Sport & Leaisure Industry - Session 4 - Relationship Marketing

Relationship Marketing

SPO 028-1: The Sport and Leisure Industry

In This Session We Will Address…

1. The difference between transactional marketing and relationship marketing.

2. What constitutes a relationship between organisations or between organisations and consumers.

3. The types of relationships in the sport & leisure industry.

Transactional Marketing

• Traditionally sport marketing has been considered from a transactional point of view.

• Transactional Marketing seeks to facilitate an exchange of products and/or services for money.

But…

Is this the optimal way for organisations to be engaging with consumers in the Sport & Leisure

industry?

Why?

Relationship Marketing

Many sport organisations have adopted an approach we call ‘relationship marketing’.

“The goals of relationship marketing are to build long-term relationships with the organisations best customers,

generating further business and ultimately profit. It is also designed to contribute to strengthening brand awareness,

increase understanding of consumer needs, enhance loyalty and provide additional value for consumers.”

Stavros et al (2008)

Relationship Marketing

• An organisation employs relationship marketing to develop its relationship with those from outside the organisation, whether that be customers or other organisations.

• Relationship marketing's objective is to build loyalty by strengthening the organisations relationship with its customers.

• It is based on the notion that it is not the exchanges (product for money) per se that are the core of marketing.

• Rather, exchanges take place in ongoing relationships between parties.

• The relationship is with the brand, NOT the individual products.

Relationship Marketing

Organisations ultimate objective is to build a relationship with people from ‘womb to tomb’.

(Young soccer fans often buy, or get their parents to buy, a replica jersey as a transaction, adults often have a catalogue of experiences with the team in question and are buying their

jersey as one of many exchanges in their relationship. The soccer club will seek to build a relationship with the child to

build loyalty.)

Relationship Marketing

• The understanding within organisations of the benefits of relationship marketing have led to a paradigm shift in marketing.

• Relationships offer an opportunity for an analogous message between those in the relationship. They both get to portray who they are through the relationship between the two, or more, organisations.

• Relational approach suits sports organisations better than the transactional approach because sports organisations are network based and operate in a system formed by numerous stakeholders (those who are affected by the process and outcome of an organisations objectives).

• The core of the system is sport itself…

A Network with Sport at its Centre

Sport

Public Schools

Private Schools

UniversitiesCollages

Apparel ManufacturersEquipment

Manufacturers

Sports Stores

Sport Technology

Amateur Clubs

Professional Clubs

Participants

Professional Athletes

Consumers FansLocal Public

OrganisationsNational Public Organisations

Sponsors

Charities

Non-profit Organisations

Media

Events

Stadia

Gyms

Public Sporting Facilitie

s

Private Sporting Facilitie

s

Relationship Marketing

• Issues facing sports organisations are often complex (lack of resources, difficult to reach target markets, etc.)

• It can be difficult for an organisation working in isolation to achieve its goals.

• Therefore sports organisations need to join forces with other parties to optimise their impact (like the example we saw in week 1 of the Table Tennis program in Nottingham which saw numerous organisations forming a relationship to deliver an 8 week block of coaching).

• To build a relationship an organisation must first determine which parties have matching or complementary goals and identify ways in which they can work together.

So Relationship Marketing is…

“the process of identifying and establishing, maintaining, enhancing and when necessary terminating relationships with customers and other stakeholders, so that the objectives of all

parties are met”

Gronroos (2004, p.101)

Why Terminate a Relationship?

Relationship Marketing

• Concept of a relationship is a series of interactions between two parties with each interaction contributing to the evolution of the relationship

• Each relationship has a content that obtains benefits for the parties involved.

• Long term development of relationships contributes to the formation of links. Relationships will illicit one or more of the following links between members of the relationship…

Social links

One of the cornerstones of the sport system.

An organisation that helps an individual or group of consumers socialise or form new friends forms a social link.

Links Within a Relationship

Emotional links

Interaction with the organisation and their product or services produce emotions that hopefully will be positive.

Fundamental for a sports club.

Functional links

Related to the use of a product or service.

The user of a pair of running trainers forms a functional link with the manufacturer or distributer.

Commercial links

Based on the construction of relationships that provide economic benefit.

A sports team and their sponsor have a commercial link.

Marketing Relationships in Sport

Two main types of relationship are formed…

Business to Business (B to B) relationships.

Business to Consumer (B to C) relationships.

Business to Business Relationships

Business to Business Relationships

Business to Business Relationships

Business to Consumer Relationships

Stages of a Relationship

Sports organisations must develop relationships with their stakeholders and these relationships constantly evolve.

This evolution involves following stages:

1. Start: Involves creating an initial interaction.

2. Development: Involves an increase in the frequency of interactions, an increase in involvement and the development of trust.

3. Established relationship: Fewer demands are made by and on both parties and the relationship offers much higher rewards.

4. Decline: Consists of a gradual deterioration in the relationship.

Catagorising Relationships

• Relationships, whether they are B to B or B to C, can be characterised in various ways:

o What are the linked benefits emanating from the relationship? (Commercial, functional, social, emotional.)

o Loyalty. (Is it born of a functional need for the organisations products/services or is it emotional?)

o The status of the parties in the relationship. The status of an organisation or consumer to another organisation can evolve from customer to client, and from client to partner.

We have addressed…

1. The difference between transactional marketing and relationship marketing.

2. What constitutes a relationship between organisations or between organisations and consumers.

3. The types of relationships in the sport & leisure industry.

For next week…

• Use today's session as a starting point for your own research into relationship marketing (you won’t struggle to find literature on the topic!).

• Use the university library, digital library, Discover and Google Scholar to delve deeper into the topic.

• Particularly look out for any studies referring to different types of B to C relationships and any interesting examples of B to B relationships where the two organisations were able to achieve objectives they mat not have been able to without the relationship they formed.

• Investigate what is meant, in this context, by the term ‘prosumer’.

References

Beech, J. and Chadwick, S. (2007) The Marketing of Sport. Harlow: Prentice Hall. Desbordes, M. and Richelieu, A. (2012) Global sport marketing: contemporary issues and practice. New York: Routledge. Gronoos, C. (2004) The relationship management process: communication, interaction, dialogue, value. Journal of Business and Industrial Marketing, 19(2), pp.99-113. Hinch, T. and Higham, J. (2004) Sport Tourism Development. Clevedon: Channel View Publications.  Stavros, C., Pope, N. and Winzar, H. (2008) Relationship marketing in Australian professional sport: an extension of the Shani framework. Sport Marketing Quarterly, 17(3), pp.135-145.  Stewart, B., Smith, A. and Nicholson, M. (2003) Sport consumer typologies: a critical review. Sport Marketing Quarterly. 12(4), pp.206-216.

Torkildsen, G. (2005) Leisure and Recreation Management. New York: Routledge. Williams, J. and Chinn, S. (2010) Meeting relationship-marketing goals through social media: a conceptual model for sport marketers. International Journal of Sport Communication. 3, pp.422-437.

Relationship Marketing

SPO 028-1: The Sport and Leisure Industry