CHAPTER	2

Contingency framework for strategic sports marketing

The foundation of any effective sports organization is a sound, yet flexible, strategic framework. The process should be systematic and well organized, but must be readily adaptable to changes in the environment, as the following article illustrates. Each strategic marketing process may have unique characteristics, but the fundamentals are all the same. To help make sense of the complex and rapidly changing sports industry, we use a contingency framework to guide the strategic sports marketing process. For the remainder of this chapter, let us look at an overview of this process.

Photo 2.1 After the lockout, the NBA is still thriving. Chris Bosh #4 participates in an NBA basketball game at the Air Canada Centre on January 24, 2010 in Toronto, Canada. The Toronto Raptors beat the Los Angeles Lakers 106–105.

Source: Shutterstock.com

Contingency framework for strategic sports marketing

Sports marketing managers must be prepared to face a continually changing environment. As Burton and Howard pointed out, “marketers considering careers or already employed in sports marketing must be prepared for unexpected, often negative actions that jeopardize a sports organization’s brand equity.”¹ Think about what can happen over the course of an event or a season. The team that was supposed to win the championship cannot seem to win a game or the likely cellar dwellers end up contending for championships. Take, for example, the Detroit Tigers. They lost 406 games from 2002 through 2005 and their last winning season was 1993. Suddenly they win the American League Championship and go to the World Series in 2006 and 2012. The New Orleans Saints also provide a great example of a team who faced tremendous odds after suffering displacement from Hurricane Katrina and went on to unexpectedly make the 2006 NFL playoffs and win the Super Bowl in 2010. In fact, Hurricane Katrina and its impact on the city of New Orleans and the Saints ranks as one of the most compelling examples of the changing environment that marketers cannot plan for.

Other unexpected events become commonplace in the sports marketing landscape. The star player gets injured halfway through the season. Attendance at the sporting event is affected by poor weather conditions. Leagues are shut down by lockouts. Team owners threaten to move the franchise, build new stadiums, and change personnel. All this affects the sports marketing process.

At the collegiate level, a different set of situations may alter the strategic marketing process. For example, players may be declared ineligible because of grades, star players may leave school early to join the professional ranks, programs may be suspended for violation of NCAA regulations, or conferences may be realigned.

Sports marketers need to be prepared for either positive or negative changes in the environment. These factors are out of the sports marketer’s control, but they must be acknowledged and managed. Sports marketers must be prepared to cope with these rapid changes. One model that provides a system for understanding and managing the complexities of the sports marketing environment is called the contingency framework for strategic sports marketing.

Contingency approaches

Contingency models were originally developed for managers who wanted to be responsive to the complexities of their organization and the changing environments in which they operate.² Several elements of the contingency framework make it especially useful for sports marketers. First, sports marketers operate in unpredictable and rapidly changing environments. They can neither predict team or player success nor control scheduling or trades. A quote by former New York Mets Marketing Vice President Michael Aronin, who spent 13 years with Clairol, captures the essence of this idea: “Before, I had control of the product, I could design it the way I wanted it to be. Here the product changes every day and you’ve got to adapt quickly to these changes.”³

Second, the contingency approach suggests that no one marketing strategy is more effective than another. However, one particular strategy may be more appropriate than another for a specific sports organization in a particular environment. For example, sports marketers for the Boston Red Sox have years of tradition on their side that influence their strategic planning. This marketing strategy, however, will not necessarily meet the needs of the relatively new teams such as the Montreal Impact (2012), Portland Timbers (2011), Vancouver Whitecaps FC (2011), and Philadelphia Union (2010) of MLS. Likewise, strategies for an NCAA Division I program are not always appropriate for a Division II program. The contingency framework can provide the means for developing an effective marketing strategy in all these situations.

Third, a contingency model uses a systems perspective; one that assumes an organization does not operate in isolation but interacts with other systems. In other words, although an organization is dependent on its environment to exist and be successful, it can also play a role in shaping events outside the firm. Think about the Chicago Blackhawks and all the resources required from the environment to produce the core product – entertainment. These resources include professional athletes, owners, management and support personnel, and minor league franchises to supply talent, facilities, other competitors, and fans. The different environments that the Chicago Blackhawks actively interact with and influence include the community, the NHL, sponsors, employees and their families, and the sport itself. Understanding the relationship between the organization and its many environments is fundamental to grasping the nature of the contingency approach. In fact, the complex relationship that sports organizations have with their many publics (e.g., fans, government, businesses, and other teams) is one of the things that makes sports marketing so complicated and so unique.

One way of thinking about the environments that affect sports organizations is to separate them on the basis of internal versus external contingencies. The external contingencies are factors outside the organization’s control; the internal are considered controllable from the organization’s perspective. It is important to realize that both the internal and external factors are perceived to be beyond the control, though not the influence, of the sports marketer.

The essence of contingency approaches is trying to predict and strategically align the strategic marketing process with the internal and external contingencies. This alignment is typically referred to as strategic fit or just “fit.” Let us look at the contingency approach shown in Figure 2.1 in greater detail.

The focus of the contingency framework for sports marketing, and the emphasis of this book, is the strategic sports marketing process. The three primary components of this process are planning, implementation, and control. The planning phase begins with understanding the consumers of sports. As previously discussed, these consumers may be participants, spectators, or perhaps both. Once information regarding the potential consumers is gathered and analyzed, market selection decisions can be made. These decisions are used to segment markets, choose the targeted consumers, and position the sports product against the competition. The final step of the planning phase is to develop the sports marketing mix that will most efficiently and effectively reach the target market.

Effective planning is merely the first step in a successful strategic sports marketing program. The best-laid plans are useless without a method for carrying them out and monitoring them. The process of executing the marketing program, or mix, is referred to as implementation. The evaluation of these plans is known as the control phase of the strategic marketing plan. These two phases, implementation and control, are the second and third steps of the strategic sports marketing process.

Figure 2.1 Contingency framework for strategic sports marketing

As you can see from the model, a contingency framework calls for alignment, or fit, between the strategic marketing process (e.g., planning, implementation, and control) and external and internal contingencies. Fit is based on determining the internal strengths and weaknesses of the sports organizations, as well as examining the external opportunities and threats that exist. External contingencies are defined as all influences outside the organization that can affect the organization’s strategic marketing process. These external contingencies include factors such as competition, regulatory and political issues, demographic trends, technology, culture and values, and the physical environment. Internal contingencies are all the influences within the organization that can affect the strategic marketing process. These internal contingencies usually include the vision and mission of the organization, organizational goals and strategies for reaching those goals, and the organizational structure and systems.

The strategic sports marketing process was defined in Chapter 1 as the process of planning, implementing, and controlling marketing efforts to meet organizational goals and satisfy consumers’ needs (see also Figure 2.2) and is the heart of the contingency framework. The planning phase, which is the most critical, begins with understanding the consumers of sport through marketing research and identifying consumer wants and needs. Next, market selection decisions are made, keeping the external and internal contingencies in mind. Finally, the marketing mix, also known as the four Ps, is developed and integrated to meet the identified sports consumer needs.

Once the planning phase is completed, plans are executed in the implementation phase. In this second phase of the strategic sports marketing process, decisions such as who will carry out the plans, when the plans will be executed, and how the plans will be executed are addressed. After implementing the plans, the third phase is to evaluate the response to the plans to determine their effectiveness. This is called the control phase. The strategic sports marketing process and its three phases will be described in detail in the remainder of the book. Let’s turn to a discussion of the internal and external contingencies for the rest of this chapter.

Figure 2.2 Strategic sports marketing process

Internal and external contingencies

A complex relationship exists between internal contingencies and the strategic marketing process. Sports marketers must ensure that the marketing strategies are aligned with the broader organizational purpose. Factors controlled by the organization such as its vision and mission, organizational objectives, and organizational culture must be considered carefully. Additionally, this organizational strategy is often based on changes that occur in the environment. It is at this point that external and internal contingencies must complement one another. Let’s take a further look at the various factors that make up the internal and external contingencies and gain an appreciation for just how much they can influence the strategic marketing process.

Internal contingencies

Internal contingencies are all influences within and under the control of the sports organization that can affect the strategic sports marketing process. Typically, the internal or controllable factors, such as designing the vision and mission, are the function of top management. In other words, these organizational decisions are usually made by top management rather than sports marketing managers. The more marketing-oriented the organization, the more the marketing function becomes involved in the initial development and refinement of decisions regarding the internal contingencies. Irrespective of their involvement, sports marketers should have an understanding of internal contingencies and how they influence the strategic marketing process. Let us describe some of the internal contingencies that sports marketers must consider within the contingency framework.

Vision and mission

One of the first steps in developing a strategic direction for an organization is shaping a vision. The vision has been described as a long-term road map of where the organization is headed. It creates organizational purpose and identity. A well-written vision should be a prerequisite for effective strategic leadership in an organization. The vision should address the following:

•  Where does the organization plan to go from here?

•  What business do we want to be in?

•  What customer needs do we want to satisfy?

•  What capabilities are required for the future?

As you can see, the organizational questions addressed in the vision are all oriented toward the future. The mission, however, is a written statement about the organization’s present situation. The purpose of a written mission statement is to inform various stakeholders (e.g., consumers, employees, general public, and suppliers) about the direction of the organization. It is particularly useful for motivating employees internally and for communicating with consumers outside the organization. Here are examples of mission statements constructed by Under Armour Performance gear⁴ and the Kent State University Athletic Department.⁵

Mission of Under Armour

To make all athletes better through passion, science and the relentless pursuit of innovation.

Mission and objectives of Kent State University Athletic Department

The Intercollegiate Athletic program at Kent State University competes at the highest National Collegiate Athletic Association (NCAA) Division I level (FBS for football) and provides select men and women with the opportunity, challenge and support to achieve their full academic and athletic potential, while operating as an integral part of the University’s educational mission.

Intercollegiate Athletics intends to intensify its pursuit of its nine major categories of objectives within the current planning horizon:

  Support and enhance University mission and objectives by furnishing an academic support system that enables student athletes to graduate in a timely fashion and at a higher rate than in the overall University undergraduate population.

  Prepare student athletes to be responsible citizens who make positive contributions to society.

  Facilitate competition in the Mid-American Conference (MAC) at an echelon meriting regional and national post-season play.

  Comply with the spirit and letter of MAC and NCAA rules and support the associations’, as well as the University’s, principles of sportsmanship and ethical conduct.

  Employ and develop coaches who are also teachers and role models devoted to the welfare of student athletes.

  Achieve gender equity and be proactive regarding the intent of affirmative action in the recruitment and retention of student athletes and the hiring of coaches and athletic staff.

  Augment attendance and revenue, so as to encourage esprit de corps and stimulate monetary contributions from alumni, friends and corporations.

  Operate in financial solvency.

  Represent the University in an exemplary fashion to alumni, friends, prospective students, and the general public, as well as play an active role in the community of Northeastern Ohio.

These mission statements address several key questions:

  What business are we currently in?

  Who are our current customers?

  What is the scope of our market?

  How do we currently meet the needs of our customers?

In addition to addressing these four key questions, the mission statements for Under Armour and the Kent State University Athletic Department also contain statements about the core values of the organization. In fact, these core values are fundamental to carrying out the vision and mission of the organization.

How do mission and vision influence the strategic sports marketing process? Both vision and mission define the consumers of sport in broad terms. For example, Under Armour sees its customers from a global perspective. Also, vision and mission define the products and services that are being marketed to consumers. The vision and mission also help to identify the needs of consumers and ultimately guide the marketing process in meeting these needs.

Nike provides an excellent illustration of the dependent relationship among vision, mission, and the strategic marketing process. Originally, the product was aimed toward the serious track athlete who wanted a low-priced, high-quality performance shoe for competition. By 1969, Nike had begun to build a strong brand reputation as the shoe for competitive athletes. Over time, however, Nike redefined and broadened its vision and mission. In 1978, footwear represented 97 percent of Nike’s total sales. Today, this percentage has decreased to roughly 67 percent as Nike produces footwear and apparel to meet the needs of almost every consumer in global markets. Nike’s strategic decision to sell more than just high-performance footwear aimed only at serious athletes has changed the entire marketing mix. Now, more Nike products are being sold at more places than ever before. In fact, Nike’s mission is “to bring inspiration and innovation to every athlete in the world.”⁶

Organizational objectives and marketing goals

Organizational objectives

The objectives of the organization stem from vision and mission. They convert the vision and mission into performance targets to be achieved within a specified timeframe. Objectives can be thought of as signposts along the road that help an organization focus on its purpose as stated in the mission statement. More specifically, an objective is a long-range purpose that is not quantified or limited to a time period. Organizational objectives are needed to define both financial and strategic direction. Organizational leaders typically develop two types of objectives: financial objectives and strategic objectives. Financial objectives specify the performance that an organization wants to achieve in terms of revenues and profits. Achieving these financial performance objectives is critical to the long-term survival of the organization. Some examples of financial objectives include the following:

  growth in revenues;

  increase in profit margins; and

  improved return on investment (ROI).

Strategic objectives are related to the performance and direction of the organization. Achieving strategic objectives is critical to the long-term market position and competitiveness of an organization. Whereas strategic objectives may not have a direct link to the bottom line of an organization, they ultimately have an impact on its financial performance. Here are a few examples of general strategic objectives:

  increased market share;

  enhanced community relations efforts; and

  superior customer service.

Marketing goals

Marketing goals guide the strategic marketing process and are based on organizational objectives. A goal is a short-term purpose that is measurable and challenging, yet attainable and time specific. Specific, measurable, attainable, reachable, and timely, the acronym SMART is often used to help define the framework of marketing goals.

Here is a sampling of common marketing goals:

  Increase ticket sales by 5 percent over the next year.

  Introduce a new product or service each year.

  Generate 500 new season ticketholders prior to the next season.

  Over the next six months, increase awareness levels from 10 to 25 percent for women between the ages of 18 and 34 regarding a new sports product.

Although multiple goals are acceptable, goals in some areas (e.g., marketing and finance) may conflict, and care must be taken to reduce any potential conflict. After developing marketing goals, the organization may want to examine them based on the following criteria:

  Suitability – The marketing goals must follow the direction of the organization and support the organization’s business vision and mission.

  Measurability – The marketing goals must be evaluated over a specific timeframe (such as the examples just discussed).

  Feasibility – The marketing goals should be within the scope of what the organization can accomplish, given its resources.

  Acceptability – The marketing goals must be agreed upon by all levels within the organization. Top management must feel that the goals are moving the organization in the desired direction; middle managers and first-line supervisors must feel the goals are achievable within the specified timeframe.

  Flexibility – The marketing goals must not be too rigid, given uncontrollable or temporary situational factors. This is especially true when adopting the contingency framework.

  Motivating – The marketing goals must be reachable but challenging. If the goals are too easy or too hard, then they will not direct behavior toward their fulfillment.

  Understandability – The marketing goals should be stated in terms that are clear and simple. If any ambiguities arise, people may inadvertently work against the goals.

  Commitment – Employees within the sports marketing organization should feel that it is their responsibility to ensure goals are achieved. As such, managers must empower employees so everyone in the organization is committed and will act to achieve goals.

  People participation – As with commitment, all employees in the organization should be allowed to participate in the development of marketing goals. Greater employee involvement in setting goals will foster greater commitment to goal attainment.

  Linkage – As discussed earlier, marketing goals must be developed with an eye toward achieving the broader organizational objectives. Marketing goals incongruent with organizational direction are ineffective.

Organizational strategies

Organizational strategies are the means by which the organization achieves its organizational objectives and marketing goals. Whereas the organizational vision, mission, objectives, and goals are the “what,” the organizational strategy is the “how.” It is, in essence, the game plan for the sports organization. Just as football teams adopt different game plans for different competitors, sports organizations must be able to readily adapt to changing environmental conditions. Remember, flexibility and responsiveness are the cornerstones of the contingency framework.

In general, there are four levels of strategy development within organizations: corporate strategy, business strategy, functional strategy, and operational strategy. The relationship among these strategy levels is pictured in Figure 2.3. Notice that there must be a good fit among the levels, vertically and horizontally, for the firm to succeed.

Corporate-level strategies represent the overall game plan for organizations that compete in more than one industry. Business-level strategies define how a business unit gains advantage over competitors within the relevant industry. Functional-level strategies are those developed by each functional area within a business unit. For example, the strategic sports marketing process is the functional-level strategy developed by sports marketing managers, just as financial strategy is the purview of their finance manager counterparts. The operational-level strategies are more narrow in scope. Their primary goal is to support the functional-level strategies. Let us take a look at the relationship among the four levels of strategy at the Maloof Companies to see how a good fit among strategies can lead to enhanced organizational effectiveness; while noted conflict and disparity can adversely impact an organization’s strategy and effectiveness.

The Maloof Companies⁷ are a diversified group of business ventures including entertainment, sports, hotels, casinos, banking, food and beverage, and transportation headquartered in Albuquerque, New Mexico, and operated in New Mexico, Colorado, and Nevada. The Maloof family owns the Palms, a $285 million hotel casino just off the Las Vegas strip with a 42-story tower and 447 guestrooms. In addition to their gaming business, the Maloofs have exclusive proprietorship rights to the distribution of Coors beer throughout New Mexico. The Maloof Companies also are the largest single shareholder in Wells Fargo Bank, which operates banks and branches in 23 states throughout the Western United States with over $200 billion in assets and 15 million customers.

Figure 2.3 Relationship between levels of strategy

The Maloofs are in the process of expanding their business in the entertainment industry with the development of Maloof Productions and Maloof Music. Maloof Productions is committed to developing and producing quality television and motion picture entertainment. Also of interest is that the Maloof Companies are best known for being the owners of the Sacramento Kings of the National Basketball Association (NBA) and the Sacramento Monarchs of the Women’s National Basketball Association (WNBA). They acquired a minority interest in the Kings in 1998 and took majority control the following year, with Joe and Gavin operating the franchise. As part of the purchase of the Kings, they also acquired the team’s sister franchise in the WNBA, the Sacramento Monarchs. The Maloofs operated the Monarchs until 2009, when the WNBA was unable to find a new owner and the team folded. In 2013, the Maloofs sold the majority share of the Sacramento Kings (65 percent) and Sleep Train Arena to a group led by TIBCO Software chairman, Vivek Ranadivé, at a valuation of more than $534 million.

Prior to the sale of the majority interest, The Maloofs, the once favored entity of Sacramento sports consumers, fell out of favor with the fans. Dissonance occurred, as sales continued to decline and rumors of moving the franchise followed. The latter topsy-turvy reign as majority owners of the team created strategic implications that hurdled the organization downward.

Traditionally, the corporate strategy for the Maloof Companies has been based on competing in all of these industries. The corporate strategy has allowed the Maloof Companies to obtain the broader organizational goals and pursue its vision and mission.

At the business level, Maloof management specified strategies for each business unit within each of the industry segments. For example, the Kings and the Monarchs would each have a unique business-level strategy, even though they are in the same industry sector – sports. These strategies were aimed at gaining competitive advantage within each relevant industry. However, each business-level strategy must support the corporate-level strategy, goals, vision, and mission.

At Maloof Corporation, there are numerous functional areas within the organization. For example, the Kings functional areas included finance and administration, general management and operations, business affairs, civic affairs, sales, and marketing. Leadership within each of these functional areas would be responsible for designing their own strategies to meet their respective business-level strategies.

Finally, within the functional areas such as sales and marketing, operational-level strategies were developed. Promotion, ticket sales, product, and pricing strategies must all be designed and coordinated to attain the sales and marketing objectives set forth in the functional-level strategy. As you can see, sports marketing managers responsible for each operational unit must be concerned with satisfying not only their own goals, but also the objectives of the broader organization.

Corporate level

Most professional sports franchises are owned by individuals or corporations that have many business interests. Sometimes these businesses are related, and sometimes the professional sports franchise is nothing more than a hobby of a wealthy owner. Today, the latter is becoming far less common as corporations include sports franchises in their portfolio. Even more rare is the sports franchise owned and operated as the primary, if not sole, source of owner income (e.g., the Mike Brown family and the Cincinnati Bengals).

There are typically two types of diversified companies – those that pursue related diversification and those that pursue unrelated diversification. In related diversification, the corporation will choose to pursue markets in which it can achieve synergy in marketing, operations, or management. In other words, the corporation looks for markets that are similar to its existing products and markets. The underlying principle in related diversification is that a company that is successful in existing markets is more likely to achieve success in similar markets. Unrelated diversification, however, refers to competing in markets that are dissimilar to existing markets. The primary criteria for choosing markets are based on spreading financial risk over different markets.

Professional sports franchises can be owned privately by one or more individuals, publicly owned corporations, or some combination of both. Corporate ownership of a major league sports team is becoming rarer. Most teams are owned by individual investors who have staked their personal fortunes to buy their franchises, which they often operate as a public trust. The Washington Redskins, Wizards, and Capitals are owned by individuals and their investment teams.

On the corporate side, the Chicago Cubs are owned by the Tribune Company and the Atlanta Braves are owned by Time Warner. However, several recent corporate ownerships of professional sports teams have fizzled, including the Disney Company’s ownership of the then-Anaheim Angels and the Mighty Ducks. The Los Angeles Dodgers were owned for several years by News Corp., before the company sold the team to an investor group from Boston, who recently sold the team to the Guggenheim Baseball Management, which includes former Los Angeles Laker Magic Johnson.

Developing corporate-level strategy

Corporate-level strategies must make three types of decisions. First, top managers must determine in which markets they want to compete. Sports organizations have a core product and service, plus they also compete in ancillary markets. The core product has been defined as the game itself and the entertainment provided to consumers, whereas secondary markets include sale of licensed merchandise, fantasy sports camps, sports magazines, sports art, and so on. The leaders of a sports organization must also attempt to identify ways of capitalizing on the similarities in markets. For instance, fans for the core product often represent a natural target market for additional products and services. Companies such as Cablevision can realize the benefits of this type of vertical integration. As Scott Rosner (2010) noted, “by owning the team, playing facility and local media distribution channel, the company captures the lion’s share of revenue generated by the team. It dominates the local marketplace, where fans are most passionate about the local team and can be most effectively monetized. Corporate owners with a local or regional focus are more successful than those with a national or global focus.”⁸

On the international front an example may include the Singapore Sports Council’s “Vision 2030”. Under the Vision 2030 initiative the Ministry of Community Development, Youth and Sports (MCYS) and the Singapore Sports Council (SSC) will work with the Public–Private–People sectors to jointly develop proposals on how sport can best serve Singapore’s future needs. Sports will be used as a strategy for individual development, community bonding, and nation building in the next two decades.

The second type of decision deals with enhancing the performance within each of the chosen markets. Top managers constantly need to monitor the mix of markets in which the organization competes. This evaluation might lead to decisions that involve pursuing growth in some markets or leaving others. These decisions are based on the performance of the market and the ability of the organization to compete successfully within each market.

The third type of decision involves establishing investment priorities and placing organizational resources into the most attractive markets. For a sports organization, this could involve decisions regarding stadium renovation, player contracts, or investing more heavily in merchandising. Corporate decisions within a sports organization must constantly recognize that the core product, the competition itself, is necessary to compete in related markets.

Business-level strategy

The next level of strategic decision-making is referred to as business-level, or competitive, strategies. Business-level strategies are based on managing one business interest within the larger corporation. The ultimate goal of business-level strategy decisions is to gain advantage over competitors. In the sports industry, these competitors may be other sports organizations in the area or simply defined as entertainment, in general.

One strategic model for competing at the business level contains four approaches to gaining the competitive advantage. These approaches include low-cost leadership, differentiation, market niche based on lower cost, and market niche based on differentiation. Choices of which of the four strategies to pursue are based on two issues: strategic market target and strategic advantage.

Strategic market targets can include a broader market segment or a narrow, more specialized market niche. Strategic advantage can be gained through becoming a low-cost provider or creating a real or perceived differential advantage.

The focus of low-cost leadership is to serve a broad customer base at the lowest cost to any provider in the industry. Although there may be a number of competitors pursuing this strategy, there will be only one low-cost leader. Many minor league teams compete as low-cost leaders due to the lower operating costs relative to their major league counterparts. Differentiation strategies attempt to compete on the basis of their ability to offer a unique position to a variety of consumers. Typically, companies differentiate themselves through products, services, or promotions. With differentiation strategies, companies can charge a premium for the perceived value of the sports product. Professional sports franchises attempt to differentiate themselves from competitors by providing a high-quality product on and off the field. This is done through a unique blend of sports promotion, community relations, stadium atmosphere, and a winning team.

Although low-cost leadership and differentiation strategies have mass-market appeal, the market niche strategies are concerned with capturing a smaller market segment.

Web 2.1 Myrtle Beach Pelicans using a low-cost market niche strategy

Source: BB&T Coastal Field

These market segments may be based on consumer demographics, geographic location, lifestyle, or a number of other consumer characteristics. Within the market niche chosen, sports organizations can gain strategic advantage through a focus on low cost or differentiation. One example of the low-cost market niche strategy is the Pro Rodeo Cowboys Association (PRCA), whose events are priced inexpensively between $10 and $15.

Functional-level strategy

Each functional area of the organization (e.g., marketing, personnel, and operations) must also develop a game plan that supports the business-level and corporate-level initiatives. Again, the contingency framework calls for “fit” between each level of strategy within the organization. It is also important to coordinate among each functional area. For example, the marketing strategies should dovetail with personnel and operations strategies. The strategic marketing process discussed earlier provides the functional-level strategy for the organization’s marketing efforts.

Operational-level strategy

Each strategy at the operational level must fit the broader strategic marketing process. This often requires integration across marketing functions and often, within the strategic sports marketing process, several narrower strategies must be considered. Plans must be designed, implemented, and evaluated in areas such as promotion, new product and service development, pricing, sponsorship, and ticket distribution. For example, the Los Angeles Dodgers unveiled a new operational-level promotion strategy to increase attendance by offering fans an “all you can eat” ticket. The right-field pavilion at Dodger Stadium was converted into the special section, giving around 3,000 fans as many hot dogs, peanuts, popcorn, nachos, and sodas as they wanted. Season ticket savings versus buying advance purchase single-game tickets are approximately 20 percent, $24 versus $30.⁹ Numerous other major league teams are taking note and testing this idea as well.

Organizational culture

Culture is described as the shared values, beliefs, language, symbols, and tradition that is passed on from generation to generation by members of a society. Culture can affect the importance placed on sports by a region or nation, whether we participate in sports, and even the types of sports we enjoy playing or watching. A similar concept applied to organizations is called organizational culture. Organizational culture is the shared values and assumptions of organizational members that shape an identity and establish preferred behaviors in an organization.

As one of the internal contingencies, organizational culture influences the sports marketer in a number of ways. First, the organizational culture of a sports organization dictates the value placed on marketing. For instance, just look at the numbers of people employed and the titles of front office personnel at a variety of sports organizations. These are just two important indicators of the marketing orientation of the organization and the importance of the marketing function.

Second, organizational culture is important because it is linked with organizational effectiveness. In a study of campus recreation programs, organizational culture was found to be positively associated with organizational effectiveness. That is, a positive culture is associated with an effective organization. A positive culture rewards employees for their performance, has open communication, has strong leadership, encourages risk taking, and is adaptive. The ability to adapt to change is one of the most important dimensions from the contingency framework perspective.

Third, the organizational culture of professional sports organizations and college athletic programs not only has an impact on the effectiveness of the organization, but also can influence consumers’ perceptions of the organization. For example, the Oakland Raiders, under former owner Al Davis, had an organizational culture that valued risk taking and doing anything necessary to get the job done. This organizational culture translated to the team’s successful and ruthless performance on the field. Subsequently, the fans began to adopt this outlaw image. Ultimately, the black and silver bad boys of football have attracted a fan following that has come to expect this rebel image.

University athletic departments and their programs are also defined by the organizational culture. Athletic programs are known to either value education or attempt to win at all costs and be marred in scandal. Penn State University, a prestigious university known for high-quality academics, has had its image tarnished by athletics, most notably its football program. As of late, Penn State University has been characterized by its tainted image when members of both the university and football staff were accused of covering up assaults by former Assistant Coach Jerry Sandusky. In this case, actions of the athletic program have influenced consumers’ perceptions of the university at large and may ultimately influence the broader university culture.

External contingencies

External contingencies are all influences outside the organization that might affect the strategic sports marketing process. External contingencies include competition; technology; cultural and social trends; physical environment; the political, legal, and regulatory environment; demographics; and the economy. Let us take a brief look at each of these factors and how they might affect sports marketing strategy.

Competition

Assessing the competitive forces in the marketing environment is one of the most critical components in the strategic sports marketing process. Competition is the attempt all organizations make to serve similar customers. Sellers realize that, to successfully reach their objectives, they must know who the competition is – both today and tomorrow. In addition, sellers must understand the strengths and weaknesses of their competitors and how competitors’ strategies will affect their own planning.

For example, according to Nielsen’s Year in Sports Media Report over 33 billion hours of national sports programming were consumed by 255 million people in the U.S. in 2013, up 27 percent from 2003.¹⁰ Furthermore, viewership figures and advertising revenue suggests there’s more to come. Much of the growth of live programming was due to the dramatically expanded coverage of college sports, on channels such as ESPNU and the Big 10 Network. The scramble to show college games, and the lucrative TV deals that scramble brings – such as the Pac-12 Conference’s 12-year, $2.7 billion deal in May 2011and the University of Texas’ Longhorn Network partnership with ESPN launched in August 2011 – have shaken up decades-old conference alignments and threaten the very structure of college sports.¹¹

An example of many “sellers” attempting to fill the same customer need can be found in college sports broadcasting. Two digital cable networks, ESPNU and College Sports Television (CSTV), are battling for college sports fans like two prizefighters going toe-to-toe. The key to victory may be a multimedia strategy. CSTV, started in 2005, is available in more than 20 million homes, although many have access only through a digital pay tier of sports networks. To expand its reach, CSTV gets its biggest Internet showcase yet – the opportunity to broadcast the NCAA men’s basketball tournament. ESPN recently launched its own network dedicated to college sports, ESPNU. In its first year, ESPNU broadcast about 300 live events ranging from Division I football to volleyball to lacrosse.¹² Table 2.1 illustrates the relative market share of the three primary players.

Table 2.1 College sports TV: the main players

Channel	Subscribers (millions)
CSTV	15
ESPNU	8
Fox College Sports	4

Source: http://www.broadcastingcable.com/news/news-articles/battle-college-sports-fans/106216.

The nature of competition

Sports marketers most often categorize their competition as product related. There are three types of product-related competition. The first of these is termed direct competition, the competition between sellers producing similar products and services. High school football games on a Friday night in a large metropolitan area pose direct competition in that the “product” being offered is very similar. One interesting example of direct competition is found in the game schedule of the NBA Indiana Pacers. High school basketball is so popular in Indiana that the Pacers rarely play a home game on Friday or Saturday night because of the competition posed by high school games.

Another type of product competition is between marketers of substitute products and services, the competition between a product and a similar substitute product. For example, when several professional sports teams have scheduled games that overlap, a consumer may have to choose to attend the Philadelphia 76ers (NBA), the Philadelphia Phillies (MLB), or the Philadelphia Eagles (NFL). Another example of substitute products is when spectators choose to watch a sporting event on television or listen to a radio or Web broadcast rather than attend the event.

The third type of product-related competition, called indirect competition, is more general in nature and may be the most critical of all for sports marketers. Marketers of sporting events at any level realize their true competition is other forms of entertainment. Professional, collegiate, and high school sporting events compete with restaurants, concerts, plays, movies, and all other forms of entertainment for the consumer dollar. In fact, a study was conducted to examine how closely other forms of entertainment are related to sports.¹³ Preliminary findings suggest that respondents’ most preferred entertainment activities are going out to dinner, attending parties, playing sports, watching movies, attending sporting events, attending live music or theater, watching TV, shopping for pleasure, watching sports on TV, dancing, and gambling. In addition, video games seem to be competing in the same “entertainment space” as watching sports on TV. Obviously, the toy industry has capitalized on this notion by creating a multitude of sports-related video games. Some people fear that today’s interactive, virtual reality video games may replace watching “real games” on TV. Similarly, playing sports and gambling are perceived to be in the same perceptual space. Sport marketers may want to better understand the excitement and risks associated with gambling and add these attributes when marketing sports participation.

Indirect competition is present when even the popular USC and UCLA football games fail to sell out their respective home stadiums (the L.A. Memorial Coliseum and the Rose Bowl). There is simply too much entertainment competition in Southern California compared with Ann Arbor, Michigan (University of Michigan) or South Bend, Indiana (Notre Dame).

Technology

Technology represents the most rapidly changing environmental influence. New technologies affect the field of sports marketing daily. Some advances in technology have a direct impact on how sports marketers perform their basic marketing functions, whereas others aid in the development of new sports products. For example, new technologies are emerging in advertising, stadium signage, and distributing the sports product. The development of mobile apps and Internet sites remains one of the fastest growing technologies to affect sports marketing (see Appendix B for examples of Internet sites of interest to sports marketers). Internet sites have been developed to provide information on sports (e.g., www.nascar.com), sites of sporting events (e.g., www.daytona500.com), teams (e.g., http://www.hendrickmotorsports.com/), and individuals (e.g., www.dalejr.com). In 2014, NASCAR.com scored a Daytona 500 record with year-over-year increase of 39 percent, including an increase of 61 percent of total visits to the platform and a 131 percent increase in page views. As Colin Smith, managing director of NASCAR Digital Media noted, more people are turning to mobile devices and second screen platforms to consume NASCAR content.¹⁴ ESPN.com is still the king of sports information on the Internet and part of sports fans’ daily routines securing 62,500,000 unique visitors each month in 2011.¹⁵ In addition, the Internet has emerged as another popular way to broadcast live events to fans. Beginning in 1995 AudioNet, Inc. (www.Audionet.com) was one of the pioneers of live game broadcasts via the Internet and video streaming. Today each of the major leagues offers its fans opportunities to follow games online. Major League Baseball’s premium package allows fans to watch up to six games live and includes a “Player Tracker” that alerts the subscriber when his or her favorite player steps to the plate. Season-long access is a reasonable $129.99.

Web 2.2 ESPN.com providing sports information via the Internet

Source: ESPN.com

The University of Nebraska game against San Jose State on September 2, 2000, was the first ever intercollegiate football game to be video webcast. The webcast resulted in more than 200,000 video streams around the world. Nebraska Athletic Director Bill Byrne summed it up nicely by stating that “we believe the Internet brings us one step closer to our fans, particularly those who are miles from home and have limited access to our normal radio and TV broadcasts.”¹⁶ Today, people not only are recording shows to be viewed later, but they can also call up their shows from on-demand channels, or watch them on their laptops, phones, or tablets.¹⁷ Back in 2007, the NCAA Men’s Basketball Championship was an example of how far things had come in a few years. March Madness® on Demand allowed fans to watch live game broadcasts of CBS Sports television coverage of the NCAA Championship on their computer for free. Today, events like the Super Bowl and March Madness are communal. They afford even geographically restricted consumers the opportunity to watch events simultaneously, engaging in the interactive and immediate nature of the mediums, further optimizing and extending the mobile-specific experiences of their audiences.

In addition to providing information and game coverage to consumers, the Internet has emerged as a popular alternative to purchasing tickets at a box office. For example, MLB Advanced Media, LP (MLBAM), the interactive media and Icompany of Major League Baseball, serves as the Internet provider of tickets for MLB, while StubHub, owned by eBay, serves as the official MLB reseller. According to the Sports Business Journal, more than 8 million tickets were resold on StubHub during the 2011 season. However, average ticket prices on StubHub have dropped from a high of $104 in 2007 to $82 in 2011.¹⁸

The accompanying article presents an excellent look at some technologies that have, or will, dramatically altered the way spectators consume sport.

Items that utilize statistical algorithms and integrate the advantages and uses of digital technologies, e.g. real-time motion tracking, are becoming more prevalent. In fact, many major American sports leagues now employ at least one full-time “number cruncher” to perform statistical analysis for league, teams, and players.¹⁹ Teams and leagues have has also formed partnerships with high-tech companies. The leagues and teams recognize the value these technological partnerships provide. For example, the NBA has teamed up with the likes of Synergy Sports Technology and StratBridge. Synergy Sports Technology’s professional online/offline products are used to provide key features, high volume video streaming, and analytics while StratBridge provides the StratTix inventory management tool to further enhance ticket sales efforts for the NBA. Throughout the year, NBA teams will be able to utilize the latest technology for managing ticket inventory, including access to graphical representations of sold and available in-arena seating, complete analysis of ticket sales and individual seating information for every game, and use of StratTix Premium service to access up-to-the-minute sales information at any time.

Interestingly, many owners have emerged from high-tech companies who are using their technology experience and strength to benefit their sports franchises. Examples of high-tech owners include but are not limited to: Charles Wan of the New York Islanders and chairman of Computer Associates International; Paul Allen of the Seattle Seahawks, Portland Trail Blazers, and Seattle Sounders, and co-founder of Microsoft; Robert J. Pera of the Memphis Grizzlies, who was a former hardware engineer for Microsoft before founding Ubiquiti Networks; Everett R. Dobson of the Oklahoma City Thunder and CEO of Dobson Technologies; Ted Leonsis of the Washington Capitals, Washington Wizards, and America Online; Daniel Snyder of Washington Redskins and Web marketer; Ken Kendrick of the Arizona Diamondbacks and Datatel; the late Hiroshi Yamauchi, former Nintendo President/Owner of Seattle Mariners who in fact sold the team to Nintendo in 2004; Mark Cuban of the Dallas Mavericks and founder of broadcast.com; while more recent emerging collaborations include TIBCO’s Chief Vivek Ranadivé utilizing their spotfire technology with the Golden State Warriors and more recently the Sacramento Kings; and former Microsoft CEO Steve Ballmer, who recently bid $2 billion to acquire the Los Angeles Clippers.

So far, our discussion of technology is based more on how technology influences spectators and the distribution of sport. How do technologically advanced products affect sports participants and their performance? Although most sporting goods have experienced major technological improvements since the early 1990s, two sports that live and die by technology are golf and tennis. In the golf industry, one company that positions itself based on cutting-edge technology is E21. E21 holds the exclusive right to manufacture golf products using proprietary E21 Scandium metal alloys. Through a sophisticated multi-technology production path, E21 manufactures shafts, drivers, and other clubs with marked improvements in distance, accuracy, and feel over competing products. In recent months a number of high-profile golf professionals have switched to or began testing E21’s Eagle One shafts. E21 Scandium products are 55 percent lighter and offer 25 percent strength to weight advantage over titanium alloys, the current standard in the golf equipment industry. The advanced dynamics of E21 alloys and the material economics offer a performance-enhanced alternative to manufacturing driver clubs with titanium, the largest segment of the annual $5.5 billion U.S. golf equipment marketplace.²⁰

Technology is even becoming a unique way to differentiate in the highly competitive sports apparel market. For example, Textronics, Inc., a pioneer in the field of electronic textiles, has produced NuMetrex, a brand of clothes that monitor the body. The NuMetrex Heart Sensing Sports Bra was named 2006 Sports Product of the Year by the Sporting Goods Manufacturers Association. The garment features electronic sensing technology that is actually integrated right into the knit of the fabric, which picks up the heart’s electrical pulse and radios it to a wristwatch via a tiny transmitter in the bra. It offers a new level of comfort and convenience for women wishing to monitor their heart rate while they exercise.²¹ Other recent product of the year winners include: KVA Stainless for its patented technologies to produce stainless steel bike tubing (2011) and TaylorMade R11S Driver for its innovative tuning characteristics (2012). Global brands Nike and Apple Computer are continuously improving upon product developments that link technology and sport. In 2006, Nike and Apple Computer revealed their collaborative Nike+iPod Sport Kit, a shoe/MP3 player/personal trainer that could bring runners around the world together – virtually – enabling them to train on a level beyond the asphalt. The original product consisted of a shoe equipped with sensors under the sole insert and a tricked-out iPod nano. Today this technology works with iPod nano, or directly with a 2nd, 3rd, 4th iPod touch, iphone 3GS, iphone 4, or iphone 5 or a Nike+Sportwatch. The sensors will transfer dynamic workout information to the iPad device. Data, such as time, distance, pace, and calories burned, determined by a person’s physiological makeup and the amount of steps the sensor picks up, are stored for later retrieval on the iPad device. The newly integrated personal trainer platforms allow further integration of the data with GPS, nutrition, and fitness applications.²²

Web 2.3 C-12 Lacrosse showing its latest advances in lacrosse technology

Source: C-12 Lacrosse

Although some marketers have a hard time grasping the special language of technology, they still agree that a whole new culture of technology has emerged. Owners such as Mark Cuban of the Dallas Mavericks acknowledges that the Mavericks constantly strive to push the tech envelope; to make the exchange more valuable to their fans and customers.²³ Cisco President and CEO John Chambers states, “Technology is changing every aspect of our life experiences and for Cisco, this is an opportunity to harness the power of our own innovative technologies to create a truly unique experience that transcends sports, connects communities, and takes the fan experience to a whole new level.”²⁴

Ad 2.1 Cobra stresses an improved performance based on their technological product improvements.

Source: COBRA GOLF

Cisco stadium underscores the commitment to creating a new standard for sports venues. As the official technology partner of the Oakland A’s, Cisco provided networking and communication products and services to transform the way that the A’s team and ballpark operations will be managed. Cisco Field encompasses state-of-the-art technology, featuring an integrated IP network built on Cisco technology and is the platform for a multitude of applications that help take the fans’ experience to the next level. For example, digital signs ensure “smart” traffic flow; fans can purchase merchandise or concessions while in their seat by ordering from a mobile device; onsite ticket kiosks enable fans to upgrade seats in real-time. Luxury suites have the opportunity to include multimedia amenities for premium video content, and Cisco TelePresence technology may even enable new forms of player-to-fan communications.

In 2010, Popular Mechanics looked at 30 NFL stadiums and identified five technologies that lead the league in innovation. Topping off the list was the Dallas Cowboys Stadium. Who would have expected Cowboys owner Jerry Jones to ignore the cliché that everything is bigger in Texas? The Lone Star State’s venue has a seating capacity of over 100,000, a $1.2 billion price tag, and houses a pair of 2100 inch HDTVs. The $40 million screens span 60 yards and are five times the size of the screens at Atlanta’s Turner Field. The second item on the list was innovation at the University of Phoenix Stadium, home of the Arizona Cardinals, and the introduction of a retractable field, yes we said field. The notion to install the departing lawn began with the owner’s desire to play games on natural grass. Third on the list was the architectural framework of Quest Field, home to the Seattle Seahawks. Decibels were an important part of the equation for Seahawks owner and Microsoft co-founder Paul Allen. The design resulted in 135 decibels, nearly as loud as a jet plane, creating one of the loudest stadiums in professional football. Fourth on the list was one giant sunroof of Reliant Stadium in Houston, Texas. The facility was an answer to fans’ cry to view football outdoors. The fifth recognized advancement was associated with the development of the New Meadowlands Stadium, home to the New York Giants and the New York Jets, and its efforts to make the stadium “sustainable”. The new venue will create less pollution, conserve water and energy, and reduce the environmental impact of its operation.²⁵

In other stadium technology advancements, numerous sporting events, e.g. football, baseball, and golf events, accept MasterCard® PayPass™, a “contactless” payment option giving fans the chance to pay for their purchases under $25 with a simple tap of their PayPass-enabled card or device on specially equipped merchant terminals. With MasterCard PayPass, sports fans spend less time standing in line or fumbling for cash at concession stands, and more time catching the on-field action.²⁶ The concept continues to expand. Enhancements as well as the future of use of the product is not only inviting to Mastercard but to organizations such as Apple, MLB, and the NFL. Computer-driven video sport is another area of technological impact. Douglas Lowenstein, president of Entertainment Software Association, believes “The video game industry is entering a new era, an era where technology and creativity will fuse to produce some of the most stunning entertainment of the 21st century. Decades from now, cultural historians will look back at this time and say it is when the definition of entertainment changed forever.”²⁷

Video sports games, a subset of the video gaming industry, are called simulations because of their lifelike approximation of real sporting events. In fact, the danger for franchises lies in fans caring more about these games and simulations than they do the “real” sports. Nearly 67 percent of American homes either own a console, such as Xbox 360, PlayStation 3, and Wii, and/or use their PC to run entertainment software.²⁸ Sport gaming accounts for approximately 28 percent percent of video games sold. Stated differently, sports games account for approximately $20 billion of the $74 billion spent worldwide on games for systems like Wii, PlayStation, and Xbox.²⁹ The sport video games today are much more interactive than the “pong” environments of the past. Conceptually, today’s games include multiplayer online platforms that provide free-to-play interactive experiences with state of the art motion controls. The leading interactive sports software brand in the world is Electronic Arts (EA) Sports (www.easports.com), with games including FIFA Soccer, Madden NFL, NFL Blitz, NHL Hockey, Fight Night Champion, NBA Live, Tiger Woods PGA Tour, and NCAA Football. In fact, versions of games such as EA Sports Madden and FIFA have had sales of approximately $93 million and $90 million respectively since their inception. EA has been a dominant player in the market; however, as Table 2.2 demonstrates, it has not been without competition. In fact, since its inception Wii sport-related games platforms have been the top four individual bestselling sport game consoles. Paul Allen, co-founder of Microsoft and owner of the Portland Trail Blazers, believes “the only thing holding back sports simulation products is the level of reality that can be achieved.”

Video sports participation is not just limited to the couch potato or kids in the living room. Pro gaming leagues are now becoming the rage and viable sports entities of their own. CPL, or the Cyberathlete Professional League, which h as been around since 1997, has awarded more than $3 million in prize money. Television deals are even being struck. For instance, Major League Gaming has a contract with the USA Network, and ESPN has a show called Madden Nation, which shows gamers playing Madden NFL. There is even the World Cyber Games, which is the largest global electronic sports tournament that includes multiple divisions and represents a variety of nations.

Cultural and social trends

Perhaps the most important aspects of any culture are the shared and learned values. Cultural values are widely held beliefs that affirm what is desirable by members of a society. Several of the core values of interest to sports marketers include individualism, youthfulness, achievement and success, and family.

Table 2.2 Top 10 sports video games (ranked by total U.S. units sold)

Title	Release Year	Publisher
1. FIFA 13	2012	2KSports
2. Grand Slam Tennis 2	2012	EA Sports
3. NBA 2K13	2012	2K Sports
4. MLB 12 The Show	2012	Sony Computer Entertainment
5. NHL 13	2012	EA Sports
6. Madden NFL 13	2012	EA Sports
7. SSX	2012	EA Sports
8. UFC 3 Undisputed	2012	THQ
9. F1 2012	2011	Codemasters
10. NFL Blitz	2012	EA Sports

Source: www.complex.com/video-games/2012/12/the-10-best-sports-video-games-of-2012/fifa-13.

Sports are symbolic of many core values. In fact in reference to America, what could be more American than baseball, our national pastime? ESPN used this rich tradition in a series of television advertisements promoting its Major League Baseball coverage. These advertisements claim “It’s baseball – you’re American – watch it.”

All these core values are directly or indirectly relevant to sports marketing. For instance, certain sports or sporting events stress individualism. Individualism is based on nonconformance or the need to be unique. Nothing could be more directly linked to individualism than the X-treme Games, featuring sports such as skateboarding and street luge. The central or underlying values inherent in all sports are achievement and success. Virtually every sports marketing theme is either directly or indirectly linked to the achievement and success of an individual athlete or a team.

Youthfulness is another core value that is continually stressed by sports marketers. People participate in sports and watch sports to feel young and have fun. Those in the mature market are making strides at staying in shape; they are also watching their own age cohorts still participating in sports at a professional level via any number of senior tours (men’s and women’s golf, tennis, and bowling). In addition, products like Just for Men are endorsed by sports legends Emmitt Smith, Keith Hernandez, Walt “Clyde” Frazier, and Michael Waltrip, who all use the product to “stay looking great.”

Another core value is family and the need to feel a sense of belonging. Engagement in culture and sport can take many forms. According to a recent study, team sports, which foster a sense of “group identity,” continue to play an important role in the lives of American children. According to the 2013 SFIA US Trends in Team Sports Report, team sports bring us together as young children, teaching us to socialize, solve problems, resolve disputes, experience the benefits of hard work, understand the different personalities and gain self-confidence and direction.³⁰ They are a significant part of the fabric of American culture. In fact, after two years of negative participation growth for most of the mainstream sports, 2011 demonstrated a turnaround in sports like tackle football, soccer, basketball, and baseball, while sports such as lacrosse, rugby, and volleyball continued to experience strong growth. Basketball leads total team participation with 26,304, 000 participants, a 9.6 percent increase from 2010. Baseball was second with 14,558,000 and soccer was third with 14,075,000. Rugby with roughly 1,130,000 participants had the single largest yearly growth of 50.7 percent while lacrosse had the second most pronounced yearly growth with a 37.7 percent growth equating to 1,648,000 participants. Tackle football saw a slight growth of 1.6 percent equating to 6,905,000 participants. The declining sports included wrestling (29.9 percent), fast pitch softball (9.4 percent), and track and field (2.7 percent).

Photo 2.2 The mature market: staying young and having fun in record numbers

Source: Shutterstock.com

Physical environment

The physical environment refers to natural resources and other characteristics of the natural world that have a tremendous impact on sports marketing. For instance, the climate of a region dictates the types of sports that are watched and played in that area. In fact, various sports were developed because of the physical characteristics of a region. Skiing and hockey in the north and surfing on the coasts are obvious examples. Sports marketers attempt to control the physical environment for both spectators and sports participants. For example, Reliant Stadium has a 50/80 rule. The 50/80 rule is a guideline to help fans prepare for game day. The organization makes the roof decisions on a case-by-case basis each game by considering numerous factors, including environment and weather. The organization will consider opening the roof when game time temperature is projected to be between 50 and 80 degrees, therefore providing an optimal viewing and playing environment. The goal of the 50/80 rule is to provide the most comfortable environment possible for spectators to enjoy a Houston Texans game.

Artificial turf replaced natural grass surfaces in stadiums in the late 1960s. In the new millennium, all new stadiums being built have switched back to natural grass. Grass not only seems to be easier on the athletes in terms of avoiding potential injuries, but fans also seem to appreciate the “natural” look of grass. Likewise, domed stadiums seem to have run their (un)natural course, with Minneapolis being a rare exception.

The newer stadiums are all open-air venues, which have greater appeal for spectators. An interesting example of state-of-the-art stadium technology designed to control the physical environment is the new Cardinals Stadium in Arizona with the first roll-out playing surface. At the touch of a button, the grass field slides in and out of the stadium along 13 steel rails. The purpose of the sliding field is threefold: it eliminates indoor watering and related humidity problems; allows the field to soak up direct sunlight; and leaves behind 152,000 square feet of unobstructed floor space for things such as concerts, conventions, and expos.³¹

In addition to the climate, the physical environment of sports marketing is concerned with conservation and preserving natural resources. This trend toward conservation is most often referred to as “green marketing.” Marketing ecologically responsible products and being conscious about the effects of sports on the physical environment is one of the concerns of green marketing. For instance, many golf course management groups have come under attack from environmentalists concerned about the effect of phosphate-based chemicals used in keeping golf courses green. Other groups have criticized the sport of fishing as cruel and unusual punishment for the fish.

Political, legal, and regulatory environment

Sports marketers are continually faced with political, legal, and regulatory environments that affect their strategic decisions. Politics have always played a major role in sports and are becoming an increasingly important part of the sports landscape. In professional sports, politicians are involved in promoting or discouraging passage of stadium tax issues. Since 1953, most stadiums have been owned by city governments. The question is, “How far does one go in sacrificing taxpayers’ wealth to promote civic pride?” Additional evidence of the relationship between government and sports marketing is the growing number of sports commissions. Since 1980, the number of sports commissions, designed to attract sporting events to cities, states, or regions, has increased; in fact, the National Association of Sports Commissions has grown from 491 to more than 671 members in the past five years.³²

The legal environment of sports has certainly taken on a life of its own in the new millennium. Sports officials (i.e., league commissioners, judges, sports arbitrators, coaches, and athletic directors) are continually confronted with legal challenges that arise on and off the playing field. These officials must be adept at interpreting the language of collective bargaining, recruiting student-athletes, understanding Title IX, avoiding antitrust issues, licensing team logos, and handling other sports law issues. One of the most famous pieces of legislation, passed in 1972 under President Richard Nixon, was Title IX. Simply, Title IX states that “no person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” Interestingly, the law that has had the most dramatic impact on the growth of women’s sports participation does not even mention the word “sports.” Perhaps the most famous Title IX decision was a 1997 ruling by the U.S. Supreme Court in the Brown University v. Cohen case. The courts ruled that Brown University did not meet any part of the three-step Title IX compliance.

This three-part test includes the following:

1.  Are opportunities for female and male athletes proportionate to their enrollment?

2.  Does the school have a history of expanding athletic opportunities for the underrepresented sex?

3.  Has the school demonstrated success in meeting the needs of those students? Unfortunately, Title IX implementation has led to reduction in men’s sports programs. Rather than adding women’s sports programs, universities have chosen to cut men’s sports such as baseball and wrestling to address the problem of proportionality.

As mentioned earlier, sports legal issues involve much more than Title IX and antitrust issues. Recent examples of sports legal issues in the news include cases of breach of contract, player-on-player/coach/fan violence, and trademark infringement. Former NBA commissioner David Stern handed down a total of $1,225 million in fines and 48 games in suspensions in the 2012–2013 season. The NBA has been a strict enforcer of policies and fines since the Pacer–Pistons brawl in 2004. In arguably the most violent fight in NBA history, with less than one minute left in the game the Indiana Pacers scuffled with the Detroit Piston players and ultimately rushed the stands, involving some drunken Detroit Pistons fans.

Due to the billions of dollars of sports-licensed merchandise sold each year, a more common form of legal issue in sport is a trademark violation. In one example, American Media, Inc. (parent company of the National Enquirer and Globe) was sued by the U.S. Olympic Committee (USOC) for using images of Olympic athletes without their consent and using the word “Olympics” in a publication entitled Olympics USA. Similarly, the IOC has filed a lawsuit against 1,800 Internet sites abusing the Olympic name. In yet another example, Callaway Golf recently stopped the sale of counterfeit clubs on eBay.com.

A regulatory body or agency is responsible for enacting laws or setting guidelines for sports and sports marketers. Regulatory agencies can be controlled by either governmental or nongovernmental agencies. One example of a nongovernmental regulatory body that has tremendous control over sports and sports marketing practices is the Fédération Internationale de Football Association (FIFA). FIFA is the international federation for the world’s most popular sport, soccer. FIFA, which was formed in 1904, promotes soccer through development programs for youth and supervises international competition to ensure the rules and regulations of the game are being followed. In addition, FIFA is responsible for maintaining the unified set of rules for soccer called the Laws of the Game.

Although FIFA is concerned with regulating the game itself, it also controls many facets outside the game that have an impact on sports marketing. For example, FIFA is committed to improving stadiums for the fans and protecting them against the rising costs of attendance. Another example of FIFA’s control over sports marketing is that virtual advertising – super-imposing marketing messages on the field during televised broadcasts – is forbidden.

In addition, FIFA works with ISL Marketing to secure sponsors for major soccer events, such as the World Cup. As a regulatory agency, FIFA attempts to make sure that the sponsors do not intrude in any way on the integrity of the game. FIFA does not attempt to influence how companies do their own business; however, they do their best to ensure that sponsors do not influence the game itself.

FIFA’s focus is to make a difference in people’s lives while creating balance and understanding of who they serve. Their mission – develop the game, touch the world, build a better future – articulates both a challenge and an opportunity. Their promise to strive for the game, for the world; reflects FIFA’s emphasis and responsibility to not only promote its core product soccer, but to reach out to its world stakeholders by extending the core, using football as a symbol of hope and integration. FIFA President Joseph Blatter describes the delicate but beneficial relationship between FIFA, its consumers, and sponsors as follows: “We see it as our duty to take on the social responsibility that comes hand in hand with our position at the helm of the world’s most loved sport. Join us in uniting forces to develop the game, touch the world and build a better future!”³³

As sport continues to grow so do the regulatory and marketing concerns that affect its strategic framework. Commercial exploitation and the perceived inequalities that accompany its presence are prevalent in today’s sport environment. Hence, so are the law suits that contest its framework. Governing agencies struggle to stay abreast of reform challenges. For example, in a recent landmark decision handed down on August 8, 2014, a federal judge ruled in favor of the plaintiff in the Ed O’Bannon v. NCAA antitrust case, knocking down the restrictions against college athletes profiting off their name, image and likeness. The injunction will not preclude the NCAA from implementing rules capping the amount of compensation however, the NCAA will not be permitted to set this cap below the cost of attendance. The landmark decision will have a significant impact upon the future regulatory environment and as the accompanying blogger illustrates, sanctioning bodies can often struggle to retain control.

Demographics

Assessing the demographic environment entails observing and monitoring population trends. These trends are observable aspects of the population such as the total number of consumers and their composition (i.e., age or ethnic background) or the geographic dispersion of consumers. Let us look at several aspects of the demographic profile of the United States, including size of the population, age of the population, shifts in ethnic groups, and population shifts among geographic regions.

Size of the population

Currently, the world population is 7,053,112,673. The U.S. population, which is the world’s third largest behind China and India, stands at over 314 million. Both are growing at a rapid pace. It is estimated that by the year 2020, the U.S. population will increase to as much as 336 million while the world population is expected to grow at a rate of roughly 76 million per year.³⁴ This is of special interest to marketers of sports entities who are considering expansion into international markets.

Age

Age is one of the most common variables used in segmenting and targeting groups of consumers. As such, sports marketers must continually monitor demographic shifts in the age of U.S. consumers. The “graying of America” has and will continue to exert a huge influence. Many Americans are now living into their 70s, 80s, and beyond. In fact, to date in the U.S., the growth in the number and proportion of older adults is unprecedented. Two factors – Americans are living longer lives than in previous decades and aging baby boomers encompass a proportionally larger demographic segment – combine to impact this growth. By 2030, older adults will account for roughly 20 percent of the U.S. population, doubling the population of Americans aged 65 years to about 72 million. In 2030, when the last baby boomer turns 65, the demographic landscape of our nation will have changed significantly, hence one of every five Americans – about 72 million people – will be an older adult. By 2050, it is anticipated that Americans aged 65 or older will number nearly 89 million people, more than double the number of older adults in the United States in 2010.³⁵

Studies show that by the year 2015, mature adults will make up almost 25 percent of the entire population; this number will grow even larger to comprise nearly 89 million people or one-third of the population by the year 2050. This means that in about 50 years, one out of every three Americans will be 55 years of age or older, more than double the number of adults in 2010.³⁶ Apparently, with new technological advances bringing about breakthroughs in medicine, a lower mortality rate, and preventive approaches to health, Americans are living longer.

Moreover, the 79-million-strong baby boom generation has already entered midlife and will soon age. In fact, if you add 65 years to January 1, 1946 you get January 1, 2011; therefore, the retirement age of the baby boomer has arrived. Four out of every 10 adults in the United States are baby boomers. In 2012, baby boomers ranged from 48 to 66. Also of significance is the baby bust generation (children of baby boomers) that follows in the wake of its parental tidal wave. In 2012, there were an estimated 20.23 million children under five years of age, compared with the 16 million in 1980.³⁷

Shifts in ethnic groups

The United States has been called a melting pot because of its diversity and multiethnic population providing promise that all immigrants can be transformed into Americans, forging a new alloy built upon freedom, civic responsibility, and the crucible of democracy. Today, the number of white Americans is diminishing. Immigrants today come not from Europe but overwhelmingly from Asia and Latin America and account for 60 percent of the nation’s population growth in the last decade. According to the U.S. Census Bureau, the Hispanic population increased by 15.2 million between 2000 and 2010, accounting for over half of the 27.3 million increase in total population. Today, roughly 45 percent of American children under the age of five belong to minority groups. By 2050, non-Hispanic whites will account for only 54 percent of the U.S. population. In terms of sheer size, just over 102 million people represent either the African American, Asian, or Hispanic ethnic groups. All three of these ethnic groups have rising income levels, which translate into more purchasing power.³⁸ Although all minority groups are growing, the fastest-growing segment has been Hispanics. Hispanic buying power is expected to reach $1.3 trillion by 2015.³⁹ The next fastest-growing minority was Asian Americans, who represent 14.4 million people. African Americans remain the second largest minority group, with nearly 38 million people and $572 billion in annual buying power.

These ethnic groups are important subcultures that share a portion of the larger (white) American culture, but also have unique consumption characteristics. There are a number of benefits in developing a marketing mix that appeals to specific ethnic groups. The accompanying article describes how Major League Baseball has recognized the value of ethnic marketing tactics.

Population shifts

The latest count of the U.S. population highlighted that the demographic center of gravity continued to shift away from the Northeast and Midwest. Through 2020, the greatest population shift will be evident in the South and West. More than one-third of the total United States population is projected to reside in the South during the years 1995 to 2025. In fact, the South will be the most populous region during the next 30 years. Over the next 30 years the West is projected to grow nearly twice the national average. The Northeast and Midwest are expected to grow at half of the U.S. rate.

While the nation’s population grew approximately 10 percent in 2010, the fastest gains occurred in the South (14.3 percent) and West (13.8 percent). Texas has grown by approximately 4.3 million people in the last decade, where Houston and Dallas-Fort Worth accounted for more than half of the State’s growth. Other Southern stars included Florida, with the third largest increase, Georgia fourth, North Carolina fifth, and Arizona the sixth. By percentage, rather than actual numbers, Nevada was the fastest growing Western state in the last decade. Interestingly in the Midwest, the only state which had a declining population in the last decade was Michigan. South Dakota was found to be the fastest growing state in the Midwest which grew by 7.9 percent. In the Northeast, New Hampshire had the region’s largest percentage increase for the fifth straight decade, growing 6.5 percent. New York and New Jersey posted the highest numeric gains in the Northeast, gaining 401,645 and 377,544 respectively.⁴⁰

There is no definitive explanation for this shift, although some believe it is due to the previously discussed aging of America or the growth of employment opportunities in these areas. Keep in mind that, until 1957 when the Brooklyn Dodgers moved to Los Angeles, there were no Major League Baseball teams west of St. Louis.

Along with exploring population shifts by state, sports marketers must assess the dispersion of people within an area. Are people moving back to urban areas, or is the “flight to the suburbs” still occurring? The 2000 and 2010 censuses showed the greatest growth to be in suburban areas. There are still fewer people living in or moving back to the central city. These measures of population dispersion are having an impact on where new professional teams are locating and where new stadiums are being built.

The economy

The economic environment is another important but uncontrollable factor for sports marketers to consider. Economic factors that affect sports organizations can be described as either macroeconomic or microeconomic elements. A brief explanation of each follows.

Macroeconomic elements

Economic activity is the flow of goods and services between producers and consumers. The size of this flow and the principal measure of all economic activity is called the gross national product (GNP). The business cycle, which closely follows the GNP, is one of the broadest macroeconomic elements. The four stages of the business cycle are as follows:

  Prosperity – The phase in which the economy is operating at or near full employment, and both consumer spending and business output are high.

  Recession – The downward phase, in which consumer spending, business output, and employment are decreasing.

  Depression – The low phase of the business cycle, in which unemployment is highest, consumer spending is low, and business output has declined drastically.

  Recovery – The upward phase when employment, consumer spending, and business output are rising.

Each cyclical phase influences economic variables, such as unemployment, inflation, and consumers’ willingness to spend. Decisions about the strategic sports marketing process are affected by these fluctuations in the economy. Ticket sales may boom during times of economic growth. In addition, the growth period may have an even greater impact on corporate demand for luxury boxes and season tickets. If the country is in either a recession or a depression, consumers may be reluctant to purchase nonessential goods and services such as sporting goods or tickets to sporting events. Mistakenly, the sports industry sometimes seems to operate under the “ignorance is bliss” philosophy when it comes to the economy. As Steve Wilstein points out, “salaries for athletes kept rising, TV deals soared, and ticket prices spiraled ever upward as if the leagues were living in their own fantasyland, immune to economic cycles.”⁴¹ Although Wilstein believes the sports that are hardest hit by the economy are those already on the periphery (e.g., the Women’s Professional Bowling Tour), even the major sports are hit hard by a poor economy.

Although the relationship between the purchase of sporting goods and tickets to sporting events is likely to be associated with good economic times, this may not always be the case. During a recession or depression, sports may serve as a rallying point for people. Consumers can still feel good about their teams, even in times of economic hardship. This is one of the important, but sometimes neglected, societal roles of sport.

Microeconomic elements

Whereas macroeconomic elements examine the big picture, or the national income, microeconomic elements are those smaller elements that make up the big picture. One of the microelements of concern to sports marketers is consumer income level. As economist Paul Samuelson points out, “Mere billions of dollars would be meaningless if they did not correspond to the thousand and one useful goods and services that people really need and want.”⁴² Likewise, having sports products would be meaningless if consumers could not afford to purchase them. A primary determinant of a consumer’s ability to purchase is income level.

Consumer income levels are specified in terms of gross income, disposable income, or discretionary income. Of these types of income, discretionary is of greatest interest to sports marketers. This is the portion of income that the consumer retains after paying taxes and purchasing necessities. Sports purchases are considered a non-necessity and, therefore, are related to a consumer’s or family’s discretionary income. According to a new analysis by The Conference Board, slightly more than half (51 percent) of American households have some discretionary income they can spend on non-necessities.⁴³ In addition, the number of families with discretionary income is expected to rise slightly over the next decade.

Sports advocates argue that new stadia and consumer spending on sports support local economic growth. The local economic benefits from a major professional sports team are typically derived from four major sources of spending: (1) attendance (tickets and parking) at the games; (2) concession items sold at the games such as food and merchandise; (3) spending before and after the events for other consumption items such as meals; and (4) taxes paid to local government on spending for the previous three categories. Others argue that spending on sport has little impact and that professional sport is an economic drain. The following quote summarizes this notion.

People have a limited amount of discretionary income. They may use it on attendance at professional sporting events. In the absence of pro sports, they will spend the money elsewhere – lower-level sporting events, the movies, etc. The same is true for large corporations. If they don’t buy sky boxes, they will entertain their clients elsewhere (i.e., restaurants). Sports facilities generate very few jobs. For a local economy, player management (and that may come from outside) and low-level game day employment (vendors, etc.…). A modest factory or a small research facility has far more impact.⁴⁴

Monitoring the external contingencies

As discussed, external contingencies are dynamic, and sports marketers must keep abreast of these continually changing influences. A systematic analysis of these external factors is the first step taken by sports marketers using the contingency framework. In addition, as the sports industry becomes more competitive, one of the keys to success will be identifying new market opportunities and direction through assessing the external contingencies. The method used to monitor the external contingencies is known as environmental scanning.

Environmental scanning

An outward-looking, environmental focus has long been viewed as a central component of strategic planning. In fact, it has been argued that the primary focus of strategic planning is “to look continuously outward,” to have foreseeability, and to keep the organization in step with the anticipated changes in the external environment. This process of monitoring external contingencies is called environmental scanning. More formally, environmental scanning is a firm’s attempt to continually acquire information on events occurring outside the organization so it can identify and interpret potential trends.⁴⁵

A sports organization can do several things to enhance its environmental scanning efforts. First, the organization can identify who will be responsible for environmental scanning. The only way to move beyond the pressures of daily business activities is to include environmental scanning responsibilities in the job description of key members of the organization.

Second, the organization can provide individuals conducting the environmental scan with plenty of information on the three Cs: customers, competition, and company. Your scanners cannot correctly monitor the environment without having a solid base of information about the following: customer expectations and needs; the strengths, weaknesses, distinctive competencies, and relative market positioning of the competition; and the strengths, weaknesses, distinctive competencies, and relative market positioning of your own company – as well as the major developmental opportunities that await exploitation.

Third, the organization can ensure integration of scanned information through structured interactions and communication. All too often, information needed to recognize new market opportunities is identified but never gets disseminated among the various functional areas. That is, marketing, finance, and operations may all have some information, or pieces to the puzzle, but unless these individuals share the information, it becomes meaningless. Organizations with the most effective environmental scanning systems schedule frequent interactions among their designated scanners.

Fourth, the organization can conduct a thorough analysis of ongoing efforts to improve the effectiveness of environmental scanning activities. This systematic study consists of evaluating the types of scanning data that are relevant and available to managers. This focus on previous environmental scanning efforts can often lead to the identification of new market opportunities.

Fifth, the organization can create a culture that values a “spirit of inquiry.” When an organization develops such a spirit, it is understood that the environmental scanning process is necessary for success. In addition, it is understood that environmental scanning is an ongoing activity that is valued by the organization.

Environmental scanning is an essential task for recognizing the external contingencies and understanding how they might affect marketing efforts. However, there are two reasons why environmental scanning practices may fail to identify market opportunities or threats. First, the primary difficulty in effectively scanning the environment lies in the nature of the task itself. As scanning implies, sports marketers must look into the future and predict what will likely take place. To make matters even more difficult, these predictions are based on the interaction of the complex variables previously mentioned, such as the economy, demographics, technology, and so on. Second, predictions about the environment are based on data. Sports marketers are exposed to enormous amounts of data and only with experience can individuals selectively choose and correctly interpret the “right data” from the overwhelming mass of information available to them.

Assessing the internal and external contingencies: SWOT analysis

To this point, we have looked at both the external and internal contingencies. To guide the strategic sports marketing process, an organization conducts a SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. The strengths and weaknesses are controllable factors within the organization. In other words, a firm must evaluate its strengths and weaknesses based on the internal contingencies. The opportunities and threats are assessed as a result of the external contingencies found in the marketing environment. These elements may be beyond the control of the sports organization.

The strategic sports marketing process must first examine its own internal contingencies. These internal strengths and weaknesses include human resources, financial resources, and whether organizational objectives and marketing goals are being met with the current marketing mix. Products and services, promotional efforts, pricing structure, and methods of distribution are also characterized as either strengths or weaknesses.

After assessing the organizational strengths and weaknesses, the firm identifies external opportunities and threats found in the marketing environment. As discussed earlier in the chapter, sports marketing managers must monitor the competition; demographic shifts; the economy; political, legal, and regulatory issues; and technological advances. Each of these external factors may affect the direction of the strategic marketing process.

The intent of conducting a SWOT analysis is to help sports marketers recognize or develop areas of strength capable of exploiting environmental opportunities. When sports marketers observe opportunities that match a particular strength, a strategic window is opened. More formally, strategic windows are limited periods of time during which the characteristics of a market and the distinctive competencies of a firm fit together well and reduce the risks of seizing a particular market opportunity. For example, IMG, a leading sports and entertainment marketing company, has created “IMG X Sports” to capitalize on the growing popularity in extreme and lifestyle sports and IMG College to capitalize on the growing popularity of college sports. In addition to capitalizing on strengths, sports marketers develop strategies that eliminate or minimize organizational weaknesses.

Ad 2.2 NCAA capitalizes on the new opportunities based on the growth in women’s sports.

Source: NCAA © National Collegiate Athletic Association, 2012

At this stage, you should have a broad understanding of how each of the external contingencies may affect your marketing plan. Table 2.3 provides a common list of questions to consider when developing the opportunities and threats (OT) portion of your SWOT analysis.

Table 2.3 Assessing external contingencies

1.  Social – What major social and lifestyle trends will have an impact on the sports participants or spectators? What action has the firm been taking in response to these trends?

2.  Demographics – What impact will forecast trends in size, age, profile, and distribution of population have on the firm? How will the changing nature of the family, the increase in the proportion of women in the workforce, and changes in ethnic composition of the population affect the firm? What action has the firm taken in response to these developments and trends? Has the firm reevaluated its traditional sports products and expanded the range of specialized offerings to respond to these changes?

3.  Economic – What major trends in taxation and in income sources will have an impact on the firm? What action has the firm taken in response to these trends?

4.  Political, Legal, and Regulatory – What laws are now being proposed at federal, state, and local levels that could affect the strategic marketing process? What recent changes in regulations and court decisions have affected the sports industry? What action has the firm taken in response to these legal and political changes?

5.  Competition – Which organizations are competing with us directly by offering a similar product? Which organizations are competing with us indirectly by securing our customers’ time, money, energy, or commitment? What new competitive trends seem likely to emerge? How effective is the competition? What benefits do our competitors offer that we do not?

6.  Technological – What major technological changes are occurring that affect the sports organization and sports industry?

Summary

Chapter 2 provides an overview of the contingency framework for the strategic sports marketing process. Although there are many ways to think about constructing a sports marketing plan, it is best to lay a foundation that is prepared for the unexpected. The contingency framework is especially useful for sports marketers because of the complex and uncertain conditions in which the sports organization operates. The unexpected changes that occur over the course of a season or event may be positive or negative. The changes that occur may be either controllable or uncontrollable events that affect the sports organization. The contingency framework includes three major components: the internal contingencies, the external contingencies, and the strategic sports marketing process. Uncontrollable occurrences are typically in the marketing environment and are referred to as external contingencies, whereas internal contingencies are within the control of the organization (sometimes beyond the scope of the marketing function). The heart of the contingency framework is the strategic sports marketing process, which is defined as the process of planning, implementing, and controlling marketing efforts to meet organizational goals and satisfy consumers’ needs.

Internal contingencies, thought of as managerial, controllable issues, include the vision and mission of the sports organization, organizational objectives and marketing goals, organizational strategies, and organizational culture. The vision and mission of the sports organization guide the strategic sports marketing process by addressing questions such as: What business are we in? Who are our current customers? What is the scope of our market? How do we currently meet the needs of our customers? The organizational objectives and marketing goals stem from the vision and mission of the sports organization. The objectives of the organization are long term and sometimes unquantifiable. Alternatively, marketing goals are short term, measurable, and time specific. It is extremely important to remember that the marketing goals are directly linked to decisions made in the strategic sports marketing process. Another internal contingency that influences the strategic sports marketing process is organizational strategy. The organizational strategy is how the sports organization plans on carrying out its vision, mission, objectives, and goals. There are four different levels of strategy development within the organization. These include corporate-level strategies, business-level strategies, functional-level strategies, and operational-level strategies. Marketing is described as a functional-level strategy. The operational-level strategies such as pricing and promotion must fit the broader strategic sports marketing process. A final internal contingency is the organizational culture or the shared values and assumptions of organizational members that shape an identity and establish preferred behaviors in an organization.

The external contingencies that affect the strategic sports marketing process include competition; technology; cultural and social trends; physical environment; political, legal, and regulatory environment; demographic trends; and the economy. As with any industry, understanding competitive threats that exist is critical to the success of all sports organizations. Competition for sporting events and sports organizations comes in many forms. Typically, we think of competition as being any other sporting event. However, other forms of entertainment are also considered competitive threats for sports organizations. Technological forces represent another external contingency. Advances in technology are changing the way that consumers watch sports, play sports, and receive their sports information. Cultural and social trends must also be carefully monitored. Core values, such as individualism, youthfulness, and the need for belonging, can have an impact on the target markets chosen and how sports products are positioned to spectators and participants. The physical environment, such as the climate and weather conditions, is another external contingency that can have a tremendous influence on the success or failure of sporting events. Another of the uncontrollable factors is the political, legal, and regulatory environment. Proposed legislation, such as the banning of all tobacco advertising and sponsorship at sporting events, could have a tremendous impact on the motor sports industry. Demographic trends are another critical external contingency that must be monitored by sports marketers. For instance, the graying of America will bring about changes in the levels of participation in sports and the types of sports in which the “mature market” will participate. Finally, economic conditions should be considered by sports marketers. Sports marketers must monitor the macroeconomic elements, such as the national economy, as well as microeconomic issues, such as the discretionary income of consumers in the target market.

Because the marketing environment is so complex and dynamic, sports marketers use a method for monitoring external contingencies called environmental scanning. Environmental scanning is the sports organization’s attempt to acquire information continually on events occurring outside the organization and to identify and interpret potential trends. Sports marketers must continually monitor the environment to look for opportunities and threats that may affect the organization.

External and internal contingencies are systematically considered prior to the development of the strategic marketing process. The process that many organizations use to analyze internal and external contingencies is called a SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. The strengths and weakness are internal, controllable factors within the organization that may influence the direction of the strategic sports marketing process. For example, human resources within the organization may represent strengths or weaknesses within any organization. However, the opportunities and threats are uncontrollable aspects of the marketing environment (e.g., competition and the economy). The purpose of conducting a SWOT analysis is to help sports marketers recognize how the strengths of their organization can be paired with opportunities that exist in the marketing environment. Conversely, the organization may conduct a SWOT analysis to identify weaknesses in relation to competitors.

Key terms

  competition

  contingency framework for strategic sports marketing

  control phase

  cultural values

  culture

  demographic environment

  direct competition

  economic activity

  environmental scanning

  external contingencies

  goal

  implementation phase

  indirect competition

  internal contingencies

  macroeconomic elements

  market selection decisions

  marketing environment

  marketing mix

  microeconomic elements

  objectives

  organizational culture

  organizational strategies

  physical environment

  planning phase

  political, legal, and regulatory environment

  strategic sports marketing process

  strategic windows

  technology

  vision

Review questions

1.  Describe the contingency framework for strategic sports marketing. Why is the contingency approach especially useful to sports marketers?

2.  Outline the strategic marketing process, and comment on how it is related to the external and internal contingencies.

3.  Define the marketing environment. Are all elements of the marketing environment considered uncontrollable? Why or why not?

4.  What is environmental scanning? Why is environmental scanning so important? Who conducts the environmental scan, and how is one conducted?

5.  Define competition. What are the different types of competition?

6.  How has technology influenced the sports marketing industry? Discuss how “out-of-market” technology benefits sports spectators.

7.  Identify several cultural and social trends in our society and describe their impact on sport and sports marketing.

8.  What are the core American values, and why are they important to sports marketers?

9.  How does the physical environment play a role in sports marketing? How can sports marketers manipulate or change the physical environment?

10.  Define the political and regulatory environment. Cite several examples of how this can influence or dictate sports marketing practices.

11.  Describe the different demographic trends of interest to sports marketers. How will these demographic trends influence the strategic marketing process?

12.  Differentiate between macro- and microeconomic elements. Which (macro- or microelements) do you feel plays an important role in sports marketing? Why?

13.  How can sports marketers assess the external environment? What are some sources of secondary data that may assist in understanding the current and future external environment?

Exercises

1.  Interview the marketing manager of a local college or professional sports organization and develop a list of the uncontrollable factors that were unexpected throughout the last season.

2.  Interview the marketing manager of a sporting goods retailer or sports organization about the company’s strategic sports marketing process. Ask how the external and internal contingencies affect planning.

3.  Find two sports organizations that, in your opinion, have effective mission and vision statements. How do they promote these statements and how are they reflected in the organization?

4.  Describe all the ways the changing marketing environment will have an impact on NASCAR racing. How should NASCAR prepare for the future?

5.  Your university’s athletic program has a number of competitors. List all potential competitors and categorize what type of competition each represents.

6.  Find examples of how technology has influenced the sporting goods industry, a professional sports franchise, and the way spectators watch a sporting event. For each example indicate the technology that was used prior to the new technology.

7.  Develop advertisements for athletic shoes that reflect each of the core American values discussed in this chapter.

8.  Interview five international students and discuss the core values used by sports marketers in their culture. Do these values differ from the core American values? For example, do the British value individualism more or less than Americans? What evidence do the students have to support their claims?

9.  How does the physical environment of your geographic area or location play a role in sports marketing?

10.  Describe how changing demographic trends have led to the development of new sports leagues, the shifting of professional sports franchises, and new sports products. Provide three specific examples of each.

Internet exercises

1.  Experience a portion of any sporting event via Internet broadcast. What did you enjoy the most about this experience, and what could be done to improve this technology?

2.  Find three sports products on the Internet that stress technological innovation. Do the companies communicate their technological advantages differently?

3.  Search the Internet for articles or sites that discuss the pros and cons of the banning of tobacco advertisements at sporting events.

4.  Go to the Internet and find census data to support what sports fans in 2020 might look like from a demographic perspective.

Endnotes

1  Rick Burton and Dennis Howard, “Recovery Strategies for Sports Marketers: The Marketing of Sports Involves Unscripted Moments Delivered by Unpredictable Individuals and Uncontrollable Events,” Marketing Management, vol. 9, no. 1 (Spring 2000), 43.

2  W. Richard Scott, Organizations: Rational, Natural, and Open Systems (Upper Saddle River, NJ: Prentice Hall, 1987), 87–89.

3  Bernard J. Mullin, Stephan Hardy, and William Sutton, Sport Marketing (Champaign, IL: Human Kinetics Publishers, 1993), 16.

4  “Under Armour Mission,” Under Armour. Available from: http://www.uabiz.com/company/mission.cfm, accessed July 6, 2010.

5  “Kent State Intercollegiate Athletics Mission Statement and Objectives,” Kent State University. Available from: http://www.kentstatesports.com/athleticDepartment/missionStatement, 2012.

6  Nike Mission Statement. Available from: http://www.nike.com/nikebiz/nikebiz.jhtml?page=4.

7  Maloof Family Information. Available from: http://www.arcoarena.com/default.asp?lnopt=4&pnopt=0.

8  Scott Rosner, “Team Ownership Could Fade with Comcast–NBC Universal Deal,” Sports Business Journal (March 2010).

9  “Food for Thought: Dodgers Offer All-You-Can-Eat Seats,” The Associated Press State & Local Wire (January 12, 2007).

10  Nielsen, 2014, Year in Sports Media Report 2013 (February 2). Available from:http://www.nielsen.com/us/en/reports/2014/year-in-the-sports-media-report-2013.html.

11  Sam Mamudi, “Study Shows Sports TV Success,” SportsWatch (January 24, 2012).

12  Ken Kerschbaumer, “Battle for College Sports Fans,” Broadcasting & Cable (March 14, 2005) p. 23; “First and Ten for a TV Upstart,” Business Week (December 18, 2006) p. 48.

13  Shank, M. D., and Verderber, K., 1999, “Understanding the Nature of Sports Competition,” International Conference on Sport & Society, Marquette, MI, June.

14  NASCAR.com. “NASCAR Digital Media Records Historic Day.” Available from: http://www.nascar.com/en_us/news-media/articles/2014/2/24/nascar-digital-media-records-historic-day.html, released February 24, 2014; accessed February 28, 2014.

15  “Top 15 Most Popular Websites,” The eBusiness (February 2012).

16  Ken Kerschbaumer, “Cornhusker Fans Surf for Tackles,” Broadcasting and Cable (August 28, 2000).

17  Rich Heldenfels, “Watching TV is Different Experience Today,” Akron Beacon Journal (February 2012).

18  Bill King and Eric Fisher, “A Secondary Look at Ticketing: Teams Face a Secondary Market that has Redefined the Ticket Business: Like it or Loathe it, it’s the World They Helped Create,” Sports Business Journal (October 2011).

19  Eric Fisher, “Numbers Game,” Sports Business Journal (September 27, 2010).

20  “Golf Company Featured on the Golf Channel,” Market Wire (November 21, 2006), E21.

21  “Textronics Expands into UK with NuMetrex Clothes That Monitor the Body,” Business Wire (September 12, 2006).

22  Wesley Cropp, “Shoes Going Very High Tech,” The Daily Iowan (July 19, 2006).

23  Blog Maverick, The Mark Cuban WebLog. Available from: http://blogmaverick.com/, accessed February 25, 2014.

24  “Cisco and Athletics Announce Cisco Field; State-of-the-Art Technology to Take Fan Experience to New Level” (November 14, 2006). Available from: http://newsroom.cisco.com/dlls/2006/corp_111406.html?CMP=ILC-001&POSITION=SEM&COUNTRY_SITE=us&CAMPAIGN=HN&CREATIVE=STADIUM&REFERRING_SITE=GOOGLE&KEYWORD=null.

25  Jeremy Repanich, “Top 5 Technologies in NFL Stadiums,” Popular Mechanics (2011).

26  “Twelve Baseball Parks to Use MasterCard PayPass Technology This Season,” (September 27, 2006). Available from: http://www.finextra.com/fullpr.asp?id=11531.

27  “Essential Facts about the Computer and Video Game Industry,” 2006, Entertainment Software Association. Available from: http://www.theesa.com/archives/files/Essential%20Facts%202006.pdf.

28  Chris Morris, “Average Vidgamer Older, More Affluent,” Technology News (June 2010).

29  “2013 Sales and Usage Data, Essential Facts About the Computer and Gaming Industry,” Entertainment Software. Available from: http://www.theesa.com/facts/pdfs/esa_ef_2013.pdf, accessed February 25, 2014.

30  Sport and Fitness Industry Association, 2013. SFIA US Trends in Team Sports Report, Silver Springs, MD, 2013.

31  Scott Wong, “New-Age Stadium Is on a High-Tech Roll,” The Arizona Republic (August 10, 2006).

32  NASC Playbook 2013, National Association of Sports Commissions, December. Available from: http://issuu.com/nasc92/docs/playbook_dec13_final_hires, accessed June 17, 2014.

33  “For the Good of the Game,” 1996, FIFA. Available from: http://www.fifa.com/aboutfifa/federation/mission.html.

34  http://www.census.gov/population/pop-profile/dynamic/PopDistribution.pdf.

35  The State of Aging and Health in America 2013, National Center for Chronic Disease Prevention and Health Promotion Division of Population Health, Department of Health and Human Services, Washington, DC. Available from: http://www.cdc.gov/features/agingandhealth/state_of_aging_and_health_in_america_2013.pdf, accessed June 17, 2014.

36  Ibid.

37  U.S. Census Bureau, 2013, State and Country Quick Facts. Available from: http://quickfacts.census.gov/qfd/states/00000.html, accessed June 17, 2014.

38  “Minorities Getting Closer to the Majority,” CNN (May 11, 2006). Available from:http://www.cnn.com/2006/US/05/10/hispanics/index.html.

39  Shannon Bryant, “Hispanic Buying Power Projected to Reach $1.3 Trillion in 2015,” Marketing Forecast (January 2010).

40  Teresa Burney, “Go West … and South: A Shift in US Population,” Builder Magazine (April 2011).

41  Steve Wilstein, “Think the NBA Can’t Go Belly Up? Think Again,” Associated Press, (September 26, 2003). Available from: http://news.mysanantonio.com.

42  Paul A. Samuelson, Economics, 10th ed. (New York: McGraw Hill, 1976).

43  Lynn Franco, The Marketers Guide to Discretionary Income (The Conference Board Inc., New York, NY, November, 2007).

44  Brian Reich, “Baseball and the American City” (April 30, 2001). Available from: http://www.stadiummouse.com/stadium/economic.html.

45  Matthew D. Shank and Robert A. Snyder, “Temporary Solutions: Uncovering New Market Opportunities in the Temporary Employment Industry,” Journal of Professional Services Marketing, vol. 12, no. 1 (1995), 5–17.