Business 1220: Marketing Report Gracie Barra London
Business 1220: Marketing Report Gracie Barra London
Executive Summary
This marketing report was created to aid Gracie Barra London’s owner, Fateh Belkalem, exposure of his gym. Fateh wanted a 40% increase in enrolment in the upcoming year. This means that there would be approximately 40 new members. Bekalem was thinking of expanding his gym into a fitness facility as well. This expansion would take away from his $3000 marketing budget leaving him with only $1000 to spend. GBL was doing very for its self without very limited marketing. Fateh was only doing this part time and wasn’t investing much time into the gym. He had lower ranked belts teach most the classes which wasn’t an issue but sometimes they ran into scheduling problem because instructors couldn’t make it. GBL’s Ju-Jitsu was superior to most because it was Gracie Ju-Jitsu. MMA had just been legalized in Ontario and martial arts in general were booming. There is a lot of competition in town for GBL. Some of the other facilities offered more arts for the same price. GBL lead these gyms due to their quality and Fateh passion for the BJJ lifestyle. Also the Gracie name is a powerful brand name with a lot of customer loyalty. The name its self affects customer perception with because it is renowned. GBL had 4 target markets to choose from. These markets were the Western students, males, females and children. Even though each market had its benefits that would help GBL’s enrolment, the male market was the best bet. Most of GBL’s customers were from this market; therefore with a proper marketing strategy GBL would be able to increase their presence. GBL could have increased its enrolment price, but it was decided that in order to stay competitive with the other gyms GBL could not afford to increase the price. GBL did add Judo as another art that they provide. Judo and Ju-Jitsu complement each other very well because they are both grappling based arts. There weren’t many options when considering place because this is a service and not a product therefore there aren’t different distribution chains. GBL’s best promotional methods were the direct mail and LTC ad options. Both of these cater perfectly to the target market. Also with the direct mail it is possible to specifically place the mail in households where GBL’s target market is present. The LTC busses allow for maximum exposure around London. The $3000 marketing budget was feasible for GBL. It wasn’t a major investment and the return on this investment will be very high. GBL will be pleased with the opportunities that will come with their enrolment increase.
Marketing Challenge Fateh Belkalem is the owner and head instructor of a Brazilian Ju-Jitsu (BJJ) gym in London Ontario known as Gracie Barra London (GBL). Fateh has already established a good customer base in his 6 years of operation. M. Belkalem’s goal is to increase enrolment by 40% for the upcoming year. To get that increase in enrolment GBL will need to decide on the following: a target market that will be focused on, a method or methods of promotion will need to be chosen as well as whether or not improvements will be made to the schedule and facility of Fateh’s gym.
Internal Analysis Finance This year sales for GBL were approximately $92,400 (Exhibit). Considering that Belkalem has hasn’t been focusing full time on GBL the sales revenue number isn’t too bad. The current advertising budget for GBL is $3000 of Fateh’s own money that he has saved up. Fateh is willing to reinvest in his company, this hints at a bright financial future for GBL. If he expands his gym into a fitness gym as well he will he will only have $1000 marketing budget. This may not be enough to achieve his 40% goal.
Marketing GBL’s greatest marketing tool is the Gracie name. The Gracie name is renown not only in the BJJ world but it all martial arts. The Gracie name implies quality training. Without a big enough budget to create a full fledge marketing campaign, the Gracie name will allow for the greatest exposure of GBL. Gracie Barra’s efforts to improve its franchises will also be a key factor in expanding GBL’s name.
Operations Fateh dedication and Gracie relationship makes it evident that GBL offers a great product. Now that Fateh will be operating GBL full time, some of the previous restrictions regarding the
schedule will be eliminated increasing customer satisfaction. Also his investment in a better Tatami will enhance the facility.
Human Resources Fateh Belkalem vast history and experience in the martial arts world will provide great knowledge on how to adapt to the changes in the martial arts indusry. His experience will also allow him to provide the best experience for his students. His other instructors are well trained but GBL needs to solve its problem with rescheduling due to instructors not making it.
External Analysis Political In 2011 MMA was legalized in Ontario, this has created a lot of media buzz and it increased the exposure for martial arts in Ontario.
Economic London’s difficulty to recover from the recession and its high unemployment rate means that people may not have disposable income to spend on an activity like BJJ. The students in London also may not have enough money to cover a monthly cost due to the tuition and living costs.
Social In the previous year, the UFC has held their biggest event in history in Ontario. Leading up to this event there was a lot of promotion done regarding MMA which lead to an increase in knowledge of the arts like BJJ. Also MMA is the world’s fastest growing sport, its exposure is higher never than it ever was with the new TV deals the UFC has signed.
Technological There hasn’t been any advancement in technology that lead to an improvement in BJJ training or any martial arts.
Competitive Analysis Direct competition The Submission Academy is open under the Drsydale name, a name that is synonymous with quality in the world of BJJ, this will attract customers. That said there lower prices may portray a lack of quality, when considering consumer perception, for those looking to compete. The academy does not have many hours of operation every week so the students don’t get as much practice time. However, the Academy’s presence at BJJ tournament gets its name out there and creates buzz about the gym its self, this is something GBL should consider. Bindner’s Ju-Jitsu Academy is not a Ju-Jitsu based gym and the BJJ instructor is not a black belt proving that the quality offered is not upper-class. The Alliance name is not a heavyweight in the BJJ world which is a lack of presence when comparing names. Theie variety of martial arts offered is a good way of attracting more customers because some people may not want to do only BJJ. Adrenaline MMA’s greatest asset are the owners’ reputation. They are all UFC fighters which implies that they are superior to all the rest even though it may not be true. Its variety of arts makes it ideal for someone who wants to do MMA but for specific arts it portrays a lack of focus on each art meaning that the direct quality of the art may not be great.
Indirect completion The indirect competition is vast in London with the government implemented programs which increases the exposure of other recreational activities to the population. Other physical activities are also much cheaper than BJJ and some are even free and there is no set schedule which allows for freedom of choice for the practitioners.
Customer Analysis Western students The Western campus is densely populated, this makes it easier to get exposure with a limited advertising budget. Students are looking for new ways of competing and staying in shape, BJJ
provides that. This market is always aware of what’s popular, seeing that MMA is growing and their fan base is dominantly this age group, the students will have passion to practice BJJ. Although most students do not live in London, they are here for 8 months of the year which will allow for enough time to enjoy the art. GBL isn’t located too far away from campus so travel should not be an issue for most. The pricing could end up being too much for the students to afford.
Males This market may already be saturated, making it difficult to keep pursuing them. Males are looking for new ways to stay in shape both competitively and or recreationally. Most men will probably be attending evening classes. It will not be as difficult for them to reach the gym because they may already have means transportation. Also the males will be able to attend the gym all year because they are most likely living in London.
Females This is a market that is yet to be hit by the BJJ gyms. Females will enjoy the benefits of BJJ because it allows for physical fitness improvements as well as the ability to protect one self. Like males, the females should be able to frequent the gym all year long. Females may want to have their own class instead of training with men which could cause a problem because it will be very slow until there are enough females for a full class. Therefore achieving a 40% enrolment increase may take longer.
Children This market may be difficult to reach because they will have to go through the parents and BJJ will be competing with the more common arts like Karate. It may be more difficult to attend the classes for children during the year because of school. Also the classes will need to be smaller taking away some practice time for the other practitioners because there will be more classes.
Marketing Decisions Target Market GBL’s current marketing strategy is limited. There hasn’t been much marketing done and yet they have managed to attract a solid male base. The western students may not have the time or the financial means to participate in BJJ. The children will be more difficult to reach because to target them it is necessary to target the parents first. The females are an untouched market, but it will require more finances to ensure their enrolment because it’s a newer market. The males are the largest market for MMA; see exhibit 1.The males show the most interest in martial arts like BJJ, see exhibit 2, therefore with a proper and efficient marketing campaign GBL could take an even larger portion of the market. The male market will have enough disposable income to spend on a leisure activity such as BJJ. Ju-Jitsu provides a new way for them to stay in shape and advance in sport. The UFC is MMA’s biggest promoter; the popularity of the UFC is what leads to the popularity in MMA and BJJ. The UFC’s target demographic is adult males, targeting the same demographic as the UFC will complement the marketing campaign without spending any extra money. The male target will appreciate good quality and great understanding of quality martial arts. Fateh is very knowledgeable and very well trained in martial arts and he will provide superior quality.
Product Currently GBL only offers Brazilian Ju-Jitsu; the BJJ offered at GBL is the best Ju-Jitsu in all of London. The Gracie name isn’t just handed out to anyone, they only franchise to people who are trained, dedicated and passionate about the art. M.Belkalem is leaving his job to focus on the gym full time; this proves his dedication and how much he cares about the sport. Commitment like this is what the Gracie name is about. Fateh should continue to provide his superior Ju-Jitsu as well as another art. This art being Judo, Fateh is trained in Judo and is a competition
champion. Judo and Ju-Jitsu complement each other very well as arts because they are both grappling based. This will attract more customers because with both arts the practitioners will see all angles of grappling and will have an upper hand in competition. GBL will become a grappling based gym that lives up the Gracie name. Adding a training facility will increase GBL’s competition because they will also need to compete with London’s other fitness gyms. Keeping GBL a grappling gym fits very well with very strong Gracie brand name and will ensure loyalty from the customers that believe and are fans of the Gracie family.
Price The current prices for a membership at GBL’s are competitive with the prices at the competing gyms. Considering that the Gracie Ju-Jitsu is some of the best BJJ available in North America the prices could be higher but in order to stay competitive GBL must stick to its current price for BJJ. Even with the addition of Judo the price needs to remain the same this way the price is still competitive with the other facilities. With an idle price and an addition of Judo the customers will be getting high quality training for a reasonable price. Customer perception will not be much of an issue due to the strong Gracie brand name. The only price adjustment that should be made is a slight and temporary discount to customers who refer other clients to the gym. This will act as an extra method of promotion that will cost little to nothing for the company and it will trigger word of mouth marketing. Fateh training in Judo means that he can teach the classes himself therefore he will not need to hire an additional instructor that will cost GBL more, this aids in avoiding a price increase.
Placement There isn’t much that can be done regarding the placement of GBL, nor is there with retail streams. There haven’t been any reasons as to why GBL would need to relocate. The current location is doing well. Distribution options are limited because this is a service and there aren’t
different distribution chains available for this. The best and only way is to provide the service directly to the customers. GBL could improve its method of payment to fit the income levels of clients.
Promotion The Western Gazette is an ideal promotion method for the Western campus. Since this is not GBL’s target market it will not be of any use in attracting the adult male market. Using direct mail is a perfect way to reach the adult male market. With this method it is much easier to select where to send the advertisements. GBL is located in between the Huron Heights and Carling regions in the City of London see exhibit 3, in those 2 regions combined there are approximately 15,870 households and 11,2151 adult males fitting GBL’s target market. With the $1574 that will be spent on direct mail advertising allows for 9900 ads to be sent. The ads should emphasize the Gracie name by using the Gracie Barra logo as well as incorporating a picture of a member of the Gracie family as well as GBL’s information, see exhibit 4. The 9900 copies sent should allow for good exposure to our market located in GBL’s region where there is less competition. A 40% increase in enrolment would mean an extra 40 members at GBL, which would mean that just 0.4% of the people who receive the direct mail will need to sign up at GBL’s. People don’t enjoy commuting for long hours; therefore if they have the option to attend a gym that is within a short radius it will aid GBL’s enrolment. For the LTC advertising, GBL will put 2 ads, see exhibit 5, out for 8 weeks. Between the first 4 week period and the second 4 week period where GBL will get a 50% discount the cost will come to $1425. The ads should be put on buses outside GBL’s region so that they are viewed by a different group then the direct mail. They should be placed on busses that drive through high traffic areas. For example, Route 10 and 2 are good routes for the advertisements. The 10 reaches the White Oaks Mall region which is a high traffic area. The 1
City of London: Selected Demographic Statistics from the 2006 Census, http://www.london.ca/About_London/PDFs/NeighbourhoodworksheetrevisedJuly7201122.pdf
2 goes up to the Argyle neighborhood, the Argyle is a densely populated part of London. This will allow for higher exposure for the ads. Approximately 18 million people commute with LTC transit yearly2. Of course with only two busses carrying the advertisement there will not be 18 million people riding them, but proportionately these ads will receive very high impression counts. The LTC busses are on route for over 14 hours a day allowing for maximum exposure all day. GBL should also send some of its grapplers to competition because it will be free promotion for GBL. To breakeven on the $3000 marketing budget GBL will need 4 new memberships. This is very attainable because of the market that has been targeted is the most inclined to take part in this sport. Even without the marketing campaign GBL could have attracted another 4 customers. With the aid of this marketing campaign GBL will attain and possible exceed its goal of a 40% enrolment increase.
Financial Feasibility With the 40% enrolment increase that GBL will have the projected sales are 129,306, see exhibit 6. This is approximately a $38,000 increase from the previous year. The return on investment is fantastic, a $3000 marketing budget lead to and 38000 increase in sales. If Fateh continues to market GBL he will continue to grow exponentially. With return like this, GBL can now look at expanding the facility and maybe even looking for another market to target. GBL future is bright and they will do well in the adult male market.
2
Conventional Transit, http://www.ltconline.ca/Conventional.htm#fifth-section
Exhibit 1 MMA interest gender chart
Source: "Lexicalist.com - Demographic analysis for "mma"." Lexicalist.com - a demographic dictionary of modern American English. N.p., n.d. Web. 4 Dec. 2012. .
Exhibit 2 BJJ Practice Gender Chart
Source: "Lexicalist.com - Demographic analysis for "bjj"." Lexicalist.com - a demographic dictionary of modern American English. N.p., n.d. Web. 4 Dec. 2012. .
Exhibit 3 Gracie Barra Location Map
Exhibit 4 Direct Mail Advertisement
Exhibit 5 LTC Advertisement
Exhibit 6 Calculations
Reference Name Yearly Membership I Cost Direct Mail Advertising II LTC Advertising III IV
Unit Contribution
V
Break Even
VI VII
Membership Fee Weighted Average Sales
VIII
Projected sales
3
Formula Monthly Cost x 12 Months
Value $77VI x 12= $924
Cost per Unit x Units sent first 4 week period cost + second period Selling Price(Yearly per member) - Variable costs3 (Yearly per member) Fixed Cost (Advertising Budget)/ Unit Contribution (Adult cost x 80%) + (Children Fee x 20%) (Units Sold x Price per Unit) x 12 months (2011 member + 40%) x Weighted Average Fee x 12 months
$0.159 x 9900= $1574 $950 + $475 = $1425 $924- $120 = $804
$3000/$804 = 4 (3.7 exact number) ($80 x 80%) + ($65 x 20%)= $77 (100 x $77) x 12 = $92,400 (140 x $77) x 12 = $129,306
Assumption based on number from : http://www.londonhydro.com/residential/waterrates/
Executive Summary
This marketing report was created to aid Gracie Barra London’s owner, Fateh Belkalem, exposure of his gym. Fateh wanted a 40% increase in enrolment in the upcoming year. This means that there would be approximately 40 new members. Bekalem was thinking of expanding his gym into a fitness facility as well. This expansion would take away from his $3000 marketing budget leaving him with only $1000 to spend. GBL was doing very for its self without very limited marketing. Fateh was only doing this part time and wasn’t investing much time into the gym. He had lower ranked belts teach most the classes which wasn’t an issue but sometimes they ran into scheduling problem because instructors couldn’t make it. GBL’s Ju-Jitsu was superior to most because it was Gracie Ju-Jitsu. MMA had just been legalized in Ontario and martial arts in general were booming. There is a lot of competition in town for GBL. Some of the other facilities offered more arts for the same price. GBL lead these gyms due to their quality and Fateh passion for the BJJ lifestyle. Also the Gracie name is a powerful brand name with a lot of customer loyalty. The name its self affects customer perception with because it is renowned. GBL had 4 target markets to choose from. These markets were the Western students, males, females and children. Even though each market had its benefits that would help GBL’s enrolment, the male market was the best bet. Most of GBL’s customers were from this market; therefore with a proper marketing strategy GBL would be able to increase their presence. GBL could have increased its enrolment price, but it was decided that in order to stay competitive with the other gyms GBL could not afford to increase the price. GBL did add Judo as another art that they provide. Judo and Ju-Jitsu complement each other very well because they are both grappling based arts. There weren’t many options when considering place because this is a service and not a product therefore there aren’t different distribution chains. GBL’s best promotional methods were the direct mail and LTC ad options. Both of these cater perfectly to the target market. Also with the direct mail it is possible to specifically place the mail in households where GBL’s target market is present. The LTC busses allow for maximum exposure around London. The $3000 marketing budget was feasible for GBL. It wasn’t a major investment and the return on this investment will be very high. GBL will be pleased with the opportunities that will come with their enrolment increase.
Marketing Challenge Fateh Belkalem is the owner and head instructor of a Brazilian Ju-Jitsu (BJJ) gym in London Ontario known as Gracie Barra London (GBL). Fateh has already established a good customer base in his 6 years of operation. M. Belkalem’s goal is to increase enrolment by 40% for the upcoming year. To get that increase in enrolment GBL will need to decide on the following: a target market that will be focused on, a method or methods of promotion will need to be chosen as well as whether or not improvements will be made to the schedule and facility of Fateh’s gym.
Internal Analysis Finance This year sales for GBL were approximately $92,400 (Exhibit). Considering that Belkalem has hasn’t been focusing full time on GBL the sales revenue number isn’t too bad. The current advertising budget for GBL is $3000 of Fateh’s own money that he has saved up. Fateh is willing to reinvest in his company, this hints at a bright financial future for GBL. If he expands his gym into a fitness gym as well he will he will only have $1000 marketing budget. This may not be enough to achieve his 40% goal.
Marketing GBL’s greatest marketing tool is the Gracie name. The Gracie name is renown not only in the BJJ world but it all martial arts. The Gracie name implies quality training. Without a big enough budget to create a full fledge marketing campaign, the Gracie name will allow for the greatest exposure of GBL. Gracie Barra’s efforts to improve its franchises will also be a key factor in expanding GBL’s name.
Operations Fateh dedication and Gracie relationship makes it evident that GBL offers a great product. Now that Fateh will be operating GBL full time, some of the previous restrictions regarding the
schedule will be eliminated increasing customer satisfaction. Also his investment in a better Tatami will enhance the facility.
Human Resources Fateh Belkalem vast history and experience in the martial arts world will provide great knowledge on how to adapt to the changes in the martial arts indusry. His experience will also allow him to provide the best experience for his students. His other instructors are well trained but GBL needs to solve its problem with rescheduling due to instructors not making it.
External Analysis Political In 2011 MMA was legalized in Ontario, this has created a lot of media buzz and it increased the exposure for martial arts in Ontario.
Economic London’s difficulty to recover from the recession and its high unemployment rate means that people may not have disposable income to spend on an activity like BJJ. The students in London also may not have enough money to cover a monthly cost due to the tuition and living costs.
Social In the previous year, the UFC has held their biggest event in history in Ontario. Leading up to this event there was a lot of promotion done regarding MMA which lead to an increase in knowledge of the arts like BJJ. Also MMA is the world’s fastest growing sport, its exposure is higher never than it ever was with the new TV deals the UFC has signed.
Technological There hasn’t been any advancement in technology that lead to an improvement in BJJ training or any martial arts.
Competitive Analysis Direct competition The Submission Academy is open under the Drsydale name, a name that is synonymous with quality in the world of BJJ, this will attract customers. That said there lower prices may portray a lack of quality, when considering consumer perception, for those looking to compete. The academy does not have many hours of operation every week so the students don’t get as much practice time. However, the Academy’s presence at BJJ tournament gets its name out there and creates buzz about the gym its self, this is something GBL should consider. Bindner’s Ju-Jitsu Academy is not a Ju-Jitsu based gym and the BJJ instructor is not a black belt proving that the quality offered is not upper-class. The Alliance name is not a heavyweight in the BJJ world which is a lack of presence when comparing names. Theie variety of martial arts offered is a good way of attracting more customers because some people may not want to do only BJJ. Adrenaline MMA’s greatest asset are the owners’ reputation. They are all UFC fighters which implies that they are superior to all the rest even though it may not be true. Its variety of arts makes it ideal for someone who wants to do MMA but for specific arts it portrays a lack of focus on each art meaning that the direct quality of the art may not be great.
Indirect completion The indirect competition is vast in London with the government implemented programs which increases the exposure of other recreational activities to the population. Other physical activities are also much cheaper than BJJ and some are even free and there is no set schedule which allows for freedom of choice for the practitioners.
Customer Analysis Western students The Western campus is densely populated, this makes it easier to get exposure with a limited advertising budget. Students are looking for new ways of competing and staying in shape, BJJ
provides that. This market is always aware of what’s popular, seeing that MMA is growing and their fan base is dominantly this age group, the students will have passion to practice BJJ. Although most students do not live in London, they are here for 8 months of the year which will allow for enough time to enjoy the art. GBL isn’t located too far away from campus so travel should not be an issue for most. The pricing could end up being too much for the students to afford.
Males This market may already be saturated, making it difficult to keep pursuing them. Males are looking for new ways to stay in shape both competitively and or recreationally. Most men will probably be attending evening classes. It will not be as difficult for them to reach the gym because they may already have means transportation. Also the males will be able to attend the gym all year because they are most likely living in London.
Females This is a market that is yet to be hit by the BJJ gyms. Females will enjoy the benefits of BJJ because it allows for physical fitness improvements as well as the ability to protect one self. Like males, the females should be able to frequent the gym all year long. Females may want to have their own class instead of training with men which could cause a problem because it will be very slow until there are enough females for a full class. Therefore achieving a 40% enrolment increase may take longer.
Children This market may be difficult to reach because they will have to go through the parents and BJJ will be competing with the more common arts like Karate. It may be more difficult to attend the classes for children during the year because of school. Also the classes will need to be smaller taking away some practice time for the other practitioners because there will be more classes.
Marketing Decisions Target Market GBL’s current marketing strategy is limited. There hasn’t been much marketing done and yet they have managed to attract a solid male base. The western students may not have the time or the financial means to participate in BJJ. The children will be more difficult to reach because to target them it is necessary to target the parents first. The females are an untouched market, but it will require more finances to ensure their enrolment because it’s a newer market. The males are the largest market for MMA; see exhibit 1.The males show the most interest in martial arts like BJJ, see exhibit 2, therefore with a proper and efficient marketing campaign GBL could take an even larger portion of the market. The male market will have enough disposable income to spend on a leisure activity such as BJJ. Ju-Jitsu provides a new way for them to stay in shape and advance in sport. The UFC is MMA’s biggest promoter; the popularity of the UFC is what leads to the popularity in MMA and BJJ. The UFC’s target demographic is adult males, targeting the same demographic as the UFC will complement the marketing campaign without spending any extra money. The male target will appreciate good quality and great understanding of quality martial arts. Fateh is very knowledgeable and very well trained in martial arts and he will provide superior quality.
Product Currently GBL only offers Brazilian Ju-Jitsu; the BJJ offered at GBL is the best Ju-Jitsu in all of London. The Gracie name isn’t just handed out to anyone, they only franchise to people who are trained, dedicated and passionate about the art. M.Belkalem is leaving his job to focus on the gym full time; this proves his dedication and how much he cares about the sport. Commitment like this is what the Gracie name is about. Fateh should continue to provide his superior Ju-Jitsu as well as another art. This art being Judo, Fateh is trained in Judo and is a competition
champion. Judo and Ju-Jitsu complement each other very well as arts because they are both grappling based. This will attract more customers because with both arts the practitioners will see all angles of grappling and will have an upper hand in competition. GBL will become a grappling based gym that lives up the Gracie name. Adding a training facility will increase GBL’s competition because they will also need to compete with London’s other fitness gyms. Keeping GBL a grappling gym fits very well with very strong Gracie brand name and will ensure loyalty from the customers that believe and are fans of the Gracie family.
Price The current prices for a membership at GBL’s are competitive with the prices at the competing gyms. Considering that the Gracie Ju-Jitsu is some of the best BJJ available in North America the prices could be higher but in order to stay competitive GBL must stick to its current price for BJJ. Even with the addition of Judo the price needs to remain the same this way the price is still competitive with the other facilities. With an idle price and an addition of Judo the customers will be getting high quality training for a reasonable price. Customer perception will not be much of an issue due to the strong Gracie brand name. The only price adjustment that should be made is a slight and temporary discount to customers who refer other clients to the gym. This will act as an extra method of promotion that will cost little to nothing for the company and it will trigger word of mouth marketing. Fateh training in Judo means that he can teach the classes himself therefore he will not need to hire an additional instructor that will cost GBL more, this aids in avoiding a price increase.
Placement There isn’t much that can be done regarding the placement of GBL, nor is there with retail streams. There haven’t been any reasons as to why GBL would need to relocate. The current location is doing well. Distribution options are limited because this is a service and there aren’t
different distribution chains available for this. The best and only way is to provide the service directly to the customers. GBL could improve its method of payment to fit the income levels of clients.
Promotion The Western Gazette is an ideal promotion method for the Western campus. Since this is not GBL’s target market it will not be of any use in attracting the adult male market. Using direct mail is a perfect way to reach the adult male market. With this method it is much easier to select where to send the advertisements. GBL is located in between the Huron Heights and Carling regions in the City of London see exhibit 3, in those 2 regions combined there are approximately 15,870 households and 11,2151 adult males fitting GBL’s target market. With the $1574 that will be spent on direct mail advertising allows for 9900 ads to be sent. The ads should emphasize the Gracie name by using the Gracie Barra logo as well as incorporating a picture of a member of the Gracie family as well as GBL’s information, see exhibit 4. The 9900 copies sent should allow for good exposure to our market located in GBL’s region where there is less competition. A 40% increase in enrolment would mean an extra 40 members at GBL, which would mean that just 0.4% of the people who receive the direct mail will need to sign up at GBL’s. People don’t enjoy commuting for long hours; therefore if they have the option to attend a gym that is within a short radius it will aid GBL’s enrolment. For the LTC advertising, GBL will put 2 ads, see exhibit 5, out for 8 weeks. Between the first 4 week period and the second 4 week period where GBL will get a 50% discount the cost will come to $1425. The ads should be put on buses outside GBL’s region so that they are viewed by a different group then the direct mail. They should be placed on busses that drive through high traffic areas. For example, Route 10 and 2 are good routes for the advertisements. The 10 reaches the White Oaks Mall region which is a high traffic area. The 1
City of London: Selected Demographic Statistics from the 2006 Census, http://www.london.ca/About_London/PDFs/NeighbourhoodworksheetrevisedJuly7201122.pdf
2 goes up to the Argyle neighborhood, the Argyle is a densely populated part of London. This will allow for higher exposure for the ads. Approximately 18 million people commute with LTC transit yearly2. Of course with only two busses carrying the advertisement there will not be 18 million people riding them, but proportionately these ads will receive very high impression counts. The LTC busses are on route for over 14 hours a day allowing for maximum exposure all day. GBL should also send some of its grapplers to competition because it will be free promotion for GBL. To breakeven on the $3000 marketing budget GBL will need 4 new memberships. This is very attainable because of the market that has been targeted is the most inclined to take part in this sport. Even without the marketing campaign GBL could have attracted another 4 customers. With the aid of this marketing campaign GBL will attain and possible exceed its goal of a 40% enrolment increase.
Financial Feasibility With the 40% enrolment increase that GBL will have the projected sales are 129,306, see exhibit 6. This is approximately a $38,000 increase from the previous year. The return on investment is fantastic, a $3000 marketing budget lead to and 38000 increase in sales. If Fateh continues to market GBL he will continue to grow exponentially. With return like this, GBL can now look at expanding the facility and maybe even looking for another market to target. GBL future is bright and they will do well in the adult male market.
2
Conventional Transit, http://www.ltconline.ca/Conventional.htm#fifth-section
Exhibit 1 MMA interest gender chart
Source: "Lexicalist.com - Demographic analysis for "mma"." Lexicalist.com - a demographic dictionary of modern American English. N.p., n.d. Web. 4 Dec. 2012. .
Exhibit 2 BJJ Practice Gender Chart
Source: "Lexicalist.com - Demographic analysis for "bjj"." Lexicalist.com - a demographic dictionary of modern American English. N.p., n.d. Web. 4 Dec. 2012. .
Exhibit 3 Gracie Barra Location Map
Exhibit 4 Direct Mail Advertisement
Exhibit 5 LTC Advertisement
Exhibit 6 Calculations
Reference Name Yearly Membership I Cost Direct Mail Advertising II LTC Advertising III IV
Unit Contribution
V
Break Even
VI VII
Membership Fee Weighted Average Sales
VIII
Projected sales
3
Formula Monthly Cost x 12 Months
Value $77VI x 12= $924
Cost per Unit x Units sent first 4 week period cost + second period Selling Price(Yearly per member) - Variable costs3 (Yearly per member) Fixed Cost (Advertising Budget)/ Unit Contribution (Adult cost x 80%) + (Children Fee x 20%) (Units Sold x Price per Unit) x 12 months (2011 member + 40%) x Weighted Average Fee x 12 months
$0.159 x 9900= $1574 $950 + $475 = $1425 $924- $120 = $804
$3000/$804 = 4 (3.7 exact number) ($80 x 80%) + ($65 x 20%)= $77 (100 x $77) x 12 = $92,400 (140 x $77) x 12 = $129,306
Assumption based on number from : http://www.londonhydro.com/residential/waterrates/
