Why America Hates Football - Essay Example

Section A. Article: Why America Hates Football. Can you identify the arguments made in this article that point towards a "cultural" explanation for the lack of popularity of football in the US, as opposed to the "market-based" explanations for football's lack of popularity Which of these do you think is the more powerful explanatory channel (culture or market) The cultural explanation for the lack of popularity given by Mandelbaum (2004) are the following: 1.- Football (soccer) is the world's most popular game, but there are 3 big team sports that are more popular than soccer in the United States: Baseball, American football, and basketball. Even ice hockey is considered to be the fourth major team sport in the United States. This means that soccer is in fifth place in popularity according to the American sports fans preferences. There could be a nationalistic reason behind this negative perception of soccer in the United States. 2.- Because soccer and basketball are very similar in many different ways, there is a wider degree of indifference towards soccer both from the cultural and the market-based approaches. 3.- Americans don't like games that can end up in draws and this is a cultural factor. The big 3 major team sports (basketball, baseball and American football) suffered different rules changes in the twentieth century to make them more popular. 4.- Sports fans from the United States would like to see a change of rules in soccer, but this could be controversial for the rest of the world. It wouldn't be soccer if only the Americans make a change of the rules; it would be a different game for the rest of the world. The marketing reasons behind the indifference of the American fans towards soccer can be summarised as follows: 1.- The most obvious marketing factor is the barriers to entry into the market. The four top team sports cover most of the space, and the space is limited. There cannot be too many sports in the consumer's minds. Too many options are not good from the marketing point of view. 2.- But the barriers to entry can also be explained as another kind of limit. It has to do with the motivation about watching soccer. It is about enjoying the game itself. It is about satisfying the needs of watching an easy game with easy rules. But basketball fills these needs already for the American sports fans as basketball and soccer are similar in several relevant ways as Mandelbaum pointed out in his article. 3.- Another reason related to this similarity is that basketball is a strong substitute. It has deep roots in the American sports fans. Its roots are very difficult to change through marketing efforts. It would cost a lot of money to advertise soccer in new ways to make it more appealing to the American audience. 4.- A change of the rules is needed in order to make soccer popular in the United States but this solution is very controversial even from the marketing point of view. We think that both reasons get combined together to make soccer a loser in the American market. Both cultural (or nationalistic) and marketing reasons play their role in making Americans indifferent towards the most popular game in the world. Mandelbaum states the following about the similarities between basketball and soccer: "Spectators see the same thing in the two games: episodes of spontaneous coordination, with players devising and implementing schemes for scoring. They see, that is, acts of creation. If architecture is, as is sometimes said, music set in concrete, then football and basketball may be said to be creativity embodied in team sports. () Football and basketball are therefore the team sports that most vividly evoke a common human fantasy: to leave the ground and fly through the air. () Their marked similarities, however, also mean that the two sports duplicate each other. They provide the same satisfactions. For spectators they are, in a sense, alternatives. North Americans don't need football because they already get what it has to offer from basketball." (Mandelbaum 2004). The problem regarding the frequent draws in soccer is addressed in the following terms by Mandelbaum: "Most American sports fans would regard the method used for deciding international championship matches that end in a draw even after extra time - the penalty shoot-out - as absurdly arbitrary and no more fitting a way to determine a winner than flipping a coin." (Mandelbaum 2004). On the other hand, consumer's behaviour is not so easy to understand. Neuroeconomics is a new field of study that tries to understand consumer's behaviours taking into account the quasi-rational or bounded rational aspect of the consumers: "Neuroeconomics, while still regarded skeptically by mainstream economists, could be the next big thing in the field. It promises to put economics on a firmer footing by describing people as they really are, not as some oversimplified mathematical model would have them be. Eventually it could help economists design incentives that gently guide people toward making decisions that are in their long-term best interests in everything from labor negotiations to diets to 401(k) plans." () By linking economic behavior to brain activity, however, neuroeconomics may finally supply the model that knocks mainstream economics off its throne. The new theory should fit better with reality, but it won't be as mathematically clean -- because the brain is a confusing place, with different parts handling different jobs." (Coy 2005) Peter Coy explains that neuroeconomics has controversial implications for understanding the consumer's behaviour: "A key tenet of standard economics is that making people happy is a simple matter of giving them more of what they like. But neuroscience shows that's not true. The brain's striatum quickly gets used to new stimuli and expects them to continue. People are on a treadmill in which only unexpected pleasures can make them happier. That explains why happiness of people in rich countries hasn't increased despite higher living standards." (Coy 2005). All of these new points of view have been accomplished thanks to the works of Herbert A. Simon, Daniel Kahneman, and Vernon Smith, among others. These 3 scientists were awarded the Nobel Prize in Economics. Their theories have contributed to the creation of new valid concepts like those of bounded rationaliy and quasi-rationality. (National Association for Business Economics 2003; New School 2006). The new field of neuroeconomics is a challenging new field of science as The Economist suggests: "Although Plato compared the human soul to a chariot pulled by the two horses of reason and emotion, modern economics has mostly been a one-horse show. It has been obsessed with reason. In decisions from how much to produce to whether to save and invest, humans have been assumed to be coolly rational calculators of their own self-interest. Over the past few years, however, evidence from psychology has persuaded many economists that reason does not always have its way." () Then there are age-old questions of free will: is your failure to save for old age simply a lifestyle choice, or is it down to faulty brain circuits Neuroeconomics is already providing fascinating conclusions. But Plato's chariot will remain an alluring explanation for a while yet." (The Economist 2005). As the London School of Economics and Political Science concluded on its Lecture 2 of Marketing MN302 and MN307 the following conclusion by Robert H. Frank is striking: "Adam Smith's Invisible hand - the claim that society is better off when individuals pursue their own interests in the marketplace - rests on the assumption that each person's choices have no negative consequences for others" (Frank,1999: 9)" (London School of Economics and Political Science 2006a) Section B. 1.- What is brand equity and how can it be measured What are some of the problems with each type of brand equity measure How and why do companies create brand equity Can brand equity also lead to problems for firms (justify your answer with your examples not mentioned in lecture Brand equity is equal to brand value. It is defined as follows by Dobney.Com: "In a market where products are similar, branding can have a large effect on the price that customers will pay. Brands therefore add value to a basic product or service. Brand equity is used to describe both the value of the brand and the brand's component values. A common question is how much does the brand add and consequently, what is the value of the brand" () In markets with more complex products where differences in value can be accounted for both by functional differences and the impact of the brand, getting at the value of the brand alone is more complex than for simple products. The brand consists of a functional element and also an emotional or associative element." (Dobney.Com 2000-2006). In Lecture 9, we learned that there are 3 ways of measuring brand equity: 1.- Price/earnings ratio or Takeover and mergers. 2.- The price premium method: The price gap between a branded good and non-branded competitor multiplied by total sales. 3.- The Interbrand (Brand Profit Method): Combines both financial and non-financial measures. (London School of Economics and Political Science 2006b). The problem with the first measure lies in the wrongful perception that can be made out of it related to the potential profits. It is also important to note that brand equity is a very strong barrier to entry in a market. The problem with the second measure lies in its cost efficiency. It means that a better brand costs more due to its better quality. The problem with the third measure lies in its complexity to be applied in a real world situation. As an example related to brand equity we have Yahoo! Mail against its main competitors, Hotmail and GMail. The Yahoo! brand is very solid due to its reliability. But as Lecture 9 stated, it is easier to keep or to maintain a good reputation than to create it from scratch. Yahoo! Reputation has been very difficult to accomplish. (London School of Economics and Political Science 2006c). We also learned that "in a dynamic world, branding can be increased" through proactive and synergic marketing efforts. (London School of Economics and Political Science 2006d). All this means that Yahoo! Mail had to strive diligently in order to build its brand. Because it is easy to lose reputation like in the case of Hotmail, which has lost a lot of ground along the way. 2.- Some critics of the commercial system point to disturbing trends over childhood obesity, drug use, eating disorder and even crime and lay the blame on the firms and the advertising industry for influencing consumer's behaviour in a negative way. Others point to the fact that advertising elasticity has been falling across most communication media for the last three decades, as evidence that consumers are becoming ever harder to reach by marketers. Who is right and who is wrong The first thing that we have to know about this answer is what advertising elasticity is. Graeme Pietersz defines it as follows: "Advertising elasticity of demand is the change in sales that results from each monetary unit (e.g. each pound or dollar) that is spend on advertising. It is a similar measure to other elasticities such as price elasticity. () Cross elasticities of advertising will be strong for competing products, some complementary products and other products bearing the same or related (in consumers' perception) branding." (Pietersz 2006). That is one of the reason that it is very hard to influence the consumers through advertising, so the marketers have used aggressive methods that many times are not ethically or morally or politically correct. More scientific research is needed so a fair kind of advertising can be implemented taking into account the ethical, moral and socio-political well-being of everybody involved. Advertising is harmful when it tries to manipulate or to push a wrong product or service. Using creative methods advertising can be much more effective, so the blame has to be placed on the marketers' lack of inventiveness and good taste. Coy, P. (2005, March 28). "Why Logic Often Takes A Backseat. The Study of Neuroeconomics May Topple the Notion of Rational Decision-Making". (online). In Business Week Online. Available from . (Accessed January 11, 2007). Dobney.Com. (2000-2006). "Brand Equity and Brand Value." (online). Available from . (Accessed January 11, 2007). London School of Economics and Political Science. (2006a). "Lecture 2." Courses: Marketing MN302 and MN307. Department of Management. London School of Economics and Political Science. (2006b). "Lecture 9." Courses: Marketing MN302 and MN307. Department of Management. London School of Economics and Political Science. (2006c). "Lecture 9." Courses: Marketing MN302 and MN307. Department of Management. London School of Economics and Political Science. (2006d). "Lecture 9." Courses: Marketing MN302 and MN307. Department of Management. Mandelbaum, M. (2004, August 1). "Why America Hates Football." (online). Available from . (Accessed January 9, 2007). National Association for Business Economics. (2003). "2002 Nobel Prize in Economics." (online). Available from . (Accessed January 12, 2007). New School. (2006). "Herbert A. Simon." (online). Available from . (Accessed January 13, 2007). Pietersz, G. (2006). "Advertising Elasticity." (online). In Money Terms. Available from . (Accessed January 11, 2007). The Economist. (2005, January 13). "Mind games. Can Studying the Human Brain Revolutionise Economics" (online). Available from . (Accessed January 11, 2007). Read More