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McGill University – Desautels Faculty of ManagementMRKT 459Case Study #5Planet Fitness: No Judgements, No LunksProfessor Marie Josee LamotheGabriel Rocha – 260870382October 29th, 2020
1.In what ways has Planet Fitness positioned itself to mitigate the most significantnegative forces in the health club industry? Do you think it is successful in achievingcompetitive advantage?Planet Fitness, founded in 1992, established itself firmly in the market of gym and healthclubs, by taking an approach never seen in the industry before. With the philosophy of a“judgement-free zone” and founders with previous experience, Planet Fitness was able todifferentiate itself and successfully achieve a competitive advantage through various aspects ofthe business.Firstly, Planet Fitness revolutionized the concept of how gyms are priced and utilized. Theydecided to remove any unnecessary amenities offered in other gyms such as; pools, squashcourts, and so on in order to reduce the monthly cost per customer. This in turn allowed PlanetFitness to reduce the likelihood of disappointing their customer by being a cheap, but simpleoption for their consumer. Therefore, Planet Fitness was able to offer a $10/month basemembership, which was easily affordable for many.To attract a more “sophisticated/premium”member they offered a $22/month PF Black card, which allowed them to have exclusive accessto features such as; massage chairs, tanning booths and hydro massage beds, as well as beingable to bring a guest to any Planet Fitness location. This shift to a more affordable and basic offerattracted many that were either intimidated by the gym culture or were price sensitive whenselecting which gym to attend.Furthermore, Planet Fitness decided to market and attempt to gain customers from othermarkets, rather than from other gyms. This idea was based on the concept of their “Judgement-Free” message they were trying to spread. Attempting to gain those who went to other more“advanced” gyms or health clubs would bring the type of consumer they were trying to avoidjoining into their facilities.Therefore, they were attempting to attract individuals who rarely ornever went to the gym, those who spent time at restaurants or the movies. As Planet Fitness wascreating a “comfortable and attractive” gym they provided an atmosphere that matched theconsumer they were after, to appeal to the 80% of the population that did not have a fitnessmembership yet. This approach also attracted a high number of female customers, accounting forroughly 60% of their consumer base, as well a third of their members made roughly $100,000
annually. As well as, almost 40% of their customers were first-time fitness members,highlighting how their cheap, and judgement free philosophy was working.

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