Strategic Sports Marketing#SLS711

Learning outcomes

By the end of this lesson you should be able to;• Understand the importance of commercial

revenues to sport organizations• Explain the link between strategy and

marketing in the development of sport• Outline some of the skills associated with

strategic sports marketing

Marketing Sport

What comprises marketing?

The 7Ps of Sports Marketing

Product, Price, Place, Promotion

People, Process, Physical Evidence

Marketing of Sport

Communicating the benefits of sport participation and spectatorship (Shilbury et al, 2009)

Ensuring survival of sport and generating future players, spectators, revenues

Marketing through sport

Sport as a vehicle to promote goods and services to sport customers

Targeted at defined sets of demographics, geographics, psychographics

Developing a relationship with fans and club increasingly important

Understanding the market

Consumer Behaviour

What is unique about sports consumers?

How do we get into a consumer’s head?

Sponsorship

Why is sponsorship so important to commercial sport?

• Sponsorship is both an industrial product (B2B) and a consumer product (B2C)

• B2C: Along the hierarchy of effects– Majority of uses for

awareness, recognition• B2B: Use of sponsorship as a

resource) – adds value, differentiates brand, leveraged across the organisation (extendibility)

Sponsorship

Key management tasks

Objectives Activation – Leverage Evaluation

The Sponsorship Process

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

Exposure

Do

Feel

Think

Do

Feel

Think

Brand Objectives

• Corporate Level Objectives– Public awareness – Media awareness – Enhance image of the

corporation

• Product Objectives– Increase awareness levels – Reinforce target market

perception – Increase sales leads

• Public Relations Objectives– Enhance business and trade

relations – Improve employee motivation – Promote community

involvement

Source: Chadwick and Thwaites 2005: 331

Activation/Leveraging

• Integrating promotional elements into sponsorship• Poor sponsorship

– involves putting a logo on a sport team, athlete, league etc which places no importance on long-term goals

• Good Sponsorship– Success needs to be activated over time – links with other

parts of the promotional mix (tie-ins and giveaways, prizes etc)

• A good ratio is about 3:1 (act. costs to rights fee)• Example: Coca-Cola use a 6:1 ratio

• Chadwick and Thwaites (2005) comment that the initiative is always from the brand side, little from the sport property

• In the English Premier League the power is with the clubs (the exception rather than the rule?)

Effectiveness

• A contested notion – most studies are supported by brand with little or no real evidence to support them

• Meenaghan (1999) – “the holy grail of sponsorship research”

• Methods include;– Sponsorship exposure– Media exposure

• Cost comparisons– Duration of television coverage to

column inches

– Awareness Measures• Recall and recognition (prompted,

unprompted)

– Brand Attitude/Imagery• Attitudes created or altered

– Affinity Measures– Sales Effects

The Sponsorship Process

Purchase

Conviction

Preference

Liking

Knowledge

Awareness

Exposure

2. Unprompted/Prompted/

Awareness/Association

1. Media Exposure Analysis

3. Image Statements

4. Consideration Set

5. Product Consumption

6. Buying Behaviour

Pre-selection evaluation & establishment of clear

sponsorship objectives

Ambush Marketing

Confusing the customer

Student task: Endorsements

Strategy:an overview

How do we determine success in the

management of sport?

Is it winning? Is it making a profit in

business. Is it customer satisfaction,

retention rates? Is it simply survival?

The problem with strategic management in sport

• Utility v Resource Maximisation

Strategic Decisions are About…

The long-term direction of the organisation

The scope of an organisation’s activities

Gaining advantage over competitors

Addressing changes in the business environment

Building on resources and competences (capability)

Values and expectations of stakeholders which affect operational decisions

Source: Johnson, Scholes, Whittington (2005)

Definition of Strategy

Academic

Strategy is the direction and scope

of an organisation over the long

term, which achieves advantage

in a changing environment

through its configuration of

resources and competences with

the aim of fulfilling stakeholder

expectations.

Real World “Strategy is what you do

when your business stops growing”

Source: Johnson, Scholes, Whittington (2005)

Strategic Decisions are Likely to:

Be complex in nature Be made in situations of

uncertainty Affect operational

decisions Require an integrated

approach (both inside and outside an organisation)

Involve considerable change

Strategic Management Operational Management

Organisation-wide, holistic Functional, Routinised

Conceptualisation of issues Techniques, processes, actions

Creating new directions: new resource allocations

Managing existing resources

Developing new resources Optimising existing resources

Ambiguous/uncertain Functionally and Operationally specific

Long term perspective Day to day issues, annual operating plan

Strategic v Operational Management

Exhibit I.v

The three strategy lensesJohnson, Scholes,

Whittington (2005)

Generating Strategic Choices and Options

The key purpose of strategic discussions is to examine the current position and evaluate future strategic options

For the purposes of this module we will do this through the following approach;

Situation analysis (internal, external) SWOT into TOWS – this will generate ST and LT options

From the ST options (plural) generated by TOWS we will analyse each through the RACES model From the LT options (plural) generated by TOWS we will analyse each through the RACES model

Exhibit 2.1 – Johnson et al, 2005

Layers of the business environment

PESTEL

Exhibit 2.2 – Johnson et al, 2005

http://www.youtube.com/watch?v=3SuNx0UrnEo

Example SWOT

Exhibit 7.2

The TOWS Matrix- Generating Options

RACES – Haberberg and Rieple

Strategy is usually a set of options for the long term viability of the organisation

The RACES framework can check the validity of the TOWS options and help make the right strategic choices

Resources Acceptability Consistent Effective Sustainable

RACES – Haberberg and Rieple

Resources:- Are resources needed available or easily obtainable?How easy are they to imitate by competitors?

Acceptability:-Are internal power brokers, leaders and important stakeholders agreed?Are external stakeholders agreed or satisfied e.g. regulatory bodies

Consistency:- Does it fit with culture, brand reputation, business architectureIf not, has the change implications been modelled into the strategy?

Effectiveness:-Does the strategy address the issues facing the organisation and resolve them? Is one option better than another at doing this?

Sustainability:- Does the strategy lead to long term advantage and how?If competitors can imitate easily is there any way to make it more uniquely successful

Implications for the application of strategy to sports marketing

Unique Features of Sport

1. People develop irrational passions2. It engenders vicarious identification3. Differences in judging performance4. The interdependent nature of relationships between sporting

organisations5. Anti-competitive behaviour6. Sport product (a game or contest) is of variable quality7. It enjoys a high degree of product or brand loyalty8. Sports fans exhibit a high degree of optimism9. Sport organisations are relatively reluctant to adopt new

technology10.Sport often has a limited supply

Stewart and Smith (1999) in Hoye et al (2006)

Unique Features of Sport - Revisited

1. A heterogeneous and ephemeral experience mired in irrational passions of fans, commanding high levels of product and brand loyalty, optimism and vicarious identification

2. On-field winning v profit making

3. Sport is variable in nature and quality

4. Sport operates with a fixed supply schedule (each game has finite outcomes)

Stewart and Smith (2011)