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(SANJEEV
BHISE PG 1 TO 7)
Donate or pay for permanent seat-licenses (PSLs) in order to buy season tickets.
4.
5.
Support tax-based initiatives to pay for a new arena or stadium for the team.
Hemispheric Lateralization
6.
7.
Left Brain
Logic
Reason
Objective
Verbal
Self-oriented
Categorical
Detail focused
Mimicry
Purposefulness
Economic Exchange
Right Brain
Intuition
Emotions
Subjective
Visual
Group-oriented
Relational
Whole picture
Creativity
Playfulness
Social Exchange
fundamental difference between sports marketing and marketing of most goods and services. While not ignoring the reasoning
function of the left brain, we want to engage fans more in line with the functions of the right brain.
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Compared to typical goods and services marketing, sports marketing differs in at least ten respects (see table below). We begin by
discussing the difference between customers and fans.
1. Fanatics
A central point of differentiation between sports marketing and traditional goods/services marketing (hereafter, GSM) is how we view
individual purchasers. One typically refers to customers when the subject is goods and services. Sports teams and players
have fans. Dictionary.com defines a customer as: One that buys goods or services. A fan is An ardent devotee; an enthusiast. A
fanatic is a person marked or motivated by an extreme, unreasoning enthusiasm, as for a cause.
Current GSM focuses primarily upon creating customer satisfaction. Satisfaction occurs when expectations are met or exceeded.
Satisfied customers mean three things to the company.[3] First, satisfied customers increase the value of the firm to shareholders.
Second, satisfied customers assure the firm of future cash flow. Third, satisfied customers reduce the variability in future cash flow.
As with GSM, sports teams seek to satisfy customers. We would expect, however, that fanatics of a team or brand are more than
satisfied. Fans experience pleasure and satisfaction with successful teams. But, they also experience feelings of delight or
excitement deeply resonating within the identity of the individual fan, such that the effects are likely to be long term.[4] Delight is a
combination of pleasure and arousal with an element of surprise that is frequently experienced in the sports world. Further, fanatics
are resilient in the face of service failure (viz., the team loses), when delight and excitement may turn to distress and gloom. Sports
teams develop a faithful fanatical following primarily due to high levels of identification, which is the second point of differentiation
between GSM and sports marketing.
1
2
3
4
5
6
7
8
Dimension
Purchasers
Adoption
Goods/services
Customers
Loyaltyrepeat purchasers
of the same brand (viz., lack
of switching behavior)
Promotion & Owner pays media for
Media
promotion
Distribution Static; More site-limited
Channel
Product
Adapted
Price
Customer pays a given price
for good/service
Facilities
Corporate owner buys/builds
own facilities
Competition Individual branding in
competitive markets
Exchange
10
Employees
Principally economic
exchange
Contractual power favors
owners
2. Identification
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Consumers are loyal to goods and services while fans identify with teams, organizations, and individuals. Loyalty is the repeat
purchasing of a good or service by a consumer. A loyal customer is sensitive to differences in brands and prefers a brand or set of
brands over others. Identification is when an individual reacts to events that occur to the team or player as if the events happened
to him or her. A highly identified fan will describe ones self to others in terms of being a team fan, perhaps to the point that the fan
feels like s/he is part of the team. Fans are certainly loyal to the team in terms of repeat purchases, but fan identification is a deeper
psychological affiliation that is a basis for a fan determining self-esteem and self-worth. Chapter 1 deals more specifically with how
teams and players can build fan identification. Because of high fan identification, fans passionately seek ways to promote the team
to others.
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Racing, or the NHL remains the same throughout the world. In a sense, given its electronic broadcasts, the distribution is
standardized around the world. Obviously, the promotion (e.g., language) and pricing (e.g., costs of cable or PPV) aspects of the
marketing mix may be adjusted to regional markets.
6. Two-part Pricing
Customers typically pay one price for a given product or service. When you go to a grocery store, you select your favorite grocery
items[6] and pay the prices marked on the items. You are not required to pay admission to the store so you can shop. However,
some exceptions exist resembling fan loyaltyand even fanaticismin customer products. People pay an annual fee to shop at
Sams Clubs or Costco. Some people we know actually get very excited about being able to shop at these places. Such
organizations are the exception to the ruleand add evidence to the premise that the most successful marketers are those
emulating sports marketers.
Professional sports and major college sports fans frequently pay a two-part tariff (or price). While some services with relatively
inelastic demand (electricity, utilities, etc.) use a two-part pricing system (basic fee + additional user fees) due to monopoly power,
even sports organizations operating in competitive entertainment markets frequently charge two prices. In sports, an initial payment
(e.g., donation to the university, payment for a seat license, membership fee) is frequently necessary to allocate a limited inventory
of preferable seats. Fans paying the initial fee are then given the opportunity to purchase tickets.
Another aspect of two-part pricing in sports is the event itself. Fans pay for a ticket to enter the event (initial payment) and then
purchase other products (food, drink, souvenirs) after entering. Thus price-setting in most sports settings must consider various
forms of price bundling. Season tickets are offered at a bundled price for the entire season and de-bundled in the form of smaller
ticket packages or individual tickets. Offering tickets with a hot dog and soft drink for a single price is another example of price
bundling in that it combines the prices of what would normally be two-part pricing. Price bundling is common among services (e.g.,
vacation package of flight, hotel, and ground transportation; cable TV packages), so this aspect doesnt by itself differentiate the
marketing of goods/services vs. sports. Yet, it is common practice in all sports marketing contexts, but is not common to all
goods/services contexts. Interestingly, fans are typically paying for admission to a publicly-owned facility, even though the bulk of the
ticket sales proceeds go directly to the team owners.
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Employees (viz., players) of sports teams, however, are more likely to possess contractual power over employers. Contract
concessions, renegotiations and arbitrations generally favor players. At the same time that union membership has declined in
manufacturing over the past four decades, union membership in professional sports leagues have grown relatively strong due to the
leverage held by the players. Consequently, work stoppages in major sports leagues have become commonplace in the past
decade. In 2004-05, the NHL shut-down due to the players unwillingness to abide by owners demands in its new labor contract.
Similarly, MLB players forced the cancellation of most of the season and the World Series in 1994. We await the outcomes of the
NFL and NBA negotiations in 2011.
Although the first nine differences are positive aspects of sports marketing, the leverage or power of individual players in major
college and professional sports has clear negative implications. The average fan has difficulty in identifying with 21-year-old
multimillionaires who often appear ungrateful for what they have. Players and coaches willingly trade team allegiances for more
money. Teams uproot overnight and move to another city. Motor sports drivers trade sponsors for more money. While most fans may
not blame the teams or players for maximizing their financial positions, the ultimate fact is that such fluctuations erode loyalty and
identification. Just as brands lose customers when they change advertising agencies and campaigns from year to year, teams lose
identified fans as they shift player personnel and team names in search of making more money.
Conclusion
Do conventional goods and services marketing best explain and predict effective marketing? Or does sports marketing?
Effective sports marketing is primarily premised upon building fan identification. Customers can identify with a branded good or
service, as when customers wear a particular clothing brand prominently displayed on their clothing. As such, it can be argued that
identification is merely a deeper level of loyalty. However, the best examples of fanatical followings are within the realm of sports
marketing.
Branded goods and services emulating sports marketing practices build highly identified customers. Services such as eBay can
generate fanatical support such that users form and meet in clubs for social benefits associated with being with fellow eBayers.
Branded products such as Apple can generate enough unreasoning enthusiasm among its fans that they will pay a premium in order
to purchase the new version of the product before others. These examples, however, are the exceptions proving the rule: Sports
marketing principles best exemplify effective marketing.
Nonsports organizations can benefit from understanding and practicing sports marketing principles. Brands that seek to build levels
of identification like that found in the wide world of sports can generate fans that are willing to proudly wear their brand names (e.g.,
Nike) and otherwise display unyielding devotion. So, whether your career is in sports marketing or grocery shopping, this text should
provide guidance for excellence in marketing.
The text is organized around a framework of understanding how buyers respond to the property (i.e., organization, team, athlete,
artist) and its sponsors. Sports marketing practices are based on building a highly identified fan base for the property. While we
focus primarily upon team sports, the property could just as easily be other entertainment entities which generate highly identified
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fans, such as musical artists, music concerts & venues, movies and actors, museums, or theatres. As seen in the Property box in
the framework, highly identified fans develop a passionate connection with the property, leading to the consumption of media,
events (meeting with other fans), and merchandise.
The role of the organization in marketing sports entertainment begins with knowledge of the individual fan, generated and
maintained through customer relationship management (CRM) systems and analyzed to gain fan insights. Armed with this
knowledge, the organization develops ticket plans to meet the desires of passionate fans. Prices and promotions are designed to
add value and generate revenue for the organization. The facility sportscape is designed and maintained to attract fans to the venue
and make them want to stay as long as possible. Capitalizing on fan passion, the organization develops licensed merchandise
strategies to satisfy fans desire to identify with the team and its players. Incorporating all of these components, fans feel like they
are part of a fan community intimately connected with the team and other fans.
Brands seek alignment with properties owning an active, avid fan base. The goal is to activate the sponsoring brand in the minds of
fans so the affinity for the property transfers to the brand. When this happens, fans attribute positive associations with the brand,
making it more distinct. Based on these positive attributes associated with the brand from the sponsorship activation process,
passionate fans respond positively in terms of support behaviorsnamely buying more of the brand.
Sponsorships are largely sold on the basis of relationships between representatives of the property and the sponsor, but also rely
heavily on qualitative, strategic, and quantitative evaluations.
Want to learn more? Subscribe to Team Sports Marketing here.
[1] Folgers has, however, sponsored NASCAR drivers with the Folgers name prominently displayed on caps, shirts and other
merchandise fans have worn.
[2] Fisher, Robert J. and Kirk L. Wakefield (1998), Factors leading to group identification: A field study of winners and
losers,Psychology & Marketing, 15 (January) 23-40.
[3] Gruca, Thomas S. and Lopo L. Rego (2005), Customer satisfaction, cash flow, and shareholder value, Journal of Marketing, 69
(July), 115-130.
[4] See Oliver, Richard J., Roland T. Rust and Sajeev Varki (1997), Customer delight: Foundations, findings, and managerial
insight, Journal of Retailing. 73 (Fall), 311-336.
[5] http://www.bizoffootball.com/index.php?option=com_content&view=article&id=312:complete-listing-nfl-broadcasted-in-231countries-and-territories&catid=40:television&Itemid=57
[6] Namely Pop-Tarts, Cheese Whiz, Cool Whip and frozen pizza.
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franchisee, this has evolved into a business entity with its headquarters in Mumbai, India. It runs under the
supervision of BCCI Vice President Chirayu Amin, current Chairman & Commissioner of IPL, and CEO, Sundar
Raman. This concept was initially started after the controversy between BCCI and Indian Cricket League (ICL).
Currently, the competition is contested by 10 teams each managed by its owners.
2.1 Strengths
The strength of an organisation may be defined as something it can do well, excel in doing it better than their
competitors can do or doing. It can also be a key factor that differentiates you from you competitors and also a crucial
factor that helps your growth. There are companies who fail or judge what they are good at. Strength can be
something which is solid like a large, growing customer base or less measurable. Your strength can also become
your greatest weakness, for example, you might be a pioneer in the business but if it is taken for granted, it can
become your greatest weakness.
The foundation of the Indian Premier League (IPL) is the Twenty20 cricket format which is played between 2 teams in
two hours and thirty minute. You can imagine how fast and exciting it would be considering the amount of time
involved. This is a shorter version of the original game which makes it more interesting. The is of an appealing nature
not only to the spectators but also to the TV audiences worldwide.
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The IPL has gone one step further than the other sports entities by employing economists who are structuring its lead
which maximises the revenue. The entity becomes successful when the sport is unified.
Icons of the sport from different countries play together, this makes it interesting and also has helped increase the
overall audience base.
The money not only comes from the title sponsor of the tournament but also from the franchisees inside the league,
so it generates huge income.
The franchisees follow their own marketing strategies to promote their team which indirectly promotes the entity as a
whole.
2.2 Weaknesses
A weakness is a deficiency, a gap or a problem that may stop your business from developing or reaching its peak. It
means that the business is not doing something right as it should be done. It can be a outdated thing that can be
applied no longer even though it was used before. It maybe an important factor that you are supposed to do or
implement but the business has its own doubt on the system. The SWOT analysis gives a clear picture of what you
are good and doing; whatever is opposite to that can be marked as your weakness. Weakness is said to be very
tangible.
The shorter version of the game played has become very popular which could replace the original version of the
game.
The target audience come from different geographical areas and will have to invest a lot of money on travel and
accommodation. They might also end up standing in long queues when the game is played between popular teams.
The amount of money invested by the franchisees are huge and some franchisees will not be able to stand short-term
failures. They might end up by taking some quick decisions like terminating managers or team players. This does not
look good in the long run as the confidence is broken.
To gain some quick returns some franchisees have hiked their advertising/sponsorship fees. The sponsors keep a
close eye on all the franchisees and move their investment to a reasonably priced team which has been consistent
with their performance.
2.3 Opportunities
Every business would have their own opportunities that can help them grow. The SWOT analysis looks at the
external opportunities available for a business to flourish. An opportunity can also be used to find out and analyse
what your competitors are not doing right, in other words, your competitors weakness can be an opportunity for you.
Tapping the opportunity at the right time can help you develop your business and complete your goals. Opportunities
provide a base line for a business entity to carry out its strategic planning keeping in mind their future requirements or
long term goals. The faster these opportunities are tapped and utillised the more aggressive would be the growth.
Opportunities can be based upon observations, market surveys, business techniques implemented by rivals etc.
The strength of IPL is its large potential mass audience. The marketing strategies are attractive and implemented in a
planned manner. This offers the advertisers and sponsors better marketing opportunities.
The concept of having a number of franchisees as competitors helps create a huge fan base for the entity.
Franchisees always find new ways and techniques to market their particular team to gain attractive sponsors and fan
followers. If the franchisee is able to make some reputation in the long run, it would have a solid fan base which inturn
would increase the amount of income from TV revenues not only for the franchisee but also for the entity.
The fan base is spread across different geographical area and the sport is also played at different locations. It means
that fans pay varying amounts to watch the sport. This would ensure a proper approach in marketing the products as
well as the brand via different mediums.
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The generation of revenue can come from more than one way. Since the franchisee system is employed the fans
have a wide range to select with respect to merchandises like shirts, caps etc. These would help generate a huge
amount of income through sales.
It also provides an excellent opportunity for the grounds to generate huge revenue during the tournament. They make
huge money by selling refreshments and other services during the games. Each franchisee can choose a particular
ground as their home ground, which inturn helps the ground to sell merchandises of the home team which also
generates huge money.
The opportunity to tap youngsters as long term followers are also part of the marketing tactics. The sale of
merchandise and tickets would increase at at a rapid pace. Each support their preferable team, they compete and
compare their teams with that of their colleagues. This helps increase the youngsters fan base which would help
boost up revenue.
Another important aspect of the IPL has been that the franchisee fees would be at a fixed rate until 2017-18. This
would help the investors investment safe from inflation which is a common factor in India as far as investing is
considered.
2.4 Threats
All business entities are prone to some kind of threat. It could be an unstable market condition or can also be a
disturbance inside the company that can decrease productivity. A weakness of your company identified by a
competitor can also pose a serious threat to your company. It is important that an organisaton at every stage identify
their threats at each stage of development and try to eradicate them as quickly as possible.
The IPL has reached a level that that needs to be maintained. It also requires constant improvement and changes so
that more and more people are attracted towards it. A slightest of deviation on the improvement and change can also
mean the end of an entertainment sports, this would also result in fans loosing interest in the league.
The viability of the league must also be a great threat. The revenue can fall if the competition drops off its level. The
main attraction of the league is its ability to make top ranked players to play for different franchisees. If they are not
able to attract best players to play for the league it would start loosing its attraction.
The franchisees income is largely based on the fan-base they have, if this comes down they would be earning
income to pay their players salary. The franchisees also buy the best players for a lot of money, if the players do not
perform and win competitions for them, it takes a long time for the franchisees to get their return on investment.
Hence, they are forced to stay there for a longer period.
The franchisee fees are very high and they keep increasing. For example, the most expensive sale in the first edition
of IPL was Mumbai Indians which was bought by Mukesh Ambani for $111.9 million but the franchisee for the newly
added team Pune Warriors had to pay a fees of $369.33 million which is more than 3 times than the initial edition.
The highly supported franchisees earn a larger chunk of the revenue than the highly priced team. This is because of
the concept itself, which ensures fans are thoroughly entertained to the best. The more support a team receives from
the audience the more revenue they generate.
12)
A PEST analysis is a framework that helps identify the environmental influences that may have a huge impact on a
business depending upon the political economic, social and technological forces which may also include optional
factors like environmental and legal. The factors mentioned above with external micro-environmental factors and
internal sources, can be used to formulate the opportunities and threats in a SWOT analysis.
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The SWOT analysis shows us the different factors that may affect or help the business with its growth plan. The
PEST analysis provides us an insight of the macro environmental activities which can drive the business in achieving
its goals. The analysis is included in a strategic analysis, which mainly focuses on the external analysis carried out. It
provides a projection of various macro environmental factors which can be taken into consideration by the company
for its strategic planning. This can be considered as an useful tool to determine the market growth or decline, the
position of the business, the present/future potentials, directions for operation etc.
SAJAK
5.1 Product
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The product offered by a company can be tangible or intangible. In the case of IPL, the product is intangible. IPL
provides sporting entertainment to its customers. The company has made all its efforts to deliver its products to a
wide range of people irrespective of age, sex, religion or status. It has ensured that the product is delivered to them is
worth their investment. The product is not only enjoyed by the investors or the franchisees but also by the audiences
which makes this a unique entertainment product.
5.2 Price
There are a very few competitors for IPL which makes it the most preferred one in its kind. Hence the price fixed for
the franchisees, sponsors and players are done by the IPL management. The IPL follows some strict policies which
makes the pricing more competitive and fair. Through its unique marketing strategy it ensures that the franchisees
and investors are made aware that their investment is worth every penny. One more consideration has been the
popularity of the game and its ability to reach people. The ways carried or implemented to reach deliver the product to
billions of people does justice to the price. Since the sport is popular the franchisees are sure of their return on
investment though they had invested huge amounts set as price.
5.3 Place
The place refers to a place where the product of a company can be purchased or available. In the case of IPL, the
product is delivered everywhere. The matches are played at a particular venue and the audiences are allowed to
purchase tickets to watch the match in a stadium. It also caters to the home audience but delivering the product right
at their door step. It has tied up with sponsors who have agreed to telecast the matches live on the television. The
IPL has gone one step further by entering into a agreement with google to telecast the match live on youtube. The
customers have nothing to pay to watch the match live on youtube. This has been a major breakthrough which had
attracted more audience, as they get the product right at their door step with no extra cost.
5.4 Promotions
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