Segmentation, Targeting & Merchandising in Sports - Essay Example

Running Head: SPORTS ADVERTISING Sports Advertising [The [The of the Sports Advertising SEGMENTATION,TARGETING & MERCHANDISING Table of Content 1. Introduction (background into the nature of the research report) 2. Literature Review 3. Findings 4. Methodology & Results 5. Discussion 6. Conclusion 7. References and bibliography 8. Appendices Sports Advertising 1. Introduction After sports marketing the largest area of company sponsorship is in the entertainment industry in America. Companies interested in sponsorship have two main options. Firstly, they can buy into an existing event and accept the restrictions and guidelines placed upon them by the event organizers in States. Merchandising is identifying as all the activities having to do through the accurate merchandise at the right cost at the right quantities at the right time in the right place through the correct controls. Marketing is the marketable functions concerned in transferring goods from creator to purchaser. By combining the aspects of merchandising and marketing into a sports range, sports merchandising is the way expert sports teams and organizations market and distribute their products to the purchaser. The vast preponderance of the marketing attempt for sports team is accomplished throughout the playing of the teams' games. Professional sports are able to create an implausible amount of experience throughout their games since their uniforms, team colors, and logos are on exhibit for the course of the game to both those in attendance, and the people inspection the game on television. Teams use dissimilar tactics and marketing maneuvers to augment attention and sales in their apparel. We will spotlight on the merchandising efforts of the Wanderer Football Club (WFC), the leader in expert sports organizations in merchandising in America. I will look at the largely merchandising effort as well as how the league markets itself through a variety of dissimilar avenues (Stephens, Tim. 2002). 2. Literature Review Sports and the mass media enjoy a symbiotic relationship. On one hand, the mass media, more than anything else, were responsible for turning organized sports from a relatively minor element of culture into a full-blown social institution in America. On the other hand, sports has been the vehicle for bringing dramatic attention to new mass media forms, which in turn have brought new sporting experiences to the public. No doubt, this marriage of sports and the mass media in USA has enabled each to flourish. Sports marketers are interested in the relationship between sports and the mass media and in how to use the media to target their messages at sports consumers. In a sense, sport marketing offers a form of narrowcasting, whereby a large group of consumers with common interests is brought together through sports events and programming. The more specific the analysis of the sports-media relationship, the more targeted is the message, and the more effective and powerful is the sports marketing strategy in USA (Buccaneers Online). 3. Methodology Marketing Strategy What strategic issues confront the sports marketer The list is endless, and this section deals with three of the entries on the list. Licensing products has generated vast amounts of revenue for some teams as marketers take advantage of brand equity in teams and properties. In a sense, the majority marketing engages segmentation of one sort or another. This section examines one method of segmentation and in the process provides a great deal of high-quality advice about segmentation plan. When looking at the merchandising effort of professional sports teams, you must look at the top dog in this, the Wanderer Football Club (WFC) in America. Football is king in the industry in America for a lot of reasons, none larger than the vast attractiveness and viewing of the sport. In a survey by ESPN/Chilton sports, two-thirds of all Americans consider themselves to be football fans. Maybe even more shocking is the fact that forty-three percent of all women consider themselves to football fans. When looking at the definition for merchandising, we can evaluate the WFC using the 5 "right" of merchandising. In looking at the 5 "rights," we begin with the right merchandise, or knowing what is the right merchandise for our customer. Teams in the WFC are able to run the spectrum of products carrying their respective logos on them, from Dallas Cowboys mouse pads to a Donavon McNabb Philadelphia Eagles jersey. Basically everything you can think of is sold with an WFC logo on it. This shows the incredible power of the WFC and its teams as brand names. Within the right merchandise there is certain products that can be labeled as staple goods and fashion goods. Staple goods are products that are consistent sellers, year after year. When talking about staple goods, the most obvious choice would be that of WFC team jerseys. In 2001, their were four million WFC jerseys purchased, which shows that this item is by far the greatest selling product offered by the WFC and its licensed sellers. Other examples of staple goods are hats, jackets, tee shirts, and footballs. These goods are very good sellers year after year, especially at WFC football stadiums on game days. The next "right" to look at is the right price, which is basically the final determinant in the purchase of a product. When looking at price, the WFC has to look at what type or types of customers they are selling to. When determining what type of customer to sell to, the WFC has decided that they will market to several types of customers. First, they have customers who can be categorized as economical, whom price is the highest concern. These customers buy the lower priced goods because even though they may not be able to afford the three hundred and seventy dollar leather Cowboys jacket, they still want to show their team pride with a thirty-dollar sweatshirt. Within each product category there are several products in different price ranges to help accommodate for different customers' financial conditions. Next, they cater to personalizing customers, whom consider price a factor, but will pay for the extras in the buying experience. For these people, the WFC offers personalized jerseys, which can have your name on the back of your favorite teams jersey. This offers the sports fan a way of showing his team spirit while personalizing the jersey with his own name on the back. The final customer the WFC targets would be that of the apathetic customer. The apathetic customer doesn't care about price; they are looking for the highest quality or most unique item to buy. These people do a great deal of business for the WFC, spending huge amounts of money on memorabilia, personalized apparel, and high end products only they can afford. These are the types of customers who spend six hundred dollars on a Joe Montana autographed 49'ers helmet or two hundred dollars on an authentic Terrell Owens jersey, instead of spending sixty dollars on a replica jersey. As you can see, the WFC has several different customers to market to, which makes great sense due to the fact that most Americans consider themselves fans of the game. 4. Findings & Results The right quantity is not really a problem the WFC has to deal with because great deals of the products sold are not bought through WFC owned stores or teams, but through licensed dealers of the products. The WFC collects royalties on all officially licensed apparel that is sold. This means that the WFC doesn't actually have to worry about producing or supplying the right amount of jerseys and other apparel, they basically just make money off all that is sold. The WFC does, however, own and operate WFCShop.com, an online store that sells all different types of products from every team in the league. This online vendor was the first professional sports online store when opened in 1995. As far as the online store goes and vendors who sell WFC licensed goods, sales potential can be gauged by a number of factors. The biggest would be the potential for a team in a given year. When looking at the highest selling teams in terms of apparel in 2001, nine of the top ten were playoff teams, with the only other being the Dallas Cowboys, traditionally the top selling team in sports merchandise. Another way of looking at sales potential would be to look at the colors and styles of jerseys and merchandise the team has. One great example of how a team can become more marketable to the fans by changing colors would be the Tampa Bay Buccaneers. Only five years ago, the Bucs revamped their uniforms, switching to a red-pewter-and-black scheme and replacing the pirate figure with a menacing, red flag. They went from an extremely low standing in terms of merchandising, all the way into the top ten. Next, we look at how the WFC takes advantage of right timing. It is not very difficult to figure that the best time to sell WFC merchandise would be during the season. Stores can take advantage of the seasonal affect by knowing exactly when they need to begin stocking up on jersey, hats, jackets, etc. From the beginning of September until the end of January, professional football products are in very high demand among sports fans. Within the season, the highest points of demand are the beginning of the season, when every fan has high hopes for their favorite team, the beginning of the playoff, and the Super Bowl, where fans buy merchandise for the teams and also WFC memorabilia. Another big rush is the Christmas season for obvious reasons, but also, because teams debut new items during this time. For instance, the Cleveland Browns debuted their new alternate, or third, jersey to the fans this Sunday. It is already expected to be huge seller for the team. The final "right" is the right place, which includes where goods should go, which stores should stock them, and where does merchandise sell best. The WFC has licensing agreements with thousands of vendors who stock different mixes of goods in each store, from general sporting goods stores to WFC specialty shops. Generally, sporting goods stores sell clothing, such as tee shirts and jerseys, and footballs, as well as some special products depending on what WFC team is in closest proximity of the store. WFC specialty shops, such as the one found in Veterans Stadium in Philadelphia, carry a great deal of WFC products, including clothing, memorabilia, equipment, and special accessories, such as calendars and such. After examining the five "rights" of the WFC merchandising effort we will now look at the WFC retailing efforts. The WFC generated 2.7 billion dollars in sales of WFC licensed merchandise in 2001, ranking it as the fifth largest company in retail sales behind only Walt Disney, Warner Bros., Calvin Klein, and Ralph Lauren Polo. Team jerseys were the highest sellers, with just over 4 million sold this past year. While these numbers are incredible by themselves, you must take into consideration that 31 percent of all Americans own WFC licensed apparel. At 2.7 billion dollars in sales this past year, the WFC brings in as much as the National Basketball Association (NBA) and Major league Baseball (MLB) combined. How can one league be so far ahead of the other major sports organizations To answer this question you must take into account several factors in promotion, such as advertising, publicity, and visual merchandising. Also, what kind of distribution the league uses to get its products to the public. 5. Discussion The WFC uses a great deal of advertising during games to market their products to the public. During games you see commercials advertising WFC licensed apparel with the players themselves wearing jerseys and hats. Knowing that the people watching the games are fans, they reach their target market every time a commercial is shown. By having such an attentive audience who are the core customers, the WFC doesn't really have to advertise through commercials outside of game times. Also, while at WFC games you see signs, and different advertisements on the "JumboTron" marketing products and apparel. Some of the advertisements are cooperative advertisement, where the company, WFC, and the store share the cost of advertisement. These will tell you that you can buy WFC licensed apparel at that particular store. Other than advertising at games, the game itself is basically an advertisement. While it is not your typical type of visual merchandising, the WFC takes advantage of the fact that they can use this to their advantage. The WFC is the most widely viewed sport, with the Super Bowl ranking in the top 100 highest watched shows 29 different times by television audiences. It is easy to see the WFC has great exposure to television audiences. It is, in fact, a game that is made for television. The rectangle, long field makes it easy to shoot the game and easy to follow the play, unlike other sports, such as hockey or basketball. While visual merchandising is usually restricted to stores, I think it is applicable in this sense as well. The presentation in this sense would be the game itself. Players wear their jerseys and uniforms to play, which gives exposure to the public of team colors, logos, and particular players' jerseys. Fans watch their favorite players each week while wearing their favorite players' jersey. Also, coaches and team personal wear tee shirts, jackets, polo shirts, and hats during the game, giving even more exposure to WFC licensed products to the fans. In addition, fans want to wear the items the pros and coaches themselves wear. All of these things together bring about the creation of sales. Display, or the techniques used to feature items, is seen, again, in what apparel the coaches and team staff are wearing. Also, another way of doing this is by the team wearing new items during certain times of the year. For instance, the WFC now has alternate, or third jerseys and uniforms. Many teams introduced these uniforms during the past two weeks, just in time for Christmas. For example, the Cleveland Browns wore new jerseys this past week and the 49'ers wore vintage jerseys on Thanksgiving. These new looks help draw attention, and create excitement in the team, which helps sell merchandise. Finally, we look at the distribution of WFC goods. The WFC uses dispersion in distributing most of their products, which is dealing with a lot of different vendors. This gives them a great amount of exposure and helps sell goods. In the instance of jerseys, the WFC uses a concentrated buying and selling effort, with Reebok being the only licensed WFC jersey manufacturer. In the past they had hundreds of different companies selling WFC jerseys, and several different manufacturers of jerseys selling to different teams. 6. Conclusion In conclusion, the WFC is one of the largest merchandisers in the America and uses many different aspects of marketing and merchandising to bring exposure to, and sales, of their products. By utilizing television, the five "rights", and advertising the WFC has built itself into an extremely well known and recognized brand name in itself. Consumer behavior is the foundation of all marketing. Without understanding the consumer, success in marketing is unlikely. The research in this section illustrates how characteristics of consumers and their behavior interrelate with sports to produce some of the unique characteristics of sports marketing. Fans take credit when "their" team does well. This phenomenon has widespread implications for marketing. Finally, this research deals more with sports participation than identities provided by sports marketers. The related findings about risk, nevertheless, illuminate the area of consumer behavior and sports marketing (Jackson, J. J. 2004, 29-33). References Stephens, Tim. "Sports Apparel Popular with Area Customers." 13 December 2002. http://www.herald-dispatch.com/specialsections/progress2002/week1/prlist5.htm Buccaneers Online. 13 December 2002. Tampa Bay Buccaneers. http://www.buccaneers.com/newsroom/newspage.aspnewsid=2025&backpage=archive Jackson, J. J. (1994). Communication and "sport for all" in historical perspective, International Journal of Physical Education, 31(2), 29-33. http://www.wycombewanderers.premiumtv.co.uk/page/Home/0,,10430,00.html www.wycombe.vitalfootball.co.uk www.wycombewanderers-mad.co.uk www.wycombewanderers-mad.co.uk Appendices Using the scale below, please indicate your overall reaction to the advertisement that you just saw. 1. High Familiarity, Male Sport Celebrity, Systematic Processing (Ad featuring basketball player Grant Hill; participants under no need to recall 8-digit number but told that results will be compared.) 2. High Familiarity, Female Sport Celebrity, Systematic Processing (Ad featuring tennis player Monica Seles; participants under no need to recall 8-digit number but told that results will be compared.) 3. High Familiarity, Male Sport Celebrity, Heuristic Processing (Ad featuring basketball player Grant Hill; subject required to recall 8-digit number but not told of comparison of results.) 4. High Familiarity, Female Sport Celebrity, Heuristic Processing (Ad featuring tennis player Monica Seles; participants required to recall 8-digit number but are not told that results will be compared.) 5. Low Familiarity, Male Sport Celebrity, Systematic Processing (Ad featuring tennis player Todd Martin; participants not required to recall 8-digit number but told of comparison of results.) 6. Low Familiarity, Female Sport Celebrity, Systematic Processing (Ad featuring tennis player Amanda Coetzer; participants not required to recall 8-digit number but told of comparison of results.) 7. Low Familiarity, Male Sport Celebrity, Heuristic Processing (Ad featuring tennis player Todd Martin; participants required to recall 8-digit number but not told of comparison of results.) 8. Low Familiarity, Female Sport Celebrity, Heuristic Processing (Ad featuring tennis player Amanda Coetzer; participants required to recall 8-digit number but are not told of comparison of results.) Read More