Business Administration 1220E Marketing Report Gracie Barra London 82%

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Western University
Business Administration
Business Administration 1220E
Eric Silverberg

GRACIE BARRA LONDON Michael Hua Student Number: 250670803 Section 008 Instructor: Eric Silverberg December 5, 2012 1 | Page Executive Summary Fateh Balkelem does not seem to be having any problems with enrolments as he has been recruiting many clients, despite the minimal promotional advertisements. Fateh Balkelem is a Brazilian Jiu-Jitsu black belt with a high degree of skill and knowledge based on martial arts. Recently, Balkelem has been feeling that over that past few years, there has been a sudden decline in the number of enrolments at Gracie Barra London. Gracie Barra London is a Brazilian Jiu-Jitsu gym that Balkelem operates in London, Ontario. With a sales goal of $3116.00, Belkalem is expecting for the number of enrolments in the next year to increase by 40%; an additional 40 people. In order to achieve this goal, he must first target a specific market group and come up with clever promotional strategies that will set him apart from his other competitors. With a promotional budget of $3,000 and a secured $8,000 secured from a private investor, he is able to successfully promote Gracie Barra London. There are several strategies that must be implemented in order for Belkalem to increase enrolment, while still making profit. Belkalem must:  Target Western University Students  Promote brand awareness in London, Ontario  Offer additional classes that he had originally planned to do, such as female-only classes, anti-bullying classes, etc.  Offer 1-on-1 sessions for students or other people who cannot attend classes for an additional fee  Advertise using LTC transit, direct mail, and the Western Gazette school newspaper  Offer student discounts of 10% for a student 8-month membership Gracie Barra is an established martial arts franchise around the world. However, Gracie Barra London is a gym that has been opened for 6 years, and has not received much brand awareness yet. Therefore, it is of interest to do so by targeting a clientele that has not yet been reached yet, such as Western University students. This is an untapped client that has much potential since there are students coming from various areas. Belkalem must promote brand awareness, not only around the Western University campus, but also throughout London, Ontario as well. In order to do this, Belkalem must keep his class prices the same, but now offer an 8-month membership for students. This 8-months is necessary because students are only in school for 8-months, and once school is over they move back to their hometowns. Since the male market is so saturated and makes up 80% of the customer base, the 4 month hiatus with students will not affect the gym that much. Also, since students are so busy during the year, Belkalem should offer 1-on-1 sessions just in case students cannot make it to one of the group classes, which will most likely happen. Using various promotional ideas such as LTC transit, direct mail, and the Western Gazette newspaper, this will help promote brand awareness around the Western Campus. Hopefully the word will move around the city of London. This report will offer Fateh Belkalem with the ideal strategies that will allow him reach his goal of a 40% increase in the amount of enrolments. By launching these promotional ideas, brand awareness is created, eventually leading to the 40% increase during the year. 2 | Page Introduction Gracie Barra London (GBL) is a Brazilian Jiu-Jitsu (BJJ) gym that was founded in 2006 by Fateh Belkalem, a BJJ black belt and a practioner of martial arts for almost 20 years. Belkalem’s marketing plan was to increase the gym’s enrolment by 40% or 40 people (Exhibit 1) in the upcoming year. Based on the analyses in the report, the most recommended target market will be decided on. In order to achieve these goals, considering the best options for prices, placement, product, and promotions will be beneficial for the success of the gym. Corporate Capabilities GBL’s finances are limited to Belkalem’s personal savings of $3,000 for advertising expenses and a private investment secured for a possible expansion. However, if he were to add a gym, it would cost him $8,000 including $2,000 from the $3,000 he has saved up, leaving him with $1,000 for advertising initiatives. This means that an advertisement will be needed and picked in the most effective way and one that is within his budget. Gracie Barra is already a well-known Jiu-Jitsu franchise around the world; however, Belkalem must start working on marketing initiatives to get London familiar with the brand. He has a lot of money saved up for more advertisements and expansion, which should also help him achieve his goal of additional enrolments and becoming more known in the city. Belkalem is also a teacher at the gym with a BJJ black belt and a diverse, educational background in martial arts. In addition, the instructors at GBL are skilled and devoted, most likely attracting more clientele if they feel that they are in an environment where they are comfortable enough to learn the sport properly. Since GBL is open seven days a week, it makes it easier to gain more enrolments if 3 | Page people know that the facility is available to them most of the time. Being so diverse in different classes and thinking about adding even more classes makes the gym look even more professional, but most importantly unique, which is a major competitive advantage in the advertising industry. Industry Analysis In 2008, there was a recession that London has still not recovered from yet. Despite this, throughout the years, Belkalem has seen an increased growth in the number of enrollments, which means that this recession did not have a huge impact on the number of enrollments and the gym itself. This is a good sign because Belkalem did not use many advertisements to begin with. This shows that through an economic recession, GBL is still able to run smoothly. The risk with adding another gym for training and conditioning is that it is very costly. When it comes to the students, they already have a gym facility offered to them as well as fitness classes that are offered in their tuition; this may negatively affect the amount of enrolments in the gym GBL acquires. Since Belkalem is already using Facebook as an advertisement tool, this shows that Belkalem is going in the right direction when trying to promote his gym. It may also be wise to expand to other social media websites as well, such as Twitter. Competitive Analysis GBL’s direct competitors are The Submission Academy, Bindner’s Jiu-Jitsu Academy, and Adrenaline. The main strengths of these companies are the fact that the prices are lower or comparable with GBL’s. These ranges in price can be seen as a good thing because Belkalem can either lower and increase his prices so that they are significantly closer to the other gyms’ price without running the possibility of being too 4 | Page high or too low. One of GBL’s competitive advantages is that Belkalem has the devotion and integrity to the sport and he puts emphasis on that. This presents Belkalem with an opportunity to guarantee a better impression on the mind of the potential clients of the gym. He shows the importance of hard work and commitment to the sport and where that can lead you. This aspect of GBL would most likely attract parents more because they are the ones that are paying for their memberships. Nonetheless, all of GBL’s competitors all have similar things in common, meaning that they lack originality. Any planned expansions and changes to the gym will be beneficial to GBL since the gym will look more appealing to the clients. Even if the changes are price related, Belkalem can either change or keep the same prices. Customer Analysis Belkalem must decide between Western University (UWO) students, males, females, or children when choosing his target market. UWO students would be a favorable customer because there is such a diversity of students on the Western campus. There are students from many areas to study at UWO with a wide range of interests. However, they already have a gym facility that is part of their tuition with the addition of many expenses, such as tuition and loans; they most likely do not want to put any more money into something that they already have. However, we do run the possible risk of losing customers during the four months that students are away at home when the school year is over. This may result in Belkalem losing profit during these months, but since the current male clientele is so saturated, Belkalem will be able to make up for the loss when the students come back. 5 | Page One of the alternative clients are males or females; males are already making up most of Belkalem’s entire customer base. Since many males are aiming to be fit, adding a gym would be very beneficial for GBL, especially if they want to work out before, this is very convenient for them. However, in attempts to reach out to them, there is not much else that Belkalem can do to expand; there are limited opportunities for expansion. A downside to targeting females is that if you have advertisements that target them specifically, this may drive males away from the gym because they will think that the gym is more of a “female-oriented” gym. Since the market of children has been growing over the past few years, this could potentially mean that word of GBL is spreading around to friends/families. This is very good since this is free advertising for the gym. However, a downfall for children is that they grow up and advertising to them could make it look like a child environment. This is a negative thing because children so far only make up 20% of GBL’s customer base. Also, if the number of enrollments of children increased, this would be a very large task to handle; therefore, Belkalem would have to hire more instructors at his expense to help him handle them. Target M
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