Read the following case carefully and answer the questions that follow: Sparkle Fitness Club began operations in 2000 in Kalimati, Kathmandu. The club's objective was to meet the fitness needs of a…

Read the following case carefully and answer the questions that follow:

Sparkle Fitness Club began operations in 2000 in Kalimati, Kathmandu. The club's objective was to meet the fitness needs of a diverse following, from the professional body builder to the overweight person.

Sparkle Fitness Club's pricing plan was to have a fitness facility that targeted the common person, a fitness facility that was not on the high end or the low end, but in the middle price range. In the beginning it planned to challenge the price of the top-of-the-line facilities. It offered its services in big spacious center in a high-traffic area, a part of city that was becoming renovated. There was little competition in the area. The establishment's large space, with natural light coming in and wall ventilated, set it apart from competitors.

The company expected its members to come from other clubs and facilities not only in the immediate neighborhood, but all around the city. It saw its trade area as the neighborhoods within 10 - 15 minutes drive.

The club decided to begin by marketing its product to people who were already working out but wanted something unique. When the club opened its fitness facility, consumers readily accepted it. Sparkle Fitness Club membership far exceeded expectations. It now has 500 members. As many as 80 - 100 people come on a given day.

For years Sparkle Fitness Club had few serious competitors. In the city, permits are required to open a gym and this are an obstacle to potential competitors. And the cost of opening a 1800 square-feet facility is an additional barrier to entry.

Questions: a. Was Sparkle Fitness Club's pricing plan appropriate in a market where there was a relatively low supply of services? Explain. b. What impact might this situation have on the club's pricing strategy? Discuss. c. Suppose the club learns that two new competitors plan to open fitness facilities within a mile area. How might the increased supply of services affect Sparkle Fitness Club's pricing policy? d. Do you think Sparkle Fitness Club's marketing strategy will sustain in the long run, considering the service quality that they were providing? Give your opinion.