Sport Marketing (2003)


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2003 presentation on Sport Marketing

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  • -The growth of the sport industry has been phenomenal and shows no sign of stopping.
    -Growth means there are increasing numbers of sport companies and products. Each sport product or company is competion.
    -The concept of competition in business is the idea that a sport business is competing against another business to win the consumer’s dollars. Winning in business means staying in business at a successful level. Success is defined by the sport company and is usually measured by achieving the companies objectives.
  • -Often referred to as the 4 P’s. The four primary elements of a marketing plan.
    - Decisions and strategies for each are important for the marketer. Information for making educated decisions involving the 4 P’s comes from market research-what you know about your consumer segments and what you know about your competitors.
    -Each competitor within a specific product market will make marketing mix decisions in an attempt to affect market position. Such moves may influence what the consumer things about the product’s quality, what the consumer is getting for the money, features not found on another similar product, status, convenience, and many other factors.
  • -The sport marketer studies the consumer in order to discover what the consumer wants or needs. The result could be developing a new product or changing an existing product in some way.
    -Product management involves tracking the sales of each product to determine if sales are increasing, maintaining or decreasing. An analysis will provide the sport marketer with the knowledge to make adjustments to specific products or to terminate a product.
  • -A consumer’s decision to buy is affected by many factors. Some include what the consumer can afford to pay, if what the consumer gets for the money is of value, if the consumer thinks they are getting a good deal.
    -The decision should be based on many factors, such as knowledge of the consumer and what the consumer will pay, cost to the company to produce and offer the product, profit-making strategies of the company to produce and offer the product, the competitions price, and supply and demand within the product market.
  • -Remember that products include people, places, goods, services, and ideas. Goods are typically manufactured in a factory and must be transported from the factory to the market.
    -Some products must be delivered to the marketplace in a different way. Sport activities are very different because a sport game does not exist until a person manufacturers it.
  • -Promotion is what the general public thinks is marketing. That is because the promotions are what the public sees. More specifically, promotions are especially designed to get a person’s attention.
    -Advertising comes in the forms of TV commercials, radio commercials and announcements, advertisements in magazines, in books, in movie theaters, in video movie rentals, on billboards on the highway, on the side of buses, trucks and cars, signs on the side of buildings, signs on athletic fields, stadiums, arenas, and uniforms.
    -People are lured to sporting events by special promotional events.
    -The marketers purpose for promotion is to encourage the person to purchase the product.
  • -
    -Step #1 in a marketing plan involves clarifying the purpose of the sport marketing and plan and linking it the organizations missions and core values.
    -Every business exist for a purpose. Each company strives to stay consistent with its purpose in order to greatly enhance its chances for success. The company’s purpose may be found in its mission statement
    -The company will offer products with the intention of meeting the company’s mission.
    -Page #192 shows an outline of the NBA’s Mission.
  • -The sport product is three dimensional. It is composed of tangible goods, support services, and the game or event itself.
    -Tangible goods: include items such as shoes, equipment, clothing
    -Support services: activities or programs ancillary to the sport but necessary for its operation
    -The game or event includes the core product: the type of spot, the participants, the team. The product extensions include the mascot, music, half-time entertainment, concessions, bands, cheerleaders. They are associated with the experience.
  • -By assessing the climate managers can identify factors associated with successful and failed marketing efforts.
    -You assess the internal and external strengths and weaknesses of an organization or event by performing an SWOT analysis
  • -Text includes a SWOT analysis of the future market climate for MLB on page #195
    -Text also includes a SWOT analysis of Women’s Professional Basketball
  • -Demographic segmentation refers to clustering sport consumers based on their age, gender, income, race/ethnicity, education and place of residence
    -Psychographics- appeals to consumers attitudes, interests and lifestyles
    -Media preference-based on their media preference of radio, TV, internet
    -Purchasing behavior refers to usage behavior.
  • -Sponsorship is undertaken for the purpose of achieving commercial objectives
    -Advertising is a direct promotion of a company through space or air time bought for that specific purpose—it is a quantified medium sold and evaluated in terms of cost per thousand
    -Sponsorship is not advertising. It is a qualitative medium. It promotes a company in association with the sponsored event.
    -With sponsorship you have access to a live audience, can have on-site sampling, and have the opportunity to entertain.
    -With sponsorship companies not only can determine how many people they’ve reached, but how they were motivated to buy something.
  • -More televised events on cable, different event attract different types of audiences
    -Originally, sponsorship was a method that companies used for free visibility and client entertainment.
  • Sport Marketing (2003)

    1. 1. Sport Marketing October 14, 2003
    2. 2. Sport Marketing • Is the process of designing and implementing activities for the production, pricing, promotion, and distribution of a sport product to satisfy the needs or desires of consumers and to achieve the company’s objectives. • **It is the most important function of a sport business.
    3. 3. Sport Marketing Plan • Comprehensive frameworks for identifying and achieving an organization’s marketing goals and objectives
    4. 4. Marketing Mix • 4 P’s – Product – Price – Place – Promotion • Market position refers to the way a company uses its marketing mix to influence the consumer’s perception of a product.
    5. 5. Product • The centerpiece of a marketing mix • The product is something that will satisfy something the consumer needs or wants. • Includes: – People, places, goods, services & ideas
    6. 6. Price • Price affects the product’s success, status quo for the product, and the consumer’s perception of the product.
    7. 7. Place • Is where and how a company gets a product from its production or origination point to a place where the targeted consumer can have access to it. • Sport activities are manufactured and consumed simultaneously.
    8. 8. Promotion • The integrated communication and public relations activities that communicate, inform, persuade, and motivate consumers to purchase the product. • Advertising or making people aware
    9. 9. Step #1: Mission • The company’s purpose may be found in its stated mission. • Example: An intercollegiate athletics program’s mission may be “to provide athletic participation opportunities for the college student.” • The company will offer products with the intention of meeting the company’s mission.
    10. 10. Step #2- Analyze the Product • Tangible good: Shoes, apparel, sporting equipment • Support services: Officials, trainers, sport psychologist • Game/event: Core product, product extensions
    11. 11. Step #3 Projecting the Climate • Assessing internal and external factors • Internal factors: – Players, owners, team management, and staff personnel • External factors: – Media, corporate sponsors, advertisers, spectators, regulations
    12. 12. SWOT Analysis S = Strengths W = Weaknesses Controllable Factors Ex. Products, Services, Financial Resources O = Opportunity T = Threats Uncontrollable Factors Ex. Competition, Demographic Shifts, the Economy, Technological Advances
    13. 13. Step #4-Positioning the Product • Objective is to differentiate the sport product from competing products by creating a distinctive image of the product. – The type of consumer – The design/benefits of the product – The price – Where the product takes place
    14. 14. Step #5-Analyzing & Targeting Consumers • Involves grouping consumers according to common characteristics. – Demographics – Psychographics – Media Preferences – Purchasing behavior – -Geographics
    15. 15. Market Segmentation Main Bases •Geographic Segmentation Region or location Size of City Density Climate
    16. 16. Eleven Regions of Sport Involvement
    17. 17. Eleven Regions of Sport Involvement New England: Eastern Cradle
    18. 18. Eleven Regions of Sport Involvement North Carolina & South Carolina: Carolinas
    19. 19. Eleven Regions of Sport Involvement Arkansas, Louisiana, Alabama, Georgia, Florida: Pigskin Cult
    20. 20. Eleven Regions of Sport Involvement South Florida: South Florida
    21. 21. Eleven Regions of Sport Involvement Pittsburgh & Buffalo: Mills and Mines
    22. 22. Eleven Regions of Sport Involvement Michigan, Illinois, Indiana, Ohio, Kentucky: American Heartland
    23. 23. Eleven Regions of Sport Involvement Arkansas, Montana, North Dakota, South Dakota, Minnesota, Nebraska, Missouri, Iowa, Wisconsin: Sport for Sport’s Sake
    24. 24. Eleven Regions of Sport Involvement Idaho, Wyoming, Colorado: Rocky Mountain High
    25. 25. Eleven Regions of Sport Involvement Texas and Oklahoma: Texas Southwest
    26. 26. Eleven Regions of Sport Involvement Nevada, Utah, Arizona: Cowboys and Mormons
    27. 27. Eleven Regions of Sport Involvement Pacific West Coast & Hawaii: Pacific Cornucopia
    28. 28. Market Segmentation Main Bases •Geographic Segmentation Region or location Size of City Density Climate •Demographic Segmentation Gender Age Income Nationality/Ethnicity
    29. 29. The Female Market •Women have been considered a special segment for over a century •Female fan base in sports dominated by men is leveling •43% female fan base in the NFL •Women purchase 70% of all NFL- licensed products •Female market is growing
    30. 30. Cohorts •Term “cohorts” used in marketing to refer to generations (ex. Baby boomer cohort, Generation Y cohort).
    31. 31. Mature’s Boomer’s 13er’s (Gen. Y)/ & X’s Diversity Uncomfortable Somewhat Comfortable Very Comfortable- May act as bridge Leisure Reward Point of Life Relief Work Inevitable Adventure Difficult Challenge Education Gift Birthright A method used to get ahead. Large number of dropouts Money Save Spend Hedge Future Save for a rainy day Now is more important Uncertain but manageable Technology Difficult Challenge Completely Comfortable and Proficient Learning Classroom/ On the Job Classroom and some experiential Experiential- able to Parallel Think Approach Careful, cautious Ready Aim Fire Ready Aim Fire Yacovinch as cited by Dr. Patrcia Boverie * ‘Tweeners, share the values of 2 groups
    32. 32. Youth Market •Often the target of sport promotions •Today’s youth market different from years in the past Interested in alpha brands (Nike, Levis) Immune to tried and true brand strategies •Companies are repackaging sport with youth market specifically in mind
    33. 33. Senior Market •By 2025, the over-50 market will grow by 75% •By 2025, the under-50 market will grow by 1% •More sport research about the mature market •Grassroot organizations cashing in on this market
    34. 34. Market Segmentation Main Bases •Geographic Segmentation Region or location Size of City Density Climate •Demographic Segmentation Gender Age Income Nationality/Ethnicity •Psychographic Segmentation Social Class Status Values, Attitudes Lifestyles (activities, opinions, interest) Personality •Behavioral Segmentation Benefits sought Purchase occasion User Status/ Usage Rate Brand loyalty Buyer readiness Attitude towards the product
    35. 35. An effective market segment is… 1. Measurable Size and purchasing power 2. Accessible Can be reached and served 3. Substantial Large and/or profitable 4. Actionable & Responsive Effective programs designed to attract and serve the segment
    36. 36. Strategies for Selecting Target Markets Undifferentiated Strategy •One marketing mix to total market •Mass marketing •More competition •Less satisfaction
    37. 37. Strategies for Selecting Target Markets Multisegment Strategy •Two or more segments •Each segment has unique marketing mix •Increased cost •Increased profits Production cost Promotion cost Research cost Greater sales volumes Larger market share
    38. 38. Strategies for Selecting Target Markets Concentrated Strategy •One segment-niche marketing •Specialized •Suits small firms or new entrants
    39. 39. Industry Analysis Segmenting •Purpose is competitive strategy formulation •Identify marketing opportunities and threats •Develop appropriate marketing mix •Study your competitors
    40. 40. Step #6-Packaging • Presenting the product in the best possible manner
    41. 41. Step #7-Pricing the Product • Determine the value of the product by assigning the price. • 4 factor’s/4 C’s: – Consumer – Competitor – Company – Climate
    42. 42. Step #8-Promoting the Product • Communicate the product’s image to the selected target audiences. • Promotional mix includes the strategy to promote the product.
    43. 43. Promotional Mix • Advertising • Publicity • Activities & inducements • Public Relations • Community Relations • Media Relations • Personal Selling • Sponsorship
    44. 44. Sponsorship • Sponsorship is a cash and/or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property. (IEG Inc., 1996) • It is not advertising. It promotes a company in association with the sponsored event.
    45. 45. Development of Sponsorship • Emerged as result of: – Advertising rates increasing – Introduction of cable TV – Identification of “minority markets” – Desire to influence baby-boomer generation
    46. 46. Sponsorship Evaluation • There are 5 areas of evaluation: – Media coverage – Awareness & attitudinal surveys – Sales – Corporate/guest feedback (hospitality) – Cost-benefit analysis
    47. 47. Impression • The exposure one receives to a sponsorship or media vehicle that communicates a message through an external influence or image, and which affects the feelings, sense or mind of the individual receiving the exposure
    48. 48. Impression Influencing Factors • Image • Availability • Geographic Region • Sheer number • Quality • Size/impact • Target Market • Sponsor Clutter • Sponsor Package
    49. 49. Measurable Categories • On-site signage • On-screen graphics • Audio mentions
    50. 50. CPMs • Cost Per Thousand • It is a tool that advertisers use to compare the price of different media • Can be broken down to show per thousand values – Example: Households, readers, listeners
    51. 51. Industry Standard Value of Impressions Category CPM Value/Impression Broadcast Television $5 to $35/thousand hh $.003 to $.023/imp Cable Television $6 to $11/thousand hh $.004 to $.007/imp Spot Television $3.03 to $10.68/thousand hh $.002 to $.007/imp Spot Radio $3.52 to $10.78/thousand $.0035 to $.011/imp Sports Magazines $30 to $75/thousand circ. $.015 to $.0375/imp Web Sites $10 to $150/thousand $.01 to $.15/imp •The average CPM for sports programming are similar to prime time programming CPMs. •The Super Bowl earns an average rating of $24.58 (Based on 1.5 viewers per hh)
    52. 52. Sporting Event Viewer’s/Household (1996) (2+) MLB 1.28 NBA 1.36 NFL 1.41 NCAA College Bowl Games 1.56 NHL 1.46 Summer Olympics (Prime Time) 1.51 Auto Racing 1.38 Average 1.45 Network Television Sports Programming Viewers Per Household
    53. 53. How to measure a media impressions value Step 1: Per Thousand Value $5 per thousand hh Number of viewers x 1000 1.5 viewers per hh x 1000 = Value per impression = $.003 Step 2: Number of impressions x Value per impression x Number of households Value of media sponsorship based on impressions 30 impressions x $.003 x 1,000,000 $90,000
    54. 54. Step #9-Placing the Product • Refers to the manner the sport is distributed to the consumer
    55. 55. Step #10-Promise of the Plan • Evaluating if all goals were met