Aradia Fitness London Case Solution

2. Key Issues

A key issue faced by Aradia Fitness London run by Andrea Tierney was the launch of TRX classes which had the potential in helping to enhance the revenue of the business. However, there was a fair amount of competition in the segment. Also, Tierney would have to educate her existing students about the benefits of attending the TRX classes and at the same time would have to ensure the affordability of the classes. On the other hand, she was faced with a challenge of determining the appropriate pricing that would cover the costs as well as be in line with that of the competitors'/ Moreover, Tierney was also faced with a decision about the promotion strategy of the TRX classes due to the low budget available and she needs to evaluate what marketing and promotional efforts should be undertaken to increase the enrollments in the TRX classes. 

3. Recommendations & Rationale

Talking from the financial perspective, it can be seen that a single TRX system would cost $158 which would mean $158 * 12 = $1,896 in total for the systems. Adding the total costs of cabinets equivalent to $120, the total would add up to $2,016. These are the incremental costs as the remaining overheads cost is not expected to change after adding the TRX classes.

Now, evaluating the pricing by the competitors, on average the price for six to eight-week TRX classes ranges between $199 to $360. As Tierney is planning on six-week classes, this would fall around $199 per customer. If she can get 10 customers in the first month who would be willing to be a part of the class, she would be able to cover up the initial investment. Hence, from a financial perspective, the option seems reasonable. Even if Tierney charges $168 per person for the TRX class for six weeks which would be way below what is being charged by Good life, it will be able to cover the initial investment as well as effectively compete with the competitors and enhance its customer base.