Sport Management Marketing Principles

What is Marketing? The process of planning, pricing, promoting, selling and distributing products to consumers and businesses.  Marketing is always changing because it must keep up with trends and consumer attitudes What kinds of products…?

Types of Products Traditional Marketing 1. Ideas - politician’s platform 2. Goods – products grown or manufactured; tangible items with monetary value like a car or Ipod 3. Services – intangible items involving a task like a car wash, manicure, or movie theatre Sport Marketing 1. Ideas - 2. Goods – sporting equipment, apparel and footwear 3. Services – swim lessons, club memberships and ball games 4. Entities – leagues, teams and individual athletes

The Big Picture People have wants/needs which are satisfied with products. Marketing creates the demand for these products. Good Marketing prompts the customer to see value in a product  The customer now wants the product or thinks they need it  The marketer has successfully created demand!

Two Thrusts of Sport Marketing 1. 1 st Thrust - Marketing sporting products (goods, services, or entities) to sport consumers. Marketing sporting apparel, memberships to LA Fitness, or tickets to a Phillies game 2. 2 nd Thrust - Marketing other consumer products (ideas, goods or services) through sport promotions. DuPont attempting to sell more products by sponsoring the Jeff Gordon racing team During an election year, the mayor of Philadelphia showing extensive public support of the Eagles, Phillies, or Flyers to gain more votes.

Historical Developments in Sport Marketing 4 Historical Developments in Sport Marketing Evolution of Sport Broadcasting Product Extensions/Promotional Strategies Growth of Sport Sponsorship Birth of Research in Sport Marketing

Historical Developments in Sport Marketing 1. Evolution of Sport Broadcasting Sport broadcasting evolved from pure, factual reporting aimed at sports fans to entertainment aimed at the masses. Roone Arledge, an ABC executive, recognized sports televised in prime time had to be more than sport, but also ENTERTAINMENT! Incorporated this philosophy into ABC’s Monday Night Football.

Historical Developments in Sport Marketing 1. Evolution of Sport Broadcasting (cont.) Arledge refused to let owners and leagues approve announcers. He selected the right mix of 3 personalities for entertainment purposes. Howard Cosell (sport journalist) Keith Jackson (voice of college football)  replaced 1 yr. later by Frank Gifford Don Meredith (former NFL star)

Historical Developments in Sport Marketing 1. Evolution of Sport Broadcasting (cont.) Arledge instituted: 1. more cameras 2. varied camera angles 3. video highlights of previous day’s games 4. instant replays 5. fan mics 6. sideline interviews 7. commentary with criticism, wit and humor

Historical Developments in Sport Marketing 1. Evolution of Sport Broadcasting (cont.) Arledge wanted the fan sitting at home to see, hear and experience the event as if actually in the venue. Arledge wanted the fans to become emotionally involved…even if they didn’t like the sport, they might still tune in because they like the program! The next time you’re watching TV and see a baseball pitch from the roof of a stadium, or a coach interviewed before entering the locker room at half time, who should you think of?

Historical Developments in Sport Marketing 2. Product Extensions/Promotional Strategies Bill Veeck is to the actual game what Roone Arledge was to broadcasting the game. Veeck recognized the success and profitability of a franchise can’t depend on the success of the team to generate capacity crowds…the team must provide other reasons than the game for people to attend and support the franchise.

Historical Developments in Sport Marketing 2. Product Extensions/Promotional Strategies (cont.) Veeck had 3 philosophies: I. People want to be entertained – Veeck added a few simple moments to the game that didn’t detract from the game (giveaway days, fireworks, theme nights) II. Promotions must create conversation afterwards – fan goes home…talks about what he saw…get additional kick out of being able to say he was there…he wants to go back…other want to experience it too…valuable word of mouth advertising!

Historical Developments in Sport Marketing 2. Product Extensions/Promotional Strategies (cont.) Veeck had 3 philosophies: III. People want a great atmosphere – Fans will be loyal if they have clean facilities and a hospitable atmosphere. The next time you go to a baseball game and you get a free baseball cap when you enter the stadium, who should you think of?

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship Sponsorship – the acquisition of rights to affiliate or directly associate with a product or event for the purpose of deriving benefits related to that affiliation. It is not a new concept… 1852 – first collegiate event, rowing, between Harvard and Yale was sponsored by a railroad company. Coca Cola – Olympic sponsor since 1928

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship Albert Spalding Early pioneer in sport sponsorship. Former professional baseball player; parlayed his fame into what used to be one of the largest sporting good manufacturing companies in the world, Spalding. 1 st marketer to capitalize on the term “official”; Spalding became the “official baseball” of the National League in He then marketed his baseball as the “best” because it was adopted for use by the National League (the highest level of professional play at that time).

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship Mark McCormack  Endorsement Deals In the 1960’s…created IMG, the first sport marketing agency. First signed Arnold Palmer, who was the most popular professional golfer at that time. IMG marketed Palmer’s popularity, ultimately securing endorsement contracts for him. The businesses Palmer endorsed, then used him to promote and sell their products.

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship Nike -  Taking Endorsement Deals to a New Level! Extremely successful packaging the Nike brand, product, advertising, and athlete into one personality. Achieved when Nike and Michael Jordan created “Air Jordan”. Nike experienced disloyalty from some past endorsers, so they decided to involve the athlete in the fortunes of the product. Jordan got royalties for shoe, apparel and accessory sales. Jordan was enticed with $$ to promote the product. Result  the most successful athlete endorsement in history, with over $100 million of Air Jordan products sold in a single year.

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship Nike -  Beyond Endorsement Deals University-wide Athletic Sponsorship Agreements – attempt to associate with the best college athletic programs (University of Michigan; University of North Carolina). Trend followed by Reebok and Adidas. Ambush Marketing – increasing business by capitalizing on the popularity of an event without becoming an “official sponsor.”  1996 Atlanta Summer Olympic Games

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship Why Do Businesses Sponsor Sports? The more a customer identifies with a product the greater the likelihood the customer will develop a long and loyal relationship with the product. People identify with sports; they have a personal commitment and emotional involvement with sport organizations. This is called Fan Identification. Ideally, businesses that sponsor sports hope to tap into and capitalize on some of the strong emotional connection between the fan and his team, and ultimately increase their own business.

Historical Developments in Sport Marketing 3. Growth of Sport Sponsorship A Current Issue of Today… Cluttered Marketplace – the marketplace is “cluttered”…increasingly difficult for sponsors to be recognized and achieve the benefits of sponsorship. Sport marketers are challenged to demonstrate how a sponsor will benefit.

Historical Developments in Sport Marketing 4. Birth of Research in Sport Marketing Customer research involves getting to know the customer so you can better determine how to create demand for the product. Matt Levine was credited with formalizing research in the sport industry. Audience Audit - Fill out a questionnaire and get a free beach towel! Fill out a Visa application and get a free cap! Focus Group – Discussion groups with 8 to 12 people with similar characteristics discussing a predetermined sport topic. Pass-By Interviews – Interviews in heavy traffic areas such as malls; use a visual aid and assess the interviewee’s reaction to it (typically a sample of a potential new product)

The Marketing Mix Marketing Mix – the controllable variables a company puts together to satisfy a target group. What are these controllable variables? 1. Product 2. Price 3. Place 4. Promotion AKA the 4 P’s of Marketing!

The Marketing Mix 1. Product – choosing what to sell Marketing sporting goods is like marketing any other product. The tangible benefits of the product can be provided and controlled. Marketing a sport service like an event, or a sport entity like an athlete or team is more challenging  little control over the core product! Because of the lack of control over the core product, sport marketers focus on extension to the core product…Remember Bill Veeck?

The Marketing Mix 2. Price – what is exchanged for the product Since the sport product (like a game) is often intangible/experiential, setting the price can be a challenge  remember, we have little control over the core product! Typically, price depends on the perceived value provided by the product. Sport marketers must be careful that the perceived value of the event justifies the price!

The Marketing Mix 3. Place – getting it into the consumer’s hands Mainstream products – made at manufacturing site and shipped to a location where customers can purchase at their convenience (products have a “shelf life”). Sport Events – produced, distributed and consumed at the same location (stadium/arena). This product has no shelf life. Sport marketers aggressively pre-sell events!

The Marketing Mix 3. Place (continued) Location, Location, Location! Similarity between mainstream products and sport events is the importance of location. McDonalds locates on prime corners of America to attract customers. People like to go to Wrigley field because of its location in a popular North Chicago neighborhood – same with Fenway Park in Boston. Facility aesthetics play an important role also. Remember Bill Veeck, again?

The Marketing Mix 4. Promotion – how the customer will be told about the product Promotion is any form of communication businesses use to inform, persuade, and remind people of products. Different types: radio spots, television spots, Internet pop-ups, billboards, print ads, direct mail piece, discount coupons, product tie-ins and point of purchase (pop) displays.

The Marketing Mix 4. Promotion - how the customer will be told about the product (continued) When promoting sport events, the marketer must consider the unpredictable and experiential nature of the product. Since they can’t promise a win (lack of control over the core product), sport marketers promote the “good time” to be had.

The Marketing Mix 4. Promotion - how the customer will be told about the product (continued) Sport Promotional Mix 1. Personal Selling – direct contact, face-to-face presentation; seller persuades buyer 2. Advertising – one way communication; pay to promote products 3. Publicity – Media exposure that’s free; Disadvantage: one has no control over what is written. 4. Sales Promotion – special activities to increase sales; includes a customer incentive or gimmick.

Segmentation Mass Marketing vs. Segmentation Mass Marketing – when an organization markets its products to every possible consumer in the marketplace. Segmentation – process if identifying subgroups of the overall marketplace based on a variety of factors. How? Market Research…Matt Levine While sport has a universal appeal, it would be foolish to market to the entire population.

Segmentation Target Market – a subgroup of the overall marketplace that has certain desirable traits: 1. Demographic – statistics such as age, income, ethnicity, gender or educational background. 2. Geographic – statistics such as region or zip codes 3. Psychographic – statistics such as preferences or behaviors…values, beliefs, lifestyle, activities, habits

Segmentation Two Popular Bases for Segmentation in Sport 1. Ethnic Marketing – Focus on Hispanics through radio broadcasts and web sites in Spanish (ESPN Deportes) 2. Generational Marketing – Focus on Generation Y (born 1977–1996) Interested in mainstream and action/extreme sports Marketers of mainstream sports are fearful they are losing you!