UFC to Africa? A marketing plan:
Introduction
The Ultimate Fighting Championship (UFC) is a mixed martial arts organisation based in the United States (Stan, 2019). The installation of Dana White as a CEO rendered it reach a seismic boom. He was proactive to positively change the perceptions towards the company through effective branding and marketing approaches to make it attractive for consumers and investors. Intensive promotional activities such as TV deals with Spike TV helped the company promote its content to a wider audience and position itself as a dominant organisation (Stan, 2019). This reflects the significance of Marketing for sport firms. This report therefore will analyse the marketing approaches of the UFC and will suggest a marketing plan for its vision of a potential future growth.
Executive Summary
Marketing was a pivotal strategy adopted by the company to promote itself and reach its objectives. The UFC has robustly established itself as a leader in the industry with an estimated market share of 90% (Gaul IV and Carl, 2018). The situational analysis of the company demonstrated the existence of some crucial elements that might lead UFC to expand its global exposure. Reaching the African market will be a lucrative goal for the company. An accurate marketing strategy based on Mass media namey TV deals, social media and Influencers marketing was designed for this purpose. The plan is expected to help UFC increase its brand awareness, reinforce its relationship with customers and other stakeholders and ultimately increase its market share.
Situational Analysis
Market overview
UFC played an instrumental role in promoting mixed martial arts to make it one of the highest growing sports in the world. The company manages MMA events and creates awareness about them through intensive promotion (Stan, 2019). It has different revenue sources with mainly, content revenues based on Pay-Per-View, Live events revenues such as ticketing, sponsorship and merchandise (Satista, 2016). UFC is competing with other prime organisations such as Bellator MMA for gaining the highest share and stature and it is considered the largest one in its field. The revenues achieved by Endeavor which is the parent company of the UFC’s success reflects the importance of the organisation as it dramatically contributed to help Endeavor achieve $1.5 billion in the Q4 of 2021 bringing total 2021 revenues to $5.1 billion (Endeavor, 2022).
The classification system of the male and female fighters through 12 separate weight divisions helped the company to create more events and to attract a wider audience. TV and media deals significantly enhanced the brand awareness of UFC and made them a global MMA brand.
Competitive analysis
Numerous organisations are managing and promoting MMA events, however a few ones are deemed direct competitors to the UFC with Bellator MMA as a main one. There is no high threat from new competitors despite the existence of new opportunities. UFC has been a pioneer in MMA sport and it has proactively gained a remarkable position and surpassed competitors (Thomson and Baker, 2010). The threat of the substitutes is considerably high. Other fighting sports might attract MMA fans such as Boxing, Judo or Wrestling. Also fans might shift to other large sports in the US such as Baseball, American football or Basketball (Thomson and Baker, 2010). The success of the UFC and the dominant position that it possesses might help in limiting the threat of substitutes through working to continuously meet the needs and expectations of fans to keep them interested.
Company analysis
In order to analyse the current situation of the UFC, 4P’s Marketing Mix analysis was implemented to revise the current situation of the company by focusing on product, place, price and promotion which will help ultimately in strategic decision making for the company (Constantinides, 2006).
Product: UFC only signs top MMA fighters who already showcased their abilities in other promotions. They are all classified by the company into divisions based on their weight. Each fighter competes in its respective division for a title. UFC manages events with several fighting bouts for its consumers and its stakeholders (McClearen, 2017). Besides the main events, UFC offers “UFC fight nights” events for ranking purposes between fighters in each weight division.
Place: Despite having a global presence the UFC’s main audience is in the United States.The company manages live events in different Arenas and relies on live broadcasting and online technology such as PPV to distribute their events to its consumers (McGowan and Mahon, 2015) .
Price: UFC’s prices for live event tickets predominantly range from $65 to $500 depending on the seats position (Sharma, 2021). Additionally, UFC’s consumers in the US need a $69.99 yearly subscription for ESPN+ to get access to the event and an additional $74.99 to purchase it. In the UK, fans need to pay £19.99 added to their BT Sport subscription to watch UFC’s events (Yanofsky, 2022).
Promotion: The company is reflecting an effective work on promoting itself. They use digital and social media, TV deals and co-branding to promote its events and ultimately its brand (McGowan and Mahon, 2015).
Consumers analysis
UFC has different stakeholders and consumers namely fans. As part of the situation analysis it is crucial to focus on the consumers of the UFC as they represent a major part of their marketing approaches. The application of the 6Ws model on consumers helps in this purpose.
Who are the current and potential consumers of the UFC?
Thomson and Baker (2010) argued that UFC’s main audience are male and females aged between 18-36 based in the US. UFC fans are intrigued by the skills of the fighters, the techniques, the intensive competitions and the unpredictability of the fights. The drama created around the fight stimulates the fans psychologically and influences their purchasing decisions.
What do the current and potential consumers do with the UFC’s product?
UFC events enable consumers to know more about fighters and to develop understanding about MMA skills and techniques. Moreover, consumers develop awareness about top MMA clothing and accessories brands added to the different sponsors of the events.
Where do UFC’s consumers purchase its product?
UFC’s consumers purchase tickets for live events or watch them broadcasted. Notably TV and media platforms represent a crucial component of the marketing approaches of the UFC (McGowan and Mahon, 2015).
When do UFC’s consumers buy its product?
Fighters with high reputation among fans such as Conor McCregor or Khabib Nurmagomedov stimulate higher consumptions for UFC’s events. In contrast, the difference in time zones might affect the purchasing decisions of fans as the time for some fights might be unsuitable in other geographic locations (Nutting and Price, 2015).
Why do the consumers buy from the UFC?
The UFC was successful to position itself as a dominant organisation in the MMA industry. It has the best fighters with the most developed facilities and arenas in the world which all helped in meeting the needs and the expectations of MMA fans. The UFC built a remarkable brand due its effective marketing approaches such as relying on Joe Rogan as brand spokesperson to increase the consumption appetite among fans.
Why do not consumers purchase UFC events?
MMA as a sport has negative perceptions towards it of being violent and aggressive where the company struggled in its early years due to this reason (Andreasson and Johansson, 2018). The language used in the press conferences might be inappropriate for certain consumers. Furthermore, other sports in the US such as NBA, Boxing or NFL might represent a substitute sport for certain consumers where they find other needs such as a sense of affiliation, local attachment which are difficult to meet by the UFC (Thomson and Baker, 2010). Importantly, pricing strategies might be a hindrance of some MMA fans to follow UFC events.
Marketing analysis
The exponential rise of the UFC was dramatically dependent on its marketing activities. The organisation used media marketing namely TV such as SpikeTV in its early years and ESPN+ Lately (McClearen, 2017). It is also relying on social media to provide engaging content as it has more than 178 million followers (UFC, 2021). Conspicuously, branding is a core element of the UFC’s marketing as it helped in creating competitive advantage and differentiating the reputation of the company. UFC used branding to create certain associations in the mind of MMA consumers to influence their purchasing decisions for instance through breaking the stereotypes around the violence of the sport merging it with entertainment. The UFC brand portrays MMA as a highly organised, sanctioned and controlled combat sport (Wagenen, 2010). The fighting promotion also represented a platform for fighters to brand themselves though different hairstyles or creating unique styles of fighting to ultimately promote the company’s brand. UFC represents a paradigm that reflects the uniqueness of sport marketing where it uses unique psychological features of the game such as drama and entertainment, aesthetic pleasure or escapism to motivate fans to purchase its events (Stuart and Smith, 2015). The hype created between Conor Mcregor and Khabib Nurmagomedov and the powerful knockouts posted in their social media summarise this aspect. Nevertheless, the marketing of the UFC has been criticised for using underdressed girls in the octagon and in the press conferences to promote themselves and their sponsors. This approach is deemed unethical as it supports the objectification of women in advertising (Zimmerman and Dahlberg, 2008). Overall, UFC’s marketing is considered effective as it helped it reach over 170 countries in the world. Despite its strong brand recognition UFC has not reached the full potential from its global opportunities. The deals agreed by the company and its partners in Asia will notably increase the exposure of the brand in Japan, China, Gulf countries and lately India. Africa for instance is still deemed a potential destination for the global expansion of the UFC as the CEO Dana white claimed. Francis Ngannou and Kamaru Usman as African champions with the Aricain-Born champion Israel Adesanya have considerable fanbase added to the other contenders from the continent such as North African ones. The following part will demonstrate a marketing plan to increase the exposure and awareness about MMA in general and UFC in particular in the African continent.
Marketing Plan
Segmentation
A study by Statista (2021) demonstrated that the dominant group of the UFC fans in the United Stated are aged between 35-44 with 27% being avid fans and 32% being casual fans while the age group of 18-34 comes the second with 22% being avid fans and 32% being casual fans. Another study showed that 30% of MMA audiences are aged between 25 and 34 whereas the aged group of 35-44 represent another 30%. There are additionally 10% of the aged group category under 24 and another 10% for people aged over 54 (MMA Facts, 2022). The latest study is more representative to african fans as they represent an appropriate sample for it. Therefore the age group of 25-44 is a suitable target for UFC marketers in the African continent. Another demographic factor to consider is gender, MMA fans are overwhelmingly males with 75-90% and a small group of females with approximately 10-25% (MMA Facts, 2022). Moreover, It is crucial for the UFC to consider income levels in the African market. North Africa with Egypt, Morocco and Tunisia, West Africa with Nigeria and Ghana and South Africa are the highest countries in terms of GDP per capita (Benson, 2022). They also have remarkable average monthly incomes compared to other regions with approximately $2000 in South Africa and Morocco and $1300 in Tunisia (Benson, 2022). These regions also have remarkable educational levels and access to technology.
The sport market size in Africa and the consumption levels are increasing however they are still lower than the United States due to economic differences. Mega-events held in Africa such as World Cup 2010 reflected the admiration of African fans to the show and atmosphere in stadiums (Sullivan, 2018). UFC live-events might be an expedient venue for fans to create a show. Additionally as Kim et al (2009) mentioned that MMA fans are motivated by aesthetic beauty of sport, African sport fans mirror this opinion where sport such as gymnastics or rugby are among the most followed ones.The UFC has this element in its brand’s portfolio. African fans are eager for competition and sporting accomplishments, therefore a highly competitive sport where only the best fighters win might arouse the curiosity of African fans.
Targeting
For better effectiveness and efficiency of the marketing plan, it is crucial to target a specific audience from the recent segmentation. In order to penetrate the African market, UFC can focus on the North African region particularly Egypt, Tunisia, Morocco and Algeria. MMA fans who are aged between 25-44 and with monthly incomes higher than $1300 are a convenient target for the company. The targeting of this market was based on its remarkable size, where this market has low barriers to enter and free from competition. Its potential of growth is high and this category is able to spend on UFC events and stimulate profits. This audience is reachable to serve live events and online contents. Marketing approaches such as mass media advertising, and social media have the potential to influence this segment.
Positioning
UFC has always positioned itself as the leading MMA organisation in the world based on its top fighters and the high quality of its events (Stan, 2019). Therefore these perceptions reassure North African fans about the company and differentiate UFC from any potential competitor or substitute. Combined with other psychological needs of the fans, the use of these perceptions will help in convincing the targeted audience about the MMA brand.
SMART objectives
The objectives of this marketing plan are increasing the awareness about the UFC by at least %25 in the north African region, Increasing the global market share by at least 3% and Enhancing relationships with MMA fans and sport stakeholders in the continent. To reach these objectives UFC needs to manage fighting events in the region and offer content through broadcasting and PPV. Mass media marketing such as a deal with BeIN Sport, the most followed platform in the region, social media promotion and influencer marketing are key components for this marketing plan.
Tactics
The following 4P’s marketing mix illustrates the envisaged tactics for this plan.
Product: UFC live event organised in october 2023 live broadcast through beIN Sport.
Price: Tickets prices range from $25 to $200 depending on the seat place. For those who have a Beinsport decoder (costs around $85) they need to upgrade it with %25 to reach a monthly cost of approximately $16 to get access to live events and other UFC’s content.
Place : Cairo Stadium Indoor Halls Complex, TV channels such as BeIN Sport. The company also can rely on its own platforms such as “UFC Arabia” in the North African Market.
Promotion: Mass media marketing through TV and namely Beinsport and social media marketing. Two open workouts followed by press conferences will be included. Ifluencers marketing using UFC’s athletes such as Mounir Lazzez, Esslam Ahmed, Ottman Alzaitar, Francis Ngannou, Kamaru Usman and Khabib Nurmagomedov who have a significant reputation in the region.
Costs and budgeting:
UFC has as expenses the cost of social media marketing where a budget of $30,000 will be allocated for 9 months of advertising starting from January 2023. Additionally, the two open workouts require a higher budget as they encompass the cost of the venue and its branding, fighters and other staff such as security, press and photographers. A budget of $3 million will be allocated for this purpose.
However, UFC is still able to make a high revenue from penetrating the African Market. For instance Formula 1 deal with beIN sport cost around $150m in 2014 for a 5 year period (Impey, 2019). Analogically and due to the modest cultural presence of MMA and the nature of the market an $80m deal for four years with beIN Sport will be reasonably profitable for the UFC. The capacity of the venue of the event is 16,000, therefore UFC is expected to make revenue from ticketing between $400,000 and $3,200,000 based on the previously mentioned prices. Additionally, Zuffa LLC the owner and the operator of the UFC stated that the costs of the profit margin of UFC’s event in the United States after fighters’ compensation and production costs is around %30 which is expected to be higher in Africa due to low production costs (Nash, 2019).
Implementation:
This marketing plan will be based on Advertising with mainly Above the line advertising and below the line advertising.
Above the line advertising (ALT):
This type of advertising aims to reach the maximum of the audience with the aim of reinforcing the promoted brand (Arora, 2018). For this purpose, UFC will rely on social media by posting a monthly post about the event in their official accounts starting from January 2023. Instagram, Twitter, Facebook and TikTok will be the main platforms. This approach is deemed effective as more than 300 million people are using the internet in Africa (Statista, 2022). Facebook and Instagram will be the core focus of the campaign as they are the most used platforms. Also, the deal with beIN Sport will help in targeting the UFC’s audience at a macro level through TV promotion and advertising to increase the awareness about the MMA brand.
Below the line advertising (BLA):
BLA will be designed specifically to attract the targeted audience of this plan (Arora, 2018). Two open workouts followed by press conferences will be organised in the region starting from March 2023 in Cairo Stadium Indoor Halls Complex. While keeping the psychographic and demographic factors about the audience in mind, relying on African fighters as influencers to showcase their abilities and create an aesthetic show in these workouts will help in meeting the expectations of the targeted fans.
Timeline
The marketing plan will be implemented depending on the following timeline
Measurement
The success of the social media campaign will be measured through the engagement rates and interactions with fans, namely by the amount of clicks, likes, shares and follows to indicate the level of brand awareness in the region (Trunfio and Rossi, 2021). For TV promotion the level of reach and views will be important to measure its performance (Ali, 2016). The effectiveness of the open workouts will be dependent on the level of attendance which is useful to compare the UFC’s popularity in different countries of the targeted region .
Conclusion
Marketing played a pivotal role in the success of the UFC. The analysis of the company showed that it has an opportunity to expand on a global level particularly in Africa. The designed marketing plan demonstrated that people aged 25-44 with an average income of $1300 are a convenient target. TV advertising through an exclusive deal with beIN Sport, social media marketing and the management of two open workouts will be the core marketing approaches of the UFC to promote for its main event in the north region of the continent in October 2023. It is predicted that this plan will help the UFC to increase its brand awareness, strengthen its relation with consumers and sport stakeholders as well as stimulating a growth in the market share. Despite considerable marketing expenses the company is still able to generate high revenues particularly from selling broadcasting rights to Bein Sport. Implementation will be started from January 2023 to October 2023 where elements such as social media engagement rates, level of attendance and level of reach will be used to measure the efficiency of this plan.