Introduction
There are five different Sports Connection clubs in the Liverpool. In order to attract more customers, these clubs provide variable offers and frequently change their strategy to the customers at every month. For these reasons, as the chain of the health club operating, the sport connection plc recently evaluates the effects of various elements of their marketing strategy and gives four questions to answer.
According to the Sports connection clubs, there are rough two market strategies. One of them is Referral Programme, which means company will award the new member who bringing other new members. Another one called deadline effect. It is quite different with Referral Programme, through the changing the price to attract customers. The club would make new members understand that new offer will increase the price or reduce the free time, and the club would continuously have the special offer to the customers.
There are many variables, including price, national disposable personal income and free time, effect the new membership and make the club gain more economic profit. This essay would like to use the linear regression and statistical analysis to give the solutions and advise. In order to give the Classification Discussed research to answer the questions, this report will be divided into three significant parts, which are basic linear regression, time effect and further research.
Basic Linear Regression
To discuss the relation between the new membership and other variables, it is necessary to divided it into two specific parts; statement of the theory and model specification.
Statement Of Theory Or Hypothesis
In order to modelling the regression model, firstly, it is necessary to calculate the total amount of the sales (Q), and take Q as the dependent variable in the model. For a dependent variable Q and independent variables, the model will be regarded as the directly solution of the basic linear regression. Then, it is necessary to express the variables as some LETTERs. That can be using P stand for price, and TF represent the Time Free. M stand for the Referral programme and L stand for the Renewal Price. Number of special Offers can be expressed by N. Finally, income can be represented by Y. In this model, the dependent variable is Q and other variable are independent variables in terms of an equation that is linear in its parameter.
To use the eview to develop this line model, as can be seen the data figured out below, the Adjusted R-squared is 0.296923, this number is nearly to 0 and that means new membership is not very relevant with the price, time free and income. It also can be found on the graph below, the Actual line has the different fluctuation with the fitted line. It is quite important to find that the coefficients and proportion of the Referral Programme and Special Offers are bigger than other variables’. In this model, this situation represent Referral programme and special offer are the most efficient variables to affect the new membership and through the analysed data. With the changing of these two variables, the total sales will be get increasing or decreasing, and other factors won’t affect the new membership like too much.
Time Effect
As can be seen in the table below, the total data is calculated on the right most side. It is quite easily to find that whether 2009 or 2010, the largest number of the total sales is in the January. And sale of the June is the smallest. Without other effect factors, the most influential reason is weather and New Year resolution. And New Year resolution will be discussed in the fourth part.
It can be model a linear regression model that the coefficient of January is the greatest. It means January has the most efficient effect on the membership. The reason of this situation is that the January is the first month in the year. People have the New Year resolution to lose the weight. Another reason is the weather is too cold, some proper ate sports can build healthy body to defend the cold. In the model, the June’s coefficient is just -165.5000.
The less new membership joins in the clubs. In the summer, some people will not attend the gym class because the weather is too hot, people will easily get to sweat and tired too go to gym, so some people quit the membership. Also it can be seen in the graph, the Adjusted R-squared is equal 0.500023. It means the relation between the membership and month factor is quite significant.
New Year Resolution
The purpose of the New Year’s resolution in Britain is to have a new start in the next year. And everyone hope to achieve their goals and achievement. In the New Year, a large number of people hope to lose some weight and have new beginning for their New Year’s resolution, as well as some people have eaten too much or drink too much and it directly make them heavier than before during the New Year holiday. And this situation will make a lot of people decide to lose weight and join the sport club. Everybody wish to have a healthy body and a longer life. It obviously takes many new memberships in the club. Another important reason is gift. Some families and friends would like to make the club card as a present to give others. This situation can lead increasing number of the customers join the club.
Beside the kind of weight reason, clubs will provide some special offer and
promotions to the customers in the New Year holiday. Because of the lower price and more free time and low renewal price. it can attract many new customers go down the gym. The firm will offer the reward new customers for bringing in other members within the first two months for the referral program; some members would like to bring more customers in the January. it would make some new customers join in the clubs.
Conclusion and recommendation:
As can be seen, in the first part of the report, price, income and other variable have the few affect on new membership. The Adjusted R-squared is nearly to 0. It means variables cannot affect the membership in a efficient way. But it can be found that referral programme and special offer are the most influential factors to the new membership. By using these two offers through the equation, the lower price and more free time can attract many new customers.
According to the time effect, we can have the conclusion that different month have different effect on the membership. Because of the special strategy, there is largest number of new membership in the January, and until the June, the number of people join the club get steep decreasing. Another significant variable of the membership is New Year resolution. Customers thinking they can have a new beginning in the New Year, and that thought will affect the sales of the gym membership.
In order to make the company have more profit in the future, there are some advises to the Sports Connection plc. Because Referral Programme and the special offer are the most influential factors, clubs can provide more special offers and keep it in a long time. And company can aim at different month to supply the different marketing strategy to attract customers. And in the New Year, Sports Connection plc can accord to the National disposable personal income and average price to offer some promotions and strategies.
