Marketing College Athletics Section 2.1

Marketing College Athletics GOALS Explain the importance of the NCAA and team rankings to college sports. Explain the importance of the NCAA and team rankings to college sports. Define market segmentation. Define market segmentation. Discuss the growing market surrounding women’s college athletics. Discuss the growing market surrounding women’s college athletics.

Distribution (Placement) Determining the best methods and procedures to use to allow customers to find, obtain, and use a P / S. Determining the best methods and procedures to use to allow customers to find, obtain, and use a P / S.

Place = Distribution Stadium, Arena, or Venue serves as BOTH the location and the method of distribution for the event Stadium, Arena, or Venue serves as BOTH the location and the method of distribution for the event The media also provides for distribution of sports events. The media also provides for distribution of sports events. –News, PPV, Radio, Internet…

Stadium as “Place” Sports are produced and consumed simultaneously (same time & place) Sports are produced and consumed simultaneously (same time & place) Stadium – represents the distribution (place). Stadium – represents the distribution (place). Stadium – add to the “effect” of the event Stadium – add to the “effect” of the event

$36 million expansion added 42 suites $36 million expansion added 42 suites Sold 10 $2 mill. Each for a 25 year commitment Sold 10 $2 mill. Each for a 25 year commitment Sold 32 for $750,000 each for a 10 year commitment Sold 32 for $750,000 each for a 10 year commitment University of Nebraska University of Nebraska Total Revenue = $44 million

Channel of Distribution Route of product follows and the businesses involved in moving a product from producer to final consumer. Route of product follows and the businesses involved in moving a product from producer to final consumer.

Conventional Channels

Need for Channels Differences in Quantity Differences in Quantity –Example: P&G Pantene Shampoo Differences in Assortment Differences in Assortment –Consumers want variety of products –Example: Dell Computers

Distribution Channels Move peoducts efficiently from where they’re made to where they’re sold. Move peoducts efficiently from where they’re made to where they’re sold. Channels: Channels: –Direct – products move from producer to consumer w/o other help. –Indirect – include 1 or more other businesses between producer & consumer

Direct and Indirect Channels distribution Products are directly sold from the producer to the final customer; no intermediaries Direct Channel Producer Customer Products sold from producer to one or more intermediaries before reaching final customer Indirect Channel Producer Customer Intermediary

Channel Considerations Coverage Required: Coverage Required: –Intensive – gum, candy, soft drinks –Selective – clothing, appliances, TV’s –Exclusive – manufacturer to retailer

Test Your Knowledge I.D. a sports / entertainment product that uses a Direct Distrib. Channel I.D. a sports / entertainment product that uses a Direct Distrib. Channel I.D. a sports product that follows an Indirect Distrib. Channel (include the various channel members) I.D. a sports product that follows an Indirect Distrib. Channel (include the various channel members) –Intensive Example –Selective Example –Exclusive Example

Effects of College Sports A winning team has economic implications for school, community, region, and state A winning team has economic implications for school, community, region, and state Fan expectation Fan expectation Promotion of organization’s goods and services Promotion of organization’s goods and services –Schedule cards –Posters –Web Sites

Rules & Rankings National Collegiate Athletic Association (NCAA)—the governing body of most college and university athletic programs National Collegiate Athletic Association (NCAA)—the governing body of most college and university athletic programs Creates and enforces guidelines and rules Creates and enforces guidelines and rules NCAA Corporate Partners NCAA Corporate Partners NCAA Corporate Partners NCAA Corporate Partners

NCAA Guidelines include: Recruitment Recruitment Gender equity Gender equity Scholarships Scholarships Gambling prohibitions Gambling prohibitions Many ethical issues Many ethical issues Overall Goal: Overall Goal: –Promotion of college athletics, w/ the integrity of the athletes and their game

NCAA Conditions Obtains accreditation by the recognized agency of its region Obtains accreditation by the recognized agency of its region Offers at least 4 intercollegiate sports for men and 4 for women (1 in each of the 3 traditional seasons) Offers at least 4 intercollegiate sports for men and 4 for women (1 in each of the 3 traditional seasons) Complies with all NCAA rules Complies with all NCAA rules Cooperates with the NCAA enforcement program and accepts penalties Cooperates with the NCAA enforcement program and accepts penalties

College Team Rankings Why so much emphasis? Why so much emphasis? #1 has lingering effects #1 has lingering effects

High ranked teams build excitement and strong attendance High ranked teams build excitement and strong attendance Creates fan loyalty and natl. respect Creates fan loyalty and natl. respect Influences TV schedules Influences TV schedules Requires fewer steps to #1 spot Requires fewer steps to #1 spot Go to Bowl game Go to Bowl game Retailers carry sportswear Retailers carry sportswear Increases recruitment Increases recruitment College Team Rankings

Market Segmentation Market segment—a group of individuals within a larger market that share one or more characteristics Market segment—a group of individuals within a larger market that share one or more characteristics

Uses the following characteristics to help define a target market: Uses the following characteristics to help define a target market: –geographic location –demographics –psychographics 21 Demographics Psychographics Geographic Location

Is where the consumer lives Is where the consumer lives –example: the states of Kansas and Missouri are key target markets for the Kansas City Chiefs the states of Kansas and Missouri are key target markets for the Kansas City Chiefs 22 MO

Are the attitudes or the opinions a consumer has toward recreational activities Are the attitudes or the opinions a consumer has toward recreational activities –example: a company would use their money to endorse athletes in the most popular sports in a particular country or locality a company would use their money to endorse athletes in the most popular sports in a particular country or locality –England- soccer –Brazil- soccer –South Carolina- stock car racing –Texas- football 23

Women’s College Sports NCAA NCAA Women’s Enhancement Program Women’s Enhancement Program Increased fan support Increased fan support Marketing opportunities in women’s sports Marketing opportunities in women’s sports

Economic Impact of College Athletics Section 2.2

Benefits to the Community Good for town business Good for town business –Hotels –Restaurants –Retailers Good for stadium business Good for stadium business –Food/restaurants –Gift shops

Are the goods, services or ideas related to sports that provide satisfaction to the consumer Are the goods, services or ideas related to sports that provide satisfaction to the consumer Make up a product lines Make up a product lines Can be classified into the following categories: Can be classified into the following categories: –sporting events –sports information –sports training –sporting goods Product Line- a group of closely related items which are manufactured or sold by a company

Are the main category of sports products Are the main category of sports products Include the following examples: Include the following examples: –games –competitions –athletes –stadiums/arenas

Is considered the actual news, statistics, schedules and stories associated with sports Is considered the actual news, statistics, schedules and stories associated with sports Uses different media outlets such as television, radio, Internet and magazines Uses different media outlets such as television, radio, Internet and magazines Includes the following examples: Includes the following examples: –Anaheim Ducks signing a new goalie –Dwyane Wade’s free throw percentage –Philadelphia Phillies season schedule

Is considered a sports service which is normally offered through a gym, fitness center or athletic department in the form of a camp, clinic or lesson Is considered a sports service which is normally offered through a gym, fitness center or athletic department in the form of a camp, clinic or lesson Is an intangible product Is an intangible product Include the following examples: Include the following examples: –Duke Blue Devils basketball camp –local gym is offering swimming lessons –quarterback clinic Intangible products- non-physical services

Are tangible products Are tangible products Can be purchased at stores or other retail outlets Can be purchased at stores or other retail outlets Include the following examples: Include the following examples: –equipment –licensed merchandise- jerseys, t-shirts, caps –collectibles/memorabilia Tangible products- physical goods which satisfy a need or want of the customer

Contains items which either work together or are similar in kind Contains items which either work together or are similar in kind Meets the need or want of a customer group Meets the need or want of a customer group Includes the following examples: Includes the following examples: –Reebok® may have a running shoe product line which contains many different styles and colors, but they all fall into the category of running shoe

Is the total assortment of goods a company makes or sells Is the total assortment of goods a company makes or sells Includes all of the product lines offered by a company Includes all of the product lines offered by a company –example: Reebok® ‘s product mix would include the running shoe product line as well as their lines for athletic clothing, basketball shoes, football cleats, golf shoes, etc. Reebok® ‘s product mix would include the running shoe product line as well as their lines for athletic clothing, basketball shoes, football cleats, golf shoes, etc.

Licensing Licensing Sponsorships Sponsorships Endorsements Endorsements Promotions Promotions

Is the agreement that gives a company the right to use another’s brand name, patent or intellectual property for a royalty Is the agreement that gives a company the right to use another’s brand name, patent or intellectual property for a royalty –licensor- company or individual granting the license for a fee in a contract –licensee- company or individual paying for the rights to use the name or property Royalty- a fee which is paid to the licensor

U of M U of M –4.02 Mill. in Licensing revenue alone in 2012 Top 5 colleges with most licensing revenue (7/14 – 12/14) follow link Top 5 colleges with most licensing revenue (7/14 – 12/14) follow link Top 5 colleges with most licensing revenue Top 5 colleges with most licensing revenue 1.Alabama 2.Texas 3.Notre Dame 4.Michigan 5.Georgia

A video documenting a team’s path to the championship game A video documenting a team’s path to the championship game A Yao Ming Houston Rockets® jersey A Yao Ming Houston Rockets® jersey A Pittsburgh Steelers® sweatshirt A Pittsburgh Steelers® sweatshirt Can you think of any other licensing examples in or out of the sporting industry?

Is the promotion of a company in association with a property or event Is the promotion of a company in association with a property or event Generates funds for all facets of sporting venues Generates funds for all facets of sporting venues Helps increase a company’s branding Helps increase a company’s branding Can be flexible Can be flexible –company can sponsor all or portions of a sporting event Branding- the process of forming a mental association with a company or product

Sponsorship UPS deal (follow link) UPS deal (follow link) UPS –70 Colleges – “Largest college sports sponsorship in history” –UPS become the “official logistics, package- delivery & retail-bus./serv. Provider in all forms of sponsor recognition. Buffalo Wild Wings (follow link) Buffalo Wild Wings (follow link) Buffalo Wild Wings Buffalo Wild Wings –With NCAA becomes the “official hangout” for March Madness men’s basketball Includes rights for all 89 NCAA championships through 2016 Includes rights for all 89 NCAA championships through 2016

Aflac® Player of the Game Aflac® Player of the Game Coca-Cola®…the official soft drink of today’s game Coca-Cola®…the official soft drink of today’s game AT&T® Center in San Antonio - home of the San Antonio Spurs AT&T® Center in San Antonio - home of the San Antonio Spurs Can you think of any other examples of sponsorship?

Are statements of approval concerning a product or service by an individual or organization on the behalf of the producer Are statements of approval concerning a product or service by an individual or organization on the behalf of the producer Generate publicity through the use of an individual’s or organizations celebrity in an advertisement Generate publicity through the use of an individual’s or organizations celebrity in an advertisement Give familiarity and credibility to a product by making it relatable to a consumer Give familiarity and credibility to a product by making it relatable to a consumer

A few of the athletes Nike® has or has had endorsements with Tiger Woods, LeBron James and Serena Williams A few of the athletes Nike® has or has had endorsements with Tiger Woods, LeBron James and Serena Williams Hanes® is endorsed by Michael Jordan Hanes® is endorsed by Michael Jordan Canon® has an endorsement deal with Maria Sharapova Canon® has an endorsement deal with Maria Sharapova Can you think of other examples of endorsements?

Are in-game or in-concert activities designed to entertain and advertise to consumers Are in-game or in-concert activities designed to entertain and advertise to consumers Provide event marketers with creative ways to entertain fans Provide event marketers with creative ways to entertain fans Offer sponsors with memorable ways to advertise to consumers Offer sponsors with memorable ways to advertise to consumers

Million dollar half-time half court shot at basketball games Million dollar half-time half court shot at basketball games Free rent half time kick at a football game Free rent half time kick at a football game Hamburger eating contest between the periods of a hockey game Hamburger eating contest between the periods of a hockey game Can you think of any other promotion examples?

Conference Realignment Conference—a group of college athletic teams within the same region Conference—a group of college athletic teams within the same region Increase revenues Increase revenues Create new rivalries Create new rivalries Playoff games generate additional revenue Playoff games generate additional revenue

New Look ball/conference-realignment ball/conference-realignment ball/conference-realignment ball/conference-realignment

The Cost of Success Success requires: Success requires: –Skilled coaches –Top-notch players

Attracting & Keeping Coaches The best coaches can command annual salaries in excess of $1 mill. The best coaches can command annual salaries in excess of $1 mill. Fringe Benefits Fringe Benefits –Incentives received in addition to base salary College Coaches Salaries Ticket Prices

Attracting & Keeping Star Athletes Competition for top athletes is fierce. Competition for top athletes is fierce. Recruiters compete with pro teams as well as other colleges. Recruiters compete with pro teams as well as other colleges. Recruiters need a well refined sales & mktg. effort to attract talent to their schools. Recruiters need a well refined sales & mktg. effort to attract talent to their schools.

Is College Football A Campus Commodity? What’s your opinion? What’s your opinion?

Amateur Sports Section 2.3

Popularity of Amateur Sports Amateur athlete—someone who does not get paid but plays for enjoyment, challenge, or both Amateur athlete—someone who does not get paid but plays for enjoyment, challenge, or both

Marketing & Sponsoring Amateur Sports Provides significant income for manufacturers Provides significant income for manufacturers Minivan and sport utility vehicle Minivan and sport utility vehicle Retro sports jerseys Retro sports jerseys

Local Promotion of Amateur Sports Fund-raising charity events Fund-raising charity events High school athletic teams High school athletic teams

National Promotion of Amateur Sports Promotion used to elevate the attention of consumers Promotion used to elevate the attention of consumers Lance Armstrong and Subaru Lance Armstrong and Subaru

Economic Benefits Minnesota’s example Minnesota’s example –Minnesota Amateur Sports Commission –Create economic development through amateur sports –Create maximum opportunity for sport participation –Establish Minnesota as a national model for the Olympic and amateur sport movement

Economic Benefits of Specific Sports Ice skating Ice skating Soccer Soccer Basketball Basketball Baseball and softball Baseball and softball