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How effective was the marketing research approach used by GSH to determine the potential demand for a fitness center?

Good Shepherd Hospital (GSH) was interested in expanding its reach into the community by establishing a fitness center. The center would serve both hospital employees and community residents. The intent was to not only establish a profitable facility but also to generate referrals to its clinical service and enhance the hospital’s presence in the community. The staff conducted market research on hospital employees and community residents to determine their interest in such a facility. The organization’s primary concerns were whether interest in the facility existed and what types of services potential users would be interested in.

Virtually everyone interviewed indicated at least some level of interest in a GSH-sponsored fitness facility, and plans were immediately drawn up for the development of a fitness center across the street from the hospital. Once operational, however, its projected volumes were quickly revealed to be overly optimistic, with few customers using the facility. When employees and residents were questioned concerning their lack of use, they reported the center was in an unsuitable location, its hours were inconvenient, it was too expensive, and it did not compare favorably with other alternatives. After reviewing the above case, address the following points:

  • How effective was the marketing research approach used by GSH to determine the potential demand for a fitness center?
  • GSH conducted marketing research on the general public in the community. Does it make more sense to segment the population into specified traits before selecting a sample?
  • What assumptions did GSH make about the location, fees and other characteristics of the fitness center?
  • When asking about interest in a fitness center, how should interviewers have qualified the positive responses? What additional questions might have been relevant to accurately estimating demand and interest?
  • Does it appear that GSH appropriately took competing facilities into consideration?

The completed case study should be 400-600 words, and should adhere to APA style. It should incorporate at least one reference (this can include your course textbook). A case study grading rubric is included on the following page.

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