Team Sports Marketing

Kirk Wakeland

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781135137441
• Edition: 1
• Topic: Commerce
• Subtopic: Marketing
• Index: Marketing

Some might argue that sports marketing is a mere subfield of marketing, meaning that there are theoretical and practical dimensions that apply only to sports marketing and are only of interest to those involved in sports. In Team Sports Marketing, author Kirk Wakefield dispels this argument by demonstrating that effective sports marketing epitomizes the science and art of marketing across any context. At the core of sports marketing is the creation and enhancement of fan identification, where consumers are not just loyal customers, but have become brand fanatics.

Team Sports Marketing shows that while many aspects of sports marketing are thought to be unique to the field, other product and service sectors would do well to learn from teams in the NFL, NBA, MLB, and NHL that have transformed customers into fans. Moving beyond principles of marketing, Team Sports Marketing is packed with examples of best practices and covering subjects as diverse as sponsorships, season ticket sales, venue management and all topics in between. Team Sports Marketing is a must read text for students and managers in professional and collegiate sports.

Support materials for professors and students are available at www.teamsportsmarketing.com.

1 What Is Sports Marketing?

A Special Case of What?

Some might argue that sports marketing is a “special case” of marketing, meaning that there are theoretical and practical dimensions of marketing that are peculiar to sports marketing. For instance, courses are offered in services marketing, international marketing, internet marketing, business-to-business marketing, and the like because the applications of marketing to these particular contexts require some adaptation specific or special to each case. Following this logic, we should accordingly treat sports marketing as a special case to study because its processes do not function or generalize well for other goods and services. That is, special cases of marketing do not possess theoretically sound (or law-like) principles or axioms that guide practice across a variety of other business contexts.

If, however, sports marketing better explains and predicts effective marketing when compared to other product and services marketing, then one might argue that marketing is actually a special case of sports marketing. General theories of marketing should ultimately possess superior predictive and explanatory powers of marketing effectiveness. As we examine the differences between typical goods/services marketing and sports marketing, consider which characteristics better explain optimal buyer-seller relationships.

What's the Difference?

If a customer is a loyal Folgers coffee customer, we can predict that he or she will likely continue to buy Folgers coffee at the grocery store. A loyal Folgers’ customer may, however, switch to similar coffee (Maxwell House) or buy Folgers at another store if appropriately discounted. You won’t see many Folgers’ customers wearing shirts with its brand name emblazoned across the chest.¹ Nor are you aware of many people who, of their own free will, frequently visit www.folgers.com. If so, they must be the same people who are visiting www.tide.com, www.zest.com, or www.crest.com. The consumer’s purchase of Folgers is primarily an economic decision based upon the perceived value of what one gets (coffee) for what one pays (e.g., $2.99 for a 13 ounce can). Some may also perceive that the best part of waking up is Folgers in the cup, but we know of no empirical evidence to support this.

If an individual is a fan of a professional or major college sports team, even a losing team,² we can predict that the fan will likely:

1. Identify with and follow the behavior of the team and individual players on that team, on and off the field (via www.espn.com, team Web sites, newspapers, television, radio, wireless, etc.).
2. Purchase licensed merchandise (jerseys, automobile paraphernalia, caps, mugs, etc.) promoting the team.
3. Donate or pay for permanent seat-licenses (PSLs) in order to buy season tickets.
4. Travel to see games of that team outside the local market.
5. Support tax-based initiatives to pay for a new arena or stadium for the team.
6. Be a supporter of the conference or league in which the team plays.
7. Devote significant social time attending, watching, and discussing the team with others devoted to the same or other teams.

The fundamental reason that fans are willing to exert effort and expend resources to support their team is due to consumer surplus. Consumer surplus is the difference between what the fan is prepared or willing to pay and the price that a team charges for a ticket. Specifically, teams sell tickets when the value (V) the fan places on the experience of being at the event equals or exceeds the price (P) that the team charges for admission to the event. In general, a transaction can take place (viz., tickets can be sold) as long as V exceeds the cost (C) to the team providing the event. Figure 1.1 illustrates the situation in which fans’ perceived value exceeds the price of admission.

Components of Fan Value Analysis Source: Adapted from Roberts, John H. 2000. Developing new rules for new markets Journal of the Academy of Marketing Science, 28 (Winter): 31–45.

While consumers of most goods and services see value as primarily an economic evaluation (Which detergent is the best buy?), the value fans derive from attending sporting events is likely to be more than a mere economic decision. In fact, when teams make fans focus on the price they are paying, they are focusing on the wrong side of the equation. The whole point is to make them fans—not consumers in the traditional sense. This is the first fundamental difference between sports marketing and marketing of most goods and services.

Compared to typical goods and services marketing, sports marketing differs in at least ten respects (see Table 1.1). We begin by discussing the difference between customers and fans.

1. Fanatics

A central point of differentiation between sports marketing and traditional goods/services marketing (hereafter, GSM) is how we view individual purchasers. One typically refers to customers when the subject is goods and services. Sports teams and players have fans. Dictionary.com defines a customer as: “One that buys goods or

Table 1.1 Top 10 Differences between Goods/Services Marketing and Sports Marketing

Top 10	Dimension	Goods/services	Sports teams/events
1	Purchasers	Customers	Fanatics
2	Adoption	Loyalty—repeat purchasers of the same brand (viz., lack of switching behavior)	Psychological identification with individuals and teams that goes beyond mere loyalty
3	Promotion and Media	Owner pays media for promotion	Fans, sponsors, and media pay to promote team/event
4	Distribution Channel	Static; more site-limited	Mobile; more flexible
5	Product	Adapted	Global
6	Price	Customer pays a given price for good/service	Two-part: Fans frequently pay for the right to pay for tickets
7	Facilities	Corporate owner buys/builds own facilities	Government (taxpayer) typically pays for facilities
8	Competition	Individual branding in competitive markets	Cooperative contractual relationships → monopoly power and antitrust exemption
9	Exchange	Principally economic exchange	Principally social exchange
10	Employees	Contractual power favors owners	Contractual power favors employees (players)

services.” A fan is “An ardent devotee; an enthusiast”; a fanatic is “A person marked or motivated by an extreme, unreasoning enthusiasm, as for a cause.”

Current GSM focuses primarily upon creating customer satisfaction. Satisfaction occurs when expectations are met or exceeded. Satisfied customers mean three things to the company.³ First, satisfied customers increase the value of the firm to shareholders. Second, satisfied customers assure the firm of future cash flow. Third, satisfied customers reduce the variability in future cash flow.

As with GSM, sports teams seek to satisfy customers. We would expect, however, that fanatics of a team or brand are more than satisfied. Fans experience pleasure and satisfaction with successful teams; but, they also experience feelings of delight or excitement that deeply resonates within the identity of the individual fan, such that the effects are likely to be long-term.⁴ Delight is a combination of pleasure and arousal with an element of surprise that is frequently experienced in the sports world. Further, fanatics are resilient in the face of service failure (viz., the team loses), and delight and excitement turn to distress and gloom. Sports teams develop a faithful fanatical following primarily due to high levels of identification, which is the second point of differentiation between GSM and sports marketing.

2. Identification

Consumers are loyal to goods and services while fans identify with teams and individuals. Loyalty is the repeat purchasing of a good or service by a consumer. A loyal customer is sensitive to differences in brands and prefers a brand or set of brands over others. Identification is when an individual reacts to events that occur to the team or player as if the events happened to him or her. A highly identified fan will describe one’s self to others in terms of being a team fan, perhaps to the point that the fan feels like he or she is part of the team. Fans are certainly loyal to the team in terms of repeat purchases, but fan identification is a deeper psychological affiliation that is a basis for a fan determining his self-esteem and self-worth. Chapter 2 deals more specifically with how teams and players can build fan identification. Because of high fan identification, fans seek out ways to promote the team to others.

3. Promotion and Media

The manufacturer and/or retailer of goods and services pays for the development and placement of brand advertising and promotions. In contrast, sports teams and individuals (players and drivers) receive indirect and direct financial support to advertise and promote themselves. Fans indirectly promote the team by buying and wearing or displaying licensed team merchandise. Sponsors directly promote the team and pay for the advertising and media to do so. For instance, AT&T initially paid the Dallas Stars to host the team Web site (attwireless.dallasstars.com). Similarly, radio and TV broadcasts of sporting events are “brought to you by” the sponsors.

Much of the actual product, particularly in terms of revenue, is in the broadcast of the games or event. The fact that sports are broadcast, in and of itself, differentiates sports from other goods and services. Typical goods and services find it difficult to entertain using its product as the star of a broadcast, although more than a few have created infomercials featuring already fit models promoting either the Ab Doer Pro, Ab Dolly, Ab Energizer, Ab Flex, Ab Force, Ab Rocker, Ab Roller, Ab Slide or the Abtronic—guaranteeing that you will look just like the model without “any effort from you.” Anyway, the point is that sports are different because others pay for the team’s advertising, promotion and broadcast in a way that typical goods and services find difficult to achieve.

Goods and services marketers typically pay for media to broadcast or to print advertising and promotional information while the media pays sports teams for the right to broadcast or print team and event information. For example, beginning in 2007, the networks (Fox, ESPN/ABC and Turner Broadcasting) are paying $4.48 billion over eight years for all media rights to NASCAR events. In contrast, no network is bidding hundreds of millions of dollars to broadcast, “Inside the Making of Tide Detergent.”

The revenue generated from TV contracts is the principal differentiating factor between the healthiest sports leagues (NFL, NBA, MLB, NASCAR) and the less healthy (NHL and WNBA). The proliferation of broadcast and other media outlets for sports also points to the fact that the distribution for sports is increasingly electronic and not limited to static locations.

4. Distribution Channel: Static vs. Mobile

Goods and services designate specific geographic outlets. Customers purchasing from Sears buy products at a local Sears store or order products to be shipped from a Sears distribution center. The distribution channel for Sears is relatively static, changing only when stores open or close. Sporting events and teams, on the other hand, are basically traveling road shows, moving from location to location, city to city, nationally and globally.

The experiential and transitory nature of sporting events (as well as other competitive broadcast events such as “Survivor”) lends itself to electronic forms of distribution. The NFL, for example, is broadcast in 205 countries across 24 time zones for upwards of 4,500 hours of weekly programming (http://www.nfl.com/international/globalTV.html, 2001). Similarly, cable and internet broadcast systems have developed new distribution channels such as NBA.TV that blur the lines between traditional broadcasts and online services that make the product available anytime, anywhere.

5. Product: Adapted vs. Global

Due to the nature of the events and the distribution channels, sports such as soccer, basketball, baseball, tennis, golf, and motor sports are truly global products needing little translation or alteration of the marketing mix to gain acceptance across cultures. The marketing mix (product, place, promotion, pricing) for typical goods and services are frequently adapted to local markets.

Compared to most sports, frequently cited “global” products such as Coke and McDonald’s are not actually standardized global products. Coke alters its packaging, name, and syrup content in foreign countries. McDonald’s offers beer in German restaurants and cooks its hamburgers rare in France. In contrast, the content or product of the NFL, Formula 1 Racing, Olympics Downhill Racing, or the NHL remains the same throughout the world. In a sense, given its electronic broadcasts, the dis...