The Consumer and Sports Products

2. The Consumer and Sports Products Economic Impact of Sports Marketing 2

3. Section 4.1 – The Consumer and Sports Products - Objectives • Define the sports consumer • Explain market segmentation • Identify sports products • Explain the differences between sports goods and services • Differentiate between the product line and product mix 3

4. Section 4.1 – The Consumer and Sports Products The Sports Consumer • Sports Consumers are the target of sports marketing, because the consumer makes purchases and helps sports organizations make a profit • Sports Consumer is a person who may play, officiate, watch, or listen to sports, or read, use, purchase and/or collect items related to sports • A purchase by a sports consumer shows support in a product and encourages growth of the product • The job of sports marketing personnel is to plan marketing strategies which encourage the sports consumer to act as a customer and purchase tickets or merchandise 4

5. Section 4.1 – The Consumer and Sports Products Consumer Decisions • The two categories that affect the sports consumer’s decision to spend money on or participate in sports are: • Sports marketers must consider a combination of these factors to make effective decisions about marketing plans • Environmental factors: • Family, friends • Society’s attitudes and values • Cultural differences • Climate and region • Marketing influences • Individual factors: • Self-concept or self-image • Physical characteristics • Learned characteristics • Motivation and attitude 5

6. Section 4.1 – The Consumer and Sports Products Sports Consumers and Market Segmentation • Understanding market segmentation of the sports consumer market is important in order to sell products and services • Market Segmentation is a way of analyzing a market by specific characteristics to create a target market • Characteristics include: • Geographics – where consumers live • Demographics – personal characteristics • Psychographics - easy to change characteristics (attitudes & opinions) • Product Benefits – consumers’ behaviors, needs, and wants • Constantly shifting based on consumer interests 6

7. Section 4.1 – The Consumer and Sports Products Sports Products • Sports products provide the consumer with satisfaction, entertainment, sociability, and achievement • Sports Products are goods, services, ideas, or a combination of those things related to sports that provide satisfaction to the consumer • Sports products can also be athletes • People who share in the process of marketing sports products include owners, sponsors, communication firms, city governments, taxpayers, and consumers 7

8. Section 4.1 – The Consumer and Sports Products Types of Sports Products • The following sports products can be classified as goods or services, or both: • Sporting event – core product of sports. Include athletes and arenas where the events take place. • Sports information – News, statistics, schedules, and stories. Can be any form of media • Sports training – service such as instructions that is provided through fitness centers, sport camps, and lessons • Sporting goods – Wide range of products. Equipment, licensed merchandise, collectibles, apparel, accessories, etc. 8

9. Section 4.1 – The Consumer and Sports Products Types of Sports Products – cont. • Difference between goods and services regarding planning and implementing the sports marketing process • Services, like events, are produced and consumed simultaneously and has no formal channel of distribution • Tangible goods must be produced by a manufacturer and sent to a retailer to sell to customer. This channel of distribution requires careful planning and managing • Tangible products are physical goods that offer benefits to the consumer • Consumers purchase these products at stores or retail outlets • Goods purchased at a sporting event can also include the service of selling the product

10. Section 4.1 – The Consumer and Sports Products Quality of Goods • Two basic questions to ask about characteristics of goods, when judging the quality of manufactured products: • Does the product conform to design specifications in the manufacturing process? • How well does the product perform it function in the opinion of the consumers, or end users, of the goods? • Consumer’s opinion or perception about the quality of the products is most important to marketing professionals • Organizations attempt to increase quality without significantly raising prices so as not to lose customers

11. Section 4.1 – The Consumer and Sports Products Sports Services • In contrast with sports products, sports services are intangible products • Intangible products are nonphysical services, such as tennis lessons, personal training, and sports camps • May include the experience of attending a sporting event, while stadiums(teams) advertise to sell their tangible appeal 11

12. Section 4.1 – The Consumer and Sports Products Quality of Service • Organizations try identify characteristics of service quality to help market their services • 1980s researchers Parasuraman, Zeithaml, and Barry identified ten demensions of service quality called SERVQUAL: • tangibles, reliability, responsiveness, competence, courtesy, credibility, security, access, communication, and understanding the customer • Researchers McDonald, Sutton, and Milne created TEAMQUAL service quality dimensions: • Reliability – perform promised services dependably and accurately • Assurance – employees knowledge and courtesy • Empathy – caring, individual attention paid to pro sports customers • Responsiveness – willingness to help customers and provide prompt service • Tangibles - appearance

13. Section 4.1 – The Consumer and Sports Products Sports Product Classifications • Sports businesses or organizations that offer a variety of products classify their products by product line and product mix • Product line is a group of closely related products manufactured and/or sold by a company • Satisfy a class of needs and may be used together, sold to same customer group, sold through same type of outlets, or have same price range (ex. Nike DryFit product line) • Product mix is the total assortment of products that a company makes and/or sells • Companies can either specialize in one specific product mix or have a very broad product mix (ex. Wilson Sporting Goods) 13

14. Section 4.1 – The Consumer and Sports Products Sports Products and Product Extensions • Sports products differ from typical consumer products because sports products have the ability to generate a greater variety of product extensions • Allows money to be made from products surrounding main event • Sports goods and services have the potential to generate income and affect the economy with one or more related products • All become the focus of marketing activities for businesses, organizations, and consumers. 14

15. Section 4.2 – Economic Impact of Sports Marketing - Objectives • Explain the economic impact of sports marketing • Define opportunity cost • Identify the impact of grassroots marketing on sports marketing 15

16. Section 4.2 – Economic Impact of Sports Marketing Economic Effects • From the moment the consumer inquires about a ticket to a sporting event, there is an impact on the economy • The local economy improves as a result of money spent at sporting events 16

17. Section 4.2 – Economic Impact of Sports Marketing Economic Effects – cont. • Each decision made at a sporting event keeps people involved in the event employed in jobs at venue • Employed individuals participate in paying taxes • Tax dollars are spent for roads, new construction, public transportation, and police • Each decision the consumer makes involves an opportunity cost • Opportunity Cost is the loss of the opportunity that is passed up in order to receive something in exchange • Affect sports marketing because it impacts how consumers decides to spend his or her discretionary income 17

18. Section 4.2 – Economic Impact of Sports Marketing Economic Effects – cont. • Satisfied customers will have a continuous impact on not only the growth of the team, but also on the local economy • As the economy grows, the more infrastructure is needed to support the athletic event • Infrastructure is the physical development of an area, including the major public systems, services, and facilities of a country or region needed to make a location function • Power and Water Supplies, Public Transportation, Telecommunications, Roads, Schools • Entire process of economic growth leading to infrastructure changes, contributes to the economy 18

19. $ $ $ $ $ $ $ $ Economic Impact of Sports Ticket Agent Sporting Event ParkingGarage City Pride Sporting Event Food and Merchandise Infrastructure Sanitation Taxes The Internet 19

20. Section 4.2 – Economic Impact of Sports Marketing The Sunshine State Case Study • Orlando, Florida, is the home of an NBA sports franchise called the Orlando Magic • Sports franchise is an agreement or contract for a sports organization to sell a parent company’s (i.e., a national sports league) good or service within a given area • By selling Orlando Magic T-shirts, caps, and other items, investors were able to convince residents to make $100 deposits on season-ticket reservations 20

21. Section 4.2 – Economic Impact of Sports Marketing Grass Marketing Efforts • To gain support from within their community, many teams get heavily involved in grassroots marketing • Grassroots marketing is marketing activities on a local community level • Example – Helping and assisting the community with charity and fund-raising events • Helps build a relationship between the community and the team • A positive relationship between the community and the team can help the economy of an area • Economic success promoted by sports marketing for events and products on a local level extend to regional or national levels 21