Moving Merchandise

Moving Merchandise Chapter 10

Realities of Sports Merchandising • Fans identify with leaders • Top selling jerseys present players with well-defined, concrete, individualistic, interesting personalities that separate them from other players. (Performance is important, but not primary.) • The leaders in team sales represent teams with the highest brand equity, not necessarily the most recent best performers. • Teams with high brand equity increase the value of their merchandise beyond its functional worth.

Purpose: Build Brand Equity • The overarching principle in maximizing revenue is to take strategic steps to build brand equity through merchandising. • This perspective focuses on a proactive, rather than a reactive, approach to building brand equity through merchandising strategies. • Too many sports teams react with merchandise after demand surfaces, such as after the team wins a championship. • Teams can enhance the value of the brand through aggressive, proactive methods, thereby driving demand rather than letting demand drive them.

Retail positioning is determined by Service level Retail control Product assortment Brand image Brand equity Profit margin Market share Distribution & Positioning The dilemma: How can you increase market share without diluting brand equity?

Distribution & Positioning • Should teams try to sell merchandise through mass retailers like Wal-Mart? Why or why not? • What happens to the position of the team’s brand in the minds of consumers when the team seeks intensive distribution versus more selective distribution?

The Top 10 or 12 Merchandising Tactics First: Determine Positioning & Distribution Strategy

#1 Training • Sales training increases the performance of salespeople, resulting in increased sales, by: • Preparing salespeople to maximize the effectiveness of each customer encounter. • Teaching salespeople a systematic selling process which makes it easier for them to apply specific selling techniques based on customer-initiated buying signals. • Improving the ability of salespeople to carry out corporate-endorsed selling strategies. • Sales training improves customer relations by: • Helping salespeople understand their customers’ underlying buying motivations. • Enabling salespeople to deal more effectively with customer concerns and objections. • Sales training improves the cost effectiveness of selling activities by training salespeople to • qualify and prioritize genuine opportunities more quickly. • sell & up-sell merchandise • Sales training can reduce turnover for sales personnel by: • Getting new hires up-to-speed more quickly. • Helping experienced salespeople become more successful with existing opportunities.

#2 Merchandise Display • How does your personal cash flow influence how you shop? What do you look for if you have limited funds versus having your daddy’s credit card? • If you were going to shop at a team merchandise store this week, what would you look to buy? • In each case above, how could merchandise displays facilitate shopping? Merchandise sales may be increased by grouping products by demographic profile (highest to lowest income) and high product interaction (e.g., pennants and other souvenirs) to make shopping easier.

#3 Service level modification • How does Wal-Mart accommodate the service level for different kinds of shoppers in the check-out lines? • How many of you are in favor of electro-magnetic shock devices installed in the handrails of carts to penalize shoppers who enter the express line with more than the maximum prescribed number of items? • How could you modify service levels in team merchandise stores to accommodate the shopping patterns of speed seekers? Empty nesters?

#4 Shelf Space Modification How can shelf-space analysis help you increase team store revenue?

#5 Occasion platforms What are occasion platforms and how could you use them as the director of merchandise sales for the Dallas Mavericks? • Devise at least four high quality occasion platforms. • How would you take advantage of gift-giving tendencies?

#5 Occasion Platforms

#6 Purchase Situations • What’s the difference between occasion platforms and purchase situations? • What are some examples of purchase situations? • As store manager for the Dallas Cowboys, devise a merchandise display geared toward a specific purchase situation. • What’s a good question for store salespeople to use to direct people to specific shopping areas?

#7 Limited-edition Product Promotions What is the appeal of limited-edition products? • What are souvenir buyers looking for? • What drives fan preferences for the product? • Why is it important for teams to develop an annual strategy of limited-edition productions?

Limited Edition? Pro Player Stadium (Florida Marlins) Limited Edition MLB Baseball Park Replica Stadium - Gold Series

#8 Growth Markets • The numbers don’t lie—America is changing. By 2020, members of non-Caucasian ethnic groups are projected to make up more than 50% of the US population. To appreciate the full impact of demographic diversity in the United States today, it is important to consider the following: • Minority population growth—with higher birth rates and increasing immigration— is outpacing the growth rate for the general US population • Hispanics and Asian Americans are the fastest-growing groups • At least 14% of Americans speak languages other than English at home; in some states, this number is as high as 20% • Major multicultural groups have moved beyond the “big three” of Hispanics, Asians, and African Americans to include waves of new immigrants from Eastern Europe, the Middle East, and the Indian subcontinent

#8 Growth Markets • Can teams target Hispanics in the same way across the U.S.? • No. Why? • While 20% of Cubans are 65 or older, only 4% of Mexicans are in the same age bracket. In contrast, 37% of Mexicans and 31% of Puerto Ricans are under 18 years old. The median age of individuals of Mexican descent in the U.S. is 24.7, compared to the overall U.S. median of 35.9 years. This suggests different merchandising approaches in the southwest (predominantly Mexican descent) and southeast (greater mix of Cuban descent).

#9 Frequent Shopper Cards • What is the real advantage to the team in using frequent shopper cards? • What should you charge fans to become members of the club? Why?

#10 Fresh Graphic Displays Ready for a rumble or not? The fan I have in mind never changes his favorite cap between the first preseason game in Ft. Myers and the last drizzly cold game in the last series in October. Drives a vintage pick-up that puts a GMC Sierra to shame. Resides in a brick house with a newly hewn cedar deck. 38 steps from the grill (outside) to the kitchen refrigerator (inside). Roughly the equivalent of walking to first base at Fenway Park.Doesn’t go anywhere without his Red Sox cap. Strong, tough, smooth, comfortable (could just as easily be speaking of the fan). For taking friends to the game, taking long walks with the retriever, meeting the guys down at the local watering hole on the other side of town. The Boston Red Sox #9 Garment Washed Adjustable Cap (No. 1997365). Distinguished wool skull, cotton’s more rugged cousin. Front crown features ole No 9. Adjustable, comfortable rear strap, properly designed to avoid catching the last few hairs remaining on his head. Price: $29.Men’s sizes: One size fits all, and One size larger than one size fits all for the larger fan www.jpeterman.com Color: Blue, Mustard (Colman’s, of course)

#11 Electronic Product/information Kiosks & Self-Serve Scanners What are the advantages of using electronic kiosks & scanners? • Expands the selling space available at sports venues • Speeds up search, shopping, and purchasing for fans. • Reduces the need for employees to answer customer questions for those that are comfortable using the devices. • Fans can scan products and instantly receive information ranging from prices of comparable or complementary products to interesting sports trivia associated with the product. • Serves the need of speed shoppers.

#12 Scout Empty Retail Space Consider the location (arena/stadium) of a local pro team. How/where could the team increase its retail selling space outside its current facilities on a temporary basis?

Increasing Impulse Buying

What are some examples of impulse purchases at the game that are partially or completely unplanned? What are the two barriers that inhibit impulse buying? Partially planned impulse purchases occur when the individual plans to buy some merchandise at the event, but has not determined what particular item will be purchased. Completely unplanned impulse purchases occur when the individual had no intention of buying any merchandise prior to attending the event. What are impulse purchases?

Time Pressure How does time pressure affect team merchandise shoppers attending a game?

Internal Pressure • How do people feel internal pressure regarding impulse buying? • What are some ways to reduce the internal pressure people feel about impulse purchases? Give examples, including how to give fans GRIEF.

Giving Fans GRIEF • Guilt: Fans can compensate for the fact that they didn’t bring family or other friends along with them by buying them a gift. • Salesperson: “Did you bring your family with you to the game today?” • Reward: Fans may believe that they should purchase because they deserve a break today or because they are worth it or for some other self-indulgent reason. • Salesperson: “You look the kind of person who deserves to have a cool jersey like this.” • Information overload: The cognitive processing and mental accounting of fans can become confused or distracted in highly entertaining or interesting store designs. Why else would anyone buy merchandise in the shops contained in a Rainforest Café? • Store interior design: Provide a variety of interesting graphics, colors, lights, sounds, smells and even tastes to generate excitement—which leads to higher purchases. • Exclusivity: Fans are more willing to make purchases if they believe there is a scarcity of a desirable product. Offering exclusive items only available at the sporting event can attract those who were considering buying merchandise at some point, but not today. • Advertising/Salesperson: “Only sold here. Not available outside of Fenway Park.” • Forgetting: Fans sometimes forget things they actually need at the sporting event, such as sunglasses, visors/caps, rain ponchos, sunblock, seat cushions, team diapers, etc. • Store advertising (visually display frequently forgotten items): “Forget Something?”

The End

Moving Merchandise