Sport Marketing Chapter 5 BeforePresentation Transcript
Fundamentals ofSport MarketingChapter 5Segmentation, Target Marketing, andPositioning in Sport Business 11
CompanyResearch & Information CollectionCompany Mission & GoalsConsumer Competitor ClimateSegmentationTarget Market DecisionsSport Marketing Mix Decisions & StrategiesMarketing Management StrategiesImplementation – Management – Evaluation – AdjustmentThe Sport Marketing Management ModelPriceProduct Place PromotionFigure 3.3 The Sport Marketing Management Model
CompanyResearch & Information CollectionCompany Mission & GoalsConsumer Competitor ClimateSegmentationTarget Market DecisionsSport Marketing Mix Decisions & StrategiesMarketing Management StrategiesImplementation – Management – Evaluation – AdjustmentThe Sport Marketing Management ModelPriceProduct Place PromotionFigure 3.3 The Sport Marketing Management ModelInfo on the 4 Cs is usedfor Segmentation &Target Market StrategiesInfo on the 4 Cs is usedfor Segmentation &Target Market StrategiesAnd, this informationinforms the segmentation,target marketing, andpositioning strategiesAnd, this informationinforms the segmentation,target marketing, andpositioning strategies
► World population – 7 billion► USA population – 311 millionmight reach 404 million by 2050► USA population shifting from a majority Euro-white population to a society characterized byseveral groups:► Hispanic – now the largest minority population at over 15%; isstill fastest growing Black► African American – expected to grow from 12.8 to 14%► Lesbian & Gay – Third largest minority - estimates are at 10%► Asian – now the fourth largest minority► Many othersThink about this……..
Some Population InformationImportant for Sport Business (Table 5.1)► The first billion in world population took from the dawn of humanity until 1830.The second billion took only 100 years -- from 1830 to 1930. The populationcrossed 7 billion in 2011 and the United Nations predicts it will cross 8 billion in2023, a rapid growth rate.► The population of the USA is aging rapidly. In 2020 that number is expected tobe 65 million. Most of them will have one year of retirement for every year ofwork.► Children under the age of 18, who were 34% of the population in 1970, will beonly 25% of the population in 2020.► At the present growth rate of 1.1% per year, the United States population willdouble to about 560 million in about the next 60 years, if current immigrationand related trends continue. Each year over 3 million people are added to theU.S. population ► Language is important. There are more that 100 languages spoken in theschool systems of New York City, Chicago, Los Angeles, and Fairfax County,Virginia.► Minority shoppers account for more than 30% of the economy
Some Population Information Importantfor Sport Business (Table 5.1)► The United States population increased by nearly 30 million from 2001to 2010, a 9.7% growth rate► Despite the recession, 75% of teens are receiving the same or morespending money from 2009 to 2010.► In 2010, 30% of the world population is using he internet on a regularbasis but 78% of the people here in the United States are connected tothe web. Additionally some 66% of those users have purchasedsomething online► The average American spent just 8 hours reading educational books in2009 but 121 hours playing video games according to the censusbureau.► Inhabitants of American cities are exposed to an average of 5000advertisements each day. This figure has nearly tripled in the last 30years.► USA ranks third largest in population in 2011 at 311 million and isexpected to rank third in 2050 with a population of 404 million.
► Today, a marketing professional MUST monitorthe population and must shift marketing theoriesand models to fit the consumer markets.► New marketing strategies are emergingto keep pace with the changingdemographics in the United States.► Segmentation is used by the marketingprofessional to target specific groups (targetmarkets) and their characteristics and behaviors.
The object of market segmentation isto develop useful data about aparticular group.Segmentation using one factor/variableselects members from a group thatshare a particular characteristic, whilemultiple factor/variable segmentationselects for a variety of characteristics.The latter method is increasinglypopular as the culture becomes moremulti-faceted.
Purposes ofSegmentation1) Primary purpose is specialization. Usingsegmentation, the company can select one ormore markets on which to concentrate andspecialize in meeting that segment’s needs.2) To divide the whole into parts – putsthings into order3) First step toward understanding consumergroups, determining target markets, andinforming marketing mix and positioningstrategies.4) To monitor changes in the segments.
SegmentationIn sport business, segmentation involves dividing consumers and theindustry into relatively similar segments for varying purposes. It is the firststep toward understanding the consumer, determining target markets, andinforming marketing mix and positioning strategies.1) Sport Consumer Market Segmentation:the division of total markets into relatively homogeneous segments.2) Sport Industry Segmentation:the division of the sport industry into relatively homogeneous segments.3) Sport Business Segmentation:the division of sports businesses into similar segments.
SegmentationNOW........ How do you DO segmentation?
Figure 5.1 The Segmentation ProcessFigure 5.1 The Segmentation Process
Segmentation CriteriaStandards to use to determine if a segment isviableIdentifiability: segments must be identifiable and measurable.Substantiality: segments must be of a size large enough to justifymarketing mix attention.Accessibility: segments must be reachable with the customizedmarketing mix.Responsiveness: segments must respond to a marketing mixcustomized to that segment.
Segmentation BasesVariables used for segmenting markets► Segmentation bases are variables (factors) usedto divide a total market (population) into segments.► The sport marketing professional must identifybases that produce a RIGHT mix of identifiability,measurability, substantiality, accessibility, andresponsiveness in that segment.► Markets can be segmented using one or morebases. Some examples: gender, income, age.
Variables Category N % Cumulative %Household Income Above $200,000$150,000-199,000$100,000-149,000$80,000-99,000$60,000-79,000$40,000-59,000$20,000-39,000Below $20,0005937101131151168147676.94.311.715.217.519.517.17.8100.093.188.877.161.944.424.97.8Gender MaleFemale53332861.937.1100.037.1Ethnicity CaucasianHispanicAfrican AmericanAsianOthers61710362234671.712.07.22.76.4100.028.322.214.171.124Marital Status MarriedSingleDivorcedWidowedOthers46029146145053.5126.96.36.199.8100.046.5188.8.131.52Education College GraduateHigh School GraduateAdvanced DegreeSchool StudentCollege StudentOthers270189129114738631.422.015.013.28.510.0100.068.746.731.718.510.0Occupation ProfessionalManagementSalesTechnicalEducationSkilled Worker2071417559593924.016.48.76.96.94.5100.076.059.650.944.037.1One example ofdemographicsfrom a studyN = 861
Another exampleof demographicsfrom a study
Demographics -Personal IncomeDisposable Income – money, after taxes, at yourdisposal.Discretionary Income – money, after necessities, tobe used at your discretion.For example, look at theDome studies handouts inthe. “Economic Factors”sections.
More to know – household and life choices over the lifetime
Demographics: Race and EthnicityDemographics: Race and Ethnicity
Now… how do you use yoursegmentation and targetmarket information todevelop marketingstrategies?Take a look at some examples…. > > >
Key Findings About Black Consumers Strategies for Sport Marketers1. The Black consumer market is a challenging segmentwith many cultural nuances that influence their thoughts andbehaviors.Involve individuals with expertise in the Black consumermarket in the designing of marketing strategies.2. Black consumers have unique media consumptionpatterns.Use Black media outlets (particularly Black radio) topromote events.3. Blacks respond more favorable to culturally basedapproaches of marketing communications.Advertisements and promotional messages should contain atheme and content that offer a reference point for Blackaudiences.4. Blacks often seek a means of identifying withorganizations as they decide whether or not to support theirbusinesses.Engage in activities that allow Blacks to find a self-referencelink to identity with the organization.5. Black consumers often have an allegiance to patronizeBlack businesses.Conduct business with Black vendors to provideorganizational needs and involve them as corporatesponsors.6. Black consumers often seek a cultural experience in theirleisure activities.Amend the product/service with extensions that areculturally salient to Black consumers.7. Black consumers are socially conscious individuals. Demonstrate a respect for the Black community throughsocially responsible/cause-related marketing.8. Black consumers may have personal and structuraldifficulty accessing the existing channels of distribution.Distribute tickets through outlets that are easily accessibleto Black consumers. Also, find creative ways of exposingthe product to the Black communities.9. Sport behaviors are often a result of socializationoccurring during childhood.Invest in programs to include Black youths to nurture theirinvolvement.10. Just as any other community, the Black community alsohas opinion leaders.Form a support group of Black constituents from variousrealms of the community to serve as staff multipliers.Example: Black Consumers and Marketing (Table 5.8)
You can see…..….segmentation information is usedin a number of ways to informdecisions and strategies that willenhance success for the company.
Some Psychological Factors Used inSegmentationTable 5.14Personality: values, beliefs, habitsPhysiological: food, drink, sleep, shelterPsychological: affiliation, beauty, belonging, curiosity, esteem,independence, love, motiveLifestyle: household style, parent style, importance of life comfort,culture, financial resources, occupation and education, communityDesire for: acceptance, achievement, comfort, fame, happiness,identification, prestigeFreedom from: anxiety, depression, discomfort, fear, harm, pain,sadnessMore to know – basic human psychological characteristics…
Maslow’s Hierarchy of Needs (1954)Self-actualization Needsself-fulfillment, self-expressionEsteem Needsself-esteem, self-respect, recognitionSocial Needslove, appreciation, fun, belongingSafety Needssecurity, freedom from painPhysiological Needsfood, water, shelterMore to know and understand about your consumer – thebasic human needs (Table 5.15)Psychographics
More to know -- SPORT SPECIFIC: Why do people play sports
Geographics – One Example of One Use of GeographicsGeographics – One Example of One Use of Geographics
Purchase BehaviorHow does your consumer make adecision about whether or not tobuy?By knowing HOW your consumer makesa decision, you can make plans andstrategies to influence it.
A typical consumer decision-making process (Table 5.19)All are affected and influenced by personal andsocial factors.Step 1 – Problem RecognitionStep 2 – Information SearchStep 3 – Evaluation of AlternativesStep 4 – PurchaseStep 5 – Postpurchase Behavior
WHY DO PEOPLE ATTEND SPORTS EVENTS ?!?Knowing What Factors Affect AttendanceHelps the Sport Business Make ImportantMarketing Decisions
Product Use & BenefitsA consumer needs a product to satisfy a needor desire. The product is the tool for theconsumer to perform certain functions andrealize certain benefits.Examples:Softball Bat: Tool to hit a softball. Benefit: improve hitting percentage, etc.Go to a WNBA game: Tool to be entertained; to seal a business deal. Benefit: havefun; transact business.Go to the fitness center: Tool to lose weight, get in shape, or other. Benefit: same.Subscribe to ESPN Magazine: Tool to keep up with sports news. Benefit: same.
Undifferentiated targetingstrategyNiche targeting strategyMulti-segment targetingstrategySelection of Target Market(s)youngoldraceincomeaddressgenderBaby boomersabilitySports fans
Sport Business Consumers► Manufacturers► Resellers, Retailers► Sports Governing Bodies► Institutions► Media Sports EnterprisesSome Types…But wait – there’s more!!!! You and yourcompany might have business consumers.
Business Consumer Segmentation► Some consumers are businesses. Hence, business-to-business (B2B) marketing.► B2B marketing involves the marketing of products to individualsand organizations for purposes other than personalconsumption. These consumers typically acquire products andservices for purposes of manufacturing, production, resale,operations, enhancement of a company’s position, or otherbusiness related reason.► Segmenting business consumers is similar to segmenting endconsumers.
Bases for Business ConsumerSegmentation► Geographic Location► Customer Type► Customer Size (can be volume)► Product Use► Purchase Criteria (price, quality,reputation, delivery)
What else do you need to know?Industry SegmentationandProduct Segmentation
The Larger Picture….Industry Segmentation► What is this industry?► What is included?► How can one make sense of such a ginormousindustry?!?!? :)How does onenavigate around andwithin such a largeindustry?How big is it?How fast does it grow?How do I findmy way?How do Iguide mybusiness?Some ways to segmentthe industry > >
The Sport Industry and itsSegments (Figure 5.11)► As divided by product function in the Pitts, Fielding & Miller Sport IndustrySegmentation Model (1994)SportParticipationSportProductionSportPromotionLet’s look at themodel > >
SPORT INDUSTRYSEGMENTATION: BY PRODUCTAND BUYER TYPESport Performance Segment:Sport performance as offered to theconsumer as a participation orspectatorial productSport Production Segment:Those products needed or desired forthe production of, or to influence thequality of, sport performance1. Outfitting Productsa. Equipmentb. Apparel2. Performance Production Productsa. Fitness Trainerb. Medical Carec. Sport Facilitiesd. Governing Bodies andOfficials1. Athleticsa. Amateur Sportb. Professional Sport2. Private Business Sport3. Tax-supported Sport4. Membership Supported SportOrganizations5. Non-profit Sport Organizations6. Sport Education7. Fitness and Sport Firms1. Professional Merchandising Products2. Promotional Events3. The Media4. Sponsorshipa. Single Event Sponsorshipb. Multiple Event Sponsorshipc. Single Team Sponsorshipd. Individual Sponsorshipe. Circuit or League Sponsorship5. Endorsementa. Individual Endorsementb. Team Endorsementc. Full OrganizationEndorsementd. Nonspecific Sport UseSport Promotion Segment:Those products offered as tools usedto promote the sport productSPORT INDUSTRYAll sport and related products – goods,services, places, people, and ideas –offered to the customerThe Sport IndustrySegment ModelPitts, Fielding, & Miller (1994)Based on theproduct’s function
Now that we have atarget market, how isthis information usedto position thebusiness forcompetitiveadvantage?
Positioning the Sport Product or SportBusinessWhat is positioning?-- the process by which marketers try to create an image oridentity in the minds of their target market for its product,brand, or organization. It is the relative competitivecomparison their product occupies in a given market asperceived by the target market.More simply, a products position is how potential buyers seethe product, and is expressed relative to the position ofcompetitors.One significant use of target marketing is…..
Road AtlantaRoad Atlanta is recognized as one theworld’s best road courses. Our multi-purpose motor sports facility is situated on750 park-like acres in the rolling hills ofNortheast Georgia. Road Atlanta is located35 miles north of Atlanta and just minutesaway from Chateau Elan, a 4-Star resortoffering guests comfort and amenities suchas three championship golf courses and aEuropean-style Spa. The facility is utilizedfor a wide variety of events, includingprofessional and amateur sports car andmotorcycle races, racing and drivingschools, corporate programs and testing formotorsports teams.360˚ Sports Academy LLC360˚ Sports Academy is dedicated todeveloping student-athletes into leaders.We endeavor to empower student-athletesto be the best they can be. The overalltakeaway from 360˚ Sports Academy is aholistic, life-building and applicableexperience that will benefit all participantson many levels and empower the nextgeneration of leaders. 360˚ SportsAcademy offers a full spectrum of trainingprograms for student-athletes and theirparents. The topics, treated in-depth andaddressed by subject matter experts, rangefrom test-taking strategies, finance basics,health and wellness, andpresentation/interview skills, to sports-specific athletic and game insights,techniques and drills.Table 5.25 Examples of Positioning Statements
Table 5.26 Examples of Positioning Statements: Multiple Target MarketsTable 5.26 Examples of Positioning Statements: Multiple Target MarketsRed Rocket Jet Ski CompanyOverall Positioning Statement:Red Rocket Jet Skis has the best sellingline of PWCs on the market today. OurPWCs are rated highest for ease of use,durability, reliability, fuel efficiency, andfun.Business Target Market:Our line of working jet skis are all youneed for emergency, rescue, or waterwaycontrol. Our jet skis are built tough to giveyou more years of service anddependability, ready to serve in the line ofduty when you need them. Traditionally orcustom rigged, your company can have afleet of the most rugged and dependable jetskis on the water today.Recreational Target Market:The Rocket is built with your fun in mind!No company offers the variety of jet skisthat we do. No matter what your funrequirements, we’ve got the jet ski for you -fun, fast, and safe.Red Rocket Jet Ski CompanyOverall Positioning Statement:Red Rocket Jet Skis has the best sellingline of PWCs on the market today. OurPWCs are rated highest for ease of use,durability, reliability, fuel efficiency, andfun.Business Target Market:Our line of working jet skis are all youneed for emergency, rescue, or waterwaycontrol. Our jet skis are built tough to giveyou more years of service anddependability, ready to serve in the line ofduty when you need them. Traditionally orcustom rigged, your company can have afleet of the most rugged and dependable jetskis on the water today.Recreational Target Market:The Rocket is built with your fun in mind!No company offers the variety of jet skisthat we do. No matter what your funrequirements, we’ve got the jet ski for you -fun, fast, and safe.Big Valley Indoor Soccer ClubOverall Positioning Statement:Big Valley is the most flexible indoorsoccer facility in the city. For any of yourneeds - practice, fun, or competition - BigValley is here with the best.Business Target Market:We offer the best practice facility for socceror field hockey in the area. Just call and talkto our friendly staff today and schedule yourpractice. And if you need the coachingroom, just let us know! We have a fullyequipped coaching room just waiting foryou and your team - the place where youcan plan your winning strategy.Recreational Target Market:The best soccer fun in town! Looking toplay indoor soccer for fun? Or is your teamlooking for some serious competition? Wehave both! Every session includesrecreational and competitive divisions. Wealso have age-group divisions from under-6to 40-plus. Register your team today - thenext league starts soon.Big Valley Indoor Soccer ClubOverall Positioning Statement:Big Valley is the most flexible indoorsoccer facility in the city. For any of yourneeds - practice, fun, or competition - BigValley is here with the best.Business Target Market:We offer the best practice facility for socceror field hockey in the area. Just call and talkto our friendly staff today and schedule yourpractice. And if you need the coachingroom, just let us know! We have a fullyequipped coaching room just waiting foryou and your team - the place where youcan plan your winning strategy.Recreational Target Market:The best soccer fun in town! Looking toplay indoor soccer for fun? Or is your teamlooking for some serious competition? Wehave both! Every session includesrecreational and competitive divisions. Wealso have age-group divisions from under-6to 40-plus. Register your team today - thenext league starts soon.
CompetitorResearch & AnalysisMissionConsumer Company ClimateSegmentationTarget MarketDecisionsSport Marketing Mix Decisions & StrategiesPriceProduct Place PromotionMarketing Management StrategiesImplementation – Management – Evaluation AdjustmentSport MarketingManagement ModelSegmentationleads to targetmarketdecisions
CompetitorResearch & AnalysisMissionConsumer Company ClimateSegmentationTarget MarketDecisionsSport Marketing Mix Decisions & StrategiesPriceProduct Place PromotionMarketing Management StrategiesImplementation – Management – Evaluation AdjustmentSport MarketingManagement ModelInfo on the 4 Cs isused forSegmentation &Target MarketStrategiesAnd, this info leadsto marketing mixdecisions andstrategies