MKTG1012 Take Home Case Assignment (15%)

Due Date, Time and Submission Format to be Assigned by Amy Casson (will be in Week 13)

Attached is Marketing case study for a (fictitious) new martial arts gym starting up in London, ON. Students will
work in teams of 3-4 people to complete this assignment. No individual assignments will be accepted except
where assigned by the professor.

Projects will be graded based on completeness of answers and overall professionalism. Projects will be 1 ½ space,
type-written with a cover page. Answers to the questions will be presented in well-marked sections, in the order
presented. Where indicated, outside research is required to answer the question properly. Students who do not
provide value-added research will not be graded favorably.

All outside sources of information must be properly sited using APA format, including a Bibliography. Students
not familiar with the use of APA to site sources, should see the Guide to Proper Referencing provided in class or
use Google to find out more. Up to 10% of the final grade will be subtracted due to poor professional quality,
including formatting, grammar, and spelling errors. Proof read your work!

Teams are self-assigned and for that reason, you are to remain in your group unless there is documented proof of
group dysfunction (i.e. missed meetings, missed deadlines or lack of quality participation in the project). Students
are expected to work far enough in advance to be able to identify group problems early.

It is requested that the Professor be given 36 hours notice prior to the project deadline of team dysfunction and
desire to disband or award a group member 0%. Documented proof that a team member has not contributed to
the project in a timely and/or accurate fashion can result in a student receiving 0% at the discretion of the
Professor. The Professor can request proof of each student’s contribution to the project to support a grading
decision.
A NEW MIXED MARTIAL ARTS GYM IN LONDON, ONTARIO

Liz Gray prepared this case solely to provide material for class purposes. The author does not intent to illustrate either effective or ineffective handling of a
managerial situation. The author may have disguised names and other information to protect confidentiality.

Estevan Lara put his feet up on his desk and leaned back in his chair. “What a year!” he thought to himself. Lara had recently
been crowned champion in his weight class at the World Jiu-Jitsu No-Gi Championship hosted by the International Brazilian
Jiu-Jitsu Federation. This win was the encouragement he needed to fulfill his lifelong dream to open a mixed martial arts
(MMA) gym and training facility in his hometown of London, Ontario. There was no time to waste. The sport’s popularity
had exploded in the last 5 years and he planned to capitalize on it. At the same time, he knew there was a lot of work to do.
He would need to determine his target market, pricing, product offering, location, and integrated marketing communications
plan. He knew a detailed market and competitive analysis was in order as well as an honest look at his internal strengths and
weaknesses and external opportunities and threats that might impact his ability to succeed. He picked up his pencil and
began his new adventure.

Mixed Martial Arts

“Mixed martial arts (MMA) is a full contact combat sport that allows a wide variety of fighting techniques and skills, from a
mixture of martial arts and non-martial arts traditions including karate, jiu-jitsu, boxing, kickboxing, wrestling, judo and muay
thai. The rules allow the use of both striking as well as grappling techniques, both while standing and on the ground. MMA
competitions allow martial artists of different backgrounds to compete.

Originally promoted as a competition with the intention of finding the most effective martial arts for real unarmed combat
situations, competitors were pitted against one another with minimal rules. Later promoters adopted many additional rules
aimed at increasing safety for competitors and to promote mainstream acceptance of the sport.

MMA competitions were introduced in the United States with the first Ultimate Fighting Championship (UFC) in 1993. The
International Sport Combat Federation (ISCF) was created in May 1999 as the world’s first MMA sanctioning body. This
ushered in a new era of MMA where it is once again recognized as a true sport worldwide. This was aided by certified officials
and well developed rules.

In November 2005 recognition of its effectiveness as a test came as the United States Army began to sanction mixed martial
arts with the first annual Army Combatives Championships held by the US Army Combatives School.” 1

The sport, known by many for its brutality, exploded into main stream media in 2006 and official UFC matches are held at
least once a month. “The UFC had already broken the pay-per-view industry's all-time records for a single year of business,
generating over $222,766,000 in revenue in 2006, surpassing both WWE and boxing.”2

1
Source: Wikipedia
2
Ibid
Professional MMA competitions are legal in most US states. In Canada they are banned in the province of Saskatchewan and
in some cities in Alberta. They were legalized in Ontario in 2010. To many, MMA competition is considered to be brutal in
nature – a sport without rules but it is quickly becoming more widely accepted as a sanctioned sport and an exceptional way
to condition the body and stay active.

Cardiovascular conditioning, speed drills, strength training and flexibility are important aspects of MMA training and, while it
was initially practiced almost exclusively by competitive fighters, this is no longer the case. As the sport has become more
mainstream and more widely taught, it has become accessible to wider range of practitioners of all ages. Proponents of this
sort of training argue that it is safe for anyone, of any age, with varying levels of competitiveness.

The Competition

In 2008, 3 professional MMA fighters opened the first MMA training facility and gym in London, Ontario – Adrenaline MMA.
Mark “The Machine” Hominick, Chris “The Polish Hammer” Horodecki, and Sam “Hands of Stone” Stout all fight professionally
in the UFC and hail from London and the surrounding area. Each fighter trains at Adrenaline and offers personal training
sessions to clients. Clients pay a monthly fee of $80 3 for full access to the gym’s equipment and unlimited classes including
kickboxing, jiu-jitsu for MMA, wrestling for MMA, yoga, pilates, boxing and strength & conditioning. Personal training
sessions are an additional cost charged by the hour and vary by instructor. The gym is located on Dundas St. west of Clarke
Rd. The gym is about 5 kms from Fanshawe College (20-30 min bus ride) and about 15 kms from the University of Western
Ontario (45-60 min bus ride). Fight Planet, a MMA apparel and gear retailer, leases a small area of square footage inside the
gym. They are the only MMA retail outlet in London.

GoodLife Fitness has 11 clubs (with 15 when you incorporate St. Thomas, Stratford and Strathroy) in London and over 275
locations across Canada. Some locations in London offer co-ed facilities (with women only sections) and others are for
women only. Women-only facilities are all located on the upper level of Loblaws and Real Canadian Superstore locations in
London. GoodLife offers a wide variety of classes and amenities including child care, massage therapy, and personal training
– all at an additional cost. Monthly memberships start at $50/month with an enrollment fee.

There are 2 Athletic Club locations in London on the west side of the city. Membership rates are similar to those at GoodLife.
The south Athletic Club has a pool while the north location does not.

There are a few YMCA facilities in London and in November 2010, the largest YMCA in Ontario will open at Sunningdale &
Adelaide. This facility will boast an Olympic size pool, warm pool with moveable floor, and state-of-the-art cardio equipment
with built-in televisions. Family memberships for 4 start at $90 for the month with no enrollment fee and a one year
commitment. Child care is extensive with excellent programming offered at no additional cost to the membership holder.

There are several small independent boxing, kickboxing, karate and jiu-jitsu facilities in London as well.

3
There are no upfront fees charged and no minimum commitment is necessary.
The Market

The market for a gym/workout facility can be broken into 5 groups.

The Health Nut

This group is dedicated to making healthy choices. They understand the importance of cardiovascular exercise to maintaining
their health and longevity. They are generally between the ages of 30 and 55, with or without children. They frequent the
gym about 3-4 times per week (2/3 times during the week and once on the weekend), spending 1-1.5 hours there at each
visit. They use free weights, cardio machinery and attend classes. They are heavy users of personal training services. They
have mid to high income levels and are willing to pay a premium to belong to a club that will help them achieve their personal
goals, fits their schedule and is convenient. They have full-time jobs within the city of London. They demand a clean
environment, the latest equipment, and knowledgeable/helpful staff. They are extremely active and participate in
marathons, triathlons, and a variety of recreational sports.

The Buff Body

This group is dedicated to looking great. They are heavy users of gym and training facilities (4-6 times a week). They often
have a gym membership and also frequent other facilities like yoga/pilates studios and swimming pools to get specialized
conditioning where needed. They are generally under the age of 40 without children. They are heavy users of free weights
and cardio equipment. They are very knowledgeable when it comes to fitness and generally don’t purchase personal training
services from generic gyms but would consider it at a specialty facility. They like the social atmosphere at the gym and spend
up to 2 hours at a time there.

The Casual Trainer

This group knows they need to go to the gym but they rarely get there. They continue to invest in memberships and vow
each year to make a bigger commitment but typically don’t follow through for an extended period of time. Flexible hours,
promotions and special programming/events can motivate them to attend with more frequency. They attend classes
sporadically, use cardio equipment and weight machinery. This group is always a big revenue generator for a gym and they
don’t create congestion because they are rarely there. This group feels frustrated that they continue to pay for something
they don’t use and continually evaluate more effective ways to invest their fitness dollars.

The Senior Trainer

This group is 60+ yrs old. They have part-time jobs or are retired. They understand the importance of healthy lifestyles but
are not knowledgeable. They require a high level of customer service and a lot of instruction. They frequent the gym during
the week and enjoy taking advantage of off-peak times when there is lots of room to move around. They are concerned
about getting hurt while working out and generally air on the side of caution and avoid aggressive training. They demand
clean and bright facilities. They enjoy classes designed specifically for seniors and use cardio equipment with the guidance of
facility staff. They don’t like loud environments and are generally not concerned about being entertained while they are at
the gym.

The Do-It-Yourself Trainer

While this group does not have a gym membership, they do understand the importance of staying active. They prefer to run
and bike outside, they are engaged in recreational sports and they may have home gyms with cardio and weight equipment.
They will, from time to time, buy gym memberships but they are averse to making a commitment and prefer flexible
offerings. They do like to pay as they go to avoid disappointment. They are generally 25-50 yrs old with full-time jobs and, in
many cases, 2 or more children at home.

London, Ontario

The population of London, Ontario is 300,000 but each September that population grows by 40,000 as students flock to the
University of Western Ontario and Fanshawe College. London is considered by many to be a conservative city. Roads are
congested, particularly at peak hours, and the city lacks a major thoroughfare to speed up east/west traffic across the middle
of the city and north/south traffic on the west side of the city. There is a general reluctance among residents to drive more
than 15 kms to get anywhere. While family residences are scattered across the city, the west side of the city is home to a
higher concentration of mid to high income households.

Potential Locations

Lara has investigated commercial real estate for lease in the city and has narrowed his options to 4 potential locations for his
gym.

Talbot & Oxford

There is a large warehouse including 8,500 sq feet of usable space at Talbot & Oxford – the former home of Rouge nightclub.
Rent is double the other 3 locations. This location is in central London, 5 mins from downtown, 10 mins from UWO, and 20
mins from Fanshawe on a direct bus route. The parking lot is very large with ample parking for 80+ vehicles.

Exeter & Wonderland

There is a large commercial space (11,000 sq feet) available for lease. This location is close to the 401 but a good distance
from UWO and Fanshawe and would be very awkward to get to by bus. This location is just south of the Athletic Club’s south
location which always seems to be busy.
Medway & Richmond

Just northwest of the new YMCA and just north of Masonville Mall. You cannot take public transportation there. The
location is spacious (8,500 sq feet), clean and bright.

Clarke Rd & Huron

In an industrial area of London accessible by bus and within 5 minutes of Adrenaline MMA. Close to Fanshawe but far from
UWO. This location is smaller than the others (7,500 sq feet) and there is ample parking.

Estevan Lara

Lara grew up in Brazil and has trained and competed in jiu-jitsu, a MMA technique, since the age of 10. He immigrated to
London in 2001 with his family and continued to compete in international jui-jitsu events while making make a modest living
on competition winnings. He plans to finance the gym with a loan from the bank and an inheritance from a recently
deceased family member.

As Lara considered all of this information, he knew he had a big job ahead of him.
The Assignment

Complete the following:

1. SWOT analysis with implications for the plan. Use information from the case and other sources including articles,
Stats Canada, etc… For example, you might like to research fitness participation rates in Canada.

2. Competitive Analysis. List your competitors’ strengths and weaknesses and indicate how this will impact your plan.
In addition to case information, you are expected to research your competitors online to gather additional data
about their programming, hours of operation, etc… Do not contact any firm by phone or email.

3. Target Market Analysis. The segments have been defined for you. Pull relevant data from the case into your chart
and discuss what you would have to do to satisfy each of these segments if they were to become your target.

4. Target Market selection. Identify your target market strategy and justify why it’s the best choice for Lara.

5. Craft a mission statement for the new gym.

6. Select a location & a name for the new gym and explain why this is the right choice for the target market. Include a
layout design of the gym.

7. Pricing. Detail your pricing plan and explain why it is the right plan for the target market.

8. Product. Detail your product offering including programming, facilities, amenities, etc… For example, will you offer
classes, personal training, etc…? Be sure to explain why this product offering will appeal to your target.

9. Marketing Communications Plan. How will you advertise and promote the new business. Keep in mind that the
budget would not be large so keep your suggestions reasonable. A $1M ad campaign would not be a reasonable
suggestion. Be sure to get creative here – design signage, social media campaigns, promotions, videos, website
content, contests, etc… Include sketches and mock ups where appropriate.

This is a comprehensive project designed to be an overview of everything you have learned in the course. Even if you believe
there is no market for a facility of this nature in London, you should create one anyway for the purposes of the exercise.