Routledge Handbook of Sports Marketing

Simon Chadwick, Nicolas Chanavat, Michel Desbordes, Simon Chadwick, Nicolas Chanavat, Michel Desbordes

• Publisher: Routledge
• Year: 2015
• Print ISBN: 9781138823518
• eBook ISBN: 9781317584919
• Topic: Business
• Subtopic: Marketing
• Index: Business

Sports marketing has become a cornerstone of successful sports management and business, driving growth in sport organisations and widening fan-bases. Showcasing the latest thinking and research in sports marketing from around the world, the Routledge Handbook of Sports Marketing goes further than any other book in exploring the full range of this exciting discipline.

Featuring contributions from world-leading scholars and practitioners from across the globe, the book examines theories, concepts, issues and best practice across six thematic sections—brands, sponsorship, ambush marketing, fans and spectators, media, and ethics and development—and examines key topics such as:

• consumer behaviour
• marketing communications
• strategic marketing
• international marketing
• experiential marketing
• and marketing and digital media

Comprehensive and authoritative, the Routledge Handbook of Sports Marketing is an essential reference for any student or researcher working in sport marketing, sport management, sport business, sports administration or sport development, and for all practitioners looking to develop their professional knowledge.

1
Defining Sports Marketing

Sebastian Kaiser and Markus Breuer

Introduction

During recent decades, sports have become an essential part of people’s leisure time. Sports organizations have evolved from local institutions that were dominated by honorary employees, to professional, global players. The FIFA World Cup and the Olympic Games can be recognized as some of the most important and probably the most sought after global sports events played at a professional level. The 2010 FIFA World Cup hosted in South Africa made $2,408 million from selling TV rights and an additional $1,072 million from selling marketing rights.¹ The 2014 World Cup held in Brazil was estimated to have generated a total turnover of $4 billion for FIFA.² In addition to sports organizations and broadcasting stations, more and more “non-sport” corporations are becoming involved in the global sports market. According to the Qatar Foundation, one of the global players in sponsorship (for example, sponsorship of FC Barcelona), global sponsorship spending was estimated at $50 billion in 2013.³ Producers of sports goods and sportswear, such as Nike and adidas, employ thousands of people all over the world and earn revenues of several billion dollars.

This chapter will provide an overview of sports, sports marketing and its economic background. It is structured as follows: the next two sections define the expressions sports and marketing and bring together these core ideas explaining the difference between marketing through sports and marketing of sports. The next section explains why marketing in the sports context differs from marketing for any other business segment. By virtue of the categories – suppliers, special characteristics of sports goods and special characteristics of sports demand – we will explain what makes sports marketing special. Finally, a brief outlook outlining some of the most important trends in sports marketing.

Defining sports and its meaning for sports consumers

Although the expression sport is widely used, it is difficult to find an appropriate definition that includes all the relevant fields of interest (from an economic perspective) and excludes all activities that should not be subject to processes like sports marketing. According to Mandelbaum (2004: 4), the expression sport is related to disport. Spectators are diverted from the burdens of normal existence. Team sports such as baseball and football offer a “particularly compelling form of drama” (Mandelbaum, 2004: 5). Similarly, Delaney and Madigan (2009: 11) argue that the term sport has its origins rooted in the idea that it is an activity designed to divert people from the routines of everyday life. While Mandelbaum considers only the spectators (consuming professional team sports), Delaney and Madigan implicitly include athletes as well. For our purposes, it is reasonable to consider both: athletes and spectators or customers. Additional information regarding the special characteristics of sports production and consumption will be provided later.

Normally, any sports are related to some kind of effort. According to Sansone (1992: 37), sport is the ritual sacrifice of physical energy. In most cases sports include competition. Physical competition mandates that physical effort and individual skills are involved to determine a winner or loser (Delaney and Madigan, 2009: 12). However, physical energy is not a necessary part of sports in modern societies. One only needs to think of mental exercises such as chess. Even competitiveness is not essential, for example, Nordic walking shows that sports could be driven by individual ambition without being competitive. That is, instead of glory and monetary incentives, athletes are motivated by social benefits or health. In this context we define sports according to Horch (1994: 245), as an aggregate of utility creating scarce goods that are linked to sporting behavior. This definition explicitly includes passive consumption of sports, as well as individual activity culminating from competition or for individual pleasure, so long as the precondition of effort or diversion is fulfilled.

Defining marketing and sports marketing

Marketing

The expression marketing was already widely discussed in the United States around the turn of the twentieth century (Usui, 2008: 15). As the production capacities of companies in the business sector grew and exceeded the consumer demand, methods of how to distribute and sell goods became increasingly important. According to Ferrell and Hartline (2012: 7), marketing is many different things. Marketing can be seen as a business process like production and logistics. As a business function, the goal of marketing is the connection of organizations (producers, suppliers) and customers. It can also be seen as a process that manages the flow of products from the point of conception to the point of consumption (ibid). For simplicity reasons we will focus on the famous 4Ps of the marketing mix concept. The concept of the 4Ps dates back to the 1960s and includes the following aspects:

• Product: product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns.
• Price: list price, discounts, allowances, payment period, credit terms.
• Promotion: sales promotion, advertising, sales force, public relations, direct marketing.
• Place (distribution): channels, coverage, assortments, locations, inventory, transport (Kotler and Keller, 2012: 25).

Marketing and the marketing mix do not focus on the promotion or even on advertising, but consider the entire value chain of a company, starting with the research and development (R&D) department and the production process (product) and ending with the field of customer care (for example, returns).

Although the 4Ps model is widely taught, it suffers from a number of flaws. First, it is incomplete as many activities that are carried out by a marketer are not considered. Second, it tends to push each activity into a separate category without considering the intersections. Third, the mutual benefit for the marketer and the consumer is neglected (Blythe, 2006: 8). Not all marketing activities are only for the benefit of the producer, some could also be providing utility to the customer. Considering these aspects, several authors built up extensions to the standard 4Ps model. Probably the best-known proposition was published by Booms and Bitner (1981), adding three more Ps (people, process, physical evidence), ending up with a 7P model. Some authors tend to distinguish different “marketing releases”. In terms of “industry 4.0” and “web 2.0”, they set up three stages of modern marketing activities:

• Marketing 1.0 is known to be product-centric marketing with the sole objective to sell products. The interaction between companies and consumers is limited to one-to-many transactions, indicating that it is impossible to address single consumers individually.
• Marketing 2.0 (“consumer-oriented marketing”) aims at satisfying and retaining the consumers. Products and services are no longer functional but become emotional. The relationship between companies and customers is one to one, based on new technologies and decreasing costs.
• Finally, marketing 3.0 is value-driven marketing and aims at “making the world a better place”. Instead of a simple interaction between company and consumer, some authors claim for a many-to-many-collaboration (Kotler, Kartajaya and Setiawan, 2010: 6).

The third stage is an inherent part of sports and its provision or consumption. For instance, when one thinks of a professional soccer game: 22 athletes and thousands in the stadium produce a unique good that is characterized by the uncertainty of outcome and is consumed by millions through TV and other media channels. However, in this case there has been no simple or direct interaction between a single company and a customer.

Sports marketing

What is sports marketing?

Sports marketing means the application of all marketing related activities, structures and thoughts to the phenomenon of sports. In this context, “sports” includes mass sports, professional (competitive) sports and sports in the media. Focusing on the supplier perspective, we can say that sports marketing is a managerial process by which the sports manager seeks to obtain what sports organizations need through creating and exchanging products and services with others (Shilbury et al., 2014: 17). To use this definition in day-to-day operations, we can put it into a sports marketing framework that outlines a step-by-step process to implement sports marketing activities. This framework includes four stages (Hoye et al., 2012: 204–205):

• Identification of sports marketing opportunities: analysis of internal and external environments, analysis of the organization, analysis of markets and consumers and consumer behavior.
• Development of a sports marketing strategy: development of a strategic sports marketing direction, development of a sports marketing strategy.
• Planning the sports marketing mix: considering price, product, promotion and place (4Ps).
• Implementation and control of the sports marketing strategy: implementation strategies, control process, sports marketing ethics.

According to Mullin (2014: 13), “sport marketing consists of all activities designed to meet the needs and wants of sport consumers[…]. Sport marketing has developed two major trusts: the marketing of sport products […] and the marketing of other industrial or services using partnerships and promotions with sport properties”. The difference between marketing of sports and marketing through sports will be discussed in the following sections.

Marketing of sports

Marketing of sports refers to the practice of marketing as it occurs within a sports organization (Parent and Smith-Swan, 2013: 97). In this context, the term “sports organization” covers, but is not limited to: (a) sports clubs (mass sports and professional sports); (b) profit oriented sports providers; (c) media (for example, broadcasting stations, websites, etc.); and (d) production and sale of sports goods (such as clothes, rackets, etc.).

Sports club marketing implies all marketing-related activities that occur in the management of professional as well as mass sports clubs. Focusing on professional sports clubs would include:

• The entire communication towards fans and other stakeholders that act as customers. The marketer has to ensure relevant information is provided to all kinds of customers, especially fans. Due to past changes in information technology (“web 2.0”), the constant provision of information and the control of all kinds of information has become one of the crucial tasks of marketing. Moreover, marketing nowadays has to consider activities, such as customer relationship management (CRM), in its marketing strategy. CRM can be based on individualism and holistic marketing, sales and service concept based on modern IT. A good CRM policy requires a good database. This is why sports clubs compete for ingenious new ways of obtaining reliable information on their customers (Desbordes, 2012: 170).
• The selection of merchandising products and the management of the distribution channels. Licensing revenues are generated when teams grant merchandise and apparel companies the right to use their names and logos. Recently, these arrangements have been increasingly lucrative as a source of revenue for professional teams (Gladden and Sutton, 2011: 130). In addition to the direct financial effect, customers purchasing branded goods show a deep commitment to the club and the public use of merchandising products (such as jerseys) initiates a recursive process, thus increasing the brand value. The portfolio of merchandising products has to be chosen and ordered in the first step. The consequent steps include the management of inventory stocks and distribution channels.
• Negotiations with actual and potential sponsors. Sponsorship is the most important source of income for most professional sports clubs. In only a few cases, the sale of media rights outperforms the sponsorship revenue. In Europe, it is only soccer clubs that generate a major part of their revenue by selling media rights. All other clubs are constrained by their sponsorship income and a patron or investor.

All activities discussed must be executed in a mass sports club in a similar manner. However, the information management is often lot easier as the interested public is usually restricted by a city or a region. Nevertheless, demographic changes and an increase in the profit making sector make it more difficult to remain competitive.

Like any other corporation, profit-oriented sports providers, such as public baths, have to cope with the 4Ps of the marketing mix. Regarding the price, many corporations compete with non-profit service providers that might offer substitutes at lower prices, benefitting from tax exemptions or voluntary work. Therefore, any kind of promotion has to ensure that customers realize the additional value that is generated by PFOs.

The economic relationships between media (including online media) and the sports sector are long-lasting and have evolved significantly in recent years (Andreff and Bourg, 2006: 37). The media assume a hybrid role in the marketing of sports. They act as customers buying broadcasting rights from sports clubs and associations, whereas broadcasters use sports events and the coverage they receive as a marketing instrument of their own: For many years broadcasted sports events did not play an important role in the program planning, however, since global events like the Olympic Games gained importance, sports as content became more and more important. Today, broadcasting stations use sports content as a positioning tool. Revenues generated from the sale of commercials during the event might be too low to cover expenditures for the acquisition of broadcasting rights. The broadcast of sports is cross-subsidized by revenues in other fields.

In terms of the overall influence of media on sports, broadcasting stations enforced several changes in competitive sports in recent years. In order to get the media’s attention, sports events had to reform forms, systems and rules of the games (for example, schedules) to meet TV requirements (Quing, 2013: 26). As a result of this influence, media is now a part of the modern magic triangle. It is formed by sports, corporations and media and describes the interdependencies between these major market players.

Sports goods producers can be regarded as suppliers for the sports industry. Although they do not underlie the restrictions for the sports organizations, they can be considered as normal for-profit corporations. The only exception is that such companies are often integrated in the entire sports value chain. When an important sports event is organized, corporations such as Nike or adidas act as sponsors and benefit from the success ...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• List of illustrations
• List of contributors
• Introduction
• 1. Defining sports marketing
• PART 1 Brands
• 2. Congruence effects in sports marketing Determinants, measures, and outcomes of fit or misfit
• 3. Brand activation in sports organizations
• 4. The Strategic branding of a football club The case of Interbrand and Shakhtar Donetsk
• 5. Sports and city branding How useful are professional football clubs for branding Europe's cities?
• PART 2 Sponsorship
• 6. Computing the impact of sponsor signage exposure within sports broadcasts
• 7. A data-driven approach to sponsorship planning Multiple sponsorship selection
• 8. Sports Sponsorship Decision Model A conceptual model proposition
• 9. Effects of multiple sponsorship activities Propositions and framework
• 10. Celebrity athlete endorsers A critical review
• 11. A Sporting (Mis)Match? Assessing the objectives pursued and evaluation measures employed by sports sponsors
• PART 3 Ambush marketing
• 12. A theoretical and empirical overview of ambush marketing in sports
• 13. Ambush marketing in sports
• 14. Towards the regulation and restriction of ambush marketing? The case of the first truly social and digital Olympic Games: London 2012
• PART 4 Customers, spectators and fans
• 15. Relationship marketing in sports Building and establishing longstanding relations in the business of sports
• 16. Experiential marketing and sporting events
• 17. Managing season ticket holders
• 18. Sports marketing professionals' expertise and knowledge on consumer behaviour
• 19. A methodology to classify spectators The case of AIK in Stockholm
• PART 5 Media
• 20. Sports marketing and new media Value co-creation and intertype competition
• 21. Digital content and real time marketing Strategic challenges for the globalised football brands
• PART 6 Marketing, ethics and development
• 22. Grassroots sports Achieving corporate social responsibility through sponsorship
• 23. Marketing sports and recreation participation
• 24. Managing Behavior Organizational and consumer perspectives on athlete transgressions
• 25. Marketing women's sports A European versus North American perspective
• 26. The role of sports as an agent of social change and marketing performance Examining the charitable face of Real Madrid
• 27. The marketing and legal implications of the atp event reorganization
• Conclusion
• Index