Ch. 12-Services and Nonprofit Organization Marketing

Ch. 11- Developing and Managing Products

The UFC as a product has come a long way since its inception; the fights went from being available strictly on satellite TV Pay-per-view to now being available on a variety of mediums such as cable, satellite, and even YouTube.  On a normal UFC fight card, there are usually around 10 fights per event.  However the main card (PPV event) is only the last four fights since those athletes are the main attraction.  Unknown and up and coming fighters usually have to fight earlier in the fight card, and as a result do not get much publicity.  In order to help the development and marketability of a fighter, the UFC began airing these "Preliminary Fights" on a variety of medium for free.  Without a network deal, the UFC had to be creative in order to show these fights to fans.  The first medium they decided to use was the social media website Facebook.  By "Liking" the UFC Facebook page, people are given access preliminary fights for free.

Facebook Prelims are available to those who "Like" the UFC Page

Not only did this idea give unknown fighters the exposure they needed to gain followers, but it also boosted the UFC's social media presence.

Ch. 8 - Segmenting and Targeting Markets

Last Saturday, fight fans were treated to an amazing line up of events! The UFC hosted live events in Belfast, Ireland and Brazil; meanwhile their rival Bellator MMA hosted their own event in California. Not only that, but a highly-anticipated fight between Sergei Kovalev and Andre Ward also happened on the same day.  

Kovalev vs. Ward

UFC Fight Line-up last Saturday

Why would these promotions host events on the same day as their competition?  Well unless you are a fight fanatic like me, you wouldn't watch all these fights (I watched all these fights live) as they are for a different target market.  For example, the UFC event that was hosted in Ireland was aired live, meaning the first fight was shown at 9 in the morning for us Americans.  I talked about the over-saturation of UFC events on a previous blog post as the UFC begin to introduce their product to the overseas market; however the UFC's expansion will benefit fans that live outside the USA, as they are treated to live events.

Ch. 15- Marketing Communications

The UFC has finally done it! For the first time ever, the Ultimate Fighting Championship has successfully hosted an event not only in New York City, but in the "Mecca of Boxing" Madison Square Garden.

UFC 205 Fight Line-up

The Mixed Martial Art promotion's promotional mix was crucial to making this event the largest the organization has ever created.  Not only did the UFC have to convince the people of New York that the sport, which was just recently legalized in the state this year, would help out the state financially in terms of revenue and tourism, but it also had to create such a large spectacle to ensure people were buying the event tickets, some of which cost up to $18,000 per seat.  The fighters did an amazing job of creating a buzz for the event, walking the streets of New York City and taking pictures with fans.

In the end the organization's hard work paid off, as they were able to break the all-time MSG live gate record, bringing in $17.7 million as compared to the previous record of $13.5 million set by Lennox Lewis and Evander Holyfield.

Ch. 10 - Product Concepts

I've been a mixed martial arts fan for almost a decade.  The first event I ever watched was a fight card from a promotion named PRIDE Fighting Championship.  Since then I have followed other organizations like Strike Force, Bellator MMA, ONE FC, World Series of Fighting, and of course the the most popular one the Ultimate Fighting Championship (UFC). 

 

World Series of Fighting

Bellator Fighting Championships

 It is now the year 2016 and Mixed Martial Arts (MMA) is pretty much a main-stream sport.  However, if I were to ask a majority of any fight fan about their knowledge of MMA news and events, the only events or fighters they can mention are those who are part or who were part of the UFC.  There are plenty of world-class athletes from different organizations, but the UFC has done a great job of ensuring their promotion's brand is considered the "major-league" of mixed martial arts.  Brand loyalty to such an extent works for the UFC as they are able to deliver high quality programming from its inception to today.  

Ch. 17 - Personal Selling and Sales Management

Although the UFC would want nothing more than to sell more than 1 million pay-per-view buys per event, I believe it is close to impossible with their current sales model.  First of all, their revenue is based on single-transaction purchases made from events they schedule on a specific calendar date.  For example, if a casual mixed martial arts fan saw that his favorite fighter is fighting on an upcoming UFC card, he only needs to purchase that one event and is not pressured to buy the next upcoming event.  As I have explained in my previous blog post, this pay-per-view model does not work in most countries all over the world, which limits the UFC's profit margins.

The World Wrestling Entertainment (WWE) is a sports entertainment organization that also used to run on a pay-per-view model.  However in 2011 they introduced a subscription-based video streaming service which includes every programming they offer.  This move was a success, as they now have over 2 million subscribers that pay on a monthly basis.  Guaranteed revenue is what the UFC needs, and if they follow the WWE model I believe they can real a broader target market.

The WWE Network lets you watch all WWE content for one flat monthly rate.

Ch. 16 - Advertising, Public Relations and Sales Promotion

The salary of mixed martial arts fighters vary, from Connor McGreggor's $3 million show money for his fight with Nate Diaz in UFC 202 to Donald Cerrone's $170,000 in that same event.  Keep in mind that these fighters have to pay managers, their gym and sparring partners, as well as medical expenses that their promotion's medical insurance will not cover.  In order to break even, most fighters obtain sponsorship from a variety of different companies.

Donald Cerrone wearing shorts with sponsors.

However with the new uniform policy of the UFC, fighters are no longer able to wear apparel with their corresponding sponsors.  Due to signing a multiple year contract with Reebok, the UFC now requires fighters to compete in Reebok "Fight Kits" in an attempt to standardize the uniform policy of its fighters.

Donald Cerrone wearing the Reebok "Fight Kit". Notice the lack of sponsors.

The UFC does share its earnings it receives from Reebok, however the fighters still make more money wearing shorts or gear with their sponsors on them.  In a Yahoo article written in May, 2015, Cerrone reveals that he stands to lose at least $60,000 in sponsorship earnings as a result of him not being able to step out with his sponsors on his shorts.

There is the argument that the UFC-Reebok deal legitimizes mixed-martial arts as a sport on the same level as NBA, NFL, and MLB; however in the time that the deal was made in the year 2015 and present day, I would tend to disagree.  The shorts and shirts is not what makes the fights exciting, it's the fighters themselves.  The people that will pay to watch Ronda Rousey or Jon Jones were not concerned about whether or not they are wearing brand-name shorts they recognize, they watch because they were enticed by the fighting style, the trash talking, and the entertainment value MMA fighting brings that no other sport can deliver.

 

Ch. 14 - Marketing Channels and Retailing

The UFC as a mixed-martial arts (MMA) promotion makes its profits mainly through Pay-per-view reveneus, which is what my main topic is about.  However the MMA promotion also earns revenues through different channels.  The UFC has a variety of licensed merchandise to include clothing, memorabilia, and even video games.  However what has emerged in recent years are gym franchises licensed by the UFC themselves.  I live in New Jersey, and a new UFC Gym recently opened near my area.  The gym is named "Frankie Edgar UFC Gym", named after a very famous New Jersey native fighter.  Since they were giving away free passes, I decided to give the place a try.  The gym was very spacious and had everything a normal physical fitness gyms would have such as weights, aerobic machines, and swimming pools.  However what made the UFC Gym different was that it was also a mixed-martial arts school.

Front Entrance of UFC Gym

There are plenty of martial arts schools around my area if you wanted to train in a specific craft.  However who wouldn't want to train martial arts in a gym that is owned by a famous fighter if you are a UFC fan?  Creating a gym franchise is a brilliant idea on the UFC's part, as not only does it offer fighters a different avenue of earning money while they are not competing, but it also serves as a marketing tool for upcoming events.

I didn't get to visit the gym during the opening day, but had I gone I would've been able to meet some famous fighters that I definitely would have wanted to meet.

I entered the UFC gym and after signing some papers was allowed to work out for the day.  The gym had plenty of weights for everyone, as well as a myriad amount of treadmills if you wanted to do some cardio work.  There was also a replica competition cage, which I'm sure people are allowed to spar in if they wanted to (with some supervision by a staff member).  

 The gym also offered kickboxing classes as well as Brazilian Jiu-Jitsu classes for any level.  Each day according to the schedule had a class almost every other hour, ranging from 5am in the morning to 9pm at night.  Not only that, but the gym was also open 24 hours a day.  If I wasn't already a member of another martial arts gym, I would highly consider joining this gym.

Ch. 6 - Consumer Decision Making

In this week's blog post I will be talking about the over-saturation of UFC events and the resulting cognitive dissonance UFC consumers feel as a result.  The Ultimate Fighting Championships has become the leader in distributing mixed-martial arts events around the world.  The UFC primarily make their profits from pay-per-view revenues; however in 2011 the UFC was able to sign a deal with FOX Sports Media to a 10 year, 100-million dollars per year contract.  The deal enabled the UFC to distribute fight events to millions of households of varying demographics.  As a result, however, the UFC needed to create more events per year, spreading the stars and talent into multiple events instead of stacking events with multiple stars.  In the year 2010, the UFC hosted 24 events, and by 2014 the UFC was hosting 46 events.

UFC Reached a peak of 46 events per year in 2014

 Is more necessarily better?  In my opinion the more events the UFC host, the less exciting each event becomes since they are not able to utilize the more popular fighters in the same card.  Hard-core MMA fans will always watch UFC events regardless of how little star-power it has.  However in order to sell pay-per-views the UFC need casual fans to want to buy the events, and it becomes harder to do so when your talent is spread thin.  The Super Bowl is one of the most-watched event in television every year because it is an annual event.  If the Super Bowl happened 10 times a year, it would not be the success it is today since people would not think it is must-watch TV; the same can be said about UFC events. 

Ch. 5 - Developing a Global Vision

BT Sport is the largest sports media distributor in the UK

Ever since the success of the "Ultimate Fighter" show in the USA, the Ultimate Fighting Championship has shown astronomical growth both domestically and globally.  However, the distribution model for countries outside of the USA is very different.  The UFC largely makes its profits from pay-per-view buys, but this model is not very popular for other countries, especially for emerging markets like the Philippines, China, and Europe.  In a perfect world, the UFC would want global marketing standardization of their products as they would stand to make more money from pay-per-view.  Realistically, however, a UFC fan in the Philippines is not gong to spend $50 to watch an event, especially when the UFC is now producing atleast two shows a month.  

In order to distribute their product in a way that would reach the most amount of consumers, the UFC signed distribution deals with media companies throughout the world.  For example, the UFC in 2016 signed an exclusive deal with BT Sports, the largest sports media distributor in the UK until 2018.  In doing so, the UFC is able to reach a vast amount of households in the UK, which in turn helps them sell tickets when they hold shows in various locations in the United Kingdom.  

Another way in which the UFC is adjusting to a growing global market in their industry is by creating products catered specifically for that region.  The "Ultimate Fighter" a show where young unknown talents compete for a UFC contract, has become so popular that the UFC decided to create a season of the show in different countries all over the world.  By creating a show in specific countries of a said market, the promotion is able to foster local talent and enable these fighters to garner national interest in their respective country.

Ultimate Fighter Japan

Ultimate Fighter China

Ultimate Fighter Latin America

Ch. 4 - The Marketing Environment

Conor McGregor is the UFC's biggest star today due to a large following from his country of Ireland.

The UFC throughout its history has tried to create a star fighter that American fans can get behind.  The most well-known fighter to come out of America in the UFC's history so far is Chuck Liddell.  Liddell became so famous that he was able to star in commercials by big companies such as Bud Light and Duralast.

Chuck Liddell in a Dura Last commercial

However as the UFC became a global brand in mixed-martial arts, new markets began to open up for them; A prime example of this is the fighter named Connor McGreggor.  Connor McGreggor is a fighter of Irish decent, and before his entry into the UFC has created a large buzz throughout the European circuit.  The UFC saw McGreggor as an opportunity to create a market in Ireland, and on February 2013 the company signed the Irish fighter into their roster.  Fast forward 3 years, and UFC's bet paid off, as he is now the most sought-after fighter to watch not only in his hometown of Ireland but all over the world.  The UFC was able to forecast a young MMA market in Ireland and used their resources to advertise Connor McGreggor as much as they can.  Had McGreggor been a boring fighter the UFC's investment in him would not have paid off, but luckily he is a very exciting fighter, in and out of the cage he fights in.

Ch. 18- Social Media and Marketing

Social media monitoring plays a vital part in the sales of UFC pay per view.  By using social media websites like Facebook, Instagram, and Twitter the promotion is able to create buzz for upcoming fights. By utilizing the video feature of these social media sites, the UFC can upload highlight videos of fighters that will be fighting soon. Not only that, but countdown shows are uploaded on websites such as YouTube in order to expose the fights to an even larger audience.  Discussions between fans are then started, and the viewers now have an avenue to express their opinions on whether the fight will be good or bad.

Social Media monitoring has also allowed for fans to directly change certain decisions the promoter has made. For example, a fighter by the name of Mikey Gall was stated to walk into the fight to the song "Hey Mickey"  by Toni Basil. The promoter Dana White decided to change the song, saying that it was distasteful.   However when fans found out about the change a social media campaign started to reinstate the previous song, as they felt it would be perfect for the fighter to come out with this song. Due to pressure from the fans online, Dana White allowed for Gall to use the entrance music he chose and in turn created even more buzz for his fight.

Ch. 2 - Strategic Planning for Competitive Advantage

The strategic planning of the UFC when it comes to distributing and promoting fights has changed vastly throughout the years.  In its early days the only way to watch UFC fights was to order it through your cable provider as it was a "pay-per-view" show.  However as smart phones and media streaming start to become the norm, the UFC has decided to change certain aspects of its business model to cater a broader audience.  The UFC has definitely conducted a SWOT analysis throughout its life, and an an example of how it would look like is as follows:

Strength:  The UFC has a variety of strengths compared to its competition, one of which is their widely-known brand.  Whenever people talk about mixed-martial arts event, it is most likely a UFC event.  The UFC brand is such a widely known term that casual fan refer to mixed-martial arts in general as UFC, much in the way that people refer to permanent markers as a "Sharpie".

The Infamous UFC Logo

Weakness:  Although the UFC is by far the best and most well-known mixed-martial arts promotion on earth, it still has weaknesses.  One of these weaknesses would be the over-saturation of events.  As the UFC promotion grew, demand for more events followed.  In turn, the UFC signed more fighters into their promotions in order to build more events more frequently.  However, the quality of fights dwindled, as they are signing fighters that did not have time to develop.  The UFC is supposed to be the "NBA" or "NFL" of mixed-martial arts, and when fighters that are not world-class athletes are competing, the quality of the fight cards are diminished.

external Opportunities:  As smart phones and internet streaming became more accessible, the UFC saw an opportunity to sell their product in a different way than just providing fights through pay-per-view.  The UFC introduced a streaming service named "The UFC Fight Pass", which contains a library of past fights as well as live event offerings for $10 a month.  

UFC Fight Pass

Threats:  One hurdle the UFC might face in the future are fight promotions owned by large media organizations.  An example would be a fight promotion named Bellator FC, who is owned by the media organization Viacom.  Such promotions would be a threat to the UFC since they would have a wider audience through channels they own (SPIKE TV, MTV, Nickelodeon).  

Ch. 1 - Overview of Marketing: UFC Mission Statement

According to the UFC's Website:

The mission statement of the UFC is to stay as the the fore-most leader in mixed martial arts promoting.  The UFC hosts over 40 live events annually throughout the world.  The UFC strives to provide their media content to as many households possible, obtaining broadcast agreements with media groups such as FOX.  The UFC also licenses videogames, apparell, and UFC Gym locations.

Ch. 1 - Overview of Marketing: Brief History of The UFC

The Ultimate Fighting Championship is the largest and most profitable mixed-martial arts (MMA) promotion in the world today.  The promotion is home to the world's top fighters such as Connor McGreggor, Jon Jones, and Ronda Rousey.  Since the company's inception in 1993, the UFC has hosted over 300 events all over the world.

Jon Jones

Ronda Rousey

In the early 1990s, an American entrepreneur by the name of Art Davie spoke to John Milius, a film director, and Rorion Gracie, a prominent Brazilian Jiu-Jitsu practitioner who is widely recognized for introducing Brazilian Jiu-Jitsu to the United States, about creating a fight promotion that would showcase various martial arts from all over the world.  Davie wanted to named the promotion "War of the Worlds", but once they received the backing of pay-per view company Semaphore Entertainment Group (SEG) they changed the name to Ultimate Fighting Championship (UFC).  At the time, mixed-martial arts was known as "no-holds barred" fighting as it was unregulated with no universal rules set.  As a result various states outlawed the sport since they did not want to involve themselves with a sport where groin shots and headbutts were allowed.  However as the sport grew regulations were passed and athletic commissions laid out the foundation to the Unified Rules of MMA.

UFC 1 Poster

The Ultimate Fighting Championship changed ownership in the year 2001 when brothers Frank and Lorenzo Fertitta along with business partner Dana White bought the company for two million dollars and created Zuffa, LLC as the parent entity.  The company under Zuffa would struggle for profits and legitimacy in the early 2000s, but found success after launching the reality television show The Ultimate Fighter.  The show allowed for fighters from all over the country to compete for a six-figure contract with the company while living in the same household for a couple of weeks.  The show was well-received, and it paved the way fighters to become household names.  Fast forward 15 years, and Zuffa was able to sell the UFC to talent agency company WME-IMG  for $3.5-$4 billion, making it the largest ever acquisition of a sports company.

Face the Pain!

My name is Joe, and this blog will be about the mixed martial arts organization called the Ultimate Fighting Championships (UFC).  I will be discussing the UFC as a company and relating it to different aspects of marketing, the inception of the group and how it went from a "no holds barred" cage fighting organization to a well-known sports entity in the world.