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3.

SPORTS MARKETING

2. Sport typologies

4. Sport industry

6. Sports marketing

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Arne Müsseler
Introduction
A 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 • Ex : Street-ball
– Individualism – Community
– Universality – Proximity
– Performance – Experience
– Technology – Fun
– Freedom
– Specialization
– Authenticity
– Innovation

Olympic Games Tribalism


Stadium Competitions Outdoor
Athletes as heros Athletes as big brothers 5
GAME 2

• Make your own typology of sports

• What criteria did you choose? Why ?

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Example of typology of sports
Based on consumers’perceptions (Hickory 2001)
TRAINING SPORT EXPRESSION SPORTS
Health and look Mental, surf, mastering the movement
Fitness, body-building, aerobics Snowboard, karate, ice-skating, dance

OUTDOOR SPORTS
RULED SPORTS
Social competition LEISURE SPORTS Exotism or roots
Ball sports Extreme or family
Freedom, amusement, conviviality
Mountain or sea
PASSION SPORT
Personal investment

RESISTANCE SPORTS ELITE SPORTS


Courage and obstination Golf, horse-riding,
Athletics, triathlon, cycling, swimming sailing, tennis

MOTOR SPORTS
Adrenalin, speed and power
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Formula 1, Rallye, Motorcycles, off-shore boat, ..
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

3. What can be a « sport product » ?


4. How can be the clients ?
5. The suppliers ?
6. The intermediaries ?

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The sport product is often a service
SERVICES WITH
HIGH AMOUNT
OF PHYSICAL DEVICES

Magnesium Food Cloth Ski Racquet Swimming-pool Competitions Training Teaching Counselling

« PURE » GOODS « PURE » SERVICE

GOODS WITH
HIGH AMOUNT
OF SERVICES
(advices, maintenance, …) 12
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)

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Source : http://umterps.cstv.com
Simplified Model of the Consumer-Supplier
Relationship in the Sports Industry

Producers/Intermediaries
Products
Sports Labor
Consumers Events
Sanctioning Bodies
Spectators Sporting Goods
Sponsors
Participants Personal
Training Media

Sports Agents
Information Equipment Manufacturers
Banking & Insurance
Government

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The sports marketing NB :
Agents &
Businessmen

exchange process
Are often between
Media and athletes
Media and Leagues

SPONSORS
sponsoring
TV Rights
image
purchases

GOVERNMENT taxes MEDIA rights


PROFESSIONAL
SPECTATOR dream ATHLETES

Ticket fees Rights &


sponsoring salary
fun subsidies

dream LEAGUES
Studies & advices
royalties
AMATEUR membership AGENCIES
subsidies
ATHLETE
Insurance CLUBS
Pleasure
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Training…
Types of sport products
• CORE • PERIPHERAL

• Sport Events • Athletes


• Arenas / stadia
• Sporting goods
• Hardgoods: equipment, accessories • Sports information
• Softgoods: apparel, clothes & footwear
– TV, Newspapers, Internet, Magazines,
• Collectibles and Memorabilia Radio, etc.
– ESPN
• Sports training & services
– Fitness and Health Services
• Sport betting ($100 b /year ?)
– Sports Camps and Instruction
– $12b online sport betting

• Sport video games / online sport


– Fantasy leagues

• Towards digital sports ?


– Online informations + games +
gambling

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Sporting goods
Average : +5% over 7 years.

• USA (SGI, 2005 est.) • Europe (SGR, 2005 est.)


– Over $100 billion – Over $40 billion

Exercise
Firearms
Golf
Camping
Fishing

+ Collectibles (cards)

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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 brands
Fred 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

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http://www.allianz-arena.org
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

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Sport Business in the Global Marketplace, 2004
Sport management, P. Masteralexis and al., 2000

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Key facts & figures
on sports industry
• 11th largest of all U.S. • Relatively weak impact in
the world (1-2% world
industry groups
PNB)
• World’s sports market • Sports firms are still
: $500 b. relatively « small »
(all included) – Sales :
Asia; 50;
Nike = $10 b.
10%
(world biggest in sports
Europe;
100; 20%
2005)
( vs. Exxon = $400 b.
USA; 350;
70%
Wal-Mart = $312 b. in
2005) 25
Lisa Neyrotti

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2004 or 2005 Sporting goods Sport retailers Media Leagues
sales Federations,
clubs
Over 1 b. $ Nike (11b), Adidas-Reebok Intersport (6,2b), Fox (12 b.) MLB (3,5 b.)
(6,6b), Wal*Mart (5,8b.), Sky (4 b.) FIFA (3b.)
Amer-Salomon (2b), FootLocker (4,1b.), Sport ESPN (2,4 b.) NFL (2,2 b.)
2000 (2b.), Decathlon
QuikSilver-Rossignol (2b), NBA, NHL (2 b.)
(3,1b.), Sports Authority
Hilfinger (2b), PGA (1,5 b.)
Alpen, JC Penney, LL
Mizuno (J), bean CIO (1,1b.)
Asics (J)
Ferrari (1,2 b.)

$1 b. < Shimano (J), New Balance, Karstadt, JJB Sport


Fila (I), Callaway, Pentland Dick's, Sport Inc.
<500 m. (GB), Decathlon (F), Skechers, Bass Pro shops, Just for
Benetton (I) feet, Cabela's, Canadian
Tire, Rallye

500 m. < Puma (D), Lacoste (F), Eurosport Manchester (315m.)


Lafuma-Oxbow (F), HTM (D), International (300 Real (287 m.)
< 250 m. Cycleurope (S), Columbia, K2 mil.) Milan (270 m.)
Chelsea (264 m.)
Juventus (262 m.)
Arsenal (211 m.)
Barcelona (206 m.)
250 m. < Converse, TImberland, North Bayern Munich
Face (GB), Tecnica (I), Scott, (202m.)
< 100 m. LAGear, Lowe, HellyHansen (+15 european clubs
(N), Aigle (F),Patagonia, over 100m.$) 27
Nautica,
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
From Sports Marketing (M. Shank)

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 Fan Cost Index Nike and 3rd world
involvment (M. (team Marketing manufacturing
Tyson vs Evander report)
Holyfield
Place Facility image Luxury suites and Success : Oriole Park at
influence VIP lounges in Cleveland indians Camden Yards in
perceived quality stadia increase (Jacobs Field), Baltimore, Ball
and credibility revenue a lot Failure: Gund Park at Arlington,
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Arena (Cleveland Retro style
Cavs),
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.
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