Exam 17 December, questions and answers PDF

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Year 1 – FB462 UCFB Wembley All clubs across all tiers of sport are now actively marketing themselves to their consumers, via a range of activities. However, consider some of the key marketing concepts which might be appropriate for sports clubs to use and how they are applied. Discuss the statement above and apply marketing theories/models such as the 7 P’s marketing mix, product life cycle, SWOT/PEST analysis and position map etc. and their impact on a sporting organisation, use a variety of examples to support your claims As with most ‘traditional’ businesses the sports industry is now actively marketing themselves to their consumers via a range of activities According to Philip Kotler “Marketing is managing profitable customer relationships” (Kotler and Armstrong, 2015). We can see this in sporting organizations such as Arsenal Football Club, as well as other football clubs, launching apps for consumers to continue to engage with the brand via mobile technology as well as providing a platform for them to sell tickets, hospitality and other services in an aim to engage with fans and increase ‘spectatorship’. By analysing how football clubs apply marketing concepts to their activities it will be able to give sports marketers an understanding into how current marketing techniques impact sporting organizations. Firstly, understanding the different types of consumers of sport is critical to the sports marketer as it gives them the ability to understand how they can ensure the needs of each consumer, or as many as possible, is being met. The types of consumers vary and include; spectators, participants, amateurs & professionals, individual & teams and sponsors. Spectators are arguably the foundation of the sports industry because without them it would not be the same as we know it today” (Shank and Lyberger, 2015). Driving an increase in spectatorship is an area in which sporting organizations their marketing activities. Spectators have various motivation factors which include, but are not limited to: Self-esteem enhancement, Diversion from everyday life, Entertainment value, Eustress/Excitement/Arousal , Aesthetic value, Need for affiliation/sense of belonging, Family ties (Wann, Melnick, and Russell, 2001) and Attendance is more likely to be connected to the entertainment value of the event and the general atmosphere, interactions and services experienced in the stadium. (Tomlinson et al 1995). Prior to any marketing activity/campaign, football clubs should analyse the marketing environment which identifies the internal and external elements which surround the organization and can have a direct impact upon its ability to ‘manage profitable customer relationships’. The marketing environment is comprised of Macro environmental, (Political, Economic, Social, Technological, Legal and Environmental (PESTLE)), Micro environmental – (Stakeholders, Competitors, Suppliers, Intermediaries and Consumers). Internal environment – (Employees, cash flow, capital assets, materials and structure). By analysing the marketing environment a club can focus its energies on producing effective marketing actives

In a nutshell, the Macroeconomic features examine the ‘bigger picture, however, the Micro economic features are the smaller elements that make up the bigger picture. Business tools such as PESTLE analysis and SWOT analysis are often used to analyse the marketing environment. Using

Arsenal Football Club as another example can show how PESTLE and SWOT analysis can be used with football clubs (Marketing activities/campaigns/fan engagement) Strengths: -

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Massive social following – Youtube - 281,511 subscribers, Instragram- 8.1million followers and Twitter 8.36million followers. Global partners/sponsors: Nike- A far reaching 125th anniversary campaign including the production of a bespoke playing kit and crest for the season, an exhibition in the Saatchi Gallery, a documentary by Ridley Scott films and a social media campaign generating fan content from 179 countries. (http://www.arsenal.com/assets/_files/documents/sep_12/gun__1348755692_ARSENAL_H OLDINGS_PLC_year_end_.pdf) Distribution through various channels: Arsenal has recently renewed a partnership with media rights distributor MP & Silva until 2018. The new deal follows on from the announcement earlier this year that in 2013/14 season, MP & Silva delivered a record distribution of the Arsenal Media Channel to 130 territories in 5 continents, covering a potential audience reach of 392 million households in Europe, Asia-Pacific, MENA, Latin America and North America. (http://www.arsenal.com/assets/_files/documents/sep_12/gun__1348755692_ARSENAL_H OLDINGS_PLC_year_end_.pdf)

Weaknesses: -

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On-field performance – No major trophies in 12 years (European Cup and League Cup) source: www.arsenal.com Disgruntled fans – Minimal re-investment into squad to improve on-field success in the last 10 years Arsenal have invested only £436.675m into their first team squad compared to other English powerhouses such as Manchester United (£744.9m), Chelsea (£790.05m), Liverpool (£675.24m) and Manchester City (1.096.62bn) in the same time period. Source: http://www.transferleague.co.uk/ Most expensive season ticket in the Premier League and according to the KPMG Value for money of the most prominent European football clubshttps://www.footballbenchmark.com/value_for_money

Opportunities: -

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Global brand awareness/expansion. “For example, we now have 600,000 regular Arsenal supporting visitors to our Chinese website and a growing number of supporters’ groups.” http://www.arsenal.com/assets/_files/documents/sep_12/gun__1348755692_ARSENAL_HO LDINGS_PLC_year_end_.pdf Sport is now consumed in more ways than ever: TV, print, online, radio, live events, social networks and mobile. 79% of sports fans have used their device for watching or following sports (Motrocity)

Threats:

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Location: With Arsenal being in London area a major threat is attracting the casual fan. With 7 other teams in the Premiership. Arsenal’s cheapest average match day ticket being only 12% cheaper than the average and Arsenal FC having the most expensive match day ticket in the Premier League. (BBC sport, 2015)

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Global Partnerships: Other Premier League clubs have formed global partnerships and international brand extensions. Although Arsenal have done pre-season tours in Singapore to increase international fan base and spectatorship, clubs like Manchester City have partnered with New York Yankees to buy the New York City FC franchise and tapped into their fanbase in the United states. http://www.forbes.com/sites/mikeozanian/2013/07/05/the-economics-behind-new-yorks100-million-mls-team/#4c59ddc34bb2

PESTLE: Political: Political decisions can sometimes have a direct impact on a football clubs decision making process whether positive or negative. The’ Brexit has caused uncertainty in the Premier League and ’"If the league becomes less attractive, the broadcasters will offer less money for the rights, club revenues will decrease and the Premier League will suffer the consequences. " http://www.skysports.com/football/news/11670/10424317/arsene-wenger-brexit-will-impact-onpremier-league-in-long-term Economic: The economic landscape has improved in recent years from recession London had the highest gross disposable household income (GDHI) per head where, on average, each person had £23,607 available to save or spend (https://www.ons.gov.uk/economy/regionalaccounts/grossdisposablehouseholdincome/bulle tins/regionalgrossdisposablehouseholdincomegdhi/2014) Social: Arsenal FC and the Emirates stadium is based in Islington which is a small, densely population inner London borough with a growing diverse population that is relatively young. The population is mobile and there is considerable annual churn. The 2010 Islington population is estimated to be 199,100, set to rise to almost 215,000 by 2020 and to 227,000 by 2031. https://www.islington .gov.uk. By effectively marketing themselves, Arsenal could have a growing, young, local fan base. Technological: With more people using social media, Arsenal can grow the brand using platforms such as Youtube which now have 281,511 subscribers, 8.1million on Instragram and 8.36million followers on twitter. Arsenal’s Youtube page features a section called ‘Arsenal Nation’ which is a discussion show where Poet talks all things Arsenal with fans. Source https://www.youtube.com/user/ArsenalTour Legal: Financial Fair Play will have an effect on all European football clubs and states “Since 2013, clubs have also been assessed against break-even requirements, which require clubs to balance their

spending with their revenues and restricts clubs from accumulating debt. In assessing this, the independent Club Financial Control Body (CFCB) analyses each season three years' worth of club financial figures, for all clubs in UEFA competitions, The first sanctions and conditions for clubs not fulfilling the break-even requirement were set following this first assessment in May 2014. The conditions relating to non-compliance with break-even requirements were effective for the 2014/15 campaign.” http://www.uefa.com/community/news/newsid=2064391.html This should be an advantage for finically prudent football clubs such as Arsenal as it limits the amount wealthy individual club owners can spend in the transfer window as they will now need to be conscious of operating losses. Environment: Arsenal’s home ground, Emirates Stadium, is now a 60,000 seated stadium which can have a hefty environmental imprint throughout the season. Arsenal have environmental policies state that”The Club will use communication channels to try and assist supporters to use products and services in an environmentally sensitive way.” http://www.arsenal.com/the-club/community/environment-andregeneration Once understanding the marketing environment football clubs will now be in a position to use the 7’ps Marketing Mix(Extended Marketing mix) 1981 by Booms & Bitner which consists of marketing tools that the organization utilizes to accomplish its objectives in the target market (Kotler & Armstrong, 1991) e.g increasing attendance of the ‘casual fan’. Product: The core product that Arsenal offers is the players playing a game of football at the venue. The fans expect excellent levels of service as Arsenal are perceived as premium brand. Because of this, this increases in their ‘game attractiveness’. Price: As a premium brand Arsenal also charge premium prices for the match with their cheapest average match day ticket starting at £97 and their most expensive starting at £97 (Highest in the league) (BBC Sport 2015). Arsenal also have the most expensive season ticket in the Premier Leaguehttps://www.footballbenchmark.com/value_for_money with prices starting at £1,014 Place: The Emirates Stadium replaced Arsenal’s previous home highbury, which had become too small and lacked the possibilities for expansion being hemmed in by housing. In the end a site was chosen just a few hundred yards away from Highbury, and, after a few delays, construction of the stadium started in 2004. The total project budget amounted to £390 million. http://www.stadiumguide.com/emirates/ By having the product easily accessible increases the chances of fans attending the stadium to watch the match. There are multiple ways to reach the stadium by public transport. The underground (tube) is one option – the nearest tube station is Arsenal, which is on the Piccadilly line. Decent alternatives are stations Finsbury Park (Victoria and Piccadilly line) and Highbury & Islington (Victoria line and London overground). From both stations it is an approximate 10-minute walk to the stadium. http://www.stadiumguide.com/emirates/

Promotion: Through advertising, promotions, sponsorship and online marketing Arsenal can influence buying decision of the various types of spectators. Puma x Arsenal’s commercial advertisement ‘ We are the Arsenal’ (YouTube: Published on Jul 13, 2016) shows fans from all over the world of different demographics and Arsenal players (past and present) in Arsenal Merchandise giving statements as to what Arsenal Football Club means to them. This directly targets the fans need for affiliation/sense of belonging. People: Individual football players can be an obvious reason for spectatorship with the likes of Mezut Ozil having 13.6milion follows on Twitter (Source: Twitter) this can have direct correlation into spectatorship. As well as players managers and other key member’s staff influence buying decisions of consumers whether that be the football manager or the sales manager selling hospitality boxes. Processes: Arsenal operate using state of the art turnstile technology which improves the process for fans entering the stadium in an interview with the Busines Insider UK, Hywel Sloman (IT Director) says the two most important pieces of technology for Arsenal are these: The turnstiles. Without these, none of the 60,000 attendees would be able to get in. (Source: Business Insider UK) By improving this process it directly improves the fans experience and in return increasing perceived value. Physical evidence: The clubs logo is seen everywhere from the ticket to the players shirts and in nearly all areas of the football stadium. If done correctly this can increase the aesthetic value to the consumer and is a fundamental element in the marketing mix. Conclusion Although there are other elements in a marketing strategy, SWOT/PESTLE and the Marketing Mix are basics in ensuring that marketing activates are effective for their purpose; in this case increasing fan spectatorship. Each marketing activity must try and tie in with the different ‘fan motivation factors’ to ensure that they are catering for each type of consumer. The better this is done, the more likely it will have a positive impact on fan spectatorship.

Bibliography Kotler, P. and Armstrong, G. (2015) Principles of marketing. Harlow, United Kingdom: Pearson Education....