MKT828 Midterm Exam 1 Notes PDF

Myopic Marketing ● The phrase “marketing myopia” characterizes a company focused on getting fast results without considering long-term implications or the actual needs of their customers. Segmentation ● components of segmentation used in sports- state of being state of mind……. ○ Four bases of segmen...

Myopic Marketing ● The phrase “marketing myopia” characterizes a company focused on getting fast results without considering long-term implications or the actual needs of their customers. Segmentation ● components of segmentation used in sports- state of being state of mind……. ○ Four bases of segmentation ■ State of being: Geography (proximity, clusters, outer rims), Age, Income, Education, Gender, Sexual orientation, Marital status and family life cycle, Ethnicity ■ State of mind: Presumes that consumers may be divided by Personality traits, Lifestyle characteristics such as attitudes, interests, and opinions and Preferences and perceptions. Values and lifestyle (VALS) typology are Innovators, Thinkers, Achievers. Experiencers, Believers, Strivers, Makers, Survivors ■ Product benefits: What does the customer want from the experience or product? Affiliation, Achievement, Status, Health and Fitness ■ Product usage: Sport marketers need to understand that their consumers can be segmented based on how much they use the product. Common divisions include heavy, medium, and light users. 80-20 rule: 80 percent of business comes from 20 percent of the customers. Repeat business is the key to success (e.g., season-ticket holder versus single-game attendee). Not all consumers consume at the same rate. The level of consumption varies from sport to sport, so the relative importance of usage rates (in terms of total attendance or participation) differs from sport to sport. The levels of consumption are likely to vary from age group to age group. The sport marketer must maintain opportunities for different levels of consumption: Heavy, Medium and Light. An increase in sales volume is much more likely to be generated by increased frequency or a higher consumption rate among existing users than it is from an increase in sales to first-time users. Type of Analysis ● Cluster… ○ Crosstabulations ■ Examine the interaction between two or more variables ○ Cluster analysis ■ Examines a high number of factors simultaneously to identify groups or customers who share common factors Customer Loyalty Ladder ● Identifies steps consumers take as they become brand loyal: 1. Identify prospects 2. Customer (purchase product) 3. Client (repeat purchase) 4. Brand supporter 5. Brand advocate or brand champion Marketing Models - BCG Matrix, Brand Positioning Map, Porters 5 Forces Boston Consulting Group Matrix (BCG Matrix) ● Used to analyze product performance and determine resource allocation ○ Dogs: low performers in low-growth markets- REMOVE FROM PORTFOLIO ○ Questionable products: low performers in high-growth markets may require investment and shifts in marketing strategy ○ Stars: high performers in growth markets continue to be supported ○ Cash cows: products in mature markets minimal investment highly profitable Brand Positioning Map ● Asseses how consumers think about products ● Helps determine where in the marketplace there is room for a new product ● Value Costs - Chart products perpendicular axes Customer Lifetime Value ● Look long term at relationships with customers ● Quantify the future of a customer over the lifetime of the product Figure 2.7 Growth Strategy Matrix ● Examines existing and new product growth opportunities within existing or new markets. ● Place products into four quadrants: 1. Market penetration-existing products in existing markets 2. Diversification-new products into new markets 3. Market development-existing products in new markets 4. Product development-developing new products to compete within existing markets Figure 2.8 Importance-Performance Analysis ● Determines how well an organization is meeting customer service quality. ● Customers provide feedback on both importance and satisfaction levels. ● Model consists of four quadrants, with perpendicular axes: ○ Importance (high, low) ○ Satisfaction (high, low) Figure 2.9 Porter’s Five Forces ● Examines forces that shape competition and impact profitability: 1. Industry rivals 2. Threat of new entrants when entry cost is low opp for profit exists 3. Bargaining power of buyer’s sway price offer incentives 4. Bargaining power of suppliers control over pricing to the industry 5. Threat of substitutes-multiple sport/entertainment Syndicated Data ● Data that have been collected, organized, and repackaged for consumption ● Several sources of such data: ○ U.S. Census (We have a Canadian Census) ○ Demographic profiling (data provided by syndicated research ○ companies) ○ Audience measurement (e.g., Nielsen or Arbitron) ○ Broadcast exposure (e.g., Joyce Julius or Repucom) Custom Research ● Not doing secondary research, only primary ● Any situation in which researchers customize and implement a methodology for obtaining data that is not already collected and available for usage ● Custom research of consumers falls in one of two categories: ○ Quantitative data: represented numerically (ex. Survey) ○ Qualitative data: nonnumeric metrics (ex. interview, focus groups) ● Primary consumers of research include the sponsorship, ticketing, and marketing departments ● A league office needs to understand consumer behaviors and perceptions as they affect the branding of the league, league partners, and league marks. ● A consumer may well have different perceptions and intentions toward the Tampa Bay Lightning brand, Tampa Bay Lightning sponsors, and the Tampa Bay Lightning experience than he or she does toward the NHL and its respective brand, sponsors, and experience. Chatbot ● Computer program powered by machine learning to simulate natural human conversation ● Use artificial intelligence and algorithms to develop responses to customer inquiries ● Can handle unlimited number of requests and inquiries Qualitative Research ● Several structured forms but can also conduct unstructured observations and discussions with consumers ○ In-depth interviews ○ Focus groups ○ Ethnography ○ Market research online communities and social media sites Quantitative Research ● Surveying is the most common method to collect quantitative data: ○ Digital (online) ○ Intercepts ○ Telephone (non favourable) ○ Direct mail (not offered very often) Performing the Right Research ● Many sport organizations undervalue or do not commit adequate resources to market research efforts. ● Identify the business objective at hand. ● Let the objective define methodology, never vice versa. ● Plan as much as possible. ● Have a sense of budget before moving forward. ● Search out a research partner, not just a supplier. Kotler’s Black Box Commitment of the Sports Consumer ● The frequency, duration and intensity of involvement in a sport ● The willingness to expend money, time and energy in a pattern of sport involvement ● Frequency elevator ○ Fan involvement is more than a constant one-way progression, as presumed by the frequency escalator ○ Fans consciously choose to become more or less committed to sport organizations over time External environmental factors that affect consumer behaviour ● Political ● Cultural Norms ● Demographic (age or generation, gender, ethnicity, sexual orientation) ● Situational ● Significant others- friends, family, parents , coaches, peers ● -cultural norms and values ● -class, race, gender relations ● -climate and geographic conditions ● -market behaviour of sport firms and organizations- behaviour of sport firms has important ramifications for consumer involvement Decision making process ● Problem solving ● Information search ● Alternative evaluation ● Product family ● Product class ● Product line ● Product type ● Product brand ● Purchase decision ● Post-purchase evaluation ○ Satisfaction = repeat purchase and grow loyalty ○ Dissatisfaction = reduce or abandon ○ Marginal satisfaction = reevaluate Common Motives for Sport Involvement/ Attitudes, Perceptions Sport Involvement ● What sport are you most Passionate about? Most impassionate? Why do you feel like this? Most people have very strong feelings toward sports, either positive or negative. Essential step. ● “Involvement” - Socializing through sports demands in some form 1. Behavioral involvement: the hands-on “doing” (playing, practice, competition) 2. Cognitive involvement: the acquisition of information and knowledge about a sport (sports trivia, knowing stats, conversation) 3. Behavioral involvement: the attitudes, feelings, and emotions that a consumer has about an activity - pep rallies, motivational commercials, etc… “Marketing through sport”, ● involves players who use sport as a booster to grow a business that is not directly connected to sports. ● Players who use marketing through sport include sports marketing agencies, brands resorting to testimonials, and so on. ● An example of marketing through sport is the Opel brand using Valentino Rossi to promote their car model Opel Adam. “marketing of sport”. ● Anyone involved in initiatives aimed at bringing a sport product closer to end consumers ● This includes marketing operators of sports businesses and organisers of events, leagues, championships, and so on. ● For example when you find a promotion entitling you to go to the stadium with a friend free of charge, you are exposed to “marketing of sport”. Marketing Planning Process ● MPP is used to build a marketing plan. ● MPP must integrate with an organization’s overall strategic vision: 1. Develop strategic vision, business mission, and values. 2. Set goals and objectives. 3. Craft a strategy for achieving the objectives. 4. Align resources to implement and execute the strategy. 5. Evaluate performance and adjust to maintain an advantage. Effective Marketing Plans - how to determine - must be Proactive 1. Make decisions to increase revenues 2. Build and sustain customer loyalty 3. Outperform competitors to sustain competitive advantage Revenue Sources ● Ticket sales, sponsorships, merchandise, concessions, broadcast rights, advertising and other sources. Socialization ● The process by which people assimilate and develop the skills, knowledge, attitudes, and other “equipment” necessary to perform various social roles ● Involves two‑way interaction between the individual and the environment ● Socialization into sports usually begins in the family Promotional Marketing Activities ● Promotion: an activity that supports or provides active encouragement for the furtherance of a cause, venture, or aim. The publicization of a product, an organization, or a venture in order to increase sales or public awareness. ● Any activity designed to stimulate interest in, awareness of, and purchase of a product ● Critical in the positioning of a product in the mind of the consumer ● Method to convey information about the place, price, and product Promotional Forms of Marketing Activity ● Paid media (advertising): paid, sponsored message conveyed through media ○ Paid media, depending on the channel employed, are controllable, targeted, cost effective, and productive ○ Examples include Google Ads, social media ads, as well as more traditional options such as television commercials, print ads, and billboards. ● Earned media (publicity): exposure in media not paid for by the organization ○ If someone mentions you in their blog, their video, or their website, mentioned in the news without being paid for the mention, this also counts as earned media. ● Sales: presentation in which seller has an opportunity to dialogue and persuade the customer ● Sales promotion: variety of activities aimed to drive product purchase- Promotional activities, which can take the form of price-oriented efforts such as discounting and packaging, or nonprice efforts such as giveaways and special events, are an essential part of attracting consumers and increasing their frequency, spending, or volume. ● Because the repeat user is the lifeblood of the sport organization, over-investing time and money in an effort to attract one-time, or first-time, patrons is a questionable strategy. Even if a sponsor underwrites the cost of a giveaway, the marketer must consider the resources (staff, time, and advertising) spent on attracting consumers who may be nothing more than cherry pickers. ● Obviously, any strategy should attempt to attract nonusers, but it should not neglect repeat users. Ultimately, each organization must determine the ideal balance in its promotional strategy. ● Tactics include some combination of the elements of paid media advertising, personal selling, public relations, and sales promotions. ● Successful strategies, however, must recognize the need of consumers to move both up and down the elevator of consumption. ● The key is to retain them at a place on the elevator where they are comfortable, so that they do not defect and need to be replaced. ● Promotional concepts that are integrated and have a variety of connecting points and communication channels have a greater likelihood of attracting an interested audience who are likely to act on the promotional offer. Core Sport Product ● ● ● ● ● A figure 6.1 suggests, the sport product is both an integrated ensemble and a bunch of components with lives of their own. At the core is the event experience, or the game presentation composed of six components: 1. Game form (rules and techniques) 2. Players (star power) 3. Fan behaviour 4. Equipment and apparel 5. Venue 6. Personnel, process, and physical facilities Event Experience: Core Element ○ Game form (rules or techniques) ○ Players ○ Fan behavior ○ Equipment and apparel ○ Venue ○ Personnel, process, and physical facilities Game Form ○ Rules and techniques ○ Special features that may make a sport product especially attractive to certain consumers Rules changes are driving a revival for MLB, and the sport has the attendance and viewership gains to prove it ○ Those key issues have been addressed in a dramatic way through the first half of this season. ○ Thanks to the advent of the pitch clock, MLB’s time of game — 2 hours, 38 minutes — is down 26 minutes versus last year and is on pace for its best mark since 1984, when games took an average of 2 hours, 35 minutes. Banning the infield shift and widening the bases have fueled year-over-year increases in batting average (.248 across MLB, up from .242), runs (9.2, up from 8.7) and stolen-base success rate (79.2%, up from 75.6%). Star Power ○ A presence that transcends the actual playing ● ● ● ● ○ Impacts consumer interest and attendance ○ Star power can be measured by metrics such as Q-score ○ Coaches and owners can also be stars ○ Star power used for social activism ○ LeBron James Explains Why Chose to Receive COVID-19 Vaccine Fan Behavior ○ Fans are an essential part of any sport event and move the core product into the realm of spectacle; they expand the drama. ○ Sport marketers must be careful how they promote fan behavior as part of the event experience because unruly fans can poison the atmosphere and incite violence. ○ Many sport organizations are attempting to regulate rowdy fan behavior and excessive alcohol consumption. Equipment and Apparel ○ Equipment needed to compete is part of the core product. ○ Apparel and equipment also go well beyond the core product and become key identifiers and extensions for brands. ○ Apparel can be used as a promotional tool (e.g., T-shirt giveaways) Venue ○ Teams and franchises are closely aligned with their venues. ○ Memories and communities are created within those venues. ○ Venues also provide significant revenue streams during and outside game days. Personnel, Process, and Physical Facilities ○ Personnel, process, and physical facilities refer to the event staff, the manner in which they go about their jobs, and the environment presented. ○ From the sport consumer’s perspective, those employees and the way that they interact with consumers are part of the sport event experience (core product). Mark Cuban ● Mark Cuban changed the game ○ Sports fan wanted to do more than just watch the game ○ He made each game an event ○ Rebranded the Mavs dancers ○ Dallas mavericks BEGINNINGS OF SPORT MARKETING ● Advertisers in 1870’s actually realized the marketing potential within sports and inserted marketing cards that featured baseball players in cigarette packages. ● The strategy was to sell more cigarettes and increase loyalty to the brand ● This later extended into the bubble gum baseball cards- collector items ● The 1st paid Athlete endorsement – Louisville Slugger requested permission to sell Honus Wagner signed bats in return for compensation. ● Fenway Park- 1912 1st PROFESSIONAL BASEBALL STADIUM 1925 Good Year Tire and Rubber Company –Blimp Advertised products and provided public service announcements- major milestone in the history of sport marketing The next iconic advertising emerged-The Wheaties Box General Mills showcased Lou Gehrig on the cereal box1934- “Breakfast of Champions” ● ● ● ● ● ● ● ● May 17th 1939- The first game ever broadcasted on TV College basketball game A League of Their Own- First Women's Baseball – WWII All American Girls Professional League- set up to keep Baseball Stadiums full during WWII despite male players were absent Unique Selling Proposition ● Identifies attributes that make a product stand out and become attractive to consumers. ● May help convince consumers to switch brands. ● Unique attributes cannot be emulated. Figure 2.15 Brands and Branding ● ● Branding is both a means and an end to product differentiation. Brands can be created or retained through ○ Names ○ Marks ○ Designs ○ Images What Is Branding? ● The brand name and marks associated with a sport organization (such as a logo) serve to provide a point of differentiation from the other sport products that exist in the marketplace. ● The brand name, logos, marks, and colors of a sport organization serve as a starting point in the brand management process. ● Sport brands trigger feelings and attitudes toward a particular sport product that have been developed through sport consumption. Promotion ● Any activity designed to stimulate interest in, awareness of, and purchase of a product ● Critical in the positioning of a product in the mind of the consumer ● Method to convey information about the place, price, and product Communication Process/ Internal and External Noises Problems with digital online surveying Online Surveys ● Benefits ○ Readily available access ○ Readily available surve-design software ○ Can target specific participants ○ Quick access to data ● ● Drawbacks ○ Limited to e-mail address access (venue may have email address data from ticket buyers but they will likely not have data from walk up cash buyers or guests of ticket buyers) ○ Can be blocked by potential participants (spam) ○ May produce relatively low response rates (respondents with a high stake may respond to surveys while others with a low stake may not respond) leading to low response rates Examples ○ To determine what influences fans to watch games at home instead of attending in person, the Chicago White Sox use an online survey to reach its TV and online audience. During live game-day broadcasts, the URL is shown on the screen and the broadcasters announce where to complete the survey and the incentive for their participation. TV and online viewers type in the URL on an Internet browser and complete the survey. ○ Following the participation in the Yosemite Half-Marathon, Vacation Races sends out an online survey to all participants via email to collect feedback on the event, from ease of access to the event to the quality of the trail to the food selection at the finish line. Participants are also asked about their travel and spending surrounding the event to help provide organizers with a sense for the economic impact in hosting the event at a rural location outside a National Park. Brand Equity ● Defined as “a set of assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers.” ● When a sport organization is able to achieve a strong image in the consumer’s mind, it realizes brand equity. Brand Equity ● Name recognition or awareness ● Strong mental or emotional associations ● Perceived brand quality ● Strong customer loyalty Benefits of Brand Equity ● Less drastic revenue declines when the team loses ● Ability to charge price premiums ● More corporate interest Developing Brand Equity ● The creation of awareness about the brand: ○ The ability of a consumer to name the brand’s existence when its product category is mentioned ● The creation of a brand image: ○ ○ Combination of different thoughts an individual has about a brand or how it is perceived by consumers Development of unique, strong, and favorable brand associations Leveraging Brand Equity ● After brand equity is built, brands can take advantage of, or leverage, their brand by introducing new products to the marketplace. ○ Line extensions ○ Brand extensions ○ Licensing Line Extensions ● New versions of a product within the same product class ● Example: Callaway Golf developing different golf club lines using different technologies, different price points, and targeted at different demographics Brand Extensions ● Use a brand name established in one product class to enter another product class ● Example: Chicago Bears opening a public fitness center Licensing ● Occurs when a brand grants an outside company the right to use their intellectual property such as their brand name, logos, colors, taglines, and mascots to produce new products. ● Can generate new revenue for sport organizations without adding risk. Brand Loyalty ● the marketing success that occurs when companies are able to retain customers across product lines. ● Results in a larger viewing audience for events which allows the sport organixzation to realize higher broadcast fees for the rights to televise a property’s game or event and attract more sponsors looking for widespread television exposure. Figure 7.2 ● Revenues fortunes for teams with high and low brand equity 80-20 rule ● A general pattern across industries showing that approximately 80 percent of market consumption comes from only 20 percent of the consumers ● 80% of your profits come from 20% of your customers