TABLE OF CONTENTS

Introduction…………………………………………………………………... 2

Product………………………………………………………………………… 3

Place…………………………………………………………………................. 5

Price…………………………………………………………………................. 7

Promotion………………………………………………………………………. 9

Marketing Mix………………………………………………………………… 12

Bibliography…………………………………………………………………….13

Andrew Lengkong 1
Power Fit Case Study
Introduction

Power Fit Company is a manufacturer that produces a wide range of fitness

machines and fitness products. The company’s base is in London, UK and would like to

start the business in Indonesia. As an Indonesian marketing expert, I was assigned to be

the local manager for the company. Hopefully the information below will give the Power

Fit Company will get a better understanding on how to exploit their markets in Indonesia.

This report will explain some of the advices the company will need to consider in

order to get ahead of other competitors in Indonesia. It will explain about 7 major points.

Products, Place, Price, Promotion, Marketing Mix, Differences in marketing products and

services, and lastly is differentiate between international and domestic marketing.

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Power Fit Case Study
Products

The first issue the company will have to consider before starting the business is

products. To keep up with the existing competitors, Power Fit will have to think about on

how to attract and satisfy consumer. Product improvement would need improvement so

that value would be added to such products. This can be done by augmenting the

products. Product augmentation is way on how to differentiate Power Fit products with

the competitors’. As it is stated in the case study scenario, their best selling products are

the treadmill and cross-trainer. Power Fit should consider on modifying their products so

the company can get ahead of their competitors. The treadmill should have some sort of

cup holder on the dash. This also makes it easier to segment their products. The treadmill

with the cup holder would be segmented to the “quickly thirsty” type of people.

Second issue the company will need to consider is to develop new products.

According to HND BPP publication (2006:219) new product development is a process

where a company develops; test the capability of the product so that it can be introduced

to the market in order to keep the survival or growth of the organization.

In this case, Power Fit Company would be the first company to come up with the

idea of having cup holder attached on the treadmill. The company has entirely open up a

new market. The packaging of the firm’s products should also be changed. But before

changing anything, the first action the organization need to do is to find ideas or some

sort of suggestion for what to do or what to improve in the company.

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Power Fit Case Study
 Referring to the book HND BPP publication (2006:221) these ideas can come

from internal and external. Internal ideas would be like suggestion boxes, customer

correspondence, sales record, complaints, salesperson’s report, competitive activity

reports, New Product Development departments, and Research and Development

departments. On the other hand, external suggestion would be something like market

research, new product agencies, inventors, patent agents, acquisition, licensing

agreements, and competitors and research institutions (including academic, trade,

industry, charitable and government institutions) any ideas given to the organization

should be taken seriously because it may lead to “catastrophe” or even “victory” for the

company.

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Power Fit Case Study
PLACE

As stated in HND BPP publication (2006:236) in order for a Power Fit to distribute their

products correctly, the ‘Five rights of distribution’ concept will be needed to be followed.

The five rights of distribution consist of the following.

• The RIGHT product- Finding out consumer’s needs and wants and satisfying it.

• The RIGHT place- Putting the product in the proper place. In this case Power Fit

will have to consider distributing their products to some sort of fitness center. Yet

malls in Jakarta have fitness/sports center in them. Example of fitness/sports

center would be like EX, Pondok Indah Mal, Puri Indah Mall (Celebrity Fitness),

Taman Anggrek Mall (Fitness First) and Senayan City (Aibi fitness station).

These are only a few of the most popular fitness center or sporting goods places in

Jakarta. Power Fit should consider on distributing their products in these places.

• The RIGHT time- Opening Hours. Most office working hours in Jakarta usually

starts at 7am-5pm, however it is different with fitness centers or sporting goods

centers. Citing from the website initiated by Senayan City (internet, 2006) Aibi

fitness station opens at 10am-10pm.

• The RIGHT quantity- The products will need to be convenient for the costumer to

purchase. This means that the product that the firm is selling has to be in the right

measurement, capacity, size and number.

• The RIGHT price- The price of the products a firm is selling will have to suit the

performance or benefits of that product. Customers expect to get higher benefits

or values if the products are costly.

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Power Fit Case Study
Power Fit’s products can be distributed in many several ways. It can be distributed to

retailer. A retailer would be something like Aibi fitness station. Another way is through

wholesaler, an example of wholesaler would be like Ace Hardware. Another effective

distribution is direct selling. This can be done through mail, telephone, door-to-door,

personal selling, computer and even Television. Power Fit Company should consider on

distributing their products in popular places where lots of people visits the place often.

The place should be convenient so that it makes it easier for consumer to look for Power

Fit’s products. In other words, consumers find it very easy to locate our products.

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Power Fit Case Study
PRICE

Every organization’s goals are to maximize profit and maintain or increase market

share in the market. But off course, before a company starts making profit, the cost will

need to be covered first.

According to HND BPP publication (2006:278) there are two types of price

setters. There are price leaders that set prices by him/her and there are price followers that

follow the price that the price leaders set. In order for a competitor to introduce an

existing product into a market, competitors tend to examine, and estimate a similar

product in the market and see if they can make it at a better price hence to make a profit.

This pricing method is called the competitor related pricing.

Another pricing method is the cost plus pricing method. A certain amount of

percentage is added to the products or services to cover the costs of producing those

products/services. Power Fit might consider on setting the price high in the first place to

get cover the cost. This method of pricing usually varies.

Target pricing is another method of other manufacturers setting their prices.

Target pricing is when a firm targets its prices in order to get back the money they have

spent in making that project. The firms usually target their “money return” over a period

of time.

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Power Fit Case Study
 The last method that effects price setting is the perceived value pricing. This

usually happens when a customer are willing to pay extra money to get something

different that is not on the catalog. Power Fit Company should consider on offering

custom made products for people that are willing to pay more to get the fitness machine

they desire. Power Fit also offers a wide variety of fitness equipments on high price

because Power Fit offers high quality products. The way people see our products should

be different than the way people see the competitors’.

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Power Fit Case Study
PROMOTION

In my opinion, personal selling is the most effective way of selling.

Communication is required to influence major purchasing. A sales person would need to

communicate very well in order to influence their targets effectively and efficiently. The

first thing a sales person should do before going any further for a purchase is finding out

as much about the buyer as possible. This means finding out whether the targeted person

has ever purchased the products before. And if so, what tactics are used to influence that

person. By doing this, a sales person would find it easier to persuade the past customer to

purchase the product again by using the same approach.

The next action a sales person should do is creating a first impression for the

customers. Male customers tend to be more attracted and pay more attention to a

beautiful, attractive, nice dressed show promotion girl. According to HND BPP

publication (2006;357) it is believed that if a sales person dress up nice and look

professional, the way customer sets their tone of the interview will be different.

Finding out the customer’s needs and fulfilling that needs with the products is the

next step. A sales person should consider on asking open questions instead of closed

questions. Because a sales person would want to find out what the targeted customers are

exactly looking for. With open questions, customers tend to answer more rather than one

or two phrases.

Next up is presentation and demonstration. As stated in HND BPP publication

(2006; 358) every customer looks at a product on whether the product benefits their need

or not. Therefore there are three categories of benefits. There is the standard benefits

which are the benefits that customers get from the company itself and the services it

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Power Fit Case Study
offers. Company benefits are acquired by having some sort of relationship between the

seller and the buyer by any means. This includes having relationship with staff that

provides installations and after-sale service. This will assure the buyer to purchase the

products. The last category of benefits is the differential benefits. These benefits would

relate with other similar competitor’s products. Power Fit products are different from the

competitor’s products because it offers high class quality products with a beneficial price

and there are slight differences between our products and other competition products.

On top of the benefits, sales person have other weapons if something should go

wrong. This would include reference selling, demonstration, guarantees, trial orders, and

sale or return services. Reference selling is when the sales person uses an existing

satisfied customer to persuade the new customer in buying the products. Demonstration is

when the products are being demonstrated to prove that the products will live up to what

it promises. Guarantees are the “assuration” of the product if something goes wrong. This

means that if the purchased product broke, the company will be responsible in fixing it or

if possible, replacing it with a new one. Trial order is something like demonstration. It’s

when a potential customer gets to try the products for free for a certain amount of time.

Sale or return let buyer return the purchased product if they are not satisfied with it. After

all these processes happened, now it is up to the buyer to make objections, negotiating or

close the deal.

Personal selling is more effective than all the other activity because it is flexible.

A sales person may personalize on what they want to say and if objections between the

customers should occur, the sales person can give out a quick response. Personal selling

also targets its products to the people that have potential on purchasing the products.

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Power Fit Case Study
 The next major promotional activity is advertising. Advertising is one of the most

effective ways of influencing the costumers. According to HND BPP publication (2006;

313) advertising is used to supports sales increases, encourage trials, create awareness,

inform about a feature or benefit, to remind, to reassure, create an image, modify

attitudes, gain trade and sales staff support.

Advertising creates awareness that leads to interest and then it creates desire

which then lead into action or purchase. Advertising can be put up pretty much every

where. It can be put up on the press or newspaper. In Indonesia, Power Fit Company

should consider putting ads up on the “KOMPAS” newspaper since it is one of the most

popular newspaper in Jakarta. The majority of Indonesians read Kompas newspaper, it

covers most of the areas in Jakarta and also many people are already loyal to Kompas

newspaper.

Also consider on placing an ad on the local television channel like Metro TV,

RCTI, SCTV, Indosiar, etc. By placing ads on the television, Power Fit’s advertisement is

guarantee to cover most of the market in Indonesia since most of the Indonesians have

television and the local channel. It is also effective because it not only shows picture in

the advertisement but also have sounds to it which makes it much more attractive to

watch. These are only some of the many several ways of placing ads to get customer’s

attention.

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Power Fit Case Study
MARKETING MIX

Citing from a website initiated by NetMba (internet,2006) There are four

characteristics of segmentation. There are geographic, demographic, psychographic, and

behavioralistic. Each of these characteristic have different variables. This report will only

explain two of the major segmentations used by the Power Fit Company.

The first way of segmentation used by Power Fit Company is the demographic

segmentation. Demographic segmentation deals with age, sex, family size, family

lifecycle, generations, income, occupations, educations, ethics, social class, religion and

nationality. The treadmill produced by Power Fit is targeted to male and female aged

somewhere between 18-65. It is also targeted to people with high income since our

products is not considered “cheap” products. Not everyone can have Power Fit treadmills.

The treadmills made by Power Fit Company are made out of high quality, genuine steel.

That is why the price is not cheap. It is targeted to basically everyone that is interested in

losing weight and also body builder or athletes.

The next segmentation Power Fit Company uses is the product usage

segmentation which goes in into the behavioralistic segmentation. Power Fit’s treadmills

are targeted to those who are interested in losing weight and also professional

athletes/body builder that are experienced in using treadmills. In other words, the

treadmills are designed for heavy users who spend a lot of time on the treadmills.

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Power Fit Case Study
BIBLIOGRAPHY

‘Aibi Fitness Station’ (2006) Senayan City

http://www.senayancity.com/floor.php?id=40

‘Marketing’ (2004) HND BPP publication

‘Market segmentation’ (2006) NetMBA

http://www.netmba.com/marketing/market/segmentation/

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Power Fit Case Study