Business Case Studies & Business Publications

KC Body: The Unlimited Monthly Plan

Baucells, Manel, C...

Case

KC Body: The Unlimited Monthly Plan

Baucells, Manel; Craddock, Jenny

QA-0859 | Published August 1, 2025 | 4 Pages Case

Collection: Darden School of Business

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In this case, a hypothetical business owner grapples with pricing options for her Pilates classes in the competitive environment of Los Angeles fitness studios. As she prepares to open her third gym location, she decides to add a yearlong subscription, paid in monthly increments, which gives customers unlimited access to classes, while also keeping pay-per-class and bundled class packages in place. Students are encouraged to debate how attractive different pricing schemes are from a customer point of view and how they influence customer behavior. They are also asked to consider pricing policies from the protagonist's perspective to maximize her studio's revenues and attendance.

• Discuss the pros and cons of subscription packages from the perspectives of both businesses and consumers. • Discuss, from the customer viewpoint, how a subscription compares to pay-per-use in terms of cost per visit, inclination to go to the gym, and the consumer experience. • Illustrate irrational consumer behaviors, notably the sunk-cost effect, payment depreciation, and the flat-rate bias. • Introduce the framework of mental accounting. • Explore some of the business implications of having mental accountants as customers.