The transformation mechanism of fitness clubs: Pricing of joint fitness courses by online platforms and well-known coaches

Abstract

As a consequence of the lockdown and quarantine measures during the COVID-19 pandemic, consumers engaged in home fitness by purchasing fitness courses online. Therefore, after the pandemic, the platform model has become a trend for transformation among fitness clubs to resist risks of uncertainty and expand the market for course sales. The cooperation between well-known coaches and online fitness platforms to achieve optimal pricing has gained attention in the process of transformation of fitness clubs from offline to online platforms. The platform model of fitness clubs can help online fitness platforms expand the dissemination of well-known coaches' courses and enhance the spillover effect of course popularity. We construct pricing decision models for both clubs and coaches by characterizing the consumer utility function of well-known coaches and online fitness platforms, the demand function for fitness courses in the market, and the revenue functions for clubs and coaches. We use the Shanghai Zhongtian Fitness Club in China as a case study to analyze pricing decision solutions and perform numerical experiments and sensitivity analyses on online course sales data obtained during the lockdown periods. The study found that the optimal prices for well-known coaches' courses and online fitness platforms increase with market size, indicating their ability to increase fitness course prices among potential consumers. Further, the profit level increases with market size, indicating that market expansion brings in more potential consumers and the profits gained by well-known coaches’ courses and online fitness platforms from potential consumers exceed the profits lost due to price increases; this results in an overall increase in profit level. We further conclude that online fitness platforms can use the platform pricing model of fitness clubs to transform and upgrade.