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3. SPORTS MARKETING Sport typologies Sport industry Sports marketing

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Presentation on theme: "3. SPORTS MARKETING Sport typologies Sport industry Sports marketing"— Presentation transcript:

1 3. SPORTS MARKETING Sport typologies Sport industry 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
Based on consumers’perceptions (Hickory 2001) TRAINING SPORT Health and look Fitness, body-building, aerobics EXPRESSION SPORTS Mental, surf, mastering the movement Snowboard, karate, ice-skating, dance OUTDOOR SPORTS Exotism or roots Extreme or family Mountain or sea RULED SPORTS Social competition Ball sports LEISURE SPORTS Freedom, amusement, conviviality PASSION SPORT Personal investment RESISTANCE SPORTS Courage and obstination Athletics, triathlon, cycling, swimming ELITE SPORTS Golf, horse-riding, sailing, tennis MOTOR SPORTS Adrenalin, speed and power Formula 1, Rallye, Motorcycles, off-shore boat, ..

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 What can be a « sport product » ? How can be the clients ?
The suppliers ? The intermediaries ?

12 The sport product is often a service
SERVICES WITH HIGH AMOUNT OF PHYSICAL DEVICES Magnesium Food Cloth Ski Racquet Swimming-pool Competitions Training Teaching Counselling « PURE » GOODS « PURE » SERVICE 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
Producers/Intermediaries Sports Labor Sanctioning Bodies Sponsors Media Agents Equipment Manufacturers Banking & Insurance Government Products Events Sporting Goods Personal Training Sports Information Consumers Spectators Participants

15 The sports marketing exchange process
NB : Agents & Businessmen Are often between Media and athletes Media and Leagues SPONSORS dream Insurance Pleasure Training… fun image sponsoring TV Rights purchases MEDIA GOVERNMENT rights PROFESSIONAL ATHLETES taxes SPECTATOR Ticket fees Rights & sponsoring salary subsidies LEAGUES Studies & advices royalties AMATEUR ATHLETE AGENCIES membership subsidies CLUBS

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.) Europe (SGR, 2005 est.)
Average : +5% over 7 years. USA (SGI, 2005 est.) Over $100 billion Europe (SGR, 2005 est.) Over $40 billion Exercise Firearms Golf Camping Fishing + Collectibles (cards)

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

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 World’s 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

27 Leagues Federations, clubs
2004 or 2005 sales Sporting goods Sport retailers Media Leagues 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”. (Webster’s) 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)
Havas Advertising Sport (Vivendi) 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 Darmon $570 million, 320 football clubs, 40 federations and leagues. Amaury Group (F): L’Equipe (newspaper) Tour de France, Paris Dakar, Marathon de Paris (events)  Sierra Productions (TV studio) Manchette (Advertisment agency)Sicavic (printing company). KirchMedia : owner of TV rights (WFC , Bundesliga, F1) + TV production (HBS) + TV channels (Sat1, Pro7, Première, Tele Cinco) + Press (Bild). Direct shares in Football clubs, leagues, events Made for TV events (ESPN XGames, NBC GGames, GWGames CNN, NBC XFL vs. NFL, ULEB vs. FIBA) but usually failures

31 The complexity of the sport marketing mix
From Sports Marketing (M. Shank) Product Price Promotion Public Relation Place Elasticity of demand decreasing with fan WNBA promoted by NBA teams by mass media and direct marketing Public relations Critical role in LT involvment (M. Tyson vs Evander Holyfield Fan Cost Index (team Marketing report) Nike and 3rd world manufacturing Facility 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

32 Main sports marketing trends
Fan identification The personal comitment and emotional involvement customers have with a sport entity. Affinity Marketing Firms use the individual’s 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.


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