Advanced theory and practice in sport marketing part 1

42Sport Marketing Research Process 42Research Reports and Services Within SportPART III SPORT MARKETING LOGISTICS 6 SPORT PRODUCT MANAGEMENT.. 364 Sport Marketing As Part of the Enterpri

ADVANCED THEORY AND PRACTICE IN SPORT

MARKETING

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ADVANCED THEORY AND PRACTICE

IN SPORT MARKETING

Eric C Schwarz and Jason D Hunter

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ACKNOWLEDGMENTS, DEDICATIONS, AND

I am personally indebted to my wife, Loan, whose love and support has beenunconditional during the writing of this book, and always I could not havecompleted this project without her calming influence and belief in my abilities

I love you and thank you!!!

I would also like to acknowledge the love and support of my mother,Charlene, who has always been there to lend a hand during times of turmoil, anear in times of confusion or frustration, a voice as one of my biggest support-ers, and has always shown unconditional love to me Thank you for everythingyou have done to help me be where I am today!

In addition, I would like to show my appreciation to my best friend and author of this book, Jason Hunter We have been through a lot over the past 20years of friendship, getting through numerous obstacles and having many suc-cesses I thank you for your efforts on this book and for your friendship

co-DR JASON D HUNTER

I owe thanks to Mariann, my wonderful wife, and three children, Zachary,Morgan, and Jake Without their time and encouragement, there would nothave been enough hours in the day to complete this project I also would like tothank my friend, colleague, and co-author Eric Schwarz Eric and I have knowneach other for 20 years, since back when we both received our undergraduatedegree from Plymouth State University in New Hampshire I am very thankfulfor the educational base and opportunities that Plymouth provided for me, andfor the lasting friendships that developed from there

Finally, I owe special thanks to my parents Jay and Merrylyn Hunter I oweall that I am today to them Without their love, support, and moral judgment,

I would have never seen the true benefits of education and strength of family

We would be remiss if we did not acknowledge those people associated withthe completion and publication of this book First, we would like to thank DennisMcGonagle from Butterworth-Heinemann/Elsevier in Boston We had just lostour book contract with another company because they were sold, and Dennishad a foresight to see the value this book could bring to the overall body ofknowledge in sport education Thank you for believing in our concept and mak-ing this book a reality Next to thank would be Fran Ford from Butterworth-Heinemann/Elsevier in Oxford We could not have completed this book withoutyour input, professionalism, and overall diligence!!! You have been a breath offresh air after previous bad experiences with publishers, and we are forever grateful that you were our partner in this project Thank you Special thanks goes

to Mani (Praba) Prabakaran from Charon Tec in India for your outstanding dling of the editorial and typesetting stages of producing this book Finally, thankyou to Julie Trinder, Stephen Pegg, and the rest of the team at Butterworth-Heinemann/Elsevier for your assistance in making this book a reality!!!

1 INTRODUCTION TO SPORT MARKETING 3

Bottom Line – What Is Sport Marketing? 13

Developing a Sport Marketing Plan 26Why the Theory and Plans Do Not Always Work 32

3 SPORT MARKETING RESEARCH 41

What Is Sport Marketing Research? 42Sport Marketing Research Process 42Research Reports and Services Within Sport

PART III SPORT MARKETING LOGISTICS

6 SPORT PRODUCT MANAGEMENT 133

Elements of Sport Products and Services 134Sport Product and Service Management 135Ethics in Sport Product and Service Management 137The Sport Product and Service Life Cycle 140Positioning and Differentiation 147

The Sport Buying Process 161

Non-Store-Based Inventories for Sales in Sport 167

Emerging Technology in Logistics: Radio Frequency

What Is Communication Management in Sport? 200

Advertising for Sport Teams and Sport Retail Businesses 224

Social, Ethical, and Regulatory Aspects of Sport Advertising 227Sport Advertising and Consumer Behavior 235Creating Sport Advertisements and Commercials 236Sport Advertising and Integrated Brand Promotion 236

Areas of Sport Sponsorship 244Ethical Issues in Sport Sponsorship 252Corporate and Brand Goals for Sport Sponsorship 256Sport Sponsorship Agreements 259

Conducting Sport E-Business and E-Commerce 313Ethics in Sport E-Business and E-Commerce 315Sport E-Business and E-Commerce in the New Economy 319

PART VI THE FUTURE OF SPORT MARKETING

15 ENTERPRISE SPORT MARKETING MANAGEMENT 363

Is Sport Marketing An Art or a Science? 364

Sport Marketing As Part of the Enterprise 366Sport Consumer Relationship Management 366More than Just Relationships: Offering Sport

Conclusion: The Future of Sport Marketing – It

Appendix: And Now a Final Word … 382

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The field of sport marketing is infused in virtually all aspects of sport agement As such, it is inevitable that many students will be involved in someaspect of sport marketing during their career This book is being published withthe sport management educator and student in mind, specifically aimed at thosewhose sport management program is housed in the business and/or manage-ment department Most sport marketing books restate concepts learned in anintroductory marketing course prior to getting into sport marketing This isappropriate for sport management programs housed in a department otherthan business and/or management However, for sport management programshoused in a business and/or management division, where virtually all studentshave already taken principles of marketing course, the book is simply repeti-

man-tive Advanced Theory and Practice in Sport Marketing strives to go beyond the

introductory marketing course by expanding the knowledge of the student withadvanced marketing theory related to research, consumer behavior, ethics,logistics, products, advertising, sponsorship, promotions, sales management, e-business and e-commerce, and international and global marketing

The other aspect of this book is the application of real-world situations intothe text Professors talk about what goes on in the field of sport marketingbased on their limited experience Advanced Theory and Practice in SportMarketing publishes what goes on in the real world of sport marketing by having professionals in the field provide first-hand accounts of how theyentered the field of sport marketing, information about what their current jobentails, and advice to students who wish to enter the field of sport marketing.This allows the instructor to better prepare the student for life in the sport mar-keting profession It is the goal of the author to have this book become aresource that sport marketing educators, students, and professionals will utilize

as an everyday reference tool in pursuit of their goals

The book reflects the authors’ extensive research and varied experiences inthe field of sport marketing Dr Schwarz has worked in and with professional,amateur, and non-profit sport organizations, as well as from the businessaspects of sport marketing specifically related to consulting work in sport facil-ity and event management He has conducted and presented research in sport

marketing and experiential learning in the United States, Canada, Europe, andAustralia In addition, from June 2006 to August 2007 he was on sabbaticalconducting research in leisure marketing and designing a postgraduate course

in Applied Sport management at the University of Ballarat in Australia

Dr Hunter supplements this knowledge by bringing extensive experience fromthe physical education, athletics, and coaching realm, as well as being a formerowner of a sport retail firm and a sport facility

Part I of the book serves to provide an overview of sport marketing, ing a basic review of those topics commonly covered in an introductory mar-keting course The remainder of this text will provide the reader a frameworkunderstanding of sport marketing by connecting traditional marketing to sportmarketing Each chapter will cover a specific aspect of traditional marketingand applying it to the field of sport marketing

includ-RESEARCH

The reader will expand their knowledge of the concepts of market tion, positioning, and demand analysis, and using that knowledge to developbasic capabilities in advertising research, competitive analysis, and strategicoutcomes assessment in sport marketing Inclusive of this will be the develop-ment and implementation of focus group research, survey research, and exper-imental studies; the identification, retrieval, and analysis of secondary data; theutilization of qualitative and quantitative research methodologies; and theapplication of the research method Inclusive of this will be a description ofresearch services within sport marketing research, including but not limited tostudies of customer satisfaction, economic impact, need assessment, organiza-tional behavior, and risk assessment

segmenta-INFORMATION SYSTEMS

The reader will gain an appreciation of the use of information systems for sportmarketing goals and objectives through structure, organization, and communica-tion Inclusive of this will be an examination of sport consumer relationship man-agement for both Internet and non-Internet environment using strategic databaseand software marketing, with the goal of being able to identify market opportuni-ties, develop targets, and manage and evaluate promotional efforts in sport

CONSUMER BEHAVIOR

The reader will learn how to utilize basic cultural, personal, social, and logical principles to explain how those factors directly affect individual purchas-ing and consumption behavior of participants, fans, spectators, volunteers,community and corporate partners Additionally, there will be an examination of

psycho-the various types of sport consumer studies, and how individual and tal factors, socialization, and participation directly influence the decision makingprocess for sport consumption Inclusive of this examination will be an analysis

environmen-of the expected demographic, psychographic, geographic, and behavioristic acteristics of the sport consumer

char-PRODUCT MANAGEMENT

The reader will learn how to distinguish, identify, and classify the various ments of sport products and services, and the stages of the sport product lifecycle In addition, the concepts of branding, licensing, images, marks, and posi-tioning will be identified as related to the sport product

ele-SALES MANAGEMENT

The reader will be presented with an overview of the strategies and niques for promoting and selling the sport product, including sales theory mod-els, promotion theory paradigms, and promotion application in sportmarketing Additionally, the distribution process of the sport product will becovered, including an analysis of the distribution principles related to time,place, and possession, as well as the process for selecting distribution systems

tech-PURCHASING AND SUPPLY CHAIN

MANAGEMENT

The reader will be presented with numerous logistical functions that a sportbusiness must manage, including inventory management, team and equipmenttransportation, warehousing, order processing, and information systems Bothnetwork design and global logistics will be analyzed as a part of this focus.Additionally, there will be an explanation of the importance of the integration

of these various systems, and the effects that integration has on the overall viability of the sport industry

PROMOTIONS AND COMMUNICATION

MANAGEMENT

The reader will learn about understand the other elements of the sport motion mix, including licensing, publicity, personal contact, incentives, andatmospherics The reader will know how to incorporate sport promotion activ-ities into an integrated communications plan, how to plan an event, create pric-ing, location, and distribution strategies, and how to cost effectively promote

pro-them Areas to be covered will include sports information, media relations,public relations, and community relations In addition, indirect (word-of-mouth) and direct (sales) promotional strategies will be covered in relationship

to positioning, building brand equity, increasing credibility, and enhancingimage transfer and association

ADVERTISING

The reader will be provided an overview of the methods for bringing publicattention to the sport product or business through print, broadcast, or elec-tronic media This will include a comprehensive examination of copy anddesign, media planning and buying, portfolio development, video production,broadcast advertising development, billboard/outdoor advertising develop-ment, and graphic design The reader will also discover how to integrate thefield of sport and the engagement of interdisciplinary thinking as it related to allareas of communication Special emphasis will be placed on journalism, audio-visual communications, development communications, telecommunications,and mass communications

SPONSORSHIP

The reader will gain an appreciation of the significant role sponsorship plays in the sport promotional mix Through an explanation of the history ofsport sponsorship, the reader will gain an understanding of the various areas ofsport sponsorship, including governing body sponsorship, team sponsorship,athlete sponsorship, broadcast sponsorship, facility sponsorship, and eventsponsorship Through the articulation of corporate and brand goals, the readerwill also learn about the various criteria for sponsorship, and how they are uti-lized in choosing the companies to partner with, developing sponsorship pack-ages, and engaging in sponsorship negotiations

RETAIL MANAGEMENT

The reader will gain an understanding of sport retailing and sport retail agement through a presentation of various retail strategies and a strategicapproach to retailing in the sport field Inclusive of this chapter will be the con-cepts of strategic retail management; the factors and skills associated with situ-ation analysis; the manners to target customers and gathering information;concepts associated with choosing a retail location; the concepts related tomanaging a retail business; the concepts related to merchandise managementand pricing; the various ways of communicating with the customer; and inte-grating and controlling all aspects of the retail strategy

man-E-BUSINESS AND E-COMMERCE

The reader will gain an understanding that in the 21st century, e-business ande-commerce have become staples within the field of sport marketing.Information will be offered regarding the factors that drive modern businessthrough digital technologies Inclusive of this will be concepts of managing dig-ital enterprises via the Internet, the World Wide Web, and Intranets, includingC2B and B2B, as well as potential future technologies In addition, how sportbusinesses utilize electronic means to overcome barriers of geographic bound-aries to market, produce, and deliver services will be covered

INTERNATIONALIZATION AND GLOBALIZATION

The reader will gain an appreciation of the ever-growing internationalizationand globalization of marketing in and through sport This will be accomplishedthrough an examination of the implementation of policies, procedures, andstrategies within the parameters set forth by cultural, economic, political, andlegal constraints of various worldwide markets

ENTERPRISE MARKETING MANAGEMENT

The reader will gain an appreciation for this growing aspect of sport ing Though effective and efficient sport marketing is increasingly importantdue to tough competition and growing global opportunities, it has long been anisland in most sport organizations, disconnected from core business processesand reliant on customized information technology that hampers communica-tion and collaboration with other departments This chapter will tie the topicsfrom previous chapters to concepts such as brand architecture, investmentmeasurement, and how to engineer creativity, and demonstrate how enterprisemarketing management and customer relationship management work together

market-to produce optimal sport marketing efforts by sport entities

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PEDAGOGICAL

FEATURES

Advanced Theory and Practice in Sport Marketing enhances learning withthe following pedagogical devices:

■ Each chapter opens with a Chapter Outline and a list of Chapter Objectives

■ Illustrations, photos, and charts throughout the text that clarify text materialand enhance learning

■ Key terms appear alphabetically at the end of the book in the Glossary

■ Each chapter will have at least one case study embedded within the chapter

to enhance critical thinking as related to real-world concepts associated withthe text material Suggested discussion topics associated with each case studyallow the learner to apply theoretical knowledge to the scenarios

■ At the end of each chapter, there is a real-world case written by professionalsfrom the field of sport marketing These experts are from academia, profes-sional sports leagues and teams, amateur sport organizations, and corporatesport The information they provide will provide the learner with knowledge

of how the individual entered the specific area of sport marketing, about thereal world of sport marketing, and advice of what the learner can do to better prepare themselves for entry into the specified area of sport marketing

■ A comprehensive Conclusion at the end of each chapter that reviews theChapter Objectives and pertinent information from the chapter

■ A Test Bank that includes Multiple Choice Review Questions and DiscussionQuestions to allow students to check their comprehension of the chapter’smain concepts

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CRITICAL THINKING

One of the most important skills for students to develop through their collegeand university years is critical thinking This mental process of analyzing andevaluating information is used across all disciplines, and serves as a process forreflecting on the information provided, examining facts to understand reason-ing, and forming conclusions and plans for action

The authors of this book have provided a series of opportunities for students

to enhance their critical thinking skills while also verifying their understanding

of the materials presented in this text For each chapter, there are 10 multiplechoice questions that provide students the opportunity to verify their compre-hension of the chapter’s main concepts To supplement that verification, thereare also four discussion questions These questions, which can be used as essaytopics or in-class discussion issues by instructors, are based on the informationprovided in the chapter, the research available in the specific aspect of sportmarketing, and the education and experiences of the authors

In addition, each chapter has a minimum of one case study focusing either onthe ethical or global nature of the specific sport marketing topics These casesare a collection of “real-world” situations modified with a sport marketingtwist to provide the student with the maximum opportunity to analyze, evalu-ate, and ponder possible solutions to the ethical or global situation Suggesteddiscussion topics associated with each case study will help the student focustheir efforts on key theoretical aspects from the chapter, and apply that knowl-edge to deal with the specific scenario

This text provides a unique opportunity for critical thinking in associationwith sport marketing in the corporate or professional setting “From Theory toPractice” cases appear at the end of each chapter, written by professionals inthe field of sport marketing They provide information about how the individ-ual entered the specific area of sport marketing, the professional world of sportmarketing, and advice of what the learner can do to become better prepared forentry into the specified area of sport marketing

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Advanced Theory and Practice in Sport Marketing provides the instructorwith the following teaching aids:

■ PowerPoint presentations for each chapter

■ An electronic test bank

■ Suggested discussion questions associated with the case studies embedded ineach chapter

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ABOUT THE AUTHORS

DR ERIC C SCHWARZ

Dr Schwarz has been a member of the faculty within the Division of Businessand Management at Daniel Webster College since 2000 Currently holding therank of Associate Professor, he serves as the Program Coordinator, and is thefaculty advisory for the Daniel Webster College Society for Sport Management.During the 2006–2007 school year, he took a sabbatical leave to serve as aVisiting Senior Lecturer and Researcher at the University of Ballarat inAustralia His responsibilities included teaching classes, conducting research inleisure and professional sport marketing, and developing a postgraduate pro-gram in Applied Sport Management

Dr Schwarz received a B.S degree in Physical Education from PlymouthState University in 1991; a M.Ed in Administration and Supervision fromSalisbury University in 1992; and an Ed.D in Sport Management from theUnited States Sports Academy in 1998

Prior to coming to Daniel Webster College, Dr Schwarz had worked with avariety of sport-related organizations in high school athletics, college athletics,and campus recreation programming He also owned his own summer camp,clinic, and coaching training business

Since coming to Daniel Webster College, in addition to his teaching andadministrative responsibilities, he has been focused on research, consulting, andexperiential learning Dr Schwarz has presented on various topics in sport mar-keting and experiential learning at conferences in the United States (SMA,EBEA), Canada (NASSM), Europe (EASM), and Australia (SMAANZ)

Dr Schwarz has been most active with the Sport Marketing Association, where

he has been a regular presenter, and has had two articles published in the ence book of papers In addition, a group of his undergraduate students finished

confer-in first place confer-in the undergraduate poster competition at the 2004 conference confer-inMemphis, and won the case study competition in 2005 in Arizona

Dr Schwarz has been involved with numerous consulting projects, includingbeing an independent consultant in facility management and marketing forthree sport facilities in New Hampshire, the development of a new retail man-agement plan for a minor league baseball team in New Hampshire, and an eco-nomic impact analysis for a Senior PGA Tour event in Massachusetts Dr.Schwarz also serves as an expert witness in Physical Education and SportManagement for a lawyer in New Hampshire.

The importance of experiential learning for both students and professors iscritical in the fields of sport marketing and management The student gainspractical experience that allows them to apply the theory learned in the class-room in a real-world setting It allows the professor to understand the mostcurrent practices in the field, thus allowing them to provide the most currentinformation to students Dr Schwarz lives that philosophy through his workwith various organizations Some of the events include the Boston Marathon,the NHL All-Star Game FanFest, the NBA Jam Session FanFest, and NASCAR

at New Hampshire International Speedway

Dr Schwarz currently lives in Merrimack, New Hampshire with his wifeLoan

DR JASON D HUNTER

Dr Hunter is a 1990 graduate of Plymouth State University with a B.S inPhysical Education; earned his Masters Degree in 1993 from the United StatesSports Academy in Sports Management; and in 2005 completed a Ph.D inEducational Administration from Madison University

Dr Hunter has dedicated his life to teaching and coaching at the collegiatelevel At Plymouth State University, he served as the director of recreation,assistant baseball and women’s soccer coach, and head women’s softball coach

He also supervised the recreation component of a new 9 million dollar campusrecreation and student union building Co-owner of D&M Sports, a sportinggoods retail store, Dr Hunter joined his love and knowledge for sports to pro-viding quality sporting goods equipment to the community

In 1997, Dr Hunter became the head coach of baseball and women’s soccer

at New England College, where he also served as an assistant athletic directorand faculty member In 2000, he relocated to Illinois to become the head men’sand women’s soccer coach and faculty member at North Central College In

2003, he moved to the College of DuPage to become a faculty member in ical education and the women’s soccer coach Dr Hunter recently has beengranted tenure in this position In addition, he has been selected as Coach of theYear five times and Adidas Central Coach of the Year in 2005

phys-Dr Hunter is developing a Sports Management Program at College ofDuPage and also serves as a senator for the faculty association He has also pre-sented at regional, national, and international conferences

Dr Hunter is the father of three wonderful children, Zachary, Morgan, andJake and the husband to Mariann Hunter, the love of his life They reside inMontgomery, Illinois

SPORT MARKETING:

THE BASICS

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INTRODUCTION

TO SPORT MARKETING

The Marketing Plan

Bottom Line – What Is Sport Marketing?

Conclusion

CHAPTER OBJECTIVE

The reader will be able to:

■ Provide an overview of sport marketing

■ Define what sport marketing is, how it is connected to the business of sport,and the relationship to traditional marketing

■ An introduction to the 3 C’s of marketing analysis (consumer, company, andcompetition) and STPD (segmentation, targeting, positioning, and delivery)

WHAT IS SPORT MARKETING?

Prior to describing what sport marketing is, we should take a look at thedefinitions of the two root words: “sport” and “marketing.”

Sport – Or Is It Sports?

First we look at the concepts of sport and sports Sport is defined as ties, experiences, or business enterprises that center on athletics, health andwellness, recreation, and leisure time opportunities Some of the common mis-conceptions about sport include (1) there needs to be a competitive situation,(2) the offering must have a standard set of rules, and (3) participants need spe-cialized equipment and facilities This is true of sports, which simply refers toindividual, dual, and team sports activities such as soccer, baseball, golf, andtennis Sport is an all-inclusive term covering all aspects that go beyond theplaying field, including all the various operations that make the games happen

activi-Sport and Business

Now we look at how the concept of business ties into these previous tions Business is defined as individuals or organizations that seek to make a

defini-Fin

anc

e

M ar

Social responsibility and ethics

Economy

Owners

Management

Source: Ferrell, O.C and G Hirt (2003) Business: A Changing World, 4th ed., p 5

New York: McGraw-Hill.

profit by providing products and services that satisfy the needs, wants, anddesires of the consumer The business world, as documented in Figure 1.1,covers a wide variety of aspects The internal factors include the primary busi-ness activities of management, marketing, and finance, which are centered onbusiness owners, employees, and customers The external factors include com-petition, the economy, information technology, legal and regulatory forces, andsocial responsibility and ethics.

The definition of business and the internal and external factors in the ness world are mirrored in the profession of sport management and administra-tion With regard to whether sport administration or sport management ismore appropriate, it seems as though more programs as business utilize theterm management over administration; however, there is no significant differ-ence between the meanings of the two terms when it comes to the field of sport.The only difference tends to be curricular based, and will vary from institution

busi-to institution Therefore, when looking at this field, the major of sport ment, and in some cases sport administration, is of greater interest to businesseducators This is defended by the following definition of sport management:the collection of skills related to the planning, organizing, directing, control-ling, budgeting, leading, and evaluation of an organization or departmentwhose primary product or service is related to sport and its related functions

manage-Marketing

Now that we have a definition of sport, as well as a basis for its relationship

to the business world, what is marketing? There is often confusion on whatmarketing truly is Marketing is often defined by its components, such as adver-tising, sales, promotions, product management, pricing, publicity, etc Thesecomponents do not define what marketing is – they act to enhance the applica-tion of marketing elements

When many people think of marketing, they are really thinking of marketingtactics People associate marketing with tactics, including the television commer-cials we see while watching sporting events, the between play promotions duringlive sporting events, and the information published in newspapers or broadcast

on a newscast But tactics in marketing are similar to the tactics of sport Theyare very important, but useless without having a sound basis of knowledge.While this knowledge is a sound basis for the understanding of marketing,the true definition of marketing is simply the functions involved in the transfer

of goods and services from the producer to the consumer The focal point ofthese functions are in three specific areas known as the 3 C’s of marketinganalysis: the consumer, the company itself, and the competition

The Consumer

Who is the consumer? Is it the shopper who visits stores, either in person orvia an online capability, in search of merchandise or bargains? Is it the buyerwho knows what they want and makes the purchase? How about the customer

who repeatedly purchases a commodity or service? It is these three and muchmore By definition, a consumer is an individual or organization that purchases

or obtains goods and services for direct use or ownership As marketing sionals, we strive to please all of these consumers to maximize sales of productsand services, and hence maximize profit But how do we reach these consumers?

profes-Segmentation

Segmentation is the concept of dividing a large, diverse group with multipleattributes into smaller groups with distinctive characteristics These distinctivegroups have similar needs and desires, and hence will respond to marketingefforts in similar manners The concept of segmentation is basic to all market-ing efforts, as the goal of segmentation is to identify the market

One of the biggest challenges for marketing professionals is to determine theappropriate segment to market Some of the major factors utilized to choose asegment includes:

■ What is the size of the segmented market?

■ What is the purchasing power of the segmented market?

■ How can the marketer be sure that the product is what the consumer wants?

■ Is it worth marketing the product to the chosen segment?

■ What tactics should be used to attract the segment to purchase the sportproduct?

To answer these questions, marketers utilize the four bases of segmentation:the consumer’s state of being, the consumer’s state of mind, product usage byconsumers, and product benefits as perceived by consumers

The consumer’s state of being is the concept of belonging to a specified class

or group In marketing, the major states of being include location, age, incomelevel, gender, race and ethnicity, and sexual orientation Geographic location isutilized to determine the spread of population as related to the distribution andusage of a product Age helps to differentiate the needs and interests of con-sumers, as they differ throughout the lifespan Income levels help the marketerdetermine probable standard of living of the demographic, which in turn influ-ences the manner in which a product is marketed An example of this would bethat a teenage inner-city basketball player who plays at the Rucker from Harlemwill be marketed to differently as compared to the suburban soccer mom, and incomparison to the 10-year-old alternative sports fan who is influenced by any-thing related to skateboarding and BMX bikes As marketing becoming moreglobal in nature, understanding the intricacies of various race and ethnic mar-kets is integral to marketing success In addition, marketing based on sexual ori-entation is an emerging market; however, there is still some controversy as towhether this should be viewed as a separate and distinct market

The consumer’s state of mind deals with the individual cognitive processes

involved in marketing Among the most prevalent concerns to marketers areindividual personality traits, lifestyle changes that are evident throughout thelifespan, and the individual preferences and perceptions of consumers, whichare wide and varied

Product usage by consumers deals with the consumption rates by the various

market segments Central to this concept is the Pareto Principle, otherwiseknown as the 80/20 rule The Pareto Principle is generally applied to vendors orcustomers in a retail setting This rule assumes that 20% of the customers gen-erate 80% of the sales, or that 80% of merchandise comes from 20% of thevendors

Product benefits as perceived by consumers go beyond the consumer’s

state of mind to look specifically at the assessment by the consumer as to theadvantages the products provided to them The consumer will always ask the question “What is in it for me?” By understanding the consumer’s view-point, it allows marketers to (1) describe the products more efficiently andeffectively in marketing collateral, (2) better prepare salespeople as to how tosell products, and (3) provide evidence as to how to better differentiate products

promotion (see Figure 1.2) The product may be tangible (goods) or intangible

(services), and decisions are made based on concepts such as branding,

func-tionality, and quality Price is the amount of money or goods asked for in

Source: www.netmba.com/marketing/mix.

Target market

Product

Price

exchange for something else Place deals with the methods of distributing the product to consumers Promotion represents how information about the prod-

uct is communicated to customers, with a goal of receiving positive responsefrom the consumer, and results in product sales

Note: Later in this chapter, we will elaborate on this concept, and show how

in the realm of sport, the elements of marketing are expanded to the 5 P’s ofsport marketing by moving publicity/public relations out of the category ofpromotion, since it is such a large factor in the marketing of sport

Positioning

Positioning is how a company seeks to influence the perceptions of potentialand current customers about the image of the company and its products and serv-ices This is accomplished by applying the 4 P’s of marketing with the goal ofstrategically placing the product or service firmly in the mind of the consumer Weoften talk in society about the concept of “making a good first impression.” Inpositioning, the goal is to get the consumer’s mind to react to the implementation

of the marketing mix in a positive manner By creating this knowledge, consumerswill develop an impression that is often difficult to change Hence, if the marketercan send a message that is consistent with what the consumer already believes(the consumer’s perceptions); the product will become easier to sell An examplewould be a Detroit Red Wings advertising campaign concentrating on Detroitbeing known as Hockeytown Hockey consumers are already aware of this fact,and the marketers can play off of this knowledge

One of the best ways to position a product in the consumer’s mind is to befirst on the scene People want who they perceive is first in the market, or thebest in the market This concept of being number one often can overcome othershortcomings of products

However, not all products can be first on the market, or number one in themarket So how do you position these other products so the consumer will buy?This is most often accomplished by claiming a unique position in the market.Through applying the marketing mix, the marketer will strive to carve thisuniqueness into the mind of the consumer, so that they feel they are gettingsomething different and worthwhile for their hard earned money In general,when there is a clear market leader, it is often extremely difficult to knock offthe king of the mountain By not challenging the market leader head-on, a com-pany can increase their market share through marketing their uniqueness ascompared to that industry leader To market their uniqueness, marketers look

to cater to the specific benefits of the product In order to do this, often theproduct must be sold at a low price, as people when viewing new products willvalue low initial price more than quality

Delivering

Delivery is the concept of producing or achieving what is desired or expected

by the consumer Through the concepts of segmentation, targeting, and tioning, a framework is created to allow the industry to utilize marketing todeliver an awareness of products to potential consumers The previous con-cepts are the development phase and the start of the implementation phase of

posi-the marketing concept Delivery is posi-the completion of posi-the implementation phase,and the start of the management aspect, where the creative and process aspects

of the marketing discipline are applied

The remainder of this book will focus on the delivery of the marketing concept.Understanding the consumer is central to the ability to engage in marketing.Marketers must know how consumers behave, their motivations, their percep-tions and preferences Marketers must have an awareness of their attitudes, theirknowledge, and their emotions Also, marketers must have the ability to seg-ment the market, analyze the target market, position the product, and deliver it

to consumers

The Company

What do we need to know about the company itself? The framework for this

is the SWOT analysis, which looks at the internal strengths, internal weaknesses,external opportunities, and external threats of the organization (Figure 1.3).For starters, the framework of understanding is in the first two parts of aSWOT analysis: internal strengths and internal weaknesses The strengths of acompany are its resources and capabilities that can be used to develop a com-petitive advantage A competitive advantage is where a company sustains prof-its above the average for the specific industry Competitive advantage is usuallylooked at in two ways: cost advantage (when a company can deliver the samebenefits as competitors at a lower cost) and differentiation advantage (when

a company can deliver benefits that exceed those of other products in the cific industry) By understanding these concepts, a marketer can gain a betterunderstanding of the company itself In addition, the marketing professional

can implement a more effective and efficient marketing effort by maintaining orimproving on strengths, while seeking ways to improve on and eliminate weak-nesses Examples would include having limited time, staff, or funding.

The Competition

Finally, what do we need to know about the competition? The framework ofcompetition is in the last two parts of a SWOT analysis: external opportunitiesand external threats By evaluating opportunities and threats, a company can eval-uate their current status in the market, and determine which direction the com-pany should be heading This is most often guided by an organizational mission,through an evaluation of organizational and management options, and outliningthe goods and/or services to be marketed The opportunities are the marketplaceopenings that exist because others have not entered or capitalized on that part ofthe marketplace Threats are those environmental factors that can negativelyaffect the marketing of a product if the company does not react to them

The Marketing Plan

All of the previous information is then compiled into a marketing plan A keting plan starts with primary and secondary market research It is very danger-ous to start a marketing plan without appropriate research by assuming what theintended market wants and needs Primary market research is gathering yourown data through observation, surveys, interviews, and focus groups Secondarymarket research uses published information including industry profiles, tradeperiodicals, and demographic profiles to determine the scope of your market.The next part of the marketing plan focuses on economics The key factorswhen identifying the economy of your market includes the following:

mar-■ What is the total size of the market?

■ What percent share of the market do you intend to capture?

■ What is the current demand within the market?

■ What are the current and future trends of the market?

■ Is there growth potential within the market?

■ What are the barriers to entering the market, and how will the company come those barriers?

over-■ How could changes in industry itself, the economy, technology, and mental regulations affect your company and force changes in your marketingefforts?

govern-The following section should describe the product(s) and/or service(s) to bemarketed Three key concepts that should be articulated in the plan for eachproduct or service should be: (1) a description of the most important features ofthe product/service, with particular consideration given to what differentiates itfrom other products/services; (2) a description of the benefits, specifically consid-ering what the product/service will do for the consumer; and (3) a description of

the post-sale services (warranties, service contracts, delivery options, consumersupport, and refund policies).

Now we need to detail the demographics of our customers For individuals,

we consider such items as age, gender, race/ethnicity, location, income level,social class, occupation, and education For business consumers we considerthe industry, location, size, and preferences

Next we detail the competition It is important to remember in this section tolist all competitors (indirect and direct), and differentiate the level of competi-tiveness – whether they compete across the board, or only in certain productareas In this section, there must also be a comparison of how your product(s) orservice(s) will compare with the competition This competitive analysis will helpdetermine your competitive advantages and disadvantages, and provide data tohelp determine the best way to market your products within the industry.After this information has been compiled, a niche can be defined A niche is

a special area of demand for a product or service On a large scale, companiessuch as Nike and Reebok design and market athletic shoes for each differentsport, and often with specialized models based on specific athletes On a moredirect scale, a niche marketing scheme would be offering specialized golf prod-ucts such as customized club, designer balls and tees, and associated golf gadget

to subscribers of Golf Magazine These niches are then used to develop themarketing strategy Inclusive of this strategy development are the elements ofthe marketing mix, including:

■ The method for setting prices and associated pricing strategies (price)

■ The distribution channels to be utilized to sell products and services (place)

■ The method for getting information to potential consumers (promotion)

Now that a description of the products, services, customers, markets, andstrategy has been completed, the final element of the marketing plan is a salesforecast Usually this is completed in two ways First, a “best-case scenario,”should provide a realistic expectation of sales Second, a “worst-case scenario,”should provide the minimum expectation of sales irrespective of what happens

Funding for Boys and Girls Club

The local Boys and Girls Club has struggled for years to raise enoughfunds to support its programs and services Support from public and privatefinancial sources has significantly declined, resulting in a decrease in avail-able budgetary money by 23% over the last 2 years The local economy isstagnant, especially since many of the major employers have laid off employ-ees during the last 5 years The General Manager of the Boys and Girls Club

Continued

INTRODUCTION TO ETHICAL DECISION MAKING

is a salaried employee of the organization, and has worries that if things donot turn around, that the Boys and Girls Club may have to either reduce pro-gramming or close down

One day, the General Manager was approached by a new Board memberwith a novel fundraising idea This Board member is a local attorney in pri-vate practice, and also represents the local sports arena The Board membersuggested that he could encourage the concessions manager at the arena todonate to the Club part of its proceeds on the sale of beer at six upcomingsports events Convinced by previous sales figures that the revenues gener-ated would more than cover costs, he thought the Club could pay the conces-sionaire for the arena a fee of $3000 for the first night and $2000 for each

of the remaining nights in exchange for the beer service concession.Therefore, for these six evenings, the Club would pay the concessionaire atthe arena a total of $13,000 for the privilege of running the concession stand.The concessionaire would guarantee that the Club would net at least $500each night

The General Manager discussed the idea with the Chairman of the Club’sBoard of Directors, and at a subsequent Board meeting the idea was approved.One week after the last of the six events, the Club received $16,000 in cash(their $13,000 investment plus $3000 in net profit)

At the next Board meeting, a proposal was presented that encouraged theClub enter into a much more formal relationship with the concessionaire atthe arena Several clauses of the contract were discussed, including:

■ The Boys and Girls Club will apply for a Class A Liquor License to sellmalted beverages at the arena The concessionaire will furnish the arena’sbeer services facilities, fixtures, supplies (exclusive of the malted bever-ages), and utilities for $2800 The concessionaire will provide 19 people tooperate the concession stand at the rate of $7.85 per hour per person Allpersonnel shall be supervised and controlled by the Club, and shall betrained to dispense malted beverages

■ During each event, the Club shall have on site at least two of its own Boardmembers who will supervise the concession operation

■ The concessionaire will provide the Club with eight tickets per event for itsexclusive use This would come out of the concessionaire’s personal allo-cation from the arena

■ The concessionaire will indemnify and hold the Club harmless for anyclaim or cause of action whatsoever arising out of the Club’s activities pur-suant to this agreement

■ The concessionaire guarantees that the Club will net at least $500 persporting event

INTRODUCTION TO ETHICAL DECISION MAKING

The Club’s Board was now uniformly enthusiastic about the proposedcontract As a result, a contract between the concessionaire and the Board ofthe Boys and Girls Club was signed

Source: Adapted from Dubinsky, J E (1997) Practical ethics: a case study In Ethical Issues in Partnerships Between Businesses and Nonprofit Organizations Retrieved from

http://www.corcom.org/publications.htm.

Suggestion Discussion Topics

1 You are the General Manager of the Boys and Girls Club Assumephilosophically and ethically that you do not agree with using alcoholproceeds to sponsors the youth organization Part of your reasoningincludes that you preach in your programming the dangers of under-age drinking Considering both the organizational and marketing-based issues related to this situation, what would you do in thissituation where your Board has now agreed to use the sales of alcoholbeverages to fund programming for the Club?

2 One of the fastest growing fundraising efforts is based on the ity of Texas Hold’Em, a popular version of poker Events take place intowns all over the country, and a portion of the proceeds go to the spon-soring charity for the evening The charity is required to provide thedealers for the evening If they cannot find enough people, they can sign

popular-up members of the poker organization as members of the charity, andthen they can deal in the event The charity also needs to be present atthe end of each evening to write checks to the winners You are theGeneral Manager of the Boys and Girls Club considering utilizing this

as a fundraising opportunity What are the pros and cons of sponsoringsuch an event? Is it ethical to use proceeds from gambling for youth pro-gramming? What are the marketing implications for your organization?

BOTTOM LINE – WHAT IS SPORT MARKETING?

In conclusion, marketing is the study of the consumer, the company, and thecompetition, specifically relating those areas to market segmentation, targetmarkets, product positioning, and delivery of the product Then to engage inmarketing, we use the various tactics of marketing, which will be elaboratedupon throughout the remaining chapters of this text

OK – then what is sport marketing? Based on the definition of “sport” and

“marketing,” it shows how complex both concepts are Therefore, it is safe toassume that combining the two concepts to get sport marketing is probably