The Consumer and Sports Products The Consumer and Sports Products Economic Impact of Sports Marketing Economic Impact of Sports Marketing 2

Section 4.1 – The Consumer and Sports Products - Objectives Define the sports consumer Explain market segmentation Identify sports products Explain the differences between sports goods and services Differentiate between the product line and product mix 3

Section 4.1 – The Consumer and Sports Products The Sports Consumer Sports Consumers are the target of sports marketing, because the consumer makes purchases and helps sports organizations make a profit –Sports Consumer is a person who may play, officiate, watch, or listen to sports, or read, use, purchase and/or collect items related to sports A purchase by a sports consumer shows support in a product and encourages growth of the product The job of sports marketing personnel is to plan marketing strategies which encourage the sports consumer to act as a customer and purchase tickets or merchandise 4

Section 4.1 – The Consumer and Sports Products Consumer Decisions The two categories that affect the sports consumer’s decision to spend money on or participate in sports are: Sports marketers must consider a combination of these factors to make effective decisions about marketing plans 5 Environmental factors: –Family, friends –Society’s attitudes and values –Cultural differences –Climate and region –Marketing influences Individual factors: –Self-concept or self-image –Physical characteristics –Learned characteristics –Motivation and attitude

Section 4.1 – The Consumer and Sports Products Sports Consumers and Market Segmentation Understanding market segmentation of the sports consumer market is important in order to sell products and services –Market Segmentation is a way of analyzing a market by specific characteristics to create a target market –Characteristics include: Geographics – where consumers live Demographics – personal characteristics Psychographics - easy to change characteristics (attitudes & opinions) Product Benefits – consumers’ behaviors, needs, and wants –Constantly shifting based on consumer interests 6

Section 4.1 – The Consumer and Sports Products Sports Products Sports products provide the consumer with satisfaction, entertainment, sociability, and achievement –Sports Products are goods, services, ideas, or a combination of those things related to sports that provide satisfaction to the consumer –Sports products can also be athletes People who share in the process of marketing sports products include owners, sponsors, communication firms, city governments, taxpayers, and consumers 7

Section 4.1 – The Consumer and Sports Products Types of Sports Products The following sports products can be classified as goods or services, or both: –Sporting event – core product of sports. Include athletes and arenas where the events take place. –Sports information – News, statistics, schedules, and stories. Can be any form of media –Sports training – service such as instructions that is provided through fitness centers, sport camps, and lessons –Sporting goods – Wide range of products. Equipment, licensed merchandise, collectibles, apparel, accessories, etc. 8

Section 4.1 – The Consumer and Sports Products Types of Sports Products – cont. Difference between goods and services regarding planning and implementing the sports marketing process –Services, like events, are produced and consumed simultaneously and has no formal channel of distribution –Tangible goods must be produced by a manufacturer and sent to a retailer to sell to customer. This channel of distribution requires careful planning and managing –Tangible products are physical goods that offer benefits to the consumer –Consumers purchase these products at stores or retail outlets –Goods purchased at a sporting event can also include the service of selling the product

Section 4.1 – The Consumer and Sports Products Quality of Goods Two basic questions to ask about characteristics of goods, when judging the quality of manufactured products: –Does the product conform to design specifications in the manufacturing process? –How well does the product perform it function in the opinion of the consumers, or end users, of the goods? Consumer’s opinion or perception about the quality of the products is most important to marketing professionals Organizations attempt to increase quality without significantly raising prices so as not to lose customers

Section 4.1 – The Consumer and Sports Products Sports Services In contrast with sports products, sports services are intangible products –Intangible products are nonphysical services, such as tennis lessons, personal training, and sports camps –May include the experience of attending a sporting event, while stadiums(teams) advertise to sell their tangible appeal 11

Section 4.1 – The Consumer and Sports Products Organizations try identify characteristics of service quality to help market their services 1980s researchers Parasuraman, Zeithaml, and Barry identified ten demensions of service quality called SERVQUAL: –tangibles, reliability, responsiveness, competence, courtesy, credibility, security, access, communication, and understanding the customer Researchers McDonald, Sutton, and Milne created TEAMQUAL service quality dimensions: –Reliability – perform promised services dependably and accurately –Assurance – employees knowledge and courtesy –Empathy – caring, individual attention paid to pro sports customers –Responsiveness – willingness to help customers and provide prompt service –Tangibles - appearance Quality of Service

Section 4.1 – The Consumer and Sports Products Sports Product Classifications Sports businesses or organizations that offer a variety of products classify their products by product line and product mix –Product line is a group of closely related products manufactured and/or sold by a company Satisfy a class of needs and may be used together, sold to same customer group, sold through same type of outlets, or have same price range (ex. Nike DryFit product line) –Product mix is the total assortment of products that a company makes and/or sells Companies can either specialize in one specific product mix or have a very broad product mix (ex. Wilson Sporting Goods) 13

Section 4.1 – The Consumer and Sports Products Sports Products and Product Extensions Sports products differ from typical consumer products because sports products have the ability to generate a greater variety of product extensions –Allows money to be made from products surrounding main event Sports goods and services have the potential to generate income and affect the economy with one or more related products –All become the focus of marketing activities for businesses, organizations, and consumers. 14

Section 4.2 – Economic Impact of Sports Marketing - Objectives Explain the economic impact of sports marketing Define opportunity cost Identify the impact of grassroots marketing on sports marketing 15

Section 4.2 – Economic Impact of Sports Marketing Economic Effects From the moment the consumer inquires about a ticket to a sporting event, there is an impact on the economy The local economy improves as a result of money spent at sporting events 16

Section 4.2 – Economic Impact of Sports Marketing Economic Effects – cont. Each decision made at a sporting event keeps people involved in the event employed in jobs at venue –Employed individuals participate in paying taxes –Tax dollars are spent for roads, new construction, public transportation, and police Each decision the consumer makes involves an opportunity cost –Opportunity Cost is the loss of the opportunity that is passed up in order to receive something in exchange –Affect sports marketing because it impacts how consumers decides to spend his or her discretionary income 17

Section 4.2 – Economic Impact of Sports Marketing Economic Effects – cont. Satisfied customers will have a continuous impact on not only the growth of the team, but also on the local economy As the economy grows, the more infrastructure is needed to support the athletic event –Infrastructure is the physical development of an area, including the major public systems, services, and facilities of a country or region needed to make a location function Power and Water Supplies, Public Transportation, Telecommunications, Roads, Schools Entire process of economic growth leading to infrastructure changes, contributes to the economy 18

Sporting Event $ $ $ $ $ $ $ $ Economic Impact of Sports 19 Sporting Event Ticket Agent Parking Garage Food and Merchandise Sanitation The Internet Taxes Infrastructure City Pride

Section 4.2 – Economic Impact of Sports Marketing The Sunshine State Case Study Orlando, Florida, is the home of an NBA sports franchise called the Orlando Magic –Sports franchise is an agreement or contract for a sports organization to sell a parent company’s (i.e., a national sports league) good or service within a given area By selling Orlando Magic T-shirts, caps, and other items, investors were able to convince residents to make $100 deposits on season-ticket reservations 20

Section 4.2 – Economic Impact of Sports Marketing Grass Marketing Efforts To gain support from within their community, many teams get heavily involved in grassroots marketing –Grassroots marketing is marketing activities on a local community level Example – Helping and assisting the community with charity and fund-raising events –Helps build a relationship between the community and the team –A positive relationship between the community and the team can help the economy of an area –Economic success promoted by sports marketing for events and products on a local level extend to regional or national levels 21