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“One-Size-Fits-All” Strategy is Obsolete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