Marketing Principles Applied to Sport Management Chapter 3

What Is Sport Marketing? Create “demand” for products and services –Create, promote, deliver goods and services to consumers and businesses Obtain the best possible understanding of who the “target market” is and what they want Includes the marketing of: –Products: Equipment, apparel, and footwear –Services: Kill lessons or club memberships –Entities: Leagues, teams, or individuals –Staff: Recruitment and retention (relationships)

History of Sport Marketing Mark McCormack –Founded IMG in 1960s; first sport marketing firm –Visionary: Back in the 1990s he predicted significant growth in Asia, South America, Africa –Now international with broad service categories Categories –Sport Broadcasting –Sponsorship –Promotional Strategies –Research

Evolution of Sport Broadcasting Define Sport Broadcasting? Roone Arledge: Sport placed in “primetime” with ABC Monday Night Football; combined entertainment and sports Helped the industry evolve from pure, factual reporting aimed at sport fans to sport entertainment Led to proliferation of sport channels and sport networks –ESPN (ESPN2, ESPN Deportes) –Big Ten Network, SEC Network

Sport Sponsorship Sponsorship: The acquisition of rights to affiliate or directly associate with a product or event for purpose of deriving benefits related to that affiliation Albert G. Spalding –First to capitalize on the use of the word official Mark McCormack –Built IMG through golfer Arnold Palmer Nike and Air Jordan –Packaging of the Nike brand, product, advertising, and athlete into one personality

Ambush Marketing Ambush Marketing: Capitalizing on the goodwill associated with an event without becoming an official sponsor Case Study: Nike and the 1996 Atlanta Summer Olympic Games

Product Extension and Promotion Who is Bill Veeck? Sport marketing pioneer in professional baseball –Philosophy: Team must provide reasons other than the game itself for people to attend and support franchise. 1.Create the greatest joy for the greatest number of people 2.Ensure a pleasurable attending experience 3.Create conversation

Research in Sport Marketing Who is Matt Levine? –Credited with formalizing customer research in sport industry; used strategies such as audience audit, intercepts, focus groups –Collected demographic and psychographic info Pass-by interviews: –On-site interviews in heavy traffic areas such as malls –San Jose Sharks logo and colors changed as a result of pass-by interviews

The Marketing Mix Controllable variables that company puts together to satisfy a target market 4 Ps: –Product (actual event vs. experience) –Price (depends on value or perceived value) –Place (preselling and exceptional locations) –Promotion (advertising, personal selling, publicity, sales promotion, and public relations)

Segmentation Segmentation: Identifying subgroups of overall marketplace based on demographic, geographic, psychographic, and product usage data Ethnic marketing –Growth of Hispanic population, ESPN Deportes Generational marketing –Generation Y and action sports

Fan Identification The personal commitment and emotional involvement customers have with sport organization Enhanced long-term loyalty in sport fans Sponsorship opportunities resulting from ability to tap into strong emotional connection between a fan and his or her sport team

Relationship Marketing Builds mutually satisfying long term relations with key parties (consumers, suppliers, distributors) Begins with customer and encourages integration of the customer into the company Builds relationships through communication, satisfaction, and service Examples: –Loyal fan gift rewards, special access to players, and special access to information

Key Skills Oral and written communication Data analysis Computer capabilities Personnel management Sales Education Understanding of the sport product

Current Issues: Cost of Attendance Drastic increase in cost of attending MLB, NBA, NHL, and NFL games Increasing evidence that sport fans are not willing or able to pay such prices –Do not see the value of attending a game Significant challenge for sport marketers is to develop relationship marketing strategies Key challenge for anyone in team sport marketing is increasing revenues for sport teams

Current Issues: Cluttered Marketplace Numerous and varied entertainment options are available to a consumer with leisure time. Added technological options for the next generation of sport fans to consume Marketplace cluttered for sponsors –Rise in number of athletes and events, increase in number of advertising opportunities available Future –Heightened focus on marketing mainstream sports to youth; increased challenge for sport entity to demonstrate how sponsor will benefit them

Current Issues: Image Matters Development and cultivation of a positive image is becoming increasingly important in sport marketing. Cluttered marketplace: Imperative that corporations identify sports, events, or athletes that have unique images Corporate and athlete ethical scandals Result: Corporations are more discerning in ways that they spend their sponsorship and endorsement dollars; they may now spend more on nonprofit organizations and causes and “clean” athletes.

Current Issues: Image Matters (cont.) Case Study: David Beckham –Champion international soccer star –Fashionable, tolerant, family-oriented Case Study: Lance Armstrong –7-time Tour de France winner –Captivated audiences after overcoming cancer –Blood doping evidenced emerged in 2012 –Many of Armstrong’s sponsors severed ties with him quickly once the evidence emerged –Including 7 in one day!

Summary Marketing of sport includes unique advantages compared with traditional products and services. Free media publicity can both help and hurt an organization’s marketing strategy. Sport marketers must understand their own product as well as innovative marketing strategies and practices.