Brenda,
Comes back to the gazelle the elephant & the lion story again..
Lot's of new students are gazelles.. They really don't want to get hurt, and are very intimidated about contact etc.
There are also elephants who are capable of doing alot, but just kinda take it easy.
Then the Lions who try to break everybody they touch.. Usually the young guns. Some think they are lions, but soon head to the elephant pen. They just don't want to play that hard. Others want to fight hard every day... Just plain nutty.. You will always have less of these than the rest, but they are fun to have around. They keep the school strong and keep you honest because you gotta keep your game up to play with them.
The elephants are pretty tough, and learn soon enough they can take the training and will progress along o.k. You can let them have the option to come in and play with the lions, but they also have the option to train in a less wild enviornment. Some are capable of stepping on the lions from time to time.. But they just choose not to do it every day.
The gazelles need to be allowed time to adjust to the idea of attacks coming at them, and once they realize they won't be killed each class, they eventually move in and play with the elephants. Some jump into the lions cage after they realize they can handle more than they thought.
Bottom line...
Set up your classes for the masses. You will see more gazelles and elephants, so make sure your program is functional and realistic, but doesn't scare off everyone who looks in the window, or never comes back after the 1st class. Pair students up accordingly and they will get good instruction, and be able to work the next day.
I Keep a seperate class for the lions. I make them take it easy during the other classes, and play nice, but I have a place for them to run and play also... Then they can get out their wildness with each other, and then feel good about playing nice and working with the others..
Most of my assistant instructors are lions. They are the most capable of really pulling off the material, and the first to "get it" when I teach them something.
You just need to make sure they are fed before you let them out of the cage to play with the rest of the animals...

As for the marketing try to stick to what you are good at. Advertise a class that will develop good self-defense skills, and also fitness. Many are looking to get a good workout and the added benefit of self-defense training is a great option. Or you have those who are looking for self-defense, and the option of getting in better shape is a great option.
If you have those who watch a class, and want more... Well.. You have the lions den. Let them come and watch one of those sessions, and they will realize where they can fit in...
Hope this helps.