Commercial Aspects of Sport

Our Commercial Idea

Tom JonesJames ReayArsen DzantievKy TeijasTom Russell

Introduction

• An overview of our chosen sports organisation • Analysis of current commercial activity • Description of our commercial idea for the

sports organisation • Marketing analysis of the idea• Financial analysis • Academic theory and models • Conclusion

Overview

• ‘Soccer’ team based in New York City• Founded on May 21, 2013• 20th franchised team competing in the MLS (major

league soccer) • Majority owned by Manchester City Football Club• Partnered with New York Yankees baseball team – have

a minority stake in the club • The Yankee stadium• Currently have plans to build their own stadium in the

Bronx – to be completed in 2018

• Single match tickets • Group tickets • 9 match plan • Standard ‘Cityzens’ membership

Current Commercial Activity

Our Commercial Idea

• Cityzen +

• Upgraded membership to the standard ‘Cityzen’ membership

• Enhanced premium membership scheme with a range of benefits for the most loyal real fans.

• Open to season ticket holders and non season ticket holders.

• Costing $80, paid monthly in 10 installments.

• Purchased online, over the phone or at the ground.

Strategic Marketing Framework

(Goldstein, n.d.)

Strengths

Attendance – Capacity to seat 33,444 fans, 12,000 + confirmed season tickets.Brand-Image – Part owned by Yankees and Manchester city F.C., both prestigious sports clubs.Marquee players – High profile signing, David villa and Frank Lampard.New York has a developed sport cultureNo direct competition in New York

Weaknesses

Experience– First season of the club in the MLS, no previous experience.Sport – Soccer is not popular in the USA.

Opportunities

Lottery – unique first time approach for a sport clubMembership Schemes – With 12,000 + confirmed season tickets (30 % of capacity) unique membership offers can improve sales.Promotional opportunities – -With world renown stars on the team, fan base can be improved with for ex. ‘Meet player sessions’.- Ties with Mcfc and Yankess can be used to provide benefits.

Threats

Fluctuations – Chances of attendance being erratic.Risk-factor – The lack of popularity of soccer in the USA, may pose as an obstacle in securing investment in promotional schemes from the fans.

SWOT Analysis of NYCFC

PESTLE Analysis- Online shopping- Social media- Online lottery- Improved match day experience with the use of IT- Buffalo technology to protect data.

- Data protection- Taxes- Safety standards- Consumer protection

-Noise pollution-Recycling

-High immigration -Preferred by many tourists-Stable political situation

-Disposable income. New York is in top 10.-Economy is in recovery-Low inflation rates

-Developed sport culture-Match-day experience-Different generations are inspired by sport

Stakeholder Analysis

Importance of stakeholders

Unknown Little or no importance

Some importance

Significant Importance

Influence of stakeholders

Significant Influence

- Suppliers - Sponsors- Board of directors

Somewhat influence

- Other football clubs

- Players- Media- Staff- Stadium

- Fans- Local

Community

Little or no influence

- MLS

Un-known - Investors

Target Market

• Yankee Stadium Location The Bronx, New York

• Average annual income New York: $56,739 The Bronx: $34,388 Department of numbers (2014) US Census Bureau (2014)

• New York Economy Unemployment: June 2014- 6.6%

December 2014- 5.8% United States Department of Labor (2014)

Target Market

• 2nd favourite sport in young adults, behind Football and ahead of Basketball.Cox, D. (2014)

• Future of American sport? Average age of Americans who state that their favourite sport is:

Soccer: 37 years oldFootball: 48 years oldBaseball: 53 years oldCox, D. (2014)

Target MarketPorters Five Forces

Rivalry Amongst Competition

Bargaining power of buyers

Threat of new entrants

Threat of substitute

products and services

Bargaining power of suppliers

Hoye, et al. (2012)

Goal – To support and contribute to the development of a loyal fan base, of at least 5000 members within the first year.

SMART Goal

Marketing Mix of NYCFC

Marketing Mix 4Ps

Product

Price

Place

Promotion

Adapted from Smith (2008)

Marketing Techniques

• Television Ads/Radio Ads/Times Square

• Working business to business• Emailing system• Work with Third Rail• Club Website• Posters/Leaflets• Promotions• Invitation Day• Social Media

Promotional Video

NYCFC Cityzen + Promotional Video – 64% of viewers are more likely to make a purchase in an online store after viewing a video (comScore, Inc, 2010)

– 52% of consumers say that watching product videos makes them more confident in online purchase decisions (Invodo, 2014)

Example: Promotions• First 500 members who sign up will receive a

10% discount of membership• The next 1000 members who sign up get 5%

off their membership

• Possible future promotions: Every friend you refer, you will receive a month free, race to get the first free membership (Subject to finance)

Example: Invitation Day

• People who have purchased season tickets will be contacted via email or phone.

• Free tour around stadium• Engaging with fan, make them feel involved• Promote the membership, persuading them to

purchase with presentations• Face to Face marketing

Lewis (1899)

Example: Social Media

• Create social page• Promoting the membership• #Cityzen+• Link with the clubs main

social page which has over 140k followers

• Engage with fans • Use players to promote

( As cited in Beech & Chadwick, 2006)

The Sport Integrated Marketing Communications Process Model (SIMC)

Communication strategy – (Communication loop)

Two-way symmetrical communication -- Ensures main objectives of both parties in the exchange process are mutually beneficial (Beech and Chadwick, 2006). Method - - Social media: Twitter, Facebook, Instagram, etc.- Other internet supported tools – Smartphone apps, e-mail newsletters, etc.

• Predicted number of members: 8000• Membership price = $ 80• Variable costs:• Membership card = 25 cents per item• Membership pack (incl. scarf, photos and wristband) = $ 3.5

• Low price, due to Economies of Scale (Bulk buying)

• Fixed costs:• Prizes = $ 300000 • Marketing campaign = $ 30000• Our Salary = $ 200000• Website update and lottery software = $ 7000• 1 year contract with United Parcel Service = $ 8000

• Semi-variable costs:• 10% discount for the first 500 people = $ 3750• 5% discount for the 2nd wave of 1000 people = $ 3750

Finance Analysis

Break-Even Chart

0 1000 2000 3000 4000 5000 6000 7000 80000

100000

200000

300000

400000

500000

600000

700000

Total Cost Fixed cost Total RevenueVariable Cost Total Semi-Variable cost

Members

Break-even point

7148 members

Ansoff Matrix – Product Growth Strategies (Beech and Chadwick, 2006)

Product Life Cycle

Evaluation Techniques

• Customer Satisfaction Surveys sent out via emailing system, 5 months into their membership.

• Quarterly year meetings to measure the progress of the amount of members we have.

• If underperforming, analyse what can be implemented to increase membership numbers

Conclusion

• Why should the fans buy our membership?

• The idea is PROFITABLE

• Will develop a LOYAL Fanbase

References• Ali, M. (2002). Practical marketing and public relations for the small business. London: Kogan Page.

• Beech, J. and Chadwick, S. (2006). The business of tourism management. Harlow, England: Financial Times/Prentice Hall.

• ComScore, Inc, (2010). .Fox Networks and comScore Reveal Ground-Breaking Findings About the Branding Impact of Online Advertising. [online] Available at: https://www.comscore.com/Insights/Press-Releases/2010/3/Fox-Networks-and-comScore-Reveal-Ground-Breaking-Findings-About-the-Branding-Impact-of-Online-Advertising [Accessed 2 Feb. 2015].

• Cox, D. (2014) Is Soccer Destined to Become America's National Pastime? [online] [Accessed on 26th January 2015] http://www.huffingtonpost.com/daniel-cox/soccer-in-america_b_4740668.html

• Department of Numbers (2014) New York Household Income [online] [Accessed on 25th January 2015] http://www.deptofnumbers.com/income/new-york/

• Goldstein, D. (n.d.). mind of marketing: Strategic Marketing Framework to print out & hang on your wall at work. [online] Mindofmarketing.net. Available at: http://www.mindofmarketing.net/2010/06/strategic-marketing-framework-to-print.html#.VMqgkXCsUmc [Accessed 26 Jan. 2015].

• Hoye, R., Smith, A.C.T., Nicholson, M., Stewart, B., Westerbeek, M. (2012) Sport Management (3rd edition), Routledge, London and New York.

• Invodo, (2014). Invodo Video Statistics. [online] Available at: http://www.invodo.com/resources/statistics/ [Accessed 1 Feb. 2015].

• Lewis, E (1899) "Side Talks about Advertising," The Western Druggist, Vol. 21, p. 65-66

• Smith, A (2008). Introduction to Sport Marketing. Oxford: Butterworth Heinemann. 98.

• United States Census Bureau (2014) State and Country quickfacts [online] [Accessed on 24th January 2015] http://quickfacts.census.gov/qfd/states/36/36005.html

• United States Department of Labor (2014) Economy at a glance [online] [Accessed on 26th January 2015] http://www.bls.gov/eag/eag.ny.htm# eag_ny.f.P

Thanks for listening

Any questions?