Presentation on theme: "3. SPORTS MARKETING Sport typologies Sport industry Sports marketing"— Presentation transcript:
13. SPORTS MARKETING Sport typologies Sport industry Sports marketing Arne Müsseler
2Introduction A key fact : growth of sports business Growth measured inAttendance figuresMedia coverage and TV rightsEmployment figuresSalaries of professional athletesSales of sporting goodsInvestments in sponsorshipInternational markets
31. Sport typologies Objectives : to grasp the common points and differences between sportTo realize that any typology is a tool for a specific purpose (ex: marketing)
4GAME 1 Compare the pictures above, How do they define sport ? Quote words.
5Modern/postmodern sports Ex : competitive skiingIndividualismUniversalityPerformanceTechnologySpecializationInnovationOlympic GamesStadium CompetitionsAthletes as herosEx : Street-ballCommunityProximityExperienceFunFreedomAuthenticityTribalismOutdoorAthletes as big brothers
6GAME 2 Make your own typology of sports What criteria did you choose? Why ?
7Example of typology of sports Based on consumers’perceptions (Hickory 2001)TRAINING SPORTHealth and lookFitness, body-building, aerobicsEXPRESSION SPORTSMental, surf, mastering the movementSnowboard, karate, ice-skating, danceOUTDOOR SPORTSExotism or rootsExtreme or familyMountain or seaRULED SPORTSSocial competitionBall sportsLEISURE SPORTSFreedom, amusement, convivialityPASSION SPORTPersonal investmentRESISTANCE SPORTSCourage and obstinationAthletics, triathlon, cycling, swimmingELITE SPORTSGolf, horse-riding,sailing, tennisMOTOR SPORTSAdrenalin, speed and powerFormula 1, Rallye, Motorcycles, off-shore boat, ..
82. The « sport product » Objectives: To understand the common points and differences between sport and non-sport productTo embrass the complexity of the sport industry
9GAME 3 List the differences between a car manufacturing company ( or any « non-sport » industrial firm)and a sport team ?
10Specificities of sport Sport is paradoxicalProfessional/amateur, individual/collective, urban/outdoor, social/economic, competitive/free, …Sport is a serviceNon 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 »
11GAME 4 What can be a « sport product » ? How can be the clients ? The suppliers ?The intermediaries ?
12The sport product is often a service SERVICES WITHHIGH AMOUNTOF PHYSICAL DEVICESMagnesium Food Cloth Ski Racquet Swimming-pool Competitions Training Teaching Counselling« PURE » GOODS« PURE » SERVICEGOODS WITHHIGH AMOUNTOF SERVICES(advices, maintenance, …)
13Definition of Sports Product A good, a service or any combination of the two that is designed to provide benefits to a :Sports spectatorParticipantSponsor.(Sports Marketing, M. Shank)Source :
14Simplified Model of the Consumer-Supplier Relationship in the Sports Industry Producers/IntermediariesSports LaborSanctioning BodiesSponsorsMediaAgentsEquipment ManufacturersBanking & InsuranceGovernmentProductsEventsSporting GoodsPersonal TrainingSports InformationConsumersSpectatorsParticipants
15The sports marketing exchange process NB :Agents &BusinessmenAre often betweenMedia and athletesMedia and LeaguesSPONSORSdreamInsurancePleasureTraining…funimagesponsoringTV RightspurchasesMEDIAGOVERNMENTrightsPROFESSIONALATHLETEStaxesSPECTATORTicket feesRights &sponsoringsalarysubsidiesLEAGUESStudies & advicesroyaltiesAMATEURATHLETEAGENCIESmembershipsubsidiesCLUBS
16Types of sport products CORESport EventsSporting goodsHardgoods: equipment, accessoriesSoftgoods: apparel, clothes & footwearCollectibles and MemorabiliaSports training & servicesFitness and Health ServicesSports Camps and InstructionPERIPHERALAthletesArenas / stadiaSports informationTV, Newspapers, Internet, Magazines, Radio, etc.ESPNSport betting ($100 b /year ?)$12b online sport bettingSport video games / online sportFantasy leaguesTowards digital sports ?Online informations + games + gambling
17Sporting goods USA (SGI, 2005 est.) Europe (SGR, 2005 est.) Average : +5% over 7 years.USA (SGI, 2005 est.)Over $100 billionEurope (SGR, 2005 est.)Over $40 billionExerciseFirearmsGolfCampingFishing+ Collectibles (cards)
18Sport 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 :
25Key facts & figures on sports industry 11th largest of all U.S. industry groupsWorld’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)
27Leagues Federations, clubs 2004 or 2005salesSporting goodsSport retailersMediaLeagues Federations, clubsOver 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 AuthorityAlpen, JC Penney, LL beanFox (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.)$1 b. <<500 m.Shimano (J), New Balance, Fila (I), Callaway, Pentland (GB), Decathlon (F), Skechers, Benetton (I)Karstadt, JJB SportDick's, Sport Inc.Bass Pro shops, Just for feet, Cabela's, Canadian Tire, Rallye500 m. << 250 m.Puma (D), Lacoste (F), Lafuma-Oxbow (F), HTM (D), Cycleurope (S), Columbia, K2Eurosport International (300 mil.)Manchester (315m.)Real (287 m.)Milan (270 m.)Chelsea (264 m.)Juventus (262 m.)Arsenal (211 m.)Barcelona (206 m.)250 m. << 100 m.Converse, TImberland, North Face (GB), Tecnica (I), Scott, LAGear, Lowe, HellyHansen (N), Aigle (F),Patagonia, Nautica,Bayern Munich (202m.)(+15 european clubs over 100m.$)
283. SPORT MARKETINGObjectives : broad pictures before « entering » the consumer behaviour and the marketing mixDefinitionCompaniesIntricaciesFuture trends
29Need 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 processesto sport productsto the marketing of nonsports products through association with sport.”(W. Shank)
30The 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 ownerDarmon $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, eventsMade for TV events (ESPN XGames, NBC GGames, GWGames CNN, NBC XFL vs. NFL, ULEB vs. FIBA) but usually failures
31The complexity of the sport marketing mix From Sports Marketing (M. Shank)ProductPricePromotionPublic RelationPlaceElasticity of demand decreasing with fanWNBA promoted by NBA teams by mass media and direct marketingPublic relationsCritical role in LT involvment (M. Tyson vs Evander HolyfieldFan Cost Index (team Marketing report)Nike and 3rd world manufacturingFacility image influence perceived quality and credibilityLuxury suites and VIP lounges in stadia increase revenue a lotSuccess : Cleveland indians (Jacobs Field), Failure: Gund Arena (Cleveland Cavs),Oriole Park at Camden Yards in Baltimore, Ball Park at Arlington, Retro style
32Main sports marketing trends Fan identificationThe personal comitment and emotional involvement customers have with a sport entity.Affinity MarketingFirms 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 marketingAftermarketingCustomer retention demonstrating the care and concern of the marketer for the customer after the purchase.Hospitality marketingSegmented service policy of event attendees/spectators to increase their satisfaction and optimizing allotment of costs depending on the targets.Ambush MarketingAlthough they are not official sponsors, firms attempt to capitalize on the popularity of an event by proxys.