BJJ Marketing Report.docx

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Western University
Business Administration
Business Administration 1220E
Eric Silverberg

Felix Wu 250681558 Professor Eric Silverberg Section 005 December 5, 2012 Executive Summary With newfound commitment to his company, Fateh Belkalem faces the main marketing challenge of maximizing future enrollment at Gracie Barra London. Specifically, he has the target goal of increasing enrolment by forty percent for this upcoming year. Through the achievement of this objective, Belkalem is confident that GBL will become the leader of the BJJ market. To ensure success, Belkalem must make essential choices: 1. Target the untapped female market of London, specifically age group 20-29 with middle to high income 2. Pursue the $10,000 gym expansion with the $8,000 secured investment and $2,000 of the advertising budget. 3. Implement self-defence courses and female-only courses within the new schedule, shifting open mat sessions to Sunday exclusively 4. Make no changes to the price other than the $15 surcharge with adult-gym memberships 5. Promote existing and new services in numerous ways There are many competitors in the Brazilian Jiu Jitsu market in London; however, none of them had pursued the female market. With males and children as existing clientele groups and university students being seasonal with high turnover, females were the logical choice. It was in the best interest of Belkalem to pursue this new market to ensure that his enrollment would not only reach his short-term goal, but also inject new clientele into his company in the long-term. Since females took BJJ for physical fitness, GBL’s largest competitor was Adrenaline. To compete with them, Belkalem should expand the gym, ensuring that his new target market would view and gravitate towards GBL as a “one stop shop”. Furthermore, it would strengthen his relationship with existing male clientele who also wanted to achieve physical fitness. To future cater to the needs of his new clients, Belkalem should offer self-defence and female-only courses where they could learn important skills and feel more comfortable in the gym setting with his new hours. Transferring all open mat shifts to Sunday would be beneficial for families not normally in the same class to train together, further promoting GB’s family spirit. GBL was already charging a relatively high price in comparison to competitors. To prevent offsetting of current clientele before even being able to target the new market, Belkalem should maintain current pricing. However, because he was adding quality to GBL and also provided higher quality and more committed BJJ classes, he could charge the extra $15 for adult- gym memberships without having to fear that Adrenaline would take clients away. Finally, promotion of the new options available to females at GBL is very important, and the best way to market was to diversify the spending of the remaining budget. This should include: bus advertisements around the community and a viral marketing campaign where GB logo white belts would be mailed to targeted population. Additionally, current members could update the website, spread the word and Belkalem could reach out to Kyra Gracie for seminars. In conclusion, Fateh Belkalem of GBL needs to pursue a new group to achieve his enrolment goals. The lowest risk and most effective method to achieving this was to target females with a new gym with slight change in pricing, specifically designed courses for females and promotion for all of the above. Completion of this plan would make GBL a strong leader in the London BJJ market now and for years to come. Introduction Fateh Belkalem faces three major marketing challenges as owner and operator of Gracie Barra London (GBL), a Brazilian Jiu Jitsu (BJJ) gym. With limited personal savings, Belkalem needs to increase gym enrolment by forty percent in the upcoming year, preferably maximize all future enrolment, and would like to establish GBL as the leader in the London BJJ market. Based on the analysis, this report will recommend the best target clientele, and suggesting options for product, price and promotion to cater to this market. In conclusion, this report will determine the most efficient and effective way that Belkalem can achieve his target goals. Analysis Corporate Capabilities Belkalem has a limited budget to utilize for promotion and/or gym expansion if he so chooses. However, the budget does offer almost enough to maximize multiple options of advertising in unison. Therefore, Belkalem has to pick the most effective combination that his budget will allow to achieve his goals. As a franchise with established corporate identity and brand; Belkalem can focus on advertising the high quality of service that the Gracie Barra franchise provides. Belkalem’s decision to resign from his full-time job gives GBL the capability to offer new specialized courses that target a new potential market to reach the target goal of future enrolment. The increased hours will have to fit with the schedules of his target market and his student teachers, some of which already have problems with scheduling. All five current teachers are qualified to teach with decent belt rankings in BJJ. To conclude, while GBL has a strong established system, it is imperative that proper adjustments be made in line with promotion strategy to maximize new corporate capabilities. Industry Analysis GBL can be grouped with the recreational program industry. Considering London was still affected by the 2008 recession, demand for luxury services such as GBL is low. Furthermore, London contained an aging, baby boomer population, and seniors could not be targeted with such physically intense training, therefore GBL should target a consistently expanding group. GBL was benefiting from London’s government initialization of ActiveLondon2010 and the Healthy Living Partnership promotion of the importance of physical activity, increasing the quantity of individuals interested in physical programs such as GBL BJJ classes. Also, with the rapid increase in popularity of UFC’s Mixed Martial Arts (MMA), increased exposure of BJJ has led to increased interest in BJJ as a competitive sport and effective technique. Competitive Analysis The Submission Academy is a direct competitor to GBL. While expanding quickly and advertising well with a “sleek, up-to-date website”, it remains fairly new, lacking history. Moreover, the owner has a lower belt ranking and is actually Belkalem’s former student with less experience. Although it offers 11 hours a week, it targets all markets with lower prices than GBL. Bindner’s Jiu-Jitsu Academy is experienced in the business operation, but primarily focuses on a different martial art style, aikido. Since the BJJ gym was opened solely for the purpose of capturing the growing market due to increased popularity, Bindner’s lacks the same history and values that GBL embodies. Furthermore, there are fewer BJJ students and less teaching hours, targeting only adults and adult-warriors. GBL can easily gain advantage over this competitor by advertising the commitment and high quality that it offered in comparison. The high reputation and one-stop shop image that Adrenaline promotes is especially dangerous to the welfare of GBL, as many individuals exercise for physical fitness rather than for martial art. Secondly, a reason the BJJ market was increasing is the overall increased interest in MMA, which Adrenaline offers fully. Adrenaline is the only direct competitor that has a black belted BJJ instructor. Therefore, clientele would be offered access to the gym and the same quality of BJJ with fewer hours of “regular BJJ” if they go to Adrenaline. On the other hand, GBL would be able to compete through Belkalem’s holistic teaching style of BJJ. Overall, GBL’s primary advantage over direct competitors and indirect competitors (i.e. sports programs) is experience and commitment to high quality BJJ. Please refer to Exhibit 1 for the perception map (PM) in regards to quality and target market specialization. Customer Analysis The relationship between males and GBL was an important one to maintain due to the fact that they accounted for the majority (about eighty percent) of current clientele. While this group consistently showed more interest and commitment, the adult male group had always naturally come to GBL with limited marketing. Additionally, the male market was also being targeted by all direct competitors and had other indirect options available to them. Considering that Belkalem looked to maximize future enrollment in the long term, targeting an already established group would provide limited potential. Both the children and university student groups would require readjustment of the gym hours to fit the schedules of school. Additionally, large adjustments would have to be made if either of these groups were targeted. While children were a growing target market, GBL would have to offer more child classes and a child-friendly gym. Western currently lacked a BJJ team, allowing GBL to gain the loyalty of students interested, but would transform the gym into a seasonal market with high turnover as out-of-province students left for summer and after education. Moreover, both markets were beginning to be targeted by competitors: children due to the increased number, and student MMA enthusiasts who had a better option at Adrenaline for the same price. Females are another untapped but inconsistent market. With the increase of interest in BJJ for self-defence and physical fitness, GBL could have a first-mover advantage in targeting women. However, others would follow quickly. Moreover, other indirect competitors were available to achieve the same goals. However, like children, the gym would have to become friendlier to the target group. The female market remains a high-risk, high-reward situation that could prove beneficial. Recommendations Target Market The goal is to increase enrolment forty percent this year and maximize it for the next few years. Therefore, it is pointless to target the existing clientele of males and children: firstly it is unlikely that maximization of these groups will lead to a significantly large increase, and secondly both of these groups are competitively targeted. It is better to target an entirely new group with more potential that will increase enrolment in the long-term. Targeting university students is not long-term due to the high-turnover and seasonality, both of which lead to high instability. Furthermore, targeting students forces new classes to all fit into either evenings or weekends when it does not obstruct school hours. Therefore, GBL should target females, specifically age group 20-29 with disposable income to spend on luxury goods such as BJJ classes, as they have not been targeted by any other competitor. With increased advertising about the “family spirit” of Gracie Barra BJJ, customized programs and more holistic options targeted directed to the needs of this target group, Belkalem will be able to reach his goals easily. Product With females as the target group, some operational adjustments need to be made. Out of the five possible alternatives that Belkalem could implement, females would attend the self- defence classes and female only classes. Implementing just two courses two times a week and switching the wrestling and open mat periods would allow for females to attend after work, and 1 for children as well as females to attend self-defence classes. Having open mat on weekends would also be beneficially as it allowed most people to come in and practice freely, especially the possibility that families with members that attend different classes
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