SPORT IS FANTASTIC CONFERENCE 2013

Darrin Gross of the Oakland Athletics Major League Baseball talks attracting and retaining sponsorship and ticket sales in a market dominated by others.

Background of Darrin Gross and the Oakland Athletics

Darrin Gross who was, at the time of presentation, the Director of Corporate Partnerships for the Oakland Athletics (OA), a Major League Baseball side, worked his way through the sport in a similar fashion to most players; that is, through the development pathway. He has been an integral part of the development of the Oakland Athletics corporate relationships and, for lack of a better phrase, off-field successes in terms of ticket sales and sponsorship attainment and retention; something which is particularly impressive when the scope of the local sports market is taken into consideration. The Oakland Athletics are a somewhat surprisingly competitive side in the MLB conference, particularly with a majority of their players (15/20, to be exact) earning the MLB minimum wage, and the club’s financial circumstances meaning they are unable to attract any high profile free agents, contributing to a lack of well-known baseball stars occupying their payroll, and as a result further increasing the level of difficulty involved in obtaining other revenue stream such as sponsorship and ticket sales.

The environment in which they operate

Gross outlines in his presentation that being surrounded by such a populated area allows for both significant advantages and disadvantages. Such advantages include:

–          San Francisco being the #6 media market in the United States, meaning there is sizeable level of potential exposure for the OA’s around the country and the world
–          Their DMA (Designated Market Area – admittedly a phrase/concept which I was completely unaware of before this presentation) consists of roughly 6 million people, not including surrounding areas such as Sacramento (not in their DMA) who contribute some further 1 million people
–          San Francisco area has been rated as one of the top #10 tourist draws in the world, therefore increasing the average potential to draw in crowds from over the world who are looking to experience a different sporting environment

The disadvantages, whilst also being greater in number, are arguably more influential on the corporate operations for the OA’s. Gross explains that such disadvantages are recognised by the club but are unable to be used as excuses, therefore increasing and fostering the creativity with which they market to the people and corporate populations. Such disadvantages include:

–          Their venue is aged, outdated and somewhat run down
–          Their stadium is shared with the NFL club the Oakland Raiders (a team with a bit of a Collingwood reputation – that is, most hated in the league, with hooligan fans) meaning the turf suffers higher than average wear and tear
–          As mentioned earlier, they have one of the 5^th lowest budgets for player salaries in the league (MLB does not operate salary cap policies), making attracting high profile players difficult
–          There are 17 other teams, clubs and events (from a variety of sports) within 90 miles of the OA’s, who are therefore competing for the same sponsorship dollars and population for ticket sales

The existence of such disadvantages means there is an increased reliance on the advantages which the OA’s do have over other teams in the area and league. Such advantages are either already in existence or have been developed by the baseball club in an attempt to make their home games a more marketable product. These include;

–          Huge parking capacities
–          Close by public transport (established through a sponsorship deal) which drops patrons off right outside the gates of the stadium
–          The stadium, despite being aged, is a great and historic arena which has a brilliant atmosphere once seated and watching baseball
–          The OA’s have a long and remarkable history of baseball excellence and successes
–          The weather is good for a majority of the playing season

All points stated above have been used by Darrin and the OA’s to celebrate what they are, and their points of difference towards competitors, rather than being forgotten in an attempt to try and be what they are not.

Key strategies, campaigns and policies

During the presentation, Gross outlines a total of ten separate strategies which have been employed at the OA’s to make them stand out from their competition. I have expanded on a couple which I would consider to be more significant and noticeable strategies below:

1. The establishment of events which are designed to ‘marry’ the clubs partners to each other

–          This involves creating events whereby partners are able to mingle with each other, therefore increasing their own business opportunities. In particular, Gross explained a situation whereby Krispy Kreme doughnuts became aligned with a wholesale sponsor to sell their product in their stores.
–          Examples of events include suite nights for representatives from different partners to come together at a match, bocce competitions, and golf days.

2. Well trained and thoughtful staff

–          Ensuring staff (particularly game day staff) who interact with the consumers on a one-on-one level are aware of the impact they can have on the experience of the patron in attending their matches, means they are more likely to provide a positive experience for them. It is important for all staff to understand their importance in providing the sport service to the customers. They have the ability to “make or break somebody’s day”.

The other strategies outlined by Gross were:

o   Strategic partner rates for unsold inventory (advertising space)
o   Kiosks (established in conjunction with the MLB) placed around the stadium
o   Flexible ticketing exchange policies
o   Value propositions e.g. free parking Tuesday’s
o   Special entrances for ‘VIFs’ (Very Important Fans – season ticket holders)
o   High level seating (Diamond seating and Field Box seating)
o   Establishment of a corporate service team
o   Partner inclusion in Social Media campaigns

The implications on the Australian sport marketing industry/landscape

Gross’s talk outlines that despite being in an area which is highly competitive, there are many ways to stand out in front of your competitors to win sponsorship. Australia’s sporting industry, whilst quite vast and spread out, is arguably a hotly contested industry, particularly with the rise of sports such as A League soccer, the introduction of the Big Bash League, and the rejuvenation of the Trans-Tasman Netball League; the ANZ Championship – not to mention the competition between the NRL and the AFL. Gross demonstrates the innovation used in the OA’s marketing techniques which is most definitely the reason they are still alive and successful today, and there is no reason why these practices cannot be replicated within the Australian sports industry.

Three key takeaways from the talk

Following listening to the talk, I determined the following three practices which could be implemented right away to help improve a sporting club or league within Australia. They are;

–          The development of kiosk technology to help ease the purchasing and collecting of tickets,
–          The establishment of corporate service teams to help prioritise the service of corporate guests, and;
–          Strong and bargained value propositions to help encourage attendance at quieter games.

The future of the sportplace – build it and they will come…?

Rungrado May Day Stadium, North Korea, has a capacity of 150,000 people, and occupies over 200,000 square metres.

A Case Study.

1. How do the variables ‘facility planning’ and ‘physical evidence’ apply to the different sections of this case study?

Facility planning refers to the need to create long-term, prospective and perspective plans about the requirements and usage for a particular facility, in this particular case study, the sport stadium. In terms of sport stadia, many modern day stadium constructors are unable to foresee the use of a stadium for just a single sport as a financially viable enterprise or endeavour. As a result, many new stadiums are being built with a multipurpose-full future usage plan in mind. Examples of functions which are increasingly being included in stadiums to expand their roles include restaurants, office spaces, night clubs, television studios and health and fitness centres.

Due to the majority of the sport product being intangible, the importance of the place of sport is enhanced as it is the majority of physical evidence which can be used to compare the quality of the product to other similar sport products. The physical evidence of product should support the quality characteristics, which can be boosted through the design of the sport facility itself, or through the promotion of the sport facility.

An example of the way a sport facilities design can add to the quality of the sport product is through the use of up-to-date interactive technology, such as instant replay scoreboards, banners, and statues of sporting heroes.
An example of how the promotion of the sport facility can add to the quality of the sport product is through the associated experience of being at the venue for any particular event. This can include promoting photographs of past events, the services provided by the organisation, and the explanations of different product offerings.

2. How do the variables ‘people’ and ‘process’ apply to the different sections of this case study?

Four of the five ways which people use to distinguish the quality of a service product are fully dependent on the level of training, abilities and skills of the human resources performing tasks outside the match. In terms of stadium management, this refers to the level of efficiency and effectiveness at which the service of watching a sports match is provided. That is, how quickly the food and beverage attendants are able to deliver food to a corporate box, for example.

The process refers to the ways in which the product is actually distributed to the customer for purchase and consumption. These processes occur between two functions; the marketing function, and the sport servuction model. Traditionally, the marketing function comprised purely the marketing department, whose role was to develop, communicate and executing marketing plans. However, in an increasingly service based industry such as sport, the marketing function has been described as ‘including all resources and activities which have a direct or even indirect impact on the establishment, maintenance, and strengthening of customer relationships, irrespective of where in the organisation they are’. This therefore concludes that all members of the organisation, including stadium staff – for example food and beverage attendants, security members etc. – are identified as ‘part-time marketers’. This would be particularly appropriate in corporate seats, where a high quality service product is expected. The sport servuction model identifies the difference in those functions which are physically evident in the process of delivering the product, compared to those functions which are not physically evident in this process. The facility design, contact people and players are the physical evidence of the product, whilst the preparation of those delivery systems and the actual services provided for the customer are invisible to the consumer.

3. Can you think of other standards that may replace ‘cost per seat’ as a better way to calculate facility construction costs? Justify your answer.

Using the calculation of ‘cost per seat’ to measure the costs of a stadium’s construction is very efficient and effective as it allows the cost to be expressed in terms of what it will mean is available to each patron of the stadium, should it be completely sold out. However, this value could be expressed more precisely to match the realistic attendance expectations of the venue, particularly for venues where the functions don’t vary too considerably. For example, the costs could be calculated based on average attendances of previous seasons (provided the prior venue was of similar capacity). This value would then represent more accurately the money which is being spent on helping to improve and/or ensure a positive experience for each expected attendant to a match. This calculation method would, however, be ineffective if previous attendance numbers weren’t indicative of future expected attendances, or if the venue serves multiple functions such as office space, night club and restaurant.

Lucozade Advertising of the Past 40 Years

The Beginning – 1972

1. Who is the drink targeted to?

This original advertisement was targeted to mothers, in particular, as well as people who needed a ‘pick-me-up’. At the time they were the ones who made the purchase decisions for the household, making them the most ideal target for providing the drink for everyone.

2. What was the purpose of the drink?

At this time, the drink was marketed as a supplement to aid recovery and tiredness and give people energy.

3. Why is it sold in such a big bottle?

Selling it in such a large bottle means there is plenty to go around the entire family; everyone can enjoy it.

4. What was the end slogan?

‘Lucozade aids recovery’ and ‘Lucozade is for you too’ – indicating it is a drink which can be beneficial to the whole family. It can help to replenish and make you feel better.

Ten Years Later – 1980’s

1. Has the target market changed?

The target market in this advertisement was that of males, who were on-the-go and generally busy people with disposable income, as opposed to mothers and families of the previous ad.

2. What image does Lucozade now want?

This add, unlike the earlier one, depicts an image of being energetic and cool, rather than a recovery drink for the family.

3. Why has the bottle shrunk?

Being marketed at a younger ‘on-the-go’ generation also meant that Lucozade had to change to packing to fit their profile of being convenient.

4. Why and how has the end slogan changed?

“The original solution” – this slogan can be said to be used to maintain the market as the people who grew up with the drink as children.

The Next Generation of Advertising

1. Who is the drink targeted at?

This time around, Lucozade have aimed their advertising at athletes and people who are sporty or aspire to be elite athletes.

2. What adjective is used to describe the drink?

The adjective used is ‘Resfreshing’

3. Why is glucose mentioned?

Glucose was the super food of it’s time, it was a scientific term at the time which sounded legitimate but not everyone was sure what it meant, meaning that Lucozade would be able to entice further customers who are wanting to get the benefits of ‘glucose’.

Some 20 Years Ago – 1990’s

1. Why are they introducing words like ‘Isotonic’?

This helped add to the effect of using the word ‘glucose’, which by this time wasn’t fooling anybody into purchasing as its meaning was now somewhat common knowledge. Isotonic built on this effect by providing another mysterious benefit to drinking Lucozade.

2. What do you notice about the packaging?

The packaging has changed from being a glass bottle to being a can, this could be due to many factors, including being cheaper to produce, convenient, more relatable to sport (cannot take glass onto a sports field), and they were also having to compete with other brands such as Coca Cola which was using aluminium cans as well.

3. Why do they use cans?

Glass isn’t appropriate to take into sporting venues or onto a sporting field.

The Most Recent Advertising – 2012

1. How different was it to the first?

There was a stark contrast in the family friendly, recovery drink to the athlete’s drink for better performance.

2. Was their campaign a success?

It can be considered that, yes, their campaigns throughout the ages were successful, due to the fact that it is still around and was only re-branded and marketed as recently at 2 years ago.

Three Rather Strange Product Extensions…

A product extension, as defined by the Business Dictionary, is the act of introducing a product with which the company is familiar, but that has features that consumers are not yet aware of. A product extension in the computer software business could be an upgrade or revision, and other possible product extensions are product repositionings and additions to existing products.
In reference to sport, product extensions are those branded products which we, as consumers, purchase in support of our club, team, league or event. It’s fun to dress up and show support for our club, it makes us feel a part of something. These money-making schemes produced by the sporting bodies have possibly, however, gone too far when designing these product extensions… would people really pay money to have these?

Brisbane Lions AFL House Key

If you’re going to pay $7 to help support your team financially I imagine you’d be more inclined to purchase something relatively worthwhile that can actually be used to visually display your support more clearly. Most AFL cubs have these available.

NFL Themed Beauty Products for Women

Apparently the only thing making these products individual is the logo on the outside… So would you wear a body lotion just because it has your team’s logo on it, even if it means you smell like every other female fan?

NRL Team Umbrella

If your half-the-price, plain black umbrella just isn’t doing the job in terms of both keeping the rain off and actively displaying your support for your team – then go ahead and purchase one of these NRL themed umbrellas!

The Characteristics of Sport as a Service

That which defines it as a service as opposed to a good;

1. Heterogeneity

This refers to the individuality of each performance which provides inconsistency and variability. This applies to sport because there is no way to ensure performances are the same each week, they in fact depend largely on who is performing the activity. It can be considered both good and bad; the unpredictable nature provides excitement, but also may mean some people are disappointed with the product if it does not go their way, particularly when it is expected to.

2. Intangibility

This refers to the fact that nothing about the product can be sensed prior to its consumption. It also refers to the fact that be engaging in the sport product, either by watching or playing, there is frequently no tangible product to be taken away from the event.

3. Perishability

This refers to the inability to reclaim the product. You cannot attend a sport match and capture it and keep that exact same experience following the match. It represents lost revenue which is unable to be retained.

4. Simultaneous production and consumption

The production of the product (that is the playing of the match) and the consumption of the product (spectators watching the match) both happen at the same time. This characterizes sport as a service rather than a good.

Understanding the Sport Consumer

A Gold Coast Suns Case Study

The Gold Coast Suns have been arguably one of the most successful new sport establishments in recent history. Here is some possible theory as to why:

Imagine you are the marketing manager of the Gold Coast Suns. What strategies would you develop to engage fans using psychological, personal and environmental factors?

Due to being a marginalised sport, it is important for the Gold Coast Suns to target the NRL focused Gold Coast market in as many ways as possible to encourage fan engagement, particularly during the early stages of their existence. It would be important to develop strategies which cover all of the following:
Psychological
Psychological inputs come internally from the sport consumer and are their beliefs and feelings about the apparent outcome of a sport experience. Many different ways of initiating psychological reactions to a sporting experience have been developed by sports marketers and include provoking consumers by highlighting the entertainment, socialisation, vicarious achievement and physical skills of players which could all be gained by attending an AFL match. In the case of the Gold Coast Suns, providing these would mean to market their game as a more exciting and social option as opposed to attending other sports matches on at the same time. One way in which this could be achieved would be to introduce a pre-match or half-time entertainment program involving showcasing local musical talents or established musicians. This would help encourage those who were otherwise inclined to attend another sporting match or not engage in the sport experience at all.
Personal
Personal inputs refer to the individual characteristics of the population, these can be defined by their demographics. One strategy which may target the personal inputs of individuals in the market is to promote the game and/or club as a highly diverse game which can be enjoyed by all, whether their ethnicity, gender, age or other factor.
Environmental
Environmental factors, unlike personal and psychological, are external to the sport consumer and create the ‘pull’ towards a particular sporting activity. As the marketing manager at the Suns, one way to encourage a greater environmental pull would be to create family memberships to promote whole family attendance. Or perhaps a ‘Bring a Friend’ campaign whereby people who often come to the AFL can get a second ticket half price for a friend who rarely attends or has never attended a Gold Coast Suns match before.

Apart from being more competitive on the field, how can the Gold Coast Suns improve their crowd and member numbers?

The Gold Coast Suns can improve their crowd and member numbers perhaps by introducing membership and ticketing packages whereby units become cheaper the more are purchased. An example of this could be buy 1 adult membership and get a children’s membership half price, or perhaps buy 2 adult ticket and a child can come for free. This would help to increase ticket sales and hopefully encourage further support for the team.

Are the psychological, personal and environmental factors the same in choosing to attend a Gold Coast Suns game instead of attending a Gold Coast Titans game? If not, what are the key differences?

I believe that the psychological and personal factors for attending a Titans game as opposed to a Suns game are very similar. Both outline that the sport consumer is attending the match for the enjoyment of the sport and/or to fulfil their own desires in attending, such as feeling part of something. However both teams have different environmental ‘pulls’ in Australia’s multicultural society, for example the Titans would attract a higher crowd of Maori’s, New Zealander’s and Pacific Islander ethnicities. Whereas alternatively, the Suns would attract a higher percentage of Australian Indigenous people. This could be largely due to the environment in which each relative audiences have been brought up, and due to their historically traditional interests.

Marketing Myopia – Harvard Business Review

What did you get out of reading this article?

In reading this article, I learned that there is no room for complacency when trying to sell a product. The sense of complacency inhibits the ability of the organisation to recognise the need to pounce on growth opportunities, which have so often then become the source of their demise.

What was the result of the railroad industry not defining its industry correctly?

In not defining its industry correctly, the railroad industry found that their customers were drawn to other methods of transportation such as cars and trucks, over using railroads. Railroad companies are now a competitor to these alternate industries which ultimately sell the same product; transportation.

In Levitt’s article what did the oil industry continue to do and what was its consequence?

The article explained that oil companies were consistently reliant on outside companies/industries to save them from becoming obsolete. Ultimately, their inability to expand their industry to include more innovative products of the same or similar purpose meant that those few who did believe in the growth opportunity of natural gas quit their jobs and pioneered the production of natural gas. Ultimately, the oil industry missed out on what would have been a multibillion dollar business for them.

What are the implications of this article to sport in general and to sport marketing industry in particular?

The implications of this article to the sport marketing industry show us that there needs to be a high focus on what sport can provide for the consumer whilst also trying to improve sport as a product itself. If little or no focus is placed on the customer then it may be likely that they won’t recognise the importance of sport to them and look elsewhere to be entertained or for a hobby. Sport must continue to change and adapt to the needs of the consumer.

Marketing through sport vs Marketing of sport

MARKETING THROUGH SPORT
When typically unrelated products use the marketing power of sport to sell their products:

Swisse TVC featuring Australian Cricketer Ricky Ponting

The Swisse Vitamins range uses a selection of talented athletes to market their various vitamin products; using the athletes to highlight the benefits of each of their products. An example of this is Ricky Ponting being used to market their Mega B+ range, claiming that by using it he is able to reduce stress and support energy production and as a result improve his performance. By marketing through athletes they are able to target typically physically active individuals who are looking to improve their performance in ways which the athletes claim the products have helped them to improve.

AFL is one of Australia’s most popular sports to both watch and play. By Toyota having naming rights to the entire Championship season means their brand name is seen and recognized a large portion of the Australian population.

Euskaltel is a Spanish telecommunications company based in the Basque (Euskadi) Country in northern Spain. By sponsoring a team in the UCI World Tour, Euskaltel were able to promote both their company and their region’s talent internationally, and most significantly across Europe, Canada and Australia where championship races are held. Unfortunately the team folded at the end of 2013 due to Euskaltel becoming engulfed in economic turmoil in the Basque region of Spain.

MARKETING OF SPORT
Using the marketing mix (4 P’s) to promote participation in or support of sport.

Cricket Australia Summer of Cricket TVC

Cricket Australia used this TVC to inspire support of the Australian Cricket Team in the upcoming International summer series by appealing to a sense of patriotism and unity, and creating excitement around the event. The use of colloquial terms and phrases such as “come on, mate” helps to unite the Australian public to support the cricket team and in return supports their final phrase of “it’s what unites (a)us”.

AFL 9s Promotional Video

The AFL used this advertisement to promote participation in their modified version of the game which is created in order to increase the number of people who are able to play AFL. They use the ad to highlight the ways in which AFL 9s is different from AFL and how it can be easier to join in and play well for more, particularly highlighting the ability for women to join in with the men’s game.

This advertisement appeared in Melbourne’s ‘Herald Sun’ to promote attendance and memberships of the Melbourne Vixens in the ANZ Championship. This is an example of marketing of sport as it directly promotes support of the netball team through purchasing memberships.