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CHAPTER 2

THEORETICAL FOUNDATION

2.1 Consumer Behavior

The term lifestyle suggests “a patterned way of life into which people fit

various products, events or resources” (Moore, 1963). It suggests that the

consumer’s purchasing behavior is a patterned phenomenon that is influenced by

both external and internal influences (Moore, 1963). The customer pattern of

consumption reflects how they choose to spend their time and money, which defines

the customer identity.

Figure 2.1 Overall Model of Consumer Behavior

(Solomon, 2017)

Understanding the customer lifestyle is an important aspect in segmenting

market and choosing target customer. The study of demographic alone may not be

sufficient because as Bone (1991) stated, the use of age, income, and employment

status as factors in determining market segment may be misleading. This is because

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the psychological age is more closely related to purchase behavior as opposed to

chronological age (Barak & Rahtz, 1989). Hence, other factors such as activities,

interests, and health should also be included when analyzing the consumer’s

purchasing behavior (Bone, 1991).

2.1.1 Internal Influence

As seen in the above figure, the self-concept and lifestyle of a consumer is

subject to two types of influences, external and internal. Culture influences a

person’s lifestyle because every cultural heritage usually has their own customary

diets which will be reflected on the overall health status of its people (Nario, 2017).

For example, Mediterranean diet is 90% plant based, which include very little

amount of eggs and dairy (Greger, 2017). This results in a population that has lower

incidence of heart disease and cancer in comparison to the region of the U.S.

population that consume more meat products.

Demographics describe a population based on its size, distribution and

structure (Pratap, 2017). Age affects the media that people use, where they shop, how

they use products, and how they react to marketing activities (Bansal, 2015). The

Millennials, born after 1994, are the generation that will make up most of the

workforce in the upcoming 20 years. Millennials can be characterized as “having

high levels of self-confidence and self-reliance; they are independent, individualistic,

and socially active and like to work in teams” (Shih & Allen, 2007). Upon making

fitness-related decisions, people with said characteristics are likely to choose group

workout classes where they can engage and socialize with their peers.

Another demographic factor such as income also influences a person’s

lifestyle in terms of how they would allocate their spending. Income enables

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purchase, and thus will determine whether a person can support the lifestyle they

have chosen. Jason Kelly, New York Bureau Chief of Bloomberg, stated that people

are shifting toward spending more on ‘experiences’ instead of ‘things’ (Schlossberg,

2016). There are a lot more emphasis towards what the people are doing instead of

what they are getting. In line with the rising popularity of healthy lifestyle, people

are also shifting to a more hands-on approach to their exercise and well-being

(Settembre, 2018). This kind of experience is what a boutique fitness studio focuses

to offer.

A social class status or societal rank can be defined as “the hierarchical

division of a society into relatively permanent and homogenous groups with respect

to attitudes, values, and lifestyles” (Mothersbaugh & Hawkins, 2015). Social status is

connected to lifestyle as the consumption behavior of different classes is attributable

to lifestyle differences (Petev, 2013). Not merely for exercising, boutique fitness

studios are now becoming the new social scene as more people consider exercising

as a part of their lifestyle. The hefty price tag of a class in a boutique fitness studio

does not stop its members from coming because it is the place where they can meet

people from similar background and social statuses.

Recommendation from reference groups or family, also known as Word-of-

Mouth (WOM) communication, is a powerful pathway that affects people’s rational

and emotional assessment which will be reflected in changes on their attitude and

behavior (De Matos & Rossi, 2008). WOM has a more long-lasting effect on

people’s motivation to sustain healthful changes compared to the initial behavior

change (Chee & Ang, 2013). This finding is an important aspect to be incorporated

into the marketing activities of a company. The purchasing behavior of Millennials is

more widely influenced by WOM as opposed to advertisements (Brooks, 2014).

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Upon the formation of a healthy lifestyle, a person needs to be motivated by real life

experiences preferably from their friends or family.

2.1.2 External Influence

The internal factors that influence consumer’s self-concept and lifestyle

include perception, learning, memory, motives, personality, emotions, and attitudes

(Mothersbaugh & Hawkins, 2015). Lifestyle begins with perception, which is how

stimuli are perceived and transformed into information. As the popularity of healthy

lifestyle rises, people who are intrigued by this phenomenon will move on to the

learning stage in which the information processing takes place. Learning itself can be

defined as “any change in the content or organization of long-term memory or

behavior” (Mothersbaugh & Hawkins, 2015). After having a deeper look into the

trend of healthy lifestyle, the information will be stored as memory and influence

their future behavior as motivation. Other than psychological factors, personal

motivation plays a big role in modifying unhealthy habits as well as adopting leading

a healthier lifestyle (Maio, 2007).

The aforesaid internal influences will then be reflected in the consumer’s

attitude, which is the organization of motivational, emotional, perceptual, and

cognitive processes with respect to some aspect of our environment (Mothersbaugh

& Hawkins, 2015). Attitude is the way a person reacts to an offering, be it a product

or service. Having a positive perception towards healthy lifestyle with motivate a

person to adapt such lifestyle into their daily life.

The combination of both external and internal influences will determine how

a consumer executes their decision process. In many decision processes, a consumer

will be facing a number of alternatives. They will choose a product or service that

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will best match their preference and likings. To gain the most benefit, the dimension

of internal and external influences of a consumer should be incorporated into the

business concept.

2.1.3 Atmospheric Concept

Another influencer of consumer’s behavior comes from the environment of

the business itself. Atmospherics is elements of an environment whose function is to

stimulate the five senses (Baker, Grewal, Levy, & Voss, 2003). Many retailers have

found that by incorporating pleasant atmospheric elements to their store, it

complements the store design and the merchandise or service that they offer. The

atmospheric elements of a store include lighting, color, music, and scent (Levy,

Weitz, & Grewal, 2013). Moreover, apart from aforesaid physical attributes, there is

another element that is crucial to the service environment called social dimensions

(Voon, 2017). Social dimensions include elements such as personnel characteristics,

employee uniforms, crowding, customer characteristics, privacy, and self-service. In

order to get its full benefit, the atmospherics and social dimensions must be adjusted

according to the concept of the business itself.

Modern boutique fitness studios are known to accentuate beautiful designs

and a more inviting vibe compared to traditional gyms. Providing a cozy and

comfortable space will motivate the members to come not only for working out, but

also to hang around and socialize. This is in line with the concept of boutique fitness

studios which is to also offer a community in addition to work out programs.

The lighting for a workout space should be light and airy. As some workout

movements require people to lie on the backs, the lighting should have a low surface

luminance so that people can still look at it directly without being too bright

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(Attwood, 2015). Next, the creative use of color can help create a mood. Warm

colors (red, gold, yellow) produce vibrant and active responses which is suitable for

rooms intended for high-impact activities such as boxing, aerobics, and zumba. Cool

colors such as white, blue, and green, on the other hand, have a peaceful and calming

effect suitable for low-impact activities such as yoga (Brengman & Geuens, 2003).

The third atmospherics element, which is music, is more easily changed

compared to other atmospheric elements. Music is known to have powerful effects

on the perceptions and behavior of consumers (Wirtz & Lovelock, 2011). The choice

of music that a boutique fitness studio chooses to play should be adjusted to the kind

of atmosphere they want to create as well as their target market. Numerous studies

have found that fast tempo music and high-volume music increases the arousal level

(Holbrook & Anand, 1990). Although beneficial for creating high energy for

physical activities, boutique fitness studios should also incorporate a selection of

slow music as it is known to motivate people to stay longer in the environment (Dube

& Morin, 2001).

Scent has large impact in affecting customer’s mood and emotion. Filling the

business environment with pleasant scent will improve the customer’s overall

comfort (McArthur, 2006). Scents such as eucalyptus and lemon are known to have

stimulating, energizing, and uplifting effects (Holmes, 2017). These are the

appropriate aromatherapies to be placed inside the workout spaces. Calming and

soothing aromas such as the lavender and chamomile scent should be placed at the

lounge areas or bathrooms so that people can feel more relaxed (Ali, et al., 2015).

Social dimensions of a business environment are mainly reflected through the

people. The appearance and behavior of both service personnel and customers can

create impression of the service environment (Wirtz & Lovelock, 2011). The term

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‘aesthetic labor’ signifies the importance of the physical imagery of service

personnel who serve customers directly (Nickson & Warhurst, 2007). The way that

the service personnel present themselves, both in attitude and appearance, should

reflect good image of the business. For boutique fitness studios, the personnel (staffs

and trainers) should be friendly, energetic, and engaging to the members. Building

relationship with customers is known to increase their loyalty as they feel more

appreciated and valued.

According to Carter and Gilovich (2012), there are two kinds of consumption

and purchase behavior: experiential and material purchase. The business of boutique

fitness studio offers experiential purchase in which the customer will obtain life

experience or get an experience as opposed to physical commodities. The experience

that a boutique fitness studio provides is a hedonic experience because it focuses on

leading its customers to positive actions, bringing pleasure, and making them feel

better about themselves (Higgins, 2006).

Among other factors, happiness and positive emotions are important

influencers to a person’s behavioral intention (Espinoza & Nique, 2003). It is in line

with the hospitality concept of “making the guest feel that the host is being

hospitable through feelings of generosity, a desire to please and a genuine regard for

the guest as an individual” (Lashley, 2000). Thus, incorporating hospitality expertise

into a boutique fitness studio is greatly advantageous to create positive customer

experience and raising customer loyalty.

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2.2 Service Marketing

2.2.1 Customer Service

Service environments consist of many design elements. Those are exterior

facilities, interior, layout, displays, and social dimension. Social dimensions include

personnel characteristics, employee uniforms, crowding, customer characteristics,

privacy and self-service. Customers are often involved in the co-production of

product or service. Some service requires customers to participate in co-producing

the service product. Working out at the Fitness Studio / Gym under the direction of

coach and personal trainer takes the form of self-service. This enable customer

interacts directly with the provider’s equipment, facilities and system. Interaction

between customer and employees plays a big role in service business. Service firms

need to select, train and motivate their employee carefully. These individuals need

good interpersonal skill as well as having positive attitudes. The difference between

one service supplier with another depends on the employee skills in hospitality.

Because people are part of the environment too. The appearance, behavior of service

personnel and customer can leave impression in customer’s mind. Service delivery

channel such as frontline employees that serve customer face to face or by phone,

have to be able to perform the core service and variety of supplementary services

such as payments, booking, information, and solving problems. As new customer

mostly relies on customer service personnel for help (Wirtz & Lovelock, 2011).

As service-oriented entities, fitness organizations inherited the unique service

characteristics of intangibility, perishability, inseparability and heterogeneity (Martin

M. M., 2007). Sports centers can continue their existence depending on their service

quality that they offer for their customers (Kim, Kim, Lee, & Bae, 2016). Hedonic

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service provides experiential consumption, fun, pleasure and excitement (Strahilevitz

& Loewenstein , 1998). Hedonic value is also defined as ‘more subjective and

personal than utilitarian consumption and resulting more from fun and playfulness

than from task completion’ (Babin, Darden, & Griffin, 1994). Since hedonic services

are purchased for their entertainment' value, fitness center will be included in

hedonic service category (Madrigal, 1995). Based on An Investigation of

Visualization and Documentation Strategies in Service Advertising Journal by Hill,

Blodgett, Baer, Wakefield (2004), “Hedonic service worked well with visualization

and documentation advertising for services.” This will help a service firm to

determine the communication plan for the market.

A useful checklist is provided by ‘5Ws Model’ (Wirtz & Lovelock, 2011):

1. Who is the target audience?

2. What do we need to communicate?

3. How should we communicate?

4. Where should we communicate

5. When does the communication need to take place?

2.2.2 Programs

Service business that requires customer to enter the service factory will have

to design the ‘service-scape’. Servicescape means the physical environment in which

the experience is created (Bitner, 1992). Service firms need to manage service-scape

carefully, since it will make a big impact on customer satisfaction. Service-scapes

not only influence the customer’ value creation, but also have an impact on their

future purchasing and consumption behavior (Pareigis, Echeverri, & Edvardsson,

2012). The atmospheric theory such as appearance of the building, interior and

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landscaping have to be combined with the equipment, staffs, signs, and other visible

cues provide tangible evidence of a firm’s service quality. By having service-scape,

both interior and exterior can communicate and reinforce the positioning of the firm

in desired ways (Wirtz & Lovelock, 2011).

Figure 2.2 Service Blueprint of a Fitness Studio

(Pestell, 2014)

The study showed that when environmental stimuli act together to provide a

coherent atmosphere, consumers will respond more positively (Journal Congruency

of Scent and Music as a Driver of In-Store Evaluations and Behavior by Mattila and

Wirtz, 2001). This study tests the mismatch of scent and music in customer purchase

behavior. To make service-scape design, one of the tools that need to be considered

is Blueprinting.

Blueprinting is a key tool used to design new service or to redesign existing

ones, and it specifies in some details how the service process should be constructed.

To enrich service innovation and service development service blueprint must be

customers centric (Shostack, 1987). To develop a blueprint, it is important to focus

all the key points involved in creating and delivering the service and need to

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specifically explain the linkages or relation between those points. The result will be

the big picture of the service process (Wirtz & Lovelock, 2011).

Figure 2.3 Gym Customer Journey

(Keller, 2018)

The above figure 2.3 is the illustration of Customer Journey mapping. Unlike

service blueprint, a Customer Journey allows a company to organize itself and

mobilize employees to deliver value to customers consistently, in line with its

purpose. Understanding the most important journeys and customer segment, helps a

business maintain focus and have the greatest impact on the satisfaction of its

customers and its own bottom-line performance (Quarterly, 2016).

Customer Journey Mapping make the participants can step through the

customer experience, recording some specific customer persona’s touchpoints,

thoughts, actions, activities, emotions and ‘moments of truth’ or decisions.

Summarizing the output in an easy-to-follow format can be helpful to educate or

engage others in the organization in understanding either current or envisioned future

state (Zink, 2016).

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For service business, customer experience is the main selling point.

Customers use products as well as service to gain more experience. This kind of

business can be found in hotel, amusement park, and other tourism destinations

(Rasila, 2012). In the context of boutique fitness studio, hospitality management play

the role in delivering experience in the form of personalized program, positive

environment and good service. In order to deliver those experiences, service

marketing concept play the role by turning a commercial or business contact into

more personalized one-to-one relationship with the customer (Sirianni, Bitner,

Brown, & Mandel, 2013). This relationship can be easily achieved with the help of

making service blueprint and customer journey which create a big picture of

customer’s experience.

2.3 Boutique Fitness Studio

2.3.1 Contribution of Hotels in the Boutique Fitness Studio Industry

Many hotels are contributing in wellness enhancement in purpose of business

travelers could keep their healthy lifestyle. For example, The InterContinental Hotels

Group has announced its intrinsic focus on wellness in terms of work, exercise, food,

and rest in several locations across the country. SRI International for The Global Spa

& Wellness Summit (GSWS) has estimated that approximately US$494 billion

market already been represented by wellness tourism (Brown, 2017). In Jakarta, The

Westin, Westin Hotels & Resorts, apart from Starwood Hotels & Resort Worldwide,

Inc. has released wellness program in their brand-new hotel in Jakarta. It has spa and

fitness studio that provide world-class sports equipment and located in a cool, well-

designed open space. Westin also provides a sports equipment loan program in

collaboration with New Balance® which offers shoes and sportswear, so tourists

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don’t have to carry their own (Wulandari, 2016). Even though there has been a

change in hotel industry about the importance of wellness, this issue has not go

national and they have not provided wellness center that enhance more than just

equipment. According SRI International, they have estimated the total of global

wellness tourism economy is worth approximately $440 billion and its 14% of global

tourism expenditures. It has created 12 million jobs around the world and has total

impact on economy of US$1.3 trillion included the calculation of economic impacts.

It is not surprised anymore that wellness tourism is a large segment, similar with

ecotourism and culinary but still, bigger than sport and medical tourism (SRI

International, 2014). Therefore, Jouer Studio is relevant with the contemporary

Hospitality and Tourism Industry showed by many hotels have applied health

program like Jouer Studio inside their wellness program.

2.3.2 Market Findings in Jakarta

There are many online fitness passes in Indonesia especially in Jakarta.

Several of them are Guavapass, Doogether, and Fitnesia. But the most well-known in

this era is Guavapass. Guavapass is an online platform that allows you to experience

a variety of fitness classes without having to be tied to a particular gym studio

membership. Guavapass itself is a startup from Singapore which was launched since

April 2015 and has been present in 9 cities of Asia and other Middle East, such as

Bangkok, Hong Kong, Dubai, Shanghai, Beijing, Seoul, Taipei, Manila, and Abu

Dhabi.

Guavapass also spread its wings to Indonesia, precisely the city of Jakarta, in

January 2016 (Risdynia, 2017). From Guavapass, it can be concluded through their

data research of their online platform, the market in Jakarta from 51% of their total

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audience who visits their website is between the ages of 25 and 34. But, it does not

rule out that people who are aged 65+ are looking them at the most. In term of

genders, majority of visitors as much as 75% are female (25% male) yet, within a

while male visitors have increased as much as 35% (Ryneveld, 2017). Therefore,

from here it can be determined that majority of people who like to join wellness

center such as boutique fitness studios are Generation X and Millennials or

Generation Y.

2.4 Generation Cohort

2.4.1 Generation X

This age subculture generation is currently in range of age from 38 – 53.

They started at the year of 1965 – 1980 (Pew Research Center, 2018). Generation X

are logged between Baby Boomers and Generation Y which are the two big well-

known generations that focus on individual itself rather than marriage life (Ryback,

2016). They have created many things in modern world, from internet, phone, trends

from 80s to 90s, and they have experienced many things the ups and downs (Barnett,

2017). With they have been declared as ‘consumer mentality’ with high education

(Coupland, 1991).

Rendering from Giang, Gen X known as ‘revenue generator’ compared to

Boomer and Millennials. They are possessing traits of adaptability, problem solving,

and collaboration. On the other hand, they lack displaying executive presence and

being cost effective compared to other generations. Their perks are low as they are

more likely walk away when flexibility is not available in their current job (Giang,

2013).

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2.4.2 Millennial

This age subculture generation is currently in range of age from 22 – 37.

They started at the year of 1981 – 1996 (Pew Research Center, 2018). This

generation is also referred as the generation Y. This generation believes it is for

success and ready to become lifelong learners. Millennials has a higher level of self-

esteem and narcissism than previous generations, this has an impact on their great

expectations in the workplace (related to rewards and working conditions).

When this generation was born, communication technology was being

intensively developed. The phone and the internet are not yet integrated, but it's

already booming such as SMS, email, instant messaging (Yahoo Messenger, ICQ,

etc.). When Y-generation started teenagers, social media appeared like Friendster,

MySpace, Facebook, and Twitter. Online games are also gaining in popularity.

Internet connections have started to improve and start easily accessible to make this

generation is very addicted to the internet.

Being born in an age of technological advancement, Millennials' behavior is

highly dependent on technology. They depend on the internet to search for various

information including information. Besides this generation is also more consumptive

than the previous generation, they love spending money to buy the latest gadgets,

vehicles, roads and get-togethers with the community.

Character of this generation are having highly achievement, confident, highly

tolerated, and has street smart. They value individuality and has trait as big spenders.

In the workplace, they are ambitious, multitasking, high entrepreneurship, and very

persistent.

As Giang (2013) said, Millennials or Generation Y are believed to be known

as ‘tech-savvy’ a person who know how to utilize social media and implement it to

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the business. They also regarded as being the most enthusiastic about their job.

Nevertheless, being as the most individualistic gene, they are scored as the lowest

hardworking, team-player, and productive part of the organization. Their perks are

they more curious when it comes to promotion in business.

2.5 About Jouer Studio

Jouer Studio’s name is derived from the French language. ‘Jouer’ means play

and it was chosen to reflect the playfulness and dynamic of the studio. Focused on

providing a wide range of group workout classes, Jouer Studio encourages the

adaptation of a healthy and active lifestyle. Jouer Studio aims to bring a welcoming

and pleasant atmosphere to its space as opposed to the rigidness of a conventional

gym. Jouer Studio believes that exercising is not something to resent but it can be

something to look forward to when done in a pleasant setting. The team of engaging

trainers and staffs, combined with Jouer Studio’s own community supported by

Jouer’s social media access, will make a workout session, enjoy meeting new people

and socializing while embracing new experience feels like a playful time.

2.6 Competitor Analysis

Competitor analysis is a crucial step in the marketing and strategic

management of a business as it supports effective strategy formulation,

implementation, monitoring, and adjustment (Fleisher & Bensoussan, 2015). Based

on observations towards other businesses with similar business concept, a competitor

analysis was done using some parameters that are considered important in customer’s

decision process of choosing a place to work out. Those parameters include class

varieties, amenities, facilities, and programs.

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The direct competitors of Jouer Studio are Breathe Studio and Core Studio.

They provide similar concept with Jouer Studio which is boutique fitness studio.

They also provide similar type of classes that Jouer Studio will provide. They are

located at Senopati and Menteng respectively. Core Studio is a boutique workout

studio that has two training rooms, one is mainly used for Muay Thai classes while

the other room is used for lower impact trainings such as Zumba and barre. Breathe

Studio also has two training rooms, one is without equipment used for yoga, HIIT,

and boxing class while the other one is equipped with Pilates reformer equipment.

Both of the studios do not offer TRX, boot camp, and hot yoga classes which Jouer

Studio will provide.

The indirect competitors of Jouer Studio are Fitness First located at Lotte

Shopping Avenue and Oakwood, as well as Fitstop, located at Menara BTPN. They

are Jouer indirect competitor because they’re both located within Kuningan area and

very accessible. However, they are different in concept with Jouer, which are just

regular gyms that offer a full range of equipment as well as some group classes. The

range of classes are quite similar as those offered in boutique workout studios

although they are typically more crowded, and the trainers are unable to give

individual attention to all the participants. By knowing the four important parameters

as well as direct and indirect competitors, Jouer Studio competitor analysis can be

described in detail.

In detail, the comparison analysis with four other competitors is described in

the following table:

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Table 2.1 Jouer Studio’s Competitor Analysis

Item Breathe Studio

Core Studio

Fitstop Fitness First

Jouer Studio

Classes Muaythai Yes Yes Yes Yes Yes

Barre Yes Yes No No Yes

Pilates Yes No No Yes Yes

Zumba Yes Yes Yes Yes Yes

Yoga (Hot) No No No Yes Yes

HIIT Yes No No No Yes

TRX No No Yes Yes Yes

Bootcamp No No Yes Yes Yes

Amenities Towel Yes Yes Yes Yes Yes

Hairdryer Yes Yes Yes Yes Yes

Curling iron/hair straightener Yes No No No Yes

Soap, shampoo Yes Yes Yes Yes Yes

Conditioner No No No No Yes

Face wash Yes No No No Yes

Cotton pad, cotton bud Yes No No No Yes

Mouthwash No No No No Yes

Hair mist/dry shampoo Yes No No No Yes

Magnifying mirror No No No No Yes

Facilities Water dispenser Yes Yes Yes Yes Yes

Yoga mat Yes Yes Yes Yes Yes

Regular scale No Yes Yes Yes Yes

Scented candle Yes No No No Yes

Locker Yes Yes Yes Yes Yes

F&B bar No No Yes Yes Yes

Parking space Yes No Yes Yes Yes

BMI scale No No Yes Yes Yes

Program Weight loss (Zumba, MT, HIIT, BC) No No No No Yes

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Item Breathe Studio

Core Studio

Fitstop Fitness First

Jouer Studio

Relaxation (Yoga, Pilates) No No No No Yes

Muscle toning (Barre, TRX, BC) No No No No Yes

Program plan & progress tracker No No No No Yes

Program plan & meal planning No No No No Yes

(Source: Writer’s Analysis)

Seeing the result of competitor analysis, facilities that are provided by each

competitor can be seen. The amenities of Core Studio are quite generic, and the

design of the space is substandard compared to higher-ends boutique workout studios.

Breathe Studio, on the other hand, provides a wide range of high quality amenities

and the design of the space is very aesthetic and pleasing.

Both of the studios provide basic facilities such as water dispensers and

towels. Breathe Studio has their own parking space although it can only

accommodate 4 cars. The parking space for Core Studio is a shared space with other

tenants of the building. Both of the studios also do not provide a BMI scale that is

capable of weighing not only the body weight but also the muscle mass and fat

percentage of a person.

Lastly, Core Studio and Breathe Studio offer membership programs that are

counted based on the frequency of the members’ visit. They do not provide

personalized programs that are adjusted to the members’ needs or interests. Jouer

Studio will provide a consultation for each members before they start their

membership programs to advise the suitable types of workout to be done.

For indirect competitors, the amenities that are provided by the both Fitness

First and Fitstop cover the basic necessity such as soap and shampoo. However due

its big size and many occupants, they are unable to provide more personalized bits

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such as face wash, cotton pads, mouthwash, et cetera. Regarding the facilities, both

of the gyms provide sufficient parking space because they are located in malls or

office buildings. However, they are lacking atmospheric enhancement such as

scented candles that are intended to make the atmosphere more inviting and pleasant.

Moreover, as most gyms do, they provide a BMI scale however it is mostly used for

members that use personal trainers service.

Lastly, they do not offer personalized programs for their regular members.

The regular members have the options of working out on their own or participating

in classes. Workout programs are available for the members that hire personal

trainers however this comes at a greater cost.

To be more in depth with the competitor analysis, after analyzing their four

parameters which are class varieties, amenities, facilities and program. SWOT

analysis of the competitors can be made.

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Table 2.2 SWOT Analysis of Competitor

Breathe Studio Core Studio Fitstop Fitness First

Strengths Close to lots of healthy restaurants; Wide range and high-quality bathroom amenities; Building interior is very aesthetic

Provides callisthenic class that is unique and not easily found in other studios; classes that are available hourly can cater to member’s varying schedule

Good facilities and equipment; located in business district, suitable for residents and workers near there; certified and engaging personal trainers; provide food and beverage corner for consumers; partnering with global fitness pass like Guavapass and Doogether for their marketing channel; partnering with sports apparels; they differentiate program from fitness equipment and classes with different price.

Well-known brand and one of leading fitness center in Asia; certified personal trainers; good location and easy access; 7-days available; good facilities and equipment.

Weaknesses Cramped workout area; Very limited parking space (only 4 cars); Only few variety of classes

No designated parking space; substandard bathroom amenities; limited space cannot accommodate many people during one class

New brand in neighborhood; lack of amenities compared to other fitness boutique studios; difficult access due to traffic jam in specific hours; closed on Sunday due to building regulation.

Bound by membership contract for a year with additional charges; personal trainers tend to impose their service to consumers; the ambience in the place is individualism; possibilities of internal conflict due to higher costs of trainers and maintenances.

Opportunities Strategic location and aesthetic design appeal lots of customer to come and try. This opportunity may increase returned customer.

Its close proximity with Taman Menteng, which is a common place to exercise, brings the studio closer to the target market

Engage market near the area; additional products and services could enter the market.

Opening new markets and branches in new places; new products and services that can be offer.

Threats Competition with other boutique fitness studios in Senopati area

Competition with other boutique fitness studios around Menteng area

Traffic jam near neighborhood could affect the market; there is possibility, they are not strong enough competing with other competitors.

Number of competitors are increasing; technological problems due to maintenance of facilities; external business risks due to many substitute; government regulations such as political, legal, and regulatory risk should be follow; the economic situation should be taken in consideration.

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2.7 Business Analysis Tools

2.7.1 SWOT and TOWS Analysis

SWOT analysis is used to identify the strengths, weaknesses, opportunities,

and threats involved in a project, business venture, or any situation of an organization.

It involves monitoring the internal and external marketing environment of the

organization (Valentin, 2015). Strategic planning is essential to bring an organization

into balance with the external environment and maintain this balance over time

(Berry, What Is a Strategic Plan, 2018). SWOT analysis is useful when done towards

the competitors because it gives insights on how to set the business apart.

TOWS analysis has the same process of identifying strength, weakness,

opportunities and threats of a company. The difference is, in TOWS, opportunities

and threats are examined first followed by strengths and weaknesses. After listing

and examining the list, managers will come up with strategies to maximize

opportunity using its strengths, to overcome the weakness and minimize threats.

(Hamel, 2018). Below is figure of SWOT and TOWS Analysis.

Table 2.3 SWOT and TOWS Analysis

TOWS ANALYSIS Weaknesses Strengths

Threats WT Strategies ST Strategies

Opportunities WO Strategies SO Strategies

(Source: Weihrich, 1982)

Strengths and weaknesses come from internal environment of the company,

while threats and opportunities exist in external environment of the company.

Strengths describe the positive factors or attributes, tangible or intangible assets

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within the company (Berry, What Is a SWOT Analysis, 2018). Weaknesses are

internal problems that put the company at disadvantages. Whereas, the external

factors which are threats and opportunities are not in company’s control. The

external environment consists of social, economic, national, rules and regulations,

and many more. It can come from any global industries (Definition of 'Swot

Analysis', 2018). Opportunities describes the potential of the business to grow, and

threats include factors which can put the business at risk. To sum up, after examining

all the SWOT and TOWS, company must come up with strategies planning that

helps to look at the big picture, examine and do the things that will help the business

to grow (Berry, What Is a SWOT Analysis, 2018).

2.7.2 Blue Ocean Strategy Analysis

The Blue Ocean strategy, first introduced by Kim and Mauborgne (2015), is a

business strategy that focuses on the creation of a new, uncontested market space that

makes competitors irrelevant. By avoiding competition and creating new value

innovation, the business is able to lower their cost and increase value for customers.

Prior in applying the Blue Ocean strategy, a business must identify their

differentiator or key selling point that separates them from the existing competitors.

Doing so will help them a create a new window of opportunity, growth, and jobs, as

opposed to fighting for a bigger share of an existing pool of customers (Denning,

2017).

Table 2.4 Blue Ocean Strategy Analysis

Eliminate Raise

Reduce Create (Source: Kim & Mauborgne, 2015)

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As explained in W. Chan Kim and Rénee Mauborgne’s book of the same

name, the Blue Ocean strategy can be applied by following these five steps:

1. Choosing the right place and building a team with the right people to initiate the

implementation of Blue Ocean strategy in the business.

2. Analyzing the existing market and their current state of play, current trends, and

market condition.

3. Identifying the pain points that limit the current industry and a pool of non-

customers that can be potential target markets.

4. Developing alternative Blue Ocean opportunities.

5. Strategizing the Blue Ocean moves, conducting market tests, finalizing, and

execution

2.7.3 Business Model Canvas

2.7.3.1 Segmenting, Targeting, Positioning

a. Segmenting

According to Dr. Chuck Hermans (2016), the marketplace should be

differentiated into sub-group customers based on demographic, geographic, and

psychographic that is commonly used, which could be potential to become our target

market, and the process of it is called segmentation. It is a simple way to group

people that have common needs and interests (Thinkcode, 2017).

We could determine our market segmentation effectively, thus our market

could be measured, it is substantiality, easy to access, variety and differentiable, and

surely can be acted upon. In Jouer Studio, we will further challenge this initial

segmentation through survey validation.

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b. Targeting

Targeting is a matching process between sub-group segmentations with

possible target products and services (Hermans, 2016). After segmentation, they need

to focus on specific market that has been segmented and applying the right position

into them (Thinkcode, 2017). Using target is significant for creating an effective

marketing plan for products and services that the company offers. While targeting, it

is important to match products and price with segmented target, because it will bring

changes to positioning (Bhasin, 2018).

After segmenting our customers, it will be clearer for us to differentiate

programs in our studio based on selected target. Results will be discussed in next

chapter with survey validation.

c. Positioning

Positioning is a strategy process to act upon the target market with marketing

tools such as price, benefits, quality, quantity, and other dimension to enter the

competition between the market (Thinkcode, 2017). It involves offering the product

that suits with target market and communicating with them in a right and suitable

manner, giving good perspective or brand image to customers (Powell, 2014). In

Jouer Studio, we will discuss it further after survey validation in next chapter.

2.7.3.2 Value Proposition Canvas

A value proposition is similarly having the same meaning about what the

product does for the customers. It should reflect a unique selling proposition that the

product embodies. In this sense, they reflect the basis on which marketer should do

to win the sustainable competition advantage by differentiating the product from its

competitive space (Walker, Boyd, Mullins, & Larreche, 2002). Some value

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propositions may be different by adding more innovative and others may be similar

with added features and attributes. Value propositions can be qualitative (e.g. design,

customer experience) and quantitative (e.g. price, speed of service) (Osterwalder &

Pigneur, 2009).

Figure 2.4 Value Proposition Canvas

(Osterwalder, Pigneur, Bernarda & Smith, 2014)

We propose our boutique fitness studios to focus on community-based quick

workouts by emphasizing more on specialized forms of exercise, and self-

improvement, fitness boutique studios to cater customers who live and work nearby.

We will further challenge this initial value proposition through survey validation.

2.7.3.3 Business Model Generation

To start any good discussion, meeting, or brainstorming should be start with

shared understanding the kind of business model it selves. One platform that could

describe and summarize the result of discussion with simple, relevant,

understandable without oversimplifying nor complexing of how the business

function. The concept should be executed with 9 blocks that show how company

function to earn money. This could be the blueprint of business strategy and

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innovation that should be implemented through organization’s process, structural,

and system (Osterwalder & Pigneur, 2009).

Figure 2.5 Business Model Generation

(Osterwalder, Pigneur, Bernarda & Smith, 2014)

In figure above, we could see that there are 9 building blocks that could help

business to describe the way of organization creates, delivers, and captures value

rationally.

There are four categorize inside Business Model Generation (BMG) which

are front-end, back-end, infrastructure efficiency, customer value, and financial

viability. Front-end consists of customer segments, value propositions,

communication channel, and customer relationships. Back-end consists of key

activities, key resources, and key partners. Customer value consists of front-end and

additional revenue stream, while infrastructure efficiency consists of back-end and

additional cost structure. Last, financial viability consists of cost structure, and

revenue streams. For next step, BMG will be made for Jouer studio, following the

concept post-survey and validation.

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2.8 Survey

The primary data collection for gaining consumer insight is completed by

conducting both online and offline survey using a questionnaire. The target

respondents for the survey are people that live and/or work in Kuningan area. The

purpose of this survey is to discover the healthy lifestyle phenomena in Kuningan

area that include their demographic characteristics, working out habits (preferred

time, place, distance), spending power, and their preferred features to be included in

a boutique fitness studio.