Recommendations | University of Melbourne

13 Concluding Recommendations

This report has detailed a number of specific recommendations for City Yoga in order

to enhance their service offering. Identified below are short-term strategies that are

considered as immediate priorities for City Yoga’s in enhancing the service whilst

also achieving Ujvari’s priorities. Also recommended are long-term strategies that

should be considered in order to grow the business.

13.1 Short-term – 0-6 months

Improve retention rates

• Enact relationship marketing strategies with participants to encourage a

strong engagement with the brand. A quarterly e-newsletter outlining new

course dates, promotions and spirituality will remind customers of City Yoga

and assist in retention.

• Rename the ‘General’ class as ‘Intermediate’ and clearly communicate the

differences in each of the class types. The term ‘General’ devalues the service

offering and does not represent the linear progression of the classes.

• Ensure classes are varied and interesting to retain participants’ interest in the

service.

• Offer a discounted multi-session pass for the intermediate class to

participants completing the Beginner’s course.

• Remove or extend the expiry date on multi–session passes such that students

have more flexibility as to when they attend classes

Improve continuity of service

• As discussed in section 8, identifying a substitute instructor will ensure

continuity of service in cases of illness and leave. This will also ensure that

customers perceive greater value in the service as it will operate year-round.


31 Concluding Recommendations | University of Melbourne

13.2 Long-term – 1-3 years

Expand and diversify

• City Yoga should aim to build the brand and the business by changing

promotional materials to focus less on the instructor, enabling affect transfer

from the service provider to the firm.

• Identify alternative services or classes to offer in the studio during the day to

utilise available space by maximising fixed costs, bring in new customers to

the firm and enact affect transfer to shift customer’s brand image away from

the current instructor to one of a studio with a range of instructors.

Recommended offerings include as pre/post-natal yoga, alterative forms of

yoga, meditation or spiritualism classes.

Establish membership program

• Phase-out multi-session passes and establish a membership structure. Once

the business has diversified into new areas customers will perceive a greater

degree of value in the studio. Relationship marketing strategies, such as

newsletters and SMS reminders as discussed in this report, should form part

of this program.


32 References | University of Melbourne

14 References

Euromonitor International Reports (2007) “Health Report Australia”. Retrieved

from Global Marketing Information Database, 10 October 2007.

Hoffman, K.D. & Bateson, J.E.G (2002). “Managing the firm’s physical evidence”

Chapter 9 in Essentials of Services Marketing: Concepts, Strategies & Cases 2nd

Ed, Harcourt, Orlando USA pp 220-245

Kolter, P., Jain C, D., & Maesincee. (2002). Marketing Moves. United States of

America: Harvard Business School Pulishing Corporation.

Larsson R. and Bowen, D. E. (1989). “Organization and customer: managing design

and coordination of services” Academy of Management Review, Vol 14. No 2, pp.

213-233

Lusch, R., Vargo.S, O’Brien, M. (2007). “Competing through service: insights from

service-dominant logic”, Journal of Retailing, Vol 1, pp 5-18

Troy, M “Yoga Trends”(date unknown), retrieved from:

http://findarticles.com/p/articles/mi_m0FNP/is_23_42/ai_111615569, 10

October 2007


33 Appendices | University of Melbourne

15 Appendices

Appendix 1 - Competitor Analysis

Appendix 2 - Strategies to reduce perceived risk

Appendix 3 - Sample Customer Survey

Appendix 4 - Customer Survey analysis



Appendix 1 - Competitor Analysis

Competitor A - Breathe Wellbeing Competitor B - Yoga Arts Academy

Competitor C - Matrix Pilates and Yoga

Directory Information Domain name (URL)

http://www.breathewellbeing.com.au/index.html

http://www.yogaartsacademy.com/ http://www.matrixpilates.com.au/

Mission statement or purpose

"all of our directors and staff are passionate about nurturing their minds and bodies" "to create a beautiful sparkling space where people feel connected and welcomed and can benefit from state of the art equipment and teaching techniques"

Dedicated to teaching the physical and spiritual aspects of Yoga. Ensuring that the body, mind and spirit are all aligned to achieve maximum benefits.

Consider themselves to be a specialised Mind, Body and Health centre. A place where you "can take time out from your busy day and re-energise your mind, body and spirit, and gain inspiration form other like minded people. In this sense they are quite similar to Breathe Wellbeing

Company's physical location

289 Little Collins St, Melbourne Level 3, 360 Little Collins St Level 4, 169 Swanston St

Principal owner or manager

Kate Challis and Raphael Bender Prahlad and Yatren Unknown

Products and Services Principal product or service

General Group classes in both Yoga and Pilates offering a range of difficulty levels and varying styles

Group and Individual tuition in one form of Yoga. Classes are based on difficulty level

Group classes, small classes and individual tuition on Hatha Yoga and Pilates

Supply source of principal product or service

Professional instructor led classes at physical location







Selling price of principal product or service (Yoga Only)

Casual: $18 per class 10 Class Pass: $160 Regular Pass (up to 6 classes a week): $36 p/week $100 start up fee Unlimited Pass: $42 p/week $100 start up fee

Evening and weekend classes: $16/$14 concession Lunch Time class: $14/$12 concession 10 Class Pass: $140/$120 concession (3month validity) Monthly Card: $150 (unlimited class attendance) Individual tuition prices range from $175 - $330 depending on sessions per week

Casual: $20 per class 10 class pass: $150

How similar is the service to City Yoga?

Also claims to have a student focus approach to teaching with an aim to individualise each class. The focus is also on the physical benefits of Yoga rather then teaching the spiritual side. However the business aim of the company seems to be on gaining large volumes of students so it has less of an intimate appeal compared with City Yoga. Breathe Wellbeing also offer speciality classes for both beginners and advanced students as does City Yoga

Only offers the one style of Yoga as does City Yoga. Smaller class sizes are encouraged so students achieve individualised attention. Providing a no frills attached studio, and studio is only open for class sessions Classes are divided between beginners and experienced students

Specialising in the one form of Yoga as does City Yoga. Matrix is also known for offering smaller group classes and their semi private classes (2-5 people) also allow for individualised attention and relationship building with instructors and other participants.

Secondary service

Specialty Yoga classes such as Sleep Yoga and Pre Natal Yoga

Naturopathy and Shiatsu as well as other forms of Eastern Exercise

Instructor programs and advanced Pilates classes

Supply source of secondary service

Professional Instructor led classes at physical location

Selling price of secondary service

Same Price schedule as above Instructor classes start at $995 over a 2 weekend period (40 hours total)

Additional Products and Services

Relaxation Lounge Free Green Tea and Water Free Organic Fruit Staffed Reception Direct Debit is available

Provides a range of workshops and events for students as well as meditation sessions twice a week

Offering to provide associated services such as osteopathy, myothearapy and naturopathy. Also provide cardio machines and light weights to provide an overall fitness centre





Customers and Marketing Primary target market (either listed at the Web site or surmised from their product offerings and presentation)

Breathe Wellbeing states they are for "people who are not gym people". Their Clientele are most likely new to Yoga or not especially advanced. They look to attract the busy CBD worker or resident either male or female

People interested in learning the spiritual side of Yoga, not really for people interested in the pure physical side. Catered best to the extreme Yoga "junkies" May be more tailored to males

People interested in gaining a fitness benefit from Yoga and Pilates. Workers and residents of the city both new and experienced in yoga. May be more tailored to females

Secondary target market

People looking to become Yoga teachers.

Reputation and image projected by the company or Web site (in your own words, if necessary)

As they are the CBD's largest Yoga and Pilates studio, Breathe aims at being considered the most accessible and approachable studio. They aim to present themselves as warm and friendly to attract newcomers to Yoga. Breathe also try to project an image of a sanctuary in the city, a place to unwind and find some personal and peaceful time.

A studio that is dedicated to the hard core Yoga fanatics. The Yoga Academy provides the opportunity to learn and practice the spiritual sides of Yoga

A welcoming environment with new facilities and state of the art equipment. Looking to promote a gym like atmosphere, in the sense that Matrix is about using Yoga as a workout. Large, bright and spacious workout rooms project an image of exclusivity and professionalism.

Sources of Competitive Advantage

In what ways does the company exhibit competitive advantage in terms of:

Pricing Prices are marginally higher than City Yoga but are average for the general city

Prices are slightly lower then City Yoga, however they change depending on whether you take a lunch or evening class. City Yoga's prices are constant for all classes

Prices a considerably higher than City Yoga and have a limited pricing options in terms of multiple class passes and membership options.





Differentiation Offering a wide variety of Yoga styles that have a broader appeal to the general public. This is aligned with their strategy of being approachable and targeting newcomers to Yoga Creating an environment that is not only useful for practicing Yoga, but a place to unwind and spend personal time in Are the largest dedicated Yoga and Pilates studio in Melbourne CBD and hold over 65 classes every week The studio remains open when no classes are scheduled

Dedicating their studio to a full appreciation of Yoga, enhancing the physical experience with the spiritual elements of Yoga. Combining a range of Eastern practices that compliment a dedicated Yoga students lifestyle. For example Naturopathy and Shiatsu massage. Providing a range of workshops and events throughout the year to encourage a deeper entrenchment in the Yoga lifestyle.

Trying to push the brand "Matrix" as a focal part of the service experience (similar to the brand/gym Fitness First). They are using a specialised focus on Yoga and Pilates as a niche in the fitness industry. Matrix is positioning themselves to be a "Mind, Body and Health" centre and not just a Yoga retreat. Their central city location and spacious premises help to push an image of exclusivity. Similar to Breathe, Matrix also offers a large number of classes every week, over 80. Matrix also offer a range of lifestyle specialists to drive their brand as a complete centre for Mind, Body and Health. They also have a plans of Myotherpay and Physiotherapy specialists to work within Matrix

Innovation Holding over 65 classes a week and leaving the studio open when no classes are in sessionAllowing for direct debit payments and membership accounts that can be "frozen" when customers are not able to attend classes for a lengthy amount of timeBreathe also offer a guarantee - if customers are not happy with their memberships or the way that they are feeling then the membership is cancelled and the start up fee is reimbursed

Combining other Eastern practices at the studio to enhance the Yoga lifestyle. Also helping to build the spirituality of Yoga practice at the studio.The majority of group classes held at the studio are open to all participants. For more advanced classes individual tuition is held. This helps to establish a large customer base and make a limited timetable more accessible.

Out of the three competitors on this list Matrix is the one business that have placed substantial efforts into promotions. They offer a free 1 day guest membership, as well as running their 8 week workout challenge programs which drive membership sales. Matrix also provides an online booking system and an online feedback service.

Growth Offering more styles of Yoga has allowed Breathe to expand its clientele as well as combining Pilates into the product mix.

Offering other practices which are complimentary to Yoga helps to expand the studio. Offers a broader appeal

Matrix are positioning themselves to open in new locations which is the reason behind pushing the brand/image.





In what ways does the company use management practices to:

Lock in customers

Pre-paid memberships and direct debit payments

Pre-paid memberships Pre paid memberships and trail programs such as the 8 week workout program

Create switching costs for customers

Provides a reason other then working out to be at the studio. Breathe are trying to establish a social experience for their customers and not just a workout experience. Breathe also provide other extras such as free fruit and green tea which other competitors do not. This again enhances the overall experience for the customer

Offering a specialised service that is dedicated to the one form of practice creates an environment which can not be imitated by the other competitors. As the Yoga academy is a specialist studio they are likely to attract highly skilled instructors as well. Being that the practice of Yoga is has a high customer involvement the quality of teachers is crucial.

Building a brand that customers feel connected ane loyal to. Although there are many independent studios that offer Yoga classes, no one studio has yet to build a successful brand and grow it. As Matrix also plans to offer specialised lifestyle services they are able to become a one destination fitness and lifestyle provider.

Other Information Quality and number of employees

7 Instructors who all have formal qualifications and vast experiences. Some have trained in Bali, India and Boston. Many of the instructors also have tertiary qualifications in related fields such as health and fitness

The principal owner, Prahlad is the most experienced and qualified instructor, as such he only takes individual tuition. Most other instructors and former pupils and have less training behind them and as such take the level 1 and 2 classes that are open to all students

6 dedicated Yoga instructors and a number of Pilates instructors as well as other lifestyle consultants. All Yoga instructors have relevant qualifications and accreditations. The yoga instructors are aged 30+.

Website available

Provides information on prices and class timetables. Also gives information regarding instructors and displays customer testimonials. Email enquiries are also encouraged

Provides details about class times, decryptions and classes. Also introduces the instructors.

Provides information on class timetables and prices as well as what services are available. Gives a brief introduction about the instructors. Also provides a means to book appointments and give feedback.



Appendix 2 – Recommended strategies to reduce perceived risk Perceived Risk Strategies in Place Recommended Strategies

Financial – Fear of monetary loss or unexpected costs

• Will I gain full value from a multi class pass?

• What happens when I cannot attend a class?

• Can I gain a refund for classes I did not use?

• Information is provided so that each

customer knows that multi-session

passes are non-transferable and non-

refundable.

• Provide more class times in order for customers to gain the most value from their passes before the expiry date.

• Extend the time period in which the customer is able to use the pass

• Provide clauses which extend the expiry date if a client is unable to use the pass due to medical issues.

• Continue to adapt the yoga experience to meet customer demands in order for them to want to return.

• Print expiry dates on the multi-passes

Functional – Will the service have a satisfactory outcome, will it be effective?

• Will I gain the benefits I am after (stress relief, physical conditioning)

• Will I be taught the appropriate methods of Yoga?

• The style of yoga practiced at City

Yoga is explained in promotional

materials

• A brief description of the instructor’s

yoga history and teaching

qualifications are also provided in

promotional material.

• Tangible cues such as the physical

space give credible evidence that the

studio will provide the promised

service

• Provide a brief consultation for new students before they commit long term.

• As an incentive for people to try yoga at City Yoga offer the first class at half price. Enabling customers to establish for themselves if City Yoga is the right match for them.

• Provide positive testimonials from current/previous students on promotional material

• Display instructor’s qualifications in the studio

Physical - The fear of causing personal injury

• Will I cause harm to my body through practising Yoga?

• Will I injure myself during a Yoga class?

• How will I feel the day after a Yoga class?



expertise




of personal injury



• Many of the current strategies are only known to students during the participation of classes. These benefits at City Yoga need to be made available to students during the pre-purchase search. This could be done through promotional material.

• In the promotional material Instructor could make a promise/pledge that he will look after his students during class.

• Along with a description in promotional materials about the forms of Yoga taught, a description of how the class is run should also be used.



Perceived Risk Strategies in Place Recommended Strategies




pace


comfortable.

• Positive word of mouth will also help to alleviate these concerns but cannot be directly controlled by Instructor. However rewarding experiences at City Yoga will increase the probability for positive WOM.

Social – Concerns about how others will think and react

• Will my friends approve of Yoga?

• What will my friends think of City Yoga?

• How is Yoga perceived these days – is it outdated?

• Promotional material depicts the

benefits of practicing yoga at City

Yoga to alleviate anxiety

• The use of proxies of different ages

and gender in the promotional material

allay social fears

• The use of testimonials and positive WOM will again reassure potential students.

Psychological – Personal Fears and emotions

• Will I be able to perform the poses in this class?

• Will the other participants judge me?

• Will the instructor make me feel uncomfortable?

• Will I fit into the culture of this studio?



expertise




of personal injury






pace


comfortable

• If customers are referred to City Yoga by a friend or hear positive word of mouth than these fears are likely to be alleviated. Referral promotions should then be encouraged by Instructor.

• Building the brand and reputation of City Yoga will also help to communicate the friendly nature and service of the studio.

• Provide a means for more social interaction, such as a relaxation lounge, facility to make tea / eat fruit

• The use of TV ads or website videos, featuring clips of classes and Instructor, for promotional activity will be able to show potential customers the City Yoga experience and give them a better feel about the studio then just print ads.



Appendix 3 - Sample Customer Survey The survey was undertaken from September 24th to October 8th 2007.

City Yoga Customer Survey

Administered by Bove Consulting Group

Department of Management and Marketing

c/o Room 115, Level 1, Old Geology Building

The University of Melbourne

Victoria 3010

Australia

Please mark the your answer to each question with an X in the space provided

1. How did you find out about City Yoga?

_ Friend

_ Brochure

_ Ad

_ walk in

_ internet

_ Other

2. How long have you been a City Yoga customer?

_Year/s _Month/s _Week/s _Day/s

3. How often do you use the City Yoga service?

_ This is my first time

_ Once a week

_ Twice a week

_ More than twice a week

_ Other

4. What time of day do you attend a City Yoga session?

_ Morning

_ Lunch time

_ Evening

Varies



5. What level of yoga experience do you have?

_ Beginner Go to Q6

_ Intermediate Go to Q7

_ Experienced Go to Q7

6. Do you think you will continue at City Yoga after completion of the beginner’s

course?

_ Yes

_ No

_ Unsure

7. When paying for the City Yoga experience do you pay as you go? Or do you

purchase a multi session card?

_ Single

_ Multi session card

8. What is the main factor which affects how often you attend City Yoga?

_ Work commitments

_ Family commitments

_ Class times

_ Cost

_ Sickness

_ Laziness

Other

9. Do you feel you receive the appropriate amount of individual attention

during a City Yoga class?

Yes

No, Why?

10. City Yoga, offers its customers…

Strongly Strongly

Disagree Agree

Knowledgeable staff 1 2 3 4 5

Friendly supportive staff 1 2 3 4 5

Reliable service 1 2 3 4 5

Punctual staff 1 2 3 4 5

Efficient staff 1 2 3 4 5

Studio/ Facilities 1 2 3 4 5

Quality of service 1 2 3 4 5

Customer satisfaction 1 2 3 4 5

Convenient timetable 1 2 3 4 5

11. What was the purpose for choosing Yoga?

_ Physical Therapy

_ Fitness



_ Weight loss

_ socialise

_ Enjoyment

_ Other

12. What factors influenced you in choosing City Yoga?

_ Experienced instructor

_ Friendly Instructor

_ Recommendation

_ Nice décor

_ Positive ambience

_ Location

_ Other

13. What factors influence your decision to continue using City Yoga?

_ Experienced instructor

_ Friendly Instructor

_ Nice décor

_ Positive ambience

_ Exclusivity

_ Location

_ Other

14. How much does the instructor (Peter Ujvári) influence your experience at

City Yoga?

_ Large influence

_ Moderate influence

_ Little influence

_ No influence

15. If Peter was no longer the instructor at City Yoga would you still attend?

_ Yes

_ No, Why?

16. Which other exercise options would you consider before undertaking a class

at City Yoga?

_ Pilate’s class

_ Gym membership

_ Home Workout

_ Aerobics

_ Walk

_ Other

17. Are you?

_ Male

_ Female

18. How old are you?



_ 16 to 25

_ 26 to 35

_ 36 to 45

_ 46 to 55

_ > 55

19. Are you?

_ Working full time

_ Working Part time

_ Studying

_ Work from home

_ Unemployed

20. Did your initial City Yoga experience meet your previous expectations a

yoga service?

_ Yes

_ No, Why?

21. Would you visit again?

_ Yes

_ No, Why?

22. Would you recommend City Yoga to other people?

_ Yes

_ No, Why?

23. Is there anything about City Yoga you would change?



Appendix 4 - Customer Survey analysis

Total respondents = 18

1. 10 of 18 respondents were referred through a friend

2. 4 of 18 respondents have been at City Yoga for 1-2years

4 of 18 respondents have been at City Yoga for 6months to a year

10 of 18 respondents have been at City Yoga for 3-6months

3. 8 of 18 respondents visit City Yoga once a week

7 of 18 respondents visit City Yoga more than twice a week

4. 6 of 18 respondents visit City Yoga for the morning session

7 of 18 respondents visit City Yoga for the evening session

4 of 18 respondents visit City Yoga at varying session times

5. 7 of 18 respondents are beginners at City Yoga

9 of 18 respondents are Intermediates at City Yoga

6. All beginners surveyed (7 of 18) said they would continue using City Yoga after

completion of the beginners program.

Only one person surveyed said they were unsure if they would continue. This person

also indicated work commitments as the sole reason for not attending classes.

7. All respondents purchased either the multi-session card of the Beginner’s program

8. Work commitments (14 of 18) were shown as the most common cause for not

attending class, followed by class times (7 of 18) and Cost (6 of 18). 4 of the 6 who

indicated cost work full time with 2/8 working part time.

9. 18 of 18 respondents feel they receive an appropriate amount of individual attention

10. 18 of 18 respondents agreed or strongly agree with the statements of question 10

11. The majority of respondents indicated fitness (11 of 18) as there main reason for

choosing yoga, followed by physical therapy (9 of 18), enjoyment (6 of 18) and to

socialise (4 of 18). Respondents across all ages indicated physical therapy with the

majority (4 of 7 who indicated physical therapy) were over 36 years of age.

12. The overwhelming factor for people choosing City Yoga is the experience of the

instructor (15/18) followed by location (10/18) and how friendly the instructor is

(8/18).

13. An experienced instructor is unanimous (18/18) reason for customers to continue

using City Yoga followed by the friendliness of the instructor (13/18) and the positive



ambiance (9/18). Physical evidence factors such as the location (7/18) and nice décor

(5/18) scored lower.

14. All but one respondent (17/18) rated the instructor as having a large influence over

the City Yoga experience

15. The majority (13/18) of respondents attending City Yoga indicated they would not

continue at city yoga if Peter Ujvari was no longer the instructor, almost a third

(5/18) indicated it would depend on the new instructor.

16. Most respondents (9/18) indicated a low impact walk would be their preferred

method of exercise over yoga.

17. Males 6 Females 12

18. One third of the City Yoga customers are males

2. How old are you? Males Total

16 to 25 1 2

26 to 35 1 7

36 to 45 2 3

46 to 55 1 4

> 55 1 2

19. 14 of 8 respondents are working full time.

20. All respondents indicated City Yoga met their previous yoga service expectation, with

4 indicating the City Yoga experience exceeded their previous experiences.

21. All respondents indicated they would visit City Yoga again.

22. All respondents indicated they would recommend City Yoga to other people, which is

reflected in question 4 with 10/18 customers referred by a friend.

23. One respondent indicated the beginner’s class is too crowded initially.

City Yoga

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