Sport Sponsorship Expenditure Bundesliga

Die Trikotsponsoren 1.Bundesliga Saison 2013/2014

This is an overview of the jersey-sponsors of all 18 teams of the Bundesliga. You can see their sponsors, the duration of the contract (the german word unbefristet behind VfL Wolfsburg means that the duration is unlimited) and the current expenditures. So Bayern Munich is (of course) the leader in this list receiving 30 Mio Euros a year, Borussia Dortmund is only on the fourth place. I think it is quite interesting that there are still teams in the widely known Bundesliga like Augsburg that only get 1.8 Mio Euros  year which is nothing compared to other teams.

Mimetic Isomorphism

Mimetic Isomorphism means to copy the business models of other leading companies in your market. This action is used to avoid risks as the copying companies know that this model will work out (otherwise the competitor wouldn’t be that successfull).

In sports we can see this very often, especially in the online shop segment. Long time ago the first companies decided to sell sport goods and apparell via online shops. This model absolutely worked out and nowadays we can find thousands of online shops offering all the sport stuff we need (and don’t need) via online shops.

Generic/Brand/Direct/Indirect

Generic:

http://www.youtube.com/watch?v=hmu6A3XiV1Q

This is about a campaign in Germany called “Deutschland bewegt sich” (Germany moves). The campaign appeals to all Germans to work out more often, get fit and stay in shape. So this is not about a special kind of sport or brand but about sports in general.

 

Brand:

http://www.youtube.com/watch?v=0KHqCpC2ODA

This is a commercial from adidas. It is about the new running shoe “boost” they introduced in 2013.

Direct/Indirect:

http://www.youtube.com/watch?v=1D3OO6fuBfA

This is a video about Nike’s 2010 campaign called “the chance” where they searched for footballing talents all over the world. So actually this video is about the participants, their dreams, etc. but in the end it is also great indirect marketing for Nike.

PESTEL

A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental(external marketing environment) factors that have an impact on an organisation.

PESTEL stands for:

• P – Political
• E – Economic
• S – Social
• T – Technological
• E – Environmental
• L – Legal

Political Factors

These are all about how and to what degree a government intervenes in the economy. This can include – government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labour law, environmental law, trade restrictions and so on.

It is clear from the list above that political factors often have an impact on organisations and how they do business. Organisations need to be able to respond to the current and anticipated future legislation, and adjust their marketing policy accordingly.

Economic Factors

Economic factors have a significant impact on how an organisation does business and also how profitable they are. Factors include – economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses and so on.

These factors can further be broken down into macro-economical and micro-economical factors. Macro-economical  factors deal with the management of demand in any given economy. Governments use interest rate control, taxation policy and government expenditure as their main mechanisms they use for this.

Micro-economic factors are all about the way people spend their incomes. This has a large impact on B2C organisations in particular.

Social Factors

Also known as socio-cultural factors, are the areas that involve the shared belief and attitudes of the population. These factors include – population growth, age distribution, health consciousness, career attitudes and so on. These factors are of particular interest as they have a direct effect on how marketers understand customers and what drives them.

Technological Factors

We all know how fast the technological landscape changes and how this impacts the way we market our products. Technological factors affect marketing and the management thereof in three distinct ways:

• New ways of producing goods and services
• New ways of distributing goods and services
• New ways of communicating with target markets

Environmental Factors

These factors have only really come to the forefront in the last fifteen years or so. They have become important due to the increasing scarcity of raw materials, polution targets, doing business as an ethical and sustainable company, carbon footprint targets set by governments (this is a good example were one factor could be classes as political and environmental at the same time). These are just some of the issues marketers are facing within this factor. More and more consumers are demanding that the products they buy are sourced ethically, and if possible from a sustainable source.

Legal Factors

Legal factors include – health and safety, equal opportunities, advertising standards, consumer rights and laws, product labelling and product safety. It is clear that companies need to know what is and what is not legal in order to trade successfully. If an organisation trades globally this becomes a very tricky area to get right as each country has its own set of rules and regulations.

(Source: http://www.professionalacademy.com/news/marketing-theories-pestel-analysis)

Dynamic Pricing

Definition: The process of determining a product’svalue in commercial transactions in a fluid manner depending on current market conditions. Dynamic pricing is gaining ground among business owners compared to the more traditional fixed pricing method. Also called real time pricing.

(source: http://www.businessdictionary.com/definition/dynamic-pricing.html)

                       

This is very important to sport teams when selling their tickets. They can react on current demands (rainy weather, team is performing poor, next opponent is Nr. 1 etc.) and adapt their prices. Furthermore they can offer different prices for different categories of seats.

Case Study p. 138-141

1)      Comment on how the variables facility planning and physical evidence apply to the different sections of this case study:

         

In the first section the author mentions the aspect of facility planning by discussing the problem of finding the right balance between a small and a large stadium. It shouldn’t be too small in order to guarantee a decent income but it shouldn’t be too large either in order to guarantee a nice atmosphere.

Also the second section approaches the aspect of facility planning. Nowadays it is quite important to offer a stadium that can be used for different events like sports, concerts, meetings etc. In the fourth section there is given an example of the approach to build such sporting facilities (Olympic Park in Sydney) but it worked out only partly (swimming facilities are a success).

The fifth section both approaches the investments in the facility infrastructure in England and the aspect of physical evidence when talking about e.g. interactive video screens in the stadiums.

 

2)      Comment on how the variables people and process apply to the different sections of this case study:

 

In the case study it is mentioned that it is very important how the operators of the facilities think and behave. Are they able and willing to be far-seeing and taking a multifunctional stadium into account? Think about our previous discussion about marketing myopia!

The process is also a very important aspect when talking about facility management. You have to take both the visible and the invisible part into account! Only if all processes are planned well before an event, the people having direct customer contact will be able to do their job well. And only if you hired competent people before, they will be able to fulfill your service plans.

 

 

3)      Can you think of other standards that may replace cost per seat as a better means to account for facility construction costs?  Justify your answer.

 

 It would be useful to take the other possibilities of using the facility into account. If the facility is multifunctional, one should consider how often the seats/rooms etc. will be used and how much money one could earn by using it differently. Furthermore it would be interesting to take the recyclable materials into account.

 

4)      Given the different contribution channels presented in Figure 7.5, can you argue the most likely (Future) distribution channel for spectator sport? You may want to consider the strategic distribution principle of vertical integration.

 

A vertical integration strategy is one in which one company operates at more than one level of the distribution channel. The distribution channel begins with the manufacturer that makes a product. The manufacturer sells the product to a wholesaler. The wholesaler sells to retailers, who ultimately sell to end customers. When a manufacturer sells directly to end customers, it uses forward vertical integration. When a wholesaler or retailer manufacturers, it uses backward vertical integration.

(Source: http://smallbusiness.chron.com/advantages-vertical-integration-strategy-20987.html)

In my opinion the most likely distribution channel is this vertical integration style, as it offers various advantages to the teams:

–          More control

–          Cost control

–          Competitive Advantages

–          Differentation

Fernwood Women’s Health Club

Place:

–    Over 70 fitness clubs situated in every state of Australia, clubs are only for women

 

Physical evidence:

–    Website in women-style, pink and white, pictures of happy women

 

People:

–    Only women work as instructors in order to create relaxed atmosphere

 

Process:

–    3068 classes per week offered, a lot of different programs like Beach Bod Boost, Operation Wedding Dress etc.

–    Personal Training possible

–    Specials like childcare and free breakfast

Gen. X, Y and Z plus Birging and Corfing

Generation X:

– Born: 1966-1976

Sometimes referred to as the “lost” generation, this was the first generation of “latchkey” kids, exposed to lots of daycare and divorce. Known as the generation with the lowest voting participation rate of any generation, Gen Xers were quoted by Newsweek as “the generation that dropped out without ever turning on the news or tuning in to the social issues around them.”

Gen X is often characterized by high levels of skepticism, “what’s in it for me” attitudes and a reputation for some of the worst music to ever gain popularity. Now, moving into adulthood William Morrow (Generations) cited the childhood divorce of many Gen Xers as “one of the most decisive experiences influencing how Gen Xers will shape their own families”.

Generation Y:

– Born: 1977-1994

The largest cohort since the Baby Boomers, their high numbers reflect their births as that of their parent generation..the last of the Boomer Is and most of the Boomer II s. Gen Y kids are known as incredibly sophisticated, technology wise, immune to most traditional marketing and sales pitches…as they not only grew up with it all, they’ve seen it all and been exposed to it all since early childhood.

Gen Y members are much more racially and ethnically diverse and they are much more segmented as an audience aided by the rapid expansion in Cable TV channels, satellite radio, the Internet, e-zines, etc.

Gen Y are less brand loyal and the speed of the Internet has led the cohort to be similarly flexible and changing in its fashion, style consciousness and where and how it is communicated with.

Gen Y kids often raised in dual income or single parent families have been more involved in family purchases…everything from groceries to new cars. One in nine Gen Yers has a credit card co-signed by a parent.

(soure for gen x and y: http://www.socialmarketing.org/newsletter/features/generation3.htm)

Generation Z:

– Born: 1995 – 2004

This is the first generation to be born with complete technology. They were  born with PCs, mobile phones, gaming devices, MP3 players and the ubiquitous  Internet. They do not know life without technology. Hence, they are often  termed as digital natives and are extremely comfortable with technology. They can email, text and use computers without any problems. In  addition, members of Generation Z can understand and master advancement in  technology. Unfortunately, this reliance on technology and gadgets has had a  negative effect on the members. They rather stay indoors and use their  electronics than play outdoors and be active. They are leading a sedentary life  that can result in health problems later on.

For them, social media platforms are a way to communicate with the outside  world. They are not bothered about privacy and are willing to share intimate  details about themselves with complete strangers. They have virtual friends and  for them hanging out with friends means talking to them over the cell phones,  emails and text messages. However, at the same time, this generation is  considered to highly creative and collaborative and will have a significant  impact on the way companies work when they join the workforce.

Members of Generation Z are adept at multi-tasking. They can text, read,  watch, talk and even eat simultaneously. However, this has also led to reduced  attention span leading to what psychologists call acquired attention deficit  disorder. This generation is unable to analyze complex data and information as  they cannot focus for very long.

(source: http://www.rocketswag.com/elderly/generation/generation-z/Characteristics-Of-Generation-Z.html)

 

Birging:

BIRGing is an arconym for Basking in Reflected Glory.

The concept of BIRGing is rooted in the social identity theory which explains how one’s self esteem and evaluation can be enhanced by the identification with another person’s success. One of the keys to BIRGing is that the person trying to receive this glory has done nothing tangible to bring the team’s success (Hirt et al. 1992). They are truly basking in reflected glory not earned. When a person’s public image is threatened the tendency to BIRG is even stronger, and BIRGing becomes an important impression management technique to counter any threats to self esteem (Lee 1985).

Corfing:

CORFing is an acronym for Cutting Off Reflected Failure.

It means that fans are distancing themselves as far as possible from the losing team. (Cialdini & Richardson 1980). These fans want to avoid any negative evaluations by others in relation to the team that was unsuccessful. The closer the identification to the team and the degree of commitment by the fan, the greater the risk the fan has of suffering a loss in self esteem if their team has lost.

(source: http://www.units.muohio.edu/psybersite/fans/bc.shtml)

 

 

Questions of lecture week 3

What is USP?

– The unique selling proposition/point is the factor or consideration presented by a seller as the reason that one product or service is different from and better than that of the competition (source: http://www.entrepreneur.com/encyclopedia/unique-selling-proposition-usp)

– Examples in sports:

Superbowl: Extreme high Awareness, world-famous, everybody wants to watch

Other events/tournaments: Soccer World Cup, UEFA Champions-League

 

What is meant by BIG DATA and what does it mean to sports?

Big data is a buzzword, or catch-phrase, used to describe a massive volume of both structured and unstructured data that is so large that it’s difficult to process using traditional database and software techniques.

While the term may seem to reference the volume of data, that isn’t always the case. The term big data — especially when used by vendors — may refer to the technology (which includes tools and processes) that an organization requires to handle the large amounts of data and storage facilities.

The term big data is believed to have originated with Web search companies who had to query very large distributed aggregations of loosely-structured data. (Source: http://www.webopedia.com/TERM/B/big_data.html)

To sports: Read this interesting article about the effect of Big Data to football:

http://www.cio.com/article/739542/How_Big_Data_Is_Changing_Football_on_and_off_the_Field

 

What is meant by random stratified sampling?

A method of sampling that involves the division of a population into smaller groups known as strata. In stratified random sampling, the strata are formed based on members’ shared attributes or characteristics. A random sample from each stratum is taken in a number proportional to the stratum’s size when compared to the population. These subsets of the strata are then pooled to form a random sample. (Source: http://www.investopedia.com/terms/stratified_random_sampling.asp)

Does segmentation go too far? Why? Why not?

This question can not be answered with a simple Yes or No, it depends! In general, a large segmentation is very important to companies in order to appeal to the different needs and wants of the broad range of customers. It is obvious that you can’t use the same marketing strategies when trying to sell your products to both teens and pensioners. But as a company one should watch out not to “over-segment” the customers. The following aspects are very important when using a segmentation strategy:

1)  Am I able to reach all of my segments through different communication channels?

2) Is my segment size large enough? Will it be profitable to concentrate on this segment?

3) Are there valid justifications for having multiple segments?

4) Are the segments stable over a long time or are they likely to change soon?

 

If a company has settled all these aspects, it should segment further in order to appeal best to all of its customers.