APPLICATION OF DIGITAL MARKETING IN MOTIVATING CONSUMER TO CHOOSE FITNESS SERVICE AT CALIFORNIA FITNESS AND YOGA CENTER

MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY - PHAM QUYNH ANH APPLICATION OF DIGITAL MARKETING IN MOTIVATING CONSUMER TO CHOOSE FITNESS SERVICE AT CALIFORNIA FITNESS AND YOGA CENTER GRADUATION THESIS FACULTY OF BUSINESS ADMINISTRATION NUMBER: 7340101 HO CHI MINH CITY, DECEMBER - 2018 MINISTRY OF EDUCATION AND TRAININGSTATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY - PHAM QUYNH ANH APPLICATION OF DIGITAL MARKETING IN MOTIVATING CONSUMER TO CHOOSE FITNESS SERVICE AT CALIFORNIA FITNESS AND YOGA CENTER GRADUATION THESIS FACULTY OF BUSINESS ADMINISTRATION NUMBER: 7340101 ADVISOR: PhD HOANG THI THANH HANG Ho Chi Minh City, December – 2018 APPLICATION OF DIGITAL MARKETING IN MOTIVATING CONSUMER TO CHOOSE FITNESS SERVICE AT CALIFORNIA FITNESS AND YOGA CENTER ABSTRACT The study of “Application of digital marketing in motivating consumer to choose fitness service at California Fitness and Yoga Center” is conducted in Ho Chi Minh City from September to December 2018 The objectives of the study are to learn the current situation and application of digital marketing on motivating consumers to choose fitness service at California Fitness and Yoga Center The research found out that the factors informativeness, entertainment, credibility and irritation had impact on consumers‟ attitude towards digital advertisement In the research, a questionnaire was developed and investigated among 109 people who are both members and non-members of California Fitness and Yoga Center The research subjects were asked questions based on the level Likert scale From the result, the study was able to propose some recommendations and to increase the performance of digital marketing at California Fitness and Yoga Center In addition, some limitations were also included in the study and suggestions for further researches related to digital marketing and fitness industry were also presented ACKNOWLEDGEMENTS This thesis is the author's own work, the research results are honest, in which no previously published content or content done by others is used except for fully cited references I specially send my sincere gratitude to my advisor – Mrs Hoang Thi Thanh Hang for many valuable advices and comments to help me well accomplish my thesis; and in spite of being extraordinarily busy with her duties, took time to hear, guide, and keep me on the correct path Next, I would like to give my special thanks to all staff and lecturers of Business Administration faculty of Banking University Ho Chi Minh City They have helped me build knowledge and enjoy my time at the university from the beginning of my academic years To the very end, their help for an easier thesis period for all students is precious to me Last but not least, I want to give my special thanks to my family for their unconditional love and encouragement through my hard time dealing with thesis To them all, I dedicated this thesis TABLE OF CONTENT ABBREVIATION INTRODUCTION Statement of the Problem Objectives 10 Research questions 11 Scope of the study 11 Research Methodology 11 Structure of the study 12 CHAPTER 1: LITERATURE REVIEW 13 1.1 Theoretical basis 13 1.1.1 Overview of Digital Marketing 13 1.1.2 Some features of digital marketing 14 1.1.2 Digital marketing and Traditional marketing 15 1.1.3 Some most-used Digital Marketing channels 16 1.1.4 Application of Digital marketing in business 18 1.2 Literature Review 19 CHAPTER 2: REALITY OF APPLYING DIGITAL MARKETING IN CALIFORNIA FITNESS AND YOGA CENTER 24 2.1 Introduction of California Fitness and Yoga Center 24 2.1.1 An overview of California Fitness and Yoga Center 24 2.1.2 Services 25 2.1.3 An overview of business performance of CFYC 27 2.2 Digital marketing application at CFYC 28 2.2.1 The situation of applying digital marketing in 2015-2017 period 28 2.2.2 Evaluation of the application of digital marketing at CFYC 33 2.3 Consumer attitude towards digital marketing application at CFYC 34 2.3.1 Methodology 34 2.3.2 Proposed research model 35 2.3.3 Data analysis 38 2.4 Results 42 CHAPTER 3: CONCLUSION AND RECOMMENDATION 44 3.1 Conclusion 44 3.2 Recommendation 45 3.2.1 Entertainment 45 3.2.2 Informativeness 46 3.2.3 Credibility 46 3.2.4 Irritation 47 3.2.5 Other suggestions 47 3.3 Research limitations 48 REFERENCE 50 ABBREVIATION CFYC California Fitness and Yoga Center HCMC Ho Chi Minh City MMA Mix martial arts PT Personal trainer/training DM Digital marketing CIR Cost-Income Ratio SEM Search Engine Marketing SEO Search Engine Optimization ROI Return on Investment SMEs Small and Medium-sized Enterprises CMG.ASIA California Management Group Asia LIST OF TABLE Table 1.1 Comparison of digital marketing and traditional marketing 15 Table 1.2 Some digital marketing tools and channels 16 Table 2.1 Factors affecting attitude towards digtal marketing arts 36 Table 2.2 Respondents‟ Demographic (N=109) 39 LIST OF FIGURE Figure 2.1 A social research of Fitness Industry 01/09/2015 - 30/11/2015 25 Figure 2.2 Revenue of CFYC during 2015 to 2017 period 28 Figure 2.6 Total affiliate revenue and cost 32 Figure 2.7 Total Internal revenue 33 Figure 2.8 Proposed model 36 Figure 2.9 Most used digital channels 41 Figure 2.10 Factors' Mean score 42 INTRODUCTION Statement of the Problem There is undeniable evidence that regular physical activity contributes to the primary and secondary prevention of several chronic diseases and is associated with a reduced risk of premature death There has been a connection between the volume of physical activities and wellbeing status, for instance the most physically active people are at the lowest risk The most impressive progress in health status is when people who are least fit become physically active Exercise is perceived as a good way of enhancing and maintaining physical and emotional wellbeing Studies also revealed that the effects of yoga on both healthy and diseased populations may be as effective as or better than exercise at improving a variety of health-related issues (Ross and Thomas, 2010) The health and fitness industry develops as people become more aware of the benefits of achieving and maintaining a healthy lifestyle As health care costs increase, consumers realize it's more economical to invest their time and money in achieving good health rather than paying for the treatment of the conditions attributed to unhealthy habits (Warburton et al, 2006) According to Maslow‟s hierarchy of needs, once a person‟s physiological needs are satisfied, they would feel the needs for safety These needs include one‟s health and well-being After physiological and safety needs are fulfilled, human needs to feel belonging and accepted among social groups Other than good physical and mental health, people also go to the gym to make friend, to have a sense of belonging to a community This explains the uprising trend of fitness and yoga industry in Vietnam and the run for market share is getting more intense as firms have to constantly find new approach to their customers In the era of information technology development, the media has been growing, with the strongest growth being the Internet With outstanding advantages, the Internet since the beginning has played an important role in every aspect of life 44 CHAPTER 3: CONCLUSION AND RECOMMENDATION This chapter aims at giving conclusion of the study Recommendations to each and every factors and limitations being investigated will be presented in this chapter along with implication and limitations of this research 3.1 Conclusion The study aimed at understanding the application of digital marketing on motivating customers to choose service at CFYC The results advance our knowledge of the use of digital marketing, underlying how consumers appreciate the brands or services on digital channels and take into account the information provided through these channels In the section where CFYC‟s current situation of applying digital marketing was discussed, since digital marketing approaches were applied into business, there has been a growth in total revenue Digital marketing is the main source of new traffics brought to CFYC thank to its spreading ability There are some restrictions in operation and in advertisement content that reduces efficiency, increases the cost The restrictions come from attitude of consumers towards Being able to identify the factors and to which extent the customers agreed or disagreed with the factors helps to suggest recommendation to improve digital marketing performance From the research findings, we can learn that factors affecting attitude towards ads that most of the consumers agreed on are informativeness, entertainment, credibility and irritation The factor that was most agreed on was informativeness; the least approved one was the entertainment factor Despite being the pioneer in fitness industry, owning the largest market share in Vietnam, deficiency is inevitable CFYC should always work on how to improve their way of doing business otherwise younger but innovating newcomers would become a threat to CFYC‟s position in the industry 45 3.2 Recommendation 3.2.1 Entertainment The majority of advertisements on digital marketing channels are mostly focused on commercial purposes to gain as much customer information as possible by promoting for clubs, services, etc, making messages delivered to customer become overloaded but lack of enjoyment Di Pietro and Pantano (2012) found out that the fun provided by advertisements along with the possibility to ask for suggestions in an ease and entertaining way motivates customers to pay more attention to the services they are introduced to According to the social listening report from Buzmetrics, the social trends of posting about training results and difficult body posing challenge on social networks have gone viral as well received positive approval Infotainment sites also contributed in making these trends more popular at the same time made fitness training more and more popular For that reason, CFYC should also pay attention to entertaining elements of digital advertisements and digital marketing platforms The use of promotional videos can directly impact viewers' senses and psychology through images, sounds, effects, etc., along with a content that conveys meaningful messages would easily touch consumer‟s emotion, especially to those who are hesitated when facing contents with too many words In addition, the interaction time for video ads is longer than posts and images, audiences are unlimited to number of views As video ads could be able to deliver creative, exclusive and meaningful content, they could create a viral effect in online environment Impressive video ads will create a good effect to help customers remember the brand longer, attract and draw more attention to advertised services, connecting the community with the brand Recommendations are to generate viral trends or competitions on social media channels in order to tell training stories and results as well as to encourage more people going to the gym through which to offer the audience a special 46 membership package and benefit coming with the trends; and to focus more on video ads to expand the scale of CFYC to more people 3.2.2 Informativeness This is the most approved factor according to the survey result However it is also noticeable that the audience of digital channels tends to pay more attention on advertisements that are concise, specific and easy to understand Providing information other than commercial purpose; for instance training instruction, training tips, diet tips, as well as stories of customers who succeeded in getting fit in order to gain more audience who have the concern for fitness as potential consumers Content marketing is now a fast growing trend that has proven its effectiveness CFYC has done a good job in this aspect However, the use of email marketing did not bring much value Email marketing is proven to deliver the highest conversion rate among all of the tools A more effective way to use email marketing for example a new platform that automatically send HTML email at the right time should be added to consideration 3.2.3 Credibility There are classic ways to boost a brand‟s credibility One of them is letting customers review on the brand Researches show that word-of-mouth is the most powerful way to marketing By reading good reviews from customers who have used the service, customers are more likely to make a purchase Therefore having a place for customers to review on the brand also helps increasing brand‟s credibility Increasing brand‟s image also increases brand‟s credibility Other than the service provided, customers also concern about company‟s social reputation Participating in social activities like charity events, charity findings, providing environmental friendly products or services is a very effective and meaningful way to increase brand‟s value and credibility, as well to help build a better community 47 3.2.4 Irritation Irritation has been a significant issue in advertising results in the promotion losing its adequacy, thus consumers will be negatively disposed toward the ad because of the immaterial and diverting data as an interruption into their security, which might make them feel confused and irritated about the advertisement (Stewart & Pavlou, 2002) Recommendation to minimize the appearance of junk ads (spam) and increase user autonomy for advertising, which means to give consumers some control over the ads called permission-based advertising, which refers to consumers' control over time, location, what and how advertising is made (Carroll, Barnes, Scornavacca & Fletcher, 2007) The fact that consumers now feel bothered by ads via social networks is due to the emergence of ads that are getting more and more frequent when users visit social networks Ads are increasingly competing with images and user feeds on newsfeed, people start to become familiar with ads and the click rate decreases Businesses also often fall into the state of advertising, but forget to explore, build relationships with customers, leading to psychological indifference to ads on social media and they are easily ignored Therefore, CFYC must not make the same mistake, In fact, they should focus on enhancing the reputation and trust of customers through interaction with customers At the same time, it is necessary to let customers be comfortable in contacting and receiving advertising, by letting them be able to accept or ignore ads easily 3.2.5 Other suggestions There are other suggestions related to digital marketing operation in CFYC Firstly, there should be a consensus between the ads performance teams and in each team in terms of campaign names, campaign rules, campaign content, etc to be able to track revenue and optimize costs easier CFYC should also optimize the process of online guests from when they registered information to when they get consulted, since it takes too much time and 48 annoys consumers Suggestion is to build a booking site in order to book a visit to club right after leaving information, to save time for customers and reduce work load for tele-marketing team CFYC has facilities all over the country, carrying the opportunity to implement wifi marketing thank to its large scale Wifi marketing can be implemented at clubs in shopping mall, offer free wifi in return of guest phone number This is a huge opportunity for expanding digital marketing audience 3.3 Research limitations Although the study can give some useful suggestions, it cannot avoid some mistakes and limitations The most obvious limitation is that this study was not able to examine the reliability of the proposed model, the correlation of the factors etc A limitation also emerges from the representativeness of the sample The result reveals that people exposed to digital marketing are those from under 25 years old as the young generation, who also are the main user of digital channels This study does not represent the wide variety of consumers as the study is only conducted in Ho Chi Minh City Some of the theories used in the study may not be suitable up to date Moreover, the study does not focus on any specific digital marketing channel in particular, therefore the detail information may vary regarding different brands according to their digital marketing strategies This study examined the application of digital marketing in a particular enterprise These findings can be considered as one of the emerging attempts to investigate empirically consumer attitude towards digital marketing for purchasing decision in fitness industry Findings of this study help to understand the factors influence consumers to choose fitness service through digital marketing The results 49 of this study, indicated that the factors affecting attitude towards digital marketing advertisement are informativeness, entertainment, credibility and irritation which can also contribute its findings to practitioners and online companies‟ managers More research on the new factors according to latest digital technology can be conducted in the future for more detailed understanding of how digital marketing affects consumers Future researches should test the reliability of the proposed model using quantitative approach 50 REFERENCE "Definition of digital marketing", 2015, Financial Times, available at http://lexicon.ft.com/Term?term=digital-marketing “Digital 2016: Vietnam Report”, 2016, available at : https://datareportal.com/reports/digital-2016-vietnam?rq=vietnam Brackett, L K., & Carr, B N (2001) Cyberspace advertising vs other media: Consumer vs mature student attitudes Journal of advertising research, 41(5), 23-32 Brajnik G and Gabrielli S., 2010, “A Review of Online Advertising Effects on the User Experience”, Journal Of Human–Computer Interaction, 26(10), 971–997, 2010 Carroll, Amy & Barnes, Stuart & Fletcher, Keith, 2007 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10.1016/j.bushor.2014.07.002 25 Warburton DE, Nicol CW, Bredin SS., 2006, “Health benefits of physical activity: the evidence” 53 APPENDIX 1: QUESTIONNAIRE DIGITAL MARKETING FACTORS AFFECTING CONSUMER BEHAVIORS TO CHOOSE FITNESS SERVICE This is a questionnaire to research the purchase behavior to choose fitness service in Ho Chi Minh City I would love to receive answers from you I guarantee your answers to these questions are for research purpose only Yours sincerely, GENERAL QUESITONS What is your gender? a Female b Male What is your age? a < 25 b 25-35 c >35 What is your job? a Student b Worker c Others How much you earn a month? a 7 millions 54 How much time are you online on average? a < hours b hours -8 hours c > hours Where did you learn of fitness service? a Facebook/ Instagram Ads b Google c Youtube Ads d Club websites e Infortainment/ Electronic newspaper f Fitness blogs/forums g Reference from friends and family h Others Have you been a fittness club member before? a Yes b No Thank you for accepting to this survey, below are important questions, please help us complete those questions Thank you Only choose one out of five options, scores are: Strongly disagree - Disagree – Neutral – Agree – Strongly agree – 55 Questions related to Informativeness DM Ads of CFYC are good sources of service information DM Ads of CFYC provide relevant service information DM Ads of CFYC provide timely information Questions related to Entertainment DM Ads of CFYC have interesting content DM Ads of CFYC are highly entertaining DM Ads of CFYC are pleasing to view Questions related to Credibility DM Ads of CFYC are trustworthy DM Ads of CFYC are believable DM Ads of CFYC are persuasive Questions related to Irritation 56 DM Ads of CFYC appear too much DM Ads of CFYC are annoying DM Ads of CFYC are irritating 57 APPENDIX 2: LIST OF INTERVIEWEES Interviewee Erik David Pedro Baliza Contact number Job Tittle 090 269 4545 CFYC‟s Marketing Vice President 0125 794 1242 CFYC‟s Marketing President Duong Tu My 093 687 8424 Performance marketing consultant Kieu Thanh Nguyen 097 875 0756 Data engineer team leader Nguyen Minh Chau 098 785 4484 Google - Affiliate Manager Huynh Thien Duc 096 821 2079 Google Ads Senior Executive Tran Thuy Thuy Huong 08 194 8822 Affiliate Senior Executive Huynh Nhat Trung 090 992 8161 Senior Marketing Executive Dang Dung 035 596 9365 Senior Campaign Executive Hien Tran 093 994 6469 Senior Digital Marketing Administrator 58 APPENDIX 3: INTERVIEW QUESTIONS  Which part of the Digital marketing team are you in?  What are the factors you think will motivate customers to choose CFYC‟s service?  What can be the reason related to digital ads that makes customers refuse to choose CFYC‟s services?  Why you think customer‟s attitude towards ads is important to choose CFYC‟s services?  About ads information, how you think information will help customer make decision?  About ads entertainment, how you think entertainment will help customer make decision?  About ads credibility, how you think it will help customer make decision?  What are the irritation that you think customer would feel?  How you think irritation can make customers refuse to choose CFYC‟s services? ... APPLICATION OF DIGITAL MARKETING IN MOTIVATING CONSUMER TO CHOOSE FITNESS SERVICE AT CALIFORNIA FITNESS AND YOGA CENTER ABSTRACT The study of ? ?Application of digital marketing in motivating consumer. .. situation and application of digital marketing on motivating consumers to choose fitness service at California Fitness and Yoga Center The research found out that the factors informativeness, entertainment,... REALITY OF APPLYING DIGITAL MARKETING IN CALIFORNIA FITNESS AND YOGA CENTER 24 2.1 Introduction of California Fitness and Yoga Center 24 2.1.1 An overview of California Fitness and Yoga Center