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.