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Segmentation of the Sports Market

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1 Segmentation of the Sports Market
Chapter 15 Segmentation of the Sports Market McGraw-Hill/Irwin ©2007 The McGraw-Hill Companies, All Rights Reserved

2 Introduction and Review
“The Mass Market Is Dead” “One-Size-Fits-All” Strategy is Obsolete Mass Marketing versus Differentiated Marketing

3 Differentiated Strategies
Marketing Mix Tailored to Each Selected Target Market Not Everyone: Wants the same products Shops at the same types of retail facilities Will pay the same prices Is motivated by the same promotions

4 Market Segmentation As Relevant for Sports Products as It Is for Non-sports Products such as Cars, Fast Food, Restaurants, Beverages, and University Programs

5 Steps in Target Marketing
Market segmentation Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors requiring separate products or marketing mixes Target marketing Evaluating each market segment’s attractiveness and selecting one or more to enter Market positioning Setting the competitive positioning for the product and creating a detailed marketing mix

6 Market Segmentation No single way to segment a market
May combine more than one variable to better define segments Best to use multiple approaches in order to identify smaller, better-defined target groups. Start with a single base and then expand to other bases.

7 Key Segmentation Variables
Geographic Demographic Geodemographic Psychographic Behavioral Product related

8 Geographic World region or country Region of country
City or metro size Density or climate

9 Demographic Age, gender, family size, family life cycle, income, occupation, education, race, religion, etc. Most popular bases for segmenting customer groups Easier to measure than most other types of variables

10 Age and Life-cycle Stage
Example: P&G has different toothpastes for different age groups Avoid stereotypes in promotions Promote positive messages

11 Modern Family Life Cycle

12 Income Identifies and targets the affluent for luxury goods
People with low annual incomes can be a lucrative market Some manufacturers have different grades of products for different markets

13 Demographics

14 Demographics

15 Geographics Urban vs. suburban One part of country vs. another
Basketball versus soccer One part of country vs. another Skiing versus golf One country vs. another Cricket versus baseball

16 Geodemographic Claritas, Inc.
Potential Rating Index for Zip Markets (PRIZM) Based on U.S. Census data Profiles on 260,000 U.S. neighborhoods 62 clusters or types

17 Psychographic Social class Lifestyle Personality

18 Psychographics (Lifestyle)

19 Behavioral Occasion segmentation
Special promotions and labels for holidays e.g., Hershey Kisses Special products for special occasions. e.g., Kodak disposable cameras Benefits Sought Different segments desire different benefits from products. e.g., P&G’s multiple brands of laundry detergents to satisfy different needs in the product category

20 Behavioral (cont.) User Status Usage Rate Loyalty Status
Nonusers, ex-users, potential users, first-time users, regular users Usage Rate Light, medium, heavy Loyalty Status Brands, stores, companies

21 Product-Related Variables
Level of Use Season ticket buyer versus infrequent buyer Loyalty Long-term versus new season ticket buyer Benefits Sought Social outing versus entertainment by athletes

22 Six Segments of Sports Fans
Players Patriots Appreciators Socialites Friends Voyeurs

23 Players Those who play a sport are more likely to be a fan of that sport Example: Golfers are most likely group to attend or watch a golf tournament on TV

24 Patriots National Pride – England vs. France
Regional Pride – New York vs. Boston Important segment for international competitions such as the Olympics, the World Baseball Challenge, and the World Cup of Soccer

25 Appreciators Admiration of players’ skills
Desire to witness excellence Not as concerned about who wins

26 Socialite Seeks sports event where interaction with friends is facilitated Tailgating Members may not be very knowledgeable of the sport or event they are attending

27 Friends Watch friend or family member compete
May have limited knowledge of sport Important for minor sports and events High school sports Amateur recreational sports

28 Voyeurs Drawn by the sex appeal of sport or individual athletes
Skimpy attire (Beach volleyball) Attractive participant (Anna Kournakova)

29 Criteria for Segment Sports Fans
Involvement Participation Social needs Identification Appreciation of sport Sex appeal

30 Overview of Fan Market

31 Participation Market Players rather than spectators
Segmentation still important Same basic categories of segmentation criteria can be applied e.g., demographics, psychographics

32 Aggregate Participation Market
Excitement-seeking competitors Getaway actives Fitness driven Health-conscious sociables Unstressed and unmotivated

33 Excitement-Seeking Competitors
Prone to engage in risky activities Bungy jumping, extreme sports Predominantly male Relatively young Generally single

34 Getaway Actives Fun with family and friends Vacation prone
Skiing, camping, hiking, golf Vacation prone Social motives Both sexes

35 Fitness Driven Activities requiring strength and stamina
Running, aerobics, martial arts College graduates dominate this group Predominantly female

36 Health-Conscious Sociables
Activities that foster good health Walking, light cardiovascular exercise Older participants Predominantly female

37 Unstressed and Unmotivated
Prone to be inactive Generally older (both sexes) Few activities appeal to this segment Little marketers can do to induce activity by members of this segment

38 Sport-Specific Segmentation
More insight than with segmentation of the aggregate participation market Used to identify homogeneous segments Applicable for any participation activity Golf, bowling, poker, skiing, tennis, hunting

39 Targeting Evaluating various segments and selecting the one(s) that promise(s) the best ROMI Successful targets must be: Sizable Measurable Reachable Demonstrate behavioral variation Actionable

40 Evaluating Market Segments
Segment Size and Growth Analyze current segment sales, growth rates, and expected profitability Segment Structural Attractiveness Consider competition, existence of substitute products, and the power of buyers and suppliers Company Objectives and Resources Examine company skills & resources needed to succeed in that segment Offer superior value and gain advantages over competitors

41 Target Marketing Strategies
Undifferentiated (mass) marketing Ignores segmentation opportunities Differentiated (segmented) marketing Targets several segments and designs separate offers for each Concentrated (niche) marketing Targets one or a couple small segments Micromarketing (local or individual marketing)

42 Micromarketing Tailoring products and marketing programs to tastes of specific people and locations Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers

43 Factors in Choosing a Market Coverage Strategy
Company resources Product variability Product’s life-cycle stage Market variability Competitors’ marketing strategies

44 Positioning for Competitive Advantage
Product’s position is the way the product is defined by consumers on important attributes, or as the place the product occupies in consumers’ minds relative to competing products. Perceptual position maps can help define a brand’s position relative to competitors

45 Perceptual Mapping Positioning - Finding a way to fix your product in the minds of consumers extreme conservative high price low price

46 Perceptual Map for Sports

47 Choosing a Positioning Strategy
Identify a set of possible competitive advantages on which to build a position Choose the right competitive advantages Select an overall positioning strategy

48 Identifying Possible Competitive Advantages
Key to winning target customers is to understand their needs better than competitors do and to deliver more value Competitive advantage – extent to which a company can position itself as providing superior value Achieved via differentiation

49 Identifying Possible Competitive Advantages
Product differentiation Services differentiation Image differentiation People differentiation

50 Positioning Errors Underpositioning Overpositioning
Failing to really position the company at all Overpositioning Giving buyers too narrow a picture of the company Confused Positioning Leaving buyers with a confused image of a company

51 Choosing Right Competitive Advantages
Important Distinctive Superior Communicable Preemptive Affordable Profitable

52 Overall Positioning Strategy
Full positioning of the brand is called the brand’s value proposition Potential value propositions include: More for More More for the Same The Same for Less Less for Much Less More for Less

53 Communicating and Delivering the Chosen Position
Company must take strong steps to deliver and communicate the desired position to target consumers Marketing mix efforts must support the positioning strategy Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies

54 Segmenting the Golfer Market
Different levels of playing ability Different motives for playing Different attitudes toward practice Differing frequency of play

55 Five Segments of Golfers
Competitors Players Sociables Aspirers Casuals Recognizing different segments allows golf marketers to better satisfy various groups of customers

56 Closing Capsule “One-Size-Fits-All” clothing results in consumers wearing clothes that don’t fit Developing one marketing mix for all consumers is equally ineffective Market segmentation and resulting differentiated marketing strategy provide better fit for each consumer

57 Closing Capsule Market is segmented using relevant criteria
Target markets are selected from array of identifiable market segments Corresponding marketing mix is developed for each selected target market

58 Closing Capsule Segmentation is appropriate for: Aggregate fan market
Fans of a particular spectator sport Aggregate participation market Participants of a particular activity

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