sports marketing
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3. SPORTS MARKETING
1. Sport typologies
2. Sport industry
3. Sports marketing
Arne Müsseler
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IntroductionA 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
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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)
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GAME 1
• Compare the pictures above,
• How do they define sport ? Quote words.
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Modern/postmodern sports • Ex : competitive skiing
– Individualism– Universality– Performance– Technology– Specialization– Innovation
Olympic GamesStadium CompetitionsAthletes as heros
• Ex : Street-ball– Community
– Proximity
– Experience
– Fun
– Freedom
– Authenticity
Tribalism OutdoorAthletes as big brothers
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GAME 2
• Make your own typology of sports
• What criteria did you choose? Why ?
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Example of typology of sports
LEISURE SPORTSFreedom, amusement, conviviality
PASSION SPORTPersonal investment
TRAINING SPORT
Health and lookFitness, body-building, aerobics
EXPRESSION SPORTS
Mental, surf, mastering the movementSnowboard, karate, ice-skating, dance
RULED SPORTSSocial competition
Ball sports
MOTOR SPORTSAdrenalin, speed and power
Formula 1, Rallye, Motorcycles, off-shore boat, ..
ELITE SPORTS
Golf, horse-riding, sailing, tennis
RESISTANCE SPORTS
Courage and obstinationAthletics, triathlon, cycling, swimming
OUTDOOR SPORTS
Exotism or rootsExtreme or familyMountain or sea
Based on consumers’perceptions (Hickory 2001)
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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
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GAME 3
• List the differences between a– car manufacturing company ( or any « non-
sport » industrial firm)– and a sport team ?
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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 »
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GAME 4
1. What can be a « sport product » ?
2. How can be the clients ?
3. The suppliers ?
4. The intermediaries ?
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The sport product is often a service
Magnesium Food Cloth Ski Racquet Swimming-pool Competitions Training Teaching Counselling
« PURE » GOODS « PURE » SERVICE
SERVICES WITHHIGH AMOUNT
OF PHYSICAL DEVICES
GOODS WITHHIGH AMOUNTOF SERVICES
(advices, maintenance, …)
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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 : http://umterps.cstv.com
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Simplified Model of the Consumer-Supplier Relationship in the Sports Industry
Consumers
Spectators
Participants
Products
Events
Sporting Goods
Personal Training
Sports Information
Producers/Intermediaries
Sports Labor
Sanctioning Bodies
Sponsors
Media
Agents
Equipment Manufacturers
Banking & Insurance
Government
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The sports marketing exchange process
SPONSORS
PROFESSIONALATHLETESSPECTATOR
MEDIA
LEAGUES
sponsoring
purchases
salary
GOVERNMENT taxes
subsidies
Rights &sponsoring
Ticket fees
CLUBS
subsidiesAMATEURATHLETE
membership
TV Rights
NB :Agents &BusinessmenAre often betweenMedia and athletesMedia and Leagues
dream
InsurancePleasureTraining…
dream
fun
image
AGENCIES
rights
Studies & advices
royalties
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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
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Sporting goods
• USA (SGI, 2005 est.)– Over $100 billion
• Europe (SGR, 2005 est.)
– Over $40 billion
Average : +5% over 7 years.
+ Collectibles (cards)
ExerciseFirearmsGolfCampingFishing
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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 : http://www.easports.com/
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Sport events
Visit : http://www.aso.fr
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Athletes as brandsFred Perry clothing brand : http://en.wikipedia.org/wiki/Fred_Perry
René Lacoste brand :
http://www.lacoste.com/intro.html
Michael Jordan brand :
http://www.nike.com/jumpman23/home/
Anna Kournikova
http://www.kournikova.com/
David Beckham
Brand it like Beckham
http://www.forbes.com/2005/04/01/cx_pm_0401beckham.html
http://www.mobiledia.com/news/47595.html
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Stadia & Arena
http://www.allianz-arena.org
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GAME 5
• Make your own typology of sport industries
• What criteria did you choose? Why ?
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Example of typology of sport industry
Sport Business in the Global Marketplace, 2004
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Sport management, P. Masteralexis and al., 2000
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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)
USA; 350; 70%
Europe; 100; 20%
Asia; 50; 10%
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Lisa Neyrotti
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2004 or 2005
salesSporting 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.)
$1 b. <
<500 m.
Shimano (J), New Balance, Fila (I), Callaway, Pentland (GB), Decathlon (F), Skechers, Benetton (I)
Karstadt, JJB Sport
Dick's, Sport Inc.
Bass Pro shops, Just for feet, Cabela's, Canadian Tire, Rallye
500 m. <
< 250 m.
Puma (D), Lacoste (F), Lafuma-Oxbow (F), HTM (D), Cycleurope (S), Columbia, K2
Eurosport International (300 mil.)
Manchester (315m.)
Real (287 m.)
Milan (270 m.)
Chelsea (264 m.)
Juventus (262 m.)
Arsenal (211 m.)
Barcelona (206 m.)
250 m. <
< 100 m.
Converse, TImberland, North Face (GB), Tecnica (I), Scott, LAGear, Lowe, HellyHansen (N), Aigle (F),Patagonia, Nautica,
Bayern Munich (202m.)
(+15 european clubs over 100m.$)
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3. SPORT MARKETING
• Objectives : broad pictures before « entering » the consumer behaviour and the marketing mix
• Definition
• Companies
• Intricacies
• Future trends
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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)
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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
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The complexity of the sport marketing mix
Product Price Promotion Public Relation Place
Product
Price Elasticity of demand decreasing with fan
Promotion 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
Place 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
From Sports Marketing (M. Shank)
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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.