<Put your full name here>
<Put your professor’s / supervisor’s name here>
<Put your course here>
<Put the date here>
- Situation Analysis
Zumba Fitness is a business model that is aiming to make revenues and thereby profits from selling Videos of exercises.
1.1 Strengths:
- Zumba’s routine is unique and has the potential to become another successful global brand like Pilates
- Consumers or the target market for Zumba accept the product fully
- Zumba has an association and exposure with a great brand – Kellog’s
1.2 Weakness:
- Lack of organization structure
- Too small team trying to achieve a lot
- Lack of focussed marketing effort
- Dependence on external marketing agency for spinning sales
1.3 Opportunities:
- Market demand for newer and alternate exercise routines
- Acceptance in the market – evident from the success of instructor training programs
- Potential to create a global brand
1.4 Threats:
- Limited finances to implement marketing plan
- Termination of association with Kellog’s that competition could drum up
- Lack of a strong brand despite 4 years being in the market
- Assumptions and missing information
The primary assumption made in the case analysis is that the complete facts are presented in the case study. The SWOT analysis is derived based on this assumption. From the description given in the case study it is also assumed that the promoters themselves do all the work and they do not have a formal organization or staff to do the tasks that are required for running an organization ant that there exists no organisational structure.
Some key information elements are not presented in the case. What is the turnover of the organization in the 4 years of its existence? How is the revenue applied? What costs are incurred in making a video? Who makes their music? How much does it cost? How much revenue are they making from instructor training? Why is this not being adopted as a business model? Has Zumba grown in line with the industry trends?
- Statement of problems
- Branding and sales: Zumba Fitness needs a strong branding and sales function. The current level of branding success does not ensure success
- Limited financial resources for organizational development
- Development of alternate solutions
- Branding and marketing
For an organization to succeed, as the marketing gurus Trout and Reis put it the war is in the mind of the consumer and it is essential to be there first and create a segment for the organization. Going by this approach creating a strong marketing and branding is very essential for Zumba. Brand can communicate very strong and positive attributes for what it stands for. For instance the Nike Swoosh is so powerful that it conveys swiftness in the minds of the consumers and the target market segment.
Brand promises something and it is that value that a customer will look for. This is something very powerful. Again the Nike Swoosh promises swiftness – this is also a brand promise. This is a very powerful communication and Zumba needs to create and ride on the power of a brand.
Zumba has the potential to become a global brand like the Pilates. However it needs to create that brand image in its target market and audience. Branding is the key to Zumba’s success, and there can be no alternate to it. Alternates can be built on how to build the brand and some of the possible alternates are:
- Can Zumba hire a marketing agency on a success fee basis? Will there be marketing companies willing to risk that?
- Can Zumba use the social media effectively to build a brand in the niche instructor segment to generate revenues initially?
- Can Zumba set up a website and use that as an effective marketing tool?
Internet and web technologies today offer a myriad range of marketing possibilities that are low cost, reach out widely to the consumer market. Especially the pull marketing proposition of the social media and internet technologies allows consumers to choose what they want to see and use. They have the power to choose and say no at the media stage itself. The best part about using web and internet technologies today is that the message that is conveyed is customised to meet the needs of the consumer and this technology is referred to as targeted marketing.
- Financial Resources: Zumba has been doing business for four years now and has very limited financial resources. For any organization to get into a turn-around mode or invest in marketing efforts it is very essential that the company have the required financial resources. Zumba could have earlier ridden on the Kellogs association. However that the association no longer exists, Zumba needs to find resources that can be invested into marketing and building that brand that is strong and has the appeal in the target market segment. Possible methods of raising financial resources required for the exercise include:
- Can the promoters of Zumba bring in more financial resources as part of the promoters’ equity?
- Can Zumba approach a bank or a venture capital firm for financing it?
- Can Zumba consider crowd sourcing as part of its funding fulfilment startegy?
Bank and institutional financing or even venture capital funding looks remote. The organization has been in existence for over four years now and have had limited success. The concept at a business levels looks very attractive. However limited success is a pointer to either a de-merit in the business idea itself or there is a lacunae in the way the business was run and opportunities lost in the first four years of operation. This may not make Zumba really attractive to banks, financial institutions and venture capital agencies. However there is a remote chance that an angel investor who is passionate about exercising comes across Zumba as a potential investment vehicle that there could be capital that comes from the formal sources. However to get seek and get the attention of the angel investor itself could take substantial amount of time and effort that could be a drain on the already financially weak Zumba.
The only option that looks feasible is to do crowd souring or crowd funding. Crowd funding works in a slightly different way and is relatively new as a means of funding. The business concept is thrown open to a general public and they create an opinion about it and start putting up small sums of money. Unlike the concept of getting USD 100,000 from a single investor or a company which is a difficult proposition for organizations like Zumba, they solicit USD 100 from each investor and look at getting similar $100 from 100 individual investors. The company gets into some kind of a formal working arrangement with each of the 100 individuals. There have been instances where millions of dollars also have been raised in funding by crowd sourcing and funding. This is a good opportunity for Zumba to explore.
- Alternate Evaluation and recommendation
For each of the two important challenges that Zumba faces today three specific alternates have already been presented in the previous section. This section recommends which alternate is ideally suited for Zumba.
- Marketing: The ideal solution in for Zumba at this juncture is to rely intensely on web and internet marketing. This could be a fairly cheap alternate, practical and cost effective when compared to the other two alternates presented. Setting up a good website and social media presence is the crux of the solution here. Zumba can outsource to a number of internet companies within United States or they can rely on few good companies that have been providing reliable services outside of United States. India, Israel and South Africa have large number of companies that are proven, reliable and have excellent track record in getting results. Social Media management can be done internally by one of the three promoters, however that is not recommended and it is highly recommended that this also is outsourced
- Funding: Since formal methods of funding like banks and venture capital funding seems to be almost certainly ruled out, it is advisable for Zumba to try their hand at Crowd sourcing and funding. One of the good points to start would be the instructors who have been trained by Zumba itself in the previous one year. These people would be the most attractive investors because they have experienced the Zumba offering personally and are convinced of its efficacy.
- Implementation:
It is rather simple to locate a good web services company in any of the above mentioned target countries and negotiate with them. Google search would be a useful tool and evaluation of their existing work and background reference checks would allow the promoters to identify one such company. Also a contract that is water tight needs to be drawn out for implementation.
A detailed email to the instructors that have been trained by Zumba in the last one year is the ideal way to start looking at crowd sourcing. Initially it is advised to take commitments from each one of the willing investors and consider accepting money only once a threshold minimum commitment levels are reached. It is imperative that the promoters themselves send out mails and make calls to the prospective investors without sounding a wee bit desperate.
- Evaluation and Control: It is imperative that once the funding block is overcome that the investors create a formal organization, have the required skeletal staff to run the operations. Performance metrics for the organization needs to be designed and implemented to ensure that they are in the right direction always.
Works Cited
Abu Bashar, Irshad Ahmed, and Mohammed Wasiq. "Effectiveness of Social Media as a Marketing Tool: An Empirical Study." 1.11 (2012).
Amstrong, P. Kotler & G. Principles of Marketing. 11th Ed. NJ: Pearson Prentice Hall, 2006.
Armstrong, Phili Kotler & Gary. "Company and Marketing Strategy: Partnering to Build Customer Relationships." Armstrong, Phili Kotler & Gary. Marketing: An Introduction. NY: Prentice Hall, 2010. 55.
Armstrong, Philip Kotler & Gary. "Customer-Driven Marketing Strategy: Creating Value for Target Customers." Armstrong, Philip Kotler & Gary. Marketing: An Introduction. NY: Prentice Hall, 2010. 177.
Armstrong, Philip Kotler & Gary. "Understanding Consumer and Business Buyer Behavior." Armstrong, Philip Kotler & Gary. Marketing: An Introduction. NY: Prentice Hall, 2010. 198.
ICFAI Center for Marketing Management. "Marketing Environment." Management, ICMR - ICFAI Center for Marketing. Marketing Management. Hyderabad: The ICFAI University, 2004. 36 - 37.
Trout, Al Ries & Jack. The 22 Immutable Laws of Marketing: Exposed and Explained by the World's Two. NY: Haper-Collins Publishers, Inc., 1994.
