Basketball Market - Research Paper Example

Basketball Market Analytical Report Registration Number Basketball Market Analytical Report Executive Summary The paper is on Basketball is no longer a pastime but a professional game that has had pervasive influence in the international audience, since its discovery in the 1890s. The most fascinating impact of the sport has been observed in the Asian community, most specifically China, where the game has continued to rise to become the national pastime, since its introduction in the 1930s. However, the business development of the sport has been slow in the Asian nation, until in the 1980s when commercial entities put their toes in the unexploited venture. The slow development was also perpetuated by the Chinese privatization policies that gave little space for private investors to develop the game to professional scales. In 2007, after the relaxation of the privatization policies in China, the government has allowed corporations like Li-Ning, Nike, and NBA to play an increasing role in developing the market and the sport’s talent. Presently, it is estimated that about 300 million Chinese people are directly involved in the game as players, and an unspecified number involved as the commercial entity of the game. In the U.S., the sport is run professionally, and enjoys wide sponsorship from the national and private sectors respectively. The two cases therefore generate substantial debate on market feasibility in relation to the current trends in the game. China is a fast emerging market player whereas the U.S. is a mature market that seeks new investment grounds to further its returns on the game. As statistics indicate, since 2007, NBA’s returns in China have been increasing by 30-40% per year, and more progress is expected in the next few years. The evidence indicates the underlying Asian business opportunity, and a close analysis of the playground as discussed in the content will reveal the feasibility of the same. Market research is any planned effort with the intention of collecting more of information about the target markets or the respective customers. For this reason, market research becomes one of the important aspects of business strategy. In a broader standpoint, market research generally entails the process of carrying out the marketing while the market research is more of specifically with the markets. A principal key determinant to the level of competition in the market systems is the market research. For instance, it provides the relevant information that helps in the identification and the analysis of the needs of the market, its size, and the competition levels. The recommendation give which country is best to operate in as a merchandise investor following detailed evidence in the paper. Table of Contents Contents Pages Executive Summary 2 Table of Contents 3 Contents Pages 3 Introduction 4 Problem Analysis and the Available Choices 5 Audience Analysis of Client 5 Comparison of Chinese and U.S. Basketball Markets 7 Recommendations 8 Qualifications of Consultant 8 Conclusion 9 References 10 Appendices; 11 Appendix 1: Time Schedule for Compiling the Report 11 Appendix 2: Resources 11 Introduction Market research involves evaluating the potential value of any market, through conducting feasibility studies that points out the profitability of the venture. The studies may also involve collecting information through opinion research, and interpreting the information using statistical analysis (Wood, 2012). The empirical analysis will generate factors and forces that can be used to draw comparison between the markets in two different countries under consideration, thus guiding in choosing the most viable location. As mentioned before, basketball enjoys widespread support in both countries, and recently becoming one of the most popular sport in the Asian nation, China. It is estimated that Chinese population between the ages of 15 – 54 years recognize basketball as a popular sport in China, further affirming the growing popularity of the sport in the populous country (Araujo, 2007). The growing fan base of the sport can be used as an indicator of viability of the sport in the two countries, with the U.S. emerging stronger in fan loyalty to the sport. The growth of the sport in the U.S. has over the years enjoyed massive support from both public and private entities, making it one of the most popular sports in the nation. The case is divergent in China; the administration has been keener on controlling the growth of the sport by regulating private business entrants from ‘mingling’ with the sport in the country (Wood, 2012). However, the policies have changed, allowing more parties to participate in the market and the development of talent in the sport. Being one of the most loved games, there is an association called the Andrew’s Basketball Association currently has a strong establishment in the game. For instance, the association is one of the world’s principal basketball leagues with many wide fan bases following it. Fans are also of variety in the game as some follow while others just love the entertainment part that comes with playing the game. Others also love the game for the thrill that it has due the nature of its competitiveness especially from the two rival teams in it. Following this their fan in loving the game, members of the basketball association have the international coverage where almost everyone knows them (Gronroos, 2006). Due to the necessities of compiling the report, there is need to understand what the association intends to have in future with the available two principal markets. In most of the occasions, it is usually expensive for an organization to invest in the two markets or even understand their nature of developments. Consequently, the data from the research will be vital to both the two markets independently. For instance, it will offer the information relating the various trends in the market and help in the identification of the customers’ ability to purchase goods or services they provide (Rodic & Budimircevic, 2011). In relation to the basketball marketing research, the analytical report will report the findings the Andrew’s Basketball Association. The aim of the research in this case, will be to assist the basketball association in identification of the best site or environment suitable for their operations. Some of the possible places that the research will evaluate on will either be in the American or the Chinese markets. To ensure the attainment of the findings pertaining to the conditions of these markets, the method will seek the sources of data that relate to the organization’s operation’s activities. Upon conclusion, the sales department should be able to find the need to adopt the recommendations and solutions presented in the report. Problem Analysis and the Available Choices The research focuses on the potential market opportunities in both countries, and the possibility of investing in either, after a conclusive analysis of the market dynamics (Gronroos, 2006). The analysis will focus on the current marketing trends that exist in the two possible markets for the client (investor). In the end, the investor will be able to choose between the two markets based on the research recommendations of the report. Therefore, in order for the client to be well versed with adequate information regarding the investment, a concise analysis using accurate tools was considered for the best decision-making. The most critical facet considered in the analysis was the contemporary market shifts that motivate the current trends in China, making it an emerging basketball hub. Ultimately, the client/investor to make an informed judgment on the most suitable business environment to cast their capital more objectively, using the discoveries. The core value of the investor entity is maximizing returns; the question is, is China economically mature to receive the national pastime as a professional sport with huge economic gains? To further ensure the understanding of the marketing conditions of the two possible markets, the team conducted a comprehensive research in both markets, by engaging professionals and major investors in the industry to make a conclusive report for the client. Past statistical data were used to further understand, monitor and forecast the future trends in the industry (Rodic & Budimircevic, 2011). Finally, the report used additional information from credible sources from other articles such as newspapers, journals, magazines, and online research. All the tools were combined to generate a potent analysis that was used to interpret understandable data to help in judgment. The other tool that was used involved conducting interviews with different market entities, to cement understanding of the present business situation with high level of certainty. The chosen methods were critically evaluated to prevent conflicting interests and perhaps painting the wrong impression to the client (Rodic & Budimircevic, 2011). Background knowledge of the sport was necessary to help in familiarizing with the different persons in the industry. The knowledge was also necessary to help in preparing the most relevant questionnaire that would resonate well with the target audience, and help achieve the objectives of the interview. The past knowledge of the sport was disregarded, to prevent bias in the interview and reporting the recommendations to the investor. Good data analysis is critical for success of proper data interpretation; proper data analysis tools were employed in the reporting process, to illuminate the details that might have been understated in the other methods (Rodic & Budimircevic, 2011). Audience Analysis of Client Based on the issue of market competition, report analysis on the market conditions should be relevant for the investor, Andrew Basketball Association (ABA) to evaluate the market condition between the two nations. The brief analysis focuses on the contemporary business situation in both countries, based on the percentage popularity of the sport, and the capital investment in the industry. The result, in this case, would be the development of high quality products that in this case will be able to meet the customer’s expectations (Gronroos, 2006). Currently, the Chinese market has around 300 million basketball players, equivalent to the population of the U.S. More importantly, the Chinese administration has leveraged on the current developments in the sports arena by easing its sports policies. The state support has also seen the formation of the China State General Sports Administration, which has outlined the long-term plan for the national sports development. In as much as the government piecemeal support mode has been insufficient to propel the sport to international status, the existing investors have focused on the low-hanging fruits: the retail and entertainment business have been used as a conduit to commercialize the sport in local business frontiers. The current entrants like Nike have done little to develop the sport, other than focusing on growing mass-market demand for its products; the enterprise has not done much to develop the play. The case therefore exposes the missing link that confronts the Chinese market. In other words, China is a developing market but rather at a snail pace, due to the commercial interest of the current players in the industry. What the market requires is a facelift that might come in the form of sponsorship and talent development. Judging by the popularity of the sport, and the number of active players mentioned, the nation poses a strong market driven by demand, but lack the most essential motivating factor. Bridging this gap would open a whole new level of commercial success in the populous nation. The current changes in the preference of the younger age group in China have presented an impressive marketing point for companies like Nike China. There is a growing trend to reward performers with pricy sneakers and other sports outfits, which is another powerful indicator of the fast growing market in China. The major impedance to the full penetration of the current companies (NBA) in China is the national sports policies. The policies have been modified to allow entry of external parties in the game but the CBA sports body retains massive control of the sport in the country. The commercial bodies are concerned with developing strong business relationships with the administration, while ensuring that all their operations and initiatives are streamlined with the government’s goals. In order to penetrate the controlled Chinese market, there is need for perfecting the strategies used by the current international companies; the strategy involves aggressive advertisement, sponsorship and other promotions that will take the sport to the people (Howard, 2010). The country poses a great opportunity and challenges that require comprehensive understanding of the market structure. Politics play a critical role in Chinese sports organization; hence, it is prudent to understand the relationship between the policies and the core business values to avoid conflict of interest. The other parameter worth investigating was the statistical evidence of the sports data in the country in the past decade. Evaluation between the two countries is the security issue. Currently, there are a lot of terrorist activities taking place worldwide especially with the target to West such as America in this instance. Most of these terrorist groups would pretend to assume the citizenship of a country but in the real sense spying to carry out their evil activities. Consequently, it calls for the government to provide the citizens with enough security (Gronroos, 2006). Comparison of Chinese and U.S. Basketball Markets The U.S. basketball market enjoys several benefits, most important being international ratings, which is the highest in the world. The other aspect about the U.S. market is that it has an established monopoly currently enjoyed by N.B.A, among other entities. The sport is equally popular in both countries except that the U.S. market is more mature and run more professionally by the currents sports enterprises. In China, in as much as the game is popular, it faces more economic setbacks that limit its full exploitation. Based on the previous records of fan turnout of the game in China, CBA has only managed to draw a few thousand fans in its matches. On the other hand, U.S.A. has a history of good fan support of the game, despite its small population than China. It is only valid to mention that the most viable point of investment in China is in the merchandise form, rather than directly investing in the game itself. Moreover, that is the working model that the market leaders like Nike and NBA has adopted. Maybe by developing the merchandise department first, the game sector will rise, but based on analytics, the prospect will require at least a decade to materialize. Basketball as a game has been popular in China since 1935, and until now, the development has not been sufficient to support the findings. Making a consideration of investing in the sport comes with unknown level of risk that will require further costs to mitigate. The project might not be viable because it shall not yield to the core objectives of the enterprise. The U.S. market has been verified to have higher opportunities compared to its counterpart. Not only is the game popular in the nation but confirming by the massive capital invested in the game, it is only advisable to focus the investment in the U.S., either directly in the game or indirectly in the merchandise section. Both have a promising payoff, dtiven by the market supply and equal demand (Gronroos, 2006). A close comparison of the current business environment in the two countries revealed that the market structure in the U.S. is free while the market structure in China is under tight control of the government, hence generating monopoly. The move was motivated by the administration’s desire to block private investors from monopolizing the game, having identified basketball as a national pastime. Despite the massive control of the industry with stringent policies, the government has done little to promote the development of the sport. The only major upgrade done was allowing the investors operate in the nation but under the close watch of the government; the enterprises must conform to the national policies in line with their business values, making them mere spectators in the deeply underexploited commerce. It is therefore worth considering noting that focusing on the U.S. market will provide huge investment returns in a reasonable timeframe compared to the Chinese market that requires significant policy changes (Rodic & Budimircevic, 2011). From our knowledge, it takes a great deal of years for the Chinese government to consider making major policy changes, which in this case will not be economically viable for the investment. Recommendations Based on the evaluations of the historical market dynamics of both countries, it was verified that the China has a bigger potential market in terms of the players, whereas in the U.S., the game enjoyed national and private sector support. The huge customer base might not accurately represent actual return on investment value, because the basketball market is driven by the demand of the (high-end) sportswear gear currently traded by the market leaders in the U.S. Since most of the prospective buyers in China are not able to spend on the quality high-end sports products, the most reasonable target of the venture would be the low-income customers, given that the other affordable materials are readily available in the market. The market prefers other cheaper alternatives, disregarding the quality of your product. In a business standpoint, this would be a big blow to the prosperity of the venture in the market, therefore, the statistical evidence might not necessarily interpret to higher demand of the sport material. The most sensible investment strategy to adopt when considering the Chinese market is to supply ‘affordable’ product to the population, if the enterprise is to compete with the other sports giant in the Asian nation. In my expert opinion, the government needs to put more than the current effort to open the market by releasing the monopoly to the market forces. The administrative interference has spawned unprofessionalism in the industry, because most investors would rather not face the looming risks; instead channel their investment in the U.S. market (Howard, 2010). Using Nike’s case in 2014, it was clear that China market contributed about 50% of its international sales that is about $175 million, which was just 33% of the total sales in the U.S. market alone. The Chinese market is growing and the best recommended market for basketball investment. GDP Growth NIKE REVENUE POPULATION Basketball League revenue USA 16.77 trillion USD 2002-2014 $200 –over $1 BILLION $318.9 Million (2014) $5 billion China 9.24 trillion USD 2002-2008 6778-12,229million USD $1.357 billions (2013) $72.88 million Qualifications of Consultant Being a marketing officer and a holder of masters degree in international business, I feel confident to hand all the marketing issues regarding market evaluation for the investment. Having understood the professional advice from the report, the ultimate judgment rests with the investor’s business priorities. Added to my vast experience in handling of civil cases across various nations all over the world, it is worth mentioning that understanding the international business law, most particularly in the Chinese environment, will be important if you consider casting the investment in the nation. The decision is informed by the knowledge that dates back from the country of origin and in comparison with the business laws, regulations and ethics of America (Cluley, 2014). As a marketer by profession, I have confidence in my consultancy and recommendations, after the wide research in the two business environments. But, in case one is interested in merchandise China is the way to go in this case. Clearly, the aspect of cheap raw materials and a large population ensures that there is continuity in the market and low production costs. ABA should invest in China. Conclusion The analytical study principally addresses the concerns that are available in the marketing conditions. Consequently, the use of the accurate data and findings in the compilation of this report will comprehensively give the detailed findings required. The elements, in this case, will convince the board on the issue relating to the suitable marketing conditions as when u pays them they become free. References Araujo, L. (2007). Markets, market-making and marketing. Marketing Theory, 7(3), 211-226. doi:10.1177/1470593107080342 Cluley, R. (2014). Consumption and repression. Marketing Theory. doi:10.1177/1470593114564904 Gronroos, C. (2006). On defining marketing: finding a new roadmap for marketing. Marketing Theory, 6(4), 395-417. doi:10.1177/1470593106069930 Rodic, J., & Budimircevic, K. (2011). Marketing research of consumer perception. Marketing, 42(2), 127-134. doi:10.5937/markt1102127r Wood, M. (2012). Marketing social marketing. Journal Of Social Marketing, 2(2), 94-102. doi:10.1108/20426761211243937 Appendices; Appendix 1: Time Schedule for Compiling the Report The process of compiling the findings will take place within twenty days of the month of May. It will involve the below work plan; Basketball Project 1st Day 2nd Day 3rd Day 7th Day 9th Day 13th Day 16th Day 18th Day 20th Day Formulation of topic to write on from the available information Assessment of the data from its sources Preparation for the collected data Data analysis Reporting Presentation of study findings Appendix 2: Resources The report in this instance is from the study of the picture of the present scenario of the marketing process in the proposed countries and how one becomes a success. Consequently, reporting in this instance will be an exploratory type of approach. The method suits best since it seeks to cover the areas where the researcher could be deficient of ideas relating to the area of study. Therefore, the aim of the research will be to acquaint him with the issues and also have thorough knowledge concerning the topic (Araujo, 2007). Read More