Nonprofit Sports Marketing Plan - Assignment Example

Table of Contents Executive Summary 1 Introduction 2 Introduction Company 3 Opportunity 4 Background of opportunity 5 Services offered 6 Market introduction 7 Situation Analysis 7 Market Summary 7 Geographic 7 Market Demographics 8 Market trends 9 Market Growth 10 Swot Analysis 10 Weaknesses 10 Competition 12 Direct Competition 12 Indirect Competitors 13 KEY success factors 13 Marketing Strategy 13 Vision Statement 14 Target Market 14 Marketing Mix 15 Financials 15 Difficulties and Risk 16 Exit strategy 16 Conclusion and Recommendations 16 Executive Summary Unified Basketball Association (UBA) is a non-profit basketball association. UBA aims to provide entertainment and expertise in the game of Basketball. UBA plans to offer a professional environment established by top notch officials and players which upholds integrity and passion of the game. In a market where, government services for sports both inside the educational system and outside are continuously deteriorating, there is dire need for organization such as UBA. UBA will use a public facility located in Saipan. This facility is an open air basketball court. This court is situated in a very good location and can host a large number of spectators. UBA will be operating mainly for the population of Saipan. However it plans to continue on its success, of organizing inter Island tournaments. The main target market will be students of public schools who do not get enough opportunities to play high quality Basketball. UBA plans to build a reputation and differentiate itself from its customer on the basis of its officials and referees. The capital expenditure is nonexistent for UBA thus risk associated with UBA will be very low. With dedication and expertise UBA will grown into nonprofit brand which is the symbol of Basketball in Saipan. Introduction With advent of consumerism, a phenomenon not new to the human race has surfaced once again. As a result of capitalism, we live in a society which doesn’t give equal opportunities to everyone; some of our brightest talent is wasted because of a lack of opportunities. Thus the need arises for organizations which would compensate for this inequality by providing free services to the young minds of tomorrow. Ventures such as these are not only an act of philanthropy, bringing our society together in an act of charity but also entrepreneurial in nature. They create jobs thus reduce unemployment and add to the GDP. Team sports are the basic tool in the upbringing of any child. They instill the basic sense of loyalty that is necessary to a tribal being such as humans. They provide the basic training in how to live in a society, how to belong to something else outside your own personality and a home. This is a feeling which later develops into nationalism and humanity. A very famous team sports is Basketball. With millions of diehard fans in America now the game is expanding fast to other nations of the world. Recently it became part of the Olympics as well. Basketball requires the players to display accuracy, strength, agility and guile for success. These traits make it a perfect challenge for youngsters. Introduction Company Unified Basketball association (UBA) is a non-profit and tax exempt organization. It plans to cater people ranging from working adults to young school children. UBA will provide these people a chance at a healthy lifestyle, beautiful memories and basketball expertise, while blessing them with a sense of belonging. As UBA is a nonprofit organization, it keeps its revenues to minimum and only charges registration fees. The main focus will be on getting maximum revenue from sponsors. This revenue surplus will be used to further subsidize the entry fee, improve the quality of service and provide players with prize money for their achievements; to increase competitiveness. The league will basically have operational revenue generating tiers. The total leagues will be divided into three divisions. Division one will have athletes under the age of 15, Division two will comprise of players aging between 15 and 20, and finally divisions three will have players above the age of twenty one. In due course a brand will be established for UBA, which will enable UBA to capitalize on its brand value. Merchandize such as garments and sport accessories with UBA logo would be sold to generate more revenue. UBA’s main focus will be on maintaining the quality of game. This will only be possible by hiring top notch officials such as coaches and referees. They will ensure that both technical and legal aspects of the game are intact. This will improve the overall integrity of the game. UBA plans to attract local basketball stars as judges in finals and major games, this will both increase the brand value and inspire the participants. The main base of operation is an outdoor basketball court, which is a public facility, located in Saipan. UBA filled papers, requesting the government access to the court. An official permission was granted and now UBA can use this facility free of cost. UBA will renovate the setting to make it more attractive both in term of convenience and outlook. This investment will be kept at a minimum, because UBA is a non-profit organization thus cannot make huge capital investments. Opportunity A need for a non-profit sports club is validated and magnified by sheer experience of the game that participants attribute to these programs. There are many studies which evaluate value of youth participation in sports. According to these studies a direct correlation demonstrates that involvement in sports results in decreasing the potential to become involved in drugs, sex, crime, and gang-related behaviors. Research studies indicates the economic, social and personal importance of introducing sports in the lives of children in a positive and constructive manner, to avoid the social and penal system costs that may later result. UBA plans to meet this need, by offering an experience that serves as a personal sports reference for participants, rest of their lives. Background of opportunity Currently there is no similar non-profit organization operating in Saipan, which provides professional sports services to the public at such low cost. If we look at background of this opportunity, there are two types of factors which create need for Unified Basketball Association. The first set of factors address the need for a youth sports platform, while the second set address need for an adult sporting opportunity. With the increase in physical awareness, people are changing back from their unhealthy lifestyles. Heart disease and diabetics are now common household names. Most people affected by these and similar diseases are recommended physical exercise by their doctors. As jogging is monotonous and boring, they are on the prowl for an opportunity to get involved into sports, which at their age and workload is not possible. UBA caters to their needs by providing a flexible, motivating experience of both sports and fitness. Secondly sports programs usually sponsored by schools are strictly limited in terms of age and range of events. According to a study, fifty nine percent of the people believe that public school systems are incapable to meet up with sports experience expectations of young students. Due to economic reasons many school programs cannot afford to spend time or money on such activities that is why many sports programs have not survived increasing economic pressures on the public school system. Services offered All of the Unified Basketball Association services will be free of cost. The customers will be charged an initial registration fee. UBA will raise funds by the registration fee mentioned, fundraising, charitable gifting and tournaments/leagues. UBA will organize a league by the name of Youth Summer League. This will comprise of three divisions. Currently there are five teams in the first divisions which comprises of players under the age of fifteen. Division two has five teams and has players aging below seventeen. Division three cater to late teens who are currently university students etc. There are only three teams currently in this division, with players under the age of twenty. The basic idea is to run leagues and tournaments for each division. A normal league will go on for around three months while a tournament are usually a weekend event. Tournaments are less expensive because it is only a weekend event. It is also more of a fundraising event. The main focus is to run a league. UBA has as yet successfully organized three key events. 2009 UBA Summer Youth Basketball league officially started on 15th May. Furthermore 3 on 3 king of the court tournament (August 21st and 22nd) and Inter Island Friendship Exhibition (September 5th) were also successfully organized. Currently there is king of the court which has three divisions and allows players above the age of twenty one to participate as well. Additionally, UBA has a venue to sell drinks to spectators/players on every event. In due course and with brand development UBA will create merchandise such as stickers, t-shirts, and other collaterals as well for additional revenue. Market introduction UBA provides valuable team and social experiences for the increasing population of public, private, home-schooled youth and working adults. UBA offers both the youth and adults the chance to play a part in a variety of team sports throughout the calendar year. Beginning at a very young age, these experiences provide a source of recreation and at the same time improves athletic skills, health and fitness as they offer experiences in teamwork, sportsmanship, fairness, collaboration and leadership. Amplified self-assurance is just one of the many concrete benefits this program offers. Situation Analysis Market Summary The main market for Unified Basketball Association will be the Commonwealth of Northern Marianas Island. The primary focus will be on Saipan which is the base of operations, in course of the market analysis. Main focus will be on younger children and students. However parents will also be encouraged to participate in tournaments as players in the mature categories. Geographic The Commonwealth of the Northern Mariana Islands consists of 14 island chain that extends 460 statute miles from the island of Rota in the south to the most northern island of Farallon De Pajaros.  We cannot apply the term city of town to islands congested areas in the Northern Marianas.  These congested and urbanized areas are usually referred to as villages or communities and have no fixed boundaries. Each of the islands of Saipan, Tinian and Rota are separate municipalities.      As UBA has its main base of operation in Saipan we will analyze its geographic in detail. Saipan is 5.5 miles wide about 12.5 miles long with a total land area of 46.5 square miles, which is almost equal to the size of American city San Francisco. Of the 8 communities on Saipan, Garapan and Chalan Kanoa may be considered the principal urbanized areas.  Market Demographics A large population of CNMI is under the age of fifteen and very few people are above 65 years. In the last census of 1995 the total population was recorded at 58,846. The average growth according to the census is about 7.1%. PUBLIC SCHOOL       Growth PRIVATE SCHOOL       Growth                             Grade   2008 2009 2010 2011 RATE Grade   2008 2009 2010 2011 RATE                             K-6th   5610 6008 6435 6892 7.1% K-6th   1405 1505 1612 1726 7.1%                             7th -12th   4759 5097 5459 5846 7.1% 7th -12th   845 905 969 1038 7.1% If we look at school enrollments, in the year 2008-2009 the school enrollments were as shown above in the table. Taking a very conservative approach, a past population growth rate has been used to describe the increase in the number of school enrollments for UBA. This is a very relevant aspect in the present scenario because school students are main target market of UBA. If we observe the trend we can see that the number of students is diminishing, as they move towards higher education. This proves a certain characteristic of the market, which will be discussed in market trends. Market trends The significant market trends are as follows: Government agencies are reducing financial support to educational and public institutions for sports Increasing demands from parents for children to be involved in activities as they have little time to give to their children Heightened awareness of the positive correlation with involvement in sports and reduced potential for involvement in violent activities Organizations and corporations are increasingly using sports events as promotional marketing tool Governments to promote participations by companies are providing tax exemptions and benefits for participating in such sports activities Many students leave the educational system, not pursuing higher education Market Growth We will consider that the market will grow with the increase in population of Saipan and number of school enrollments. This has been done to take a conservative approach to estimating revenues, to get more realistic figures. Swot Analysis Strengths Dedicated facility: Use of public facility allows us to eliminate the cost on utility and facility fee. Allow us to lower entrance fee for participants. Man power UBA currently has experienced certified officials, Table officials and referees who have complete comprehensions of the game. This team of professional is capable to uphold the true spirit and standard of the game. Equipments UBA uses top quality basketballs to enrich players with a complete experience of the game. The association also has a portable electronic scoreboard and portable electronic shot clocks. This set of equipment brings credibility to the game and reduces cost on manually keeping score. Weaknesses Facility The current facility is also being shared by the community because it is a public facility. This has resulted in some constraints in scheduling of matches. But with effective and timely planning this is being efficiently controlled. Financial The only two sources of income are participations and corporate sponsors. As participants are paying very low registration fees, in order to increase the participation rate the only real source of income are the sponsors. Opportunities Location The basketball facility is in a prime location to attract corporate sponsors, because of its high commercial and marketing value. Grants UBA can target government grants to increase its revenues, as it is providing valuable service to the community. Facility UBA can strive for government legislation in order to permanently adopt the currently facility. Threats Competition There are many other basketball organizations that have the same mandate as UBA. We will discuss them in detail under direct competitors of UBA. There are other sports which are an indirect threat to UBA; they will be discussed in detail in the indirect competitors of UBA. Economic Business willingness to sponsor teams to participate on UBA’s event Individuals willingness to spend to participate on UBA’s event Current local situation The current location cannot be a long term solution for UBA, they will have to acquire a new facility or adopt the current facility permanently. Seasonal changes UBA’s events are at the mercy of the weather because UBA’s events are held at an outdoor facility, thus games have to delayed or even cancelled in case of bad weather. This results in bad customer perception. Competition Direct Competition Basketball Association of the Northern Marianas Island, mainly known as BANMI BANMI is the Basketball Federation of the CNMI Only Federation in the CNMI that is sanctioned or a member of FIBA (The International Basketball Federation) Caters to all age group Indoor facility United Filipino Organization, mainly known as UFO Catered mainly to the Filipino community in the CNMI 21 & over divisions only Outdoor Facility Base on the 2005 Census report, the Filipino is the largest single ethnic group in the CNMI at about 30% of the estimated total CNMI population Pilipino Contract Workers Association, mainly known as PILCOWA Similar to UFO Outdoor Facility Marianas Inter-Scholastic Organization Basketball League, mainly known as MISO Basketball League Catered mainly to Junior Varsity & Varsity (High Schools) Indoor Facility One league per year Indirect Competitors Aside from basketball, there are many other sports organizations on island that can be considered as a competition for UBA. To name a few: Swimming Track & Field Triathlon Baseball Softball Soccer (Football) Tennis Mixed Martial Art (MMA) Volleyball Beach Volleyball KEY success factors The key success factors for UBA are as follow: Keep registration fees as low as possible to attract more participants Provide a very professional experience of Basketball Increase customer satisfaction through sound customer relations as word of mouth is the main promotional tool Increase the turnout for events to increase attraction for sponsors Marketing Strategy The Unified Basketball Association Inc. is a non-profit organization whose goal is to provide players and coaches an opportunity to embrace the game of basketball. The organization strives to create a positive experience for all players involved, while at the same time provide them the opportunity to better understand the game of basketball and improve their skills to whatever level each player wishes to strive for. Vision Statement ‘Basketball for everyone’ Mission ‘Our mission is to enrich the experience of Basketball for everyone. Our dedicated staff of referees and coaches strives to bring professionalism and dedication in the players involved, no matter which age group they are a part of.’ Target Market The target market for UBA can be divided into two main segments with further categories: Students: The main target market for UBA is students enrolled in all grades. These range from junior high students to high school students. This target market can be further divided into two categories, private schools and public schools. Here again the major emphasis is on public school. This is because private schools usually have better sports facilities for their students, where as for public schools these are almost nonexistent. Non- students: These are basically people above the age of 20. These could be further divided up into two categories such as full time and part time workers. The emphasis will be on part time workers as they can devote more time to the game and become part of the league. Full time workers can only participate in tournaments. The difference in income levels will not be an issue as the registration fees are kept very low. Marketing Mix People: Highly dedicated and expert coaches and referees Place: An outdoor court, which is a public facility Product: A rich experience of league Basketball Promotion: Using word of mouth and creating merchandize such as sports shirts for promotion Price: The aim is to keep the registration fee as low as possible and raise maximum capital from sponsorships. Financials While analyzing the financials we will have to realize that this is a nonprofit organization. There is no capital expenditure. UBA has incurred most of its expenses as operating expenses. The financial analysis is thus limited to determining the cost of revenue for UBA. We will analyze revenues in terms of entry fee and charges paid at the food stands. The main aim of Unified is however to raise funds from grants and donations. UBA has two main sources of revenues generated by registration fees such as the leagues and tournament. For instance, the “King of the Court” charges teams for weekend tournament. A team usually consists of four to five participants. Each participant is charged registration fee of $15. Total collections made from the inaugural tournaments amount of to $1125. The payable ratio is very low, and currently only 0.06 of total revenues are still outstanding. The main revenues are from the summer youth league and currently amount to $2940. These are charged at $20 per player. All of these have been paid up in advance and no registration fee from youth league is outstanding. If we look at the organizational expenses of UBA we can see a total of $3769. The major expense from these expenses is as expected of referee and official fees. These official fees amount to a total of $1,311, and are the major operating expense of the organization. Unified Basketball Association has setup its utility on a government facility, thus there are no depreciation or rental expenses. A cash prize of thousand was awarded to winning teams. This was usually divided on a total of six to seven teams. Currently UBA is facing average expense of almost $361.75 per game. The main source of revenue is sponsorships and entrance fee. Difficulties and Risk If we look for future volatility in UBA’s expenses and revenues, expenses are mostly stable and would not be much affected by inflation. If we look at potential risks and threats for future increases in expense, we can summarize them as follow: Inflation: The increase in prices will be mostly threatening to referee and official fees. With increases in inflation there is threat of officials and referees demanding more fees, as inflation would increase the fees from alternative sources and thus UBA will also have to increase its fee to attract high quality officials. Other expenses such as equipment etc are so low in cost that affect of inflation would not trigger a noticeable increase in expenses. Exit strategy The exit strategy for UBA will be very simple, as they do not have capital expenditure. The main focus should be on returning any registrations fee to avoid legal claims etc. The officials should also be notified that the facility is no longer in use of Unified. Conclusion and Recommendations There are a lot of competitors in the market. This market is in the maturity stage, for such a market the main focus should be on making a strong brand image with differentiation and reducing operating expenses. With the current rate of expansions, very soon UBA will need a full time facility because it is using the current facility with the public. Therefore UBA must take steps to get government legislation on permanently acquiring the facility or keep a lookout for another facility in the future. UBA should also introduce services for specific school, these should be free of cost events, consisting of inter school events. These would increase promotion and turnout for games, thus resulting in both higher participation and more sponsors. Read More