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

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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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Exhibits

Exhibit 1

Exhibit 2

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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