Digital entrepreneurship

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This is a marketing strategy for XYZ, a Gym software company located in Russia. The software is a new offering that caters to a wide range of consumers. The paper begins by performing market research, competitor review, and an examination of the role of technology. In terms of industry niches, the paper will look at some of the market and niche opportunities. The paper would evaluate some of the demands that the industry has not been able to address to better explain this. The paper also moves on to assess not just how long the opportunity will last, but also how dangerous it will become. Marketplace positioning, customer segmentation, and value proposition, psychographic methods by evaluating clientele view. The issue of demographics, geographic, behavioural as well as approaches for exploiting opportunities will be examined as well. The plan captures digital marketing strategies and revenue models as well.

Key definitions

Competitive advantage is a factor that differentiates a business from its rivals and attracts customers to choose its offers. With no competitive advantage, a business has no strategy to acquire and attract clients (Guerras-Martin et al. 2014, P. 70). Mobile app refers to software created on small, wireless devices such as Smartphone (Fu et al. 2013, p. 1276). Virtual reality; this is a computer simulated three-dimensional environment that can be used to engage with an individual in a seamless manner. Niche opportunity is the process where a firm focuses its marketing attempts on the well-defined target market. This is not an existing thing, but it has to be developed (Malley 2014, p. 3). Red ocean; this is a strategy where a company tries to outperform its competitors so as to get a large market share.

2.0 Market Research and Competitor Analysis

While this area has several health and fitness centers, XYZ will emphasise on convenience and personalisation of its target customers. That is, customers will be apple to book for a workout session in any place, be it school, office, or at home. In this sector, there are other players such as, and However, they do not offer a mobile app that allows customers to book for workout sessions. When it comes to services, these companies offer various health and fitness services including; boxing, cardio, among others. Irrespective, these players have various capabilities. For instance, is an established company in the health and fitness sector; hence, it has a large customer base with qualified trainers. Moreover, it is strategically located, which means it's easily accessible. However, has less personal trainers and the training is extremely high. On the other hand, has a good reputation, an aspect that helps the company to not only attract potential customers but also retain them. Nonetheless, during certain times of the day, the place is filled with people such that some do not get equipment. This is likely to keep away potential customers.

The role digital technologies

In health and fitness sector, digital technologies like virtual reality and mobile apps play an important. For example, they help health and fitness to attract the attention of its target clients by using appealing ads, which prompts them to click and view them. These technologies also can collect main data signals (Lupton 2014). This is useful when it comes to understanding the context of the ads and also opportunities to reach the target audience at an individual level.

2.2 barriers for new entrants

This industry requires significant investments in training equipment and certified trainers, which hinder new entrants. Additionally, this sector is highly competitive, therefore, for new entrants, it may be hard to penetrate the market.

3.0 The Market Opportunity

3.1 Unmet or under-served needs

Based on the market research, working class professional is busy and hence, do not get time to work out. As a result, their workout needs are not unfulfilled, but also under-served. A number of them have joined gyms and paid membership fees, however, they cannot regularly go to the gym to keep fit. Currently, mobile gyms are emerging, which would help busy individuals to use a mobile application to book for workout sessions. Customers can simply book a session by dialing numbers, however, with a mobile app, they can seamlessly log into the mobile app and book for a health and fitness session regardless of time, place and also chooses their preferred trainer.

3.2 Market opportunity

Established firms, in health and fitness industry, does not have a mobile app, hence, this is a potential opportunity for XYZ. This opportunity is potentially profitable for XYZ because individuals are becoming increasingly conscious about fitness and health while the increased use of a mobile gym app presents numerous potential.

3.2 Niche opportunity

XYZ health and fitness mobile app is a niche opportunity. This attributed to the fact that the firm will be channeling its efforts to persons who have a busy schedule and cannot get the time to go to the gym. The company_x0092_s target customers_x0092_ is not only busy individuals, but also unique (Malley 2014, p. 14). Hence, the company understands their health and fitness needs that are not met. In this way, it will become a leader in offering health and fitness services through a mobile app.

For how long might the opportunity exist?

This opportunity may last for a short period. Since it will be running an android app and based on evidence android has a market share of 57% (Perin 2015). As a result, XYX potential rivals may capitalize on android on their health and fitness services.

Red ocean_x0092_

The company will be competing in a _x0093_red ocean_x0094_. This is because the strategy presents a firm a chance to outperform its competitors while grabbing a higher market share (Dehkordi, Rezvani and Behravan 2012, p. 477). This will lead to considerable value creation, which will, in turn, attract more health-conscious customers. Nonetheless, this will male competition irrelevant as it will be complex for XYZ rivals to imitate the ideas for business success. Again, the company will be focusing on current customers who want to keep fit, but because busy schedules that cannot afford the time to go to the gym.

3.5 How risky is this opportunity?

This opportunity is risky because deciding the mobile app and the type the resonate effectively with target customers may be a challenge. Even though the company may choose standard mobile ads as they are widely used and relatively cheap, they have lower interaction level (Fu et al. 2013, p. 1278). This means that conversely, rates may be lower.

Positioning in the marketplace

When it comes to positioning, the company will conduct demos in residential areas as well as different workplace parking areas while the first session will be free once a customer makes a booking. The demos will also capture the organisations positioning message, _x0093_we offer convenient, personalised and effective workout_x0094_.

Used digital technologies

3.7.1 Virtual reality

XYZ will use virtual reality to promote its services. The company vehicles will move around the residential place, and different workplaces, and learning institutions showcasing health and fitness services it offers. The demos will be in form of immersive computer simulated images of people using gym app to workout. In essence, this will provide potential clients a feeling of being in computer simulated environment (Zampoglou et al. 2014, P, 451). Much as virtual reality technology is costly and elaborate, it is suitable for XYZ in reaching its target clients.

3.7.2 Mobile apps

The firm will also use mobile apps. This is due to their remarkable development as well as rise. As a result, they will help XYZ an opportunity to reach its customers and the appropriate time. In this case, the company will use mobile advertising about the services its offers and they will make in an attractive for customers to see and interact with them. The company will use options galore, which will carry through main data signals (Lupton 2014). This will help XYZ to recognise the context of interaction with the mobile ads whilst providing numerous opportunities to reach its target customers on an individualised level.

Customer Segmentation and Value Propositions

4.1 Customers

XYZ target customers include; students, housewives within metro cities, senior citizens and professionals. This is the appropriate segment for the XYZ mobile app since they have busy schedules and cannot get time to go the gym. Due to their busy schedules, working professionals cannot find time to go to the gym in order to stay fit. As such, the XYZ mobile app would make it easier for them to book a training session. Additionally, they will simply make a booking at any time irrespective of place and choose a trainer.

4.2 Customer segmentation method

XZY mobile app customers will be differences based on gender, age, spending behaviors and preferences. Therefore, to segment, it will be necessary to use a number of techniques such demographic, psychological, behavioral and geographical.

4.2.1 Psychographic approach

This method greatly focuses on the customers_x0092_ views as interests (Hamka et al. 2014, p. 220). Moreover, psychographic segmentation method dives into client_x0092_s identity while customising their preferences in accordance to their personality. With respect to XTZ mobile app, the lifestyle of the customers will be considered. For example, senior citizens have totally different lifestyle compared to students. Again, different lifestyles determine the way in which customers respond to workout issues and branding. Social class is another aspect in psychographic segmentation. Socio-economic level affects the customer's purchasing power. As such, the organisation will segment its customers based on income level. This is because working professional would be charged higher than these other customers. In general, psychographic segmentation will present a useful way for the organisation to personalise the marketing strategy and the way to enhance the app. However, this method is extremely costly compared to other methods (Sharma and Lambert 2013, p. 51). Nonetheless, segmenting customers into groups based on the social class and socioeconomic groups is important when it comes to determining branding message that resonates with them on a deeper degree. Since the firm_x0092_s main assumption is health and fitness for its target clients, the content on the mobile app will focus healthy lifestyle through regular workouts.

4.2.2 Demographics

The demographic method is a popularly used method in dividing customers. In this case, the company will segment its customers based on the education level; age, race, and gender. Marketing to various demographics is due to emerging races. Groups are responsive to different methods and have varied ways to understand the product content. Therefore, to reach college student, the company will use visual content and significantly use mobile phones than senior citizens. This view is supported by previous studies that demonstrate that adults aged 18 to 29 years use mobile phones compared to 35% of people over 65 years (Perin 2015). The demographic method is appropriate for the firm since the required information is readily accessible. Nevertheless, this method is vulnerable to inconsistency, not as a result of data inaccuracy but because of oversimplifying clients_x0092_ perceived requirements (Sell and Walden 2012, p, 1374). Based on this fact, the company will not use one-sided strategy to categorise customers on the basis of incidental features.

4.2.3 Behavioural

Behavioral method segments clients in terms of how they respond to products. Several factors influence customers_x0092_ purchasing decisions (Bagga and Singh, 2012 p, 40). In this respect, the company will segment customers based on buying behaviors, traits, and tastes.

4.2.3 Geographic

Geographic approach is widely employed in dividing customers in accordance with location. Customers in different location have various requirements and buying patterns. Using this data, the company will market its services to meet the needs of customers in different locations. Since this is a fitness and health app company, the company will promote healthy eating habits and regular exercises to remain competitive. Besides, being relatively simple, the geographical segmentation method will be beneficial for the company in various ways. For instance, it focuses on the objective to meet the needs of target customers on the basis of culture, regulations and climatic conditions. Moreover, it is suitable for small business, like XYZ, hence will help in effective budget allocation. The budget allocation is very challenging for small business (Hope and Fraser 2013, p, 71). As such, the firm will use geographical information of its target customers to develop limited, but it develops effective marketing strategies while preventing wastage of funds. Segmenting customers based on location is considerably valuable as it helps in identifying particular traits (Hassan and Craft 2012). The company_x0092_s ability to localise its health and fitness services can increase clients_x0092_ experience. By and large, customer segmentation can be challenging, but there are a number of tools that a firm can use to analyse its customer's traits, segment them and fulfill their fitness and health requirements. The objective of customer segmentation is recognising target customers and enhances conversion by proper positioning of the services using contextual marketing strategies (Canhoto, Clark and Fennemore 2013, p 50).

How do your proposed value propositions meet the needs for each customer segment?

The proposed value proposition will meet the health and fitness needs of XYZ target customers. In particular, customers will have the opportunity for instant booking for workouts anytime, and sessions will be customised as customers will be able to choose their preferred personal trainer and diet tips based on workouts done daily will be posted through the app. Additionally, customers will able to the app to chat with the trainers for workout tips and make payment through the app. Again, scheduling for workouts will be based on the client_x0092_s timetable.

Cultural/language/geographical concerns for customers

Since the company targets different customers, several concerns may arise. Specifically, geographical and cultural may influence customer buying behavior (Canhoto, Clark and Fennemore 2013, p. 2011). Therefore, the company will use geographical information to understand their preferences and behaviors.

4.5 The most/least desirable and the most profitable customers? Why?

The most/lease desirable customers will be determined using the frequency they use the firm_x0092_s app to participate in the workout. Most desirable are those that frequently use the services such as working professional, housewives and senior citizens. This is because they can afford to pay for services. On the other hand, the least desirable are college students who spent less time working out. Again, college students prefer taking part in other activities like watch movies, play video games or clubbing instead of working out. Therefore, the most desirable customers will be given discounts during certain periods throughout the year.

5.0 The Proposed Business Strategy

Capabilities to exploit opportunities

To capitalize on these opportunities, the company needs a gym mobile app that allows users record their workout activities; workout time; and has a calendar for record keeping. In addition, XYZ needs a mobile app that automatically increasing customer level based on the calendar; however, the customer should have the opportunity to choose. Again, it should have motivating facts and figures to encourage beginners.

Competitive advantages and sustainable business goals

The company will differentiate itself from its rivals using positioning. In this respect, the company will position itself as a specialist and market leader in the provision of health and fitness mobile app. Much as positioning calls for strategic actions the rewards are significant (Thompson et al. 2013, p. 23). Competitive advantage is a useful fact that determines high performance and ensures sustainability in the marketplace. With respect to attaining sustainable business objectives, the firm will use niche opportunity to outperform its competitors.

Key objectives

To ensure that the health and fitness app is customised and convenient to target clients around the world

To enhance the popularity and downloads

Long, medium and short term priorities

Short term: to reach 100,000 downloads in the first six months

Medium term: to increase promotion of paid app on the free app for one year

Long term: generate revenue from the paid app

Revenue Models

6.1.1 What are your likely costs?

The cost of the app will be determined by several factors. For instance, watch rival pricing. Specifically, the regular cost for one-time purchase will be $2.99. However, if customers download more app they get a discount and pay around $3.99 for two apps.

How will you generate revenue?

There will be free and paid apps. The company will generate revenue from paid app, which will provide a detailed diet plan based on the daily workout. It will also showcase calorie calculator and very personalised such as clients will have the chance to choose a personal trainer. Therefore, the free app will be the main platform for promoting paid app.

How will you make profits (and on what timescale)?

The company will start making profits after six months the app is released in the market. To start with, the company will target of six months whereby it has to get a particular number of free download to the range of 100,000. After attaining the targeted number of downloads, the company will increase promotion for free and paid apps so as to get significant revenue from paid apps. Nonetheless, if the number paid downloads does not increase in one year, the paid app will be modified.

How should you evaluate your investment priorities and returns?

The company will evaluate its investment priorities and returns based on the goals and assets. These factors will be important when it comes to articulating the firm_x0092_s mission, defining attainable objectives, identification and management of constraints while monitoring investment progress (McGrath 2013, p, 62). Assets such as cash and customers will be important for the company. This is because they will assist the company to adopt strategies that complement assets and hence minimize any risks and attain the targeted goals. However, assets of assets must take into consideration the size of the company_x0092_s portfolio, type of monetary assets and effective way to use it (Neely 2012, p, 18).

6.2 Digital Marketing

6.2.1 Translating the value proposition of your product or service into something that your customer(s) can easily understand?

To help customers understand the value position of the services offered XYZ use free as well as paid apps. In the free app, there will be for customers to set workout time and exercises. The exercises will be simple with comprehensive guidelines on how to do them and for how long. Again, for beginners will get motivation and push to continue with the workout, this will encourage return customers in turn leading to return business. Besides, they will be able to use the app to know their progress, such as daily time increase, calories burned and weight lost. At the same time, the app will demonstrate an effective diet plan and calendar of daily workout routine. Moreover, the paid app will contain a detailed diet plan based on daily workouts, personalised and calorie calculator.

How are you marketing your value proposition and advertising your business?

To promote the value position, the firm is using the correct language. In other words, XYZ uses clients_x0092_ language while connecting the conversion that already in their minds (Sánchez et al. 2012, p, 153). However, for this marketing approach to be effective, the company must language, its target customers use to describe health and fitness services and their benefits. This will be realised by performing a simple survey or the use of a Facebook page. When it comes to advertising, the company will use other apps such as NIKE app since this is where customers will be buying workout tools like shoes, clothes and so forth. Social media networks will also be used to showcase the company_x0092_s services. Besides, virtual reality will be done in residential places, learning institutions and metro areas and workplaces. This will help the company reach its target audience.

What brand image(s) are you developing and how?

The company is developing a convenient and personalised brand image for busy individuals who cannot find time to visits the gym. This will be achieved through

How are you acquiring customers?

Xyz will use various approaches to acquiring customers. For instance, the company will use discounted offers to acquire more customers. Specifically, for customers that download more than one app, they get a discount. In addition, customer thank you cards. These involve sending customers_x0092_ handwritten _x0093_thank you_x0094_ card when they reach a certain level; this will not only keep them loyal to the company_x0092_s services but also good ambassadors to attract new ones.

How are you maintaining a relationship with your customers (digital/traditional)?

The company will use digital approaches to maintain a relationship with its clients. In this perspective, XYZ will use the app to chat with customers about their progress. Conversely, they will use social media platforms, particularly Facebook to engage with customers. Social media is a good platform for XYZ to advertise its business as it caters for a significant number of audience, it cost effect and fast. However, it can generate negative users like spammers that adversely affect the brand reputation (Sashi 2012, p, 253).

6.3 Partner network

To meet its goals, the company will outsource certified professional trainers and app developers. Furthermore, XYZ will partner with other firms. For instance, app providers, gym vehicle drivers, certified professional trainers. Other partners are organisations that will post their ad on the company_x0092_s health and fitness app. Some of these companies are Adidas and Nike. Again, the firm will also partner

6.4 Other Considerations

6.4.1 Organisation structure

Owing to the fact that XYZ is a start-up, it is necessary to take into account various factors including; sources of funding, business structure, business insurance coverage and registration of the firm. XYZ is fitness and health mobile app will be managed by three persons. The director of sales and marketing is in charge of marketing strategies to reach the firm_x0092_s target customers. Additionally, he oversees the activities of the manager responsible for health and wellness programs and finance and administration manager. The manager for health and wellness programs is responsible for fitness trainers, health educators, and marketers. As the company develops more positions will be added if required.

6.4.2 Website/app interface design

The design of the app will take the form android interface as it is accessible on all smartphones (Seo and Choi 2014, P. 199). Moreover, it is simple with no frill steps. It will be fitted with options for weight loss, records of calories lost and an attractive user interface, which enables users to remove bugs, add their favorite diet tips as well as plans.

6.4.3 Key resources

XYZ key resources include customers, customer relationships to provide straight-forward details while respecting customers decisions. Other resources include workers, gym vehicles, among others.

6.4.4 Are you using a single location or a multinational approach?

At the beginning, the company with be targeting a single location but as the demand increases it will penetrate other foreign countries

6.4.5 What are your biggest and most likely risks? And what are your contingencies for these?

The main risk that company may face is intense competition from established fitness and health companies. However, this will be addressed by the use of mobile gym app, which none of these competitors are using.

7.0 Conclusion

The business plan is a new aerobics app being introduced as a new product in a Gym Company know as XYZ. While based in Russia, the company should undertake on numerous activities such as market research and competitor analysis, to determine the strategy it can adopt to penetrate the market. How it positions itself across the market is critical, as such, the company has to examine the aspect of positioning, segmentation, value proposition and psychographics. Whereas the aspect of scope is elementary, the company should review demographics and behavioral elements.

8.0 References

Bagga, T. and Singh, A., 2012. A study of viral marketing phenomenon: special reference to videos and E-mails. International Journal of Marketing and Management Research, 3(5), pp.37-49.

Canhoto, A.I., Clark, M. and Fennemore, P., 2013. An attitude-based latent class segmentation analysis of mobile phone users. Telematics and Informatics, 31(2), pp.209-219.

Dehkordi, G.J., Rezvani, S. and Behravan, N., 2012. Blue Ocean Strategy: A Study Over A Strategy Which Help The Firm To Survive From Competitive Environment. International Journal of Academic Research in Business and Social Sciences, 2(6), p.477.

Fu, B., Lin, J., Li, L., Faloutsos, C., Hong, J. and Sadeh, N., 2013, August. Why people hate your app: Making sense of user feedback in a mobile app store. In Proceedings of the 19th ACM SIGKDD international conference on Knowledge discovery and data mining (pp. 1276-1284). ACM.

Guerras-Martin, L.A., Madhok, A. and Montoro-Sanchez, A., 2014. The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 17(2), pp.69-76

Hamka, F., Bouwman, H., De Reuver, M. and Kroesen, M., 2014. Mobile customer segmentation based on smartphone measurement. Telematics and Informatics, 31(2), pp.220-227.

Hassan, S.S. and Craft, S., 2012. Examining world market segmentation and brand positioning strategies. Journal of Consumer marketing, 29(5), pp.344-356.

Hope, J. and Fraser, R., 2013. the Budget. Budgetierung im Umbruch?, 1, p.71.

Lupton, D., 2014. Beyond techno-utopia: Critical approaches to digital health technologies. (Online) Available from Lupton, D., 2014. Beyond techno-utopia: Critical approaches to digital health technologies. (Accessed 18th May 2017).

Malley, L.I.A.H., 2014. Health, Fitness, Neoliberalism and Niche Markets: Does Planet Fitness Deliver?

McGrath, R.G., 2013. Transient advantage. Harvard business review, 91(6), pp.62-70.

Neely, M., 2012. Wellness strategies for smaller businesses. Benefits quarterly, 28(3), pp.16-19.

Perin, A 2015. Social Media Usage: 2005-2015. PEW Research Center. (Online) Available from (Accessed 18th May 2017).

Sánchez, R.G., Thin, A.G., Hauge, J.B., Fiucci, G., Nabeth, T., Rudnianski, M., Luccini, A.M. and Star, K., 2012, September. Value propositions for serious games in health and well-being. In International Conference on Serious Games Development and Applications (pp. 150-157). Springer Berlin Heidelberg.

Sashi, C.M., 2012. Customer engagement, buyer-seller relationships, and social media. Management decision, 50(2), pp.253-272.

Sell, A. and Walden, P., 2012, January. Segmentation bases in the mobile services market: Attitudes in, demographics out. In System Science (HICSS), 2012 45th Hawaii International Conference On (pp. 1373-1382)..

Seo, S.M. and Choi, Y.H., 2014. Development of android app for smooth multimedia streaming service via portable media file format. International Journal of Multimedia and Ubiquitous Engineering, 9(10), pp.197-208.

Sharma, A. and Lambert, D.M., 2013. Segmentation of markets based on customer service. International Journal of Physical Distribution & Logistics Management.

Thompson, A., Peteraf, M., Gamble, J., Strickland III, A.J. and Jain, A.K., 2013. Crafting & Executing Strategy 19/e: The Quest for Competitive Advantage: Concepts and Cases. McGraw-Hill Education.

Zampoglou, M., Malamos, A.G., Kapetanakis, K., Kontakis, K., Sardis, E., Vafiadis, G., Moulos, V. and Doulamis, A., 2014. IPromotion: A cloud-based platform for virtual reality internet advertising. In Big Data and Internet of Things: A Roadmap for Smart Environments (pp. 447 470). Springer International Publishing.

November 09, 2022


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