Introduction
The main objective of this report is to study the features of the modern fitness market to draw attention to the possibilities of implementing the cycling studio project. Moreover, this segment is rapidly gaining popularity worldwide. Consequently, an attempt will be made to launch such a project considering the specifics of the UAE market. The studio itself will be implemented on the female-friendly principle, allowing the business to expand the category of potential customers. In addition, it is necessary to point out that modern technologies will be used to help studio visitors track their progress. Thus, this report will highlight opportunities for developing cycling business in the UAE. In addition, the main points of segmentation of the market of consumers of a particular type of service and methods of communication with them will be studied. Cycling studios are a promising direction; therefore, there will be an opportunity to implement such a project in the UAE market.
The Business Plan: Supplier Pressure
Cycling will require much more space than a regular beauty salon or workshop but less than a fitness room. The studio will need at least one spacious hall, where there will be a place for reception, changing rooms, toilets, and showers. It is also necessary to pay attention to the presence of ventilation when choosing a room; it must be of high quality and in accordance with all sanitary standards. Thirty bicycles occupy approximately about 60 square meters (The Future of Fitness in the Middle East, 2021). The future studio should be located in a convenient place where transport often goes.
It will be convenient for customers if parking is located near the club. Usually, all exercise bikes are bought in the USA. Their cost there is from 900 to 2000 dollars, but it is necessary to consider that the local suppliers can increase the price (Connaghan, 2022). The Schwinn brand is reputed as the most effective exercise bike model; thus, this company is a leader in the market (Connaghan, 2022). Therefore, it should be noted that there are not so many suppliers of high-quality bicycles, which can significantly increase the initial investment. In addition, it may put the company at risk in the future if the supplier refuses to work.
Buyer Pressure
In a competitive environment, manufacturers must constantly improve the quality of services or reduce the price. As a result, this can lead to a significant reduction in studio profits. Plus, customers regularly have new needs and criteria for choosing services. It is necessary to constantly monitor this and catch trends in time to avoid losing the audience’s interest. However, it is worth noting that cycling studios are an innovative approach to business training. Accordingly, the main stages are concentrated exclusively in the major cities of the UAE, namely Abu Dhabi and Dubai (The Future of Fitness in the Middle East, 2021). Thus, based on this information, it can be assumed that market is not developed. Accordingly, many people are not familiar with this type of fitness. Thus, the number of potential customers is constantly growing, and there are not so many offers on the market since the main competitors only have a small number of studios in these cities (Time Out, n.d.). Consequently, it can be assumed that the pressure of clients in this area is relatively low, which helps to open a new studio with fewer risks.
Internal Competition
Intra-industry competition leads to a decrease in profits because it is constantly necessary to increase the cost of promoting the service, improve its quality, reduce prices or not raise them, even if the cost has increased, expand the range, invest in market research. The fewer players in the niche and the more differentiated they are, the more stable the company’s profit. It is worth noting that CRANK is the main competitor since its services are explicitly aimed at the development of cycling. This organization has two studios, which are open in Abu Dhabi and Dubai. Their peculiarity lies in the fact that their services are innovative in the UAE market; therefore, CRANK is the leader in the country in providing this type of fitness service. However, other competitors are not exclusively engaged in developing a cycling studio; the quality and uniqueness of their services are relatively low. Thus, internal competition is currently low. This factor ensures a reliable entry into the market of fitness services in the aspect of cycling studios.
The Threat of New Competitors
Luxury gyms in big cities would need a significant investment, while smaller-scale fitness ideas like cycling studios are more concerned about fluctuating profits. The demand for the worldwide indoor cycling market is anticipated to rise from USD 13 million in 2018 to USD 29 million in 2027, at a compound yearly growth rate (CAGR) of 8.9% from 2019 to 2027, according to the most recent research report (Factors, 2021). The UAE is home to some of the most well-known fitness companies in the world, such as the British company Fitness First and the American chain Gold’s Gym. According to research by the International Health, Racquet & Sportsclub Association (IHRSA), just 6% of the population of the UAE is a registered member of a health club, compared to penetration rates of around 20% in developed countries like the US (Arabian Business, n.d.). Thus, a large market and a small number of offers open up many opportunities for entrepreneurs. Consequently, the risk of new competitors is relatively high, which must be taken into account when entering the market.
Substitute Products
In the field of fitness services, substitute goods are alternative solutions that potential customers can use to solve their problems and needs. The leading competitor is traditional fitness gyms, which often offer the opportunity to practice both on traditional equipment and bicycles. Such a factor can significantly attract customers since cycling studios focus on only one type of training. In the UAE, many fitness gyms represent various services and have existed on the market for quite a long time (Arabian Business, n.d.). Here we should highlight Fitness First, Elite Fitness, and Eldorado Fitness Gym. In all of them, there is an opportunity to train using bicycle simulators. However, the fundamental difference between the studio is a more narrowly focused approach and a combination of elements of music and relaxation. Therefore, this aspect of the competition is not significant with a proper marketing approach.
Target Customer: Segmentation Theories
In order to determine the development of the brand in the right direction, it is important to identify potential customers. In this case, the strategy and segmentation technologies of S. Dibb and L. Simkin should be used, allowing the company to consider marketing research when searching for its client (Scheuffelen et al., 2019). In addition, it should be noted that younger segments of the population are often interested in new forms of fitness. Therefore, communication should be built through Internet communication. The profile of a potential clients of the cycling studio is men and women under the age of 40 who are interested in an active lifestyle. Particular attention should be paid to the female category since it is most interested in implementing non-power classes, which prevail among men. Thus, the main category should be women who seek to introduce sports into everyday life. They come to the studio to get in shape and take a break from household chores. At the same time, they are not too interested in fitness but are looking for an interesting kind of active leisure for themselves
Communication Mix Strategy
The development of a communication strategy allows an organization to create a well-thought-out action plan to achieve its goals. The strategic approach has several advantages. It allows the company to optimize costs and allocate all types of resources as economically as possible: temporary, human, and financial. The marketing strategy includes studying the company’s position in the market, identifying the advantages of the brand, and selecting the target audience (Rahardani & Sanjaya, 2022). SEO or search engine optimization is perhaps the most important digital marketing strategy. Conducting several advertising campaigns in Internet communities, search engines, and video platforms is necessary. Contextual advertising should also be considered, allowing us to bring the studio to the highest positions in the search results.
Attraction marketing is a digital marketing strategy, the primary purpose of which is to understand the doubts and concerns of customers and provide them with relevant information that will attract their attention, win their trust, and turn them into loyal clients. In this case, collaborating with various fitness bloggers from the UAE would be a competent approach. The main problem with cycling studios is that there may be doubts in public opinion about the seriousness and usefulness of this type of fitness. Therefore, it is necessary to make several video reviews in which various influencers will be able to dispel the major doubts and demonstrate the advantages of cycling studios.
The constant development of this strategy through various communication channels creates an almost inextricable link in the relationship between the company and the client. Content marketing is a strategic approach to creating and distributing valuable, relevant, and permanent content to attract and retain the target audience. In this case, the company should not neglect modern marketing channels like TikTok and Reels on Instagram (Rahardani & Sanjaya, 2022). It is important to organize a massive advertising campaign with video clips of the classes themselves in the cycling studio. Thus, potential customers will be able to understand what they can focus on and what to expect from this type of fitness. A dedicated approach will allow for a comprehensive communication process with potential customers, creating a positive image of the cycling studio and the service itself.
Marketing Trends
One of the cycling features is that clients are not only engaged in pedaling intensively but also dance to rhythmic music, which allows them to relax and completely forget about accumulated fatigue and stress. Therefore, cycling studios do not require professional coaches and employees, and it is essential that they can find an approach to each client and easily communicate with a large audience (The Future of Fitness in the Middle East, 2021). Due to the mixing of different dance styles during classes on an exercise bike, interest in training does not disappear, and there will be no monotony. Considering the cycling market in the UAE, it should be noted that this type of fitness is not innovative for the country.
There is a large number of competitors who already have representative offices in major cities. However, in this case, the possibility is that they are all concentrated mainly in Dubai and Abu Dhabi (Time Out, n.d.). Therefore, paying attention to the growing trend and the need for a similar type of fitness training, cycling studios can be opened in other cities of the country. The current competitors are CRANK, Motion, and Power Cycle. Using modern marketing trends of communication and interaction with influencers, the company can create a positive image. Using the capabilities of chats and bots, the studio will be able to retain customers and attract new visitors.
It is worth noting that this market is of particular interest for research, as it is new and developing. The government’s enhanced efforts in emerging Middle Eastern nations are anticipated to be a growth-promoting aspect for the cycling market (Arabian Business, n.d.). Increased government spending to safeguard the health of the Arab population, supported by a significant rise in obesity in the population of the Middle East, is anticipated to drive market growth and define the competitive landscape in the coming years. Additionally, it is projected that the Arab population, particularly in the UAE, would face more health and fitness difficulties due to the country’s growing obesity rate (Arabian Business, n.d.). Specialized fitness studios are one of the most promising segments of the fitness services market.
Conclusion
Summing up, it should be noted that the development of the cycling industry is going quite fast. Consequently, by applying Porter’s five forces analysis, it was revealed that opening such a business in the UAE is a sufficiently relevant idea. This is due to the absence of a large number of competitors, as well as the fact that most of the market is not occupied by big players. By applying a digital marketing strategy, it is possible to increase brand awareness and this type of fitness. The growing need for an active lifestyle allows us to implement similar projects in the UAE.
References
Arabian Business. (n.d.). Business of fitness: UAE’s $380m exercise industry enters a new cycle. Web.
Factors, F. &. (2021). Exceptional growth in North America and global indoor cycling software market share to gain USD 29 million by 2027: Facts & factors. GlobeNewswire. Web.
Rahardani, M. E., & Sanjaya, R. (2022). The strategy of marketing communication mix to increase brand awareness through Instagram. Journal of Management and Business Environment, 4(1), 43-54. Web.
Scheuffelen, S., Kemper, J., & Brettel, M. (2019). How do human attitudes and values predict online marketing responsiveness?Journal of Advertising Research, 59(2), 142–157. Web.
The future of fitness in the Middle East. (2021). dwtc.com. Web.
Time Out. (n.d.). Trendy fitness studio CRANK has opened in Abu Dhabi. TimeOut. Web.