Market Research Methods in the Sports Industry

Neven Šerić, Jasenko Ljubica

• Publisher: Emerald Publishing Limited
• Year: 2018
• ISBN:
  9781787541931
• Topic: Betriebswirtschaft
• Subtopic: Marketing
• Index: Marketing

Whetherprofessional or amateur, sports businesses must develop their brand and imageto meet the expectations of a diverse environment, consisting of fans, sponsors, and other stakeholders. The value and instruments of market researchcan provide the required resources for sports businesses to realize theirplans.
In Market Research in the Sports Industry, Jasenko Ljubica and Neven Seric provide a comprehensive elaboration of marketresearch methods to be used by sports businesses. The book identifies andexplains the most effective uses of market research, drawing upon real-lifecase studies. The application of the methodspresented in this book, ranging from the simplest - monitoring the environment– to the most complex sampling methods, can significantly contribute to thedevelopment of sports businesses by increasing the number of members, sponsors, followers and fans.
The book will beinvaluable for researchers, educators and students of Sports Management andMarketing, and it will also prove useful to sporting professionals seeking togain a competitive edge in the market.

Chapter 1

Introduction to Market Research Methods in the Sports Industry

The term ‘sport’ represents an organized physical or other related type of activity, that is, an activity performed according to established rules for the purpose of preservation, improvement and development of psychophysical abilities and sport knowledge, satisfaction of needs for movement and play, and achievement of sport results (Swayne & Dodds, 2011). It is also an activity of public interest that includes training for sport, organization and implementation thereof, participation in competitions (professional and amateur), organization of sport events and organization and implementation of sport recreation (Funk, 2008). Contemporary sport also includes extracurricular and student activities. Such a construct of sport as a social phenomenon assumes continuous monitoring of the environment in which sporting activities take place (Beech & Chadwick, 2004).

The current profession of sport resides with legal and physical entities (sport entities) in accordance with sport rules and defined legal provisions (Chadwick, Chanavat, & Desbordes, 2016). Legal sport entity is a person established for performing sport activities (Swayne & Dodds, 2011). Depending on their activities and national legal provisions, sport entities can act as sport clubs, sport recreational organizations and sport federations. The widely known and established form of sport entities are sport clubs. The sport club is a legal entity established for the organization and implementation of sport training and participation in competitions (Swayne & Dodds, 2011). Sport clubs act as amateur (recreational) or professional entities. A professional sport club can also function as a public–private partnership. A professional sport club performs sport activities according to economic standards, i.e., primarily, the generation of profits. Therefore, the rules applicable to other economic entities (e.g. companies) also apply to professional sport clubs, if the national legislations do not imply otherwise. Sport federations are the associations that regulate and monitor the activities of sport clubs as well as maintain and develop the common interest in a particular sport that entail the sport itself, athletes (both amateur and professional) and clubs. Sport federation’s activities can also entail other stakeholders such as fans and sponsors, although to a lesser extent. A physical entity refers to athletes, trainers or other people professionally trained in certain types of sport as well as recreational performers of sport activities (amateurs) for the purposes of health improvement, socialization and so forth. Sport entities practice market research for the purpose of designing and implementing sport training and preparation, training of children and youth in sport schools, implementation of sport recreation, organization and implementation of extracurricular sport activities in special institutions and training of sport techniques to all interessants (Swayne & Dodds, 2011). Following the above stated classification, we use these terms accordingly in this book. To avoid tautology and facilitate comprehension for the reader, we also use aggregate terms such as environment, target segments or stakeholders of a sport entity as the object of analysis in market research in the sports industry. Hence, these aggregates include entities stated above with various national and supra-national sport federations, regulatory bodies, members, fans, sponsors, occasional followers, athletes, trainers, employees of sport entities and so forth.

Sport entities are obliged to respect and apply sport-related rules of national and international sport federations and the International Olympic Committee. These and other relevant entities regulate sport activities through sport and legal regulations. Each entity should develop its own model of data collection and distribution of required information (Graham, Goldblatt, & Neirotti, 2001). The administration of market research methods, specifically adapted for the entity, the sports industry and the culture, is the way to effectively execute such activities (Kahle & Riley, 2004). Hence, along with the research methods competence, researchers have to possess high degree of industrial knowledge related to sport and cultural intelligence, which is a critical success factor in the global organizations context (Ljubica & Dulcic, 2012), which sport entities are starting to transform in increasingly. In addition, market research in the sports industry contributes to a wide array of areas. These areas include promotion of sport development, provision of conditions and infrastructure for sporting activities, training and recreation conditions, funding for national and international competitions, fulfilment of contractual conditions to athletes, encouraging sporting activities of people with disabilities, creating conditions for the implementation of extracurricular sport activities of students, encouraging research and developmental, educational and professional work in sport. Although sport bases on the principles of voluntarism, partnership, inclination, ability and professional and scientific work, sport entities can generate revenue aiding the implementation of their activities in accordance with the relevant national laws (Shank, 2005). In ethical terms, sport activities should be humane, free, voluntary, healthy, safe, fair, tolerant and socially acceptable. Sport should be accessible to all social classes, regardless of age, physical ability, disability, gender, race, language, religion, nationality, social origin, political commitment, property and other characteristics. Therefore, sport refers to all actions that enable and foster sporting activities and the conditions required for such activities (Copley, 2004).

It is also important to emphasize the significance of national and local sport federations as forms of sport entities. Their main purpose is the protection and development of common interests (of sport entities, professional and amateur athletes, recreational consumers of sport products and services and other stakeholders such as fans and sponsors) in a particular sport. Sport federations encourage the development of sport; represent, coordinate, organize and conduct competitions; keep records of members; and promote professional work and training of sport professionals and athletes. These entities cooperate with other relevant national and international sport and other-type entities and perform other tasks within their scope (Swayne & Dodds, 2011). National sport federations adopt sport rules in accordance with the local law and international sport rules. These entities find market research methodologies particularly useful (Buhler & Nufer, 2010). Market research activities also aid the organization of sport competitions, participation in such competitions, in defining athlete-transfer regulations and for other related purposes.

Sport competitions can be in the form of events, manifestations, meetings, games, etc. Sport competitions organize in accordance with legal provisions and sport rules. Sport research activities are particularly important for major international competitions—Olympic and Paralympic Games, World and Continental Championships, College sport competitions, International Cup competitions and others.

Sport facilities provide surfaces and space for performing sport along with supporting activities (Swayne & Dodds, 2011). In addition to providing space for sport, the sport facility also has supporting equipment required for certain sport.

Market research is particularly useful in the sport industry for the development of specific records or archives of athletes, sport entities, trainers and sport specialists, for people exercising rights to various fees, sport facilities and as sport events and manifestations.

Sport entities devise funding options in various ways including membership fees, donations, contributions, subsidies, legacies, interest on investments, rents, dividends, fund revenues, services, sponsorships and other marketing activities, TV rights and event revenues. The annual financial plan determines the sources of funds for the financing of sport activities of each entity individually. Relevant sport and non-sport supra-entities also use market research to supervise sport entities.

The marketing value of sport and the sport industry has been growing exponentially over the past decades rendering the parallel growth in use of the market research methods a logical consequence (Chadwick et al., 2016). The first game ever broadcasted (over the telegraph) was in 1919 (the Lone Star Showdown); the first sport event broadcasted over the radio took place in 1921 (boxing match in Pittsburgh). In 1923, Gene Sarazen, the golf player, signed the first sponsorship contract with Wilson Sport Goods, which until today remained the longest lasting one – renewed every two years until Sarazen’s death in 1999. In 1925, the Goodyear Company started to use a large advertising balloon over the sites of the most popular sport events. Coca-Cola became the sponsor of the Olympic Games in 1928 and remains their partner until today. Berlin’s Olympic Games were the first major sport event broadcasted by television followed by the similar broadcasts of the most exciting sport events in England and the United States. In the United States, the first television broadcast was in Colorado in 1951 at the Molly Pitcher Handicap Horse Race in Monmouth Park Jockey Club, Oceanport. Babe Didrikson Zaharias was the first woman to sign a sponsorship agreement with Wilson Sports Goods recorded in 1949. In August 1954, the first issue of the Sports Illustrated magazine was released, which until today remains one of the most important specialized sport magazines on a global scale. The Marketing Department of the University of Ohio was the first to offer a sport marketing course programme in 1966. Boxing match between Joe Frazier and Muhammad Ali in 1975 was the first example of pay-per-view TV broadcasting. ESPN, the first specialized sport channel in the world, started broadcasting in 1979. These and other events have defined marketing frameworks in sport, no longer imaginable without market research (Chadwick et al., 2016).

Prior to the implementation of marketing tools in the management of a sport entity, it is necessary to collect information that will improve the comprehension of the situation in the environment, the position of a sport entity, its goals and the optimal ways to realize such goals (Fullerton & Merz, 2008). The implementation of marketing tools in sport implies respect for the specificity of sport marketing in relation to the concept of general marketing (Beech & Chadwick, 2004). The antecedent of the implementation of marketing tools in managing a sport entity is a market situation research. The comprehension of the market position of a sport entity and the forces that influence its activities aid the comprehension of the context of the situation in which the sport entity operates (Kahle & Riley, 2004).

Since sport entities face many unpredictable environmental factors, the continuous monitoring of such environment is imperative for their survival. The modes of communication between the sport entities and public are changing. In 2002, Westerbeek and Smith predicted trends in the development of sport marketing. Sport has become a part of the programme content of most of the media; sport entities strive for global visibility and new technologies “enter service” in the entertainment industry. Hence, it is crucial to understand the potential effects, limitations and opportunities in the environment in which the sport entity operates. The first step always represents the data collection on environmental factors. The second step is the evaluation and analysis of identified factors. The third step is the integration of collected and analysed data into information based on marketing plans and strategies. The final step is the ‘analysis of the relevance of the analysis’ with regard to the accuracy and usefulness of the collected information. In this regard, the methods of market research in sport are particularly useful to analyse political, economic, socio-cultural, technological, natural, ethical and legal factors in the environment of sport entities. Political factors refer to the dominant ideology of governments, which determines the organization form of political authority over sport. Economic factors refer to the form of economy (planned and market), inflation, market openness, the trend of GDP growth and so forth. Socio-cultural factors define the predominant social culture and change of the same cultural differences in the environment and in the wider area where the sport entity publicly appears. Technological factors define technological changes that have repercussions on activities and funding of sport entities. Natural and ethical factors include climate change, the need for sustainable and responsible development of sport, ethical standards in sport and so forth. Finally, legal factors include legal regulations and restrictions on sport.

In the beginning of sport marketing, the predominant population of sport enthusiasts entailed men aged from 18 to 50. Today there is a growing number of women actively following sport and participating in the sports industry. There is also a growth in the number of families with children as a special segment of sport followers. The heterogeneity of sport and its followers demand the collection of relevant data making the knowledge of and the ability to implement the market research methods effectively in sport a precondition of survival. Since it is not possible to personalize the relationship of the sport entity towards all segments of sport followers, one needs to target specific follower segments. For this, it is necessary to select an appropriate method of market research in the sports industry.

Chapter 2

Motives for Market Research in the Sports Industry

Sport is a specific social phenomenon and a service industry positioned in a recreational context and is based on the available time of potential beneficiaries (Houlihan, 1991). In the competitive context, the focus is on the top results that bring publicity and attention of sponsors (Baade, 1996). In all contexts, regardless of mass, exclusiveness, well-known or insufficiently known, amateur, individual or team level of sport, resources are a prerequisite for the realization of sport programmes. In order to attain such resources, sport entities manage their activities and image to meet the expectations of the environment in which they operate. Knowledge about the preferences, desires and attitudes of target population (on which the survival of the sport entity depends) segments is critical for meeting these expectations. Current and potential members, fans, spectators and sponsors represent important segments whose attitudes sport entities need to explore and, based on feedback, accordingly adapt the action plans. Market research in the sports industry primarily serves this purpose. Fully professionalized sport entity, with continuity of good results and with portfolio of sponsors that provide sufficient funds, should use market research methodologies presented in this book to secure the support of the fans and wider environment and stakeholders. Both professional and amateur sport entities should familiarize themselves with these methods to be able to solve the problems they encounter with the fans, sponsors or member-related issues. Market research in the sports industry detects the causes of sport phenomena. Instead of dealing with the rehabilitation of the consequences, it puts focus on the cause and search for a permanent solution of the problem. It includes the analysis of good practices of sport entities and a number of methods, both complex and simple, that aid to the determination of the causes of sport phenomena.

The specificity of sport reflects in invisibility of its services or a high level of consumer involvement in the process of their delivery (Vamplew, 1982). Sport is intangible and the value of sport services to the users reflects the emotional aspect (satisfaction) and the realization of the need for self-actualization (Shilbury, Quick, & Westerbeek, 2003). In another aspect, it is possible to increase the value and contribution of sport through the provision of existence (financial support) and social influence. Due to increasing popularity, sport turns into a competitive activity, which is significantly contributed by promotion for, both, purposes of differentiation of sport entity and the image of the brand (Šerić, 2011). Sport is an area of activities in which the loyalty and fidelity of followers is extremely important. This articulates through various forms of associations and actions based on the strong psychological and emotional connection between consumers and sport entities (Lazear, 1996). Therefore, the consumers of sport products and services are ready to allocate time and money for sport entities and their products and services. Products and services of sport entities are also valuable research subjects, whether the focus is on recreational programmes intended for the general population or monitoring of regular or special competition programmes (Wenner, 1989). Sport, through results of athletes, represents the personification of the local and national community image (Šerić, 2011; Vučetić, Rupčić, & Perkov, 2010). In this context, for implementation of market research activities, sporting activities have wider positive social repercussions (Novak, 2006). Economic recession caused problems in functioning of the majority of sport entities in developed countries. Due to the financing problems in sports activities, it is practical and useful for sport entities to implement marketing activities in the fullest range possible (Fleisher & Bensoussan, 2003). Before undertaking new activities in the management of sport entities, it is important to know whether the same are perceived as friendly in a particular environment. Market research serves to gain knowledge of causality of the environment in which the sport entity operates. Given that the sport and sport activities are currently in a state of stagnation in many countries due to funding difficulties, it is useful to connect sport with the economy (Kahn, 2000). Appropriate positioning of national sport along with the image of the country contributes to the growing interest of sponsors, which sporting activities significantly depend on. The attendance of sport events and the sale of tickets and souvenirs contribute to the financing of sporting activities. Market research in the sport industry practices with those purposes. Identifying new ways of financing and management of sport facilities are also reasons to adopt methodology of market research in the sport industry (Šerić & Jurišić, 2014). A significant percentage of sport entities is a non-profit type and finding new ways of financing is one of the most important management tasks. For these sport entities, the methods presented in this book will be particularly useful, for the purposes of both strengthening the positive image and securing future financing of their activities.

2.1. Market Research, Market Monitoring and Informal Data in the Sport Industry

Availability of data on sport and sport subjects is a precondition for frequent or standard use of market research methods in the sport industry (Chaffey & Ellis-Chadwick, 2012). Experiences show why reactions of all stakeholders of sport, sport events and sport phenomena are sometimes negative. Managerial judgements based on personal judgement often result in decisions that are not adapted to the reality of the environment (Šerić & Jurišić, 2014). It is therefore necessary to take particular care when making decisions in the area of resource management, pricing policies, promotion and other relevant marketing activities that affect the attitude of the public towards the sport entity (Bartoluci & Škorić, 2009). As sport is a specific social phenomenon, it is not advisable to make tactical and especially strategic decisions (with long-term repercussions on activities of sport entities) without clear insight in the repercussions these can have on the stakeholders of sport entities. While collecting the research data, the phenomenology of sport should be borne in mind, which requires modification of research methods, sample selection criteria and research instruments (Funk, 2008). In many countries, especially post-transition ones, professional sport entities do not consider this fact, rendering their athletes to, in spite of their talent, seek professional development in foreign countries and professional clubs that have recognized the futility of the general approach to market research in a specific industry like sport. By not respecting the phenomenology of sport as a social activity, such approach often results in an undesirable image of the sport entity and its stakeholders in the public, unsatisfactory or lack of public and sponsor support, which has negative repercussions in various areas such as the quality and effectiveness of management and financing activities (Wenner, 1989). Sport entities, qualified in a global environment by years of successful management, consciously or unconsciously, have been conducting market monitoring (Shilbury et al., 2003). The most successful sport entities, regardless of the specifics of the given sport, conduct research aimed at aiding to the decision-making of sport entity management. Most of the decisions of successful sport entities in all major activities (resource management, financing, promotion, etc.) are based on the research related to specific dilemmas (Šerić, Pepur, & Kalinić, 2011). Fans (and general audience) are crucial to long-term survi...