Sports Marketing,
A Strategic Perspective
Matthew D,Shank
Professor of Marketing and Chair
Department of Management and Marketing
Northern Kentucky University
Understanding the Sports Industry
? Sport - Source of diversion or physical
activity engaged in for pleasure
? Sports as Entertainment - Reebok president
Robert Meers,“We’ve recognized for several
years that sport is part of entertainment,The
market now is really sports,fashion and
music,We can’t expect to ignore reality and
survive.”
Growth of the Sports Industry
? 11th largest of all U.S,industry groups
? Nation’s output for sports goods and services
estimated at $213-350 billion annually
? How do we measure growth in the sports industry?
? Growth measured in….,
– Attendance Figures
– Media Coverage
– Employment Figures (4.5 million jobs)
– International Markets
Growth of Sports Industry
? The sports industry generates estimates of 213 to 350 billion dollars per year in
revenues,As ESPN founder Bill Rasmussen points out,“The games are better,and
well the athletes are just amazing and it all happens 24 hours a day,America?s sports
fans are insatiable.”
? Attendance is increasing,
– The NFL experienced a record number of fans in the 1999 season (15,710,970)
– The NBA 1999-2000 season also produced a small increase (1%) for the NBA
– MLB reached 20 million fans faster than any other year in history and attendance
increased again (3%)
– NHL continues to grow in attendance and popularity,Tracing average attendance
over the past few years,regular season numbers have increased from 14,749 (?93-
?94) to 16,359 (?99-?00)
– NASCAR had 11 million people attend its events in 1999
? Sports Sponsorship Spending Exceeds $1 Billion Dollar Mark
? New Leagues (AF2,XFL,WPFL,WSA,WNHL)
Growth of Sports Industry
? Media Coverage is Increasing
– 200 million people watched NBC coverage of the Summer Olympic Games and 3.7 billion
people who watched worldwide
– ESPN,the original sports-only network launched in 1979,reaches some 76 million
homes with its 4900 hours of sports programming and remarkably ESPN2 reaches 65
million viewers,
– $2.3 billion to secure the broadcast and cable rights for the Olympic Games in 2004,2006,
and 2008
– $2.64 billion paid by NBC and Turner Sports to televise NBA contests,$18 billion paid by
the networks for the NFL,$2.5 billion for post season MLB
– New sports networks,such as the Golf Channel,SpeedVision,and the Women’s Sports
Network
– Internet,satellite stations and pay-per-view cable television are growing in popularity
Opportunities in the
Sports Industry,Academics
? Over 200 Academic Programs in Sports Administration
? NKU Marketing Track and proposed program
Opportunities in the
Sports Industry,Careers
? Upwards of 4.5 million Sports Related Jobs in Sports
Administration
? 13 career areas in sport,These include,event suppliers,
event management and marketing,sports media,sports
sponsorship,athlete services,sports commissions,sports
lawyers,manufacturers and distribution,facilities and facility
suppliers,teams,leagues,college athletics,and finance
? Marketing & Public Relations
Professional Sports
Intercollegiate Sports
Youth Sports
Olympic Sports Organizations
Regional and National Sport Commissions
Amateur Sports
Corporate Sports Marketing
Sports Marketing Firms
Licensing Firms
What is Sports Marketing?
? Sports Marketing - The specific application
of marketing principles and processes to
sports products and to the marketing of
non-sports products through association
with sport
Simplified Model of the Consumer-Supplier
Relationship in the Sports Industry
Consumers
Spectators
Participants
Corporation
s
Products
Events
Sporting
Goods
Personal
Training
Sports
Information
Producers/Intermedia
ries
Sports Labor
Sanctioning
Bodies
Sponsors
Media
Agents
Equipment
Manufacturers
Classification of Sports
Spectators
Individuals
Corporate
In-Person Mediated
Classification of Sports Participants
? Unorganized Sports Participants
? Organized Sports Participants
Amateur
Youth Recreational Instructional
Youth Recreational Elite
Schools
Intercollegiate
Professional
Minor/Secondary
Major
The Sports Product
? Sports Product - A good,a service or any
combination of the two that is designed to
provide benefits to a sports spectator,
participant or sponsor,
Types of Sports Products
? Sporting Events
– Athletes
– Arenas/Stadia
? Sporting Goods
– $60.2 billion industry comprised of four segments (equipment,
transportation,apparel,and footwear)
– Collectibles and Memorabilia
? Sports Training
– Fitness and Health Services
– Sports Camps and Instruction
? Sports Information
– Newspapers,Internet,Magazines,Radio,etc,
The Sports Marketing Exchange Process
Something of Value
Something of Value
Exchange
Players
Exchange
Players
Overview of the Contingency Framework for
Strategic Sports Marketing
? Foundation of any sports organization is to
design and maintain a sound,yet flexible
strategic framework
? Strategic framework that is suited to the
sports industry is the contingency
framework,Why?
? Flexible and adaptable to changes in the
marketing environment
Contingency Framework for Strategic Sports Marketing
fit fit
EXTERNAL
CONTINGENCIES
Competition
Legal/Political
Demographics
Technology
Culture
Physical
Environment
Economy
INTERNAL
CONTINGENCIES
Organizational Vision
Organizational
Mission
Organizational
Objectives &
Mktg Goals
Org Strategy
Org Culture
Planning
1,Understanding Consumers
Needs
a,Mktg Research
b,Consumers as Participants
c,Consumers as Spectators
2,Market Selection Decisions
a,Market Segmentation
b,Target Markets
c,Positioning
3,Marketing Mix Decisions
a,Sports Products
b,Pricing
c,Promotion
d,Place
Implementation
Control
THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
STEP 1.Understanding Consumers Needs
1,Mktg Research
2,Consumers as Participants
3,Consumers as Spectators
STEP 2,MARKET SELECTION DECISIONS
1,Segmentation Alternative
2,Target Markets
3,Positioning
STEP 3,MARKETING MIX
THE IMPLEMENTATION PHASE
THE CONTROL PHASE
Activities Associated with Implementation
? Organizing
? Leadership and Interaction
? Resource Acquisition and Allocation
? Coordination and Timing of Activities
? Information Management
Control Phase
? Sales Analysis
? Profitability Analysis
? Customer Satisfaction
? Marketing Audit
Environmental Contingencies
? Competition
? Technology
? Culture/Social Trends
? Physical Environment
? Regulatory/Legal/Political
? Demographic Trends
? Economy
Internal Contingencies
? Organizational Vision
? Organizational Mission
? Organizational Objectives & Mktg
Goals
? Organizational Strategy
? Organizational Culture
Organizational Mission
? Written statement about the organization?s present
situation and the direction of the organization,(what
business we are in and who we serve)
? The Green Bay Packers mission is to be a dominating
force in professional football?s competitive arena
– On the field,the Packers will continually strive to present their fans
with the highest level of performance quality available
– In their operating activities and relations with the NFL,the Packers
will also continually strive for excellence in the quality of work
performed
– Overall,the Packers will commit themselves to doing their part in
representing the State of Wisconsin with competitiveness,respect and
dignity
ORGANIZATIONAL OBJECTIVES vs
MARKETING GOALS
? Organizational Objectives - Signposts along the road
which help an organization focus on its long-range
purpose stated in the mission statements,
? Typically include both financial and strategic
dimensions
? Examples of financial include,growth in revenues;
growth in profits
? Examples of strategic include,enhance corporate
image; increase customer satisfaction
SWOT Analysis
? Internal Strengths and Weaknesses
a,Resource capabilities
b,Marketing Mix Considerations
? External Opportunities and Threats
Marketing Research -Systematic process of
collecting,analyzing and interpreting data to
reduce the risk in decision-making
? What kinds of studies would need to be
done in sports marketing?
? When to use in the context of the marketing
plan?
? How to conduct a marketing research
study?
Marketing Research Process
? Problem/Opportunity Definition
? Choosing a Research Design Type
? Choosing a Data Collection Method
? Designing a Data Collection Form
? Choosing a Sampling Technique &
Collecting Data
? Data Analysis
? Final Report Preparation
Abbreviated Research Proposal
? PROBLEM STATEMENT
? RESEARCH OBJECTIVES
? METHODOLOGY
– Sample
– Procedures
? DATA COLLECTION INSTRUMENT
Designing A Questionnaire
? Specify Information Requirements
? Determine Method of Administration
? Determine Content of Questions
? Determine Form of Response
? Determine Exact Wording of Questions
? Determine Question Sequence
? Pretest and Revise if Necessary
Adult Sport Participant Market
General Observations
? Majority of American Adults Do Not
Participate in Many of the Most Common
Sports
? Numbers Conflicting; Surgeon General?s
Report (only 15% of adults say that they
exercise regularly)
? Why?
Most Popular Sports
25
30
31
42
43
44
44
56
62
70
0 20 40 60 80
H i k i n g
Ba s k e t b a l l
Bi l l i a rd s
Bo w l i n g
C a m p i n g
F i s h i n g
Ex w Eq u i p
Bi k i n g
Sw i m m i n g
W a l k i n g
M i l l i o n s o f
P e o p l e
P a rt i c i p a t i n g a t
l e a s t o n c e
Participant Consumption
Behavior
Actions performed when searching
for,participating in,and evaluating
the sports activities that consumers
feel will satisfy their needs and
desires,
Conceptual Model of Consumer Behavior
Internal External
?Personalit
y
?Perception
?Attitudes
?Motivation
?Learning
?Culture
?Reference
Groups
?Family
?Social Class
Needs/Desires
Decision-Making
?Problem Recognition
?Information Search
?Alternative Evaluation
?Participate
?Post-participation
Evaluation
Past Experience
Decision Making Process
? Problem Recognition
? Information Search
? Alternative Evaluation
? Participate
? Post-Participation Evaluation
Psychological Factors
? Personality
? Perception
? Attitudes
? Motivation
? Learning
Why Do We Participate?
? Personal Improvement - Better Health,
Sense of Accomplishment,Develop
Positive Values,etc,
? Sport Appreciation - Enjoy the game and
competition
? Social Facilitation - Spend time with
others,feel part of a group
Sociological Factors
? Culture
? Reference Groups
? Family
? Social Class
Understanding Spectators as Consumers
? Examining the differences
– Sometimes there is overlap,but usually treated
as separate and distinct markets
– Heavy Participants - More likely to be male,
better educated,more minorities,and younger
than spectators
Factors Influencing Attendance
? Fan Motivation Factors
? Game Attractiveness Factors
? Economic Factors
? Competitive Factors
? Demographic Factors
? Stadium Factors
? Value to the Community
? Sports Involvement
? Fan Identification
Fan Motivation Factors
? Self-Esteem Enhancement (BIRGing and
CORFing behaviors)
? Diversion from everyday life
? Entertainment Value
? Eustress or Positive Stress
? Economic Value
? Aesthetic Value
? Need for Affiliation
? Family Ties
Model of Sportscape
Stadium Access
Facility Aesthetics
Scoreboard Quality
Seating Comfort
Pleasure
Desire to Stay
Repatronage
Layout Accessibility
Space Allocation
Signage
Perceived
Crowding
Factors Affective Response Behaviors
Understanding Spectators as Consumers
What do fans value?
? Reasonably priced parking ($8) & tickets ($25)
? Adequate parking/access
? Reasonably priced foods
? Home team with a winning record
? Close Score
? Home team star regarded as top 10 player
? Reasonably priced souvenirs
? Game that ends in less than three hrs
? Wide Variety of Snack Foods
Sport Involvement
? Perceived interest and personal importance
of sports to spectators
? Two dimensions of sport involvement,
Importance of Sport & Affect (feelings)
? High involvement consumers attend more
games,consume more sports through media
such as newspapers,Internet,mags,& more
likely to identify sponsors
Fan Identification
? Related to sport involvement
? Defined as the personal commitment and
emotional involvement customers have with a
sports organization
? Level of fan identification,Low (social); Medium
(focused); High (vested)
? Why do we want high identification? Higher
attendance,decreased price sensitivity,decreased
performance-outcome sensitivity
Market Selection Decisions
STP,
Understanding Segmentation,
Targeting,and Positioning
Segmentation - Grouping consumers
together with common needs
Segmentation Bases,
? Demographic
? Geographic
? Psychographic
? Benefits
? Geodemographic
? Behavioral
Targeting - Evaluating the Various
Segments and Selecting the one(s) that
promise the best ROMI
Successful Targets Must Be,
? Sizable
? Measurable
? Reachable
? Demonstrate Behavioral Variation
Positioning - Finding a Way to Fix Your
Product in the Minds of Consumers
Perceptual Mapping
extreme conservative
high price
low price
Six Attributes of Sports
? Strength,Speed vs Methodical,Precise Movements
? Athletes only as participants vs Athletes +
recreational participants
? Skill Emphasis on Impact with Object vs Skill
Emphasis on Body Movement
? Practice Primarily Alone vs Primarily With Others
? A Younger Participant in the Sport vs Wide Age
Range of Participants
? Less Masculine vs More Masculine
Sports Product Concepts
? Sports Product - Good,Service or
Combination of the two that is designed to
provide benefits to a sports spectator,
participant or sponsor,
Goods and Services as Sports Products
(The Good/Service Continuum)
? Intangibility -- cannot be seen,felt,tasted
? Inseparability -- simultaneous production
and consumption
? Heterogeneity -- potential for high
variability
? Perishability -- cannot be inventoried or
saved
Classification Of Sports Products
? Product Mix - All the Different Products and
Services a Firm Offers
? Product Line - Groups of Individual Products that
are Closely Related in Some Way
? Product Item - Any Specific Version of a Product
that can be Designated as a Distinct Offering
Product Characteristics
Branding
Product Design
Product Quality
Total
Product
Branding
? Name,design,symbol or any combination
? Broad purpose of branding is for a product to
distinguish and differentiate itself from all other
products
? Some Great Sports Names include the Macon
Whoopie,Louisiana Ice Gators
Brand Names
? What?s in a name?
– Easy to say,generate positive feelings and
associations
– Translatable into a successful logo
– Consistent with rest of product lines,city,or
organization
– Legally and ethically permissible
Branding Process
Brand Awareness
Brand Image
Brand Equity
Brand Loyalty
Licensing
? Contractual agreement whereby a company
may use another company?s branding in
exchange for a royalty or fee
? Booming business (e.g.,NBA has 150
licenses) with 13.65 billion
? NFL (3.6) NBA (2.6) Colleges (2.0) MLB
(1.9) NHL (1.2)
? CAPS (Coalition to Advance the Protection
of Sports Logos)
Sports Product Quality
? Quality of Services
? Quality of Goods
Nature of Service Quality
EXPECTED SERVICE LEVELS
PERCEIVED SERVICE LEVELS
Expected Service Levels
? Service Promises (ads,price)
? Word-of-Mouth
? Past Experience
Perceived Service Levels
Service Quality Dimensions
? Tangibles -- Physical facilities,appearance of
personnel,equipment
? Reliability -- Ability to perform the service
dependably,accurately,consistently
? Responsiveness -- Willingness to provide prompt
service to customers
? Assurance -- Trust,knowledge and courtesy of
employees
? Empathy -- Caring,individualized attention to
customers
Quality of Goods Dimensions
? Performance
? Features
? Conformity to Specifications
? Reliability
? Durability
? Serviceability
? Aesthetic Design
Product Design - Aesthetics,Style and
Function of the Product
RELATIONSHIP AMONG PRODUCT DESIGN,
TECHNOLOGY AND PRODUCT QUALITY
Technological Environment
Product Quality
Product Design
New Sports Products From the
Perspective of the Organization
? New-to-the-World Products
? New Product Category Entries
? Product Line Extensions
? Product Improvements
? Repositionings
New Sports Products From the
Perspective of the Consumer
? Discontinuous Innovations
? Dynamically Continuous Innovations
? Continuous Innovations
New Product Development Process
? Idea generation
? Screening
? Business analysis/Concept Testing
? Development
? Test Marketing
? Commercialization
New Product Screening Checklist
General Characteristics of New Product/Service
? profit potential
? existing and potential competition
? size of overall market
? level of investment
? level of risk
New Product Screening Checklist
Marketing Characteristics of New Product/Service
? fit with marketing capabilities
? effect on existing products and services
? appeal to current consumer markets
? existence of differential advantage
? impact on image
Production Characteristics of new Product/Service
? fit with production capabilities
? ability to produce at competitive prices
? availability of labor and material resources
Total Industry Sales
Product Life Cycle
INTRO GROWTH MATURITY DECLINE
TIME
$$
Awarenes
s
Differentiat
e
Maintain
Eliminate or
Extend
Diffusion of Innovations -
Rate at which new sports products spread
throughout the marketplace
Factors Influencing the Rate of Diffusion,
? New Product Characteristics
? Perceived Newness of the Innovation
? Nature of the Communication Network
Diffusion of Innovations
Types of Adopters
? Innovators
? Early Adopters
? Early Majority
? Late Majority
? Laggards
Promotional Concepts
? COMMUNICATION - Process of
establishing a,oneness” between the sender
and receiver
? PROMOTION MANAGEMENT - Focus of
the promotional element of the marketing
mix
Promotion Mix Elements
? Sales Promotions
? Public or Community Relations
? Sponsorship
? Personal Selling
? Advertising
Communications Process
Source
Receiver
Decoding
Medium
Encoding
Message
Feedback Noise
Promotion Planning
? Target Market Considerations
? Promotional Objectives
? Establishing Promotional Budgets
? Choosing an Integrated Promotional Mix
Target Market Considerations
? Push Strategy
? Pull Strategy
Promotional Objectives
The Hierarchy of Effects
? Unawareness
? Awareness
? Knowledge
? Liking
? Preference
? Conviction
? Action
Promotional Budgets
? Arbitrary Allocation
? Competitive Parity
? Percentage of Sales
? Objective and Task Method
Integrating the Promotional Mix
? Integrated Marketing Communications -
Concept by which a sports organization
carefully integrates and coordinates its
many promotional mix elements to deliver
a unified message about the organization
and its products
Building An Advertising Strategy
MARKETING STRATEGY
AD
OBJECTIVES
BUDGETING
CREATIVE
DECISIONS
MEDIA
STRATEGIES
AD EVALUATION
Ad Objectives
(awareness,inform,change attitudes,purchase)
? INDIRECT OBJECTIVES - ENHANCE
CORPORATE IMAGE
? DIRECT OBJECTIVES - STIMULATE
DEMAND FOR THE SPORTS PRODUCT
Ad Budgeting
? ALL YOU CAN AFFORD
? COMPETITIVE PARITY
? PERCENTAGE OF SALES
? OBJECTIVE AND TASK
Creative Strategies
? IDENTIFYING THE BENEFITS OF
THE SPORTS PRODUCT
? DESIGNING THE AD APPEAL
? DEVELOPING THE AD EXECUTION
Designing The
Ad Appeal
? Health Appeals
? Emotional Appeals
? Fear Appeals
? Sex Appeals
? Pleasure or Fun Appeals
Designing The
Ad Execution
? One or Two Sided Messages
? Comparative Message
? Slice-of-Life or Lifestyle Message
? Scientific Message
? Testimonials
Media Strategy
? SPECIFY THE MEDIA OBJECTIVES
(REACH,FREQUENCY,CONTINUITY)
? SELECTING THE MEDIA VEHICLES
Personal Selling,
The Strategic Selling Process
? Buying Influences
? Red Flags
? Response Modes
? Win-Results
? The Sales Funnel
? Ideal Customers
Sales Promotions
? Premiums
? Contests and Sweepstakes
? Sampling
? Point of Purchase Displays
? Coupons
Public Relations
? Publicity (news releases,press conferences)
? Participation in Community Events
? Producing Written Materials (press guides)
? Lobbying
Sponsorship
? Investing in a sports entity to support
overall organizational objectives and
marketing goals,
? IEG estimates $6.8 billion spent on
sponsorship and of this $4.6 billion will
be spent on sports
? Not unlike other forms of communication,
sponsors must fight the clutter and find
the perfect match
The Sponsorship Process
Sponsorship
Objectives
Sponsorship
Budget
Sponsorship
Acquisition
Implementing and
Evaluating the
Sponsorship
Sponsorship Objectives
? Direct
– Sales Increases
? Indirect
– Awareness
– Competition (ambush mktg- planned effort to associate
themselves with an event -- I Love LA)
– Reaching Target Markets (Allows us to reach consumer
where they live and play)
– Relationship Building
– Image Building
Sponsorship Budgeting
? Sample costs of sponsorship
– Corporate Box at the United Center $220,000
– Title sponsor of Tot Trot $7500
– Official Supplier for MLB $10 million
– Premier League $15 million
? Initial Costs,but there is maintenance and
leveraging
Sponsorship Acquisition
? 1) Determine Scope of the Sponsorship
(sports event pyramid with global,
international,national,regional and local
events)
? 2) Determine the athletic platform (entity
and level of competition)
Sponsorship Implementation
and Evaluation
? Number of mentions in popular media
? Media Equivalencies
? Sales figures (pre and post)
? Attitude change (pre and post)
? Number of distributors (pre and post)
Distribution Concepts
? Ability of consumers to gain access to
products in a timely and convenient
fashion
? Moving product from producer to
consumer via the various channels of
distribution
Sports Distribution Issues
? Sports Retailing
? Stadium as,Place”
? Sports Media
Sports Retailing Mix
? Products
? Pricing
? Distribution
? Promotion
Retail Image/Store Personality
? Factors include (in general),
– atmospherics
– location
– employees/sales personnel
– clientele
– merchandise assortment
– promotional activities
Stadium as,Place”
? New Sports Venues
? Ticket Distribution Issues
Sports Media as Distribution
? Delivering the Sports Product to
Consumers Via Media
? Rising Cost of Media Rights
? Media as a Portion of the Revenue Mix
? New Trends in Sports Media
Pricing Concepts
? Price is a Statement of Value
? Value = Perceived Benefits
Price of Sports Product
? Essence of pricing is the exchange process
- An attempt to quantify the value of what
is being exchanged
Internal and External
Determinants of Pricing
Internal
? Product
? Promotion
? Distribution
? Cost
? Organizational
Objectives
External
? Consumer Demand
? Competition
? Legal
? Economy
? Technology
RELATIONSHIP OF PRICE TO SOME
OTHER MARKETING MIX ELEMENTS
? Related to product life cycle
? Communicates something about the product
? Promotion geared towards information
about price
? Product lines with different prices attract
different segments of consumers
Estimating Consumer Demand
? Consumer Tastes
? Availability of Substitute Sports Products
? Consumer Income
Pricing Strategies
? Differential Pricing Strategies
? New Sports Product Pricing Strategies
? Psychological Pricing Strategies
? Product Mix Pricing Strategies
? Cost-Based Pricing Strategies
Differential Pricing
? Second Market Discounting
New Sports Product Pricing
? Penetration Pricing
? Price Skimming
Psychological Pricing
? Prestige Pricing
? Referent Pricing
? Odd-Even Pricing
? Traditional Pricing
Product-Mix Pricing
? Bundle Pricing
? Captive Pricing
? Two-Part Pricing
Cost-Based Pricing
? Cost-Plus Pricing
? Target Profit Pricing
? Break-Even Pricing
Price Adjustments
? Price Reductions and Price Increases
? Price Discounts
Implementation Issues
? Communications
? Staffing Staffing and Skills
? Coordination
? Rewards
? Information
? Creativity
? Budgeting
Strategic Control Issues
? Planning Assumptions Control
? Process Control
? Contingency Control
Planning Assumptions Control
?,Are the premises or assumptions used to
develop this marketing plan still valid?”
? Examine the external environmental
factors and the sports industry factors
Process Control
? Monitoring Strategic Thrusts
? Milestone Review
? Financial Analysis
Contingency Control
?,How can we protect our marketing
strategy from unexpected events or crises
that could affect our ability to pursue the
chosen strategic direction?”
? Developing a Crisis Plan
Growth of Sports Industry
? The sports industry generates estimates of 213 to 350 billion dollars per year in
revenues,As ESPN founder Bill Rasmussen points out,“The games are better,and
well the athletes are just amazing and it all happens 24 hours a day,America?s sports
fans are insatiable.”
? Attendance is increasing,
– The NFL experienced a record number of fans in the 1999 season (15,710,970)
– The NBA 1999-2000 season also produced a small increase (1%) for the NBA
– MLB reached 20 million fans faster than any other year in history and attendance
increased again (3%)
– NHL continues to grow in attendance and popularity,Tracing average attendance
over the past few years,regular season numbers have increased from 14,749 (?93-
?94) to 16,359 (?99-?00)
– NASCAR had 11 million people attend its events in 1999
? Sports Sponsorship Spending Exceeds $1 Billion Dollar Mark
? New Leagues (AF2,XFL,WPFL,WSA,WNHL)
A Strategic Perspective
Matthew D,Shank
Professor of Marketing and Chair
Department of Management and Marketing
Northern Kentucky University
Understanding the Sports Industry
? Sport - Source of diversion or physical
activity engaged in for pleasure
? Sports as Entertainment - Reebok president
Robert Meers,“We’ve recognized for several
years that sport is part of entertainment,The
market now is really sports,fashion and
music,We can’t expect to ignore reality and
survive.”
Growth of the Sports Industry
? 11th largest of all U.S,industry groups
? Nation’s output for sports goods and services
estimated at $213-350 billion annually
? How do we measure growth in the sports industry?
? Growth measured in….,
– Attendance Figures
– Media Coverage
– Employment Figures (4.5 million jobs)
– International Markets
Growth of Sports Industry
? The sports industry generates estimates of 213 to 350 billion dollars per year in
revenues,As ESPN founder Bill Rasmussen points out,“The games are better,and
well the athletes are just amazing and it all happens 24 hours a day,America?s sports
fans are insatiable.”
? Attendance is increasing,
– The NFL experienced a record number of fans in the 1999 season (15,710,970)
– The NBA 1999-2000 season also produced a small increase (1%) for the NBA
– MLB reached 20 million fans faster than any other year in history and attendance
increased again (3%)
– NHL continues to grow in attendance and popularity,Tracing average attendance
over the past few years,regular season numbers have increased from 14,749 (?93-
?94) to 16,359 (?99-?00)
– NASCAR had 11 million people attend its events in 1999
? Sports Sponsorship Spending Exceeds $1 Billion Dollar Mark
? New Leagues (AF2,XFL,WPFL,WSA,WNHL)
Growth of Sports Industry
? Media Coverage is Increasing
– 200 million people watched NBC coverage of the Summer Olympic Games and 3.7 billion
people who watched worldwide
– ESPN,the original sports-only network launched in 1979,reaches some 76 million
homes with its 4900 hours of sports programming and remarkably ESPN2 reaches 65
million viewers,
– $2.3 billion to secure the broadcast and cable rights for the Olympic Games in 2004,2006,
and 2008
– $2.64 billion paid by NBC and Turner Sports to televise NBA contests,$18 billion paid by
the networks for the NFL,$2.5 billion for post season MLB
– New sports networks,such as the Golf Channel,SpeedVision,and the Women’s Sports
Network
– Internet,satellite stations and pay-per-view cable television are growing in popularity
Opportunities in the
Sports Industry,Academics
? Over 200 Academic Programs in Sports Administration
? NKU Marketing Track and proposed program
Opportunities in the
Sports Industry,Careers
? Upwards of 4.5 million Sports Related Jobs in Sports
Administration
? 13 career areas in sport,These include,event suppliers,
event management and marketing,sports media,sports
sponsorship,athlete services,sports commissions,sports
lawyers,manufacturers and distribution,facilities and facility
suppliers,teams,leagues,college athletics,and finance
? Marketing & Public Relations
Professional Sports
Intercollegiate Sports
Youth Sports
Olympic Sports Organizations
Regional and National Sport Commissions
Amateur Sports
Corporate Sports Marketing
Sports Marketing Firms
Licensing Firms
What is Sports Marketing?
? Sports Marketing - The specific application
of marketing principles and processes to
sports products and to the marketing of
non-sports products through association
with sport
Simplified Model of the Consumer-Supplier
Relationship in the Sports Industry
Consumers
Spectators
Participants
Corporation
s
Products
Events
Sporting
Goods
Personal
Training
Sports
Information
Producers/Intermedia
ries
Sports Labor
Sanctioning
Bodies
Sponsors
Media
Agents
Equipment
Manufacturers
Classification of Sports
Spectators
Individuals
Corporate
In-Person Mediated
Classification of Sports Participants
? Unorganized Sports Participants
? Organized Sports Participants
Amateur
Youth Recreational Instructional
Youth Recreational Elite
Schools
Intercollegiate
Professional
Minor/Secondary
Major
The Sports Product
? Sports Product - A good,a service or any
combination of the two that is designed to
provide benefits to a sports spectator,
participant or sponsor,
Types of Sports Products
? Sporting Events
– Athletes
– Arenas/Stadia
? Sporting Goods
– $60.2 billion industry comprised of four segments (equipment,
transportation,apparel,and footwear)
– Collectibles and Memorabilia
? Sports Training
– Fitness and Health Services
– Sports Camps and Instruction
? Sports Information
– Newspapers,Internet,Magazines,Radio,etc,
The Sports Marketing Exchange Process
Something of Value
Something of Value
Exchange
Players
Exchange
Players
Overview of the Contingency Framework for
Strategic Sports Marketing
? Foundation of any sports organization is to
design and maintain a sound,yet flexible
strategic framework
? Strategic framework that is suited to the
sports industry is the contingency
framework,Why?
? Flexible and adaptable to changes in the
marketing environment
Contingency Framework for Strategic Sports Marketing
fit fit
EXTERNAL
CONTINGENCIES
Competition
Legal/Political
Demographics
Technology
Culture
Physical
Environment
Economy
INTERNAL
CONTINGENCIES
Organizational Vision
Organizational
Mission
Organizational
Objectives &
Mktg Goals
Org Strategy
Org Culture
Planning
1,Understanding Consumers
Needs
a,Mktg Research
b,Consumers as Participants
c,Consumers as Spectators
2,Market Selection Decisions
a,Market Segmentation
b,Target Markets
c,Positioning
3,Marketing Mix Decisions
a,Sports Products
b,Pricing
c,Promotion
d,Place
Implementation
Control
THE STRATEGIC MARKETING PROCESS
THE PLANNING PHASE
STEP 1.Understanding Consumers Needs
1,Mktg Research
2,Consumers as Participants
3,Consumers as Spectators
STEP 2,MARKET SELECTION DECISIONS
1,Segmentation Alternative
2,Target Markets
3,Positioning
STEP 3,MARKETING MIX
THE IMPLEMENTATION PHASE
THE CONTROL PHASE
Activities Associated with Implementation
? Organizing
? Leadership and Interaction
? Resource Acquisition and Allocation
? Coordination and Timing of Activities
? Information Management
Control Phase
? Sales Analysis
? Profitability Analysis
? Customer Satisfaction
? Marketing Audit
Environmental Contingencies
? Competition
? Technology
? Culture/Social Trends
? Physical Environment
? Regulatory/Legal/Political
? Demographic Trends
? Economy
Internal Contingencies
? Organizational Vision
? Organizational Mission
? Organizational Objectives & Mktg
Goals
? Organizational Strategy
? Organizational Culture
Organizational Mission
? Written statement about the organization?s present
situation and the direction of the organization,(what
business we are in and who we serve)
? The Green Bay Packers mission is to be a dominating
force in professional football?s competitive arena
– On the field,the Packers will continually strive to present their fans
with the highest level of performance quality available
– In their operating activities and relations with the NFL,the Packers
will also continually strive for excellence in the quality of work
performed
– Overall,the Packers will commit themselves to doing their part in
representing the State of Wisconsin with competitiveness,respect and
dignity
ORGANIZATIONAL OBJECTIVES vs
MARKETING GOALS
? Organizational Objectives - Signposts along the road
which help an organization focus on its long-range
purpose stated in the mission statements,
? Typically include both financial and strategic
dimensions
? Examples of financial include,growth in revenues;
growth in profits
? Examples of strategic include,enhance corporate
image; increase customer satisfaction
SWOT Analysis
? Internal Strengths and Weaknesses
a,Resource capabilities
b,Marketing Mix Considerations
? External Opportunities and Threats
Marketing Research -Systematic process of
collecting,analyzing and interpreting data to
reduce the risk in decision-making
? What kinds of studies would need to be
done in sports marketing?
? When to use in the context of the marketing
plan?
? How to conduct a marketing research
study?
Marketing Research Process
? Problem/Opportunity Definition
? Choosing a Research Design Type
? Choosing a Data Collection Method
? Designing a Data Collection Form
? Choosing a Sampling Technique &
Collecting Data
? Data Analysis
? Final Report Preparation
Abbreviated Research Proposal
? PROBLEM STATEMENT
? RESEARCH OBJECTIVES
? METHODOLOGY
– Sample
– Procedures
? DATA COLLECTION INSTRUMENT
Designing A Questionnaire
? Specify Information Requirements
? Determine Method of Administration
? Determine Content of Questions
? Determine Form of Response
? Determine Exact Wording of Questions
? Determine Question Sequence
? Pretest and Revise if Necessary
Adult Sport Participant Market
General Observations
? Majority of American Adults Do Not
Participate in Many of the Most Common
Sports
? Numbers Conflicting; Surgeon General?s
Report (only 15% of adults say that they
exercise regularly)
? Why?
Most Popular Sports
25
30
31
42
43
44
44
56
62
70
0 20 40 60 80
H i k i n g
Ba s k e t b a l l
Bi l l i a rd s
Bo w l i n g
C a m p i n g
F i s h i n g
Ex w Eq u i p
Bi k i n g
Sw i m m i n g
W a l k i n g
M i l l i o n s o f
P e o p l e
P a rt i c i p a t i n g a t
l e a s t o n c e
Participant Consumption
Behavior
Actions performed when searching
for,participating in,and evaluating
the sports activities that consumers
feel will satisfy their needs and
desires,
Conceptual Model of Consumer Behavior
Internal External
?Personalit
y
?Perception
?Attitudes
?Motivation
?Learning
?Culture
?Reference
Groups
?Family
?Social Class
Needs/Desires
Decision-Making
?Problem Recognition
?Information Search
?Alternative Evaluation
?Participate
?Post-participation
Evaluation
Past Experience
Decision Making Process
? Problem Recognition
? Information Search
? Alternative Evaluation
? Participate
? Post-Participation Evaluation
Psychological Factors
? Personality
? Perception
? Attitudes
? Motivation
? Learning
Why Do We Participate?
? Personal Improvement - Better Health,
Sense of Accomplishment,Develop
Positive Values,etc,
? Sport Appreciation - Enjoy the game and
competition
? Social Facilitation - Spend time with
others,feel part of a group
Sociological Factors
? Culture
? Reference Groups
? Family
? Social Class
Understanding Spectators as Consumers
? Examining the differences
– Sometimes there is overlap,but usually treated
as separate and distinct markets
– Heavy Participants - More likely to be male,
better educated,more minorities,and younger
than spectators
Factors Influencing Attendance
? Fan Motivation Factors
? Game Attractiveness Factors
? Economic Factors
? Competitive Factors
? Demographic Factors
? Stadium Factors
? Value to the Community
? Sports Involvement
? Fan Identification
Fan Motivation Factors
? Self-Esteem Enhancement (BIRGing and
CORFing behaviors)
? Diversion from everyday life
? Entertainment Value
? Eustress or Positive Stress
? Economic Value
? Aesthetic Value
? Need for Affiliation
? Family Ties
Model of Sportscape
Stadium Access
Facility Aesthetics
Scoreboard Quality
Seating Comfort
Pleasure
Desire to Stay
Repatronage
Layout Accessibility
Space Allocation
Signage
Perceived
Crowding
Factors Affective Response Behaviors
Understanding Spectators as Consumers
What do fans value?
? Reasonably priced parking ($8) & tickets ($25)
? Adequate parking/access
? Reasonably priced foods
? Home team with a winning record
? Close Score
? Home team star regarded as top 10 player
? Reasonably priced souvenirs
? Game that ends in less than three hrs
? Wide Variety of Snack Foods
Sport Involvement
? Perceived interest and personal importance
of sports to spectators
? Two dimensions of sport involvement,
Importance of Sport & Affect (feelings)
? High involvement consumers attend more
games,consume more sports through media
such as newspapers,Internet,mags,& more
likely to identify sponsors
Fan Identification
? Related to sport involvement
? Defined as the personal commitment and
emotional involvement customers have with a
sports organization
? Level of fan identification,Low (social); Medium
(focused); High (vested)
? Why do we want high identification? Higher
attendance,decreased price sensitivity,decreased
performance-outcome sensitivity
Market Selection Decisions
STP,
Understanding Segmentation,
Targeting,and Positioning
Segmentation - Grouping consumers
together with common needs
Segmentation Bases,
? Demographic
? Geographic
? Psychographic
? Benefits
? Geodemographic
? Behavioral
Targeting - Evaluating the Various
Segments and Selecting the one(s) that
promise the best ROMI
Successful Targets Must Be,
? Sizable
? Measurable
? Reachable
? Demonstrate Behavioral Variation
Positioning - Finding a Way to Fix Your
Product in the Minds of Consumers
Perceptual Mapping
extreme conservative
high price
low price
Six Attributes of Sports
? Strength,Speed vs Methodical,Precise Movements
? Athletes only as participants vs Athletes +
recreational participants
? Skill Emphasis on Impact with Object vs Skill
Emphasis on Body Movement
? Practice Primarily Alone vs Primarily With Others
? A Younger Participant in the Sport vs Wide Age
Range of Participants
? Less Masculine vs More Masculine
Sports Product Concepts
? Sports Product - Good,Service or
Combination of the two that is designed to
provide benefits to a sports spectator,
participant or sponsor,
Goods and Services as Sports Products
(The Good/Service Continuum)
? Intangibility -- cannot be seen,felt,tasted
? Inseparability -- simultaneous production
and consumption
? Heterogeneity -- potential for high
variability
? Perishability -- cannot be inventoried or
saved
Classification Of Sports Products
? Product Mix - All the Different Products and
Services a Firm Offers
? Product Line - Groups of Individual Products that
are Closely Related in Some Way
? Product Item - Any Specific Version of a Product
that can be Designated as a Distinct Offering
Product Characteristics
Branding
Product Design
Product Quality
Total
Product
Branding
? Name,design,symbol or any combination
? Broad purpose of branding is for a product to
distinguish and differentiate itself from all other
products
? Some Great Sports Names include the Macon
Whoopie,Louisiana Ice Gators
Brand Names
? What?s in a name?
– Easy to say,generate positive feelings and
associations
– Translatable into a successful logo
– Consistent with rest of product lines,city,or
organization
– Legally and ethically permissible
Branding Process
Brand Awareness
Brand Image
Brand Equity
Brand Loyalty
Licensing
? Contractual agreement whereby a company
may use another company?s branding in
exchange for a royalty or fee
? Booming business (e.g.,NBA has 150
licenses) with 13.65 billion
? NFL (3.6) NBA (2.6) Colleges (2.0) MLB
(1.9) NHL (1.2)
? CAPS (Coalition to Advance the Protection
of Sports Logos)
Sports Product Quality
? Quality of Services
? Quality of Goods
Nature of Service Quality
EXPECTED SERVICE LEVELS
PERCEIVED SERVICE LEVELS
Expected Service Levels
? Service Promises (ads,price)
? Word-of-Mouth
? Past Experience
Perceived Service Levels
Service Quality Dimensions
? Tangibles -- Physical facilities,appearance of
personnel,equipment
? Reliability -- Ability to perform the service
dependably,accurately,consistently
? Responsiveness -- Willingness to provide prompt
service to customers
? Assurance -- Trust,knowledge and courtesy of
employees
? Empathy -- Caring,individualized attention to
customers
Quality of Goods Dimensions
? Performance
? Features
? Conformity to Specifications
? Reliability
? Durability
? Serviceability
? Aesthetic Design
Product Design - Aesthetics,Style and
Function of the Product
RELATIONSHIP AMONG PRODUCT DESIGN,
TECHNOLOGY AND PRODUCT QUALITY
Technological Environment
Product Quality
Product Design
New Sports Products From the
Perspective of the Organization
? New-to-the-World Products
? New Product Category Entries
? Product Line Extensions
? Product Improvements
? Repositionings
New Sports Products From the
Perspective of the Consumer
? Discontinuous Innovations
? Dynamically Continuous Innovations
? Continuous Innovations
New Product Development Process
? Idea generation
? Screening
? Business analysis/Concept Testing
? Development
? Test Marketing
? Commercialization
New Product Screening Checklist
General Characteristics of New Product/Service
? profit potential
? existing and potential competition
? size of overall market
? level of investment
? level of risk
New Product Screening Checklist
Marketing Characteristics of New Product/Service
? fit with marketing capabilities
? effect on existing products and services
? appeal to current consumer markets
? existence of differential advantage
? impact on image
Production Characteristics of new Product/Service
? fit with production capabilities
? ability to produce at competitive prices
? availability of labor and material resources
Total Industry Sales
Product Life Cycle
INTRO GROWTH MATURITY DECLINE
TIME
$$
Awarenes
s
Differentiat
e
Maintain
Eliminate or
Extend
Diffusion of Innovations -
Rate at which new sports products spread
throughout the marketplace
Factors Influencing the Rate of Diffusion,
? New Product Characteristics
? Perceived Newness of the Innovation
? Nature of the Communication Network
Diffusion of Innovations
Types of Adopters
? Innovators
? Early Adopters
? Early Majority
? Late Majority
? Laggards
Promotional Concepts
? COMMUNICATION - Process of
establishing a,oneness” between the sender
and receiver
? PROMOTION MANAGEMENT - Focus of
the promotional element of the marketing
mix
Promotion Mix Elements
? Sales Promotions
? Public or Community Relations
? Sponsorship
? Personal Selling
? Advertising
Communications Process
Source
Receiver
Decoding
Medium
Encoding
Message
Feedback Noise
Promotion Planning
? Target Market Considerations
? Promotional Objectives
? Establishing Promotional Budgets
? Choosing an Integrated Promotional Mix
Target Market Considerations
? Push Strategy
? Pull Strategy
Promotional Objectives
The Hierarchy of Effects
? Unawareness
? Awareness
? Knowledge
? Liking
? Preference
? Conviction
? Action
Promotional Budgets
? Arbitrary Allocation
? Competitive Parity
? Percentage of Sales
? Objective and Task Method
Integrating the Promotional Mix
? Integrated Marketing Communications -
Concept by which a sports organization
carefully integrates and coordinates its
many promotional mix elements to deliver
a unified message about the organization
and its products
Building An Advertising Strategy
MARKETING STRATEGY
AD
OBJECTIVES
BUDGETING
CREATIVE
DECISIONS
MEDIA
STRATEGIES
AD EVALUATION
Ad Objectives
(awareness,inform,change attitudes,purchase)
? INDIRECT OBJECTIVES - ENHANCE
CORPORATE IMAGE
? DIRECT OBJECTIVES - STIMULATE
DEMAND FOR THE SPORTS PRODUCT
Ad Budgeting
? ALL YOU CAN AFFORD
? COMPETITIVE PARITY
? PERCENTAGE OF SALES
? OBJECTIVE AND TASK
Creative Strategies
? IDENTIFYING THE BENEFITS OF
THE SPORTS PRODUCT
? DESIGNING THE AD APPEAL
? DEVELOPING THE AD EXECUTION
Designing The
Ad Appeal
? Health Appeals
? Emotional Appeals
? Fear Appeals
? Sex Appeals
? Pleasure or Fun Appeals
Designing The
Ad Execution
? One or Two Sided Messages
? Comparative Message
? Slice-of-Life or Lifestyle Message
? Scientific Message
? Testimonials
Media Strategy
? SPECIFY THE MEDIA OBJECTIVES
(REACH,FREQUENCY,CONTINUITY)
? SELECTING THE MEDIA VEHICLES
Personal Selling,
The Strategic Selling Process
? Buying Influences
? Red Flags
? Response Modes
? Win-Results
? The Sales Funnel
? Ideal Customers
Sales Promotions
? Premiums
? Contests and Sweepstakes
? Sampling
? Point of Purchase Displays
? Coupons
Public Relations
? Publicity (news releases,press conferences)
? Participation in Community Events
? Producing Written Materials (press guides)
? Lobbying
Sponsorship
? Investing in a sports entity to support
overall organizational objectives and
marketing goals,
? IEG estimates $6.8 billion spent on
sponsorship and of this $4.6 billion will
be spent on sports
? Not unlike other forms of communication,
sponsors must fight the clutter and find
the perfect match
The Sponsorship Process
Sponsorship
Objectives
Sponsorship
Budget
Sponsorship
Acquisition
Implementing and
Evaluating the
Sponsorship
Sponsorship Objectives
? Direct
– Sales Increases
? Indirect
– Awareness
– Competition (ambush mktg- planned effort to associate
themselves with an event -- I Love LA)
– Reaching Target Markets (Allows us to reach consumer
where they live and play)
– Relationship Building
– Image Building
Sponsorship Budgeting
? Sample costs of sponsorship
– Corporate Box at the United Center $220,000
– Title sponsor of Tot Trot $7500
– Official Supplier for MLB $10 million
– Premier League $15 million
? Initial Costs,but there is maintenance and
leveraging
Sponsorship Acquisition
? 1) Determine Scope of the Sponsorship
(sports event pyramid with global,
international,national,regional and local
events)
? 2) Determine the athletic platform (entity
and level of competition)
Sponsorship Implementation
and Evaluation
? Number of mentions in popular media
? Media Equivalencies
? Sales figures (pre and post)
? Attitude change (pre and post)
? Number of distributors (pre and post)
Distribution Concepts
? Ability of consumers to gain access to
products in a timely and convenient
fashion
? Moving product from producer to
consumer via the various channels of
distribution
Sports Distribution Issues
? Sports Retailing
? Stadium as,Place”
? Sports Media
Sports Retailing Mix
? Products
? Pricing
? Distribution
? Promotion
Retail Image/Store Personality
? Factors include (in general),
– atmospherics
– location
– employees/sales personnel
– clientele
– merchandise assortment
– promotional activities
Stadium as,Place”
? New Sports Venues
? Ticket Distribution Issues
Sports Media as Distribution
? Delivering the Sports Product to
Consumers Via Media
? Rising Cost of Media Rights
? Media as a Portion of the Revenue Mix
? New Trends in Sports Media
Pricing Concepts
? Price is a Statement of Value
? Value = Perceived Benefits
Price of Sports Product
? Essence of pricing is the exchange process
- An attempt to quantify the value of what
is being exchanged
Internal and External
Determinants of Pricing
Internal
? Product
? Promotion
? Distribution
? Cost
? Organizational
Objectives
External
? Consumer Demand
? Competition
? Legal
? Economy
? Technology
RELATIONSHIP OF PRICE TO SOME
OTHER MARKETING MIX ELEMENTS
? Related to product life cycle
? Communicates something about the product
? Promotion geared towards information
about price
? Product lines with different prices attract
different segments of consumers
Estimating Consumer Demand
? Consumer Tastes
? Availability of Substitute Sports Products
? Consumer Income
Pricing Strategies
? Differential Pricing Strategies
? New Sports Product Pricing Strategies
? Psychological Pricing Strategies
? Product Mix Pricing Strategies
? Cost-Based Pricing Strategies
Differential Pricing
? Second Market Discounting
New Sports Product Pricing
? Penetration Pricing
? Price Skimming
Psychological Pricing
? Prestige Pricing
? Referent Pricing
? Odd-Even Pricing
? Traditional Pricing
Product-Mix Pricing
? Bundle Pricing
? Captive Pricing
? Two-Part Pricing
Cost-Based Pricing
? Cost-Plus Pricing
? Target Profit Pricing
? Break-Even Pricing
Price Adjustments
? Price Reductions and Price Increases
? Price Discounts
Implementation Issues
? Communications
? Staffing Staffing and Skills
? Coordination
? Rewards
? Information
? Creativity
? Budgeting
Strategic Control Issues
? Planning Assumptions Control
? Process Control
? Contingency Control
Planning Assumptions Control
?,Are the premises or assumptions used to
develop this marketing plan still valid?”
? Examine the external environmental
factors and the sports industry factors
Process Control
? Monitoring Strategic Thrusts
? Milestone Review
? Financial Analysis
Contingency Control
?,How can we protect our marketing
strategy from unexpected events or crises
that could affect our ability to pursue the
chosen strategic direction?”
? Developing a Crisis Plan
Growth of Sports Industry
? The sports industry generates estimates of 213 to 350 billion dollars per year in
revenues,As ESPN founder Bill Rasmussen points out,“The games are better,and
well the athletes are just amazing and it all happens 24 hours a day,America?s sports
fans are insatiable.”
? Attendance is increasing,
– The NFL experienced a record number of fans in the 1999 season (15,710,970)
– The NBA 1999-2000 season also produced a small increase (1%) for the NBA
– MLB reached 20 million fans faster than any other year in history and attendance
increased again (3%)
– NHL continues to grow in attendance and popularity,Tracing average attendance
over the past few years,regular season numbers have increased from 14,749 (?93-
?94) to 16,359 (?99-?00)
– NASCAR had 11 million people attend its events in 1999
? Sports Sponsorship Spending Exceeds $1 Billion Dollar Mark
? New Leagues (AF2,XFL,WPFL,WSA,WNHL)
