Strategy and Implementation Summary
Our overall strategy and implementation plan is based on the fact that City Dojo has never had an “on paper” business or marketing plan. Over the past five years the dojo has not advertised its services outside internal efforts and still has been able to support a low but consistent flow of new members.
The dojo will focus its efforts on a broad market, in a very competitive field. Considerable research was done to establish the fact that there is opportunity in three areas: the youth market ages 4 to 14, the adult market ages 30 to 49, and the senior market ages 50+.
A special note should be taken that a large potential market is not being addressed. The ages 15 to 29 market is considered to volatile and competitive (health/fitness clubs, school activities, etc.) for our services at this time. While we certainly accept membership at this age, we do not plan to actively market this group.
5.1 Competitive Edge
- Dojo established for 38 years (since 1964).
- Dojo location and ample lighted parking.
- Shihan very knowledgeable (6th degree black belt) and an internationally recognized trainer.
- Shihan and Sensei have strong desire and patience to teach.
- Shihan and most Sen sai speak Spanish.
- Competitive pricing and hours of operation.
- Solid untapped database from which to market.
- Over 300 Black Belts graduates since inception.
- Shihan’s business savvy.
- Dojo facility needs remodeling.
- Student attrition.
- Website not competitive.
- No advertising or marketing plan.
- No budget.
- Do not offer Tai Chi (alternative “soft” Martial Arts) as most competitors do.
5.2 Sales Strategy
The overall strategy is to increase membership to 200 by year-end 2004, which is 80% of the dojo capacity and an aggressive three year growth of 307%. Through marketing efforts we will make our potential customers aware of our dojo. From this awareness we will increase the number of potential members that walk in our front door.
These new potential members will be met by either the Shihan or a well-trained sales associate/receptionist who will have all sales materials, promotions and a computer for data entry. The sales associate will be empowered to offer our promotions, however if the potential member is interested in joining, an instructor and/or the Shihan will be made available for immediate consultation.
5.2.1 Sales Forecast
The following chart and table reflect our aggressive, but obtainable sales forecast. Membership is projected to grow at a steady pace, leveling off during summer months, our slower time of year. Membership costs are expected to decrease as we better control student turnover.
The special classes include rent of our facilities ($200 a month) to contract instructors who are experts in Tai Chi or Yoga. This class time will consist of one-two hour class per week (four a month) on Saturday and/or Sunday when the dojo has been traditionally closed. Facility rental is projected conservatively for one group in 2002, two in 2003 and three by 2004.
Seminars are projected based on historic demand for the Shihan’s services. Belt testing is held quarterly and fees traditionally track membership.
|Weekend Classes (Special)||$800||$4,800||$7,200|
|Belt Testing Fees||$3,432||$5,794||$7,819|
|Direct Cost of Sales||2002||2003||2004|
|Weekend Classes (Special)||$600||$800||$1,000|
|Belt Testing Fees||$490||$660||$930|
|Subtotal Direct Cost of Sales||$18,327||$23,010||$23,193|
The milestones shown in the chart below reflect the major changes that we anticipate for the dojo in 2002. The goals are very aggressive for a business the size of the dojo, however the commitment by those individuals assigned is solid and goals established will be met.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Computer Upgrade, and Installation||8/1/2002||9/1/2002||$3,000||ABC||Investor|
|Software Upgrade, Installation and Training||8/15/2002||9/15/2002||$1,000||ABC||Consultant|
|Strategic Alliance Development||7/1/2002||1/1/2003||$0||ABC||Owner|
|Marketing and Sales Material||9/1/2002||11/1/2002||$500||ABC||Investor|
|Instructor Customer Service Training||8/1/2002||10/15/2002||$500||ABC||Instructor|
|Hiring Sales Associate/Receptionist||7/1/2002||1/1/2003||$2,500||ABC||Owner|
5.4 Marketing Strategy
In our Marketing Strategy we realize our target is very broad, kids 4 to 14 and adults 30 to 49. To address this market we must understand that our dojo is our “showplace” and in marketing efforts we want potential members to judge our “book by its cover.”
- Our first strategy will be to remodel the dojo into an “exciting,” “fun,” “traditional” place where our members will, “want to train, not have to train.”
- Secondly, an internal strategy, we want to address our attrition ratio with training of the instructors.
- Third, we will utilize “paper” media for advertising our facility to our market.
- Finally, we must address a strategy to market our newly remodeled facility for rental to others for classes on weekends when the dojo has been traditionally closed.
5.4.1 Promotion Strategy
Based on buying pattern research, we determined “word of mouth” was by far the most successful means of promoting our dojo, followed by the “storefront” and finally “advertising.” With this in mind we have established the following promotional strategies:
Our members (students) must like who we are and what we do, in order for us to succeed.
- To assist in promotion, we will offer an incentive to current members who bring in new members.
We want potential members to judge our “book by its cover.”
- Our storefront (external and internal) will be redesigned to sell itself. People will want to go in just to see what a dojo looks like.
- We will be holding an annual for charity “kata” tournament at the dojo with a “significant” purse. Proceeds will go to a local charity, in hope of gaining news play.
- Shihan will continue to offer free karate (self-defense) seminars to local grade schools and retirement communities.
- Our Web page will reflect our new image.
For the first time in five years we will have a significant advertising budget.
- The Yellow Pages, the #1 source of new recruitment in media. We will purchase “competitive” ad space.
- City Weekly, the local “entertainment and news” paper shows promise and we will be experiment placing and tracking ads.
5.4.2 Marketing Programs
In our Marketing Strategy our primary market will be kids 4 to 14 and adults over 30 to 49. A separate market for senior adults (50+) will be addressed separately.
To address our largest market we must understand that our dojo is our “showplace” and in our marketing efforts we want potential customers to judge our “book by its cover.”
- Our most important marketing program is to remodel the dojo into an “exciting,” “fun,” “traditional” place where our members will, “want to train, not have to train.” Emphasis will be placed on a kid friendly environment, that adults can enjoy too. The Shihan will coordinate the effort, dojo design will be a composite of suggestions from Shihan (master instructor) and Sensei (instructors) with a touch of Feng Shui. A budget of $10,000 has been established for this project which will begin August 1, 2002. Our marketing research indicates a “fantastic” looking dojo will bring in more students at all market levels. Increased membership will tell the story.
- Another key marketing program is to introduce simple methods of training to our instructors to reinforce students, “want to train, not have to train” concepts. A Sensei (teacher by trade) will be responsible or putting together this program, with a budget of $500 for special classroom (w/dinner) training of the instructor team at a pleasant facility. This program is intended to reduce high level of membership attrition currently at 40% and the goal is to implement the program by October 15, 2002.
- Our final program is to advertise in the Yellow Pages and Weekly newspaper. Shihan will head up this program. A budget of $5,000 has been established. Both programs will be tracked, but the Weekly newspaper will offer more clearly defined (short term) success to specific advertising promotions and plans can be adjusted accordingly.
The other market that we will address is the rental of our facility to others, for classes on weekends when the dojo has been traditionally closed. Emphasis on this Marketing Strategy will be to bring in outside contract instructors and allow them access to our newly remodeled facility. Our goal is to have 3 – two hour classes each week at our facility on Saturday/Sunday by year-end 2004, primarily for those over 50 years old. This strategy will help us maximize our dojo earning potential and open the doors for the 50+ market.
- We will create a very professional brochure on what our facility has to offer. Shihan will head up this program, with a budget of $500 (available in Nov. 2002).
- Second, we will direct mail inquiries to “soft” Martial Arts (yoga and tai chi) instructors concerning possible agreements of offering their classes in our facilities. Emphasis will be to allow us to open the doors for those who want to teach but don’t want the ongoing expense or worry of opening their own studio. Shihan will head this program. Initially there is no budget.
5.4.3 Positioning Statement
For adults in the city who want to learn and/or have their children learn the art of karate and to build self-confidence, we offer competitive pricing, convenient hours, and quality instruction, under the leadership of a 6th degree black belt, and internationally recognized instructor. Unlike our competition, we offer the most modern of facilities, in a convenient location with ample parking, and programs that are entertaining, adventuresome, with a hint of tradition.
5.4.4 Pricing Strategy
We must offer our services at a pricing structure that will both meet our financial needs and the needs of our members. Our current pricing structure of $1,000 annual membership is competitive for schools that own their own facility. We will keep this fee but offer promotional discounts to current members for bringing in new students and/or assisting in improvements to the dojo. We have failed in the past to offer consistent promotional pricing strategies of which we will address.
There are as many introductory promotional pricing packages as there are dojos. All the programs are designed to draw or introduce the potential member to the dojo without requiring them to sign a long-term contract. All offer the same basic package which includes anywhere from 1-3 months training, 1-3 private classes with gi (uniform), and prices varying from $29.00 to $99.00.
Our pricing strategy is to offer a very short introductory package of two personal training sessions and a gi for $29. If the potential member wants to continue, we will offer a six month introductory package at $299. After six months, if the potential member wants to continue we will offer the annual contract at $1,000 (with discounts for payment upfront). Billing options monthly or quarterly will be offered.
In addition, we will be working to identify other pricing structures which address families and lower income students.
5.5 Strategic Alliances
City Dojo’s Shihan is well known and has considerable experience in the local market. We are going to use this experience and build on our current “loosely” defined strategic alliances.
- There are a number of Asian and Mexican food establishments surrounding the dojo. We will contact select establishments for an agreed brochure trade, with emphasis on a positive well designed showcase that will benefit both parties with possible discounts made available.
- Another alliance is to work with the local Community College to attempt to make available a class that will allow physical education credit. The goal is to establish a relationship with the school by January 2003, for Spring classes 2003. We also will try to offer classes through the schools adult education program.