Using Sports to Market Products

1. Using Sports to Market Products Lesson 4.1

2. Market Audience Size A.Wide range of demographic groups enjoy sports young market flocks to the X Games B. Baby boomers with hearty disposable income and a focus on personal fitness are participating in many sports C. Sports medicine and training centers are in every major city D. Web sites are available for participants and fans

3. Market Audience Size (con’t) D. The Audience 1. businesses want to align themselves with a sports team or athlete 2. sports events attract more viewers and participants than any other entertainment 3. 1997 – 24.7 million golfers 4. 1997 – money spent by sports advertisers ($152 billion) 5. play time in games has been adjusted in order to wedge in more commercials

4. The Power of Sports A. More time and money are spent on sports than any other recreational pursuit in the country B. Fans spend a lot of mental energy on their favorite teams and athletes C. Sports promoters and investors spend a lot of time creating new possibilities for revenue

5. The Power of Sports (con’t) D. Power of emotional ties 1. people have emotional ties toward sports 2. enjoy the intrigue of the skill and psychology of the players 3. emotionally involved with their own performance or that of their children or local amateur teams 4. find their self-worth or personal contentment influenced by the success or failure of a team 5. men cried openly at the last game of the original Cleveland Browns in 1995

6. The Power of Sports (con’t) 6. Fan elation after a team victory is powerful (rioting after championship games) 7. Fans may overlook an athlete’s tasteless or criminal behavior as long as he/she still scores and entertains 8. Pay-per-view audience has grown (1999 fight between Mike Tyson and Francois Botha attracted nearly 1 million pay-for-view customers and cost each fan $45.95) 9. People who feel strongly about their teams or favorite athletes will make loyal customers of products they learn about through event advertising or endorsements

7. The Power of Sports (con’t) E. Power of a New Market 1. Rising popularity of women’s athletics is causing companies to take a closer look at their marketing campaigns (WNBA attendance of 13,000 per game and 2 million television viewers for a New York Liberty game) 2. Title IX has helped the cause for women’s sports 3. Women’s World Cup Soccer championship game attracted the largest crowd ever to the Rose Bowl 4. Women make 80 percent of all purchasing decisions

8. The Power of Sports (con’t) 5. Women spend more than $5 billion a year on sportswear 6. Men still have a larger portion of promotion and endorsement dollars, but women are gaining momentum 7. In 1994 Steffi Graf and Gabriela Sabatini earned $6.5 million and $4 million from endorsements and NIKE named a shoe after Sheryl Swoopes

9. Marketing Theory A. marketing products through sports – interconnected process B. company buys the rights to advertise during a game or to use a logo on products it makes C. television and radio stations and networks sell broadcast time to teams and their sponsors D. cities buy the rights to host teams and sell this idea to the taxpayers E. consumer buys the products advertised during the game

10. Marketing Theory (con’t) F. How Companies Decide 1. use outside consulting firms 2. some companies have their own special sports marketing groups within their marketing departments 3. ESPN CHILTON Sports Poll is one of the largest marketing firms (begun in 1994) a. offers its clients the most efficient and effective ways to reach their target market b. offers demographic data and information about the mood of the sports consumer at any point in time c. offer advice on how a company can best attract a particular market

11. Sponsorship Lesson 4.2

12. Sponsors & Investments A. sponsor – a person, organization, or business that gives money or donates products and services to another person, organization, or event in exchange for public recognition 1. local veterinary clinic sponsors a neighborhood girls’ softball team 2. clinic’s name on the players’ uniforms or the recreation association might publicly thank the clinic and other sponsors through the local newspaper, a direct mail flyer, or posters hung in local shops

13. Sponsors & Investments (con’t) B. Reasons for Sponsorship 1. to increase sales 2. to introduce a new product or service to a large audience 3. to compete where many potential customers are in one place 4. to be identified with an event in which the target market is interested 5. to earn the goodwill of the audience 6. to show commitment to the community 7. to enter new markets 8. to entertain clients, employees, or potential customers 9. to enhance the companies’ image

14. Sponsors & Investments (con’t) C. Need for Profit 1. business becomes a sponsor to receive a guaranteed amount of exposure, recognition, or acknowledgement 2. exposure is used to increase sales and profits 3. when the business no longer makes a profit from the sponsorship – it cancels the relationship or creates a new ad campaign 4. business uses market research to measure the results of its sponsorships

15. Sponsors & Investments (con’t) 5. sponsors monitor the value of their investments to make sure they receive a good return on them 6. return is the profit the sponsor earns from its support of an athlete or team 7. sponsorship costs can be high 30-second commercial for a recent Super Bowl cost between $1.6 and $2 million

16. Sponsors & Investments (con’t) D. Examples of Niche Markets 1. auto racing is the number one sport for fan loyalty 2. racing fans are the most loyal to the sponsors of their favorite drivers or teams 3. sponsors get recognition with logos on the driver’s uniform, helmet, and car and receive extra publicity when their team or driver wins 4. value is added to the sponsor’s return when the business name is mentioned during the race broadcast

17. Sponsors & Investments (con’t) 5. young men (12-34) is one of the most sought-after target markets today 6. ESPN started the X Games in 1995 – more than 250,000 teens attended the 1998 games in San Francisco 7. 1999 – NBC created and televised the Gravity Games (a variation of the X Games) 8. networks are aiming at mostly male, mostly young market that doesn’t enjoy sports like baseball and football

18. Sponsors & Investments (con’t) 9. soft-drink makers, technology businesses, and clothing businesses are among the main sponsors of extreme sports 10. NBC signed X Game celebrity Michael “Biker” Sherlock to help with the logistics of the Gravity Games 11. Advantage International is the operations manager for Gravity Games

19. Can Anyone Sponsor Anything? A. Sponsors come in all sizes and all ranges of budgets B. Newer sports offer attractive opportunities for smaller businesses C. Minor league baseball has grown in popularity since the major league players’ strike in 1994 D. Fans were disappointed and angered by the strike, the increasing cost of tickets, the building of new stadiums with taxpayer dollars, and what was perceived as arrogance of players and owners E. They transferred their loyalty to the minor league teams F. Sponsors can advertise with the minor league and still reach the same baseball-loving market

20. Can Anyone Sponsor Anything? (con’t) G. Affinity sports-niche markets whose participants are just as passionate about their sports as are enthusiasts in the more traditional sports (bass fishing and rope jumping have thousands of participants and significant tournaments nationwide) prime opportunities for a business to achieve its sponsorship goals

21. Can Anyone Sponsor Anything? (con’t) H. Loss of Sponsors 1. backlash against sports sponsorship by tobacco and alcohol businesses 2. ended tobacco ads on television 3. canceled many sponsorships 4. Multistate Tobacco Settlement of 1998 a. tobacco sponsorship is prohibited for concerts, events in which the participants are under 18, or for football, baseball, soccer, or hockey b. tobacco sponsorship is limited to one event and one brand per year per business

22. Can Anyone Sponsor Anything? (con’t) I. Tobacco businesses have sponsored auto racing for the last 25 years contributing fees of $15 million per year to NASCAR, $50 million per year to the Indianapolis 500, and $10 million per year to the National Hoot Rod Association J. 1998 – U.S. Health and Human Services Secretary Donna Shalala called for a ban on alcohol advertising in college sports K. University of NC, Baylor, and Brigham Young had already prohibited alcohol advertising before her challenge

23. Promotions Lesson 4.3

24. Promotion A. selling is the exchange of a product or service for another item of equal or greater value B. goods and services can be sold 1. soccer ball is a good 2. valet parking at a stadium is a service and a ticket to the game is a service C. Selling with respect marketing 1. determining needs of customers and responding to those needs 2. planned, personal communication to help influence a customer’s decision to purchase 3. enhancing future business opportunities

25. Promotion (con’t) D. Promotion – publicizing or advertising a product, service, or event with the goal of selling it 1. information about the product, service, or event that is given to the consumer 2. make the consumer want the product 3. promotion leads to selling 4. developing a communication process with customers, writing promotional materials, or using publicity to draw attention to a product or service

26. Promotion (con’t) E. Promotion Example 1. serves both the buyer and seller of the promotion 2. a business sponsors a high school team 3. the business provides a game schedule and the notice that they are a “proud sponsor” of the team

27. Promotion (con’t) F. Promotion Targets 1. important to attract new markets and keep old ones 2. primary goal of promotion – increase sales or attendance, by finding new customers or persuading regular consumers to buy more 3. promotion is the critical stage in winning new customers 4. Arthur Ashe Kids’ Day was established by the U.S. Tennis Association to develop a love of tennis in the upcoming younger generation (family-oriented day includes appearances by Rosie O’Donnell, Britney Spears, Pete Sampras, and Venus and Serena Williams, plus tennis clinics, shows, games, and giveaways)

28. Promotion (con’t) 5. Maintaining customer satisfaction, loyalty, and repeat business is a crucial goal of promotion 6. Increasing customers’ usage 7. Offer special prices for different groups, half-price ticket for the first 500 people who show up wearing a team cap 8. Long-time supporters might be offered an upgrade in season tickets or discounted parking

29. Promotion (con’t) G. Promotion Objectives 1. company must determine what it wants to accomplish 2. decide on a target market 3. research the five elements of market segmentation (demographic, psychographic, geographic, product usage, and benefits derived) of that target market 4. decide on the message it wants to send with its campaign (persuade the customers to try a new product, inform the customers about new or special features of an existing product, create a new attitude about an existing product, or broaden awareness of a product)

30. Promotion (con’t) 5. company must determine what it wants consumers to do (trying a new product, coming to a certain store or event, buying more of something they already buy) 6. Fox Sports Online had a series of television commercials showing young men so focused on Fox Sports Online that they ignored everything else going on around them a. The commercials ran during NFL games as well as at other times b. Fox’s target market was males between 18 and 49 with a particular sense of humor c. Message: the site is interesting and fun, achieved the desired outcome of new site users

31. Promotional Tools (4 ps) A. Promotion plan (promotion mix) 1. Personal selling – an in-person, face-to-face communication between a seller and a customer a. between a vendor and a business buyer b. telemarketing c. seller has the opportunity to overcome any hesitation on the part of the consumer d. seller must be familiar with the product and must want to sell it e. seller offers more information, comparison with a similar product, or stories about personal experiences with the product f. human interaction often makes the sale g. customers will return if they are treated courteously and professionally

32. Promotional Tools (con’t) 2. advertising – paid communication between the product maker or seller and the audience or customer a. should clearly explain the benefits of a good product b. an occur almost anywhere and reach millions of people quickly in diversified and target markets

33. Promotional Tools (con’t) 3. Publicity – any free notice about a product, service, or event a. articles in newspapers or magazines or “sound bites” on television or radio are examples of publicity b. newspapers’ front-page stories about 1999 Tour de France racer Lance Armstrong’s victory over cancer – promoted interest in the race (brought free promotion to Armstrong and the entire race, to other racers, and to bicycle-related business owners who were quoted in the article)

34. Promotional Tools (con’t) c. keeping your name, event, or organization in public view through press releases, speeches, volunteer work, donations other than sponsorship, and letters to the editor 4. Sales Promotion – any action or communication that will encourage a consumer to buy a product a. usually short-term “specials” b. example: limited-time memberships to health clubs, giveaways, coupons, items with the company’s name printed on them, free samples of a product c. aimed at consumers, as with the giveaway or sample product, or at vendors, as with a free display rack with the agreement to sell a certain sports magazine

35. Endorsements Lesson 4.4

36. What is an Endorsement? A. FTC defines an endorsement as “any advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experience of a party other than the sponsoring advertiser” B. Endorsement – person’s public expression of approval or support for a product or service C. Promotional tool rather than a form of sponsorship D. Film critic’s comments used by the filmmaker in an advertisement – legally are endorsements (the critic is a known and real person, review is an opinion independent of any comments by the filmmaker)

37. What is an Endorsement? (con’t) E. Commercial featuring two unidentified teenagers talking about a product or store is not an endorsement – the teens are not “real” and are acting as spokespersons for the company F. A commercial starring a well-known racecar driver for a brand of tires is an endorsement because 1. the public knows the person is a real professional driver 2. assumes the comments are personal opinion whether that fact is made plain or not 3. assumes the driver would not make the comment if he or she did not believe it

38. What is an Endorsement? (con’t) G. an ad for golf balls in which a famous golfer is shown hitting the balls is an endorsement even if the golfer doesn’t speak H. the most influential endorsements are made by entertainment or sports celebrities, even though other people, including politicians, professionals, and ordinary citizens also endorse products

39. What is an Endorsement? (con’t) I. Legal Restrictions on Endorsements (set by the FTC) 1. endorsements must always reflect the honest opinions, findings, and beliefs or experiences of the endorser 2. the endorser must have real experience with the product 3. The endorsements may not contain any deceptive or misleading statements. (The statements must be able to be substantiated by the advertiser.

40. What is an Endorsement? (con’t) 4. Endorsements may not be presented out of context or reworded as to distort in any way the endorser’s opinion 5. The endorser must use and continue to use and believe in the product for as long as the endorser is used in the advertisements. 6. If the product changes in any way, the company must notify the endorser, and the endorser must continue to use and believe in the new or revised product.

41. Athlete Endorsements A. 1998 – American businesses paid more than $1 billion to athletes for endorsements (more than 2000 athletes who made endorsements) B. advantages and disadvantages of endorsements 1. consumers will buy products endorsed by celebrities more often than products that are not so endorsed 2. fans and businesses like to be identified with a winning team or athlete 3. young people copy their role models, the endorsers 4. viewers, listeners and fans are less likely to return off a commercial featuring a celebrity than a commercial featuring a fictitious character

42. Athlete Endorsements (con’t) 5. consumers tend to believe celebrities, especially those with a good public image 6. endorsements are very expensive to the sponsoring company 7. the endorser may not agree to endorse only one product 8. Michael Jordan has endorsed Gatorade, NIKE, McDonald’s Rayovac, MCI, and Sara Lee products 9. Consumer may doubt the sincerity of the endorser 10. If the endorser commits a crime or a serious social blunder – there is the risk of negative publicity

43. Athlete Endorsements (con’t) C. How Controversial Can an Endorser Be? 1. Is the endorser a positive representative for the product or service? 2. Harmful vs. questionable endorsement? 3. Dennis Rodman is an acceptable endorsement candidate for some businesses even though his behavior offends many people – has endorsed Comfort Inns & Suites, his own Converse athletic shoe, and a new camera for Eastman Kodak (lost a contract with Carl’s Jr. for attacking a photographer)

44. Athlete Endorsements (con’t) D. Should Endorsers Speak Out On Anything Besides the Product? 1. Is there a moral obligation to speak out on human rights or other controversial topics

45. Athlete Endorsements (con’t) 2. Tiger Woods receives tens of millions of dollars from Nike for his endorsements while Nike has been harshly criticized for what some call exploitation of workers in its factories in Vietnam (Some believe that Woods should take a stand against this abuse.) a. athletes are experts in their own field, not in the field of politics, labor, human rights, or global issues b. Why should athletes and other celebrities be expected to support a cause most of the rest of citizens of the country are not expected to support? c. Athletes have a responsibility to know what’s going on with the businesses they endorse and to speak up if bad conditions become known d. Athletes must speak out while they are still active players.

46. Athlete Endorsements (con’t) E. What About “What Might Have Been?” – In 1993 Reggie Lewis (Celtics) died suddenly of heart failure. In 1999 his widow sued Lewis’ doctors for failing to correctly diagnose and treat the heart condition that resulted in his death. She sued for $115 million in lost endorsement revenues. The judge declared a mistrial

47. Athlete Endorsements (con’t) F. What Businesses Look For In An Endorser? 1. buy a personality a. someone with a positive, charismatic, trustworthy image; someone respected by consumers b. a celebrity most consumers know c. a celebrity whose career is in process d. someone who presents few risks e. someone who has a believable relationship with the product 2. Speaking ability, personal appearance, educational background are not among the top requirements because these deficiencies can be remedied with voice coaches and wardrobe assistants.