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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Introduction:

In today's world, consumption of fast food, high sugar drink, and reduction in physical activities have gone up which is deteriorating the health of an individual. People have started caring about how many nutrition they get from each meal, how many calories they burnt, and how to organize their workout plan. In 2015, Australians spent at least $8.5 billion on the gym membership in a year, which equal $2340 per household. There are almost 1 million people who spend $25 on the gym fees in each week. This report also shows that 4.6 million Australians have gym membership card (NewsComAu, 2015). Additionally, based on Google trend, gym is one of the popular search term (75 out 100) from March 2017 till now (Google Trends, 2018). Therefore, we can see there is a large market size for fitness because people want to live a healthier life and have a good figure. Although consumers are joining gyms, the majority of people do not know what they are going to do; how to get their body toned in a short period; they are unwilling to invest a significant amount of money in the gyms and there is no support when they are doing the workout. Thus, based on all the pains which consumers may have, we invented this new fitness product, that can combine different gyms and programs to help consumers achieve their goal; the product provides 30 days free trial in order to reduce consumer's uncertainty; we will occasionally offer articles and tips to accelerate their expectation; experts will continually update new programs on the websites; we also invited some personal trainers to give professional suggestion about workout (customers need to book from online); 24/7 technical support will help customers have a better experience with our product. Accordingly, we will charge members each month from the day they start to join in our membership and get each consumer's commission fee from gyms because we provide potential customers and gain additional exposure for them.

In this report, we are going to introduce Microenvironment, Macro environment and SWOT analysis. Using all this information to explain how we are going to develop our product and provide different industries as examples to demonstrate various concepts.

Micro analysis:

Competitor & supplier analysis: gyms and personal trainers can become both competitors and suppliers for us. On the one hand, we cooperate with them and they provide useful resources to us, such as a place for people to do workout and professional training tips and programs. On the other hand, they are competitors for us because they serve similar services to customers.  Work out apps can threaten our markets as well, such as Sweat and Asana Rebel. They provide services through their App, which is similar to us. However, our website so far is focused on Australian market which means we can have a closer relationship with our customers, and provide unique service for each consumer.

Intermediaries analysis: In a traditional market the wholesalers, distributors, and retailers are referred as intermediaries. However, there is an only two-way relationship in e-market (consumers and sellers). It does not mean there are no intermediaries in e-commerce, on the contrary, it can add additional values for online products. Network intermediaries can maximize profits for online business because they help us to provide quality information to our consumers. According to Rong, the internet intermediaries have built sales network which is an efficient platform for both customers and sellers because of reliable information. Alternatively, two parties can save their costs, get quality information and improve efficiency compare traditional intermediaries (2014, p.46).  

Customers analysis: Our product is specifically focused on young and middle age group. Results show that people between the age of 15 to 54 preferred to do the physical workout or sports over other age groups (Evershed, 2015). Despite age, we also concentrate on those who do not know how to train their body and do not have knowledge of programs. Consumers can find different kinds of workout based on their willingness, such as cardio and weights workout. Additionally, the number of gyms have increased causing further confusion for consumers, because they do not know which one is perfect fit for them. In Australia, the number of gyms have increased from 2362 in 2005 to 3468 in 2018 (Statista, 2018). Therefore, we combined different kinds of gyms and consumers can get access to various ones.

Macro analysis

Socio-economical: Internet access not only connects the personal computer or mobile devices but also connects individuals with the whole world. Today, we can just sit at home and order everything online, for example, we can have fresh food delivered to our house instead of doing grocery shopping in person. In Australia, there are 88% of people access the internet in 2018 (Statista, 2018). Instead of using the internet to watch TV show and News, people have started purchasing and selling on the internet using sites such as eBay and Amazon. Online shopping has helped consumers to save costs and time which is causing them to accept it. In fact, online sales have risen from $172 billion in 2005 to $329 billion in 2010 all over the world. In Australia, online industries revenue has increased in recent years, and they expected to boost revenue around 9.7% ($20.1 billion) in 2018 (Ibisworld.com.au, 2018). Based on the Zhou, Dai and Zhang (2007), the reason consumers have accepted online shopping is because of convenience, lower price, no time restriction, easy to access product information. Moreover, they claimed that most important reason is consumers trust their online retailers. As we can see, using internet to change their lifestyle is a significant trend. Therefore, we use websites to connect with our consumers, due to a willingness to pay online. Beyond that, we will build customers relationship first, because we want consumers to trust us.  

Legal & ethical: Ethic is referred to how society expects behaviour and foundation of law. The law, on the other hand, is created by the government to protect citizens, which include the judiciary, legislature and public officials (Differencebetween.net, 2018). Even though there are some differences between law and ethics, they are both based on values and beliefs. In today's world, importance of this lies in the intellectual property, privacy, and data. Industries are very cautious about their products, especially for similar commodities, such as Coke and Pepsi; iPhone and Samsung. These kinds of issues are happening not only in the physical goods but also e-commence. Therefore, we are going to analyse the importance of intellectual property and why we need it for our products. The intellectual property belongs to economic analysis as according to some scholars, it has become key to drive economic growth and cultural development. Despite the importance, this is a challenge for the law, due to intangible nature of it. Copyright is one of the vital terms for intellectual property. Copyrights are related to people who have rights and power to protect their work, for example, it can be a book, programs, recording, broadcasts and so on (Copyright.org.au, 2018). In another word, whatever we create belongs to us and nobody can use it without our permissions. It is especially crucial for internet because we can quickly search information online, and directly use it as our sources without telling anyone. For instance, photographer Roger took a photo of the couple who held a line of puppies and sold it as greeting cards. Internationally, artist Jeff Koons who used Roger's photography and made significant money, and Roger sued Koons because of copyright. As a result, Koons was forced to pay a settlement to Rodgers (99designs, 2018). Without copyright, we would not know who is the original person to create this specific work. Another reason is money as under copyright law we need to pay for others work in order to use for ourselves (Efstratiadis, n.d.). In the same way, copyright also important for our product, for example, the style of the website, information, and programs can be easily copied by our competitors. Therefore, as a new business, we need to protect our property. Nevertheless, we also want to expand our market not only in Australia but the world.

The second elements of intellectual property are patents. The patent is a document which authorized by the government agency and provides exclusive rights to an inventor for some years. Patent is same as copyright, both important for retail shops and online stores. Once industries get patent, it can give inventors rights to stop others to sell and manufacture the inventions; inventors can license someone about their inventions but under certain contracts. It encourages people to study new technologies without worrying about someone stealing their intellectual property. Patent also protect inventors' rights even though exporting overseas (Ipaustralia.gov.au, 2016). For example, Uber has been granted 272 US patents and 367 worldwide patents. In the initial year, Uber barely have any patents; however, there was a rapidly increase from 2015 till now. The reason behind this is because Uber's brand value has steadily climbed in recent years. Uber's brand value was $11billions in 2016, after two years, it directly jumped to $16.6 billion and now the report shows this brand is one of the most valuable brands among brand Finance's Global 500 2018 (Iam-media.com, 2018). As we can see, along with the brand value and market share increase, industries need to have different types of patents to protect their brand equity and their company. Our product is similar to Uber when it started. It is unique for the market, that is why we need the patent to protect this whole product in order to gain considerable market share and brand value in the future.

The last element is the trademark. Trademark is a sign which allows companies to distinguish themselves from others. It can be a brand logo, brand image, colours, sounds, shape and so on. A trademark must be new before registering. In another word, they should not have similar or same trademark as others in a marketplace (Christie, 2011, p.35). Trademarks are essential to influence consumers' decisions because it directly shows the brand image and reputation. Therefore, a useful and unique trademark is a key to get closer to customers and also let them find the brand easily. Trademark is a valuable asset for future, as the growth of the goodwill will increase the brand value and equity in the market with the right trademark producing positive feeling for both employees and customers (Rubinstein, 2014). For example, we when speak of Chanel, we all know it is luxury brand, and people know it represents fashion and good quality; when we want to drink soda, we think about Coke; when we want to eat fast food, we want to have McDonald. These are the successful trademark, which allows people to store their information in their brain in the long term instead of short term. Hence, we are going to design a trademark that lets consumer know this is a fitness brand (clear image in a marketplace) and an exclusive logo to attract potential consumers in order to spread our market. We know it is difficult for a new product, sometimes it takes years to achieve the goal of having brand recognition similar to Coke and Chanel. But we will continue to improve the brand image and to communicate with consumers until finding out how can we engage with them.  

Privacy: In this part, we are going to use seclusion theory, access control and autonomy model to explain privacy in e-marketing, why privacy so important and how it is influenced industries. Privacy can combine both ethical and legal aspects. Especially nowadays, people can just use Facebook to search anyone's profile and to know about their lifestyle. Seclusion theory can refer to the ability to be alone in the society. It can punish someone who crosses the line over privacy and to maintain personal distance. Access control is an emphasis that a person has right to regulate the information, which can protect individual's personal information from unauthorized release. Those two are more focused on how data is released, rather than construct the personal information. The last one, which is autonomy model, can help people to identify what kind of data are important for their life decisions (Strauss and Frost, 2014, p.124). Privacy is important for business as it protects industry information not only related to themselves but also their customers. Traits of consumers such as their searching patterns, purchasing habits online, how they interact with friends are all data collected by different industries. If a company loses their information, it will directly affect consumer's privacy. As we mentioned, privacy also matters for companies' brand. Privacy for a business is not only some papers and documents but also the operations which may contain company's financial situation. Once customers know everything about a company, it may probably either rebuild this brand or destroy. Lastly, privacy will influence future development, because if we do not have privacy then other competitors can know precisely what we are going to do for our next step (Gorodyansky, 2017). Thus, privacy is important and crucial for a business. For our product, it is also necessary even though it is new business because of information like- how we connect with different gyms, personal trainer to join our companies, how we earn revenue and so on. These are different kind of privacy which need to isolate from customers.

Data: For all the businesses, the key to improving their profits are increasing sales, but without knowing consumers' insights, how can one boost sales. Therefore, some companies will collect their purchase information, such as Woolworth with the rewards card. Based on this card, they will know what we bought each time, and then generate results. Collecting customer's data is both important for a retail store and e-business. For example, companies use cookies to understand online behaviour. In another word, cookies will ask a browser to store all the information which we go through online (The Economist, 2014). This is a reason why when we search some information from online, they will continue the exposure to us through advertisements. However, consumers are more cautious about letting businesses know their online information due to they worry business will sell their information to others. Therefore, Privacy Act 1988 is an Australian law which can protect individual information from others. Under this law, businesses need to let their consumers know why their information being collected; how they are going to use the information with customers having rights to access their personal information and unsubscribe information if we do not want (Oaic.gov.au, 2014). For instance, at David Jones website, we can see they have privacy & security page which is available to everyone who wants to know what they have gathered from an individual's data, for instance, some basic profile information, name, gender, address, telephone numbers and so on. They also include some other data which can help to improve their business (David Jones, 2015). Meantime, we will also introduce to consumers what kind of information we will collect from consumers before they sign in on our website, and let them understand why are we doing this in order to make sure we do not violate or misuse their data.

Political: Electronic commerce is radically influencing Australia's economic market due to the development of technology. However, in May 2011, the government released national digital economy strategy which showed government participation could foster e-business, such as reduce costs, increase citizen satisfaction and innovation. Australian Taxation Office will also become part of this process because of government. They are responsible for collecting taxation revenue from individual and company; manage goods and services under Australian states and territories; administer Australia's allowance and business register (PARLIAMENT of AUSTRALIA, 2018). All these responsibilities require interaction with our businesses, such as the permanent employees(stakeholders), employees' income and set up our company(new). The whole process controlled by Australia government which can make sure we do not perform an illegal behaviour in e-business, and also, serve us a better online environment by the government.  

Technology: As we mentioned in the socio-economical paragraph, technology is accelerating e-business development and consumers have started to accept online shopping. Along with technology development, it makes everything so much more comfortable than before. For example, cashless and wireless transactions. In the meanwhile, technology also is a crucial term for our product, because we are going to use the website to start this new business, all the customers need to go through it to contact with us if they have any issues and questions about a brand.

SWOT analysis:

Strengths:

• Affordable price

• One card access different kinds of gyms

• Professional training

• Each program tailor with different consumers

• Eliminate time restriction

• 24/7 technical support

• Community connection

• Fast and effective

Weaknesses:

• Not enough awareness

• Consumers may not trust new product

• Limited financial capital

• Experience employees

• Weak market image

Opportunities:

• Fewer competitors

• Large market share

• Become market leader in this area

• Growth of internet users

• Consumers accept shopping online

Threats:

• New competitors entre

• Exist gyms and personal trainers

• Adverse government policy

In conclusion, in this report, we firstly analysed what are the consumer's issues (target market/ customers). Based on that, we introduced what is our product and what kind of benefits our consumers can get from us (value proposition). Following part is how we use e-business to earn money and expand market share (revenue model). In the second paragraph, we demonstrate Micro and Macro environment, which use different theories to explain the internal and external environment. Alternatively, we covered how they influence today's online business and the way in which customers can protect themselves from information explosion. Then for each term, we provide industry examples to illustrate why they are so important for business. Therefore, we also need to apply same terms for our product. In the future, we hope the product will become a brand like Uber, which have a large market share and impressive brand image in consumer's mind.

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