Using Sports to Market Products

Using Sports to Market Products

Lesson 4.1

Market Audience SizeA.Wide range of demographic groups enjoy

sports young market flocks to the X GamesB.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

Market Audience Size (con’t)

D.The Audience1. businesses want to align themselves

with a sports team or athlete2. sports events attract more viewers and

participants than any other entertainment3. 1997 – 24.7 million golfers4. 1997 – money spent by sports

advertisers ($152 billion)5. play time in games has been adjusted

in order to wedge in more commercials

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

The Power of Sports (con’t)

D.Power of emotional ties1. people have emotional ties toward sports2. enjoy the intrigue of the skill and psychology

of the players3. 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. 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


E. Power of a New Market1. 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 sports3. Women’s World Cup Soccer championship game

attracted the largest crowd ever to the Rose Bowl4. Women make 80 percent of all purchasing

decisions


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

Marketing TheoryA.marketing products through sports –

interconnected processB.company buys the rights to advertise during a

game or to use a logo on products it makesC.television and radio stations and networks sell

broadcast time to teams and their sponsorsD.cities buy the rights to host teams and sell this

idea to the taxpayersE. consumer buys the products advertised during the

game

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

Sponsorship

Lesson 4.2

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 recognition1. local veterinary clinic sponsors a neighborhood girls’

softball team2. 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

Sponsors & Investments (con’t)

B.Reasons for Sponsorship1. to increase sales2. to introduce a new product or service to a large audience3. to compete where many potential customers are in one

place4. to be identified with an event in which the target market

is interested5. to earn the goodwill of the audience6. to show commitment to the community7. to enter new markets8. to entertain clients, employees, or potential customers9. to enhance the companies’ image


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


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


D.Examples of Niche Markets1. auto racing is the number one sport for

fan loyalty2. racing fans are the most loyal to the

sponsors of their favorite drivers or teams3. 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


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


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

Can Anyone Sponsor Anything?

A.Sponsors come in all sizes and all ranges of budgetsB.Newer sports offer attractive opportunities for smaller

businessesC.Minor league baseball has grown in popularity since the

major league players’ strike in 1994D.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

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


H.Loss of Sponsors1. backlash against sports sponsorship by

tobacco and alcohol businesses2. ended tobacco ads on television3. canceled many sponsorships4. 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


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

Promotions

Lesson 4.3

PromotionA.selling is the exchange of a product or service for

another item of equal or greater valueB.goods and services can be sold

1. soccer ball is a good2. valet parking at a stadium is a service and a

ticket to the game is a serviceC.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

Promotion (con’t)

D.Promotion – publicizing or advertising a product, service, or event with the goal of selling it1. information about the product, service,

or event that is given to the consumer2. make the consumer want the product3. promotion leads to selling4. developing a communication process

with customers, writing promotional materials, or using publicity to draw attention to a product or service

Promotion (con’t)E. Promotion Example

1. serves both the buyer and seller of the promotion

2. a business sponsors a high school team3. the business provides a game schedule

and the notice that they are a “proud sponsor” of the team

Promotion (con’t)

F. Promotion Targets1.important to attract new markets and keep old ones2.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)

Promotion (con’t)

5. Maintaining customer satisfaction, loyalty, and repeat business is a crucial goal of promotion

6. Increasing customers’ usage7. 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

Promotion (con’t)G.Promotion Objectives

1. company must determine what it wants to accomplish

2. decide on a target market3. 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)

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

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 buyerb. telemarketingc. seller has the opportunity to overcome any hesitation on the part of the consumerd. seller must be familiar with the product and must want to sell ite. seller offers more information, comparison with a similar product, or stories about personal experiences with the productf. human interaction often makes the saleg. customers will return if they are treated courteously and professionally

Promotional Tools (con’t)

2. advertising – paid communication between the product maker or seller and the audience or customera. should clearly explain the benefits of a

good productb. an occur almost anywhere and reach

millions of people quickly in diversified and target markets


3. Publicity – any free notice about a product, service, or eventa. 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)


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 producta. 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

Endorsements

Lesson 4.4

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 sponsorshipD.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)

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 because1. the public knows the person is a real

professional driver2. assumes the comments are personal opinion

whether that fact is made plain or not3. assumes the driver would not make the

comment if he or she did not believe it

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


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.


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.

Athlete EndorsementsA.1998 – American businesses paid more than $1 billion

to athletes for endorsements (more than 2000 athletes who made endorsements)

B.advantages and disadvantages of endorsements1. 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

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


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)


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

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.


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

Athlete Endorsements (con’t)F. What Businesses Look For In An Endorser?

1. buy a personalitya. someone with a positive, charismatic,

trustworthy image; someone respected by consumers

b. a celebrity most consumers knowc. a celebrity whose career is in processd. someone who presents few riskse. someone who has a believable relationship

with the product2. Speaking ability, personal appearance,

educational background are not among the top requirements because these deficiencies can be remedied with voice coaches and wardrobe assistants.

Using Sports to Market Products

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