MKTG 4320Sport Marketing

STP, Research, Pricing

How do sport marketers help sport product succeed economically?

Product Development

Segmentation

Positioning

Targeting

Strategic Differentiation:

Market Segmentation

Divides a heterogeneous group into smaller homogenous segments

Groups have similar wants and similar responses

Ex.: The “women’s market”

What do you do when you are: NASCAR NFL team NHL team MLS team

NASCAR

Allstate "Girls Day Out II"

Number of titles: 21. Currently in print: 1 million

NFL

Football 101 Raven’s “Club Purple”

Other Initiatives:

MLB: Mother’s Day community outreach with Charity Component (e.g., Fight Breast Cancer).

MLS: Put features of their players in women’s magazine (education about players and game). Team level efforts include ads targeting “moms”.

NHL with Reebok launch line of women’s apparel.

Why do sport marketers care about product’s position on product-space map?

Where do sport consumers see you, based on important attributes?

Product Position

How the product is positioned in consumers’ minds

Positioning for Media, Sponsors, Spectators: The US Open Series

The Role of Research in

Sport Marketing

You need to:

Appreciate marketing information system

Understand research methods

Recognize available internal and external data sources

Marketing Research

Basic data are essential to good decision making

Key is ongoing and systematic research

Challenge is taking data collected, analyzing it, and making sense of it

A marketing information system (MIS) is integral

Marketing Information System (MIS)

Can range from index cards to a fully integrated database

Complexity depends on:

Size, geographic dispersion of market

Availability of data

Budget

Organization leadership

What question should sport marketers ask? Why?

Information From MIS

Who consumes our product?Who decides on the purchase?Who consumes our competitors’ products?

What products compete with ours?What products complement ours?What are the key benefits sought by consumers?

When do consumers buy?

How do consumers consume our product?

Information From MIS

Size of market

General Market Data

Market demographics

Purchase behaviors

Spectatorship or participation level

Future trends

Information From MIS

Contact names and numbers of all consumers

Product usage behavior (e.g., frequency)

Individual Consumer Data

Method of payment

Market’s chosen media

Pattern of consumption

Information From MIS

Competitor

An organization offering similar products

Usually located within 30-minute drive

Competitor Data

Visit competitors to gather data

Hire “mystery shoppers”

Data Sources for MIS

Internal—within-organization information

External—information from outside the organization

Internal MIS Data Sources

Sales records

Inquiries

Communications of praise/complaint

External MIS Data Sources

Census reports

State agencies

Secondary Sources

Public libraries

Chambers of commerce

Trade associations

Professional research services

Trade and scholarly press

External MIS Data Sources

Communicate with target market

Primary Sources

Importance of primary research

Initiate data-based marketing efforts

Types of Primary Market Research in Sport

Observation

Focus groups

Surveys and questionnaires

On-site, mail, telephone, computerized, Internet

Personal interviews

Panels of experts

Mystery shoppers

You were just hired as assistant marketing director for the Toronto Argonauts. During the first meeting you impress your boss by saying that what you guys need is to enter the 21st century with a sleek customer database. Your boss asks:

What information do you want in there?

What will you do with it?

Team work: What do you do with a customer database?

Pricing Strategies

The Basics of PricingWhat needs to be priced?

Tickets

Memberships

Signage

Apparel

Concessions

Price according to location, image, and time (why time?).

The Basics of Pricing

Easily changed

Effective with elastic demand

Highly visible

Important to consumers

Core Issues

Fan Cost Index (FCI)

Cost From Consumer’s Perspective

Fan Cost Index (FCI)

Reported annually

Includes all price elements for professional event

4 average-priced tickets

2 beers (small)

4 sodas (small)

4 hot dogs

2 game programs

2 game caps

Parking

Example: NHL

“The Toronto Maple Leafs have the most expensive tickets at $76.15 (USD)* and the priciest FCI at $411.30. The Montreal Canadiens are second in both categories at $64.26 and $361.25, respectively. Fellow Original Six teams, the Boston Bruins and New York Rangers, are third and fourth in FCI rankings at $352.60 and $348.84.”

Team Marketing Report 2009

Value and Price

High price not necessarily detrimental

Price often associated with perceived quality

Product value includes more than winning:

convenience, aesthetics, cleanliness, availability, durability

Standard Approaches to Pricing

Production costs

Market conditions (supply and demand)

Competitor’s price

Product and event frequency

What the Market Will Bear

What could be the result of an incorrect decision?

Can you give an example?

If hunches are wrong, results can be costly

Would any particular group be more sensitive to price change? Why?

Special Pricing Factors to Consider

Pricing based on user group

Corporate season-ticket holder

User Segmentation

Single-ticket purchasers

Special groups

Student packages

Unbundling

Special Pricing Factors to Consider

Time—bundled packages

Prime vs. non-prime time

Time and Place Smoothing

Price scales in venue

Key factors—proximity, line of sight, and demand

Note the Escalator!

Price hikes threaten to push consumers off escalator

Emphasize other features of the product