HOW TO GROW

A PREMIUM
BRAND?
Harjas Bakshi
148

KEY ISSUES
Rising competition from:
Clarkhouse, a top-rated hotel chain
Manhattan-based Fitworth health club chain
Transitions Pricing Strategy
Transitions membership was aging- 46 from 41
High costs:
Deliberately created high-cost facilities
Pay a premium for celebrity chefs and former Olympic coaches and

athletes
Maintaining such plush facilities in prime locations

SYMPTOMS
Shrinking margins
Operating expenses continued to rise
Flat sales growth
Market share difficult to track

OPPORTUNITIES
Clearly differentiated brand
Exploit the available facilities, taking advantage of the location
Expansion-broadening their niche
Charge a one-time initiation fee instead of annual fee
Corporate discount and package pricing for various services
Go down a notch-Tie up with Ambassador hotels
Opening Transition satellite spas at certain corporate headquarters

ACTIONS
A pricing option might be a good place to start
Customers believe that the clubs high price and high quality
Use the flanker strategy to explore the Ambassador hotel offer
Transitions current method allows members to focus on benefits, not on a

series of costs.

ACTIONS
Tailoring the pricing,
Partnering with another company, and
Even, opening satellite spa at corporate locations

are all good ideas, as long as Gordon is clear

about his objectives before he makes a move.