Intro to Sport Marketing

Agenda
Current Events Ice to the Eskimos (Chapters 1 & 2)

Size of the Sport Industry

Differentiate between Sport Product & Traditional

Goods & Services Differentiate between Fans & Customers Differentiate between Marketing & Sport Marketing 2 Thrusts of Sport Marketing Break Sport Sponsorship Proposal Assignment Marketing Plan Assignment

U.S. GDP by Industry

Rank 1 2 3 4 5 6 7 8 9 10 11 12 Industry Real Estate Retail Trade Wholesale Trade Construction Professional, Scientific, & Technical Services Federal Reserve banks, Credit Intermediation & Related Activities Ambulatory Health Care Services Hospital & Nursing & Residential Care Facilities Administrative Support Services Broadcasting & Telecommunications Other Services, Except Government Insurance Carriers & Related Activities

(Milano & Chelladurai, 2011)

Value ($B) 1461 812 723 608 542 506 433 3340 [sic] 344 324 288 264

13
14 15 16 17 18 19 20 21 22 23

Utilities
Management of Companies & Enterprises Food Services & Drinking Places SPORT (Liberal Estimate) Manufacturing Chemical Products SPORT (Moderate Estimate) Securities, Commodity Contracts, & Investments Legal Services SPORT (Conservative Estimate) Manufacturing Food & Beverage & Tobacco Products Oil & Gas Extraction Publishing Industries Computer Systems Design & Related Services Manufacturing Computer Electronic Products

249
234 225 207 199 189 184 176 168 164 150 142 133 132

24
25

Manufacturing Fabricated Metal Products

Truck Transportation

123
119

Why are these the wealthiest franchises? How many of the top 20 are in the NFL?
FORBES FRANCHISE VALUES Team Washington Redskins Dallas Cowboys Houston Texans New England Patriots Philadelphia Eagles Denver Broncos Cleveland Browns Chicago Bears Tampa Bay Buccaneers Baltimore Ravens Miami Dolphins Carolina Panthers Green Bay Packers Detroit Lions Tennessee Titans New York Yankees Pittsburgh Steelers Seattle Seahawks League NFL NFL NFL NFL NFL NFL NFL NFL NFL NFL NFL NFL NFL NFL NFL MLB NFL NFL Owner Daniel Snyder Jerry Jones Robert McNair Robert Kraft Jeffrey Lurie Pat Bowlen Randy Lerner McCaskey Family Malcolm Glazer Steve Bisciotti Wayne Huizenga Jerry Richardson Public William Ford Bud Adams George Steinbrenner Dan Rooney Paul Allen Value $1.1 billion $923 million $905 million $861 million $833 million $815 million $798 million $785 million $779 million $776 million $765 million $760 million $756 million $747 million $736 million $730 million $717 million $712 million

10 Differences Between Traditional Goods/Services and the Sport Product

1. Often sport organizations simultaneously compete and cooperate

2. The sport product is publicly consumed

3. Sport consumers often consider themselves experts 4. Sport consumer demand fluctuates widely

5. Fans have an emotional tie to their favorite team/sport

10 Differences Between Traditional Goods/Services and the Sport Product

6.The sport product is perishable 7. The Sport product is intangible and subjective 8. The sport product is unpredictable and inconsistent

9. The sport marketer has little or no control over the core product and must concentrate on product EXTENSIONS.
10. Sport is universal and pervades all elements of life

Wait, You Pay Your Competitor?

2013 Week 1 payouts: Ohio St paying Buffalo $1M, Miami paying FAU $500K, Oregon paying Nicholls St $450K, Kansas St paying NDSU $350K

To Beat You???
Wins by FCS schools with paychecks: E. Washington ($450K)over Oregon St. McNeese St ($400K) over USF NDSU ($350K) over Kansas St. Towson ($275K) over U Conn

How are sports FANS different from customers?

If you get a good set of tires for your car, you are

satisfied. Things you will never say:

Let me show you my new tires. This last month I had the best electricity Ive ever had. Hey, lets all go grocery shopping. Ill set up the tailgating in the

parking lot.

How are sports FANS different from customers?

Do you like Crest? When are you going to use Crest again? Do you think it will perform well again? Would you like to use Crest together? Did you hear them talking about Crest on Toothpaste Talk Radio this morning? Where did you get that throwback Crest jersey?

This morning I used Crest.

You repeatedly pay for cable. You are loyal to your anti-perspirant. You identify with your team.

Top 10 Differences Between Goods/Services Marketing and Sports Marketing

Dimension 1 Purchasers 2 Adoption

Goods/services

Sports & Entertainment

Customers Loyaltyrepeat purchasers of the same brand (viz., lack of switching behavior)

Fanatics Psychological identification with individuals and teams that goes beyond mere loyalty

3 Promotion & Media 4 Distribution Channel

5 Product 6 Price 7 Facilities 8 Competition

Owner pays media for promotion Static; More site-limited

Adapted Customer pays a given price for good/service Corporate owner buys/builds own facilities Individual branding in competitive markets Principally economic exchange Contractual power favors owners

Fans, sponsors, and media pay to promote team/event Mobile; more flexible
Global Two-part: Fans frequently pay for the right to pay for tickets Government (taxpayer) typically pays for facilities Cooperative contractual relationshipsmonopoly power & anti-trust exemption Principally social exchange Contractual power favors employees (players)

9 Exchange 10 Employees

So, is sports marketing different?

Sports marketing is building a highly identified fan base such that fans, sponsors, media and government pay to promote and support the organization for the benefits of social exchange and personal, group and community identity within a cooperative competitive environment.

Marketing Orientation
Concentrating on understanding the consumer and providing a sports product that meets consumer needs while achieving organizational objectives.
For Example: The Boston Red Sox, despite a tremendous ticket-demand every year, still work hard on fan relations and marketing initiatives.
They know that they cant take the fans for granted. They worked with a graphic designer to make their tickets look sharper. A team vice president taste-tests the parks concession food Theyve extended the box office hours so fans can buy tickets on the way out of a game
(Boston Globe, 7/02)

Marketing Myopia
Marketing myopia is the practice of defining a business in terms of goods and services rather than benefits sought by customers. Myopic sport organizations Focus on producing and selling rather than meeting needs of customers Rely on winning Confuse marketing with promotions Ignore competition Focus on the short term rather than the long term

Marketing Myopia

Does winning guarantee increased attendance?

The Edmonton Oilers won five Stanley Cups in seven

years season ticket sales went down after each year.

Said one Oiler executive: "The Oilers went through a

period where all they did was open the doors and waited for people to show up. That's not how you do business." (Edmonton Sun, 9/02)

2 Major Thrusts of Sport Marketing A. Marketing OF Sports

B. Marketing THROUGH Sports

SPORT SPONSORSHIP PROPOSAL ASSIGNMENT

Select a Partner for the Sponsorship

Proposal Assignment
Now that we have our groups established: From the next slide your group must pick your top 3 (in order, 1=most desired 3= third most desired) sport properties you want to represent in a sponsorship negotiation.
You also have to pick your top 3 corporations you want

to represent in a sponsorship negotiation

GO!

SPORT SPONSORSHIP PROPOSAL ASSIGNMENT

Sport Properties: Richmond Flying Squirrels Richmond Raiders Lobs & Lessons Richmond Kickers Arena Racing University of Richmond Athletics VCU Athletics Special Olympics Virginia SCOR Tuckahoe Little League

Sponsors: Jersey Mikes Haley Automotive Group American Family Fitness Lexus of Richmond First Capital Bank Car Pool Martins Virginia 529 Bon Secours Sports Medicine VCU Medical Center

SPORT SPONSORSHIP PROPOSAL ASSIGNMENT

Each group will be emailed to inform them which sport property and which sponsor they will represent.
Each student team will research their assigned company (the business) and develop a profile of that organization.
Each business will develop and rank three objectives they would like to achieve through a sport sponsorship. Businesses should also consider a dollar amount they think the company might be willing to invest in an annual sport sponsorship. In order to objectively evaluate all sponsorship proposals, each business must create an evaluation matrix they will use.

SPORT SPONSORSHIP PROPOSAL ASSIGNMENT

Playing

the role of the sport organization, three sport properties will meet with each potential sponsorship client (business) to discuss their business and objectives.

After

conducting a needs analysis for each business through the meetings on October 22, sport organizations will develop a sponsorship proposal to meet the needs of each potential sponsor.

Sport

organizations can utilize whatever inventory they wish for their proposals with the following exceptions:
sport

organizations may not sell any naming rights to facilities or teams they may not sell any television spots (for this exercise, we will assume that all sport
organizations control their own radio broadcasts and web streaming if they possess such inventory).

For

this exercise, sport organizations must also pay a rental fee for any use of the sport facility outside of game day and must pay a wholesale price to the concessionaire for any catering or food offers.
All

sponsorship proposals must be for a term of one season. note, exclusive inventory cannot be offered to more than one

Also

client (i.e., only one client can be presenting sponsor of the pregame radio show).

On November 4, sport organizations will make three sponsorship presentations, one to each prospect.

Each

team will have a maximum of 15 minutes for each proposal, which will include any negotiation time.
After

hearing all three proposals, each business will rank the three proposals (Best = 1, Worst = 3).
Each

business will then submit a 2-3 page paper explaining their sponsorship evaluation criteria, including a completed Sponsorship Evaluation Matrix for each sport property they met with, and their justification for their sponsorship rankings.

SPORT SPONSORSHIP PROPOSAL ASSIGNMENT

*Due to the creative nature of this project, the Sponsorship must be turned in to the instructor via hard-copy and not electronically.

Grading for the project will be as follows:

Sponsorship proposals 50 points Evaluation paper 25 points Proposal ranking 25 points (avg. of three proposals ~ 25, 20, 15)

Total Points: 100 *Yes, part of your grade is reflected in how well you evaluate the sponsorship proposals you hear when acting as the potential sponsor.

MARKETING PLAN SPORT PROPERTIES

Arena

Racing Bike MS College Prep Golf Tour Sportable VCU Womens Basketball VCU Baseball U of Richmond Mens Lacrosse U of Richmond Womens Lacrosse
Individually, email your top three picks for which sport property you want to create a marketing plan (1= Most Desired 3 = Third Most Desired) to the instructor.