CHAPTER

7

Sports product concepts

After completing this chapter, you should be able to:

  Define sports products and differentiate between goods and services.

  Explain how sports products and services are categorized.

  Define branding and discuss the guidelines for choosing an effective brand name.

  Discuss the branding process in detail.

  Examine the advantages and disadvantages of licensing from the perspective of the licensee and licensor.

  Identify the dimensions of service quality and goods quality.

  Define product design and explain how product design is related to product quality.

Think about attending a Major League Baseball game at Wrigley Field in Chicago. Inside the stadium you find vendors selling game programs, scorecards, Major League Baseball-licensed merchandise, and plenty of food and drink. An usher kindly escorts you to your seat assignment and ensures that your seat is clean before you begin to enjoy the entertainment. During the game, you are exposed to more product choices.

Every game experience presents us with a number of opportunities to purchase and consume sports products. Some of the products, such as the scorecards, represent a pure good, whereas others, such as the game itself, represent a pure service. Each sports product represents a business challenge with incredible upward and downward potential. In this chapter, we explore the multidimensional nature of sports products.

Defining sports products

A sports product is a good, a service, or any combination of the two that is designed to provide benefits to a sports spectator, participant, or sponsor. Within this definition, the market concept discussed in Chapter 1 is reintroduced. As you recall, the marketing concept states that sports organizations are in the business of satisfying consumers’ needs. To do this, products must be developed that anticipate and satisfy consumers’ needs. Sports marketers sell products based on the benefits they offer consumers. These benefits are so critical to marketers that sometimes products are defined as “bundles of benefits.” For example, the sport of lacrosse has emerged as one of the nation’s fastest-growing sports. Lacrosse has been tagged as “the fastest game on two feet” and those “feet” are rapidly moving across the country.1 Colleges and High Schools are now adding Lacrosse to their athletic repertoire as the sport gains attention in the areas that knew little if anything about the game in the past. Lacrosse originated from Native Americans who often played the game as a way to train for warfare. The game may not be played for the same reasons today, but the action and intensity that is displayed is still highly competitive and exciting providing a “bundle of benefits” for the consumer.

What has caused the game to spread so quickly? There are four main factors. 1. Increased visibility in the National Media. 2. Development of a Professional League. 3. Growth of new High School and College Programs. 4. Growth of Youth Programs. Knowledge of the game is spreading, making it no longer appear to be in the dark to the general public. The game is also very appealing. It is fast-paced, full of non-stop action, provides great exercise, and is less expensive to play than many traditional sports. It is a good mix between many popular American sports such as football, basketball, and hockey. The whole of America is starting to discover Lacrosse and it is spreading just as fast as the game itself.

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Photo 7.1 This baseball, glove, and bat represent pure goods.

Source: Shutterstock.com

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Photo 7.2 This competition represents a pure service.

Source: Courtesy of Cory Hindel

In addition to sports and sporting goods, athletes can also be thought of as sports products that possess multiple benefits. For example, NBA teams are currently seeking players who can perform multiple roles on the court rather than those who have more specialized skills. The player who can rebound, is great defensively, dribbles well, and can play the post is invaluable to the franchise. The classic example of the “hybrid” player with multiple skills was Magic Johnson, who played center and guard in the 1980 NBA Finals. Today’s NBA stars, such as the Boston Celtics’ Kevin Garnett and Miami Heat’s LeBron James and Dwayne Wade, exemplify the versatile player who offers many benefits to the team.

A number of athletes offer a unique bundle of benefits both on and off the court. Consider former star center, Shaquille O’Neal. The Shaq has been a top performer, helping teams such as the Lakers earn a three-peat championship and he was one of three players in NBA history to be selected to the NBA All-Star Game for 15 seasons. In addition to Shaq’s 18 seasons as a player, he was the oldest active player in the NBA, has made and appeared in several movies and raps, written his autobiography, owns his own sportswear company, starred in his own reality show titled Shaq vs., and is currently an NBA analysts for TNT. The 7-foot-1-inch center has been aligned with numerous endorsement contracts, from Taco Bell to Payless Shoes to Buick, and has helped a number of nonprofit organizations. Most recently, Shaq has utilized the social network of Twitter as a way to communicate with fans and enhance his brand. All of these activities contribute to the “product” we know as Shaq.2

Goods and services as sports products

Our definition of products includes goods and services. It is important to understand the differences in these two types of products to plan and implement the strategic sports marketing process. Because services such as watching a game are being produced (by the players) and consumed (by the spectators) simultaneously, there is no formal channel of distribution. However, when you purchase a pure good, such as a pair of hockey skates, they must be produced by a manufacturer (e.g., Bauer), sent to a retailer (e.g., Sports Authority), and then sold to you. This formal channel of distribution requires careful planning and managing. Let us explore some of the other differences between goods and services.

Goods are defined as tangible, physical products that offer benefits to consumers. Obviously, sporting goods stores sell tangible products such as tennis balls and racquets, hockey equipment, exercise equipment, and so on. By contrast, services are usually described as intangible, nonphysical products. For instance, the competitive aspect of any sporting event (i.e., the game itself) or an experience such as receiving an ice-skating lesson reflects pure services.

CAREER SPOTLIGHT

Rodger Collins, President Packaged Beverages, Dr. Pepper Snapple Group

Question: From your perspective, what is most successful … new to the world products, new product category entries, product line extensions, product improvement, or repositioning?

Answer: At Dr. Pepper marketing is implemented in four so called buckets. The first bucket is the heavy or core user. The second bucket is the light user. The third bucket would be the line extension or innovation, such as launching Dr. Pepper Cherry and using Kiss as the spokesman. Finally a cultural approach, for example, Dr. Pepper is targeting the Hispanic community.

Question: In looking at the consumers’ perspective, which of the following do you target, discontinuous innovations, dynamic continuous innovations, or continuing innovations?

Answer: We look internally, where the value of a product or service is with the correct investment. An example would be the Crush brand, which was idle until we utilized the brand exploiting the flavor line with a powerful trademark and marketed it across the country. As for the citrus beverage line Mountain Dew holds the market. We look to utilize Sun Drop which is popular in the southeast and to become a player in this product line.

Question: How does your company go about implementing the new product development process?

Answer: We have a committee that receives concepts from our marketing department on all new products. All new products are developed internally through our research and development laboratory. We have doctors in our labs developing all of our new products. As for market categories, we test and launch products depending on market segmentation and focus groups.

Question: How does your company go about dealing with problems in marketing?

Answer: All market research is considered to be on the high end. Therefore it is discounted and we approach this utilizing low end numbers. Formulas are in place in this company to actualize all numbers into useable material.

Question: Can you give me some examples of your company’s products and the product life cycle?

Answer: A good example would be Snapple; a twenty year old product that started as a high end, healthy beverage. Between competitors and a lack of advertising Snapple went from a growth to a mature to a declining product. Two years ago we had a product restage with new packaging, ads, and a conversion to the use of real sugar in the beverage. This plan has completely paid off. We must be careful because this beverage line is quick to decline because of competition and copy cats. We have another beverage that is in the introduction stage. This is Mott’s Medley, which competes with V8’s Fusion. We are in the early stages. We have priced this beverage low, so as to create a larger customer base. The jury is out. Finally we have Dr. Pepper. A beverage that is 100 years old that we do not feel has reached the maturity stage. We feel we are still in the growth stage. We believe line extensions will allow us to continue to grow despite the cycling of the market. As for declining brands, we have been harvesting Royal Crown Cola. We have put no money into it because of the competition of Coke and Pepsi and are somewhat treading water with this beverage. We have not deleted any brands, only packaging on many different products.

Question: How much stock does your company put into fads, classics, and seasonal products?

Answer: We never look at products like fads. We look at them as innovations. If we have the ability to manufacture and the capacity to distribute with no capital upstart we will look to utilize the product. We have very limited seasonal products, but Iced Tea and Lemonade sells better in the summer.

Question: What techniques do you employ in the product diffusion process to speed the adoptions of your products?

Answer: With our new products we utilize target marketing, the internet, and social media, especially when dealing with the younger demographic. As for an older demographic we employ coupons, especially at checkouts in grocery stores with a coupon printed on the back of the receipt.

Question: Can you speak of your new Venom line of energy drinks and your managing of the products?

Answer: We developed this line and launched it in 2007 and it is in the growth category. We feel there is a large amount of potential. We are focusing on the distribution and availability of this product targeting young males. We have created a partnership with Andretti motor sports and are sponsoring Marco Andretti, a young male Indy car driver. We have also utilized exit sampling, focusing on handing out the product at big stadiums where young males are likely to attend. We have made a large investment into the development marketing and distribution of this product as we hope it will pay off in the future.

It is easy to see why soccer balls and exercise equipment are classified as pure goods and why the intangible nature of the game constitutes a pure service, but what about other sports products? For example, sporting events typically offer a variety of pure goods (such as food, beverages, and merchandise). However, even these goods have a customer service component. The responsiveness, courtesy, and friendliness of the service provider are intangible components of the service encounter.

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Figure 7.1 The goods–services continuum

Most sports products do not fall so neatly into two distinct categories, but possess characteristics of both goods and services. Figure 7.1 shows the goods–services continuum. On one end, we have sporting goods. At the other end of the continuum, we have, almost exclusively, sports services. For example, a sports service that has received considerable attention in the past few years is the fantasy sports camp. Sports camps from a variety of team and individual sports have sprung up to appeal to the aging athlete. For instance, the Chicago Cubs Fantasy Camp offers lifelong memories and mementos for $4,500.00. During the week, campers receive the following tangible goods: a personalized uniform with name and number, engraved Louisville Slugger bat, baseball autographed by an instructor, baseball card with the camper’s picture and camp stats, a DVD of the “Big Game” vs. the former major leaguers, and a glossy 8’ × 10’ team photo, and an opportunity to play under the lights at Wrigley Field.

Thus far, the distinction between goods and services has been based on the tangible aspects of the sports product. In addition to the degree of tangibility, goods and services are differentiated on the basis of perishability, separability, and standardization. These distinctions are important because they form the foundation of product planning in the strategic sports marketing process. Because of their importance, let us take a look at each dimension.

Tangibility

Tangibility refers to the ability to see, feel, and touch the product. Interestingly, the strategy for pure goods often involves stressing the intangible benefits of the product. For example, advertisements for Nike’s Dri-FIT performance apparel highlight not only the comfort of the product, but also the way the clothing will make you “ready to take on the challenges of wild and wicked workouts.” Similarly, Formula 1 racing is paired with TAG Heuer watches in a sponsorship agreement and product line that leverages the benefits of both brands by asking “What are you made of?” By pairing with Formula 1 racing, Tag Heuer hopes to capitalize on the intangible attributes of excitement, danger, excellence, and pushing yourself to be the best.

However, the strategy for intangible services is to “tangibilize them.”3

Standardization and consistency

Another characteristic that distinguishes goods from services is the degree of standardization. This refers to receiving the same level of quality over repeat purchases. Because sporting goods are tangible, the physical design of a golf ball is manufactured with very little variability. This is even truer today, as many organizations focus on how to continuously improve their manufacturing processes and enhance their product quality.

Pure services, however, reflect the other end of the standardization and consistency continuum. For example, think about the consistency associated with different individual and team athletic performances. How many times have you heard an announcer state before a game, “Which team (or player) will show up today?” Meaning, will the team play well or poorly on that given day?

The Duke University men’s basketball team, under the leadership of Mike Krzyzewski, has been one of the most consistent teams in college sports over the past 25 seasons. This, however, does not guarantee they will win the night you attend the game. In recent years, teams such as the high-performing New England Patriots have had very successful regular seasons, but have faced the embarrassing distinction of being eliminated in the first round of the NFL playoffs. Historically, Buffalo Bills had the embarrassing distinction of being the only team ever to lose four consecutive Super Bowls.

Consider another example of the lack of consistency within a sporting event. You may attend a doubleheader and see your favorite team lose the first game 14 to 5 and win the second game of the day by a score of 1 to 0. One of the risks associated with using individual athletes or teams to endorse products is the high degree of variability associated with their performance from day to day and year to year. Because sports marketers have no control over the consistency of the sports product, they must focus on those things that can be controlled, such as promotions, stadium atmosphere, and, to some extent, pricing.

Perishability

Perishability refers to the ability to store or inventory “pure goods,” whereby services are lost if not consumed. Goods may be inventoried or stored if they are not purchased immediately, although there are many costs associated with handling this inventory. The length of time a product may be inventoried, a product’s shelf life, varies. Most sport and entertainment services have a limited shelf life and are perishable only during the life of the exhibition. Each exhibition has an exclusive time frame that encompasses a unique set of attributes, therefore, they cannot be renewed. Although future reproductions via video rebroadcast and match play may occur, the unique intangible characteristics cannot be renewed. For example, if one was planning to attend a 1:00 football game but has car trouble and ends up not arriving until 4:30, most likely, exception being overtime or major delay, the shelf life of the exhibition has expired. If a tennis professional is offering lessons, but no students enroll between the hours of 10:00 A.M. and noon, this time (and money) is lost. This “down time” in which the service provider is available but there is no demand is called idle product capacity. Idle product capacity results in decreased profitability. In the case of the tennis pro, there is a moderate inventory cost associated with the professional’s salary.

Another example with much higher inventory costs is a professional hockey team that is not filling the stands. Consider the New York Islanders, the NHL team with the poorest average attendance and lowest percentage of attendance to capacity (82 percent) in the 2012 to 2013 season. The costs of producing one professional game include everything from the “astronomical” salaries of the players to the basic costs of lighting and heating the arena. If paying fans are not in the seats, the performance or service will perish, never to be recouped. As a general rule of thumb, the most perishable products in business are airline seats, hotel rooms, and athletic event tickets.

In an effort to reduce the problem of idle product capacity, sports marketers attempt to stimulate demand in off-peak periods by manipulating the other marketing mix variables. For example, if tennis lessons are not in demand from 10:00 A.M. to noon, the racquet club may offer reduced fees for enrolling during these times.

Separability

Another factor that distinguishes goods from services is separability. lf a consumer is purchasing a new pair of running shoes at a major shoe store chain, such as The Athlete’s Foot, the quality of the good (the Reebok shoes) can be separated from the quality of the service (delivered by The Athlete’s Foot sales associate). Although it is possible to separate the good from the person providing the service, these often overlap. What this suggests is that manufacturers will selectively choose the retailers that will best represent their goods. In addition, manufacturers and retailers often provide detailed training to ensure salespeople are knowledgeable about the numerous brands that are inventoried.

As we move along the goods–services continuum from pure goods toward pure services, there is less separability. In other words, it becomes more difficult to separate the service received from the service provider. In the case of an athletic event, there is no separation between the athlete, the entertainment, and the fan. The competition is being produced and consumed simultaneously. As such, sport marketers can capitalize on a team or athlete when they are performing well. When things are going poorly, they may have to rely on other aspects of the game (food, fun, and promotions) to satisfy fans. The Green Bay Packers have sold the history and tradition of the team to the fans. Despite several losing seasons the team has sold out every game since 1960, with the fans braving the elements in support of their team. These fans were rewarded with another Super Bowl victory in the 2010–2011 season.

Classifying sports products

In addition to categorizing products based on where they fall on the goods–services continuum, a number of other classification schemes exist. For sports organizations that have a variety of products, the concepts of product line and product mix become important strategic considerations. Let us look at these two concepts in the context of a goods-oriented sports organization and a services-oriented sports organization.

A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer groups, are distributed through the same type of outlets, or fall within a given price range. Wilson Sporting Goods sells many related product lines such as shoes, bats, gloves, softballs, golf clubs, and tennis racquets. The total assortment of product lines that a sports organization sells is the product mix. Table 7.1 illustrates the relationship between the product lines and product mix for Wilson Sporting Goods. The number of different product lines the organization offers is referred to as the breadth of the product mix. If these product lines are closely related in terms of the goods and services offered to consumers, then there is a high degree of product consistency.

Nike recently increased the breadth of its product mix by adding new brands and product lines. The company acquired Converse and its famous Chuck Taylor All-Star shoes, as well as Hurley International, a surf- and skateboard apparel brand. Other new acquisitions include Cole Haan dress shoes and Umbro sports apparel. The strategic advantage of this related diversification is the use of Nike’s established marketing muscle.4 Synergy in distribution and promotion, as well as strong brand identification, should make Nike’s launch into new markets a successful venture.

Table 7.1 Wilson Sporting Goods product mix

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Source: Wilson Sporting Goods, www.wilsonsports.com.

Joycelyn Hayward, the manager of a sporting goods store that carries Nike, summed it up best by saying, “Nike’s ability to churn out innovative products and marketing plans has kept it ahead of rivals”.5

Today, Nike is focusing on increasing their talent pool of athletes and expanding their growing product lines in new sports. For example, LeBron James joined the Phil Knight stable in 2003 for a $90 million, multiyear endorsement contract prior to playing a college or professional game. Nike certainly pinned its hopes on James to invigorate sales in the high-end market. This risk paid off as 2005 was a record year for sales and profitability for Nike who increased revenues by 12 percent from the previous fiscal year to $13.7 billion.6 Nike, under the initial leadership of Knight, is quickly moving into international markets and these endeavors accounted for 55 percent of Nike’s total of $25.3 billion of revenue in 2013.7 Knight will always be remembered as the man who realized the true marketing power of sports celebrities.

The depth of the product lines describes the number of individual products that comprise that line. The greater the number of variations in the product line, the deeper the line. For example, the Wilson basketball product line currently features over 60 different basketballs, 6 of which are indoor and 56 of which are indoor/outdoor. Now, think about how the product concepts might relate to a more service-oriented sports organization, such as a professional sports franchise. All these organizations have gone beyond selling the core product, the game itself, and moved into other profitable areas, such as the sale of licensed merchandise, memorabilia, and fantasy camps. In essence, sports organizations have expanded their product lines or broadened their product mix.

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Web 7.1 TaylorMade-Adidas Golf extends their product line with Adidas golf footwear and apparel.

Source: © 2014 TaylorMade Golf Company, Inc.

Understanding the depth, breadth, and consistency of the product offerings is important from a strategic perspective. Sports organizations might consider adding product lines, and, therefore, widen the product mix. For example, Nike is using this strategy and capitalizing on its strong brand name. Alternatively, the sports organization can eliminate weak product lines and focus on its established strengths. In addition, the product lines it adds may be related to existing lines (product line consistency) or may be unrelated to existing lines (product line diversification).

Another strategic decision may be to maintain the number of product lines, but add new versions to make the line deeper. For instance, the MLS has 19 teams divided into Eastern and Western conferences, 16 in the U.S. and 3 in Canada, and is scheduled to grow to 20 teams in the near future. All of these product planning strategies require examining the overarching marketing goals and the organizational objectives, as well as carefully considering consumers’ needs.

Product characteristics

Products are sometimes described as “bundles of benefits” designed to satisfy consumers’ needs.8 These “bundles” consist of numerous important attributes or characteristics that, when taken together, create the total product. These product characteristics, which include branding, quality, and design, are illustrated in Figure 7.2. It is important to note that each of the product characteristics interacts with the others to produce the total product. Branding is dependent on product quality; product quality is contingent on product design; and so on. Although these product features (i.e., branding, quality, and design) are interdependent, we examine each independently in the following sections.

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Figure 7.2 Product characteristics

SPOTLIGHT ON INTERNATIONAL SPORTS MARKETING

The 5 worst athlete-endorsed products of all time

Athletes-endorsed products are an enigmatic paradox that has plagued me for quite some time.

In layman’s terms, athletes have long tried to attach their names to companies or products that have left us shaking our heads or wiping the tears of laughter from our eyes.

Raffy Palmeiro’s Viagra advertisement a few years back was a fine case of both. Alas, seasoned slugger and seemingly impotent Palmeiro is not the only man who has made some downright dumb choices in marketing.

This brief list is a compilation of some of the more bizarre athlete endorsements of the past few decades.

David Robinson Doritos Raft

It’s a hot August day, and the sun beats down, as you dream of Tom Brady’s UGG Boot endorsements and Roethlisberger jerky.

You sit up and slowly walk toward the nearest body of water, but you’re not quite sure you want to go all the way under.

Really, there’s only one thing to do – grab your David Robinson Doritos raft!

What was the thought process here? David Robinson was a Navy man, but the Navy seldom uses life rafts like the one pictured above (or so I’ve read).

I also worry about the size of the raft itself, I doubt it could hold one of the Robinson’s limbs, let alone his whole body.

Shaq Fu for Sega

Shaquille O’Neal has never been shy about trying different things. He has rapped, protected and served, acted, commentated, competed and headlined an awesome 1990s video game.

Ladies and gentlemen, I give you “Shaq Fu,” the game that, well, gamers around the world regard as the worst fighting game ever created. The old mantra says not to judge a book by its cover, but anyone who judged this game by the cover was rewarded with some extra time and money.

There is a website that has dedicated itself to destroying all remaining copies of the game left in existence. It’s facetious to an extent, or at least, I hope.

Query of the day

What would you rather do for an hour?

A)  Play several rousing rounds of Shaq Fu

B)  Watch Kazam

C)  Listen to Shaq’s Diesel album.

D)  Wait in line for Shinedown tickets?

Carson Palmer Goes “Long-Er”

Why in the world would Carson Palmer sign off on this? Who is his agent? Was Mark Sanchez unavailable?

How psyched was the guy who suggested they do the mustard as football laces pattern on the wiener when his idea was accepted? Is this why Palmer is no longer a Bengal? What was the runner up tag-line to “GO Long-er.”

My stomach is rumbling!

Big Ben Does Beef Jerky Right

While Ben Roethlisberger is high in both protein and fat, his “Super Championship Edition” jerky – whatever that means – is low fat.

With Big Ben’s numerous indiscretions over the past few seasons, he is somewhat of an easy target. To be entirely honest though, any athlete who endorses his own beef product should expect a few punches and pokes.

What is the obsession with quarterbacks and meaty byproduct?

Tom Brady Loves UGG Boots

Personally, I am yet to meet a man who dons UGG Boots. Then again, I am not all that worldly and seldom spend time with society types like Tom Brady.

It’s hard to take shots at Tom Brady with all the success he has had in his career, and while it’s possible he can transform the UGG brand into something men will actually wear, I think this will be a tough sell.

Source:Article author: Adam Dietz. Rightsholder: Bleacher Report; http://bleacherreport.com/articles/1165407-the-worst-athlete-endorsed-products-of-all-time?search_query=athleteendorsements#/articles/1434868-the-50-biggest-sports-fails-of-2012.

Branding

What first comes to mind when you hear University of Notre Dame, Green Bay, or Adidas? It is likely that the Fighting Irish name, along with the Lucky Leprechaun ready to battle, comes to mind for Notre Dame. The Packers are synonymous with Green Bay, Wisconsin, and the symbolic three stripes are synonymous with Adidas. All these characteristics are important elements of branding.

Branding is a name, design, symbol, or any combination that a sports organization (or individual athlete as is the case with David Beckham) uses to help differentiate its products from the competition. Three important branding concepts are brand name, brand marks, and trademarks. A brand name refers to the element of the brand that can be vocalized, such as the Nike Air Jordan, the Pittsburgh Penguins, and the UNC Tarheels. When selecting a brand name for sporting goods or a team name, considerable marketing effort is required to ensure the name symbolizes strength and confidence. Because choosing a name is such a critical decision, sports marketers sometimes use the following guidelines for selecting brand names:

Images  The name should be positive; distinctive; generate positive feelings and associations; be easy to remember and to pronounce. For team names, the positive associations include those linked with a city or geographic area.

Images  The name should be translatable into a dynamite attitude-oriented logo. As an example of a successful logo choice, consider Kansas City’s Major League Soccer team, who recently changed their name from the Wizards to Sporting Kansas City. CEO and managing partner Robb Heineman stated that the name change “continues the forward-thinking and innovation. This is all about our connection to the community and us trying to be innovative in what we’re trying to do.”9

Images  The name should imply the benefits the sports product delivers. For example, the name communicates the product attributes the target market desires.

Images  The name should be consistent with the image of the rest of the product lines, organization, and city. Again, this is especially important for cities naming their sports franchises. One example of this concept in action is MLS’s Columbus Crew.10 The Crew was chosen to represent the Columbus community in a positive manner. The name suggests the hard work, do-not-quit attitude that people in the Columbus community value.

Images  The name should be legally and ethically permissible. That is, the name cannot violate another organization’s trademarks or be seen as offensive to any group of people. For example, a great many team names with reference to (and perceived negative connotations of) Native Americans have been changed or are under scrutiny (e.g., Miami University of Ohio Redskins to RedHawks, Atlanta Braves, and Washington Redskins). The NCAA decided in 2005 to ban the use of American Indian mascots by sports teams during its postseason tournaments. Schools using American Indian mascots or nicknames would also be barred from hosting NCAA postseason tournaments.

While choosing a team/brand name is critical to marketing success, some teams and leagues haven’t fared so well in the name game. For example, the National Lacrosse League has had a history of poor team names.11 The name Colorado Mammoth conjures up images such as big, slow, and extinct – not exactly a good fit for a professional athletic team. In addition, some of the University of California institutions such as UC Santa Cruz and UC Irvine have struggled to develop a positive association with the brand names of Banana Slugs and Anteaters, respectively.

A brand mark, also known as the logo or logotype, is the element of a brand that cannot be spoken. One of the most recognizable logos in the world is the Nike Swoosh. Interestingly, Carolyn Davidson was paid just $35 in 1971 to create the logo that now adorns Nike products, as well as CEO Phil Knight’s ankle in the form of a tattoo. It’s important for sports marketers to realize that while the Nike logo was created for the paltry sum of $35, the cost of changing logos and nicknames can swell to $250,000. Some of the incidental costs of changing your brand include: surveys of constituent groups, designing the logo, retaining a marketing firm, developing a new ad campaign to create awareness, repainting facilities, buying new stationery, replacing signage, creating new uniforms, and even developing a new mascot costume.12

SPOTLIGHT ON SPORTS MARKETING ETHICS

NCAA Native American mascot controversy

The world of intercollegiate athletics is an interesting stew to say the least.

It is a mixture of money, a smattering of egocentricity, a dash of concern for the student athlete, a yet smaller dash of perceived concern for said student athlete’s actual academic progress towards a degree and then brought together with a healthy dose of public perception and dare I say EVEN MORE MONEY.

Back in 2005, the NCAA decided that it would institute a new rule:

It self-decided (as a PR move I believe) it would strong-arm schools with nicknames or mascots IT deemed “hostile or abusive”; they would no longer be allowed to keep these nicknames.

This was targeted at colleges and universities that were currently using a Native American derived name and/or symbols.

Most of these schools were small with no strong alumni bases or financial incentive to keep their respective name and made the change without any fanfare.

However, there were plenty of major universities that were presented with a proverbial pickle.

Schools such as Florida State (Seminoles), Utah (Utes), Illinois (Illini), and, to lesser extents, Central Michigan (Chippewa’s), Miami of Ohio (Redskins) and North Dakota (Sioux).

The first three schools are traditional football and basketball powerhouses whose revenue annually adds tens of millions to their athletic department coffers as well as hefty sums reaching the NCAA itself.

From the schools above, Miami has changed its name to “Redhawks” with little to no opposition; North Dakota is in the process of dropping “Sioux” after 81 years upon losing its final appeal to the NCAA after many years while Florida State, Utah, Illinois and Central Michigan have kept their names after receiving “waivers” from the NCAA by proving they (currently) have the blessing and written approval of those respective tribes (Seminole, Illini, Ute and Chippewa).

Ironically, these schools (save CMU) produce millions of dollars in athletic revenue through large gate attendance, huge TV contracts and merchandising. Even more “ironic” is the fact that the NCAA actually profits twofold. It is giving the appearance on one hand of being thoughtful, respectful and politically correct while the other hand is taking fistfuls of dollars looking the other way. If they are going to enact any rule, then it should apply to all schools regardless of their circumstances. If not, then retract it.

The truth (in my opinion and millions of other fan-based polls) is that the NCAA should be involved in other things like policing an ever growing number of student athletes being arrested (some multiple times), making sure progress is made in the classroom and that graduation rates are strong (things it was actually set up to do in the first place).

Schools along with their alumni and communities should be able to decide for themselves what they want to be called. If a school thinks its current nickname is somehow offensive, then let it decide (such as Stanford University did in 1972 all by itself in dropping the nickname “Indians” in favor of “Cardinal”).

If a school has a relationship with a certain tribe and they mutually agree that the name is acceptable, again let them decide. But to force schools to do what you want them to do and then go and break this rule yourself (as the NCAA is doing) AND then on top of that, still profit from it, this is ridiculous to say the least.

A final footnote to this article:

One school (the University of Iowa) has even gone a step further in this. They have now decided that they themselves will also police the ranks and will no longer schedule a school to any athletic event that still carries a Native American name and its most recent victim was the University of North Dakota.

Even though again UND is in the process of dropping the “Sioux” nickname, this is still not enough for the Iowa Hawkeye higher-ups. So, a potential track meet between the schools was recently cancelled.

Yet another “irony” is that Iowa plays in the same conference (the wealthy Big 10) as Illinois (Illini) and they meet in every NCAA sanctioned sport, every year.

FYI Iowa “enlightened” brass: the term “Hawkeye” originally appeared in the novel, “The Last of the Mohicans” written by James Fenimore Cooper. In the book, the character named Natty Bumppo is given the word “Hawkeye” as a nickname from the Delaware Indians.

Maybe the university should consider beefing up its own literature and history departments. Talk about hypocrites!!!

Fortunately, I graduated from a university where this was not an issue.

Our mascot was a feisty chicken bred for cock-fighting to entertain soldiers during the American Revolutionary War.

OOPPS, maybe I spoke to soon. Let’s hope the NCAA and PETA don’t read this………………… shhhhhhhhhhhhhhh

Source: Rightsholder: Neil Kline; http://www.bernardgoldberg.com/ncaa-native-american-mascot-controversy/.

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Web 7.2 Sports logos gallery on the Web

Source: http://www.baseball-almanac.com/

A trademark identifies that a sports organization has legally registered its brand name or brand mark and thus prevents others from using it. Unfortunately, product counterfeiting or the production of low-cost copies of trademarked popular brands is reaching new heights. Product counterfeiting and trademark infringement are especially problematic at major sporting events, such as the Super Bowl or Olympic Games. For example, Collegiate Licensing Co., a division of IMG Worldwide, which represents about 200 collegiate properties, found some 3,000 counterfeit items at football bowl games and the NCAA basketball tournament.

The branding process

The broad purpose of branding a product is to allow an organization to distinguish and differentiate itself from all others in the marketplace. Building the brand will then ultimately affect consumer behaviors, such as increasing attendance, merchandising sales, or participation in sports. However, before these behaviors are realized, several things must happen in the branding process shown in Figure 7.3.

First, brand awareness must be established. Brand awareness refers to making consumers in the desired target market recognize and remember the brand name. Only after awareness levels reach their desired objectives can brand image be addressed. After all, consumers must be aware of the product before they can understand the image the sports marketer is trying to project.

After brand awareness is established, marketing efforts turn to developing and managing a brand image. Brand image is described as the consumers’ set of beliefs about brands, which, in turn, shape attitudes. Brand image can also be thought of as the “personality” of the brand. Organizations that sponsor sporting events are especially interested in strengthening or maintaining the image of their products through association with a sports entity (athlete, team, or league) that reflects the desired image. For instance, the marketers of Mercedes-Benz automobiles have established sponsorships with tennis events to reinforce a brand image of power, grace, and control.

Sports marketers attempt to manage beliefs that we have about a particular brand through a number of “image drivers,” or factors that influence the brand image. The image drivers controlled by sports marketing efforts include product features or characteristics, product performance or quality, price, brand name, customer service, packaging, advertising, promotion, and distribution channels. Each of these image drivers contributes to creating the overall brand image. After shaping a positive brand image, sports marketers can then ultimately hope to create high levels of brand equity.

Another link in the branding process is developing high levels of brand equity. Brand equity is the value that the brand contributes to a product in the marketplace. In economic terms, it is the difference in value between a branded product and its generic equivalent. Consumers who believe a sport product has a high level of brand equity are more likely to be satisfied with the brand. The satisfied consumers will, in turn, become brand-loyal or repeat purchasers. Gladden, Milne, and Sutton have developed a unique model of assessing brand equity for the sports industry. The components of the model can be seen in Figure 7.4. The authors explain brand equity by extending the previous work of Aaker, who believes there are four major components of brand equity.13 These are perceived quality, brand awareness, brand associations, and brand loyalty. Gladden, Milne, and Sutton describe the perceived quality of sport as the consumers’ perceptions of a team’s success. Obviously, this could be extended beyond the notion of a team to other sport products. Brand awareness is defined as the consumers’ familiarity with a particular team or sport product. Brand associations refer to the intangible attributes of a brand or, in the case of sport, the experiential and symbolic attributes offered by an athletic team. The final component, brand loyalty, is defined as the ability to attract and retain consumers. As the authors point out, this is sometimes difficult because of the inconsistent and intangible nature of the sports product.14

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Figure 7.3 The branding process

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Figure 7.4 The conceptual model for assessing brand equity

When describing the full model of brand equity for sport, Gladden and his colleagues also discuss the antecedents and consequences of brand equity for a sports product. These antecedent conditions are particularly important for marketing managers to understand because they will have an impact on the level of brand equity. The three broad categories of antecedents include team-related factors, organization-related factors, and market-related factors.

Team-related factors are further broken down into the success of the team, head coach, and star player(s). Previous research has shown that winning or success is still a critical factor in establishing a strong brand and in achieving the desired outcomes such as merchandise sales, media exposure, and so on. Although selling an inferior core product (i.e., losing team) is never easy, it is important to underscore the notion that sports marketers must do their best to enhance those aspects of the event experience that they can control. As the accompanying article illustrates, the Miami Marlins are still making money even after a series of losing seasons.

MIAMI MARLINS ATTENDANCE REVERTS TO OLD SUN LIFE STADIUM LEVELS

What has moving to Miami brought the Marlins? About 100 extra fans per game.

That’s the current gap between this year’s attendance and the average gate count for the Marlins’ last season at Sun Life Stadium, the football field that owner Jeffrey Loria blamed for the team’s long-standing attendance and revenue woes.

Those problems ended up following Loria to the government-owned Marlins Park, which is on track to face the worst fan rejection of a new baseball stadium in at least a generation.

“Usually you have a honeymoon effect,” said J.C. Bradbury, a sports-science professor at Kennesaw State University in Atlanta who studies the business side of baseball. “It’s hard to have that when the fans are predisposed not to like you.”

Attendance for the Marlins hit a 15-year high with the opening of the 36,000-seat Marlins Park last year, despite lingering ire over Miami and Miami-Dade picking up most of the $634 million construction tab. But the gains didn’t last long. On the heels of a losing season, Loria slashed the team’s payroll by $60 million and traded most of the star players. Sales of season tickets plunged 60 percent, and the Marlins became the only Major League franchise to turn to Groupon to fill seats on Opening Day in April.

“I obviously still feel tremendously sorry about what happened last year,” said Marlins president David Samson. “The goal we have with our fans every day is to get them to the point when they say, ‘I remember when – I remember when I was so unhappy with the team. But now, it’s a love affair.’”

At the moment, the Marlins have the worst attendance in baseball at about 17,830 people per game, according to a ranking on espn.com. That amounts to an average sales drop of 10,400 tickets from the 2012 inaugural season – a 37 percent decline.

Using attendance figures from the 1980s on posted at baseball-reference.com, The Miami Herald compared the ongoing 2013 season at Marlins Park to the second year of every new stadium built since 1989.

Only one ballpark saw a worse drop: Tampa Bay’s Tropicana Field, where attendance fell 38 percent in the season after its 1998 debut.

But Marlins Park could wind up in the statistical basement by the time this season ends. During its first 55 home games, which is how many times the Marlins have played in Miami this year, Tampa Bay only saw a drop of 30 percent. Assuming the Marlins follow the same trajectory once summer ends, it will pass Tampa’s record for the worst sophomore season.

Loria argued the player trades were necessary after his $100 million payroll, one of the highest in baseball, failed to deliver last year. Once the new squad gels and starts winning, front-office executives predict fans to come back in the numbers needed to spend more on the field. In April, Samson said the Marlins need attendance of about 30,000 to afford a $80 million payroll, far better than the estimated $35 million players earn now.

The Marlins are reporting an average announced attendance of 17,977 per game, helped along by Thursday’s second-best tally of 25,916 thanks to a popular summer-camp promotion.

The per-game average is 109 more seats than the team’s attendance for the same number of games at Sun Life in 2011. It’s also enough to fill about half of Marlins Park’s 36,742 seats, but actual attendance has been lower because the announced tally includes sold or distributed tickets that are not used.

Despite a strong start when then-Dolphins owner H. Wayne Huizenga brought the team to his South Florida football stadium in 1993, the Marlins have generally drawn some of the smallest crowds in the major leagues. Even when the team won the World Series in 2003, attendance was still the third worst in baseball.

Ire over Loria’s trades and the team’s second losing season have yet to put baseball to the real test in Miami. “I think when they see a winning team, we’ll have the same enthusiasm we have for the Miami Heat,” said Miami Mayor Tomás Regalado, who opposed using public funds to build the stadium. He said he has yet to attend a Marlins game there, but added, “I think the stadium is fabulous.”

On Tuesday night, Luis Roblejo joined family and friends for their first Marlins game of the season. They took up five seats in a mostly empty upper deck above right field. Each wore a Marlins jersey. None bore the name of a current player.

“I’m a little bit embarrassed” about not being at the ballpark yet, said Roblejo, an IT worker in Miami. He wore an old Gaby Sanchez jersey, while his 13-year-old son, Ryan, had Hanley Ramirez’s name on the back of his Marlins shirt. Both players were traded last year.

“If I had more players to identify with, I would come,” Roblejo said.

To combat weak demand, the Marlins are cutting into profits with more promotions than they ever envisioned at the new ballpark. The discounting includes kids-eat-free specials on Wednesdays and $27 all-you-can-eat buffets on Saturdays. Seniors get free tickets on Thursdays. “It’s a very aggressive approach to get people back into the building,” said Sean Flynn, head of marketing for the team.

Ana and Juan Avila paid about $54 to bring their two children to Sunday afternoon’s win over the Pittsburgh Pirates. Each ticket came with a free hot dog and soda. “It’s my first game ever,” said their son Juan, 9, from his seat high above right field in a nearly empty Section 140. “It’s bigger than I expected.”

Even with the discouraging attendance numbers, Marlins Park remains livelier than the statistics might suggest. Buying a hot dog ($6) or a Pepsi ($4.50) requires waiting in line. While the upper deck remains roped off many evenings for lack of ticket sales, the lower deck appeared more than half full during two visits to the park this week.

During Tuesday night’s extra-inning loss to the New York Mets, enough spectators jumped up with raised arms to perform several laps of a respectable fan wave before it fizzled.

“The recovery from the hurt is happening quicker than we thought,” said Samson, the team president. “As time passes and people realize it’s a fun place to see a game, things will get better.”

Source: Article author: Douglas Hanks; http://www.miamiherald.com/2013/08/01/3537432/marlins-attendance-reverts-to.html.

Although success is defined by wins and losses, it can also be thought of as the historical standard by which the team has been judged. Interestingly, the authors of the model also believe the head coach can be an important factor in establishing brand equity. The University of Minnesota received a tremendous boost when they hired basketball coach Tubby Smith, and The Ohio State University brand was bolstered with the hiring of former Florida head coach Urban Meyer. Similarly, a star player or players can boost brand equity, especially in the sports of baseball and basketball. For example, the LeBron phenomenon gave the struggling Cleveland Cavaliers a new image and chance to reposition their franchise with the drafting of James in 2003. However, this brand positioning strategy was changed when LeBron James and Chris Bosh signed matching 6-year $110.1 million contracts to join Dwayne Wade and the Miami Heat in 2010. Now that James will be returning to Cleveland, new brand image strategies will be developed. The organization-related antecedents described in the model include reputation and tradition, conference and schedule, and entertainment package–product delivery. The reputation and tradition of the team off the field is believed to be a factor in building brand equity. An excellent example of problems in the front office influencing fan perceptions and brand equity is that of the hapless Arizona Cardinals. Owner Bill Bidwell has been scrutinized and criticized by the fans and media for years because of bad choices made on and off the field.

The conference affiliation and schedule are also organizational factors influencing image. Gladden et al. believe college and professional teams who play in tougher conferences with long-standing rivals will create greater benefits for the team’s equity in the long term. This must certainly hold some truth as college teams and conferences are constantly realigning. Starting back in 2011, the Big Ten, Pac-10, Big 12, WAC, and the MWC all had new looks. The projected conference changes for 2013 and 2014 include the following: Syracuse and Pittsburgh moving to the ACC; Memphis, San Diego State, SMU, Boise State, Houston, and UCF all moving to the Big East; FIU, Old Dominion, UAB, Louisiana Tech, North Texas, UTEP, and UTSA all moving to the Conference USA, with Charlotte planned to join in 2015; San Jose State, Utah State, Idaho, and New Mexico State will all be independents; Georgia State moving to the Sun Belt Conference; Maryland and Rutgers are moving to the Big Ten in 2014; and the dissolution of the WAC for football in 2013.

Finally, the entertainment aspect of sport created and managed by the organization will affect brand equity. As mentioned previously, this is one of the controllable elements of the largely uncontrollable sports industry.

The market-related antecedents are those things such as media coverage, geographic location, competitive forces, and support. Media coverage refers to the exposure the sport product receives in the media via multiple outlets such as radio, TV, newspaper, and the Internet. Obviously, the images portrayed in the media and amount of coverage can have a huge bearing on all aspects of brand equity. Geographic location is also related to equity in that certain areas of the United States are linked with certain types of sport. As described in Milne and McDonald,15 “it may be easier to establish brand equity for a Division I men’s basketball team in Indiana than it would be in Idaho.” Competition must also be considered a market factor, and the authors of the model describe it as the most influential in creating equity. In some instances, competition can enhance the value of a brand, but more typically competitive forces vying for similar consumers will weaken equity and its outcomes. Fan support is the final market force influencing equity. Quite simply, the greater the number of loyal fans or supporters means the greater the brand equity.

Although the preceding discussion has focused on the antecedents of brand equity to a sports product, the model also describes the related outcomes or consequences of establishing a strong brand. More specifically, the authors believe higher levels of brand equity will lead to more national media exposure, greater sales of team merchandise, more support from corporate sponsors, enhanced stadium atmospherics, and increased ticket sales.

How can marketers assess the equity of a brand such as the Yankees or Nike? One popular technique to measure brand equity evaluates a brand’s performance across seven dimensions. Brand equity is then calculated by applying a multiple, determined by the brand’s performance on the seven dimensions, to the net brand-related profits.

These dimensions include leadership or the ability of the brand to influence its market, stability or the ability of the brand to survive, market or the trading environment of the brand internationality or the ability of the brand to cross geographic and cultural borders, trend or the ongoing direction of the brand’s importance to the industry, support or the effectiveness of the brand’s communication, and protection of the owner’s legal title.16

Although there are a number of ways to measure brand equity in consumer goods, there have been very few attempts to look at the equity of sports teams. One exception was a study that measured the brand equity of MLB franchises.17 To measure brand equity, the researchers first calculated team revenues for each franchise. These revenues are based on gate receipts; media; licensing and merchandise; and stadium-oriented issues, such as concessions, advertising, and so on. The franchise value is then assigned a multiple based on growth projections for network television fees. Next, the total franchise value is subtracted from the value of a generic product to determine the brand equity. Because there is no such thing as a generic baseball team, the researchers used the $130 million fee paid by the two new expansion teams at the time of the study, Tampa Bay and Arizona. This $130 million fee, though low when compared with today’s standards, represents the closest estimate to an unbranded team, because the new teams had yet to begin play.

Interestingly, only seven of the 30 MLB teams show any brand equity. Based on the research, the following teams have positive brand equity (in rank order): New York Yankees, Toronto Blue Jays and New York Mets, Boston Red Sox, Los Angeles Dodgers, Chicago White Sox, and Texas Rangers. The teams with the lowest brand equity include the Pittsburgh Pirates and Seattle Mariners. Given the fact that many of these “brands” have been around for decades, the brand equity for MLB franchises is surprisingly low.

Although the previous study used an economic basis for determining brand equity, other research has employed less precise, qualitative approaches. For example, a panel of sporting goods industry experts was asked to name the most powerful brands in sport. In this study of equity, sports brands were defined as those who directly manufacture sporting apparel, equipment, and shoes. Nike is in a league of its own when it comes to branding. Ever since the introduction of the Air Jordan basketball shoe, Nike has grown geometrically since the days when Phil Knight (founder) sold shoes out of the trunk of his car.

Brand loyalty is one of the most important concepts to sports marketers, because it refers to a consistent preference or repeat purchase of one brand over all others in a product category. Marketers want their products to satisfy consumers, so decision making becomes a matter of habit rather than an extensive evaluation among competing brands.

SPORTS MARKETING HALL OF FAME

Phil Knight

Knight was a middle-distance runner for the University of Oregon track team, where he encountered Coach Bill Bowerman’s obsession with improving running shoes.

When Knight studied at the Graduate School of Business at Stanford, a professor, Frank Shallenberger instructed his students to write a paper on how they would create a new company.

With his experience of Bowerman in his mind, Phil Knight’s paper argued how profits could be generated by importing cheap but well-made running shoes from Japan.

He put his theory into practice and Phil Knight and Bowerman each invested $500 in purchasing Tiger shoes from Japan. They founded Blue Ribbon Sports, Inc. (either in 1962 or 1963 – I have seen both dates reported).

In their first year they cleared $364, but by 1969 sales had rocketed to a million dollars. The company was renamed Nike in 1972.

They developed the “swoosh” logo and cultivated endorsers that included Michael Jordan, Tiger Woods and Pete Sampras.

In spite of receiving a lot of negative publicity because of their use of child labor in the Far East, by 2004 Nike was selling goods worth around $12bn annually and employing 24,000 staff worldwide.

In November 2004 Phil Knight announced he was stepping down as chief executive, but will remain chairman of the board of directors.

On the Nike website, Phil Knight states his personal philosophy: “There is an immutable conflict at work in life and in business, a constant battle between peace and chaos. Neither can be mastered, but both can be influenced. How you go about that is the key to success.”

Source: http://www.biogs.com/famous/knightphilip.html. © 2002–2014 Danny Rosenbaum All Rights Reserved.

In sports marketing, teams represent perhaps one of the most interesting examples of loyalty. It is common to hear us speak of people as being “loyal fans” or “fair-weather fans.” The loyal fans endure all the team’s successes and hardships.

As the definition implies, they continue to prefer their team over others. Alternatively, the fair-weather fan will jump to and from the teams that are successful at the time.

What are the determinants of fan loyalty to a team? Psychologist Robert Passikoff believes the interaction of four factors creates fan loyalty.18 The first factor is the entertainment value of athletics. As we discussed in Chapter 5, entertainment value is one of the underlying factors of fan motivation. In addition, entertainment was discussed as one of the perceived values of sports to the community. The second component of fan loyalty is authenticity. Passikoff defines authenticity as the “acceptance of the game as real and meaningful.” Fan bonding is the third component of fan loyalty. Bonding refers to the degree to which fans identify with players and the team. The bonding component is similar to the concept of fan identification discussed in Chapter 5. The fourth and final component of fan loyalty is the history and tradition of the team. For example, the Cincinnati Reds are baseball’s oldest team and, although they may be lacking in other dimensions of loyalty, they certainly have a long history and tradition with the fans in the greater Cincinnati area.

Table 7.2 Psychological commitment to team scale

1.  I might rethink my allegiance to my favorite team if this team consistently performs poorly

2.  I would watch a game featuring the [name of team] regardless of which team they are playing

3.  I would rethink my allegiance to the [name of team] if the best players left the team (i.e. transfer, graduate, etc.).

4.  Being a fan of the [name of team] is important to me.

5.  Nothing could change my allegiance to the [name of team].

6.  I am a committed fan of the [name of team].

7.  It would not affect my loyalty to the [name of team] if the athletic department hired a head coach that I disliked very much.

8.  I could easily be persuaded to change my preference for the [name of team].

9.  I have been a fan of the [name of team] since I began watching collegiate football.

10.  I could never switch my loyalty from the [name of team] even if my close friends were fans of another team.

11.  It would be unlikely for me to change my allegiance from the [name of team] to another team.

12.  It would be difficult to change my beliefs about the [name of team].

13.  You can tell a lot about a person by their willingness to stick with a team that is not performing well.

14.  My commitment to the [name of team] would decrease if they were performing poorly and there appeared little chance their performance would change.

To measure fan loyalty, self-identified fans are asked to rate their hometown teams on each of the four dimensions. Interestingly, the fan loyalty measure does not specifically include a team performance component. Contrary to popular belief, Passikoff believes winning and loyalty do not always go hand in hand.

Another way to operationalize the loyalty construct has been developed by researchers Dan Mahony and his colleagues.19 They believe that loyalty can be thought of as having two distinct components: attitudinal loyalty and behavioral loyalty. Attitudinal loyalty can be expressed as an individual’s psychological commitment to the team (or PCT). To better understand how to measure PCT and what it means, Table 7.2 shows the scale developed by Mahony.

In our society, loyalty to sports teams, at the high school, college, and professional levels, is perhaps higher than it is for any other goods and services we consume. Unfortunately, team loyalty at the professional level is beginning to erode because of the constant threat of uprooting the franchise and moving it to a new town. This is perhaps one reason for the increased popularity of amateur athletics. Colleges will not threaten to move for a better stadium deal, and athletes do not change teams for better contracts (although they do leave their universities early for professional contracts). Historically, fan loyalty has been defined in four ways: Pure entertainment – how well a team performs or how exciting the play; fan bonding – respect and admiration of players; history and tradition – is the game and the team part of community beliefs and rituals; and authenticity – how well they play as a team or how well the stadium or managers/players present themselves in the community. To increase fan loyalty, many teams are establishing fan loyalty programs, pairing new technology with existing marketing principles. Technology facilitates engagement with fans during games through a variety of scoreboard and fan chatter platforms. These platforms could be expanded to all team branded touch points that a fan may encounter. These points include sports websites, fantasy sports systems, and stores and bars in which sports fans purchase products.20

The loyalty programs are driven by a card that is swiped at kiosks when fans enter a stadium or event. The fans benefit by earning points that can be redeemed for rewards such as free tickets, merchandise, and concessions. The teams benefit by collecting valuable information on their fan base that can later be used to direct strategic marketing decisions. Major League Baseball seems to have taken the lead in fan loyalty efforts, including the most successful program with the Arizona Diamondbacks.21

Non-sport organizations also seek to develop customer loyalty through sport. In a Turnkey Intelligence survey conducted exclusively for Sport Business Journal and Sport Business Daily respondents were screened and analyzed based on their general avidity levels.22 Results revealed that overall official brands got a good ride with NASCAR. For example, Subway who was not even an official sponsor but a part-time sponsor on driver Carl Edwards’ car, received the highest percentage of recognition among respondents in the quick-service restaurant category. In addition, according to NASCAR’s Brian Moyer, managing director of market and media research, Nationwide, the insurance company who titles NASCAR’s second-tier circuit, did a good job of diversifying their partnership by tying-in and integrating Dale Earnhardt Jr. and Danica Patrick with the Code Spotter and their Dash-4-Cash promotions.23 Gatorade also received high marks specifically integrating the success of their partnership with Kroger for the Dayton 500, creating custom labels highlighting three flavors which integrated the race and Driver Johnson. Other notable winners with NASCAR fans were Coca-Cola, Visa, Chevrolet, Bank of America, and UPS.

Licensing

The importance of having a strong brand is demonstrated when an organization considers product licensing. Licensing is a contractual agreement whereby a company may use another company’s trademark in exchange for a royalty or fee. A branding strategy through licensing allows the organization to authorize the use of brand, brand name, brand mark, trademark, or trade name in conjunction with a good, service, or promotion in return for royalties. According to author Steve Sleight, “Licensing is a booming area of the sports business with players, teams, event names, and logos appearing on a vastly expanding range of products.”24 For example, the NFL has approximately 175 licensees selling more than 2,500 products such as apparel, sporting goods, basketball cards and collectibles, home furnishings, school supplies, home electronics, interactive games, home video, publishing, toys, games, gifts, and novelties.25

Since the emergence of NFL Properties in 1963, licensing has become one of the most prevalent sports product strategies. In 2012, sales of licensed products generated an estimated $5.454 billion in royalties, a gain of 2.5 percent over 2011, for an estimated retail value of $112.1 billion.26 Sports accounted for an estimated $12.6 billion in retail sales and collegiate merchandise accounted for an additional $3.8 billion, royalties were $685 million and $206 million, respectively.27 Major League Baseball retained top spot as the largest sports licensing agency; however, the National Football League, National Basketball Association, collegiate products, WWE, NHL and NASCAR all topped the billion dollar mark. Additionally, the PGA and Major League Soccer are growing markets that together account for $1.19 billion in sales. Let’s take a look at the top five properties and their plans for strategic growth.

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Photo 7.3 Future Redbirds in their St. Louis Cardinals licensed baby gear

Source: Matthew Shank

1.  Major League Baseball, $5.28 billion: The 30 clubs that make up Major League Baseball scored more than 74 million fans during the 2013 championship season, producing the sixth largest total attendance in the history of the league. MLB was also bolstering its number of licensing deals. MLB announced a variety of exclusive multi-year deals with newcomers in 2013. MLB forged a multi-year agreement with Pandora jewelry introducing a collection of Pandora charms representing the Leagues’ 30 MLB clubs.28 In addition MLB and Wines by Design (WBD) announced a new relationship to feature limited edition, collectible baseball wines. Howard Smith, Senior Vice President of Licensing noted that WBD would be introducing wines from a variety of winemakers and tailor each to individual teams for their fans to enjoy throughout the season.29 These deals helped MLB retain the top spot in sport licensing sales and further complement previous enactments such as Topps, the first exclusive baseball card company of MLB in nearly 30 years, as well as others including Ballpark Classics for ballpark-themed tabletop baseball games; ballpark-branded grass seed blends and fertilizers from The Scotts Miracle-Gro Company; and Tommy Bahama in a multi-year deal for a series of collector’s edition Major League Baseball team shirts.

2.  National Football League, $3.25 billion: The NFL split a key part of its licensing deal between Nike and New Era in the hopes of enhancing future revenue. The five-year multimillion-dollar deals with those companies and five others began in 2012 and many analysts believe they could be worth $1 billion to the U.S. sport league.30 The goal was to provide the fans with a wider breath of merchandise and under the new agreement Nike secures the license for uniforms and gear worn by players and coaches, while New Era is the on field hat provider.31 The NFL also extended agreements with Under Armour (sponsor of the NFL Combine), GIII (outerwear), VF (T-shirts and fleece), and Outerstuff (youth apparel).32 Other key NFL initiatives focus on Back To Football, women’s merchandise, tailgating, cross promotion with NFL sponsors (for example, Proctor & Gamble’s Gillette razor blades). NFL-licensed product is sold at GSI/NFLShop.com, team stores, and national retailers such as Kohl’s.

3.  National Basketball Association, $3 billion: Key licensing properties include NBA, WNBA, NBA Development League, and USA Basketball. With the start of every new season, the NBA introduces new uniforms and new products. To celebrate the Los Angeles Lakers’ 15th championship, NBA unveiled a line of commemorative merchandise. The line was highlighted by an Adidas anniversary jacket, which featured 15 individual patches, each one representing a championship year. The Lakers wore the jacket on-court opening night when the team received their championship rings. The collection was sold at Champs Sports, NBA Store on Fifth Avenue, and NBAStore.com. Other new products include the launch of new trading cards from the NBA’s new exclusive trading card partner, Panini, and the launch of a new trading card game called Adrenalyn. In 2013, the NBA signed a three-year, $100 million deal with technology guru Samsung. The agreement will put the company’s tablets and televisions courtside. The NBA is also expected to create content customized for Samsung devices.

4.  The Collegiate Licensing Company, $4.62 billion: Top collegiate properties include Texas, Alabama, Notre Dame, Michigan, and Kentucky as well as the NCAA, the Tournament of Roses, the BCS, and the South Eastern Conference (SEC). Women’s, youth, and housewares will continue to be growth categories in the college market. Vintage-inspired products and the use of vintage college logos through the College Vault program will also continue to be a source of growth. Electronic Arts’ NCAA Football title, which launches its 20th anniversary game in 2012, remains the top revenue-producing college product, with exciting new developments such as FTDs College Rose program, Nocona Boots, and projects in the electronic and digital space. Wal-Mart continued to be the largest retailer of collegiate licensed product. College-branded merchandise at Old Navy and Justice proved successful, and new programs with other non-traditional college retailers are in development. Online retailers such as Fanatics and Dreams continue to be key partners in reaching displaced college fans. College Colors Day, a fan holiday created by The Collegiate Licensing, will continue to provide a strong marketing platform for retailers during the critical back-to-school selling period, with other retail marketing programs such as Saturdays Since, I Love College Hoops, and others providing retailers solid platforms for raising consumer awareness and driving sales of college merchandise. (Note: Collegiate Licensing Company, clients includes all major schools except the Ohio State University, Michigan State, University of Southern California and Oregon.)

5.  NASCAR, $1.3 billion: The key licensing properties for NASCAR and its teams were a variety of initiatives aimed at core fans, new young fans, and those with a love of technology. Historically NASCAR fans see licensed NASCAR products as money well spent. 33 While Dale Earnhardt Jr. has dominated NASCAR merchandise sales over the past decade, other newcomers, such as Danica Patrick, Austin Dillon, Ricky Stenhouse Jr., Trevor Bayne and Kyle Larson provide a new set of inventory in the collectibles and merchandise markets. In fact, after her procurement of pole position in 2013, Patrick merchandise soared, setting off a flurry of buying activity.34 Traditional licensing products include apparel, die-cast, and collectibles. In fact, NASCAR die-cast collecting has become a bona fide hobby. However, the economic downturn and a saturated licensing market have raised concerns of how NASCAR teams can stack up in the future. Therefore, NASCAR announced the formation of the NASCAR Teams Licensing Trust to coordinate merchandise sales of the top 11 teams.35 In addition, other new programs were announced in the electronics category with products such as Right Way Dale Earnhardt Jr. Spotter GPS, Centon NASCAR flash drives and new remote-control cars and slot car racing sets by Jada and SCX. Expansion of the NASCAR hologram program consisted of continued protection for the sport and the fans who buy licensed products coupled with an online NASCAR Superstore giveaway for each code registered. NASCAR’s licensing business will continue to focus on avid fans and expand its product lines for new young fans. There will be special emphasis on a video game strategy, outdoor programs, the launch of the NASCAR Hall of Fame and expanded retail. The demand for NASCAR merchandise still goes up after a victory, and many suggest that NASCAR should be proactive and make a more concerted effort to hark back to its dirty fingernail roots redefining the win on Sunday, sell on Monday mentality.36

Advantages to the licensee

Images  The licensee benefits from the positive association with the sports entity. In other words, the positive attributes of the player, team, league, or event are transferred to the licensed product or service.

Images  The licensee benefits from greater levels of brand awareness.

Images  The licensee benefits by saving the time and money normally required to build high levels of brand equity.

Images  The licensee may receive initial distribution with retailers and potentially receive expanded and improved shelf space for their products.

Images  The licensee may be able to charge higher prices for the licensed product or service.

Image

Web 7.3 Licensed merchandise on the Web

Source: FansEdge™, Incorporated

Disadvantages to the licensee

Images  The athlete, team, league, or sport may fall into disfavor. For example, using an athlete such as Terrell Owens is risky given his past behavior, off the field as well as on the field.

Images  In addition to the licensee, the licensor also experiences benefits and risks due to the nature of the licensing agreement.

Advantages to the licensor

Images  The licensor is able to expand into new markets and penetrate existing markets more than ever before.

Images  The licensor is able to generate heightened awareness of the sports entity and potentially increase its equity if it is paired with the appropriate products and services.

Disadvantages to the licensor

Images  The licensor may lose some control over the elements of the marketing mix. For instance, product quality may be inferior, or price reductions may be offered frequently. This may lessen the perceived image of the licensor.

Based on all these considerations, care must be taken in choosing merchandising–licensing partnerships. Certainly, “the manufacturer of the licensed product should demonstrate an ability to meet and maintain quality control standards, possess financial stability, and offer an aggressive and well-planned marketing and promotional strategy.”37

In addition to carefully choosing a partner, licensors and licensees must also be on the lookout for counterfeit merchandise. One estimate has it that $1 billion worth of counterfeit sports products hit the streets each year. For instance, the NFL typically confiscates $1 million worth of fake goods during Super Bowl week. The licensing affiliate Locog had targeted in excess of $110 million from merchandising sales for the London 2012 Olympics, while the Beijing organizing committee targeted income of $70 million from merchandising Olympic products for the 2008 Games and in previous games an estimated $17 million in bad goods were sold. In an attempt to stop or reduce counterfeit merchandise, Olympic officials have previously used a new DNA technology in which an official Olympic product has a special ink containing the DNA of an athlete. A handheld scanner determines whether the tag matches the DNA and whether the merchandise is legitimate.38

This problem has become so pervasive that the leagues now have their own logo cops who travel from city to city and event to event searching for violations. In addition to this form of enforcement, the Coalition to Advance the Protection of Sports Logos (CAPS; see http://www.capsinfo.com/) was formed in 1992 to investigate and control counterfeit products. Since 1993, CAPS has been involved in the seizure of more than nine million pieces of counterfeit merchandise featuring the logos of various professional sports leagues and teams, colleges, and universities – valued at more than $329 million. How can consumers guard against fakes? CAPS offers the following suggestions to consumers who are purchasing sports products:39

Images  Look for quality – Poor lettering, colors that are slightly different from the true team colors and background colors bleeding through the top color overlay are all signs of poor product quality.

Images  Verification – Counterfeiters may try to fake the official logo. Official items will typically have holograms on the product or stickers with moving figures, and embroidered logos should be tightly woven.

Images  Check garment tags – Poor-quality merchandise is often designated by split garment tags. Rarely, if ever, will official licensed products use factory rejects or seconds.

Quality

Thus far, we have looked at some of the branding issues related to sports products. Another important aspect of the product considered by sports marketers that will influence brand equity is quality. Let us look at two different types of quality: service quality and product quality.

Quality of services

As sports organizations develop a marketing orientation, the need to deliver a high level of service quality to consumers is becoming increasingly important. For instance, at NFL Properties (NFLP), service quality is taken to the highest levels. NFLP is highly committed to understanding the individualized needs of each of its sponsors. Every sponsor of the NFL receives the name of a primary contact at NFLP whom they can call at any time to discuss their marketing needs. They also recognize that each sponsor is in need of a unique sponsorship program, given their vastly different objectives and levels of financial commitment to the NFL.40

Although NFLP is an excellent example of an organization that values service quality, we have yet to define the concept. Service quality is a difficult concept to define, and as such, many definitions of service quality exist. Rather than define it, most researchers have resorted to explaining the dimensions or determinants of service quality. Unfortunately, there is also little agreement on what dimensions actually comprise service quality or how best to measure it.

Lehtinen and Lehtinen say service quality consists of physical, interactive, and corporate dimensions.41 The physical quality component looks at the tangible aspect of the service. More specifically, physical quality refers to the appearance of the personnel or the physical facilities where the service is actually performed.

For example, the physical appearance of the ushers at the game may affect the consumer’s perceived level of service quality.

Interactive quality refers to the two-way flow of information that disseminates from both the service provider and the service recipient at the time of the service encounter. The importance of the two-way flow of information is why many researchers choose to examine service quality from a dyadic perspective. This suggests gathering the perceptions of service quality from stadium employees, as well as fans.

The image attributed to the service provider by its current and potential users is referred to as corporate quality. As just discussed, product performance and quality is one of the drivers of brand image. Moreover, Lehtinen and Lehtinen also cited customer service as one of the image drivers. This suggests a strong relationship between corporate quality, or image of the team, and consumers’ perceptions of service quality.

Groonos describes service quality dimensions in a different manner.42 He believes service quality has both a technical and functional component. Technical quality is described as “what is delivered.” Functional quality refers to “how the service is delivered.” For instance, “what is delivered” might include the final outcome of the game, the hot dogs that were consumed, or the merchandise that was purchased. “How the service is delivered” might represent the effort put forth by the team and its players, the friendliness of the hot dog vendor, or the quick service provided by the merchandise vendor. This is especially important in sports marketing, as “the total game experience” is evaluated using both the “what” and “how” components of quality.

The most widely adopted description of service quality is based on a series of studies by Parasuraman, Zeithaml, and Berry.43 They isolated five distinct dimensions of service quality. These dimensions of service quality comprise some of its fundamental areas and consist of reliability, assurance, empathy, responsiveness, and tangibles. Because of their importance in service quality literature, a brief description of each follows.

Reliability refers to the ability to perform promised service dependably and accurately. Assurance is the knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy is defined as the caring, individualized attention the firm provides its customers. Responsiveness refers to the willingness to help customers and provide prompt service. Tangibles are the physical facilities, equipment, and appearance of the service personnel.

To assess consumers’ perceptions of service quality across each dimension, a 22-item survey instrument was developed by Parasuraman, Zeithaml, and Berry. The instrument, known as SERVQUAL, requires that the 22 items be administered twice. First, the respondents are asked to rate their expectations of service quality. Next, the respondents are asked to rate perceptions of service quality within the organization. For example, “Your dealings with XYZ are very pleasant” is a perception (performance) item; whereas the corresponding expectation item would be “Customers’ dealing with these firms should be very pleasant.”

From a manager’s perspective, measuring expectations and perceptions of performance allows action plans to be developed to improve service quality. Organizational resources should be allocated to improving those service quality areas where consumer expectations are high and perceptions of quality are low.

The original SERVQUAL instrument has been tested across a wide variety of industries, including banking, telecommunications, health care, consulting, education, and retailing. Most important, McDonald, Sutton, and Milne adapted SERVQUAL and used it to evaluate spectators’ perceptions of service quality for an NBA team. The researchers fittingly called their adapted SERVQUAL instrument TEAMQUAL.44

In addition to finding that the NBA team exceeded service quality expectations on all five dimensions, the researchers looked at the relative importance of each dimension of service quality. More specifically, fans were asked to allocate 100 points among the five dimensions based on how important each factor is when evaluating the quality of service of a professional team sport franchise. As the results show in Table 7.3, tangibles and reliability are considered the most important dimensions of service quality. Tangibles, as you will recall from Chapter 5, form the foundation of the sportscape, or stadium environment. This study provides additional evidence that the tangible factors, such as seating comfort, stadium aesthetics, and scoreboard quality, play an important role in satisfying fans. Understanding fans’ perceptions of TEAMQUAL is critical for sports marketers in establishing long-term relationships with existing fans and trying to attract new fans. As McDonald, Sutton, and Milne point out, “Consumers who are dissatisfied and feel that they are not receiving quality service will not renew their relationship with the professional sport franchise.”

Table 7.3 Importance weights allocated to the five TEAMQUAL dimensions

Dimensions

Allocation

Reliability – ability to perform promised services dependably and accurately

23%

Assurance – knowledge and courtesy of employees and their ability to convey trust and confidence

16

Empathy – the caring, individualized attention provided by the professional sports franchise for its customers

18

Responsiveness – willingness to help customers and provide prompt service

19

Tangibles – appearance of equipment, personnel, materials, and venue

24

Source: Mark A. McDonald, William A. Sutton, and George R. Milne, “TEAMQUAL: Measuring Service Quality in Professional Team Sports,” Sport Marketing Quarterly, vol. 4, no. 2 (1995).

On the sports participation side, an excellent study was conducted to explore the determinants of service quality in the sport recreation industry or recreation center. The researchers, Ko and Pastore,45 suggest that service quality is multidimensional and consists of four primary factors. Factor one is program quality, which refers to the range of programs, such as the variety of recreation and fitness programs offered, operating time or whether programs start and finish on time, and whether participants can get up-to-date information on programs. Factor two, interaction quality, is the level of customer to employee interaction and also customer to customer relationships. Outcome quality is the third factor and is based on physical change, or does the participant realize the health benefit he or she wished to obtain; valence, which refers to post consumption or whether the overall experience was a good or bad one; and sociability, or the social interaction, which motivates many participants to engage in physical activity. The final factor, environment quality, is the ambient condition, design, and equipment quality. All of these refer to the tangible, physical environment in which the consumption takes place.

Quality of goods

The quality of sporting goods that are manufactured and marketed has two distinct dimensions. The first quality dimension of goods is based on how well the product conforms to specifications that were designed in the manufacturing process. From this standpoint, the quality of goods is driven by the organization and its management and employees. The other dimension of quality is measured subjectively from the perspective of consumers or end users of the goods. In other words, does the product perform its desired function? The degree to which the goods meet and exceed consumers’ needs is a function of the organization’s marketing orientation.

From the sports marketing perspective, the consumer’s perception of product quality is of primary importance. Garvin found eight separate quality dimensions, which include performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality (see Table 7.4).

Whether it is enhancing goods or service quality, most sports organizations are attempting to increase the quality of their product offerings. In doing so, they can better compete with other entertainment choices, more easily increase the prices of their products, influence the consumer’s loyalty, and reach new market segments willing to pay more for a higher quality product.

Table 7.4 Quality dimensions of goods

Quality dimensions of goods

Description

Performance

How well does the good perform its core function? (Does the tennis racquet feel good when striking the ball?)

Features

Does the good offer additional benefits? (Are the golf clubheads constructed with titanium?)

Conformity to specifications

What is the incidence of defects? (Does the baseball have the proper number of stitches or is there some variation?)

Reliability

Does the product perform with consistency? (Do the gauges of the exercise bike work properly every time?)

Durability

What is the life of the product? (How long will the golf clubs last?)

Serviceability

Is the service system efficient, competent, and convenient? (If you experience problems with the grips or loft of the club, can the manufacturer quickly address your needs?)

Aesthetic design

Does the product’s design look and feel like a high-quality product? (Does the look and feel of the running shoe inspire you to greater performance?)

Perceived quality

Is the product perceived to be long lasting? Does the product have a good reputation?

Source: Adapted from D. A. Garvin, “Competing on the Eight Dimensions of Quality,” Harvard Business Review (November–December 1987), 101–109.

Some sports franchises have been criticized for attempting to increase the quality of their overall products, while driving up the price of tickets. Unfortunately, it is becoming more costly for the “average fan” to purchase tickets to any professional sporting event. Sports marketers have targeted a new segment (corporations) and overlooked the traditional segments.

Other criticisms have been directed at the NCAA and professional sports for making it too easy for athletes to leave school and turn professional. The National Basketball Association announced that 56 players, including 49 players from U.S. colleges and institutions and 7 international players, have filed as early entry candidates for the 2012 NBA Draft. This exodus of stars may have detrimental effects on “product quality” at the high school and college levels. The NFL requires draftable college players to exhaust eligibility (either 4 or 5 years) and non-college players become automatically eligible for selection in the next principal draft that is conducted after four NFL regular seasons have begun and ended following either his graduation from high school or graduation of the class in which one entered high school.46 Even under the NFL’s “Special Eligibility” route, requiring players to request special permission to enter the league, the players must still be three seasons removed from their high school graduation.47 The reason for this rule is that it’s believed that younger college players are not fully developed physically and are not ready for the physical demands of professional football.48 The most famous challenge to this ruling, in which the courts ultimately upheld the policies of the NFL, was former Ohio State standout Maurice Clarett. Clarett challenged the ruling of the NFL and entered the 2004 draft. Federal Judge Shira Scheindlin initially ruled that the NFL could not bar Clarett from participating in the 2004 NFL Draft. This decision was later overturned by the United States Court of Appeals for the Second Circuit, and Clarett’s higher appeal was refused by the Supreme Court.

From a marketing standpoint, the fans are also suffering and may experience dissatisfaction when college players and high school players turn pro early. Teams no longer stayed together long enough to get and capture the imagination of fans. Former Atlantic 10 Commissioner Linda Bruno stated, “It seems as soon as college basketball hooks on to a star, he’s suddenly a part of the NBA. Athletes leaving early have definitely hurt the college game.” University of Louisville’s head basketball coach Rick Pitino, whose opinion is widely respected, adds, “Quite frankly, I think college basketball is in serious trouble.” Interestingly, the early departures that are making the college game less appealing are doing nothing to strengthen the quality of the NBA. The NBA is saturated with players whose games never had a chance to grow or, as former Stanford Coach Mike Montgomery put it, “will have to be nurtured through [their] immaturity.”49

A final product feature related to perceptions of product quality is product warranties. Product warranties are important to consumers when purchasing expensive goods or hedonic purchases because they act to reduce the perceived risk and offset consumer sensitivity, i.e., fear of replacement, associated with cognitive dissonance. Traditional warranties are statements indicating the liability of the manufacturer for problems with the product. For example, Spalding’s line of Neverflat balls has a product redesign with a new membrane, a redesigned valve, and the addition of NitroFlate, a substance added to the ball during inflation that forms a barrier preventing seepage. Spalding has produced balls it says will not leak air for at least a year. It is backing that claim with a money-back guarantee.

Interestingly, warranties are also being developed by sports organizations. The New Jersey Nets offered their season ticket holders a money-back guarantee if they were dissatisfied with the Nets’ performance. With the price of tickets skyrocketing for professional sporting events, perhaps these service guarantees will be the wave of the future. The Indiana Ice of the U.S. Hockey League offered their fans a similar deal. The Ice are so convinced local hockey fans will enjoy seeing the under-20 amateur team play next season, franchise officials are offering a money-back guarantee on season tickets.

Product design

Product design is one competitive advantage that is of special interest to sports marketers. It is heavily linked to product quality and the technological environment discussed in Chapter 2. In some cases, product design may even have an impact on the sporting event. For example, the latest technology in golf clubs does allow the average player to improve his or her performance on the course. The same could be said for the new generation of big sweet spot, extra-long tennis racquets. In another example, the official baseball used in the major league games was believed to be “juiced up.” In other words, the ball was livelier because of the product design. As a result of this “juiced up” ball, home run production increased, much to the delight of the fans. From a sports marketing perspective, anything that adds excitement and conjecture to a game with public relation problems is welcomed. In the end, what matters is not whether the ball is livelier, but that the game is.

Baseballs are not the only products that are having an impact on the outcome of sporting events, and equipment changes aren’t the only way to think about product design or redesign. Baseball is constantly looking for ways to make games shorter and thus more attractive to fans. In a recent rule change, the time a pitcher is allotted to deliver the ball with no runners on base has changed from 20 to 12 seconds. The price for each violation is a ball. It is hoped that this minor product redesign will have a major impact. Historic rule changes that have had a significant impact on the sport product include the designated hitter in baseball, the shot clock in basketball, or (in 1912) when hockey moved from seven to six players on the ice at one time.

Image

Figure 7.5 Relationship among product design, technology, and product quality

Product design is important to sport marketers because it ultimately affects consumers’ perceptions of product quality. Moreover, organizations need to monitor the technological environment to keep up with the latest trends that may affect product design. Let us look at this relationship in Figure 7.5.

As you would imagine, the technological environment has a tremendous impact on product design decisions. In almost every sporting good category, sports marketers communicate how their brands are technologically superior to the competition.

The golf equipment industry thrives on the latest technological advances in ball and club design. Bicycle manufacturers stress the technological edge that comes with the latest and greatest construction materials. Tennis racquets are continually moving into the next generation of frame design and racquet length. NordicTrack exercise equipment positions itself as technologically superior to other competing brands. Nike is continually developing new lines of high-tech sports gear in its state-of-the-art Sports Research Lab, which aided in the development of the Nike+ wireless system, allowing Nike footwear to communicate with an iPod nano for the ultimate personal running and workout experience. “The most common feedback we are receiving from Nike+ users is that the experience has changed the way they approach running,” says Brent Scrimshaw, vice president of EMEA Marketing.50 “Whether it’s the instant feedback they hear over their music or the ability to set goals and challenge friends on nikeplus.com, Nike+ is encouraging people who never ran to run, and motivating people who run to run more.” In this case, the claim is that product design is actually influencing not only performance, but motivation to perform.

The product design of sporting goods, in turn, influences consumer perceptions of product quality. By definition, product design includes the aesthetics, style, and function of the product. Two of the eight dimensions of the quality of goods are incorporated in this definition, providing one measure of the interdependency of these two concepts.

The way a good performs, the way it feels, and the beauty of the good are all important aspects of product design. Again, think of the numerous sporting goods that are purchased largely on the basis of these benefits. Consumers purchase golf clubs because of the way they look and feel. Tennis shoes are chosen because of the special functions they perform (cross-trainers, hiking, or basketball) and the way they look (colors and style).

Color has historically been an important factor in the design of almost all licensed merchandise. Recent trends show that in hats, jerseys, and jackets, anything that’s black is “gold.” The Oakland Raiders’ silver and black are always near the top in NFL merchandise sales regardless of the team’s record on the field. The Toronto Blue Jays adopted logo incorporates black and moves away from the reds and blues of the past. Although fans associate certain colors with their favorite teams (e.g., Dodger Blue or the Cincinnati Reds), MLB markets licensed products that deviate from the traditional colors. Baby blues, pinks and camouflage are replacing the traditional team colors, and fans seem to be responding. Examples like these illustrate that color alone may be a motivating factor in the purchase of many sports products. Sports marketers, therefore, must consider color to be critical in product design.

Image

Photo 7.4 Bike manufacturers must stress the importance of product design and technology.

Source: Shutterstock.com

Figure 7.5 also shows that product quality may influence product design to some extent. Sports organizations are continually seeking to improve the levels of product quality. In fact, having high-quality goods and services may be the primary objective of many firms. As such, products will be designed in the highest quality manner with little concern about the costs that will be ultimately passed on to the consumers.

Some major league sports organizations (e.g., New York Yankees and Detroit Red Wings) will design their teams to achieve the highest quality levels without cost consideration.

As new technologies continue to emerge, product design will become increasingly important. Organizations with a marketing orientation will incorporate consumer preferences to ensure their needs are being met with respect to product design for new and existing products. What will the future bring with respect to product design, technology, and the need to satisfy consumers? One hint comes to us via the athletic shoe industry. With advances in technology, customized shoes are now being produced for professional athletes. Gone are the days when recreational athletes could wear the same shoes as their professional counterparts. Today’s professional athletes are demanding custom fit and high-tech shoes, and weekend athletes will soon require the same. Companies such as Nike are now customizing certain features of their shoes to the mass market under the Nike ID (individualized design) name. While other companies such as Under Armour, who made headlines at the 2014 Olympics in Sochi for seemingly all the wrong reasons, i.e., speed skating apparel deemed inferior, remained committed to its customers and ended up being vindicated, also cementing its place at the next two Olympics.

Another perspective on the future of product design is that the design of products will stem from demand and changes in the marketing environment. One such change is the emergence of a viable market for women’s sports products. For instance, ski and snowboard companies are now turning their attention to women’s products based on a growing number of women hitting the slopes. Historically, the only difference in men’s and women’s ski products was the color, but today there are product design changes that truly address women’s needs. Skis for women are softer and lighter. Boots are more cushioned and designed to fit the foot and calf muscles of the female skier. All of these product changes try to capitalize on the marketing environment and satisfy the needs of a growing target market.51

Summary

Sports products are defined as goods, services, or any combination of the two that are designed to provide benefits to a sports spectator, participant, or sponsor. Within the field of sports marketing, products are sometimes thought of as bundles of benefits desired by consumers. As discussed in Chapter 1, sports products might include sporting events and their participants, sporting goods, and sports information. The definition of sports products also makes an important distinction between goods and services.

Goods are defined as tangible, physical products that offer benefits to consumers. Conversely, services are intangible, nonphysical products. Most sports products possess the characteristics of both goods and services. For example, a sporting event sells goods (e.g., concessions) and services (e.g., the competition itself). The classification of a sports product as either a good or a service is dependent on four product dimensions: tangibility, standardization and consistency, perishability, and separability. Tangibility refers to the ability to see, feel, and touch the product. In other words, tangibility is the physical dimension of the sports product. Standardization refers to the consistency of the product or the ability of the producer to manufacture a product with little variation over time. One of the unique and complex issues for sports marketers is dealing with the inconsistency of the sports product (i.e., the inability to control the performance of the team or athlete). Perishability is the ability to store or inventory product. Pure services are totally perishable (i.e., you cannot sell a seat after the game has been played), whereas goods are not perishable and can be stored or warehoused. Separability, the final product dimension, refers to the ability to separate the good from the person providing the service. In the case of an athletic event, there is little separation between the provider and the consumer. That is, the event is being produced and consumed simultaneously.

Along with classifying sports products by the four product dimensions, sports products are also categorized based on groupings within the sports organization. Product lines are groups of products that are closely related because they satisfy a class of needs. These products are used together, sold to the same customer groups, distributed through the same types of outlets, or fall within a given price range. The total assortment of product lines is called the product mix. The mix represents all the firm’s products. Strategic decisions within the sports organization consider both the product lines and the entire product mix. For instance, an organization may want to add product lines, eliminate product lines, or develop new product lines that are unrelated to existing lines.

Products can also be described on the basis of three interrelated dimensions or characteristics: branding, quality, and design. Branding refers to the product’s name, design, symbol, or any combination used by an organization to differentiate products from the competition. Brand names, or elements of the brand that can be spoken, are important considerations for sports products. When choosing a brand name, sports marketers should consider the following: the name should be positive and generate positive feelings, be translatable into an exciting logo, imply the benefits that the sports product delivers, be consistent with the image of the sports product, and be legally and ethically permissible.

The broad purpose of branding is to differentiate your product from the competition. Ultimately, the consumer will (hopefully) establish a pattern of repeat purchases for your brand (i.e., be loyal to your sports product). Before this can happen, sports marketers must guide consumers through a series of steps known as the branding process.

The branding process begins by building brand awareness, in which consumers recognize and remember the brand name. Next, the brand image, or the consumers’ set of beliefs about a brand, must be established. After the proper brand image is developed, the objective of the branding process is to develop brand equity. Brand equity is the value that the brand contributes to a product in the marketplace. Finally, once the brand exhibits high levels of equity, consumers are prone to become brand loyal, or purchase only your brand. Certainly, sports marketers are interested in establishing high levels of awareness, enhancing brand image, building equity, and developing loyal fans or customers. One of the important sports product strategies that is contingent upon building a strong brand is licensing. Licensing is defined as a contractual agreement whereby a company may use another company’s trademark in exchange for a royalty or fee. The licensing of sports products is experiencing tremendous growth around the world. Advantages to the licensee (the organization purchasing the license or use of the name or trademark) include positive association with the sports entity, enhancing brand awareness, building brand equity, improving distribution and retail relationships, and having the ability to charge higher prices. Disadvantages to the licensee are the possibility of the sports entity experiencing problems (e.g., athlete arrested or team performing poorly or moving). However, the licensor (the sports entity granting the permission) benefits by expanding into new markets, which creates heightened awareness. Yet the licensor may not have tight controls on the quality of the products being licensed under the name.

Quality is another of the important brand characteristics. The two different types of quality that affect brand image, brand equity, and, ultimately, loyalty, are the quality of services and the quality of goods. The quality of services, or service quality, is generally described on the basis of its dimensions. Parasuraman, Zeithaml, and Berry describe service quality as having five distinct dimensions: reliability, assurance, empathy, responsiveness, and tangibles. Reliability refers to the ability to perform a promised service dependably and accurately. Assurance is the knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy is defined as the caring, individualized attention the firm provides its customers. Responsiveness refers to the willingness to help customers and provide prompt service. Tangibles are the physical facilities, equipment, and appearance of the service personnel. Using this framework, sports researchers have designed an instrument called TEAMQUAL to assess the service quality within sporting events.

The quality of goods is based on whether the good conforms to specifications determined during the manufacturing process and the degree to which the good meets or exceeds the consumer’s needs. Garvin has conceptualized the quality of goods from the consumer’s perspective. He found eight separate dimensions of goods quality, including performance, features, conformity to specifications, reliability, durability, serviceability, aesthetic design and perceived quality.

Product design is the final characteristic of the “total product.” Product design is defined as the aesthetics, style, and function of the product. It is important to sports marketers in that it ultimately affects consumers’ perceptions of product quality. For a sporting event, the product design might be thought of as the composition of the team. For sporting goods, product design has largely focused on the development of technologically superior products. In fact, the technological environment is believed to directly influence product design. Product design, in turn, enjoys a reciprocal relationship with product quality. In other words, product design affects perceptions of product quality and may influence product design.

Key terms

Images  assurance

Images  brand awareness

Images  brand equity

Images  brand image

Images  brand loyalty

Images  brand mark

Images  brand name

Images  branding

Images  branding process

Images  dimensions of service quality

Images  empathy

Images  goods

Images  idle product capacity

Images  licensing

Images  logo

Images  logotype

Images  perishability

Images  product design

Images  product characteristics

Images  product line

Images  product mix

Images  product quality

Images  product warranties

Images  quality dimensions of goods

Images  reliability

Images  responsiveness

Images  separability

Images  service quality

Images  services

Images  sports product

Images  standardization

Images  tangibility

Images  tangibles

Images  TEAMQUAL

Images  trademark

Review questions

1.  Define sports products. Why are sports products sometimes called “bundles of benefits”?

2.  Contrast pure goods with pure services, using each of the dimensions of products.

3.  Describe the nature of product mix, product lines, and product items. Illustrate these concepts for the following: Converse, Baltimore Orioles, and your local country club.

4.  What are the characteristics of the “total product”?

5.  Describe branding. What are the guidelines for developing an effective brand name? Why is brand loyalty such an important concept for sports marketers to understand?

6.  Describe how an athlete’s image has an impact upon brand development.

7.  Define licensing. What are the advantages and disadvantages to the licensee and licensor?

8.  Describe service quality and discuss the five dimensions of service quality. Which dimension is most important to you as a spectator of a sporting event? Does this vary by the type of sporting event?

9.  Describe product quality and discuss the eight dimensions of product quality. Which dimension is most important to you as a consumer of sporting goods? Does this vary by the type of sporting good?

10.  How are product design, product quality, and technology interrelated?

Exercises

1.  Think of some sports products to which consumers demonstrate high degrees of brand loyalty. What are these products, and why do you think loyalty is so high? Give your suggestions for measuring brand loyalty.

2.  Interview the individuals responsible for licensing and licensing decisions on your campus. Ask them to describe the licensing process and what they believe the advantages are to your school.

3.  Construct a survey to measure consumers’ perceptions of service quality at a sporting event on campus. Administer the survey to 10 people and summarize the findings. What recommendations might you make to the sports marketing department based on your findings?

4.  Go to a sporting goods store and locate three sports products that you believe exhibit high levels of product quality. What are the commonalities among these three products? How do these products rate on the dimensions of product quality described in the chapter?

Internet exercises

1.  Search the Internet for a sports product that stresses product design issues on its Web site. Then locate the Web site of a competitor’s sports product. How are these two products positioned relative to each other on their Web sites?

2.  Search the Internet for three team nicknames (either college or professional) of which you were previously unaware. Do these team names seem to follow the suggested guidelines for effective brand names?

Endnotes

1  Kevin Burke. “Lacrosse: The Fastest Growing Sport in the Country” (2008). Available from: http://blog.dc.esri.com/2008/01/24/lacrosse-the-fastest-growing-sport-in-the-country/.

2  Shaquille O’Neal, http://cbs.sportsline.com/u/fans/celebrity/shaq; “Athletic Shoes by Shaquille O’Neal Now Available Only at Payless ShoeSource,” PR Newswire, Financial News (January 14, 2004).

3  Christopher Lovelock, Services Marketing (Englewood Cliffs, NJ: Prentice Hall, 1984).

4  Boaz Herzog, “Rising with a Swoosh,” The Sunday Oregonian (September 21, 2003), D1.

5  Joycelyn Hayward, Sporting Goods Store Manager. Personal Statement.

6  Nike Annual Report & Notice of Annual Meeting, Form 10-K, 2013.

7  Nike Annual Report & Notice of Annual Meeting, Form 10-K, 2013.

8  See, for example, Courtland Bovee and John Thill, Marketing (New York: McGraw-Hill, 1992), 252.

9  Terez Paylor, “Wizards Change Name to Sporting Kansas City,” Kansas City Star (November 17, 2010). (http://www.kansas.com/2010/11/17/1593465/wizards-change-name-to-sporting.html)

10  The Columbus Crew, www.thecrew.com.

11  Andrew Lupton, “The NLL Fails to Excel at the Team Name Game,” National Post (f/k/a The Financial Post) (Canada),(January 8, 2007), p. S2.

12  Marcus Nelson, “Want a New Look? There’s a Price,” The Palm Beach Post (October 24, 2003).

13  David Aaker, Managing Brand Equity (New York: The Free Press, 1991).

14  James Gladden, George Milne, and William Sutton, “A Conceptual Framework for Assessing Brand Equity in Division I College Athletics,” Journal of Sports Management, vol. 12, no. 1 (1998), 1–19.

15  George R. Milne and Mark A. McDonald, Sport Marketing: Managing the Exchange Process (Sudbury, MA: Jones & Bartlett, 1999).

16  Louis E. Boone, C. M. Kochunny, and Dianne Wilkins, “Applying the Brand Equity Concept to Major League Baseball,” Sport Marketing Quarterly, vol. 4, no. 3 (1995), 33–42.

17  Ibid.

18  John Lombardo, “MLB Makes It 5 Firsts in a Row in Brand Keys Fan Loyalty Survey,” Street and Smith’s Sports Business Journal, vol. 8, no. 10 (August 25–31, 2003), 28.

19  Daniel F. Mahony, Robert Madrigal, and Dennis Howard, “Using the Psychological Commitment to Team (PCT) Scale to Segment Sport Consumers Based on Loyalty,” Sport Marketing Quarterly, vol. 9 (2000), 15–25.

20  Michael Manoochehri, “Information Systems & Service Design” (2009). Available from: http://courses.ischool.berkeley.edu/i228/f10/files/A4_Michael_Manoochehri_0.pdf.

21  Jeff Summers, “Diamondbacks’ Fan Loyalty Programs,” Bleacher Report (April 21, 2010).

22  David Broughton, “Official Brands Get a Good Ride with NASCAR’, Sport Business Journal (November 28–December 4, 2011).

23  Ibid.

24  Steve Sleight, Sponsorship: What Is It and How to Use It (London: McGraw-Hill, 1989).

25  Scott Sillcox, “Licensed Sports Products and the Ebb and Flow of Time: What Can Change in 10 Short Years,” licensedsports.blogspot.com, accessed March 3, 2014.

26  Licensing.org, “Licensing Industry Revenue Rises for Second Consecutive Year,” June 18, 2013.

27  Ibid.

28  PR Newswire, “PANDORA Jewelry and Major League Baseball Properties Form a New Relationship,” http://PRNewswire.com, accessed March 4, 2014.

29  MLB.com, “Wines by Design Announces Wine Licensing Agreement with Major League Baseball Properties with an MLB All-Star Wine Release,” MLB.com, accessed March 5, 2014.

30  Reuters, “NFL signs Apparel Licenses with Nike, Six Others,” reuters.com, accessed March 5, 2014.

31  Ibid.

32  Ken Belson, “Nike to Replace Reebok as NFL’s Licensed-Apparel Maker,” New York Times (October 12, 2010), accessed March 5, 2014.

33  Hlglicensing.com, Licensors, NASCAR Demographics, accessed March 6, 2014.

34  Kurt Badenhausen, “Danica Patrick Merchandise Flying Off Shelves Since Winning Daytona 500 Pole,” Forbes.com (February 24, 2013), accessed March 4, 2014.

35  Dave Caldwell, “With Merchandise Sales Down, Nascar Has High Hopes for Tiny Cars,” New York Times Business Daily (August 21, 2010), accessed June 20, 2014.

36  Ibid.

37  Eddie Baghdikian, “Building the Sports Organization’s Merchandise Licensing Program: The Appropriateness, Significance, and Considerations,” Sport Marketing Quarterly, vol. 5, no. 1 (1996), 35–41.

38  Elliott Harris, “Spitting Image: Ink with DNA Could Put Counterfeiters on Spot at Olympics,” Chicago Sun Times (June 8, 2000), 133.

39  Robert Thurow, 1996, “Busting Bogus Merchandise Peddlers with Logo Cops,” The Wall Street Journal (October 24, 1997), B1, B14.

40  Rick Burton, “A Case Study on Sports Property Servicing Excellence: National Football League Properties,” Sport Marketing Quarterly, vol. 5, no. 3 (1996), 23.

41  Jarmi R. Lehtinen and Uolevi Lehtinen, Service Quality: A Study of Quality Dimensions (Helsinki: Service Management Institute, 1982).

42  Christian Groonos, “A Service Quality Model and Its Marketing Implications,” European Journal of Marketing, vol. 18 (1982), 36–44.

43  A. Parasuraman, Valarie Zeithaml, and Leonard Berry, “A Conceptual Model of Service Quality and Its Implications for Future Research,” Journal of Marketing, vol. 49 (1985), 41–50.

44  Mark A. McDonald, William A, Sutton, and George R. Milne, “TEAMQUAL: Measuring Service Quality in Professional Team Sports,” Sport Marketing Quarterly, vol. 4, no. 2 (1995), 9–15.

45  Yong Jae Ko and Donna L. Pastore, “Current Issues and Conceptualizations of Service Quality in the Recreation Sport Industry,” Sport Marketing Quarterly, vol. 13, no. 3. (2004).

46  See National Football League Eligibility Rules, NFL Regional Combines, https://www.nflregionalcombines.com/Docs/Eligibility%20rules.pdf, accessed June 20, 2014.

47  Ibid.

48  Chad Walters, “NBA and NFL Draft Eligibility Restrictions – Why?” Lean Blitz (February 15, 2013).

49  Jack McCallum, “Going, Going, Gone,” Sports Illustrated, vol. 84, no. 20 (May 20, 1996), 52.

50  Aaron Reed, “Nike+ Motivates Athletes to ‘Run Like You’ve Never Run Before’ in New Commercial,” SYS-CON Media (April 20, 2007). Available from: http://java.sys-con.com/read/364540.htm.

51  “Ski Industry Focusing on Women,” sportsbusinessnews.com (January 30, 2004).

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