CHAPTER	13

Implementing and controlling the strategic sports marketing process

The opening scenario presents an excellent example of how sports organizations operate in uncertain and changing conditions. Moreover, sports organizations must consider the internal and external environments and formulate a plan that achieves a “fit” with these environments. The strategic sports marketing process is ultimately directed toward the achievement of the organization’s mission, goals, and objectives. The contingency theory of sports marketing suggests that there are a variety of marketing plans that can achieve these goals. However, not all these plans are equally effective. Likewise, organizations have a variety of ways to implement and control the strategic sports marketing plan they have developed, all of which are not equally useful for putting the plan into action. Thus, sports marketers should allocate the time and effort necessary to develop a program that will lead to the desired outcomes and most effectively implement and control the planning process.

The remainder of this chapter looks at the last two phases of the strategic marketing process – implementation and control. We begin by examining a model of the implementation process and the organizational design elements that facilitate or impede the execution of the marketing plan. Then, we shift our focus to the control phase and look at some of the common forms of strategic control.

Implementation

Implementation can be described as putting strategy into action or executing the plan. As illustrated in the opening scenario, the Dew Tour’s goal of enhancing the brand can be achieved with proper planning. However, none of these plans matters unless the Dew Tour continually monitors the implementation process to make sure plans are being carried out in the correct manner.

To successfully manage the implementation process, the sports marketer must consider a number of organizational design elements. These organizational design elements include communication, staffing, skills, coordination, rewards, information, creativity, and budgeting. Implementation must begin with communication. Effective communication requires a leadership style that allows and encourages an understanding of the marketing plan by all members of the sports marketing team. A second critical element involves staffing and developing the skills in those people who are responsible for carrying out the plan. These people must also be placed within the organization so they can work together to implement the plan, thus a third critical design element is coordination. Rewards that are congruent to the plan can provide the motivation and incentives necessary for people to work effectively toward the achievement of the goals and objectives outlined within the plan. Information must be available to those people who will carry out the plans so effective decisions can be made throughout the implementation phase. Effective work environments also allow for and encourage creativity from individuals who are expected to find ways to carry out the strategic marketing plan. Finally, a supportive budgeting system is critical to the successful achievement of strategic goals and objectives. These seven organizational design elements of implementation and their relationship to the strategic sports marketing process are outlined in Figure 13.1.

Each of these seven elements must be carefully considered within the strategic marketing process by the sports marketing manager. The implementation design must be appropriate for the plan. In other words, a “fit” between the planning phase and the implementation phase is required. Thus, a change in the strategic marketing plan of a sports organization could lead to the need to make changes in one or more of these design elements. As you read the accompanying article on the critical issues impacting the Arena Football League,¹ think about what design elements could have been changed to enhance the league endeavors.

Figure 13.1 Implementation phase of the strategic sports marketing process

Communication

Effective communication is critical to the successful implementation of the strategic sports marketing plan. Before we discuss the issues involved in effective communication, we must understand the importance of having a leader who is committed to the strategic sports marketing plan. Without such commitment, the best communication efforts will be ineffective. The values of the marketing leader and the President/CEO of the organization not only affect the strategic sports marketing process, but also the way the plan will be implemented. Strategic leadership requires a “champion,” someone who believes so strongly in the strategic marketing plan that he or she can share the “what,” “why,” and “how” with those who will be responsible for its implementation.

Photo 13.1 Sports organizations often utilize creative marketing strategies to target consumers.

Source: Shutterstock.com

The commitment of the leader to the plan usually dictates the level of commitment among those who will carry it out. In addition, different strategies require different skills, even among leaders. Therefore, when strategy changes, a change in leadership often follows. That relationship may also be reversed. A change in leadership will often lead to a change, or at least an adjustment, to the strategy. As illustrated in the previous article, there is a close relationship between strategy and leadership, and it is sometimes necessary to bring in outside sports marketers to implement a changed or new strategy. Organizations will also often bring in someone new when they believe a new marketing strategy is needed to enhance performance.

Just how important is communication? The results of a recent study indicate that when selecting a new commissioner/CEO to run a major sports property, being able to effectively communicate and manage the media was deemed “extremely important” by 81 percent of the respondents.² Certainly, the LPGA had this in mind when they hired their new commissioner, Michael Whan. Unfortunately, the former commissioner who had come to the job after four years as president of a media consulting firm in Los Angeles, got off on the wrong foot with the media at the first tournament of the year, the SBS Open at Turtle Bay. Without warning, media representatives showing up to cover the tournament were told they must agree to restrictive regulations concerning who controlled the images and stories from the tournaments. Rather than sign, the Associated Press walked out, as did two weekly magazines that cover the LPGA, Golf World and Golf Week.³ In 2009, Commissioner Bivens was removed from her position, not because of her lack of a golf background or the economic downturn, it was as Alan Shipnuck said, “She stubbornly refused to back down in her demands of so many cash-strapped corporations, clinging to the belief that this was the last best chance to launch the LPGA into the big-time. Instead many companies have simply walked away, resulting in the loss of seven tournaments this year (so far.)” Obviously, all leaders of business today must be willing to adjust their vision. The tool of communication is necessary to have all members of the organization working towards success. Bivens failed early in her attempts at communication and when she needed the support of the LPGA players there was little goodwill.⁴ In yet another example, many often question how FIFA, a federation responsible for managing the affairs of the world’s most lucrative and popular sport, can be expected to properly organize and run a quadrennial international soccer competition worth billions of dollars in revenue when its own leaders can’t even agree in the spotlight?⁵ Turmoil among the ranks of FIFA’s leaders, prominent as of late, reflects poorly on the interpersonal communication (or lack thereof) within the organization. The conversational “methods of delivery” often prove more damaging than the actual content. The miscommunication might not seem like a big deal upon initial consideration; however, it’s an understatement that this is not exactly the professional impression soccer fans might hope to get from the brass of a federation responsible for managing the affairs of the world’s most lucrative and popular sport.

As discussed in the FIFA and LPGA examples, organizational leadership sets the tone for communication within the sports organization. Communication may be formal or informal and may use a number of different channels. For example, some organizations may require that all communications be written and meetings be scheduled and documented. Other organizational leaders may have an informal, open-door policy and allow for more “spur of the moment” meetings and “hallway” discussions. Either policy can be effective when it comes to implementing strategy within the sports organization, as long as the necessary information is clearly and accurately communicated.

Strategy was once considered a “top-down” only process where those who had a “big-picture” view of the organization were considered the best candidates for formulating strategy. This often led to huge communication requirements as organizational leaders attempted to inform those who had to carry out the strategy about not only the strategy, but also the rationale for strategic choices made by the top management. Experience and research has shown that the communication process is easier when those who are expected to implement the plan are involved throughout the process. Thus, involving the entire sports marketing team throughout the strategic sports marketing process can usually be more effective than attempting to communicate the plan after it has been developed.

Even when everyone responsible for implementing the plan is involved in its development, strategic sports marketing plans should be communicated often. Due to the contingent nature of the strategic sports marketing process, plans and circumstances can change, and people can forget the original plan and the basic premise on which the plan was formulated. Employees can learn about or be reminded about the content and purpose of the plans in a variety of ways. This information can be communicated in regularly scheduled meetings or at gatherings where the strategic plan is the primary agenda item. Printed material can also be useful. Some sports organizations may give employees desk items, such as calendars or paperweights, with keywords that remind them of the strategy. They may even program screen savers on computers with words that will remind employees of the strategic thrust of the marketing plan. Promotional literature that can be displayed around the office or sent to employees through e-mail is also useful. In essence, sports marketing organizations that can provide daily reminders of the strategy are more likely to keep everyone involved on the same strategic path. Many forms of internal promotion can be used to achieve this goal.

Communication with groups and individuals outside the marketing department is also important. Many such individuals and groups, both within the organization and outside the organization, have a stake in the marketing strategy and can have an impact on the implementation of the plan, and so it is important to inform other departments within the sports organization who affect or are affected by the strategy or the strategic marketing direction. For example, many teams and leagues are in the process of trying to develop long-term relationships with their fans. One of the ways to build these relationships is to allow fans more access and contact with the players. At the collegiate level, many universities have implemented Kid’s Clubs offering such benefits as free admission to events, pizza parties, t-shirts, and access to special events and clinics. This creative plan can only be executed by communicating its importance to coaches, members of the teams, and the athletic department as a whole.

On the professional front, many teams hold an annual fan appreciation day and preseason fan fests to enhance fan relations. The Tampa Bay Rays, for example, hold an annual fan fest event prior to the beginning of the baseball season. Highlights of the event include player meet and greets with autographs, clubhouse tours, National Anthem auditions, memorabilia, and interactive play areas. Taking it one step further, the Cleveland Indians have developed a Fan Advisory Council. The council, comprised of groups of 12 to 14 Indians’ individual ticket buyers and season ticket holders, meets once per month during the regular season to discuss anything and everything related to Indians baseball and the Progressive Field experience. Of course, the ownership hopes this will help curb a slide in season-ticket sales too. All of these activities contribute to strengthening the team–fan relationship, but as shown in Table 13.1, neither of these teams is among the top fifteen in professional sports.

As with internal promotion, external promotion and communication of the strategic sports marketing plan can take many forms. Some channels for these communications include social media and the utilization of Web sites, annual reports, mailers, marketing specialties such as calendars, or meetings. Again, the key to effectively communicating to outside or inside groups is committed and competent leadership. It is with this leadership and effective communication efforts that the foundation for successful implementation of the strategic sports marketing plan is provided.

Table 13.1 Stadium experience rankings of professional sports teams

1.	Memphis Grizzlies
2.	San Antonio Spurs
3.	Indiana Pacers
4.	Oklahoma City Thunder
5.	Green Bay Packers
6.	Arizona Diamondbacks
7.	Pittsburgh Penguins
8.	Anaheim Ducks
9.	Ottawa Senators
10.	Baltimore Ravens
11.	Cincinnati Reds
12.	St. Louis Cardinals
13.	Detroit Red Wings
14.	Chicago Blackhawks
15.	Denver Broncos
16.	Seattle Seahawks
17.	Tampa Bay Rays
18.	Indianapolis Colts
19.	Texas Rangers
20.	Atlanta Falcons
21.	Houston Texans
22.	Detroit Tigers
23.	Atlanta Braves
24.	Los Angeles Kings
25.	Miami Heat

Source: ESPN.com

Staffing and skills

As we just discussed, it is critical to the success of the strategic sports marketing plan to have a leader who can “champion” and communicate the strategy. As important as the leader is to effective implementation, it is equally important to have a staff that cares about and is capable of implementing the strategy. A group of individuals must be assembled who have the appropriate mix of backgrounds, experiences, know-how, beliefs, values, work and managerial styles, and personalities.

It is important to consider strategy prior to hiring and training new employees and in retraining those who are already with the marketing team. This is especially vital in managerial or other key positions. However, staffing for the implementation of strategic sports marketing plans must go much deeper into the organizational ranks. In fact, putting together an effective marketing team is one of the cornerstones of the implementation process.

A few studies have examined the relationship between types of strategy and staff characteristics. One study of corporate executives and their perceptions regarding the relationship between managerial characteristics and strategy offered two interesting findings.⁶ First, experience and exposure to a particular type of strategy has been viewed by corporate executives as being essential for managers. Previous experience and exposure to a strategy can provide an opportunity for these experienced individuals to provide important input into the implementation of the plan. However, the second finding suggests that a “perfect match” between managerial characteristics and strategy is likely to result in an overcommitment to a particular strategy. In other words, managers may not be able to change strategic direction when contingencies change if they are perfectly matched in education, training, experience, and personality to one particular strategy. These findings may be particularly relevant for sports organizations. Because sports organizations operate in changing, uncertain, and unpredictable environments where the internal and external contingencies can change frequently, staffing must consider the capacity for change among employees.

To develop a staff capable of implementing the strategy, three categories of characteristics must be considered: education, training, and ability; experience and previous track record; and personality and temperament. With any team-building activity, it is important to consider the compatibility of the individuals who will work together to implement the strategic sports plan.

Just what skills are necessary to land and keep your dream job in sports marketing? The answer to this question is best addressed in two parts. First, what knowledge is required for an individual to be successful in all sports management positions? In other words, what are the foundation skills for a successful career? Second, what are the marketing-specific core competencies of the sports marketing manager?

Web 13.1 Sports careers on the Web

Source: http://www.teamworkonline.com

In addressing the first question, the general competencies necessary for all sports marketing management careers include being able to:⁷

  Direct the work effort of people or groups of people.

  Interrelate with the community.

  Negotiate to arrive at a solution to a problem.

  Function within a specified budget.

  Use supervision techniques.

  Evaluate the results of your decisions in light of work objectives.

  Self-evaluate employees’ job performance.

  Use problem-solving techniques.

  Interpret basic statistical data.

  Speak before large audiences.

  Apply the knowledge of the history and evolution of sport into the structure of today’s society.

  Appreciate the psychological factors that pertain to an athlete’s performance and attitude on the playing field.

These general skills are required of all sports marketing managers to some extent, but what about more specific marketing skills? This question was posed to sports marketing professionals employed in sports marketing firms, amateur sports organizations, professional sports organization, and college athletics. The results of this study are presented in Table 13.2.

Remember, changes in strategy may lead to modification of the staff and skill base. Thus, employee training and retraining is often an important part of the implementation process. As strategy is developed and the implementation plan formulated, sports marketers must consider not only new staffing needs, but also new skill needs. Training and retraining programs should be designed and included in the implementation plans so the staff is prepared to implement the new or modified strategy. Until all the staff and skills are in place, it is unlikely that the sports organization can proceed with the successful implementation of the marketing plan.

Table 13.2 Most important skills for sports marketing managers

Presented in rank order where 1 is the most important skill and 20 is the least important skill
1.	Establish a positive image for your sporting organization.
2.	Achieve sponsors’ promotional goals.
3.	Stimulate ticket sales.
4.	Maximize media exposure for events, athletes, and sponsors.
5.	Acquire sponsors through personal contacts.
6.	Maintain good relations with community, authorities, and partners.
7.	Acquire sponsors by formal presentations.
8.	Develop special promotions.
9.	Improve budget construction.
10.	Negotiate promotion contracts.
11.	Evaluate sports marketing opportunities and performance.
12.	Design and coordinate content of events.
13.	Coordinate press coverage of events.
14.	Create contracts.
15.	Provide corporate hospitality of events.
16.	Build public image and awareness of athletes.
17.	Schedule events and facilities.
18.	Establish event safety factors.
19.	Build rapport with editors, reporters, and other media reps.
20.	Buy and resell media rights.

Source: Peter Smolianov and David Shillbury, “An Investigation of Sport Marketing Competencies, Sport Marketing Quarterly, vol. 5, no. 4 (1996), 27–36.

Coordination

Successful implementation of the marketing plan depends not only on capable and committed leadership who can effectively communicate internally and externally and a staff with the necessary skills, but also on the effective organization of those people and their tasks. Structure helps to define the key activities and the manner in which they will be coordinated to achieve the strategy. A fit between strategy and structure has been shown to be critical to the successful achievement of strategy and the performance of organizations. According to one important study of organizations, when a new strategy was chosen, a decline in performance was observed and administrative problems occurred until a new method of organizing people and activities was put into place. Once the new method was implemented, organizational performance began to improve, and the strategy was more likely to be achieved.⁸ Thus, the strategic marketing plan must dictate how people and tasks are organized.

One way of coordinating people and tasks in a sports organization is by practicing some form of Total Quality Management (TQM). Quality improvement programs and practices have become an important and powerful tool for organizations, including sports organizations.⁹ Nearly all major corporations and industries in the United States have adopted some type of quality initiative to meet competitive challenges. Traditionally, TQM programs have been focused on manufacturing quality. To manufacturers of sporting goods, quality is likely to mean an excellent consistency of goods and deliveries made by their suppliers. In a manufacturing environment, TQM has been primarily concerned with both the counting and reduction of defects and reducing the cycle time taken to complete any given process.

Even though TQM philosophies originally were used in manufacturing companies, a large number (69 percent) of service organizations are also using the principles of TQM. Although the nature of services is vastly different from those of manufactured products (see Chapter 7), Roberts and Sergesketter argue that the fundamental quality issues are similar.¹⁰ A service organization, like a manufacturing organization, must concentrate on the reduction of defects and cycle times for important processes. As such, the philosophies of TQM are just as applicable for sports services as they are for manufacturing.

Although TQM represents a quality philosophy, there is little agreement as to what TQM (or quality) actually is and how best to manage the TQM process in an organization.¹¹ Evans and Lindsay define TQM as an integrative management concept for continuously improving the quality of goods and services delivered through the participation of all levels and functions of the organization.¹² In addition, TQM is described as incorporating design, control, and quality improvement, with the customer as the driving force behind the process.

Although the definitions of TQM may vary on the basis of wording and relative emphasis, all quality improvement programs share a common set of features or characteristics.¹³ These characteristics include, but are not limited to, the following:

1.  Customer-driven quality – Quality is defined by customers, and all TQM practices are implemented to please the customer.

2.  Visible leadership – Top management is responsible for leading the quality charge and places quality above all else.

3.  Data-driven processes – All TQM processes are driven by data collection, use of measurement, and the scientific method.

4.  Continuous improvement philosophy – It is always possible to do a better job, and continual, small changes in improvement are just as critical as an occasional major breakthrough.

Rewards

As we discussed previously, the execution of strategy ultimately depends on individual members of the organization. Effective communication, staffing, skill development and enhancement, and coordination are vital to implementation efforts and should be planned for and considered throughout the strategic sports marketing process. Another critical component in the design of an implementation plan is to provide for motivating and rewarding behavior that is strategy supportive. Thus, a reward system is a key ingredient in effective strategy implementation.

There is no one “correct” reward system. From a strategic perspective, rewards must be aligned with the strategy; therefore, the best reward system is contingent upon the strategic circumstances. These rewards and incentives represent another choice for management. Thus, reward systems will reflect the beliefs and values of the individuals who design them. However, to successfully motivate desired behavior, reward systems must consider the needs, values, and beliefs of those who will be motivated by and receiving the rewards.

Management can choose from several types of motivators, which can be classified on the basis of three types of criteria. Motivators can be positive or negative, monetary or nonmonetary, and long run or short run. Some examples include compensation (salary or commission), bonuses, raises, stock options, benefits, promotions, demotions, recognition, praise, criticism, more (or less) responsibility, performance appraisals, and fear or tension.

Experience has shown that positive rewards tend to motivate best in most circumstances; however, negative motivators are also frequently used by organizations. Many organizations assume that only financial motivators will lead to desired behaviors. However, many organizations have obtained great success with nonfinancial rewards. Typically, a combination of both provides optimal results. Timing is also an important consideration in motivating performance with reward systems. Rewards systems should be based on both short- and long-term achievements so that employees can receive both immediate feedback and yet be motivated to strive for the longer term strategic goals.

In an interesting twist, some sports owners would like to link their teams’ on-field performance to salaries. David Gill, former chief executive of Manchester United, English football’s biggest brand, said he “would like to see players’ salaries more variable, where they win rewards if we are winning.” His model is not new to some industry executives, like bankers, but sports is arguably different. Athletes risk injury and the end of their career every time they run out to play, and also have a short career span. Unsurprisingly, the sports stars prefer a guaranteed salary to a performance-related payout.¹⁴

In summary, reward systems are critical to the successful achievement of the strategic sports marketing plan. To be effective, these systems must motivate behavior that “fits” with and ensures adequate attention to the strategic plan. Although reward systems are contingent upon the internal and external contingencies and the specific circumstances around which a sports marketing group must operate, there are some important general guidelines for developing effective reward systems (see Table 13.3).

Table 13.3 Guidelines for designing reward systems

1.	Rewards must be tightly linked to the strategic plan.
2.	Use variable incentives and make them part of the compensation plan for everyone involved in strategy execution.
3.	Rewards should be linked to outcomes that the individual can personally affect.
4.	Performance and relationship to the success of the strategy should be rewarded rather than the position held by the individual.
5.	Be sensitive to the discrepancies between top and bottom of the organization.
6.	Give everyone the opportunity to be rewarded.
7.	Being fair and open can lead to more effective reward systems.
8.	Reward success generously – make the reward enough to matter and motivate.
9.	Do not underestimate the value of nonfinancial rewards.
10.	Be willing and open to adapting the reward system to people and situation changes.

Source: John Pearce and Richard Robinson, Formulation, Implementation, and Control of Competitive Strategy, 5th ed. (Boston: Irwin, 1994).

Information

Accurate information is an essential guide for decision making and action, and necessary for all phases of the strategic sports marketing process. Execution of the sports marketing plan depends on effective information systems. These systems should provide the necessary information but should not offer more than is needed to give a reliable picture of issues critical to the implementation of the strategy.

Reports of information must be timely. The flow of information should be simple, including all the critical data being reported only to the people who need it. In other words, reports do not necessarily need wide distribution.

To aid strategy implementation, information reports should be designed to make it easy to flag variances from the strategic plan. In designing these reports, the critical questions to ask are as follows:

1.  Who is going to need this information?

2.  For what purpose will they need it?

3.  When do they need it?

The NHL provides an example of a sports organization that enhanced their ability to implement marketing strategy through an information system.¹⁵ One of the organizational objectives of the NHL was to make better use of emerging technologies. NHL Commissioner Gary Bettman believes “everything is connected to everything else” and that the league needs to be a leader in the use of technology to achieve its goals. Toward this end, the NHL has implemented a program called NHL-ICE (Interactive Cyber Enterprises), which has developed information systems for the media, fans, coaches, and players. The NHL-ICE program also includes the design and content of the NHL Web site, implementing a real-time scoring system that captures statistics for every hockey game, and integrating network computing solutions into the marketing of the league’s products and services.

The WWE and ESPN also present another fine example of information driving strategies. Both have implemented ePrize’s Multi-Channel Platform, a proprietary interactive marketing technology that enables seamless consumer interaction via microsite, social networking sites, and mobile devices. The primary feature of the multi-channel platform includes customizing content so that fans can enjoy special offers, coupons, and game experiences based on their registration information and past consumption behaviors. In addition, the platform affords both entities to learn more about their fans by creating a fan profile through an interactive survey.

Professional teams, such as the Portland Trail Blazers, understand the importance of information sharing among their stakeholders. The Trail Blazers were the first NBA franchise to create their own social networking site, marketing to users of blogs, message boards, and other community fan sites. The Blazers launched http://iamatrailblazersfan.com in February 2007, their first team-run social networking site. The site has assisted in the team’s grassroots marketing efforts while increasing fan communication.

“If you are pushing information via e-mail and only 20 percent of fans open up the e-mail, then you want to find a way to spread news about the team in a fast and effective way,” said Dan Harbison, Senior Director of Digital Marketing and Media for the Blazers. “Others can leverage sites such as MySpace, Facebook and Twitter, but the Trail Blazers are not able to sell tickets or sponsors through those sites so they are looking at what they see as benefits of their own social network.¹⁶

Creativity

The design of the strategic sports marketing plan’s implementation phase is concerned with putting in place an effective system for executing marketing programs that will lead to the achievement of goals and objectives developed by the organization. The premise of this book is that the changing and uncertain environments in which sports organizations operate often require the need to adjust or change plans based on changing internal and external contingencies. Innovative plans and processes are vital to finding a fit with those contingencies. Thus, innovation, in the context of the strategic sports marketing process, is concerned with converting ideas and opportunities into a more effective or efficient system.

The creative process is the source of those ideas and, therefore, becomes an important component in the successful formulation and implementation of strategic sports marketing plans. Without creative endeavors, innovation is unlikely, if not impossible. An increase in creative efforts should likewise lead to an increase in innovative plans and processes.

When we talk about creativity, it is important to consider both the creative process and the people who engage in that process. The creative process can be learned and used by virtually anyone. However, some people have more experience with being creative and more confidence in their ability to be creative than others.

Many organizations can encourage creativity in their employees. This process of creating and innovating within an organization has been referred to as intrapreneurship, or corporate entrepreneurship. Intrapreneurial efforts have become popular as organizations have acknowledged the value of innovation in changing and uncertain environments. The watchword of today’s businesses, sports organizations included, is change. As we discussed, innovation is vital to an organization’s ability to change and adapt to internal and external contingencies. There are two general steps that can lead to an increase in the number of creative efforts and the resulting innovations: education and training regarding the creative process, and establishing an organizational culture and internal environment that encourages creativity.

The creative process

Although creativity is usually associated with promotion, it is important for all elements of the marketing mix. To be competitive, sports organizations must be creative in their pricing, in developing new products and services, and in getting new sports products to the consumer. The first step in increasing creative efforts within a sports organization is educating employees about the creative process. Creativity is a capability that can be learned and practiced. It is a distinctive way of looking at the world and involves seeking relationships between things that others have not seen.

Although they are referred to by different names, there are four commonly agreed-upon steps in the creative process. They are knowledge accumulation, incubation, idea generation, and evaluation and implementation.

The knowledge accumulation phase is an often overlooked, but absolutely vital, stage in the process of creating. Extensive exploration and investigation must precede successful creations. Because creations are simply putting together two existing ideas or tangibles in a new way, it is necessary to have an understanding of a variety of related and unrelated topics. This information gathering provides the creator with many different perspectives on the subject under consideration. Information can be gathered through reading, communication with other people, travel, and journal keeping. Simply devoting time to natural curiosities can be useful in this stage. The key is that the more the creator can learn about a broad range of topics, the more there is to choose from as the new creation is being developed.

In phase two, the incubation period, the creative individual allows his or her subconscious to mull over the information gathered in the previous stage by engaging in other activities. The creative effort is dropped for other pursuits. Routine activities, play, rest, and relaxation can often induce the incubation process. “Getting away” from the creative endeavor allows the subconscious mind to consider all the information gathered.

Often, when the creator least expects it, solutions will come. The next stage, idea generation, is the stage that is often portrayed as the “lightbulb” coming on in one’s mind. The opportunity for this has been set, however, in the first two phases. As the body rests from the research and exploration, the subconscious mind sees the creative opportunity or the “light.”

The last stage, evaluation and implementation, is often the most difficult. It requires a great deal of self-discipline and perseverance to evaluate the idea and determine whether it will lead to a useful innovation. Following through with that implementation is even more challenging. This is especially true because those individuals who are able to generate creative ideas are often not the ones who can turn those ideas into innovations. Creators may fail numerous times as they attempt to implement creative efforts. And as the accompanying article illustrates, sometimes the innovative ideas that do reach the marketplace aren’t the most welcomed.¹⁷

Encouraging intrapreneurship

Creative efforts and the innovations within organizations are a function of both individual and organizational factors. Entrepreneurial employees add value to the organization and enhance implementation by finding creative ways to achieve the strategic plan. However, these efforts can flourish only if organizational features foster creativity. To encourage an intrapreneurial environment, staff members must be rewarded for entrepreneurial thinking and must be allowed and even encouraged to take risks. Failure and mistakes must be allowed and even valued as a means to creative and innovative expression.

The key to successfully creating a climate that encourages creativity and innovation is to understand the components of such an atmosphere. Those components include management support, worker autonomy, rewards, time availability, and flexible organizational boundaries. To understand these components, consider the following guidelines used at 3M Company:¹⁸

  Do not kill a project – If an idea does not seem to find a home in one of 3M’s divisions at first, 3M staff member can devote 15 percent of their time to prove it is workable. In addition, grant money is often provided for these pursuits.

  Tolerate failure and encourage risk – Divisions at 3M have goals of 25–30 percent of sales from products introduced within the last five years.

  Keep divisions small – This will encourage teamwork and close relationships.

  Motivate champions – Financial and nonfinancial rewards are tied to creative output.

  Stay close to the customer – Frequent contact with the customer can offer opportunities to brainstorm new ideas with them.

  Share the wealth – Innovations, when developed, belong to everyone.

Sports marketers are always looking for new and innovative approaches to all elements of the marketing mix and technology is transforming the delivery of these marketing experiences. Advances in technology have made information more accessible and put spectators in the heart of the action. Whether the enhancement of promotional delivery systems, broadcast, venue management, sportscape, logistics, or safety and security, people want technology to enhance their sporting lives. Spectators, governing bodies, and event planners are demanding more from their sporting events, therefore, real-time information utilizing multimedia solutions must be integrated into planning and promotion. On the promotion side, for instance, the University of Cincinnati’s Department of Athletics introduced Social Seats.¹⁹ Social Seats is an exclusive offer to fans of UC Facebook page and followers of the GoBEARCATS twitter account. The program allows fans who purchase tickets for any of the remaining four basketball games as well as those who have already purchased tickets an opportunity to be entered into a random draw. The winners receive upgrades to lower level seats, access to the media room and media hospitality area, as well as the postgame press conference. The Bearcats benefited from the increased exposure on the social network, to fans at the park, and on televised games. On the product side, Sportsline’s HydraCoach bills itself as the world’s first “intelligent water bottle.”²⁰ You enter your weight and activity level, and then indicators on the side of the unit tell you whether you are meeting your “personal hydration goal.” One area of innovation in sports facility design is going green. The Cleveland Indians and Green Energy Ohio installed a new solar electric system at Progressive Field, the first American League ballpark to go solar. The ballpark utilizes recycling containers and biodegradable cornstarch utensils and cups. In addition, the facility composts the garbage, which in turn has reduced the trash pickups by 50 percent since 2007.²¹

National Park, home to the Washington Nationals, is the nation’s first major professional stadium to become LEED Silver Certified by the U.S. Green Building Council. LEED is an internationally recognized green building certification system, providing third-party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO₂ emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts. The project incorporated a variety of sustainable design elements in regards to its proximity to the Anacostia River. For example, HOK Sport, the ballpark’s architect, integrated the first “green roof” at a big league sports facility. The Chesapeake Bay Foundation, an environmental nonprofit, gave a $101,670 grant to the D.C. Sports and Entertainment Commission to cover the cost of planting grass and other plants on top of a 6,300-square-foot waterproof surface above a concession stand in left field.²²

In other examples, for the first time in the history of any major North American professional sports league, a league-wide uniform innovation had been established. The National Hockey League and Reebok partnered to create a technologically advanced uniform for players called the Rbk EDGE Uniform System.²³ At the time it provided a technology advanced edge for the Reebok brand. However, Adidas, who purchased Reebok in 2005 for $3.8 billion, has recently been contemplating replacing Reebok as the official NHL brand, for the Reebok brand has struggled, continuing to lose ground to Nike for the soles of Americans.²⁴ In fact according to Sporting Goods Intelligence, from 2005 through 2012, Nike increased its U.S. footwear sales 75 percent, to $6.3 billion, meanwhile Adidas, over the same period, saw its footwear sales rise a more modest 35 percent, to $1 billion.²⁵ All the while, Reebok’s U.S. footwear sales fell 40 percent, to $597 million, over the same period. Up until 2006, the NBA had Reebok as its official uniform and apparel supplier; however, they decided to move to replace the contract with one that made Adidas the official supplier, a strategy the NHL is now contemplating. In other apparel advances, Under Armour in 2011 unveiled a uniform technology comparable with Nike’s Pro Combat used by top football programs across the nation. Branched off its original compression shirts, these Under Armour uniforms were 33 percent lighter, integrated technology that enhanced breathability, afforded heat exchange, and enhanced muscle stability. Under Armour also designed the Mach 39 Speedskating Skin for the 2014 US Olympic Speedskating team. The skin’s design was rigorously tested for maximum efficiency. The engineering of the skin focused solely on full-body aerodynamics. Under Armour utilized Lockheed Martin’s expertise during a two-year research and testing program. The engineers employed high-speed cameras to help create computational fluid dynamic models that analyzed how air flowed around the skater during key body positions. Coupled with over 300 hours of wind-tunnel testing on reinforced fiberglass mannequins with hundreds of different skins setups and textile configurations, the research allowed designers to zero in – down to the millimeter, actually – on exactly how and where to build the new suit.²⁶ The goal of the new design was to achieve technological improvements that would be measurable. Unfortunately, during the 2014 Olympic Games, performances were dismal and many experts and athletes readily blamed the suit for these disappointing performances. It was not until the national governing body did a comprehensive review of its preparation heading into the Games that the controversial suits were found not to have anything to do with the sub-par performance; its findings: too much travel, too much training at high altitude, overly optimistic expectations, and not enough time in the new suits.²⁷

Budgeting

Budgets are often used as a means of controlling organizational plans. However, the budgeting process can be an important part of the implementation plan if budget development is closely linked to the sports marketing strategy. In fact, the allocation of financial resources can either promote or impede the strategic implementation process.

Marketers within the sports organization must typically deal with two types of budgetary tasks. First, they must obtain the resources necessary for the marketing group to achieve the marketing plan goals. Second, they must make allocation decisions among the marketing activities and functions. These two types of activities require working with individuals and groups internal and external to the sports marketing function.

To develop strategy-supportive budgets, those individuals responsible should have a clear understanding of how to use the financial resources of the organization most effectively to encourage the implementation of the sports marketing strategy. In general, strategy-supportive activities should receive priority budgeting. Depriving strategy-supportive areas of the funds necessary to operate effectively can undermine the implementation process. However, overallocation of funds wastes resources and decreases organizational performance.

In addition, just like the rest of the strategic sports marketing process, the budgeting process is subject to changing and often unpredictable contingencies that may necessitate changes in the marketing budget. A change in strategy nearly always calls for budget reallocation. Thus, those individuals who are responsible for developing budgets must be willing to shift resources when strategy changes.

Control

In the uncertain and changing environments in which sports organizations operate, it is critical to consider four questions throughout the strategic sports marketing process.

1.  Are the assumptions on which the strategic marketing plan was developed still true?

2.  Are there any unexpected changes in the internal or external environment that will affect our plan?

3.  Is the marketing strategy being implemented as planned?

4.  Are the results produced by the strategy the ones that were intended?

These questions are considered the basis of strategic control and the fundamental issues to be considered in the control phase of the strategic sports planning process model. Strategic control is defined as the critical evaluation of plans, activities, and results – thereby providing information for future action. As illustrated in Figure 13.2, the control phase of the model is the third step to be considered. However, it is important to note that the arrows allow for “feedforward.” In other words, even though control is the third phase of the model, we consider it as we develop earlier phases of the process. Once the initial plan is developed, the assumptions on which the plan was developed and the internal and external contingencies must be examined and monitored. As the implementation process is set in place and as the plan is executed, strategic control reviews the process as well as the outcomes. Variances from the original assumptions, plans, and processes are noted and changes are made as needed.

Figure 13.2 Control phase of the strategic sports marketing process

The three types of strategic control that sports marketers must consider are planning assumptions control, process control, and contingency control. The following sections outline each of these three types of control.

Planning assumptions control

As we have discussed throughout this text, it is vital to understand internal and external contingencies and formulate strategic sports marketing plans that establish a fit with those contingencies. During the planning phase, it is often necessary to make assumptions concerning future events or contingencies about which we do not have complete information. In addition, individual planners may perceive and interpret data differently. In other words, the strategic sports marketing plan is based on a number of situation-specific premises and assumptions. This level of control attempts to monitor the continuing validity of these assumptions. Thus, in planning assumptions control, the sports marketer asks the question: “Are the premises or assumptions used to develop the marketing plan still valid?” To fully evaluate the responses to this question, the assumptions used during the development of the marketing plan must be listed. This step is vital to the success of this control mechanism so those individuals who are responsible can monitor them throughout the process.

A good example of planning assumptions control at work resides within the realms of the Big East Conference. As the conference struggles to compete with the cash cow, that is college football, now the third most popular sport in America but even more important, a money-making machine, the conference fights to retain a basketball presence. Many feel college basketball has been lost in the shuffle, often being overlooked as far as conference realignment goes and undoubtedly the Big East was the conference that took the biggest hit. Losing major schools like Miami, Syracuse, and Pitt to the ACC, to splitting into two separate conferences altogether, the new Big East offered some great moments on the college basketball landscape, but it definitely was not an improvement on the legacy the previous incarnation developed over the past 35 years. Three new teams – Creighton, Butler, and Xavier – joined the Catholic 7, and although Creighton and Xavier made some noise by making the NCAA Tournament (http://www.sbnation.com/march-madness) the Big East could use some extra firepower in its quest to return to dominance.²⁸

Another example of a planning control assumption has been associated with the marketing and endorsement of players and teams. Scandals with teams such as USC, Penn State, Syracuse, the Ohio State University, and Miami and with players the likes of Tiger Woods, extramarital sex scandal, Michael Phelps, marijuana use, Lance Armstrong, doping, and Barry Bonds regarding steroid use, have made corporate partners rethink their plans and uses.

Because of the complexity of the decision-making process, it may be impossible to monitor all the assumptions or premises used to formulate the strategic sports marketing plan. Therefore, it is often practical not only to list the premises, but also to prioritize them based on those that may most likely effect a change in the marketing plan.

Although all assumptions should be considered in this form of control, two categories of premises are most likely to be of concern to the sports marketer: external environmental factors and sports industry factors. As we discussed earlier, strategic sports marketing plans are usually based on key premises about many of these variables. Some examples of external environmental factors include technology, inflation, interest rates, regulation, and demographic and social changes. The relevant sports industry in which a sports organization operates is also usually a key premise aspect in designing a marketing plan. Competitors, suppliers, league regulations, and leadership are among the industry-specific issues that need to be considered when identifying the critical assumptions used to develop the strategic plan.

Monitoring the premises or assumptions used to develop the strategic sports marketing plan is vital to the control phase of the strategic sports marketing process, but it is not sufficient. In other words, this form of control does not measure how well the actual plan is progressing, nor is it able to take into account the aspects of the internal and external environment that could not be detected during the planning phase when the premises were developed. Thus, effective control must consider two additional forms of evaluation: process control and contingency control.

Process control

Process control monitors the process to determine whether it is unfolding as expected and as desired. This type of control measures and evaluates the effects of actions that have already been taken in an effort to execute the plan.

Because of changes in premises and contingencies, the realized strategic marketing plan is often not the intended strategic marketing plan. Changes and modifications to the plan usually occur as a result of the process control activities carried out by marketers. In other words, during this stage of control, sports marketers attempt to review the plan and the implementation process to determine whether both remain appropriate to the contingencies. Either the marketing plan or the implementation process put in place to execute the plan may not proceed as intended. These variances may lead to a need to change the plan or the process or both. Thus, the key question asked by this form of control is: “Should either the strategic plan or the implementation process be changed in light of events and actions that have occurred during the implementation of the plan?” It is important to note that to change or modify the marketing plan or implementation process is not necessarily a decision to avoid. The benefit of this form of control is that sports marketers can minimize the allocation of resources into a strategic plan or implementation process that is not leading to achievement of the objectives and goals they deem important. To answer the preceding question, two measures are typically used: monitoring strategic thrusts and reviewing milestones. As we discussed earlier, the strategic sports marketing plan is a means of achieving strategic and financial organizational goals and marketing objectives. An important part of evaluating the plan and process is to review the achievement of these objectives and goals during the execution of the plan. Because objectives are not time specific or time bound (as discussed in Chapter 2), strategic thrusts can be examined to evaluate progress in the direction of strategic and financial objectives. On the other hand, reviewing milestones typically examines achievement of marketing objectives. Let us look at each of these two forms of process control more closely.

Monitoring strategic thrusts

Monitoring strategic thrusts attempts to evaluate or monitor the strategic direction of the plan. As a part of the overall strategic plan, smaller projects are usually planned that will lead to the achievement of the planned strategy. Successful pursuit of these smaller projects can provide evidence that the strategic thrust is the intended one. However, if these projects are getting lost to other “nonstrategic” projects, it could mean that the overall strategy is not progressing as planned.

One strategic thrust of special interest to sports organizations and organizations marketing their products through sports is, of course, sponsorship. Determining the effectiveness of a sponsorship program is becoming increasingly more important as the costs of sponsorship continue to rise. A Turnkey Sports Poll was conducted with 400 senior-level sports industry executives to understand just how important measurement can be to the sponsorship package. Half of those surveyed indicated that the fact that “certain sponsors are paying closer attention to measuring return on investment” is “good for sports.” Additionally, nearly 60 percent of the executives indicated that in the last three years spending on consumer research was either “up slightly” or “up significantly.”²⁹

Just how, then, do we measure or determine whether we are seeing a return on our marketing investment? Lesa Ukman, former CEO of IEG, which publishes the IEG Sponsorship Report, believes sponsorship return can be measured. Ukman stresses the following regarding sponsorship measures:³⁰

Sponsorship return can be measured. The key lies in defining objectives, establishing a presponsorship benchmark against which to measure, and maintaining consistent levels of advertising and promotion so that it is possible to isolate the effect of sponsorship.

The lack of a universal yardstick for measuring sponsorship is a problem, but it is also an opportunity. The problem is that sponsorships often are dropped, not because they don’t have measurement value, but because no one has actually measured the value.

The lack of a single, standardized measurement is also an opportunity because it means sponsors can tailor their measurement systems to gauge their specific objectives.

Since there are no universal measures, companies struggle with finding the resources and determining what the right things to measure are. In the sporting world, it is not uncommon for companies not to measure return from sponsorship. In fact, in 2012 when IEG asked the question, does your company actively measure return from its sponsorship, a full one-third of the sponsors said no. Companies often choose the easiest method of assessment focusing on awareness of products, attitudes and brands. The more challenging methods that focus on the harder-to-determine effectiveness measures are further down the purchase funnel. Marketers also continue to rely on their property partners for evaluation assistance, with survey respondents ranking their dependence on rightsholders to help them measure return as a 6 on a 10-point scale.³¹ Here are a few of the more popular ways of measuring sponsorship effectiveness and brand impact against the objectives of awareness and exposure, sales, attitude change, and enhancing channel-of-distribution relationships:

  N-Score is a new measurement system from Nielsen that rates the brand impact of professional athletes and sports personalities, enabling advertisers to make smart marketing decisions on commercial endorsements. Based on Nielsen’s strategic collaboration with E-Poll Market Research, N-Score provides the most comprehensive, in-depth look at a sports figure’s overall endorsement potential. A potential endorser’s N-Score is the result of a model that factors in awareness, appeal (how strongly one likes or dislikes an individual) and 46 specific personal attributes.

The N-Score is available for over 1,000 athletes, coaches, broadcasters, and other sports personalities, on both a national basis and in 30 local markets. Advertisers can use N-Score to evaluate how effective a sports figure will be when endorsing their products. N-Score can also measure the positive and negative impact of off-field events on an athlete’s effectiveness, including the impact across different demographic groups.³²

  For the NASCAR Sprint Cup Series, Sprint identified three metrics specific to return on investment. According to Tim Considine, director of sports marketing Sprint Nextel Corp., they generate return by assessing the size of the customer base, average revenue per unit-total revenue divided by the number of customers, and churn. Considine noted that they prefer to achieve low churn, high average revenue per unit, and large customer base.³³

  Number of stories and mentions in popular media, such as newspapers, televised shows, and magazines, serve as a measure of exposure as well. For example, John Hancock Financial Services measured the impact of its football bowl sponsorship using this method. In one year, approximately 21 binders of newspaper clippings were collected at an estimated advertising equivalency of $1 million.³⁴

Awareness is also assessed through “media equivalencies,” that is, determining how much “free” time the sponsor has accumulated through television coverage. For example, Joyce Julius & Associates had estimated that Louisville-based Yum Brands earned almost $2.7 million in exposure in its debut as the first presenting sponsor of the Kentucky Derby.³⁵

Web 13.2 Sponsorship ROI evaluation

Source: Joyce Julius & Associates, www.joycejulius.com

While the measurement of brand exposure has historically used human observation, companies like Margaux Matrix are testing electronic tools to perform the same operation more accurately.³⁶ Not all researchers are sold on the notion of media equivalencies. In fact, a study by the former public relations firm Jeffries-Fox’s led to the official Institute for Public Relations (IPR) position that “The IPR Commission does not endorse Ad Value Equivalencies as a measurement tool.”³⁷

  Sales figures for products and services can be examined both prior to (pre) and after (post) the event to estimate the potential impact of the sponsorship. Other methods of tracking sales include looking at sales for the sponsorship period versus the same time period in prior years or measuring sales in the immediate area versus national sales. In addition, sales might be tied directly to the sponsored event. For example, discounts for products might be offered with proof of attending the event (show ticket stub); therefore, the number of redemptions might be tracked. Of course, many other factors, such as competitive reaction and additional sales promotions, will influence the sales figures.

One final variation of measuring the impact of sales is to involve the sales force in tracking the value of leads and contacts generated through sponsorship.

  To assess consumer attitudes toward various products and services, as well as the sponsored event, research is conducted in the form of surveys or in-depth interviews. This primary market research is used to gauge the image of the event and its sponsors, attitudes that consumers have toward the event and its sponsors, and awareness of events and sponsors’ products and services.

When determining the impact of sponsorship on channels of distribution, it is common practice to track the number of outlets carrying the given product before and after the sponsored event. In addition, sponsors may want to assess the number of retailers or dealers participating in a program versus previous promotions. Finally, companies may measure incremental display at the point of purchase in retail outlets.

For example, M&M’s MARS brand continues to employ the “Race Day is better with M” slogan on a range of confectionary displays offered to meet the snacking needs of NASCAR fans. In fact, M&M’s estimates that approximately 83 percent of consumer purchases are unplanned. Therefore, M&M’s displays often employ impulse strategies that seek to trigger or solicit immediate consumption (IC) or future consumption (FC) responses. IC responses seek to trigger an “immediate” impulse purchase e.g., items that are often available at checkout lines, while FC displays often focus on enhancing exposure in high traffic areas e.g., a lobby where shoppers are purchasing for others.³⁸ Overall implications and strategy goals: to interrupt trips with off-shelf displays to keep MARS NASCAR products on the top of mind on fan trips; important to display product for pantry-load trips; and critical to have immediate consumption displays to capture the impulse purchase. The strategic approach highlighted message reach, increased focus on home viewer and consumer engagement with quarterly giveaways. M&M’s committed to providing national advertising and PR support integrating television, FSI, in-store, promotional radio, online, PR, social, POP and shopper marketing strategies. The ultimate goal, to utilize displays to tempt the passionate fan and trigger impulsivity by making chocolate more mentally available in-store, sounds delicious.³⁹

Milestone review

The second form of process control is milestone review. Marketing managers at sports organizations usually establish milestones that will be reached during the execution of the marketing plan. These milestones may be critical events, major allocations, achievements, or even the passage of a certain amount of time. They are often an integral part of a program evaluation and/or network analysis strategies. Critical path or milestone reviews help market planners to prioritize goals and objectives, define time lines, as well as the sequence, order, and thresholds of market strategies. As these milestones are reviewed on a continuous basis, an evaluation of the advisability of continuing with the plan and the process is afforded.

Photo 13.2 Sponsors such as M&M must design controls to evaluate sponsorship effectiveness.

Source: Getty Images

Financial analysis

Financial information can be used to understand and control the process of strategic marketing plan implementation; that is, to perform financial analyses. It is important for any sports organization to have a good accounting system. In terms of process control, the accounting system can provide the following:

  A ready comparison of present financial performance with past performance, industry standards, and budgeted goals.

  Reports and financial statements that can be used to make appropriate strategic decisions.

  A way of collecting and processing information that can be used in the strategic sports marketing process.

Two important components of a good accounting system are the income statement and balance sheet. The balance sheet and income statement are the traditional financial statements that have been required in annual reports for many years. Income statements provide a summary of operating performance. These documents summarize both money coming into and going out of the sports organization and the marketing department or division. Because income statements are a good measure of customer satisfaction and operating efficiency, they should be prepared frequently – at least every three months, if not monthly. Balance sheets provide a summary of the financial health of the sports organization at a distinct point in time. The balance sheet provides the sports marketer with a summary of what the organization is worth; what has been invested in assets, such as inventories, land, and equipment; how the assets were financed; and who has claims against the assets. Tables 13.4A and 13.4B provide simple examples of the information typically found on income statements and balance sheets. In contrast, the statement of cash flows, which replaced the statement of changes in the late 1980s, shows the sources and uses of a firm’s cash. The statement of cash flows details where resource of cash comes from and how they are used. It provides more valuable information about liquidity than can be obtained from the balance sheet and income statements.

Table 13.4A Rich Creek Rockers income statement

Income statement for the year ended December 31, 2012
Revenues:
Single game admissions	$140,000
Season ticket holders	275,000
Concessions	250,000
Advertising revenue	95,000	760,000
Expenses:
Cost of concessions sold	100,000
Salary expense – players	235,000
Salary and wages – staff	130,000
Rent	150,000	615,000
Profits before taxes		145,000
Income tax		33,000
Income after taxes		$112,000

Table 13.4B Rich Creek Rockers balance sheet

One of the more useful methods of financial analysis for control purposes is known as ratio analysis. Financial ratios are computed from income statements and balance sheets. These ratios can tell the sports marketing manager a lot about the progress and success of the strategic sports marketing plan. In other words, using financial ratios can help a sports marketing manager assess whether the marketing strategy continues to provide an appropriate fit with internal and external contingencies. There are several types of financial ratios that can be categorized as follows:

  Profitability ratios – Provide an indication of how profitable the organization or division is during a period of time.

  Liquidity ratios – Indicate the ability of the organization to pay off short-term obligations without selling off assets.

  Leverage ratios – Measure the extent to which creditors finance the organization.

  Activity ratios – Measure the sales productivity and utilization of assets.

  Other ratios – Determine such things as return to owners in dividends, the percentage of profits paid out in dividends, and discretionary funds.

Table 13.5 lists some of the more commonly used ratios, how each is calculated, and what each can tell the sports marketing manager. Examples of how these ratios are applied and interpreted are shown in Table 13.6.

Table 13.5 Summary of selected key financial ratios

Table 13.6 Examples of key financial ratios

Contingency control

The third form of control, contingency control, is based on the assumption that sports marketers operate in an uncertain and unpredictable environment and that the changing nature of the internal and external environments may lead to the need to reassess strategic choices. Although it is included as a part of the control phase, this form of control should be of concern throughout the strategic sports marketing process.

The goal of contingency control is to constantly scan the relevant environments for internal and external contingencies that could affect the marketing planning process. Foreseeability, the ability to anticipate the future events, outcomes or results of an action based on the circumstances, past experiences, apparent riders or reasonable sense expected of a human being, is critical to the success of contingency control. Unlike planning assumptions control, the goal here is to remain unfocused so any unanticipated events will not be missed. In other words, the “big picture” is of most concern in this phase of control. The primary question to be addressed here is: “How can we protect our marketing strategy from unexpected events or crises that could affect our ability to pursue the chosen strategic direction?” Attempts to control without a prestructured list of variables of concern may not seem to make sense at first. However, it is easier to understand this form of control if one thinks in terms of how a crisis usually occurs. The daily events leading up to an unpredicted event lead to a focus in the form of a crisis. Previously unimportant or unnoticed events become more problematic until an actual crisis requires some action. Learning to notice and interpret signals thus becomes an important way to circumvent crises. Thus, the goal of contingency control is to learn to notice these signals and to have a plan of action in place to cope with a crisis if it occurs.

Sports scandals and crises are not infrequent. Anyone who reads a newspaper sports section has observed situations that could lead to a public relations nightmare for a sports organization or individual athlete. More research is now being conducted on better understanding the defining characteristics of scandal and attempting to quantify the magnitude of a specific scandal. Hughes and Shank found that media and corporate sponsors generally identified four consistent characteristics that make an event in athletics scandalous or not.⁴⁰ These characteristics included an action that was either illegal or unethical, involved multiple parties over a sustained period of time, and whose impact affected the integrity of the sport with which they are associated.⁴¹

The top 10 sports scandals of all time are presented in Table 13.7.⁴²

Although crises such as these are unpredictable, it is useful to plan so the chosen response can be not only faster, but also more effective. A crisis plan should include the following:⁴³

  Well-defined organizational response strategies

  Specific procedures that will lead to a more efficient and effective response

  Steps that will deal effectively with potential media impact and will enhance image

  Efficient ways to deal with a variety of problems that could occur

Moreover, sports organizations may benefit from an informal and a formal crisis response plan. The key is that any crisis plan should offer priorities for proactive and reactive response under a variety of circumstances. It should have the capacity to both alert and calm people during an unexpected event that could have the potential for major consequences.

Table 13.7 Top ten sports scandals

1  O.J. Simpson It’s not every day that the NBA finals are overshadowed by a Heisman Trophy winner and former NFL star on the run from double murder charges. While acquitted during the most publicized trial of all time, years later OJ now sits in prison convicted of robbery.

2  Pete Rose Baseball’s all time hits leader and manager of the Cincinnati Reds gets thrown out of the game for illegally betting on baseball (including games in which the Reds were playing). Years later Pete’s banishment still stands and Major League Baseball’s Hall of Fame refuses to consider him for induction.

3  Tiger Woods On his way to becoming the greatest golfer of all time, 2009 saw a series of events that included a car accident, more than a dozen mistresses, divorce and therapy derail his career and personal life. Two years later Tiger is still trying to recapture his golf greatness and another Masters title.

4  Barry Bonds and Steroids Baseball’s steroid era and the Mitchell Report gave us hulking players (Mark McGwire, Sammy Sosa, Barry Bonds) who easily shattered Roger Maris’ and Hank Aaron’s home run records. In the wake of player admissions and denials, most have been tried in the court of public opinion and require the use of asterisks when analyzing their baseball accomplishments.

5  Soviet Union Basketball Win over United States in 1972 Olympics The US Men’s Basketball team had won every single game between 1936 and the 1972 final. Had it not been for a referee adding three seconds back on the clock, the US would have beaten Russia on this day as well. To date, the US team refuses to accept their Silver Medal from the ’72 games and gave rise to the creation of US Olympic Basketball “Dream Teams.”

6  Tonya Harding and Nancy Kerrigan Seeking to eliminate her main rival leading up to the 1994 Olympics figure skating competition, Tonya Harding, her husband and others assaulted Nancy Kerrigan by striking her in the leg with a club during a skating practice session. Harding wound up finishing 8th at the Olympics, while Kerrigan took home the silver medal.

7  Penn State Sex Abuse One of college football’s most celebrated programs and coaches failed to report and likely covered up when allegations of child molestation against former defensive coordinator Jerry Sandusky surfaced. Fast forward, Coach Paterno has passed, Sandusky convicted and a university and administration still in turmoil and under investigation for a massive cover up.

8  New Orleans Saints Bounty Program “Bountygate” was a fund that rewarded Saints players with financial bonuses for inflicting injuries on opposing players that forced them to leave games. Following an NFL investigation, the Saints will play their 2012 season without their head coach, defensive coordinator and key players who have all been suspended by commissioner Roger Goodell.

9  1918 Chicago Black Sox In response to notoriously cheap team owner, Charles Comiskey, who leveraged loopholes in contracts and MLB laws to prevent playing his star players, eight members of the 1919 Chicago White Sox were banned from baseball for life for taking money from underworld figures to intentionally lose games (including the 1919 World Series). The scandal, which was also immortalized by the film Eight Men Out, remains one of baseball’s darkest and enduring moments.

10  SMU Death Penalty To date this remains the most severe penalty handed down to any athletic program. SMU’s entire 1987 schedule was cancelled due to massive violations of NCAA rules and regulations including slush funds and illegal payments to athletes for over a decade. Following the death penalty, the SMU Mustangs had only one winning season over the next 20 years.

Source: http://www.mensfitness.com/leisure/sports/11-biggest-sports-scandals-of-all-time?page=2.

Summary

Implementing and controlling the strategic sports marketing process is the emphasis of Chapter 13. After the planning phase of the strategic marketing process is completed, the implementation and control phases are considered. Implementation is described as an action step where strategic marketing plans are executed. Without the proper execution, the best plans in the world would be useless. To facilitate the implementation process, seven organizational design elements must be addressed. The organizational design elements include communication, staffing and skills, coordination, rewards, information, creativity, and budgeting. To begin, the organization must effectively communicate the plan and its rationale to all the members of the sports marketing team who will play a role in executing the plan. In terms of staffing and skills, there must be enough people and they must have the necessary skills and expertise to successfully implement the strategic marketing plan. Research has shown that the skills deemed most important for sports marketing managers include establishing a positive image for your sports organization, achieving sponsors’ promotional goals, stimulating ticket sales, maximizing media exposure for events, athletes, and sponsors, and acquiring sponsors through personal contacts.

Coordination is another of the organizational design elements that influences implementation. Coordination involves determining the best structure for the organization to achieve the desired strategy. Research has shown the importance of good fit between structure and successful implementation. One way of coordinating people and tasks that has received considerable attention over the last decade is through total quality management (TQM). TQM philosophies are based on aligning the organizational structure to best meet the needs of the customers.

Another important organizational design element that affects implementation is the rewards structure of the sports organization. With proper pay and incentives, employees may be motivated to carry out the strategic plan. Some guidelines for designing effective rewards systems include linking rewards to the strategic plan, using a variety of incentives: link performance with rewards, give everyone the opportunity to be rewarded, and be willing to adapt the rewards system.

Information is one of the most essential elements of effective implementation. To aid in the gathering and dissemination of information for strategic decision making, organizations must design information systems. Before gathering information, consider who is going to need this information, for what purpose is the information needed, and when do they need it?

Fostering creativity, another organizational design element, is yet another important aspect of implementation. Creativity and innovation within the organization is called intrapreneurship or corporate entrepreneurship and is developed through education and training. To enhance employee creativity the creative process, consisting of four steps, is used by organizations. These steps include knowledge accumulation, idea generation, evaluation, and implementation. Efforts to encourage intrapreneurship are also enhanced by creating an organizational environment that cultivates such thinking.

The final organizational design element that has a direct impact on implementation is budgeting. Without proper monies, the strategic sports marketing plan cannot be properly implemented or carried out. Budgets must be secured for all marketing efforts within the larger organization. Once these monies are obtained, they must then be allocated within marketing to achieve specific marketing goals that have been prioritized.

After plans have been implemented, the control phase of the strategic sports marketing process is considered. Strategic control is defined as the critical evaluation of plans, activities, and results, thereby providing information for future action. In other words, the control phase explores how well the plan is meeting objectives and makes suggestions for adapting the plan to achieve the desired results. Three types of strategic control considered by sports marketers include planning assumptions control, process control, and contingency control.

Planning assumptions control asks whether the premises or assumptions used to develop the marketing plan are still valid. Two categories of assumptions that should receive special consideration from sports marketers are those concerned with the external contingencies and the sports industry. Because plans are typically developed by carefully considering the external environment and the sports industry, assumptions with respect to these two issues are critical.

Process control considers whether the plan and processes used to carry out the plan are being executed as desired. The key issue addressed by process control is whether the planning or implementation processes should be altered in light of events and actions that have occurred during the implementation of the plan. To make decisions about whether plans or the implementation process should be changed, sports organizations review milestones that have been set or monitor strategic thrusts. Milestones such as financial performance are more specific objectives that can be examined, while strategic thrust evaluates whether the organization is moving toward its intended goals.

Key Terms

  activity ratios

  budgeting

  communication

  contingency control

  control

  coordination

  creative process

  creativity

  crisis plan

  financial analyses

  implementation

  information

  intrapreneurship

  leverage ratios

  liquidity ratios

  milestone review

  monitoring strategic thrusts

  planning assumptions control

  process control

  profitability ratios

  ratio analysis

  rewards

  staffing and skills

  strategic control

  total quality management (TQM)

Review questions

1.  What are the organizational design elements that must be managed for effective implementation?

2.  Why must there be a fit between the planning and implementation phases of the strategic sports marketing process?

3.  What are some of the common ways of communicating with groups both inside and outside the sports organization?

4.  What are the marketing-specific core competencies of the sports marketing manager?

5.  Define TQM. What are the common characteristics of any TQM program? Why is it important for sports organizations to practice a TQM philosophy?

6.  What are the guidelines for designing rewards systems?

7.  What is intrapreneurship? What are the four steps in the creative process? How can sports organizations encourage intrapreneurship?

8.  Define strategic control. What are the three types of strategic control that sports marketers must consider?

9.  What two measures are typically used during process control?

10.  How can we evaluate sponsorship effectiveness?

11.  Describe the different financial ratios that can be calculated to assess whether a sports organization’s financial objectives are being met.

12.  What are the fundamental components of a crisis plan?

Exercises

1.  Describe three sports organizations that have a strong leader who communicates well outside the sports organization. What are the common characteristics of these leaders, and why do these leaders communicate effectively?

2.  How does the training that you are receiving complement the marketing-specific skills required of sports marketing managers?

3.  Locate the organizational charts for the marketing department of two professional sports organizations. How will this structure facilitate or impede the implementation of their strategic marketing effort?

4.  Design a rewards system to encourage intrapreneurship.

5.  Discuss the last three major “crises” in sport (at any level). How did the organizations or individuals handle these crises?

6.  Discuss how being the quarterback of a football team is similar to being a marketer responsible for implementing and controlling the strategic sports marketing process.

7.  Interview three marketing managers who are responsible for sponsorship decisions in their organization. Determine how each evaluates the effectiveness of their sponsorship.

Internet exercises

1.  Browse the Web site of the Sports & Fitness Industry Association (SFIA), formerly the SGMA (www.sfia.org) and discuss how the information found on this site might be useful for developing a strategic marketing plan for the new IBL.

2.  Find two Web sites that would provide sports marketing managers with information about whether their planning assumptions regarding the demographics of the U.S. population remain valid.

3.  Find examples of three nonsports organizations that advertise on ESPN’s Web site (www.espn.com). How might these companies evaluate the effectiveness of their Web-based advertising?

Endnotes

1  Eric Ivie, “Busy Offseason Ahead for Arena Football League: Fan Take,” Yahoo.com (August 20, 2012). Available from: http://sports.yahoo.com/news/busy-offseason-ahead-arena-football-league-fan-163400668.html, accessed May 7, 2014.

2  “Turnkey Sports Poll,” Sport Business Journal (November 13, 2006). Available from: http://www.sportsbusinessdaily.com/Journal/Issues/2006/11/20061113/SBJ-In-Depth/Turnkey-Sports-Poll.aspx, accessed May 7, 2014.

3  Joe Logan, “LPGA’s First Female Commissioner Rides Out Bumpy Start,” Buffalo News (New York) (July 20, 2006), D1.

4  Alan Shipnuck, “LPGA Commissioner Carolyn Bivens was Undone by Unflinching Commitment to her Vision for the Tour,” Sports Illustrated (July 10, 2009). Available from: http://www.golf.com/tour-and-news/lpga-commissioner-carolyn-bivens-was-undone-unflinching-commitment-her-vision-tour, accessed May 7, 2014.

5  Andrew Todd-Smith, “Commentary: 2022 Qatar World Cup Decision Raises Questions About FIFA Leadership,” TheLantern.com (January 9, 2014). Available from: http://thelantern.com/2014/01/commentary-2022-qatar-world-cup-decision-raises-questions-fifa-leadership/, accessed May 6, 2014.

6  Anil K. Gupta and V. Govindarajan, “Build, Hold or Harvest: Converting Strategic Intentions into Reality,” Journal of Business Strategy (Winter 1984), 41.

7  Peter Smolianov and David Shilbury, “An Investigation of Sport Marketing Competencies,” Sport Marketing Quarterly, vol. 5, no. 4 (1996), 27–36.

8  Alfred D. Chandler, Strategy and Structure (Cambridge, MA: MIT Press, 1963).

9  Marlene L. Mawson, “Total Quality Management: Perspectives for Sport Managers,” Journal of Sport Management, vol. 7 (1993), 101–106.

10  Harry Roberts and Bernard Sergesketter, Quality Is Personal (New York: Free Press, 1993).

11  George Easton and Sherry Jarrell, “The Effects of Total Quality Management on Corporate Performance: An Empirical Investigation,” Journal of Business, vol. 71, no. 2 (1998), 253–261.

12  James Evans and William Lindsay, The Management and Control of Quality, 2nd ed. (St. Paul, MN: West, 1993).

13  Ibid.

14  “Pay for Performances: Why Footballers Are Not Remunerated Like Investment Bankers,” Financial Times, London, (January 27, 2007), 10.

15  BusinessWire, “NHL Teams with IBM to Promote and Enhance Hockey Through New Alliance, NHL-ICE,” Freelibrary.com (September 5, 1996). Available from: http://www.thefreelibrary.com/NHL+teams+with+IBM+to+promote+and+enhance+hockey+through+new…-a018651230.

16  John Lombardo, “Blazers First with Social Networking Site,” Sport Business Journal (March 5, 2007). Available from: http://www.sportsbusinessdaily.com/Journal/Issues/2007/03/20070305/This-Weeks-News/Blazers-First-With-Social-Networking-Site.aspx, accessed May 8, 2014.

17  Zack Pumerantz, “The 100 Worst Things in Sports.” Bleacherreport.com (October 22, 2012). Available from: http://bleacherreport.com/articles/1375225-the-100-worst-things-in-sports.

18  R. Mitchell “Masters of Innovation,” Business Week (April 10, 1989), 58–63.

19  “Bearcats Announce Football Social Seats Promotion,” Bearcats.com (2014). Available from: http://www.gobearcats.com/sports/m--footbl/spec-rel/091012aaa.html, accessed July 6, 2014.

20  “Sportline Hydracoach User Guide,” Hydracoach.com (2007). Available from: http://www.hydracoach.com/Techsupport/HydraCoach%20User%20Guide-v.2.pdf, accessed July 5, 2014.

21  “Community – Our Tribe is Green,” Cleveland Indians Inc. (2014). Available from: http://cleveland.indians.mlb.com/cle/community/green.jsp, accessed July 6, 2014.

22  “Green Ballpark,” Washington Nationals (2010). Available from: http://washington.nationals.mlb.com/was/ballpark/information/index.jsp?content=green_ballpark, accessed May 8, 2014.

23  “Reebok and NHL to Unveil New Technologically Advanced Uniform System,” Marketwired.com (2007). Available from: http://www.marketwired.com/press-release/reebok-and-nhl-to-unveil-new-technologically-advanced-uniform-system-631899.htm, accessed May 8, 2014.

24  Josh Kosman and Larry Brooks, “Adidas May Distance Reebok from NHL,” New York Post, (February 1, 2014). Available from: http://nypost.com/2014/02/01/adidas-may-distance-reebock-from-team-sports/, accessed May 8, 2014.

25  Ibid.

26  Tim Newcomb, “U.S. Speedskating Finds Edge with High-Tech Engineered Skins,” Sports http://IIIustrated.com (January 16, 2014). Available from: http://sportsillustrated.cnn.com/-olympics/news/20140116/sochi-olympics-speed-skating-under-armour-mach-39-skin/#ixzz318YY9ElF, accessed May 6, 2014.

27  Kelly Whiteside, “U.S. Speedskating Says Don’t Blame Under Armour Suits,” USA Today (May 1, 2014). Available from: http://www.usatoday.com/story/sports/olympics/2014/05/01/us-speedskating-under-armour-suits/8589263/, accessed May 6, 2014.

28  “Should the Big East Expand to 12 Schools,” SB Nation (March 24, 2014). Available from: http://www.bigeastcoastbias.com/2014/3/24/5543726/should-the-big-east-expand-to-12-schools, accessed May 7, 2014.

29  Noah Liberman, “Agencies Roll Out New Measurement Tools as Sponsors Seek to Justify Their Investments,” Sports Business Journal (September 26, 2005). Available from: http://www.sportsbusinessdaily.com/Journal/Issues/2005/09/20050926/SBJ-In-Depth/Agencies-Roll-Out-New-Measurement-Tools-As-Sponsors-Seek-To-Justify-Their-Investments.aspx?hl=Nokia%20Corp&sc=0, accessed May 8, 2014.

30  Lesa Ukman, “Evaluating ROI of a Sponsorship Program,” Marketing News (August 26, 1996), 5.

31  “How Athletes are Fighting for Endorsement Dollars,” Sportbusinessdaily.com (October 4, 2012). Available from: http://www.sportsbusinessdaily.com/SB-Blogs/Events/Sports-Marketing-Symposium/2012/10/Athlete-Endorsements.aspx, accessed May 8, 2014.

32  William Chipps, “Sponsorship Spending: 2010 Proves Better Than Expected; Bigger Gains Set for 2011,” http://Sponsorship.com (January 6, 2011). Available from: http://www.sponsorship.com/About-IEG/Press-Room/Sponsorship-Spending--2010-Proves-Better-Than-Expe.aspx. accessed May 8, 2014.

33  “State of the Media: Year in Sports 2010,” Nielsen.com (2010). Available from: http://www.nielsen.com/us/en/reports/2011/year-in-sports-2010.html, accessed May 8, 2014.

34  “And Now a Word From Our Sponsors,” Marketing Tools (2005). Available from: www.demographics.com/publications/mt/95_/9506_mt/mt169, accessed June 2, 2009.

35  “Team Sponsorships and Partnerships,” Joyce Julius & Associates Inc. (June 2006). Available from: http://www.joycejulius.com/Newsletters/a_second_look__june_2006.htm, accessed July 6, 2014.

36  “Sponsorship: Keeping an Eye on the Ball,” Marketing Week (October 30, 2003), 43.

37  “Institute for Public Relations Releases First-Ever Guidelines for Measuring Importance of Interest Audience,” US Newswire (February 17, 2004).

38  M&M MARS, http://mars24seven.com/handler/download.ashx?FileName=2014_NASCAR_Cstore_Selling_Story.pptx, accessed May 7, 2014.

39  Ibid.

40  Stephanie Hughes and Matt D. Shank, “Defining Scandal in Sport: Media and Corporate Sponsor Perspectives,” Sport Marketing Quarterly, vol. 14, no. 4 (2005), 207–216.

41  Ibid.

42  “Top 10 Sports Scandals,” Topyaps.com (June 21, 2010). Available from: http://topyaps.com/top-10-sports-scandals/, accessed May 5, 2014.

43  “Defining Crisis and Crisis Planning.” Available from: www.sports.mediachallenge.comcrisisindex.html#feature, accessed May 6, 2014.