Executive Summarys3.amazonaws.com/prealliance_oneclass_sample/3lbOz2yzbO.pdfGracie Barra Jiu-Jitsu...
Transcript of Executive Summarys3.amazonaws.com/prealliance_oneclass_sample/3lbOz2yzbO.pdfGracie Barra Jiu-Jitsu...
Student: Benjamin Wiseman 1
Executive Summary Gracie Barra Jiu-Jitsu is a chain of Brazilian Jiu-Jitsu (BJJ) gyms started by Carlos Gracie Jr. in 1986. Gracie Barra London is an independent franchise of Gracie Barra Jiu-Jitsu owned and operated by BJJ black belt Fateh Belkalem. Beklahem has noticed that growth in gym membership has slowed down, and is looking for a way to increase gym membership by 40% in the next year. Because the current gym membership is 100 people, this means that the 40% increase is also a forty member increase. With a $3,000 budget for promoting the business, and the option of a gym expansion using 2/3 of the promotion budget and a private investment, Belkalem is looking to target a specific market for membership. In order to successfully achieve the marketing challenge of 40 new members within a year it is necessary to analyze Belkalem’s business, as well as the environment surrounding the business, its competitors and its consumers. It is also necessary to recommend the most suitable target market for the 40 members, and the best way in which to modify the gym’s product, placement, pricing and promotions. After analyzing Gracie Barra London internally, and analyzing external factors, it is clear that these are the best options for the gym’s target market, product, placement, pricing and promotions:
- Target Market: Females ages 18-40 - Product: Addition of female beginner classes and self-defense classes - Placement: unchanged - Pricing: unchanged - Promotions: LTC Bus Ads and Western Gazette Ad These recommendations were made after analyzing all possible options. The reason that females 18-40 are the target market is that Gracie Barra has zero female clients and has no share in a large market, and that females 18-40 are very concerned with learning a practical method of self-defense such as Brazilian Jiu-Jitsu. The reason that these classes were added to the product was in order to make a more female-friendly gym and classes that would be more attractive to females whose priorities are self-defense and who feel uncomfortable grappling with males. The placement and pricing remained the same because it was unnecessary to change either, and changes to either could have had a negative effect on reaching the goal of 40 new members. These promotions were chosen because they will give the business the most positive publicity, they use the high majority of the money allotted for promotion, and they will take very few new memberships for Belkalem to profit from the investment. Overall the recommendations made in this report will maximize Gracie Barra London’s chances of successfully reaching their goal of 40 new members in the next year.
Student: Benjamin Wiseman 2
Marketing Report Introduction:
Fateh Belkalem is the owner and operator of Brazilian Jiu-Jitsu gym “Gracie
Barra London”, and his marketing challenge is to improve enrollment in his gym by
40% in the upcoming year, from 100 full time members to 140. In order to do this
he intends to choose a target market, cater to their needs, invest $3,000 in
advertising and potentially expand his gym to incorporate strength and general
fitness training. This report will begin by analyzing Gracie Barra London and its
surrounding environment. This report will then recommend the ways in which
Belkalem should modify his business in order to successfully meet his goal of a 40%
increase in gym enrollment by the next year.
Analysis:
Corporate Capabilities
Gracie Barra London is very limited in their financial capabilities. Belkalem’s
initial investments have left him in a position where he has very little money to put
back into his company. Gracie Barra London is limited to $3,000 to spend on
marketing, $2000 of this money can be spent on a gym expansion for which he has
secured an $8,000 private investment.
Belkalem has very little experience in marketing his gym, with most
marketing in the past being through social media and word of mouth. Despite this,
the Gracie Barra franchise is incredibly marketable because it is one of the largest
and most prestigious Jiu-Jitsu gym franchises. Gracie Barra London gained half as
many members as they aim to gain this year despite the lack of advertisement. This
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success despite lack of advertisements shows consumer faith in the Gracie Barra
name.
It is unlikely Gracie Barra London will experience capacity restrictions
because they have the opportunity to run many more classes in the time that they
are open, and also have the potential for the downstairs expansion if membership
growth is extreme. The facilities at Gracie Barra London are high quality do to the
money Fateh initially invested in the gym. The instructors other than Belkalem at
Gracie Barra London are of high quality, but they do have some issues with
reliability.
Belkalem’s qualifications as a prestigious martial artist, and his enthusiasm
for the sport is very attractive to consumers. However, he worries that there may be
members who are unhappy with unreliable instructors. He has had successful
relations with many customers particularly males and children, but has had
difficulty establishing consistent female membership.
Industry Analysis
Belkalem should be optimistic that the Brazilian Jiu-Jitsu industry is growing
due to increased interest in Mixed Martial Arts. However, he should consider the
current economic hardships in London, because Jiu Jitsu is one of the most
expensive fitness opportunities. Belkalem should also consider the social
implications of the popular culture spotlight on MMA and Jiu Jitsu competitors and
how competitors promoting gyms has led to greater success.
Competitive Analysis
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There are three direct competitors to Gracie Barra London: The Submission
Academy- Brazilian Jiu-Jitsu, Bindner’s Jiu-Jitsu Academy, and Adrenaline. Two
Competitive Positioning maps (see Exhibit 1) show Gracie Barra’s status amongst its
competitors.
Submission Academy- Brazilian Jiu-Jitsu’s owner/operator is a purple belt.
This means that the instruction at Submission Academy is of a lower quality than at
Gracie Barra. Submission Academy is also inferior to Gracie Barra in the amount of
hours of lessons they offer weekly and thus the value of their memberships is lower.
Submission Academy is cheaper then Gracie Barra which is a big advantage in a
weak economy. Submission Academy’s biggest assets that separate itself from
Gracie Barra are its sleek website and presence in competitive Jiu-Jitsu, both of
these will attract new members who are interested in starting Jiu-Jitsu training.
Bindner’s Jiu-Jitsu Academy is operated by a very successful Aikido academy,
meaning it has the opportunity to attract customers from Aikido to try Jiu-Jitsu.
Bindner’s also offers the cheapest membership of Gracie Barra’s competitors, which
will attract member’s hurt by the weak economy. Bindner’s major drawbacks are
there lack of hours and inexperienced Jiu-Jitsu instructors meaning that Bindner’s
has much lower quality and value in its membership in comparison to Gracie Barra
and Submission Academy.
Adrenaline is primarily an MMA gym which teaches several martial arts. This
is an advantage because of the popularization of MMA and the potential for
crossover from wrestlers, kickboxers, and other martial artists into Jiu-Jitsu. It also
has the image of prestige because it is partly owned by some of the most famous
Student: Benjamin Wiseman 5
Canadian UFC stars such as Mark Hominick. Adrenaline also offers the cheapest
children’s memberships, meaning that they could get many more children who
continue on to become members as adults. Adrenaline’s major drawback is that it
offers significantly less hours of actual Brazilian Jiu-Jitsu than the other three Jiu-
Jitsu gyms, meaning it is unlikely for a devoted BJJ practitioner to join Adrenaline.
Consumer Analysis
The current customer base of Gracie Barra Jiu-Jitsu is comprised mainly of
males, and children, but potential customer groups include students and females.
Males practice BJJ for health, self-defence and competitveness. Males are a huge
market for Gracie Barra, but they can receive more memberships if they concentrate
more on physical fitness through the gym expansion, or offer more competitive
classes. Children practice BJJ for physical well being and for the martial arts
effectiveness as a anti-bullying tool. A way to increase children’s membership would
be to offer more classes for children that concentrate on smaller age groups, rather
than the current children’s class that is for children ages 4-14, which would be
extremely intimidating for children below 8 or 9 years old, and might seem childish
for children 12-14. Students will be attracted to Gracie Barra because of the youthful
fan base of MMA, the need for extra curricular activities and fitness. There are a lot
of students but the issue with this demographic is that pursuing it leads to a
seasonal business. Finally Gracie Barra has had trouble retaining female members.
By making a female friendly gym, and concentrating on lessons that are important to
females, primarily self-defence, Gracie Barra can succeed in this demographic.
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Recommendations
Target Market Selection
The best target market for Gracie Barra London to pursue in order to
increase membership by 40% in the next year is the female market, more
specifically the market of females ages 18-40. Gracie Barra already has success in
attracting male and child members, despite their lack of promotion. University
students are a large market but targeting them would lead to Garcie Barra making
less money per membership due to seasonality. Students are also more likely to go
to Adrenaline because they have more interest in the UFC and MMA. Females are a
hugely untapped market that value fitness and self-defense. Based on the given
population data, there are 192,400 women in London as well as female students,
and the gym has zero female members. Most of these women are interested in what
the gym has to offer, mainly the strengthening fitness and self-defense.
Product
A change to the product this report does not recommend is the expansion to
the gym. It is very unlikely that people would chose Gracie Barra over other gyms
for anything but BJJ. This option would also take up most of the budget that can be
used more effectively on advertising. In order to successfully attract the female
market female only classes and self-defense classes must be added. Belkalem
believes that the gym is not very female friendly, and many females without jiu-jitsu
experience would be intimidated by co-ed martial arts. Many women join other
martial arts gyms because they offer classes such as kickboxing for self-defense, and
are unaware that in reality jiu-jitsu is the perfect martial art for self-defense,
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because it stresses technique over size and strength. Belkalem should add classes
for female beginner on Tuesdays and Fridays, and female self-defense classes on
Wednesdays and Saturdays. These classes work well within the schedule of Gracie
Barra and will not only draw women, but also provided more than enough classes so
that women who have commitments on certain days will be able to make at least
one class a week.
Placement
While placement is not a large element of this type of business, considering
how the product is a service rather than a physical product, there is the placement
of the physical gym, which is important to the success of the business. Not only are
there certainly no better locations available that would fit within the $3,000 budget,
but it is highly unlikely that with the added stress of moving the business Gracie
Barra London would be able to successfully sell 40 new memberships, or keep the
entirety of the gyms current members. For these reasons this report does not
recommend any modifications in the placement of Gracie Barra London.
Price
Belkalem felt that the price of membership should rise in order to match the
prestige of the Gracie Barra product, however because the challenge is selling more
memberships, rather than making more profit, it does not make sense to increase
the price of the memberships, and because there is great value in a Gracie Barra
London membership, especially in comparison to the other jiu-jitsu gyms in London,
there is no need to recommend lowering the price of a membership either.
Promotion
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Of the three suggested methods of promoting this product, the one Belkalem
should not utilize is direct mail. Direct mail is often seen as junk mail and very few
people seriously look into unaddressed admail. The promotional strategy that this
report recommends for Gracie Barra Jiu-Jitsu is a combination of LTC bus
advertising and advertisements in the Western Gazette. The primary focus should
be on the LTC bus advertisements purchasing one king size advertisement for four
four week periods. The reason that the LTC bus advertisements are the primary
objective of the promotion is because the high majority of the target market are
women who are no longer at university and therefore will not be reading the
Gazette. The ads should concentrate on the effectiveness of jiu-jitsu for women who
are being attacked by larger men. An example of a rough version of the ad can be
seen in exhibit 2. This is a first draft template that will be developed further by a
paid consultant. The sixteen weeks of bus advertising will cost $2300 of the $3,000
marketing budget, and it will give the business massive exposure. It will take just 3
new full year memberships for Belkalem to begin profiting from this advertisement
(exhibit 3), a very low risk considering the goal of 40 new members, and that in the
previous year without advertisement, Gracie Barra London had 20 new members.
This report also suggests that Gracie Barra Jiu-Jitsu take out a quarter page
advertisement in the Western Gazette, meant to attract female students in their late
teens-early twenties who may live on campus and do not use the London transit
system very often. This advertisement will be in the Gazette for the entire year, and
will be seen by many female students. The advertisements in the Gazette will cost
$481.60, meaning that if they generate just 1 new membership (exhibit 4), Belkalem
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will make money off of this advertisement. In total this promotional
recommendation will cost $2,781.60, and Belkalem will need just 4 new
memberships, 1/10 of Belkalem’s goal of 40 new memberships, in order to make a
profit off of his promotions. If the marketing challenge is successfully completed,
and Belkalem receives 40 new memberships in the next year, the profit he will make
would be between $22,818.40 (exhibit 5) and $35,618.40 (exhibit 6).
Conclusion
Based on these recommendations Belkalem will surely find more success in
the market of females ages 18-40. This is because of a combination of promotions
targeting females and changes to the schedule creating female-friendly classes. A
breakthrough in this massive consumer market will likely lead to substantial
growth, and Belkalem will most likely meet his goal of 40% growth in membership
over the course of the next year. Still it is very important that Belkalem monitor the
success of this plan over the course of the year, in order to maximize its success, and
adjust the strategy of his business based on the results. As well, it is important that
Belkalem prepares for consumer and competitor reaction to this marketing plan.
Such as the reaction of the majority male members to a much more female friendly
gym, and how competitors such as Submission or Adrenaline will draft similar plans
to target females if the plan is successful.
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Fact in poster comes from: http://www.rainn.org/get-
information/statistics/sexual-assault-victims
Exhibit 3
Calculations of Break Even Analysis of Bus advertisement:
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2300 (cost of bus advertisement) ÷ 960 (full years membership cost)=2.40
memberships to break even and 3 memberships to make a profit
Exhibit 4
Calculations of Break Even Analysis of Western Gazette advertisement:
481.6 (cost of WG advertisement) ÷ 640 (cost of 8 month student membership)=.75
memberships to break even 1 membership to make a profit.
Exhibit 5
Minimum profit from 40 new memberships would be if 40 memberships were all 8
month student memberships:
40 × 640 (cost of 8 month student membership)= 25600 – 2,781.6 (money spent on
ads)= 22, 8181.4
Exhibit 6
Maximum profit from 40 new memberships would be if all 40 members were full
year memberships:
40 × 960 (cost of full year membership)=38,400 – 2,781.6 (money spent on ads)=
35,618.4