Sport Marketing Beginnings

Sport Marketing Beginnings

  • 1870s: Baseball cards in cigarette packages to increase loyalty.

  • First Paid Endorsement: Louisville Slugger bats with Honus Wagner’s signature.

  • Iconic Milestones:

    • 1912: Fenway Park, 1st professional baseball stadium.

    • 1925: Goodyear Blimp for public announcements.

    • 1934: Lou Gehrig on Wheaties, “Breakfast of Champions.”

    • 1939: First TV broadcast of college basketball.

Uniqueness of Sport Product

  • Intangible: Consumers can’t physically possess the sport event.

  • Inconsistent and unpredictable: Game outcomes vary, making the product hard to standardize.

  • Simultaneous production and consumption: Fans consume the sport product as it is produced.

  • Emotional attachment: Fans have deep loyalty to teams, creating unique challenges for marketing strategies.

  • Widespread Media Exposure: Double-edged sword. Promotes athletes but leads to scrutiny (e.g., Ronaldo, Messi, LeBron).

Marketing Myopia Symptoms

  • Common Issues:

    • Lack of research, short-term promotions, poor sales, and service.

    • Ignorance of competition and consumer changes (e.g., second-screen experiences).

    • Short-term focus on pricing over relationships (e.g., “Fans First Pricing”).

SWOT Analysis

  • Strengths/Weaknesses: Internal factors.

  • Opportunities/Threats: External factors.

Strategic Models

  • BCG Matrix: Market Penetration, Diversification, Market/Product Development.

  • Porter’s Five Forces: Rivalry, New Entrants, Buyer/Supplier Power, Substitutes.

  • Brand Positioning Map: Charts products along axes (Value, Cost).

Commitment & Frequency

  • Frequency Escalator: Encourages consumers to move up/down levels of sport engagement.

  • Objective: Convert single-game buyers into heavy users (e.g., corporate clients).

Revenue Sources in Sport Industry

  • Global Scope: $60B+ industry from media rights, gate revenues, sponsorships, merchandising.

5 P’s of Sport Marketing

  • Product, Price, Promotion, Place, Public Relations.

Kotler’s Black Box

  • Stimuli (External) → Mind (Internal) → Response (Purchase/No Purchase).

External Factors

  1. Marketing Mix: Includes the traditional 5 Ps (Product, Price, Place, Promotion, Public Relations). These elements influence how a sport product is positioned in the market.

    • Product: The actual game, event, or service offered to fans.

    • Price: Ticket pricing, merchandise, and other related expenses.

    • Place: The venue or platform where the sport is consumed (stadium, online streaming, etc.).

    • Promotion: Marketing campaigns and efforts to boost visibility.

    • Public Relations: Managing the sport's image and fan engagement.

  2. Economic Factors:

    • Impact of macroeconomics and microeconomics on consumer spending.

    • Influence of business cycles (e.g., during recessions, ticket sales might dip).

    • Economic impact on venues and athlete contracts.

  3. Technology:

    • Wearable tech for athletes and AI-powered analysis for fans.

    • Digital ticketing and app-based ordering improve fan experience.

    • Social media and streaming increase engagement.

    • Innovations like virtual reality and drones enhance sports viewing.

  4. Political, Cultural, and Demographic Factors:

    • Political influences shape regulations in sports.

    • Cultural preferences impact which sports are favored (e.g., cricket in India, soccer in Europe).

    • Demographics (age, gender, ethnicity) influence marketing strategies.

  5. Situational Factors:

    • Personal beliefs and attitudes, like family traditions, influence fan loyalty.

Internal Factors

  1. Beliefs, Attitudes, and Motives:

    • Beliefs and values drive consumer preferences (e.g., health and fitness or fun).

    • Motives include affiliation (belonging to a fan base), achievement (BIRG - Basking in Reflected Glory), craft (appreciation for skills), and escape (stress relief).

  2. Perceptions and Lifestyle Marketing:

    • Tailoring messages to align with fan values and interests (e.g., fitness, social engagement).

  3. Consumer Responses and Involvement:

    • Purchase decisions are influenced by cognitive (thought), affective (emotion), and behavioral involvement.

Syndicated and Custom Research

  1. Syndicated Data:

    • Collected by third-party sources (e.g., Nielsen, U.S. Census) and used for market segmentation and audience profiling.

  2. Custom Research:

    • Tailored to specific needs, whether quantitative (surveys) or qualitative (interviews). Used to understand consumer behavior at a granular level.

Market Research Techniques

  • Cross tabulations analyze the interaction between multiple variables.

  • Cluster analysis identifies groups of customers with similar characteristics.

Product Usage Segmentation

  1. Consumers are segmented by usage frequency (heavy, medium, light users).

  2. 80-20 rule: 80% of the revenue often comes from 20% of the customers (e.g., season-ticket holders).

State-of-Being Segmentation

  • Divides the audience by demographics (age, income, gender, ethnicity) and psychographics (values, interests, lifestyle).

Sport Product and Positioning

  1. Sport Product:

    • A combination of tangible (venue, players) and intangible (experience, emotions) elements.

    • The game presentation experience involves the game, venue, fan behavior, and entertainment package.

  2. Positioning:

    • USP (Unique Selling Proposition) is the distinguishing feature that sets the sport brand apart.

Brand Equity and Associations

  1. Brand Equity:

    • A strong brand image results in price premiums, corporate interest, and fan loyalty.

    • Awareness and image creation are key to building equity.

  2. Brand Associations:

    • Formed around logos, mascots, rivalries, and team performance.

    • Focus should be on long-term associations, beyond individual players or coaches.

Leveraging Brand Equity

  1. Line Extensions:

    • Variations of the same product targeting different consumer segments (e.g., premium or budget options).

  2. Brand Extensions:

    • Using the brand name to enter new product categories (e.g., a sports team opening a fitness center).

  3. Licensing:

    • Selling rights to use the brand for additional revenue without operational risk.

Sales Promotions

  1. Price-oriented promotions (e.g., discounts) or non-price promotions (e.g., giveaways).

    • Must be carefully planned to avoid alienating loyal customers like season-ticket holders.

Non-Price Promotions

  • Special events like fireworks, concerts, and giveaways.

  • Provide tangible incentives to engage fans.

  • Impact on loyal fans must always be considered when planning any promotions.

Promotional Forms of Marketing Activity

  • Paid Media (Advertising): Sponsored messages conveyed through media.

  • Earned Media (Publicity): Media exposure without direct payment.

  • Sales: Seller dialogues with a customer, aiming to persuade.

  • Sales Promotion: Activities designed to drive purchases.

Goals of Promotion (AIDA)

  1. Increase Awareness

  2. Attract Interest

  3. Arouse Desire

  4. Initiate Action

Paid Media

  • Effective communication to spur action, using either one consistent message or multiple messages.

  • Goals of Paid Media:

    • Create awareness and communicate benefits.

    • Develop or change brand image.

    • Associate the brand with emotions or group norms.

    • Trigger consumer behavior.

Public Relations (PR)

  • Strategic process to build relationships between organizations and the public.

  • PR Tasks:

    • Media relations, publications, websites, media guides, press releases, promotional materials.

    • Crisis management, community relations, media training, internal communication.

  • PR Strategies:

    • Build brand image and increase awareness.

    • Support ticket and merchandise sales.

    • Engage in social advocacy and promote civic issues.

Community Relations

  • Programs help athletes and organizations connect with communities, often showcased through media as acts of good citizenship.

Sponsorship

  • A triangular business relationship involving three groups: the sponsored property, corporate entity, and consumers.

  • Sponsorship provides rights to associate with a product, person, team, or event, and can achieve promotional objectives.

  • Sponsorship Elements:

    • Logo, name, or trademark rights.

    • Exclusive category association.

    • Naming rights for events or venues.

    • Media assets like broadcasts, websites, and social media.

  • Reasons for Growth in Sport Sponsorship:

    • Shifts in spending by alcohol and tobacco industries.

    • Increased reach and lower cost compared to traditional ads.

    • Growth of sport-themed entertainment, mobile sport content, and international sport programming.

Lifestyle Marketing

  • Creating products, services, and promotions that fit specific audience segments based on their interests and activities.

Sponsorship Effectiveness

  • Measure sponsorship impact by audience demographics, ROI (Return on Investment), and ROO (Return on Objectives).

Eight-Step Process of Sponsorship Sales

  1. Research the category and prospect within that category.

  2. Schedule a meeting with the sponsorship decision maker.

  3. Hold a preliminary meeting; listen more than talk.

  4. Arrange a follow-up meeting.

  5. Create a marketing partnership proposal.

  6. Present the proposal in draft form to allow negotiation.

  7. Negotiate the final deal.

  8. Introduce the client to the activation team.

Sponsorship and Cross-Promotion

  • Joining of two or more entities to capitalize on a sponsorship or licensing opportunity.

  • Benefits:

    • Share the total cost of the sponsorship.

    • Promote several product lines within the same corporate structure.

    • Leverage existing business relationships.

  • Additional Benefits of Cross-Promotion:

    • Allows newer or smaller corporations to leverage the strength of a larger corporation.

    • Tests relationships for future opportunities.

    • Creates pass-through opportunities.