Chapter 15 - College of Business
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Chapter 15
Segmentation of the Sports Market
McGraw-Hill/Irwin
15-1 ©2007 The McGraw-Hill Companies, All Rights Reserved
Introduction and Review • “The Mass Market Is Dead” • “One-Size-Fits-All” Strategy is Obsolete • Mass Marketing versus Differentiated Marketing
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Differentiated Strategies • Marketing Mix Tailored to Each Selected Target Market • Not Everyone: – Wants the same products – Shops at the same types of retail facilities – Will pay the same prices – Is motivated by the same promotions 15-3
Market Segmentation • As Relevant for Sports Products as It Is for Non-sports Products such as Cars, Fast Food, Restaurants, Beverages, and University Programs
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Steps in Target Marketing • Market segmentation – Dividing a market into smaller groups of buyers with distinct needs, characteristics, or behaviors requiring separate products or marketing mixes
• Target marketing – Evaluating each market segment’s attractiveness and selecting one or more to enter
• Market positioning – Setting the competitive positioning for the product and creating a detailed marketing mix 15-5
Market Segmentation • No single way to segment a market • May combine more than one variable to better define segments • Best to use multiple approaches in order to identify smaller, better-defined target groups. – Start with a single base and then expand to other bases. 15-6
Key Segmentation Variables • • • • • •
Geographic Demographic Geodemographic Psychographic Behavioral Product related
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Geographic • • • •
World region or country Region of country City or metro size Density or climate
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Demographic • Age, gender, family size, family life cycle, income, occupation, education, race, religion, etc. • Most popular bases for segmenting customer groups • Easier to measure than most other types of variables
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Age and Life-cycle Stage • Example: P&G has different toothpastes for different age groups • Avoid stereotypes in promotions • Promote positive messages
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Modern Family Life Cycle
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Income • Identifies and targets the affluent for luxury goods • People with low annual incomes can be a lucrative market • Some manufacturers have different grades of products for different markets
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Demographics
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Demographics
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Geographics • Urban vs. suburban – Basketball versus soccer
• One part of country vs. another – Skiing versus golf
• One country vs. another – Cricket versus baseball 15-15
Geodemographic • Claritas, Inc. – Potential Rating Index for Zip Markets (PRIZM) – Based on U.S. Census data – Profiles on 260,000 U.S. neighborhoods – 62 clusters or types
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Psychographic • Social class • Lifestyle • Personality
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Psychographics (Lifestyle)
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Behavioral • Occasion segmentation – Special promotions and labels for holidays • e.g., Hershey Kisses – Special products for special occasions. • e.g., Kodak disposable cameras • Benefits Sought – Different segments desire different benefits from products. • e.g., P&G’s multiple brands of laundry detergents to satisfy different needs in the product category 15-19
Behavioral (cont.) • User Status – Nonusers, ex-users, potential users, first-time users, regular users
• Usage Rate – Light, medium, heavy
• Loyalty Status – Brands, stores, companies
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Product-Related Variables • Level of Use – Season ticket buyer versus infrequent buyer
• Loyalty – Long-term versus new season ticket buyer
• Benefits Sought – Social outing versus entertainment by athletes 15-21
Six Segments of Sports Fans • • • • • •
Players Patriots Appreciators Socialites Friends Voyeurs
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Players • Those who play a sport are more likely to be a fan of that sport • Example: Golfers are most likely group to attend or watch a golf tournament on TV
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Patriots • National Pride – England vs. France • Regional Pride – New York vs. Boston • Important segment for international competitions such as the Olympics, the World Baseball Challenge, and the World Cup of Soccer 15-24
Appreciators • Admiration of players’ skills • Desire to witness excellence • Not as concerned about who wins
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Socialite • Seeks sports event where interaction with friends is facilitated • Tailgating • Members may not be very knowledgeable of the sport or event they are attending
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Friends • Watch friend or family member compete • May have limited knowledge of sport • Important for minor sports and events – High school sports – Amateur recreational sports
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Voyeurs • Drawn by the sex appeal of sport or individual athletes • Skimpy attire (Beach volleyball) • Attractive participant (Anna Kournakova)
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Criteria for Segment Sports Fans • • • • • •
Involvement Participation Social needs Identification Appreciation of sport Sex appeal
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Overview of Fan Market
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Participation Market • Players rather than spectators • Segmentation still important • Same basic categories of segmentation criteria can be applied – e.g., demographics, psychographics
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Aggregate Participation Market • • • • •
Excitement-seeking competitors Getaway actives Fitness driven Health-conscious sociables Unstressed and unmotivated
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Excitement-Seeking Competitors • Prone to engage in risky activities – Bungy jumping, extreme sports
• Predominantly male • Relatively young • Generally single
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Getaway Actives • Fun with family and friends – Skiing, camping, hiking, golf
• Vacation prone • Social motives • Both sexes
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Fitness Driven • Activities requiring strength and stamina – Running, aerobics, martial arts
• College graduates dominate this group • Predominantly female
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Health-Conscious Sociables • Activities that foster good health – Walking, light cardiovascular exercise
• Older participants • Predominantly female
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Unstressed and Unmotivated • • • •
Prone to be inactive Generally older (both sexes) Few activities appeal to this segment Little marketers can do to induce activity by members of this segment
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Sport-Specific Segmentation • More insight than with segmentation of the aggregate participation market • Used to identify homogeneous segments • Applicable for any participation activity – Golf, bowling, poker, skiing, tennis, hunting
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Targeting • Evaluating various segments and selecting the one(s) that promise(s) the best ROMI • Successful targets must be: – Sizable – Measurable – Reachable – Demonstrate behavioral variation – Actionable 15-39
Evaluating Market Segments • Segment Size and Growth – Analyze current segment sales, growth rates, and expected profitability
• Segment Structural Attractiveness – Consider competition, existence of substitute products, and the power of buyers and suppliers
• Company Objectives and Resources – Examine company skills & resources needed to succeed in that segment – Offer superior value and gain advantages over competitors
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Target Marketing Strategies • Undifferentiated (mass) marketing – Ignores segmentation opportunities
• Differentiated (segmented) marketing – Targets several segments and designs separate offers for each
• Concentrated (niche) marketing – Targets one or a couple small segments
• Micromarketing (local or individual marketing) 15-41
Micromarketing • Tailoring products and marketing programs to tastes of specific people and locations – Local Marketing: Tailoring brands and promotions to the needs and wants of local customer groups – Individual Marketing: Tailoring products and marketing programs to the needs and preferences of individual customers
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Factors in Choosing a Market Coverage Strategy • • • • •
Company resources Product variability Product’s life-cycle stage Market variability Competitors’ marketing strategies
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Positioning for Competitive Advantage • Product’s position is the way the product is defined by consumers on important attributes, or as the place the product occupies in consumers’ minds relative to competing products. – Perceptual position maps can help define a brand’s position relative to competitors
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Perceptual Mapping Positioning - Finding a way to fix your product in the minds of consumers high price
conservative
extreme
low price 15-45
Perceptual Map for Sports
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Choosing a Positioning Strategy • Identify a set of possible competitive advantages on which to build a position • Choose the right competitive advantages • Select an overall positioning strategy
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Identifying Possible Competitive Advantages • Key to winning target customers is to understand their needs better than competitors do and to deliver more value • Competitive advantage – extent to which a company can position itself as providing superior value – Achieved via differentiation
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Identifying Possible Competitive Advantages • • • •
Product differentiation Services differentiation Image differentiation People differentiation
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Positioning Errors • Underpositioning – Failing to really position the company at all
• Overpositioning – Giving buyers too narrow a picture of the company
• Confused Positioning – Leaving buyers with a confused image of a company
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Choosing Right Competitive Advantages • • • • • • •
Important Distinctive Superior Communicable Preemptive Affordable Profitable 15-51
Overall Positioning Strategy • Full positioning of the brand is called the brand’s value proposition • Potential value propositions include: – More for More – More for the Same – The Same for Less – Less for Much Less – More for Less 15-52
Communicating and Delivering the Chosen Position • Company must take strong steps to deliver and communicate the desired position to target consumers • Marketing mix efforts must support the positioning strategy • Must monitor and adapt the position over time to match changes in consumer needs and competitors’ strategies
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Segmenting the Golfer Market • • • •
Different levels of playing ability Different motives for playing Different attitudes toward practice Differing frequency of play
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Five Segments of Golfers • • • • •
Competitors Players Sociables Aspirers Casuals
• Recognizing different segments allows golf marketers to better satisfy various groups of customers 15-55
Closing Capsule • “One-Size-Fits-All” clothing results in consumers wearing clothes that don’t fit • Developing one marketing mix for all consumers is equally ineffective • Market segmentation and resulting differentiated marketing strategy provide better fit for each consumer
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Closing Capsule • Market is segmented using relevant criteria • Target markets are selected from array of identifiable market segments • Corresponding marketing mix is developed for each selected target market
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Closing Capsule • Segmentation is appropriate for: – Aggregate fan market – Fans of a particular spectator sport – Aggregate participation market – Participants of a particular activity
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