The evolution of sports has blossomed into a global billion-dollar business. The evolution of media has become synonymous with sports as well. At one moment in time the only way to watch a game was to be in attendance. These days the radio, television, and social media have led to a financial influx at all levels of sports. With so many outlets to preview to the consumer, a company must have a reliable and effective marketing strategy to sell their product and maximize revenue. This comes in many forms as technology has allowed us to access and perceive different angles of the game, once never dreamed of. Social media allows us to access game stats and information as well as have conversations with people across the globe instantaneously. Communities form a sense of cooperation as support their local clubs. This all goes to lend itself to the sports product.
Throughout this paper I will take in depth look at the sport product and the various variables that lend itself to the making of a finished product including sports marketing, entertainment, knowing your consumer, the community, and branding. I will also discuss physical sports products rather than the gamesitself. The sports product has been shaped as we progress forward with technology. As the popularity of sports increased, people realized they could turn a profit. In the 1870s tobacco companies started printing baseball cards to be given when people bought tobacco; the earliest form of trading cards.
The next major step was in 1911, through the use of telegraph, announcers, and a model field where people gathered to witness what was being telegraphed. Then came the radio explosion and in 1921 boxing, baseball, and football were being broadcast live across the nation. By 1939 the National Football League was airing football games on nation television for everyone’s visual satisfaction. Today people spend their money on apparel, tickets, and television,making sports the mammoth infrastructure it is today. To continue to get people to pay organizations have to stay up to date to create the best possible product. This begins with sports organization itself and broadcasting companies who promote and market the game. Sports marketing is a big variable that lends itself to a finished sports product. Many teams unite to form a league on various different levels including amateur, NCAA, professional, etc. These leagues are often branded through the branding process. This allows for differentiation from othermarketplaces, leagues, and sports, leading to increase sales, attendance.
The first step of the branding process is raising awareness by promoting to the target market. Knowing the demographics of your fan base is an important tool when creating brand awareness. The word fan comes from the word fanatics, meaning overly zealous belief in a cause. Bhattacharya’s model reasons that fan identification can be broken down into team characteristics, organizational and product characteristics, affiliation characteristics, and activity characteristics. Affiliation characteristics looks at the fan as well as the community bond to the team. Activity characteristics looks at technology and the way its allowed fans to stayconnected to the league through social media, media coverage, and ticket sales. Lastly is organization and product characteristics which look at the organization or league based on off field issues. (Sutton, Mcdonald, Milne, & Cimperman, 1997)
This leads directly to the next step of the branding process, brand image. Brand image is the consumers beliefs about brands as well as their attitude. Take for example the NFL and its recent problems with concussions and new kneeling policies. The inconsistent penalties on athletes for domestic abuse, drug use, etc. as well as players kneeling in protest of police brutality has led to many believing the image of the brand has been tarnished. Many people find kneeling during the nationalanthem offensive to soldiers. In turn this has led to decreased ticket and merchandise sales. Also included is the removal of Papa John’s as a sponsor due to controversial remarks. Nike apparel goes hand in hand with this as they have decided to sponsor Colin Kaepernick, the first to kneel during the national anthem, as their newest spokesman.
While they had a brief reduction in profit and stock prices, recent studies show increase sales as high as 30 percent. It’s yet to be seen how this will affect brandimage. This is part of brand equity and how likely people are to come back. Brand equity has been questioned in recent years as it pertains to its relevance compared to image and attitude. Brand equity has been directly related to a positive brand image. Brand image and attitude through brand association and signals to the consumer lead to a more positive brand equity. “Results of a study suggested that focusing on the constructs that create brand equity is more relevant to managers than trying to measure it as an aggregated financial performance outcome.” (Faircloth, Capella, & Alford, 2015)
One study found that the sportsproduct is sold by the leagues to more than just spectators of the game but four distinct groups. First arefans who support the league who spend their money on merchandise, tickets, and television. Next is the various media companies that purchase and broadcast the games. Third are the communities that pay taxes to build facilities and support the teams in their area. Last are the corporations who support the league by purchasing teams or sponsoring the league. (Mason, 1999)First and foremost, professional sports in particular, is a business. There are some distinguishing factors between sport and business, that being the relationship that sports products can create with its consumers. Consumers becomes so emotionally invested by identifying themselves with an individual or team and yearn for a great performance.
Studies have shown that fans proclaim affiliation to a sports organization so strongly as if they had something to with the team being successful. Whilecorporate sponsors is a relatively new variable, community and fandom has fed sports since the beginning. With the introduction of corporate entities within professional sports, they have become a new product entirely, bound to revenue generation and economic production. This has somewhat stripped some of the involvement of community as sports have become global and less attached to one specific area or community. One paper wanted to answer the question of what a professional sports product is and what parties it is sold to. Professional leagues are interesting because each team is economically interdependent and singular while also tied financially to the league. Each team can make its own decisions as it pertains to coaching, staff, etc., yet they adhere to league rules and get a piece of the revenue pie each year created by the league. The first segment is discussed about who the sports product is sold to is the fan. This is the foundation of the sporting industry. This is the group that buys apparel, season tickets,single tickets, concession, etc. When they can’t go to the game they’ll buy a television deal that allows them to watch. These types of fansare considered the foundation because they keep the currency rolling, winning or losing, they’re committed.
The next consumer is the communities who have long maintained the sports organization as a partof their culture. This has shifted with the rise of corporate owners in many American professional teams, though maintains itself in many European markets. Communities continue to hold their teams dearly as they pay taxes for the construction of new facilities and stadiums. Sometimes that’s still not enough as owners move their teams and look for greener pastures. Having a professional sports organization in your city stimulates the economy and allows for increased notoriety and bragging rights for being a “Major League City”.The next consumer is television broadcasting companies. Television deals range in the billions of dollarsthese days as companies fight for theright to broadcast games on their television network. The rise of the television has allowed broadcasting companies and sport in general to build their brand and become global. This lends itself to the decrease in community and rise of corporation sponsorship/ownership, this being the last consumer. The growth of the sporting industry has led to corporations becoming a partof sports creating new revenue streams. League affiliation with corporations is done through the sale of luxury box suites, gained synergies in having a corporation owned team, and revenue through advertising and sponsorship through the corporations. (Mason, 1999)This can seen in licensing which is an agreement to use the leagues trademark in exchange for royalties. For example,the NFL has 175 licensees selling more than 2,500 products. (Shank & Lyberger, 2015)Sponsorships and licensees have advantages and disadvantages. Some disadvantages include when an athlete or organizationfalls out of favor with the public. Lately a lot of companies have had falling outs with the public due to comments made by the company. Due to the agreement between the league and corporation/athlete, both are hurt in the process, harming the product.
Advantages include increasing equity and expanding market and promotion. That being said there isn’t much research on the impact of sponsorship on brand image. A study conducted look at the influence of sponsorship on “association transfer from sponsored entity to the sponsor.” Results showed that a stronger associative link is found when highly fitting partners are found between sponsor and sponsored entity. In other words,a positive association between two organizations positive relates to image and promotion. (Srdan, 2012)One consumer group of sports products are the television broadcasting companies. You can consider them the middleman as they provide an outlet for fans to watch the game at home. They must also create a significant product through production variables to keep people coming back to watch gamesincluding new camera angles, sidelines reporters, and commentators.
Creating an exciting product first and foremost starts with entertainment. Creating an entertaining product increases ticket sale, apparel sales, etc. Bob Ryan, a longtime sports journalist, is quoted as saying, “Entertainment and product are not the same, yet they do go hand in hand. Entertainment provides a level of theatrics and lavish presentation to create an interesting and engaging product.”When referring to a sports product you also are dealing with equipment. Sports brands such as Nike, Adidas, and Under Armour are synonymous with sports. As sports revenue increases so do sales. Now that we are in an economic boom of sports, we’re finding new sports left and right. There are various types of “new sports”. First is the new-to-the-world products which are new to the consumer as well as the organization itself. This includes actual sports such as in line skating as well as new innovations such as Wi-Fiin stadiums, both contribute to a sports product. Products that are new to just the organization are referred to as new product category entries. This can be seen in popular brands such as Adidas and Nike branching out to new sports to become more globally recognized. Product line extensions are add-ons to an existing league. Think of the minor league baseball league,D-league in the NBA. As equipment goes product improvements are often seen in basketball shoes, ala Jordan Brand, LeBronJames, and Kevin Durant shoe lines.
Another example would be improvement of helmets in football in recent years as the science of headcontusions continue. (Shank & Lyberger, 2015)As it pertains to entertainment, sports improvement can be then improvement of a team or individual. Interestingly enough the consumer often lends itself to the creation of new products. As new sports are created or tested upon by the consumer, they are often the first to create new prototype version. These prototype versions than go on to be commercialized. In a survey conducted of 153 users of outdoor related activities. Of those 153 people, over a third had ideas for improved or new products while 9% had already made their own innovations for their activities.
Another finding of the study concluded that most people’s reason for innovation was not for monetary gain but being more efficient in their athletic activities. The causal effect of this is that people who create prototypes for themselves will not contact a manufacturer forcing a manufacturer to integrate the creator.(Luthje, 2004) Marketing is the business of promoting and selling a product. The sports product has various variables that lend itself to sports. Sports products not only refers to sporting equipment but on the field entertainment as well. How well the finished product comes out depends on various entities such as the community, investors, the league, broadcasting companies, and consumers. How does the league and broadcasting companies build popularity and a following though? The answer lies through the use of promoting their brand image, attitude, and equity with the consumers. Throughout this paper I discussed the sports marketing and how it relates to the sport product.
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