Sport Marketing (2003)

Sport Marketing

October 14, 2003

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.

Sport Marketing Plan

• Comprehensive frameworks for identifying and achieving an organization’s marketing goals and objectives

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.

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

Price

• Price affects the product’s success, status quo for the product, and the consumer’s perception of the product.

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.

Promotion

• The integrated communication and public relations activities that communicate, inform, persuade, and motivate consumers to purchase the product.

• Advertising or making people aware

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.

Step #2- Analyze the Product

• Tangible good: Shoes, apparel, sporting equipment

• Support services: Officials, trainers, sport psychologist

• Game/event: Core product, product extensions

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

SWOT Analysis

S = Strengths

W = WeaknessesControllable Factors

Ex. Products, Services, Financial Resources

O = Opportunity

T = ThreatsUncontrollable

Factors

Ex. Competition, Demographic Shifts, the Economy, Technological

Advances

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

Step #5-Analyzing & Targeting Consumers

• Involves grouping consumers according to common characteristics.– Demographics– Psychographics– Media Preferences– Purchasing behavior– -Geographics

Market Segmentation Main Bases

•Geographic SegmentationRegion or location

Size of City

Density

Climate

Eleven Regions of Sport Involvement

Eleven Regions of Sport Involvement

New England: Eastern Cradle

Eleven Regions of Sport Involvement

North Carolina & South Carolina: Carolinas

Eleven Regions of Sport Involvement

Arkansas, Louisiana, Alabama, Georgia, Florida:

Pigskin Cult

Eleven Regions of Sport Involvement

South Florida: South Florida

Eleven Regions of Sport Involvement

Pittsburgh & Buffalo:

Mills and Mines

Eleven Regions of Sport Involvement

Michigan, Illinois, Indiana, Ohio, Kentucky:

American Heartland

Eleven Regions of Sport Involvement

Arkansas, Montana, North Dakota, South Dakota, Minnesota, Nebraska,

Missouri, Iowa, Wisconsin: Sport for Sport’s Sake

Eleven Regions of Sport Involvement

Idaho, Wyoming, Colorado: Rocky Mountain High

Eleven Regions of Sport Involvement

Texas and Oklahoma:

Texas Southwest

Eleven Regions of Sport Involvement

Nevada, Utah, Arizona:

Cowboys and Mormons

Eleven Regions of Sport Involvement

Pacific West Coast & Hawaii:

Pacific Cornucopia

Market Segmentation Main Bases

•Geographic Segmentation

Region or location

Size of City

Density

Climate

•Demographic Segmentation

Gender

Age

Income

Nationality/Ethnicity

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

Cohorts

•Term “cohorts” used in marketing to refer to generations (ex. Baby boomer cohort, Generation Y cohort).

Mature’s Boomer’s 13er’s (Gen. Y)/& X’s

Diversity Uncomfortable SomewhatComfortable

VeryComfortable-May act asbridge

Leisure Reward Point of Life Relief

Work Inevitable Adventure DifficultChallenge

Education Gift Birthright A method usedto get ahead.Large number ofdropouts

Money Save Spend Hedge

Future Save for a rainyday

Now ismoreimportant

Uncertain butmanageable

Technology Difficult Challenge CompletelyComfortable andProficient

Learning Classroom/ Onthe Job

Classroomand someexperiential

Experiential-able to ParallelThink

Approach Careful, cautious Ready AimFire

Ready Aim Fire

Yacovinch as cited by Dr. Patrcia Boverie

* ‘Tweeners, share the

values of 2 groups

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

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

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 SegmentationBenefits sought

Purchase occasion

User Status/ Usage Rate

Brand loyalty

Buyer readiness

Attitude towards the product

An effective market segment is…

1. MeasurableSize and purchasing power

2. Accessible Can be reached and served

3. SubstantialLarge and/or profitable

4. Actionable & ResponsiveEffective programs designed to attract and serve the segment

Strategies for Selecting Target Markets

UndifferentiatedStrategy

•One marketing mix to total market

•Mass marketing

•More competition

•Less satisfaction

Strategies for Selecting Target Markets

MultisegmentStrategy

•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

Strategies for Selecting Target Markets

ConcentratedStrategy

•One segment-niche marketing

•Specialized

•Suits small firms or new entrants

Industry Analysis Segmenting

•Purpose is competitive strategy formulation

•Identify marketing opportunities and threats

•Develop appropriate marketing mix

•Study your competitors

Step #6-Packaging

• Presenting the product in the best possible manner

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

Step #8-Promoting the Product

• Communicate the product’s image to the selected target audiences.

• Promotional mix includes the strategy to promote the product.

Promotional Mix

• Advertising• Publicity• Activities &

inducements• Public Relations

• Community Relations• Media Relations• Personal Selling• Sponsorship

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.

Development of Sponsorship

• Emerged as result of:– Advertising rates increasing– Introduction of cable TV– Identification of “minority markets”– Desire to influence baby-boomer generation

Sponsorship Evaluation

• There are 5 areas of evaluation:– Media coverage– Awareness & attitudinal surveys– Sales– Corporate/guest feedback (hospitality)– Cost-benefit analysis

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

Impression Influencing Factors

• Image• Availability• Geographic Region• Sheer number• Quality

• Size/impact• Target Market• Sponsor Clutter• Sponsor Package

Measurable Categories

• On-site signage

• On-screen graphics

• Audio mentions

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

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)

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

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 impressionsx

Value per impressionx

Number of households

Value of media sponsorship based on impressions

30 impressionsx

$.003x

1,000,000

$90,000

Step #9-Placing the Product

• Refers to the manner the sport is distributed to the consumer

Step #10-Promise of the Plan

• Evaluating if all goals were met