Exam 2 Study Guide PDF

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Chapter 5: Market Segmentation Basics of Marketing Segmentation - Process of dividing a large, heterogeneous market into more homogeneous groups of people, who have similar wants, needs or demographic profiles, to whom a product may be targeted. - There is no single profile for a consumer purchasing a sport product. - “Football fans” is a very diverse group of individuals - Objectives of Segmentation - Specialize: - The goal should be to repackage the product based on the targeted consumer profile - Focus on the most likely to buy: - Are these the easiest people to get to make a purchase? Is this always the case? - After identifying the most likely group to purchase, move your attention to the next likely group. - Meet the wants and needs of consumers without exhausting your resources: - It’s easier to give people what they want than to convince them to purchase something they are uncomfortable with purchasing. - Provide product, price , promotion, place and public relations information in an honest manner. - Issues with Segmenting the Market - Identifiability: Can the marketer identify a segment? - Accessibility: Can the market access the segment? - Responsiveness: - Will the segment be responsive to marketing efforts in terms of wants and needs, and is it worth targeting the segment? - Four bases of Market Segmentation: determines how to segment the market - State of Being - Personal Demographics of a given consumer - Where a person lives - Income Level - Age - Family Status - Number of Children - Profession - Education - Gender - Sexual Orientation

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- Race and Ethnicity State of Mind - Includes Consumer Psychographics - The ‘Values and Lifestyle’ (VALS) Typology is commonly used to measure ‘state of mind’ and attempts to differentiate consumers based on characteristics such as personality, lifestyle, attitudes and interests - VALS identifies 8 segments of consumers - Innovators - Thinkers - Achievers - Experiencers - Believers - Strivers - Makers - Survivors Product Benefits - Focuses on what the customers wants from the product or experience - Socialization - Excitement - High Performance - Entertainment - Affordability - Affiliation - Recognition Product Usage - Consumers should also be differentiated based on the degree to which they use a given product - 80-20 Rule - 80% of business comes from 20% of the customers Types of User Group Segmentation - Unaware non-consumer - A nonuser of your product who is unaware of the product’s existence. - Misinformed non-consumer - A nonuser who is misinformed about the characteristics of your product - Aware non-consumer - A nonuser who is aware of your product, but chooses not to consume it.

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Media consumer - A potential nonuser of your product who consumes via media Light user - A user of your product who is low on the frequency escalator Medium user - A user of your product who is moderate of the frequency escalator Heavy user - A user of your product who is high on the frequency escalator - Ex. a season-ticket holder Defector - A previous user of your product who no longer consumes your product - Ex. a previous season-ticket holder who no longer attends games in person

Chapter 6: Sport Product - Focuses on both attending the actual event and all of the “event experiences” that go along with attending the event. - Marketers must keep in mind that sport is inconsistent. - Two Primary Approaches to Marketing Sport - Marketing the actual sport product - Sells the competition on the field as the primary attraction - Absolute contest quality - Overall quality of the matchup - Marketing the “Experience” of the Event - Follows the convention that the game is only one portion of the sport experience. - Majority of sport organizations follow this approach - Elements of Marketing the Sport Product - The Game - Each sport has different qualities and characteristics that can be sold to fans. - Star Power - Powerful and popular players/coaches are key as drama and memorable moments often come from key figures - The Organization - Markets the actual organization to consumers - The Venue

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Stadiums/Venues are a part of the community and are powerful in pulling at the emotions of sports fans - Equipment and Apparel - This constantly changes - Apparel is associated with personal identification to some - Novelties/Fantasies - Selling events that bring consumers closer to the team/players/venue/organization - This is a growing trend - Memories - Relationship between sport and history has the ability to captivate and motivate consumers. - Personnel and Process - Revolves around team personnel who provide customer service based experiences - Ticket/Other Print Material - Print products associated with a game/team can extend the life of the product. - Electronic Products - Internet, streaming, TV, video games, etc., are a prime way to connect with current and potential consumers Marketing New/Alternative Products - Relative Advantage: advantage over competitors? - Complexity: issue of distance, parking, time commitment for consumers - Compatibility: fit with the behavioral pattern of consumers? - Divisibility: are the majority of fans willing to pay higher ticket prices to see a game in a new facility. - Communicability: explaining the advantages of a new facility to consumers Product Space Map - Conceptual tool that when paired with research can be used to help determine what product you are actually providing, what your consumer is looking for, and what consumers you should be targeting. Images and Marks - Important considerations when marketing a new product Building on Brand vs. Branding - Building on Brand: - Marketing a new product around an established brand - Branding: Product and Brand Cycles

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There are life cycles in brands, even the most popular and successful ones. Development --- Introduction --- Growth --- Maturity --- Decline

Chapter 7: Managing Sports Brands - Licensing - A contractual method of developing and exploiting intellectual property by transferring rights of us to third parties without the transfer of ownership. - What Makes Licensing Work - Licensee purchases and gains access to logos, names and a product they feel that they can market and sell - Licensee usually pays a one-time / annual fee and royalties ranging from 6-25 % - The licensor gains monetarily and gains through the exposure of their brand being advertised in conjunction with the licensee. - Concern: licensing your brand to a company with a questionable reputation of poor marketing - Licensing Failures - Revenue from Licensed Products - Revenue from licensed products have become significant over time. - Becoming a large portion of the overall revenue stream for leagues, professional franchises and NCAA conference programs. - Fanatics - The highest volume of national retailer for UGA merchandise is Wal-Mart, not NIKE, who owns brands exclusive rights. - Athletic department and center campus take a 50/50 split on the collection of royalties on license revenue. - History of Pro Sport Licensing - NFL: 1st licensee was Sport Specialities in ‘60’s. - Grossed the NFL $124k in revenues - 2004: - NFL had over 275 licensees that generated over $3 billion in retail sales. - NHL had 250 licensees with 1.5 B in sales - MLB had 400 licensees with $3B in sales - NBA had licensees with 2.5 B in sales Chapter 8: Sales and Service - Sale basics - Sales is the most important aspect of any sports organizations - Sales teams need to work extremely hard to sell tickets, advertising, and sponsorships

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- Selling sports is not the same as selling used cards. - People want to buy this product but they still need to be incentivized to do so. Sales and Sport - Sales and sports are associated with emotion Sales - Refers to moving services from those who produce them to those who consume them Sports Sales - 4 Factors - Quality: how well is the product performing? - Quantity: how many are sold? - Time: do I have time to use this product? - Cost: how much does it cost? Sales people and success Sales people quality is determined with these factors: - Belief in product - Belief in yourself - Seeing/calling a lot of people - Timing - Listening to the customer - A sense of humor - Knocking on old doors - Asking for the sale - Following up after the sale with the same aggression - Common sense Direct Marketing - An interactive system of marketing that uses one or more forms of advertising to get a response - One-on-one interaction between fans and products - Measured by Return on Investment (ROI) Innovative Ways to Sell Sports - Coupons attract sales - Group sales impact - Use of volunteers and non-profit groups - Education can sell the fan base - FUN IS GOOD Generating Repeat Sales - Keeping customers is a lot cheaper than gaining new ones - 4 factors

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- Quality of conformance - Customer Satisfaction - Market perceived quality versus competitor quality - Customer value management Basics on how to implement a sales program - Hire and train a specialized sales force - Support the sales force with a comprehensive management plan - Create and maintain an effective database so you can reach your target market Pricing Strategies in Sports - Sales team must determine pricing for its product - Primary Product Groups - Hard or soft goods - Tickets - Memberships - Concessions - Information - Signage Cost, Value and Objectives - Satisfaction = Benefits - Costs Fan Cost Index (FCI) - A tool used to become familiar with. - This metric has been calculated by Team Marketing Report since ‘91 - Measures the complete cost of attendance and how this cost varies both between markets in the same sport and among markets across sports. Standard Pricing Factors - Factors to determine the price of a product - Production Costs - Market Conditions - Competitor’s Prices - Organizational Objectives - Product/Event Scarcity - Brand Strength (Yankees vs. Rays) Break Even Analysis - This helps determine how many items you need to sell in order to break even. - Total Cost = fixed costs + variable costs - FC = fixed costs (equipment, supplies, etc.) - VC: variable costs (employee wages, materials, etc.) Cost-Plus Pricing - An alternative way to price

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FORMULA - Your costs + Desired Profit = Sales Price of Product...