Thursday, February 18, 2016

Decisions Facing MLB Show Marketing is an Outside-In Process

Image Credit: ABC News
Baseball is known as America's pastime. It is a game that recently celebrated its 140th birthday. Thousands of players have played professional baseball since Abner Doubleday introduced baseball in 1876. Moreover, generations of fans have followed the sport, with family members often passing down team loyalties from generation to generation. These characteristics of baseball bring out its timeless appeal, but they also carry less desirable connotations such as "old" or "outdated." Old and outdated are not necessarily compatible traits with a young audience coveted by Major League Baseball. 

What to do? MLB must do what every organization is forced to encounter: Take an outside-in approach to decision making. The outside part of outside-in is monitoring of the external environment; the in part of outside-in is making marketing decisions in response to what is learned from the external environment.

Millennials up to Bat

In Chapter 3 of Sports Marketing, socio-demographic trends are identified as factors in the external marketing environment, or those forces occurring outside the organization that cannot be stopped or changed. Specifically, the growing importance of the Millennial generation is a socio-demographic trend that has the potential to significantly affect most businesses, including Major League Baseball. 

Pew Research classifies Millennials as persons borne between 1981 and 1997. This population group totaled 75.3 million people in the U.S. in 2015, surpassing the 74.9 million Baby Boomers (persons born between 1946 and 1964). Millennials' importance as a population group will only continue to grow with immigrants boosting the number of Millennials in the coming years as projected in the chart below.

Image Credit: Pew Research

Marketers must be cognizant of trends like the rise of the Millennials. More importantly, they must develop strategies to respond to the trends. According to a USA Today article, the average age of MLB's TV audience was 56 years-old in 2015. The average age of MLB app users fell in the upper end of the Millennial generation at 34 years-old. If MLB maintains status quo and does not adapt it products to younger consumers, it is possible they will become less relevant to Millennials.

MLB to Swing for the Fence?

To its credit, MLB is on top of the shift toward a younger audience. It is aware of the shift and must now respond with marketing strategies that plays favorably to Millennials. One popular notion is that the pace and speed of a baseball game is too slow to keep the interest of young people. Thus, MLB is considering ideas for shaking up the status quo. MLB hired Hall of Fame infielder Cal Ripken Jr. as a special advisor to come up with ideas to innovate the game. Among the ideas pitched (pun intended):
  • Instead of an inning three outs in an inning, how about five batters?
  • What if every inning started with the batting team having a runner on first base?
  • Should players be required to attempt to steal a base?
You may have read enough if you consider yourself a baseball purist- how dare they tinker with a classic game! But, MLB must at least consider such innovations to the product if it thinks today's customer will find value in it. Doing things the way they have always been done is not an acceptable business strategy in any industry, particularly when the market from which you attract customers is transforming as it is in the United States.

MLB's Strategy?

Baseball is revered by many people because of the strategic competition it can become, two teams making player adjustments and other moves in an attempt to gain the upper hand. MLB would be well-served by adopting the same approach as it scans the external marketing environment to determine how to respond to trends such as the rise of the Millennial population.

What trends in the external environment do you see as most important that MLB recognize and respond to them? 

Thursday, February 11, 2016

Does College Football Have an Attendance Problem?

The pageantry of college football makes it one of the most compelling sports to attend in person in the United States. Tailgate parties, marching bands, cheerleaders, and more are staples of game day atmosphere on campuses across the country. The experience of attending a college football game sets the sport apart from other collegiate sports as well as its professional counterparts. College football has one other unmistakable trait associated with it: Declining attendance. 

An Observable Trend

Attendance figures compiled by the NCAA reveal a slow but steady decline in average game attendance. The average number of fans taking in a game at the Football Bowl Subdivision (FBS) level has decreased 6.4 percent over the past decade, with the average of 43,288 fans being just under 3,000 fewer fans than on average ten years ago. Many sport properties that saw attendance declines in the wake of the 2008 economic recession would cite the economy as a reason for such a drop. However, a review of annual attendance figures suggests a gradual drop not caused by a single external factor like the economy.

Attendance figures show fewer fans showing up for football games. However, the question begging for an answer is "why." Unfortunately, the answer is a complex one.

Factors Influencing Attendance

In Chapter 2 of Sports Marketing, a framework  is presented for sporting event attendance. The model, developed by sport consumption researcher Daniel Wann and colleagues, identifies four influences on direct sport consumption:

  • Perceived options- Includes future availability to consume, financial requirements, parking, weather, day and time of event
  • Team or sport identification- Extent to which one is a fan of the sport played or team playing
  • Personal incentives- Interest in characteristics of a sport (e.g., fighting in hockey) or desire for socialization with others
  • Marketing incentives- Amenities offered in a venue or promotional tactics intended to influence attendance (e.g., t-shirt giveaway).
Known as the Theory of Personal Investment, the model suggests that attendees are motivated by different factors. Some attendees are influenced most by the sport or team, which might be an obvious influence. But, there are other attendees who may have less interest in the teams playing than in the chance to spend a few hours having fun with family or friends. Also, a person may make the decision not to attend at all, particularly if indirect consumption is an option, especially watching an event on television. There are no lines for food or restrooms, it is climate controlled, and inconveniences like parking and traffic are nonexistent.  

Short-Term Slip or Permanent Shift?

What are your thoughts about attendance trends in college football. Interest in the sport remains strong, so is it only a matter of time before attendance increases? Or, is the gradual decline in average attendance over the past decade the new normal in college football, with perhaps more years of decline in store? Moreover, what can sports marketers do to entice people to return to stadiums on Saturdays using marketing incentives?