Chapter 3 Marketing Principles Applied to Sport Management What Is Sport Marketing? • Create demand – Create, Promote, Deliver goods to consumers • Obtain the best possible understanding of what consumers want • Includes the marketing of – products, such as equipment, apparel, and footwear – services, such as skill lessons or club memberships – entities, such as leagues, teams, or individuals History of Sport Marketing • Mark McCormack – Founder of IMG; first sport marketing firm in 1960s – Now international and broad categories • Categories – – – – Sport Broadcasting Sponsorship Promotional Strategies Research Evolution of Sport Broadcasting • From pure, factual reporting aimed at sport fans to sport entertainment aimed at masses • Roone Arledge: ABC Monday Night Football; combined entertainment and sports • Led to proliferation of sport channels – ESPN (ESPN2, etc.) – Big Ten Network © Comstock Images/Getty Images 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 – 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 Product Extension and Promotion • Bill Veeck – 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 • Matt Levine – Credited with formalizing customer research in sport industry; audience audit, intercepts, focus groups • 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 group • 4 Ps: – – – – Product (actual event vs. experience) Price (depends on value or perceived value) Place (preselling and exceptional locations) Promotion (advertising, personal selling, publicity, and sales promotion, public relations) Segmentation • Identifying subgroups of overall marketplace based on demographic, geographic, psychographic & product usage • 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 © Photos.com 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 © Photos.com 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: Database Marketing • Creating a database that includes consumer names, addresses, and other demographic information • Managing database by developing and delivering integrated marketing programs – Including promotions and sales offers to targeted consumer segments • Database marketing is often an integral factor in a company’s decision to sponsor an event 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 • 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 from a sponsorship Current Issues: Image • 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.