Marketing Plan for Sports Enterprise - Case Study Example

Marketing Plan for Sports Enterprise and Number Introduction The company ‘Sporties’ thathas been selected for this report is a fictitious sports manufacturer based in the UK. The company has been offering sports goods and sports wears for many years in the UK. The company is planning to expand and the recommended strategy to Sporties is ‘Product Development’. The competition among sports companies is increasing rapidly, therefore, in order to remain competitive and to increase market shares the company is planning to starts a Sports Services program. Sports service program Our company is going to start a program in which it will form a sports company in the UK. The target market of our company will be the major schools and college in the locality. The sports service will provide a platform where the school sports teams will be provided the opportunities to participate in games. This service will be different from other kinds of sports clubs and school sports clubs and more details will be provided in the following sections. Sports Marketing Opportunities The growing activities in sports are increasing the need of managers and directors with high level of knowledge (CHOCANO, 2004). The six challenges identified by McKinsey for a sport business to be a successful include Players’ salaries, Changes in technology, Pricing, Internationalization, Innovation and Illegal activities by athletes (Patterson, 2004). Since the trends in sports industry vary from country to country, therefore, it is very important to conduct an analysis of the market, where we are planning to start our business. PEST Analysis Economic The economy of London has emerged out of recession and the growth rate is very slow and in 2010, the economy is expected to face various hurdles. In a report (2010) it has reported that London economy has faced a decline in average annual growth rate of passengers, a rise in new orders and a rise in expected house prices (London Gov, 2010). In a survey conducted by World Bank in 2010, ‘Doing Business 2010: Reforming through Difficult Times’, it was found that UK is the fifth country in the world and first country in Europe in terms of ease in doing business (London Gov, 2009). Moreover, London Gov (2009) report also shows that the output of goods and services in London has increased in August 2009 and business activity recorded by Purchasing Managers’ Index (PMI) in August was 54.2 as compared to 52.1 in July. It shows the increase business activities in London Economy. Political/Legal The Government of UK only seeks to assist the sports organizations with funding and strategies and does not control the sport. Moreover, sports in UK are also free from political influence; however, government does participate in some international matters (CCRP, 2010). Moreover, in all UK home countries, there is separate Ministry of Sport, which considers its strategic priorities with powers to implement and none of the ministers is in the respective administrations. Social The table shows that consumer expenses on sports have increased from 2000 to 2004 and only a small declined has been seen in 2005 (Sheffield Hallam University, 2007). In the UK, schools are considered as the major providers of sport and physical activities and year 2004 has been designated as the ‘European Year of Education through Sport (CCRP, 2010). Moreover, the number of National governing bodies which are developing the talented players in schools. TABLE: Main Sports Related Indicators for London Source: Sport England by Sheffield Hallam University Technology Major development has taken place in the last few years in sports industry because of the latest technologies. Latest sports and fitness facilities have been introduced in sports club in London and all over UK. Furthermore, to gain more benefits by using internet, in December 2000 a two day summit was held in Lausanne by International Olympic Committee (IOC) for further increasing the use of internet in improving future games (CCRP, 2010). Various sports clubs in UK are using internet technology to develop direct relations with their members. Therefore, based on the above PEST analysis, it can be argued that sports activities are increasing in the UK and they are highly encouraged by government agencies. Although the economic situation of doing business in the UK is not very supportive however, the sports industry has not affected much by the crisis. Target Market Since the target market of our company will be only educational institutions therefore, following are the identified market segments. The table shows the different levels of educational institutions and a rough idea about the age groups studying in these schools. We are aiming to target the last three segments. TABLE: Market Segmentation School Age Group Primary 1 - 6 - or ages 4 – 11 Secondary Years 7 - 11 Sixth Form College/School 11 – 16 and ages 16 – 18 University 18 onwards Positioning In order to enhance the image of our products and services in the minds of our target customers, we are seeking to establish a strong positioning strategy. The positioning strategy which we have selected for our service falls in the first category of the given diagram ‘Strengthen the current position’. Since the aim of introducing this service is to increase the bar of customers’ expectations therefore, we believe that we will fall in first category. Secondly, we want to position our company as a sports development enterprise. Positioning Strategy Source: Marketing Strategy by Ferrell & Hartline Marketing Mix Product/Service Sporties School Club will design a sports service program to all schools, colleges and universities. The company will start its services by offering memberships to the schools, colleges and universities in the city. The institution which will join the club will be able to send its sports teams in the competitions organized for different schools. For example, if 25 schools accept the membership of the club, then they will be able to participate in sports competitions, arranged from time to time and they will be also able to get sponsors of the company such as its sports goods and sportswear at discounted prices on annual schools sports week. Although there are various companies which have been providing this service, however, the aim of Sporties School Club is to offer a more organized service specifically targeting educational institutions. DIAGRAM: Three Levels of Product Moreover, our sports program will be more like a Sports Development Program, which will offer more opportunities to schools to participate in interschool sports competitions. The students of the institutions which will be listed in our membership portal will get the chance to enjoy sports activities after schools or in vacations in our sports facility. TABLE: Product Line and Items Sporties Company Product Assortment Product Line Items Offered in the product line Fitness centre Fitness services Aerobics High energy and low energy classes Weight training Massage Medical Health edibles Body building Body building, weight lifting, cycling etc. Medical Dietician, Remedial massage etc Sports events Competitions between institutions Different games such as tennis, cricket etc. Training classes Club competitions Institutions competitions Sporting goods manufacturer Sportswear products and equipment Tennis, golf, football and cricket Racquets, shoes, balls, clothes, caps, bats etc. Price We will adopt the market penetration pricing strategy, as our aim is to become market leader. Therefore, price skipping is not a good strategy for us. The prices charged from the member institutions will include membership costs which will be paid monthly. The prices will be market competitive. Place Although we aim to expand our business in the whole UK however, in the start, we will offer our services only in London. The reason for selecting London for this purpose is that London has around 15 universities, 327 secondary schools, 51 FE colleges, 1233 Primaries and 114 Special institutions (Schools web directory, 2010). According to directory listings, there are more than 55 sports clubs in London (All in london, 2010). Since our target market is the educational institutions therefore, we will try to establish our sports facility in an area where there is significant number of institutions. We will try to buy property for establishing a sports facility near Camden Town, London. DIAGRAM: London Universities Source: WLV Website Promotion Advertising In order to provide information on locations, prices, and times and to develop interest, advertising Medias including local press and radios, websites and leaflets and posters will be designed. The radio channels through which we will advertise our service will be WFTG-AM and WWEL-FM and their frequencies are 1440 AM and 103.9 FM respectively. The cost of ad for 30 seconds for both of the stations is $32.00 (Gaebler, 2010). Ads will be also given in local newspapers such as Bexley Mercury, South London Press, Edgware & Mill Hill Times etc. The leaflets and posters will be pasted near the educational institutions so that they may catch the sight of our target market. Direct Marketing Since we aim to attract as many educational institutions as much possible therefore, the promotional material will be also sent directly to the educational institutions through our representatives. For this a few agents will be hired with a strong marketing pitch and with some know how about sports facilities and fitness and they will be sent to different institutions. Brochures will be also developed for this purpose. Public Relations The direct marketing will also provide us an opportunity to develop public relations. Our representatives will also give presentations and will be having discussions with the management of educational institutions. However, once the management of an institution will show its willingness to obtain the membership of our sports facility, and then our team will visit the institution and give presentations related to our services, its benefits and packages etc. Sponsorship Free kits will be provided to the schools for their annual functions and they will be motivated to take memberships to further get benefits of our services. For example, if our representatives are reached by Holborn College to sponsor their annual sports function, then a few kits will be provided to college. Moreover, a specific budget will be allocated for this purpose. Implementation and Control phases Action Plan This plan is for one year and following are the details of our action plan and its implementation. Process to be executed Sports facility will be developed in a commercial area and tenders will be published in newspapers to buy fitness equipment New staff will be hired provided that the previous staff does not have desirable skills Advertisements will be published and memberships will be offered Annual sports functions of institutions will be sponsored and club competitions between members will be organized within club and institutions Requirements for effective implementation Availability of desirable budget Availability of desirable location Obtaining considerable memberships in the first year Expected results It is expected that in the first years of operations, our profit will be either negative or near breakeven point. The reason is that we will spend huge amount of money on fixed assets and the number of institutions as members is also expected to be low. In the second year, the company aims to achieve break even or positive profit. Therefore, our realistic goal is that we will start generating positive income at least after one year. Required resources Funding to build sports facility and buy equipment Government assistance on sports development program Sports skilled people Capabilities of personnel Although our staff has been dealing with sports business for years however, we will need to conduct some hiring to recruit our company representatives, fitness instructor, fitness club workers etc. We will encourage internal recruitment for this purpose, however, in the case, we could not find right person and we will go for external hiring. Control Process Since we are going to open our own facility by entering into UK market and we are not going for any merger or acquisition therefore, we will have significant control over the operations of the company. Moreover, participation and decentralization will be encouraged however, to keep a control on process; monthly report will be prepared on the performance of the company. Sport Marketing Ethics Since our target markets are the school, college and university going students and their institutions, therefore, we will promote our services among them. Whilst organizing the events such as sports events, our company will sponsor the event and will seek to attract more sponsors. Companies such as soft drinks are paying thousands of dollars in sponsorship programs to attract school age children. Promoting the products through our channel that are not actually healthy for the young people may create ethical issues for us. However, being an ethical organization, we will consider that the events which we will sponsor may not promote such brands. Conclusion Therefore, from the market analysis, it is evident that sports activities are highly encouraged in the UK and government is also supporting sports development organizations. Being a sports goods and sportswear manufacturers, we have identified an opportunity to start a sports program which will give the educational institutions a platform to compete with each other. In this way, educational institutions will not be supposed to spend huge amount of money on sports facility. By offering penetrating pricing strategy, promoting services through different channels, sponsoring annual sports functions and establishing a sports facility near the educational institutions, we actually expect to become market leaders in this industry. However, our company does face the economic and funding challenges, which we will cover through our internal financial strength. Bibliography Allinlondon. (2010). Listing of Sports Clubs in London. Retrieved June 21, 2010, from http://www.allinlondon.co.uk/directory/1372.php CCRP. (2010). The Organisation of Sport & Recreation in the UK. Retrieved June 22, 2010, from http://www.yorkshiresport.org.uk/ccpr/c2.htm#government CHOCANO, P. D. (2004). Sports management: A sector in expansion . Retrieved June 21, 2010, from http://ideas.ie.edu/articulos.cfm?idArticulo=93&idIdioma=1&titulo=Sports-management:-A-sector-in-expansion- Ferrell, O. C., & Hartline, M. D. (2008). Marketing Strategy. Cengage Learning. Gaebler. (2010). WWEL Radio Advertising Costs. Retrieved June 21, 2010, from http://www.gaebler.com/WWEL-FM-KY-Radio-Advertising-Costs++24891 London Gov. (2009, September). London’s Economy Today. Retrieved June 22, 2010, from http://www.london.gov.uk/mayor/economic_unit/docs/londons_economy_today_no85_240909.pdf London Gov. (2010, January). Londons Economy Today. Retrieved June 22, 2010, from http://www.london.gov.uk/mayor/economic_unit/lon-ec-today.jsp Patterson, D. (2004, Septemnber 10). Business of Sports Is Changing. Retrieved June 21, 2010, from http://smallbiztrends.com/2004/09/business-of-sports-is-changing.html Schoolswebdirectory. (2010, June 1). UK Schools & Colleges Database. Retrieved June 21, 2010, from http://www.schoolswebdirectory.co.uk/index.php?county=London&submit=Submit+Query Sheffield Hallam University. (2007, December). The economic importance of sport in London, 2000-2005. Retrieved June 22, 2010, from Sport England: www.sportengland.org/research/idoc.ashx?docid=cc9d2fd9... WLV. (2010). Map. Retrieved June 21, 2010, from http://www.scit.wlv.ac.uk/ukinfo/ Read More