Transcript Chapter 20-2 - NMSU College of Business

Chapter 20
Controversial Issues in
Sports Marketing
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
20-1
Controversy
• Marketers Face Continuous Scrutiny
• For Sports Marketers, Criticism Emanates from
Many Different Groups
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Consumers
Consumer Advocacy Groups
Community Residents
Fans
Media
Government
20-2
“Do The Right Thing”
• Ethics Is Subjective
• Any Decision May Evoke Controversy
• Critics Are Vocal
• Issues for Both the Marketing of Sports
Products and Marketing Through Sports
20-3
Controversial Issues
in Sports Marketing
• Target Market Decisions
• Marketing Mix Decisions
– Product
– Distribution
– Pricing
– Promotion
• Broad-Based Controversies
20-4
Target Market Decisions
• Exclusionary Membership Policies
– Private Clubs Excluding Women or Minorities
– Protests Regarding Masters Golf Tournament
• Targeting Children
– Expensive Products
– Creating Unrealistic Expectations
20-5
Product Decisions
• Oversaturation of Spectator Sports
– More Teams, Longer Seasons, More Sports
– More Post-Season Participants
– More Media-Based Access to Sports
• Gimmick Sports
– Contrived Competitions
– Athletes Outside of Their Sport
– Focus on Sexuality Rather than Sport
– Non-Athlete Participation
20-6
Product Decisions
• Appearance Money
– May Cause Ticket Prices to Go Up
– May Not Be a Good Investment
• TV’s Role in Spectator Sports
– Media Time-Outs
– Event Scheduling
20-7
Product Decisions
• Changing the Spectator Sport Core Product
– Traditionalists Will Resist
– Did the Change Make the Game Better
• Player Mobility
– Often Cited as the “Business Side” of Sports
– Players Deemed “Greedy” – Moving for Money
– Owners Deemed “Cheap” – Money over Fans
20-8
Product Decisions
• Unwholesome Nonsports Products Sold
Though a Sports Platform
– When Appropriate Segment Is Targeted
– When Non-Targeted Segments Are Reached
– Examples of Unwholesome Products
• Alcoholic Beverages (Miller Lite Beer and the NFL)
• Tobacco Products (Marlboro and Indy Car)
• Products of a Sexual Nature (Viagra and MLB)
20-9
Distribution Decisions
• Franchise Mobility
– Loyal Fans Even When Overall Support Is Low
– Team Moves because of Financial Incentives
• Drop in Table 20.1 Here
20-10
Distribution Decisions
• Taxpayer-Funded Venues
– Billionaire Owners with Millionaire Players
– New Stadium May be Required to Keep Team
– Taxpayers “Held Hostage”
– Better Ways to Spend Tax Money
• Control Of Streaming Video and Podcasts
– Not Allowing 3rd Party Distribution
20-11
Distribution Decisions
• Drop in Table 20.3 Here
20-12
Pricing Decisions
• Ticket Prices
– Fan Cost Index Documents High Cost
– Focus on Corporate Ticket Buyers
– Exorbitant Prices for Special Events
• PSLs
– Personal Seat License
– Permanent Seat License
– University Contribution
– Seeing PSLs Used at High Schools
20-13
Examples of University PSLs
• Drop in Table 20.2 Here
20-14
Pricing Decisions
• Pay-per-View (PPV)
– When Event Moves from Free to PPV Format
– Will Mainstream Events Go to PPV Format?
• Team “Scalping” of Tickets
– Often Illegal for Individuals to Sell Tickets at
Prices Exceeding Face Value
– Some Teams have “Premium Ticket” Unit
– Court Cases Ruled in Favor of the Teams
– Secondary Ticket Market Being Used
20-15
Pricing Decisions
• High Prices for Participation Sports,
Athletic Shoes, and Other Sports-Related
Products
– Greens Fees
– Ice Time
– Shoes Endorsed by Popular Players
– Food & Beverages at Pro Sport Venue
20-16
Promotion Decisions
• Overcommercialization
– Proliferation of Event Sponsors – Olympics
– Cluttered Sports Environment – NASCAR
– Perception of Emphasis on Bottom Line
• Naming Rights
– Venue Names Often Ignored
– Title and Presenting Sponsors
– Cost – Is It a Sound Investment
20-17
Promotion Decisions
• Signage Issues
– Too Many According to Fans
– Too Few Say Many Sponsors
– Clean Stadium Concerns
• Athlete Endorsements
– Create Unrealistic Expectations Among Kids
– Create Demand that Parent May Rebuff
– Believed to Exert Upward Pressure on Prices
20-18
Promotion Decisions
• Virtual Advertising
– Ability to Manipulate Environment
– Ability to Block Out Actual Signage
– Opportunities for Ambush Marketers
– May Distract Viewer from the Action
20-19
Broad-Based Controversies
• Overstated Estimates of Economic Value
– Estimate Used as Rationale for Investment
– Governments Invest Millions on this Basis
– Critics Doubt Investments Will be Recouped
– Critics Argue Much of the Money Would be
Spent in the Area Even without the Team,
Stadium, or Event
20-20
Broad-Based Controversies
• Costs Are Underestimated
• Drop in Table 20.4 Here
20-21
Disregard of Human Rights
• Outsourced Manufacturing
– For Example, Athletic Shoes in Vietnam
– “Emergence of “Hate Nike” Web Sites
• Led to New Policies at Some Universities
• Competition Tours
– Teams Reluctant to Compete in Countries
• Zimbabwe
• China
20-22
Gender Equity
• Title IX
• Led to More Female Participants
• Has Resulted in Cuts to Men’s Programs
• Most Universities Have Compliance Officer
20-23
Handling of Performance Enhancing
Drugs (PED)
• Steroids and Human Growth Hormones
• Rules Against Use, But Penalties Have Been
Relatively Mild
• Have Leagues Condoned Use for Economic
Reasons?
• Recent Government Intervention
20-24
Integrity of Sports
• Criminal Charges
– Sexual Assault, Marijuana
• Civil Infractions
– Reckless Driving, DUI
• Cheating
– Spying, Corked Bats, Foreign Substances
20-25
Integrity of Sports
• Judging Transgressions
– Olympic boxing, Olympic ice skating
• Selection of Location for Special Events
– Salt Lake City Olympics
• Gambling
– NBA referee, Pete Rose
20-26
Security
• A Concern versus a Criticism
– Fan Safety
– Terrorism
– Tremendous Financial Burden on Organizers
20-27
Closing Capsule
• Sports Marketers Have Many Critics
• Questions Arise Regarding Each Element
of an Organization’s Marketing Strategy
• There Are Also Several Broad-Based
Controversies Surrounding the Sports
Marketing Environment
20-28
Closing Capsule
• We Market Through Sports
• We Market Sports Products
• It May Sound Easy, But It’s Not
• As a Business, There Is A Focus on the
Bottom Line – And the Industry Has Critics
20-29