Presentation on theme: "1 3. SPORTS MARKETING 1.Sport typologies 2.Sport industry 3.Sports marketing Arne Müsseler."— Presentation transcript:
1 3. SPORTS MARKETING 1.Sport typologies 2.Sport industry 3.Sports marketing Arne Müsseler
2 Introduction A key fact : growth of sports business Growth measured in –Attendance figures –Media coverage and TV rights –Employment figures –Salaries of professional athletes –Sales of sporting goods –Investments in sponsorship –International markets
3 1. Sport typologies Objectives : –to grasp the common points and differences between sport –To realize that any typology is a tool for a specific purpose (ex: marketing)
4 GAME 1 Compare the pictures above, How do they define sport ? Quote words.
5 Modern/postmodern sports Ex : competitive skiing –Individualism –Universality –Performance –Technology –Specialization –Innovation Olympic Games Stadium Competitions Athletes as heros Ex : Street-ball –Community –Proximity –Experience –Fun –Freedom –Authenticity Tribalism Outdoor Athletes as big brothers
6 GAME 2 Make your own typology of sports What criteria did you choose? Why ?
7 Example of typology of sports LEISURE SPORTS Freedom, amusement, conviviality PASSION SPORT Personal investment TRAINING SPORT Health and look Fitness, body-building, aerobics EXPRESSION SPORTS Mental, surf, mastering the movement Snowboard, karate, ice-skating, dance RULED SPORTS Social competition Ball sports MOTOR SPORTS Adrenalin, speed and power Formula 1, Rallye, Motorcycles, off-shore boat,.. ELITE SPORTS Golf, horse-riding, sailing, tennis RESISTANCE SPORTS Courage and obstination Athletics, triathlon, cycling, swimming OUTDOOR SPORTS Exotism or roots Extreme or family Mountain or sea Based on consumersperceptions (Hickory 2001)
8 2. The « sport product » Objectives: –To understand the common points and differences between sport and non-sport product –To embrass the complexity of the sport industry
9 GAME 3 List the differences between a –car manufacturing company ( or any « non- sport » industrial firm) –and a sport team ?
10 Specificities of sport Sport is paradoxical –Professional/amateur, individual/collective, urban/outdoor, social/economic, competitive/free, … Sport is a service –Non tangible (except infrastructures and accessories). –Instantaneous and non-storable (is destroyed as soon as its produced) –Co-created by the client (spectator) and the « front-line employee » (athlete) –Front-office (the arena) + Back-office (training gymnasium) Sport is the only « industrial product » that can be made with : –Often collaborating AND competing firms (teams!) –Often an uncertain result (the result of the match!) –Sometimes a rigid productivity (fixed quantity of matches, of players) « the cost disease »
11 GAME 4 1.What can be a « sport product » ? 2.How can be the clients ? 3.The suppliers ? 4.The intermediaries ?
12 The sport product is often a service Magnesium Food Cloth Ski Racquet Swimming-pool Competitions Training Teaching Counselling « PURE » GOODS« PURE » SERVICE SERVICES WITH HIGH AMOUNT OF PHYSICAL DEVICES GOODS WITH HIGH AMOUNT OF SERVICES (advices, maintenance, …)
13 Definition of Sports Product A good, a service or any combination of the two that is designed to provide benefits to a : –Sports spectator –Participant –Sponsor. (Sports Marketing, M. Shank) Source :
14 Simplified Model of the Consumer-Supplier Relationship in the Sports Industry Consumers Spectators Participants Products Events Sporting Goods Personal Training Sports Information Producers/Intermediaries Sports Labor Sanctioning Bodies Sponsors Media Agents Equipment Manufacturers Banking & Insurance Government
15 The sports marketing exchange process SPONSORS PROFESSIONAL ATHLETES SPECTATOR MEDIA LEAGUES sponsoring purchases salary GOVERNMENT taxes subsidies Rights & sponsoring Ticket fees CLUBS subsidies AMATEUR ATHLETE membership TV Rights NB : Agents & Businessmen Are often between Media and athletes Media and Leagues dream Insurance Pleasure Training… dream fun image AGENCIES rights Studies & advices royalties
16 Types of sport products CORE Sport Events Sporting goods Hardgoods: equipment, accessories Softgoods: apparel, clothes & footwear Collectibles and Memorabilia Sports training & services –Fitness and Health Services –Sports Camps and Instruction PERIPHERAL Athletes Arenas / stadia Sports information –TV, Newspapers, Internet, Magazines, Radio, etc. –ESPN Sport betting ($100 b /year ?) –$12b online sport betting Sport video games / online sport –Fantasy leagues Towards digital sports ? –Online informations + games + gambling
17 Sporting goods USA (SGI, 2005 est.) –Over $100 billion Europe (SGR, 2005 est.) –Over $40 billion Average : +5% over 7 years. + Collectibles (cards) Exercise Firearms Golf Camping Fishing
18 Sport Video Games Video Games = $33 b. Electronics Arts : $1,2 b. (40% in sports) +7% a year since 1995, slowing down (Les Echos, 2005) Visit :
19 Sport events Visit :
20 Athletes as brands Fred Perry clothing brand : René Lacoste brand : Michael Jordan brand : Anna Kournikova David Beckham Brand it like Beckham m.html
21 Stadia & Arena
22 GAME 5 Make your own typology of sport industries What criteria did you choose? Why ?
23 Example of typology of sport industry Sport Business in the Global Marketplace, 2004
24 Sport management, P. Masteralexis and al., 2000
25 Key facts & figures on sports industry 11th largest of all U.S. industry groups Worlds sports market : $500 b. (all included) Relatively weak impact in the world (1-2% world PNB) Sports firms are still relatively « small » –Sales : Nike = $10 b. (world biggest in sports 2005) ( vs. Exxon = $400 b. Wal-Mart = $312 b. in 2005)
26 Lisa Neyrotti
or 2005 sales Sporting goodsSport retailersMediaLeagues Federations, clubs Over 1 b. $ Nike (11b), Adidas-Reebok (6,6b), Amer-Salomon (2b), QuikSilver-Rossignol (2b), Hilfinger (2b), Mizuno (J), Asics (J) Ferrari (1,2 b.) Intersport (6,2b), Wal*Mart (5,8b.), FootLocker (4,1b.), Sport 2000 (2b.), Decathlon (3,1b.), Sports Authority Alpen, JC Penney, LL bean Fox (12 b.) Sky (4 b.) ESPN (2,4 b.) MLB (3,5 b.) FIFA (3b.) NFL (2,2 b.) NBA, NHL (2 b.) PGA (1,5 b.) CIO (1,1b.) $1 b. < <500 m. Shimano (J), New Balance, Fila (I), Callaway, Pentland (GB), Decathlon (F), Skechers, Benetton (I) Karstadt, JJB Sport Dick's, Sport Inc. Bass Pro shops, Just for feet, Cabela's, Canadian Tire, Rallye 500 m. < < 250 m. Puma (D), Lacoste (F), Lafuma-Oxbow (F), HTM (D), Cycleurope (S), Columbia, K2 Eurosport International (300 mil.) Manchester (315m.) Real (287 m.) Milan (270 m.) Chelsea (264 m.) Juventus (262 m.) Arsenal (211 m.) Barcelona (206 m.) 250 m. < < 100 m. Converse, TImberland, North Face (GB), Tecnica (I), Scott, LAGear, Lowe, HellyHansen (N), Aigle (F),Patagonia, Nautica, Bayern Munich (202m.) (+15 european clubs over 100m.$)
28 3. SPORT MARKETING Objectives : broad pictures before « entering » the consumer behaviour and the marketing mix Definition Companies Intricacies Future trends
29 Need for Sports Marketing Definition of Sport –Source of diversion or physical activity engaged in for pleasure. (Websters) Definition of marketing –The science of the art of selling (P. Dubois) –Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Simply put: Marketing is the delivery of customer satisfaction at a profit. (Ph. Kotler) Definition of Sports marketing –The specific application of marketing principles and processes to sport products to the marketing of nonsports products through association with sport. (W. Shank)
30 The companies IMG World Sportfive Octagon (Interpublic Group)Octagon Havas Advertising Sport (Vivendi)Havas Advertising Sport Amaury Sports, Carat Sport, Darmon Group … (Sponsorship Research International, Group ISL Worldwide, brankrupted in 2001) Tendency to vertical integration : –Sponsorship Agency + Media Operator + Event organizer + Club owner
31 The complexity of the sport marketing mix ProductPricePromotionPublic RelationPlace Product PriceElasticity of demand decreasing with fan PromotionWNBA promoted by NBA teams by mass media and direct marketing Public relationsCritical role in LT involvment (M. Tyson vs Evander Holyfield Fan Cost Index (team Marketing report) Nike and 3 rd world manufacturing PlaceFacility image influence perceived quality and credibility Luxury suites and VIP lounges in stadia increase revenue a lot Success : Cleveland indians (Jacobs Field), Failure: Gund Arena (Cleveland Cavs), Oriole Park at Camden Yards in Baltimore, Ball Park at Arlington, Retro style From Sports Marketing (M. Shank)
32 Main sports marketing trends Fan identification –The personal comitment and emotional involvement customers have with a sport entity. Affinity Marketing –Firms use the individuals level of cohesiveness, social bonding, identification and conformity towards a particular reference group. Fan Relationship Marketing (FRM) –Integrating the spectator into the team (one-to-one mkt, loyalty, …) with the help database marketing Aftermarketing –Customer retention demonstrating the care and concern of the marketer for the customer after the purchase. Hospitality marketing –Segmented service policy of event attendees/spectators to increase their satisfaction and optimizing allotment of costs depending on the targets. Ambush Marketing –Although they are not official sponsors, firms attempt to capitalize on the popularity of an event by proxys.