The Primary Focus of Nor'easters' Marketing Strategy - Case Study Example

Strategic Marketing Management Background of the Case: Entertainment in the form of sports is a booming sector for doing business. Many successful businessmen are getting comparative advantage in this field and so they are entering in large numbers. Many multinational companies are also now venturing into this sector by making huge investments. With such prospects or opportunities, optimally managing a sports team becomes all more important to actualize those opportunities. Optimal management will also need to be exhibited when the sports teams’ performance and thereby customers’ or fans’ response drops. Apart from improving the performance of their players, the management needs to come up with strategies particularly marketing strategies to entice the customers back to the stadiums. Nor’easters of Springfield is a new class A minor baseball team headed by President and General manager Bob Cortez and eagerly monitored in marketing prospects by Larry Buckingham, the Director of marketing. As an initial player in the market Nor’easter planned to start their first season in June 2009 with full preparation of competing in the existing market of Springfield, a small city located 92 miles west of Boston, with a well planned marketing strategy. The environment of Springfield was highly competitive as teams like “FALCON” (a minor league ice hockey team) was planning to leave Springfield due to too much market competition. Though in 1950, the city of Springfield was vibrant one with diverse manufacturing centers, by 2008 only few large manufacturers remained, with the city losing many higher-wage-earning residents. It was a big challenge for Larry Buckingham to formulate new market strategies to bring in the target customer base (60% of household comprised families with children younger than 18 years age group) with new offers, thereby sustaining at the initial level of business and earning the breakeven in the first year. Problem Specification: In the target market of Springfield, it is a difficult task for Larry to design market research in a short span of time through a selected research design, and thereby fix the appropriate price for the ticket and other offerings for the baseball fan. Designing a survey with financial constraints and keeping in tune with the volatile situation of sports the market was a risky job for Larry. The reports from sports reporters and different sports administrators were a source of information for him to take an effective strategic decision about Nor’easters’ different offering schemes. Although that information from external sources could be valid, it cannot be foolproof. “Larry needed data that was specific to his market and that was relevant for his purposes. The older market data that he had available was insufficient for determining the possible attendance numbers and did not answer any questions about the current demographics in his area.” (Case study). Larry Buckingham’s research objective was to find out how much to charge for the ticket, basing on the different demographic factors and what should be offered at the initial level. Previous experience or trends also cannot be analyzed, because Larry operated mainly in the field of theater, with only little experience in the sports industry and marketing. “Buckingham’s situation was especially stressful because, although he had a successful decade of experience in marketing various entertainment services, especially live theatre, the sports industry was new to him.” (Case study). The prime objective of any business is generating profit and the expansion of business. Although, Larry with this motive tried to carry out a competent research on the demographic profile to fix on the prices, there was not fullest cooperation from Bob Cartez. Bob was always busy in team’s development, issues of finance, operation, and government relationship, thereby giving less priority for the marketing research. This has lead to a ‘vacuum’ and it has become difficult for the Nor’easters’ management to enforce an effective and strategic decision. This has led to many problems with Nor’easters struggling to better its business with more value proposition and also finding it difficult to developing the brand name of Nor’easters. List of Alternatives- The marketing strategy of Nor’easters should attempt to successfully communicate the unique value the ‘program’ (i.e. the sports and games) offers for the customer. This strategy redirects the focus from the "cost" issue to the benefits that customers and the stakeholders experience from involvement in the program. The marketing strategy will continue to identify the needs of the market and communicate with their targeted audience in the most effective and positive manner possible, which was a problem in case of Nor’easters. So, if the marketing strategy is focused on mainly reaching the value of the ‘program’ to the customer, then Nor’easters can achieve success Implementing a new product or positioning a product or new segments to the customer in the market depends on S T P (segmentation, targeting and positioning) concepts, which generate idea about how to enter and sustain in the marketing. For doing the same, companies like Nor’easters can scan the market and take the help of any media to promote the brand. The uniqueness of the product or services, Nor’easters offers will add value and thereby entice the customers. So, the basic crux of its research campaign is to scan the market optimally from various aspects and thereby come with the pricing strategies and other offerings. Deduction is basically the process of drawing conclusions from rational and logical and principles. Induction is the process of moving from specific observation to a more general theory. Doing any research or survey is to draw an effective and feasible conclusion. Before entering into the market to start any business the company should do the thorough research about the place, price, product and promotion and then implement entry strategy, but incase of Nor’easter it was not planned systematically. However, as the research conducted by the marketing director was not conclusive, they need to redo the research in a more in-depth manner. That is, in the research the net response from Springfield resident census tract was 5.2%, minor league hockey team, individual, and season ticket buyers was 6.1%, college football individual and season ticket buyer was 7.6%, which shows that the net response was not good due to some mistakes and also due to improper selection of research tools or techniques. Thus, they should select effective research tools and techniques to make the research more responsive and apt for decision making. “Always apply the right marketing research survey tools at the right time for your decision making. Marketing research surveys and related tools have one primary purpose: to assist in decision-making. Thus, optimum marketing research methods fit within a larger scheme of marketing intelligence.” () Recommendation- Organizations including Nor’easters, which want to optimize their growth, reach and profit cannot remain “static”. They need to keep on entering new territories breaking both geographical ‘boundaries’ as well as economical ‘boundaries’, thereby expanding their reach and emerging successful. With every organization wanting to expand their reach and make an imprint in various markets, there will be enough opportunities for it, to initiate that expansion drive. So, when the organization has enough opportunities, it can set targets and formulate various strategies to achieve those targets and thereby beat off the competitors. Every organization’s survival and success in the light of stiff competition hinges on the success of its main or flagship product or service. It is the ‘key’ that opens the door of success or profit. So, for an organization to survive in a competitive market, and to increase its profits in an optimum manner, its products or services have to be marketed optimally. The primary focus of Nor’easters’ marketing strategy is to effectively allocate and coordinate marketing resources and activities to accomplish the firm’s objectives, within a specific product market or target market. Therefore critical issues concerning the scope of marketing strategy is specifying the target market for a particular product and product line. To focus on the target market or to first find out the exact target market, as mentioned earlier, Nor’easters and its Marketing director need to carry out an foolproof marketing research. Based on the research results, the target group can be ascertained and then the important decision of fixing the price can be done. To do that, Buckingham decision to go for fresh research survey was correct and his questionnaire was apt as he had identified two main categories of information, which is needed to take an optimal decision, price sensitivity and sports attendance. There was good response to the postcard based questionnaire, with many reverting through internet and telephones. “One approach to combining a paper survey with an electronic format is to email the individuals in the target population with a survey document as an attachment, or (if it is very short) to embed the survey items directly in the email. This exploits the convenience of technology for the delivery of the survey (and possibly its return)” (). The analysis of this response clearly pointed to the target customer base of households with children under the age of 18 years, which occupied 64% of the response. So, this main customer base of children and their families need to be targeted. That is, Nor’easters should concentrate more on converting this young children as well as youths as potential customer, thereby turning them into potential baseball fan. This can be done by offering certain benefits, such as discount on purchasing seasonal ticket. This strategy could being the potential customer base for maximum of the matches, thereby filling the stadium as well as the coffers in the long term. Also, they could be offered comfortable seats at the stadium or particularly seats closer to the player area and even player enclosures. As the young customer base will normally be enticed by certain players and look for role models, they like to nearer to them. So, when they are offered vantage seats, they will continue to visit the stadiums, resulting in good profits as well as attendance. As the young people will be normally accompanied by their parents and other elders, the attendance in the stadiums can be optimized. Efforts should be made to aid Nor’easter maintain the quality and integrity of the program within the finite financial resources of participants and the community of donors and supporters. Nor’easter is constantly working to improve the program through certain initiatives. Pricing is a difficult aspect of taking strategic decision, but with the sound research they can set an apt price. First time customers buy certain things basing on certain parameters i.e. quality, service, price, affordability, accessibility and availability of the items. In the entertainment market like the sports watching, the two most important factors, which the customer will focus before going to watch any match or event is the price of tickets and importantly profile of players. Emotional marketing is a new concept in the entertainment market, as there are many customers who become emotionally attached with the team as well as their players for certain specific qualities. So, on the part of Nor’easters, it is important for Larry to formulate certain policies to communicate with the customers (particularly the target base of young children) about the players and the team success before the commencement of the seasons. All the company including Nor’easters should think about the new approach of IMC (integrated marketing communication) to promote their business, with added inputs from research and market survey. So, for Nor’easters to achieve overall success in the marketing, there should be synergy between the various processes of the organizations, particularly the research part and the implementation part. Thus, Nor’easters should think about coordination of the different strategies for optimal success i.e. research strategy, financial strategy, marketing strategy and strategy for value creation and public relation. From the financial side also, Nor’easters is getting good inflow of funds, which can be effectively used for marketing and brand promotion. With the total fixed expenses of the team is $1,961,379, $ 3,800 for research survey and $ 725 for other expenses, there should be a specific financial strategy to prosper the business. As they are getting the stadium at free of cost from Springfiled College (college provided the stadium for free in exchange for 100% of the parking revenue amounting to $4 per car) and sponsorship amounting to around $21000 from different colleges and $25,000 from different restaurants, then they should spend more in promoting the brand before proposing a specific price for the customer. Also, instead of concentrating more on sales of ticket and getting response from the market, being the marketing director, Larry should concentrate more on advertising team and creating a strong brand name for the team. Good performance by the teams and the resultant strong participation by the people create strong leagues in every sport. For spreading the brand name of the league and its services the company has to invest more in the media to advertise about the team. Also, there should be more active participation by the team players as part of its marketing strategies, particularly in the merchandising sector and also as part of CSR activities. The company should concentrate more in value proposition, brand creation, advertising, price offerings, services offerings, and getting more sponsorship to conduct the event in an effective way. When these activities are carried out, the intended customer base can be optimally enticed, which will translate into good ticket sales and maximum attendance, thereby turning Nor’easters a profitable enterprise. References powerdecisions.com. Marketing Research Survey Tools. Retrieved on March 11, 2010 from http://www.powerdecisions.com/marketing-research-tools.cfm swarthmore.edu. Survey Research Tools. Retrieved on March 11, 2010 from http://www.swarthmore.edu/x15998.xml Read More