Marketing the Activity-Based Program

n Chapter 12

n Marketing includes all the activities involved in producing and moving goods and services from the producer to the consumer

Stoddart (1982)

n Defines marketing as: “the total management of sports activity that directs the flow of events, services, and goods from the sport to satisfy the needs of an existing or potential public that has been identified.”

n As consumer income increases, a smaller percentage of the income is required for the basic necessities of food, clothing, and shelter.

n More money is left for leisure spending

n Many businesses have been formed to offer leisure activities

The Marketing Mix

n Service marketing a little different from marketing a product.

n Same basic components form a marketing mix

n Product

n Place

n Price

n Promotion

n Public

Market Research

n First step in the marketing effort

n What are the needs and do you have the resources to meet the needs?

n What is the company capable of offering (labor, funding, other resources)?

n What is the competition?

n Can the program be tested and researched?

n How will the program or service function?

n Who will be the consumers, what is their motivation to buy?

n How will the program or service be priced and promoted?

n How will the program or service be packaged (includes facilities and location)?

n If seasonal, what will carry the organization through the off season?

n What long-range trends can be predicted?

n What is the market potential of the program or service?

The Scientific Method

n Objectivity

n Organized and systematic inquiry

n Maximum care and accuracy

n Control

5 Steps of the scientific method

n Perceive that a problem exists

n Identify the cause of the problem

n Formulate a hypothesis or plan of action to solve the problem

n Expand and develop the plan of action

n Test the plan by experimentation and observation

n Companies use a test market in some restricted locale to observe the market response and gauge market potential

n ERS example

Data Sources

n Organizations or individuals may have already obtained some data for the researcher to utilize: Secondary Sources

n Libraries, professional journals, census data, business papers, university research reports, business directories, professional association reports, government reports.

n Bibliographies

n Indexes and guides:

n Reader’s guide to Periodical Literature

n Education Index

n Public Affairs Information Service

n Dunn and Bradstreet

Primary Sources

n If these secondary sources are not available, the researcher must gather the data by using surveys, questionnaires, or interviews

n Promotional competitions and giveaways

n Special lists: alumni, fraternity members, clubs, ticket holders, recreational sports participants

Other Sources for Marketing Trends

n Employees

n Customers

n Suppliers

n Trade and technical journals

n Professional associations

n Colleges and universities

n Conventions

n Civic Organizations

Market Position

n An image created in the mind of the consumer

n Low-cost leader

n Technology leader

n Quality leader

n Service leader

Component 1: Product or Program

n Develop the product or service

n Fitness Center: facilities and life-style counseling

n Peripheral products: juice bar, towel service, sauna and jacuzzi, locker rooms

n Program or Product Image

Component 2: Place

n Where the program or service is offered

n Quality of the facilities and amenities

n Location

n Parking

Component 3: Price

n Who are the customers?

n What is the quality of the product or service?

n What is the image of the organization? Cheap or First Class

n Customers must receive greater perceived benefit from the product or service than it costs them.

n Benefits derived

n Costs can include traveling time, distance, parking availability

n Full cost pricing is the actual cost of the product or service

n Then a % is marked up, or added to the cost

n Demand Pricing is used when the actual costs cannot be determined accurately: depends on the consumer demand for the product

n Margin Pricing: a Fixed markup is added to the cost of the product.

n Operating expenses may fluctuate

n Use only when profit is large enough to cover fluctuations

n Externally guided pricing is rare in sports and PE settings

n government control of prices has been implemented

n Ticket prices may be set by governing body

n Customary Pricing – charge the usual price; candy bars, cans of soda

n Prestige Pricing: First class, exclusive, related to establishment of product image

n Odd pricing: $24.95, a few cents less than a whole number makes it sound less

n Skim-the-cream pricing:

n pricing high when the product or service first comes out

n only works when little or no competition

n Penetration Pricing:

n Low introductory price to help a product get a foothold on the market

n When the appropriate share of the market is obtained the price rises: Fitness clubs

n Could start price wars

Component 4: Promotion

n One part of the total marketing mix

n Objective is to stimulate a demand for a type of product and then generate a secondary demand for a particular product

n Innovation is the key

n Pet rocks, Teenage Mutant Ninja Turtles

Consumer Adoption Sequence

n How does a consumer make a decision to purchase or utilize a product or service?

n 4 Steps of consumer adoption

n Awareness

n Interest

n Trial

n Adoption

n 4 Types of Promotion

Advertising

n Paid media promotion

n Contacting large number of people

n Cannot adjust the sales approach to individual needs

n Newspaper, magazine, TV and Radio, Local weekly magazines, professional newspapers/newsletters, billboards, direct mail

Publicity

n Public Relations: planned persuasion, conscious effort to motivate people, via non-paid media exposure

n Word of mouth referrals by existing customers

n School settings use PR

n PSAs: Public service announcements

n News releases or articles

Personal Selling

n Person-to-person contact occurring between the potential or current customer and a member of the organization.

n Face-to-face: tailors approach to the exact needs of the customer

n Telemarketing

n The front line: usually the first person that a new customer meets; secretary or receptionist

n Trained to give good first impression

n Should be knowledgeable enough to answer most questions from potential customers

n Sales Reps: key personnel in recruiting new customers

n Need training and continuing education

n Sales training: everyone in a business is a potential sales person

n Need to understand the needs of the customer and the business and its operation

n Skill of selling

n Good communication

n Listen to consumer

n Persuasion is secondary to communication

n We sell every day of our lives

n Steps in selling:

n Qualify the customer

n Show the customer the need for the product or service

n Closing the sale: once the questions have been answered about financing, need, benefits, etc. reiterate these aspects and ask for the sale

n Ongoing process continues after initial adoption; customer service

n Other selling opportunities

n Support staff can be a help to selling: repair, custodial, delivery

n Public speaking and membership in professional or fraternal organizations

Special Promotions

n Giveaways, special campaigns, fund raising events

n T-shirts, visors, caps, workout bags, imprinted towels may be given to participants of a fun run, tournament, camp

n A reward and a source of advertisement

n Good way to get someone to try the product or service

n Limit the length of the promotion

n Cost break for advanced sales

n Memberships, preseason sales of tickets

n Group Sales

n Season tickets vs. per game ticket price

n Corporate memberships

n Community lectures or seminars

n Monthly or quarterly free lectures; i.e., hospitals, fitness centers, sports medicine clinics, weight loss

n Fund raisers such as raffles, auctions, tournaments

n Jerry Lewis telethon

Component 5: Public

n Major consideration is the potential consumer

Customer Relations

n After the sale, the organization needs to continue to sell the customer

n PR is a long term process

n Albrecht’s 4 elements of PR

n A well-conceived strategy for service

n Delivery systems oriented to customers and employees

n Customer-oriented front line people

n Understanding of the customer’s relationship with the organization

The service triangle

The service strategy

The customer

The systems The people

The service triangle

n Involves problem solving, planning, teaching, and training.

n Good PR depends on two-way communication

n Members of fitness clubs

n Parents, athletes, opposing team members, administration and support staff

Break down in customer service

n 1. Failure to understand customer needs due to poor market research, and lack of communication

n 2. Inconsistency between what management perceives to be customer expectations and the translation of those perceptions into service quality

n Service quality standards

n 3. When service quality specifications are not translated into service delivery

n Occurs through teamwork, training, and empowerment of front-line workers

n Too much red-tape can hinder the service

n Rewards for customer service

n 4. External communication with customers does not accurately reflect the capabilities of the organization

n Promising more than an organization can deliver

n Jet service

n Two for one membership to a fitness center

n Can occur when different divisions of the same organization fail to communicate

n 5. Difference in what the customers expects they will receive and their perception of actually what they did receive.

n Satisfaction is comparing expectations with outcome

n Most customers never complain to the organization but to other potential customers

Timing and Public Acceptance

n A product or a service that is well-accepted by the public, instead a product or service that is “ahead of it’s time.”

n Timing relates to reception by the public

n Peak hours when people are free and willing to participate

n Seasonal activities

n Being the first one with an idea

The Role of the Administrator in Marketing

n Goal setting, planning, and maintaining

n Development of the Plan

n Resources: People or objects, including the marketing budget

n Differs by product type and location

n 1. Where current marketing efforts are

n 2. Determination of goals: spectators, market share, etc.

n 3. Identify strategies to achieve goals, and select the tactics need to carry out the strategy; figure 12.2

n 4. Setting up a time line for implementation of the plan; figure 12.3

Implementation of the Plan

n Role of a manager is to delegate tasks to all members of the marketing team and all appropriate staff

n Meetings with consultants, approval of ad copy, monitoring adherence to timelines

Monitoring Progress

n An ongoing process in all areas of management

n Track tactics for effectiveness: cost and effectiveness

n Opportunities for unplanned promotion

n May require a change in strategy and retraining of personnel

n Rewarding of exemplary performance