Friday, June 28, 2013

Twenty-Year-Old Sausages Are Still Fresh

A coincidental continuation of the food theme on the Sports Biz U blog- the last post about MiLB's #Foodfight contest is followed up with a tribute to Klement's racing sausages. If that name does not ring a bell, you may be more familiar with them as the Milwaukee Brewers racing sausages. Klement's is the brand behind the sausages. The Milwaukee-based company has been serving up sausages since 1956, and the company has gained notoriety over the past 20 years as sponsor of the sausage race at Brewers' games. Today, we think of sponsorship activation requiring sophisticated, often expensive investments to pull off. The long-running success of Klement's racing sausages suggests otherwise.

Keeping it Simple
The concept behind Klement's sausage races is simple- five characters representing different varieties of Klement's sausages race each other during an in-game promotion, running around the perimeter of the field from the left field wall to first base. The original lineup of three sausages has grown to five (Hot Dog and Chorizo have joined Bratwurst, Polish Sausage, and Italian Sausage), but the concept has maintained its simplicity. The simplicity of the sausage races can be traced all the way back to the original idea. Michael Dillon, one of the creators of the sausage race, went to a costume store and bought materials to make the costumes. There is something about seeing people running races in goofy costumes, whether it be mascots or sausages, that gets our attention and connects with them.

Activation as a Brand Builder
The Klement's racing sausages have evolved from props in a promotion to brand characters for Klement's. The five sausage characters appear at events, have bios on the company's website, and have been featured as "Bobbledog" giveaways at Milwaukee Brewers games. Far from being an added expense of sponsorship, Klement's racing sausages have become an integral part of the brand. Should brand managers and their marketing agencies be more strategic in developing activation programs? Could there be opportunities for activation to be a catalyst for launching complementary brand assets like brand spokescharacters? The success of Klement's racing sausages could inspire new ideas for more strategic integration of sponsorship with a firm's branding strategy.

So, happy 20th birthday to Bratwurst, Polish Sausage,and Italian Sausage. Here is how it all began, video from their first race- enjoy.

JS Online - 20 Years of Racing - Sausages, That Is

Tuesday, June 25, 2013

MiLB's #Foodfight is not Child's Play

If we are to believe depictions of adolescence shown to us by the entertainment industry, food fights are a must-have experience. Grade school, high school, and even college students are supposed to sling food at each other at some point as if it is part of the education process. Personally, I like food too much to throw it! And, Minor League Baseball also appreciates food too much to relegate it a "Get Messy Night" promotion. MiLB took to social media to celebrate the culinary delights found at ballparks across the country and help clubs with their marketing efforts to bring more people to games (and to eat!).

A Strategic #Foodfight
From May 15 through June 6, MiLB conducted a #foodfight campaign on Twitter. To participate, the first step was to follow Minor League Baseball on Twitter. Then, people tweeted their menu item of choice from a list of 64 nominees in four categories: Gut Busters, Hogs 'N' Dogs, Local Legends, and Scrumptious Sandwiches. The first two weeks of the campaign was used narrow the field of 64 down to the top choice in each category. The four category winners competed in the last week of the contest:

While the contest was effective for stirring interest of fans who voted for their favorite ballpark food, the promotion had marketing value for MiLB teams that could benefit them long after people remember the voting results. MiLB was able to collect data (names and email addresses) on voters. Data were shared with clubs. In the short run, some clubs sent emails to people voting for them that offered discounts. In the long run, teams will be able to mine data collected on #foodfight voters to target in future marketing campaigns.

Social Media is not a Strategy
MiLB is to be commended for its creative use of social media to add followers to its own Twitter presence and engage fans of the teams represented in #foodfight. But, more importantly, MiLB recognizes that social media is a channel, a means to an end that is one of an array of tools sports marketers have available to attain business objectives like increased attendance, higher per cap spending, and a larger brand community. Marketing expert Gini Dietrich recently wrote "there is no such thing as a social media strategy. That’s akin to saying you have a telephone strategy or a typewriter strategy." It is tempting to think about social media as a stand alone endeavor, but it should not be managed and executed that way. MiLB's promotion shows how you can achieve both social media impact and marketing benefits.

And the Winner Is...
In case all of this food talk is getting to you or if you are simply curious about which entry won the MiLB Food Fight, here you go:

It is the Fantastic Freeze Sundae offered by the Toledo Mud Hens. How does something as simple as ice cream top 63 other entries? When it is a 15-scoop creation served in a regulation-size batting helmet! And, it helps that the Mud Hens have the largest social media following in Minor League Baseball. The team tapped its community through its social media accounts, website, email, broadcasts, and in-game messaging to enlist fans to vote.

Friday, June 21, 2013

You Are a Marketer- What is Your Job?

If I had a dollar for every student who has come by my office over the past 13 years to inform me "I want to work in sports marketing," I would have a nice nest egg accumulated toward my retirement! All kidding aside, I do not dismiss students' proclamations of wanting a career in sports marketing, but I do begin such conversations by asking them to describe what that career entails. Three frequently given responses pertain to advertising, promotion, and athlete representation (often inspired by watching Tom Cruise's portrayal of a sports agent in Jerry Maguire). But more times than not, students are not really sure what sports marketing really is. They need not feel badly; when I ask students in Principles of Marketing class the same "what is" question, responses tend to reflect similar, rather narrow perceptions such as advertising and selling. It appears that students are interested in a career for which they do not have a clear understanding of what they will be doing.

Marketing Job Roles- Who's Got the Customer?
It turns out that marketing students are not the only ones feeling conflicted over the responsibilities of a marketer. For example, marketing curriculum places an emphasis on customers. Marketing is taught as processes that are intended to add value for customers. But,a recent study of business executives done by the Economist Intelligence Unit found the customer far down the list of priorities. Executives had the following responses when asked the question "What should be marketing's top function?":
  • Driving revenue growth - 30%
  • Finding new customers - 17%
  • Improving organization reputation - 16%
  • Creating new products and services - 13%
  • Entering new markets - 13%
  • Retaining customers - 10%
The low percentage of executives seeing marketing's chief role being retaining customers is interesting. The relationship marketing paradigm is a cornerstone of many marketing courses. The cost of customer retention relative to customer acquisition is an often taught fundamental (e.g., it costs 10 times more to acquire a new customer than to keep an existing one). Yet, practitioners seem to have a growth orientation that comes from new opportunities more than growing share of wallet with existing customers.

The New Marketing
The relative high percentages placed on "new" (grow revenues and find new customers) is reflective of the expectations placed on marketing executives today. Performance is measured in financial impact and size of market footprint (e.g., number of customers, market share, and sales volume). The outward focus on customers must be done in tandem with an internal focus on driving growth.

The growth-oriented perceptions  business executives hold toward marketing have major implications for sports marketers. Tapping more and new revenue streams is the name of the game. In team sports, the percentage of total revenues coming from traditional sources like ticketing and sponsorship is decreasing as media rights, licensing, and other businesses have taken on greater significance. An example of how a growth focus shapes marketing strategy is Legends. The sport and entertainment company is a venture between the Dallas Cowboys and New York Yankees, two marquee pro team brands. Legends was founded in 2008 and has quickly established itself as a leader in venue premium seating, hospitality, and ticket marketing services. The Cowboys and Yankees organizations looked beyond their core operations to find market needs that they could meet through their competencies and realize revenue growth.

The customer will always have a deserved lofty status in marketing. After all, if there are no customers there is no business. What has changed is that business growth has assumed a more prominent position in the strategic decisions made in the marketing C-suite today.

Center for Media Research - "Who Knows the Customer Best?"

Tuesday, June 18, 2013

Military and Sports Sponsorship: Fit or Frivolous?

What do you do when your expenses rise or income falls? We tend to do some budget belt-tightening to adapt. Congress has wrestled with this issue quite a bit in recent months to stabilize the federal budget. Even key government departments are not immune to budget reductions. For example, the U.S. Army has seen its annual marketing budget reduced by more than half since 2008, from $423 million to $190 million. But, lawmakers have not stopped there in scrutinizing how military branches spend to market themselves to potential recruits. Some in Congress are calling for reduction or elimination of sports sponsorship spending given the difficult budget situation. However, a vote last week on an amendment to the 2014 Defense Department budget calling for a ban on sport sponsorship was defeated. It is the second year in a row that the issue was put to a vote, and although it was defeated both times it is likely that scrutiny of the military's sports marketing investments will continue.

Army National Guard "All In" on Sponsorship
One branch that is particularly bullish on sports sponsorship is the Army National Guard. It currently has the greatest presence in motor sports of all military branches. The Guard's current sponsorship portfolio includes:

  • NASCAR - Sponsorship with Hendrick Motorsports and Dale Earnhardt Jr.; Will spend more than $29 million this year on rights fees and activation
  • IndyCar - Sponsorship of Panther Racing and drivers Ryan Briscoe and JR Hildebrand at a cost of more than $14 million
  • American Motorcyclist Association - Almost $4 million spent to sponsor this national sanctioning body for motorcycle racing
Add to these partnerships another $5 million invested in a sponsorship with World Wrestling Entertainment, and the Guard has put more than $50 million toward reaching prospective recruits through sports. It is not surprising that some members of Congress would rail against military sponsorship of sports properties given this eye-popping figure.

A Question of Fit
If the political posturing is removed from the picture, the core question of whether military branches should use sponsorship as a marketing vehicle is the same one that any business must ask: Does a good fit, or match exist between our brand and the brand with which we will associate? Of utmost interest is whether there is a good fit between the target market of the sponsor and audience or fan base of the sports property. For the National Guard, the answer is a resounding "yes." The primary audience it targets, young adults ages 17-24, can be reached effectively through NASCAR, IndyCar, and AMA. A study conducted by Alan Newman Research gives evidence to the Army National Guard that sponsorship resonates with recruits:

  • 90% of enlistees or re-enlisted personnel said they were exposed to the Guard through marketing materials featuring NASCAR teams and drivers.
  • 85% agreed that professional sports sponsorship is beneficial for attracting and retaining good soldiers.
The budget figure might raise some eyebrows, but if sports is an ideal vehicle for attracting young people to the Army National Guard, it should be part of the Guard's marketing strategy. The emphasis on sponsorship is consistent with a trend observed across all military branches in recent years. Marketing spending has shifted away from traditional mass media and into social media, sponsorship, and gaming as marketers follow their target markets to where they consume information and entertainment.

For those of you teaching sports marketing, this issue can make for interesting classroom discussion. Should military branches have constraints imposed on their marketing budgets because they are public entities? Or, should marketers have the leeway to do what they believe will be most effective for achieving objectives?

Friday, June 14, 2013

A Two-Way Influence on Building Families of Sports Fans

Acquiring customers is one of the greatest challenges marketers face. We are tasked with persuading buyers that they should spend their money and time with us. Customer acquisition is crucial not only for the short run success of a business, but converting prospects into customers is the initial step in a journey to build long term customer relationships. Sports marketers are particularly aware of the importance of converting occasional buyers into highly involved fans. One of the key levers in escalating customer relationships is the family.

Parents Influence Kids
Brand loyalties can be formed at a young age, and parental influence plays a major role in many cases. Children observe brands their parents buy- clothing, cars, food, and more- and store that information in memory. Sports consumption is very much influenced by parents. In a study published in 2000 in the International Journal of Sports Marketing & Sponsorship, Richard Kolbe and Jeffrey James found that people most frequently develop an identification with a pro sports team is between the ages of six and ten And, not surprisingly, the person with the greatest influence on team identification is the father.

I test this finding on the impact that fathers have on sports consumption informally during the first class meeting of my sports marketing class each semester. Students complete a data sheet that includes a question about whether they have favorite teams or players and why they are fans. Two influences emerge consistently: Family and geography. Students talk about their connection with the University of Tennessee, for example, saying that their family has gone to UT games for as long as they can remember. Other students talk about family gatherings in the living room to watch their favorite team together. Sometimes, the reason for being a fan of a particular team is to form a friendly family rivalry, with a child picking a team other than dad's favorite so that they can compete vicariously.

Kids Influence Parents
Parental influence on children's sports consumption will always exist, but the direction of influence is not a one-way flow. Kids are increasingly influential on shaping the family's sports interests and consumption. One of the primary drivers is youth sports participation. Children can be exposed to sports that capture their fascination and begin playing competitively. In some cases, parents have no influence at all because they have little or no familiarity with a sport. For example, lacrosse is gaining interest by appealing to youths to participate. Their parents may have no experience or knowledge of the game, but their children's involvement creates new fans as parents may also follow other lacrosse because of exposure via youth participation.

This phenomenon played out in my own home with ice hockey. I grew up following hockey thanks to having a French Canadian father (although there were no opportunities to play hockey in Mississippi). When our youngest son took up hockey at age 7, my wife knew virtually nothing about the game. Today, she is knowledgeable about rules, the NHL, and is a Nashville Predators fan. It is no coincidence that my son began by playing in a "learn to play" program put on by the Nashville Predators. The program grows youth hockey participation and at the same time builds interest among parents. Many teams use this strategy to increase their relevance among families.

One Unit, Many Needs
It is tempting to treat families as a single-dimension customer segment. After all, we learn in marketing classes that family life cycle stages (e.g., families with children living in the home) are one approach we can use to segment markets. But, within the "traditional" family, there are individuals with different needs. Parents may be looking for family friendly, affordable entertainment. Children want to have fun and not be bored. Fans within the family are going to be more involved in the game itself, and adults and children alike might value exclusive experiences like player autograph sessions or behind-the-scenes tours.

Should families be a targeted segment? Absolutely. The point is to develop offerings for the family segment that appeal to the various influences (and influencers) that ultimately determine brand loyalty (i.e., fan identification).

Tuesday, June 11, 2013

NHL Lockout- What Lockout?

The Stanley Cup Final begins tomorrow night. It pits the Boston Bruins against the Chicago Blackhawks. The matchup features two of the NHL's "Original Six" franchises as well as two of the past three Stanley Cup champions. Th NHL has arrived at this point following a shortened 48-game season condensed into just over 100 days. The playoffs may have come on the heels of a shortened season, but they have not been short on drama. It is as if the NHL never missed a day.

The Season that Almost Wasn't
The NHL locked out its players on September 15, 2012. The collective bargaining agreement between the two sides had expired, and disputes over sharing revenues and other issues went unresolved (and barely discussed) over the months leading up to the deal's expiration. Thus, the clock began ticking- would a new deal be reached in time for the regular season to begin on schedule in early October? Didn't happen. The impasse dragged on- could it be resolved before Thanksgiving? Nope. Ah, no worries hockey fans, because the NHL would not let its prized New Year's Day outdoor game, the NHL Winter Classic, become a victim of this labor dispute. At least that is what we thought until the NHL announced that it would be canceled.

By this point, fan disgust with both sides was high, apathy from casual fans rampant, and serious concerns expressed by some of the NHL's corporate partners. The posturing and pride both sides possessed took the NHL dangerously to the brink of cancelling the 2012-2013 season. For those of us who thought that the NHL would not allow the cancellation of the 2004-2005 season to be repeated began to wonder if we were wrong. The relevance of the NHL as a marquee sport property in the U.S. could have been irreparably damaged had the lockout resulted in canceling the season. In the end, the two sides saved the season and more importantly, guaranteed 10 years of labor peace to save teams, fans, and sponsors from being dragged through this mess again anytime soon.

New and Old Business
When the puck finally dropped January 19th, the NHL could begin moving forward and it did. First, it was announced that the NHL Winter Classic would return January 1, 2014. It will feature the Detroit Red Wings against the Toronto Maple Leafs at Michigan Stadium, essentially a make up for the cancelled 2013 event. Then, the league announced announced five more outdoor games to be played at iconic venues Yankee Stadium (two games), Soldier Field (Chicago), BC Place (Vancouver), and Dodger Stadium (yes, the one in warm southern California). And, the series has a corporate sponsor (Coors Light). Among old business the NHL must contend with is resolving ownership of the Phoenix Coyotes, currently owned by the NHL. Multiple deals have collapsed, and another one is currently in the negotiation stage. How long will the NHL be willing to own a team just so it can be in the Phoenix market? Will an opportunity to secure stable ownership in Quebec City or another market hungry for a major league sports team be too good for the NHL to refuse?

And the Winner Is...
This is the time of year when the NHL is all about handing out hardware. Of course, the Stanley Cup, one of the most iconic trophies in all of sports, will be hoisted within the next two weeks by either the Bruins or Blackhawks. Later this week, the NHL will announce its annual award winners in TV broadcasts on Friday and Saturday. Trophies that recognize the top rookie, defenseman, goalie, and head coach are among the honors to be awarded this week. Later this month, the NHL Draft will be held at the Prudential Center in Newark. Then, free agency signings begin and July, officially moving the NHL past this grueling season and toward what should be a bright future. The NHL lockout that threatened to eliminate this season seems like a distant memory to many fans now.

Another trophy awarded by the NHL is the Hart Memorial Trophy, given to the player who is the most valuable to his team. While the award will go to either Sidney Crosby, Alex Ovechkin, or John Tavares, I cannot help but think there is one other person who merits an MVP-like trophy this year: Scot Beckenbaugh.  He is not a goalie, but Beckenbaugh made the save of the year in the NHL. In his position as a Deputy Director for the Federal Mediation and Conciliation Service, Beckenbaugh was actively involved in bridging the gap between NHL owners and the players' union in the latter stages of the lockout. He is credited with helping bring the lockout to an end.

Friday, June 7, 2013

What is Networking?

If you were to ask 100 sports business professionals their advice on how students can best prepare for a career in the industry, two responses are nearly universal:

  1. Get experience
  2. Build a professional network of contacts
Both pieces of advice are outstanding and among the most useful a student can receive. If you teach sports marketing or sports management, there is a feeling of validation experienced when guest speakers tell students about the importance of experience and networking. But, that does not help meet the pressing challenge of grasping what networking is and how to go about building a professional network.

Networking is...
Whether done face-to-face or online, networking sounds a bit mysterious to the newcomer who is about to launch his or her professional career. Questions arise like "Who do I network with?" and "What am I supposed to do?" are not uncommon. Let's remove the mystery- I like the description of networking given by Terrance Williams in a post on the blog New Grad Life: Networking is building good relationships."  Networking is not about how many business cards you can collect or how many "big name" connections you have on LinkedIn. It is an ongoing process of relationship building with people who share common interests and goals.

Students' Views of Networking
I have included networking as a component in my undergraduate sports marketing course for the past four years. The emergence of LinkedIn as a social networking site for business professionals coupled with the importance networking in the sports industry prompted me to incorporate networking into my class. I quickly realized that students' familiarity with social media via their Facebook usage did not prepare them to be successful at networking on LinkedIn. In fact, I was unsure how prepared they were to network in general.

I address this uncertainty by collecting data on students views of networking. Each semester, I gather data on networking about two weeks into the class. I distribute a survey with three items:

  1. Complete the following sentence: Networking is _____.
  2. On a scale of 1 to 10, with 1 being very uncomfortable and 10 being very comfortable, I would rate my comfort level with networking with people face-to-face as a _____ because _____.
  3. What I need to become better at networking is _____. 

Transaction or Relationship?
Extending the marketing literature to networking yields two views:

  1. Transactional - Networking is exchange of information or influence for short-term benefit
  2. Relational - Networking activities are not outcome dependent; they are done to build mutually beneficial relationships
A content analysis of students' definitions of networking finds that the transactional view dominates- 74% of definitions collected use words that are consistent with a transactional view of networking. Only 32% of definitions make reference to relational characteristics of networking (The fact that the sum exceeds 100% reflects that some students had transactional and relational characteristics in their definitions).

Networking as Transaction. Here are two definitions representative of a transactional view of networking:

  • "Seizing every opportunity to professionally connect with an individual providing you with valuable professional contacts. It's a small world."
  • "Building a contact base with several people that could lead to more future contacts."
 These definitions are consistent with perceptions of networking as being like notches, with the objective to acquire as many notches as possible, that they are like prizes in some way.

Networking as Relationship. While most definitions emphasized networking as a transaction, some students come into networking with an understanding of its relational benefits:

  • Making advantageous relationships.”
  • When you go around engaging with other business people to form a relationship. This relationship can be the start of a friendship as well as a great career opportunity."
Like the transactional view, networking as a relationship acknowledges there are times we will make "withdrawls" to benefit us (e.g., request a recommendation letter or ask for an introduction to a prospective employer). But, we also need to make deposits with people in our network, otherwise our goodwill account can become overdrawn!

Quantity versus Quality
The distinction between networking as transaction or relationship can be described as a quantity versus quality issue- should we focus on building a large network or develop a smaller one with deeper interactions? There are merits to both sides of the question, and some might even answer "both." Don't let this question stifle your networking efforts, though. You can figure out the answer that serves you better as your networking progresses, but either way get off the couch or from behind the screen and network!

Tuesday, June 4, 2013

The 5Ps of Sports Marketing

One of the most gratifying aspects of being a scholar is the focus placed on learning. One might associate a professor with teacher. Yes, that is one of our roles... and a very important one. But, in order to be effective teachers we must be passionate learners first. For me, this fact of life for a scholar played out repeatedly as Mike Fetchko, Ken Clow, and I wrote the Sports Marketing textbook. The final product is designed as a resource for teaching, but a great deal of learning occurred during the three-year process of writing the book.  The insights and experiences that resulted in learning are too numerous to list, but one of the first learning moments was also one of the most poignant. And, it became the foundation for our textbook.

In the summer of 2009, Sports Marketing was in its embryonic stage. Mike Fetchko and I had a telephone conversation with Jeff Gregor, CMO at Turner and one of the book's industry contributors. A few minutes into our conversation, Jeff mentioned something that shaped development of the book. He referenced the "5Ps of sports marketing." What? I had been teaching marketing for fifteen years and practicing it for 10 years prior to that, but I had only heard of 4 Ps (product, price, place, and promotion). There is more? Not only was there a fifth P, but the mix was somewhat different than the traditional marketing mix.

The 5Ps of Sports Marketing
The learner in me could not wait to hear more about the 5Ps of sports marketing, so I asked Jeff Gregor to explain. This is what he told us:

  • Positioning - Understanding customers (consumption motivations, external environment influences, segmenting audiences)
  • Platform - Responding to customers by developing a bundle of benefits delivered as products, services, or experiences to meet their needs
  • Promotion - Engaging customers through strategically planned communications
  • People - Serving customers through effective implementation of platform and promotion
  • Profits - Satisfying customers while pursuing a dual goal of organizational profitability
We were hooked! Gregor's description of how to manage a sports marketing business is powerful because it is at the same time timeless and contemporary.

Something Old, Something New
It is not coincidental that the first P in the sports marketing mix is positioning. It is not positioning in the literal sense of crafting a brand position. Positioning refers to gaining understanding of the customer's needs, motivations, and influences. If that sounds familiar, it should- these aims have been the heart of marketing for decades. The term "customer focused" is often reduced to marketing-speak, but when positioning is practiced in this way an organization is indeed customer focused.

Perhaps the most surprising P is profits. Not very customer focused to be concerned with profits, is it? As marketers, we should never have to apologize for our pursuit of profits. In fact, profits are fundamental to marketing. The marketing concept has a dual focus of meeting customers' needs while achieving organizational goals such as profitability. The twist on profits today in marketing is the focus on measurement of marketing activity. Greater accountability exists for the effects of marketing decisions and investments on profits. Which promotions generated the highest incremental revenue? Did implementation of dynamic pricing drive ticket revenue and accompanying spending by patrons? Which offers in an email campaign yielded the highest click-through rates and sales? The emergence of big data and analytics as marketing management tools will serve to put greater emphasis on this "new" P of the sports marketing mix in the future.

The sports marketing mix can have 3 Ps, 5Ps, or 22 Ps, but there will always be one very important C: the Customer. Without customers, there is no need for marketing. Do not let "customer focused" become hollow words that sound good but have no influence in your decisions.