Fundamentals Of Sports Marketing - Research Paper Example

 Fundamentals Of Sports Marketing Abstract This paper examines selling concepts and persuasion in marketing. It particularly investigates the topic of sports marketing, a trend that has become very popular in both the corporate and sporting world. The paper examines sports marketing using the aspect of the selling concept and persuasion, and relate it to three disciplines in the social sciences namely commerce, economics, and history. The introduction section gives the general selling concepts and persuasion with a bias towards sports marketing. It also gives the thesis statement of the paper. The main body of the paper covers the topic in detail, developing and supporting the thesis statement. The conclusion section summarizes the main ideas brought out in the paper and shows how they support the thesis. It then draws inferences wherever appropriate. Introduction Sports marketing refers to how a number of companies such as Fila, Reebok, Addidas, Nike and many others are selling their products using persuasion by letting athletes wear their products. For instance, many basketball stars wear Nike shoes courtesy of sports marketing. Sports marketing is a field and dimension within the broader marketing concept (Schlossberg, 1996, 22). It is quite a new concept compared to the other marketing fields and dimensions. Sports marketing is currently undergoing constant evolution and change as the society fights the free market in deciding the ethical and legal boundaries of today’s business. It is worth noting that sports marketing falls within the general marketing although it lacks a clear definition. Today, sports makes use of television and corporate sponsorships money in competing and paying for high quality athletes. These companies use individuals, colleges, leagues and teams in differentiating their products from those of their competitors in today’s competitive business environment. Interestingly, what one may consider as sports marketing could turn out to be selling out to a number of critics. Today’s business world keeps pressing for a competitive advantage, with the sports world generally welcoming the money offered (Gorman and Calhoun, 1994, pp 49). The trend of sports marketing has affected sports at all levels; from the professionals to small leagues. It is not easy to specifically pinpoint where sports marketing all began (Kamphorst and Roberts, 1989, pp 33). Similarly, it is neither easy to establish the developmental phase we are in nor the future of this emerging marketing field. Sports marketing has greatly transformed the sports industry by making it more lucrative than ever before and as a result led to its growth and development (Mullin et al, 1993, pp 61). History Sports marketing can be traced back to the 1870s when tobacco manufacturing companies designed baseball players’ cards and put them in cigarette packs. This was in order to develop their brand loyalties and improve their sales. The tobacco industry has therefore played a very big role in the development of sports marketing (Pope, 1997, pp 16). The baseball cards used by the tobacco industries were perhaps the first sports promotion aimed at benefiting another industry. The concept of baseball cards developed into bubble gum cards in the early years of this century. It is interesting to note that promotion developed and formed its own industry. A number of sports cards are now available, some of them without any gum. The first sports marketing examples made use of armature athletes as a means of advertising and also for public relations (Mullin et al, 1993, pp 63). For instance, during the 1936 Olympics in Berlin, Adidas gave free shoes to Jesse Owens. Sports turned into the Unites States’ mark of shifting social times with the integration of baseball by Jackie Robinson in 1957. Robinson’s breakthrough helped in changing the US social times by ending segregation in clubhouses, restaurants, and hotels. This was later followed by other sports where the inclusion of blacks in sports helped in the growth of the sports market. Culture started becoming less segregated, thus enabling sports marketers to reach both whites and blacks by sponsoring integrated sporting events or sponsoring them. This event greatly helped the Civil Rights Movement and at the same time proved how socially powerful sports can be. It also helped in demonstrating the impact that one can make when he or she uses sports as his or her communication medium. Robinson left a legacy that became very important to sports as well as sports marketing in subsequent years. Television was very useful in the development of sports personalities. Radio had earlier tried this, but the visual aspect of television made it even better, since it enhanced sports marketing. Both television and radio helped marketers in tuning their messages to make them more specific and reach larger audiences. People were now able to view their sports heroes better than they had in the past. Sooner or later, they wanted to emulate them; both their clothing style and their athletic feats. For instance, during Muhammad Ali’s fights, people were able to recognize that he wore Adidas shoes, Champion or Everlast Belt boxers. These brands became very prominent with Ali’s increasing prominence. People also noticed Ali’s Adidas and Converse Chuck Taylor gazelle shoes. Nike was established in 1964, mainly specializing in the Tiger brand of shoes. It later took the sporting attire industry by storm (Strasser and Becklund, 1991, pp 27). Sports started to drive the preferences of consumers like never before. The forcing of the tobacco industry off television airwaves went a long way in freeing up large advertising budgets. Promotions such as NASCAR’s Winston Cup and the Tennis Circuit of Virginia Slims followed. This fit was immense for both the tobacco industry and sports. As a result, it provided the first tremendously successful sports marketing (Schaaf, 1995, pp 18). Companies such as Philip Morris were now able to avert the law that had been keeping them from purchasing TV commercials. They could now get airtime during sporting events. In the 1970s, sports marketing witnessed numerous key evolutionary events. Product sponsorships by athletes became a trend (Kamphorst and Roberts, 1989, pp 35). For instance, Joe Namath turned into a sex symbol. He utilized this image in selling pantyhose among other merchandise. Towards the late 1970s, Joe Green of Pittsburgh Steelers starred in a highly commended advertisement for Coke. There emerged tough shoe wars between Nike, Puma, Adidas and many others who competed for athletes for their endorsements (Strasser and Becklund, 1991, pp 27). Players began marketing themselves using their personality and performances to land greater sums of money in form of sponsorship deals. ESPN was established to provide the first ever all sports network, and continued growing with the moving of sports to the society’s forefront. The first ever corporate-sponsored stadium was sponsored by Rich Foods Incorporated over a 25 year period at 1.5 million dollars; a very important milestone at the time and a good bargain even by today’s standards. By early 1980s, sports had become a great marketing tool worldwide. Commerce and economics The commerce and economics of sports marketing are not easily separable. Sports marketing with regard economics and commerce can therefore be reviewed together. The 1980s saw sporting goods became more tailored to meet the needs of specific sports. This is the time a number of individuals captured the hearts and eyes of the nation. Among those who rose to great fame include Joel Montana, Bo Jackson, Magic Johnson, Larry Bird and Michael Jordan. The Los Angeles Olympics helped in bringing to the spotlight a number of lesser-known athletes. It also helped in increasing the popularity of sports in the nation. Millions of sponsor dollars started flowing, with even mediocre athletes beginning to sign contracts with a number of contracts to either wear or endorse their products. The Major League Baseball brought with it free agency with money flowing in for athletes, with many other professional leagues coming shortly after. Salaries increased and leagues found themselves having to tackle competition issues related to the finances of teams (Jones, 1980, pp 15). Each off-season saw athletes signing for a million dollars per year more than they had signed previously. They cited lesser players making a lot more than they were making. A number of athletes such as Mike Tyson, Len Bias, Pete Rose, Chris Washburn, Jose Canseco, Darryl Strawberry and Dwight Gooden helped in taking sports marketing to another level. They took part in numerous multi-million dollar endorsement contracts with sports apparel companies. The 1990s saw a tremendous growth for a majority of sports and by extension sports marketing. The leagues became even more popular and expanded to utilize the untapped markets. Many athletes endeavored to sign endorsement contracts with a number of companies. For instance, kids like Tracy McGrady and Kobe Bryant became millionaires overnight with the signing of various deals; endorsement of Adidas as well as playing deals. Even mediocre athletes such as Jermaine O’Neal became instant millionaires courtesy of these contracts. College players such as Stephon Marbury, Tim Thomas and Shareef Abdul-Rahim started to treat college like a minor league and not an education. Money from television is the main driving force behind a majority of professional leagues, as well as college leagues. College basketball as well as football is ruled by television money (Feinstein, 1998, pp 23). Football and seasons keep getting longer in order to stretch out television proceeds over more weeks. Similarly, basketball has pre-season tournaments for the same reason as elongated football seasons. A majority of professional teams get more than 50 per cent of their revenue from television deals negotiated by the league. Determining these figures is not possible since these teams are privately owned. Moreover, some teams are constituents of larger organizations that do not make public the balance sheets related to these teams. Baseball is still struggling, with teams such as Chicago, Los Angeles, New York and Atlanta greatly benefiting from television contracts. On the other hand, other teams such as Milwaukee, Pittsburgh and Montreal are finding it hard to win such contracts. This can be attributed to the 1993 strike that played a big role in killing the popularity of baseball, and which is yet to recover. Baseball recovery is hindered by the availability of a wide range of entertainment alternatives such as basketball and football. Sports stadiums have turned out to be great advertisement spots for numerous industries. It is no longer affordable for a stadium to be named after a coach, player or great person unless they lots of money for it. The search for brand new stadiums and luxury boxes sends players and teams moving around searching for the best profit potential. The number of family-owned teams is rapidly on the decrease. Companies are increasingly endeavoring to snatch up teams in order to find the necessary synergy to boost their core business (Gorman, J and Calhoun, 1994, pp 56). Their main aim is therefore not to boost the sport but rather their core business. A number of drinks such as Gatorade have for a long time been synonymous with certain sports activities. They owe their great success to sports marketing campaigns (Pitts and Stotlar, 1996, pp 39). Gatorade refers to a brand of flavored and non-carbonated drink made by a PepsiCo division known as Quaker Oats Company. It drink is meant to be consumed during physically involving occasions since it is formulated to help in re-hydrating and replenishing fluids, electrolytes and carbohydrates. Another reason why Gatorade’s success is attributed to sports marketing is its name. Gatorade was named after a football team known as the Gators. The Gators credited Gatorade for their first ever win against the Yellow Jackets of Georgia Tech in 1967. As a result, Gatorade grew into an instant phenomenon. Moreover, the Yellow Jackets coach Bud Carson attributed his team’s loss to not having taken Gatorade. Courtesy of sports marketing, Gatorade has become the official drink of a number of sports establishments. Among them are the Major League Soccer, the US Soccer Federation, the Volleyball Professionals Association, the National Hockey League, the USA Basketball, Women’s Basketball Association, National Basketball Association, Major League Baseball, the National Football League and many other collegiate and professional organizations. Gatorade provides these organizations with its drinks in various flavors. Gatorade has recently expanded its market to the United Kingdom in the year 2008. It has become the provider of sports drinks to Chelsea Football Club in the UK. Gatorade has drawn a lot of attention in the sporting arena and beyond. The Gatorade shower is one such event, where the victorious team members pour the Gatorade drink over their coach’s head. This is a very popular event that has greatly contributed to marketing Gatorade. In 1991, Gatorade featured the Chicago Bulls’ star Michael Jordan in its advertisements. This is the time that Chicago Bulls won its first NBA championships. These advertisements were titled ‘be like me,’ and went a long way in popularizing the drink among basketball fans and players. A number of sports celebrities have also participated in the marketing of a number of products. Among them are LeBron James and Kobe Bryant, who are both great stars in the US basketball. James has taken part in the endorsement of Glaceau, Upper Deck, MSN, Bubblicious, Sprite, State Farm and Nike. Similarly Bryant has endorsed a number of brands including GameLoft, Upper Deck, Guitar Hero, Vitamin Water and Nike. Nike took the world by storm when they introduced their air cushioning system into the market. The real storm came when they got Michael Jordan to endorse the product. Sales grew tremendously, making Nike the largest sports shoes seller in the world. When Nike re-branded their sports shoes and named them Air Jordan, there was a huge demand for them, hence pushing the price up to $100 from the initial price of $65. This re-branding went on and Nike introduced the Air Jordan XVII which went for $200 and sold massively. The signing of Michael Jordan just after Nike went public saw its sales revenue surpass $1 billion. Michael Jordan is said to have had a great impact on the US economy; to the tune of $10 billion according to the 2007 Forbes magazine. All the products endorsed by Jordan have experienced tremendous sales. He has also had a big influence on raising TV ratings, NBA teams gate receipts and NBA goods sales. His contribution to Nike’s product line is estimated at over $ 5 billion. He has also contributed close to $408 million in sales revenue to other companies. Courtesy of Jordan’s influence NBA saw an increase in sales of its jerseys, shirts, and caps by over $3 million Nike signed Tiger Woods to endorse their products for $40 million in 1996. Woods then emerged the winner of the US Masters. This drove the sales of Nike’s sneakers in the US and beyond. Another sport that seems to be taking the world by storm is football. Football is undoubtedly among the most important sports world over. As a result, its marketing is increasingly becoming very important compared to the past. Owners of clubs and brands are generating more revenue than ever before from sports, courtesy of sports marketing (Desbordes, 2007, pp 37). Conclusion Sports marketing is the latest phenomenon in the general marketing field. Interesting, it is the fastest growing of all the fields of marketing. It has helped in revitalizing a number of sports that were once quite dull. It has also sparked a lot of interest in the corporate world in form of sponsorships and commercials. Sports marketing has also brought a lot of athletes to the limelight, including Joel Montana, Bo Jackson, Magic Johnson, Larry Bird, Michael Jordan and many others. Indeed, sports marketing has greatly transformed the sports industry by making it more lucrative than ever before and as a result led to its growth and development. References Desbordes, M (2007) Marketing and football-an international perspective, Butterworth-Heinemann, Paris, pp 37 Feinstein, J (1998) A March to Madness, Brown and Company, Boston, pp 23 Gorman, J and Calhoun, K (1994) The Name of the Game-The Business of Sports, John Wiley and Sons, New York, pp 49-56 Jones, M (1980) Current Issues in Professional Sports, Whittemore School of Business and Economics, New Hampshire, pp 15 Kamphorst, T and Roberts, K (1989) Trends in Sports, Giordano Bruno Culemborg, Netherlands, pp 33-36 Mullin, B et al (1993) Sport Marketing, Human Kinetics Publishers, Champaign, pp 61-63 Pitts, B and Stotlar, D (1996) Fundamentals of Sport Marketing, Fitness Information Technology, West Virginia, pp 39 Pope, S (1997) The New American Sport History, University of Illinois Press, Chicago, pp 16 Schaaf, P (1995) Sports Marketing- It is Not Just a Game Anymore, Prometheus, Amherst, pp 18 Schlossberg, H (1996) Sports Marketing, Blackwell Publishers, Incorporated, Massachusetts, pp 22 Strasser, J and Becklund, L (1991) Swoosh; the Unauthorized Story of Nike and the Men Who Played There, HarperCollins Publishers, Incorporated, New York, pp 27 Read More