Nba – a Case Study Essay Example

to recognizing and responding to the global interest in basketball, the NBA also promotes its teams and players around the world in an effort to market the league's domestic activities. Despite losing a global icon in Micheal Jordan when he retired in 2003, the NBA has continued to promote several players including LeBron James, Kobe Bryant, Dwayne Wade, and Shaquille O'Neal. The collective endorsements of these athletes totaled more than $60M in 2007 and all four were in the US top ten list of professional athletes with highest endorsements.

The NBA routinely holds exhibition games with its star players in countries outside the United States with a two-fold objective — to spread the game of basketball and to gain popularity and visibility of its teams, players, and activities. So far, this practice has helped the league make inroads into achieving both these objectives. The three principals on the management team at the NBA — David Stern as Commissioner, Adam Silver as Deputy Commissioner and COO, and Heidi Ueberroth as President of Global Marketing Partnerships and International Business Operations — have over 20 years of combined personal and industry experience.Their extensive experience provides the NBA with the empirical information as well as the passion to grow and celebrate the game of basketball.

The NBA is currently in its 62nd year of operation. Its programs have been well received, and continued marketing will be key to the development of brand and product awareness as well as the growth of its audience.

The NBA is "one of the premier sports and entertainment enterprises ... delivering joy and excitement to hundreds of millions of basketball fans all over the world." Over the

course of the last 24 years, the NBA has enjoyed a fifteen-fold increase in revenues; its games are televised in 215 countries and 41 languages; and its websites (NBA.com, WNBA. com, and NBADLEAGUE. com) attract more than 5M visitors a day, with more than half of them coming from outside the US .

Market Summary

The NBA seems to attract more live audiences than those watching games on TV.For instance, in the 2006-07 season, regular season attendance set a record for a third consecutive year with more than 21. 8M ticket holders passing through the turnstiles . On the other hand, less than 10M viewers watched the playoffs on TV; less than 15M viewers watched the finals on TV. As the NBA intensifies its marketing campaigns, specifically through interactive TV and in-game interviews as part of live telecasts, it can gauge audience reception better and understand the TV-viewers' needs better and how to communicate with them.

Target Markets Sport: Includes those customers who like sports, in general, regardless of their affection toward basketball.

Live Entertainment: Includes those customers who regularly attend live games. This may include season ticket holders, celebrities, other sports icons who pay homage to their NBA counterparts, etc. Athletes: Includes athletes who are vying for a chance to play in the NBA. Besides domestic candidates, the NBA and some of its teams now have International scouts who select appropriate candidates from outside the US.

Recreational: Includes customers who do not attend live games, but instead watch televised games either on NBA TV or on National Television in the US and in other countries.

Market Demographics NBA

• • The NBA serves a global audience that consists of "hundreds of
  

millions of basketball fans".

Market Needs The NBA is one of the world's premier sports and entertainment enterprises; a diverse group of high-performing individuals delivering joy and excitement to hundreds of millions of basketball fans all over the world. It seeks to fulfill the following benefits that are important to its customers:

• Fan Experience. Customers want to enjoy the game of basketball and learn more about their sports idols. The NBA, through its website and multiple delivery services, gives its visitors and fans an opportunity to "touch" and interact with the league, its teams and its players . The fan experience is further enhanced through a combination of traditional and new media including real-time statistics, scores, live-studio based programming, live "look-ins" of games in progress, highlights, etc.
• Customer Service. Exemplary service is required to build a sustainable business with a loyal customer base.The NBA achieves this by running programs where athletes interact with the community and the fans. These programs also serve as a means to demonstrate leadership in social responsibility and involve volunteer services and fund-raising for charity.
• Well-thought-out formats. The recreational market has not been well addressed by using a format that is suitable for television.
• The NBA's industry experience and
  

personal dedication to the sport of basketball will provide it with the needed information to produce insightfully designed formats for the regular season, the playoffs, and the finals.

Market Trends NBA: A Case Study 4 The NBA will distinguish itself by marketing the game of basketball not only to the US market, but also worldwide including China and Europe. It will do this through its "Basketball Without Borders" initiative and its NBA CARES initiative in collaboration with the International Basketball Federation (FIBA).

It will also do this though its properties in countries outside the US like NBA China.The emphasis of the NBA's marketing efforts in the past was placed on individual players and athletes who had a certain pedigree of talent; the NBA is now shifting its focus toward placing team-building and leadership recognizing that basketball is a team sport. Moreover, it is also trying to highlight that sport can be used as a demonstrative tool to bring diverse people together to achieve a common goal. Another trend is globalization and diversification of the league itself. Over 70 international players from 31 countries and territories are currently playing in the NBA. This has also led to the increase of global basketball fans.

A key deduction can be made by comparing visitors to NBA. com from when the site launched to the present day — the website averaged 65,000 daily visitors with one-third of all visits from outside the US in 1995; more recently, the site averaged 5M daily visitors with more than half of them from outside the US.

Market Growth With a increasing number of fans, the availability of worldwide talent and audiences, the NBA target markets are

expected to experience some growth over throughout the world.Despite low TV ratings in the US, NBA games continue to be televised in more countries than ever before and in more languages.

Further, the NBA recently renewed a lucrative 8-year contract (through 2016) with Walt Disney and Turner Networks for a sum of $7. 4B — a fine example of the league sustaining revenues through corporate sponsorships and agreements. SWOT Analysis The following SWOT analysis captures the key strengths and weaknesses within the NBA and describes the opportunities and threats facing the NBA.

Strengths

• Talent, and access to it Core leadership — in-depth industry experience and insight • Social responsibility initiatives — Basketball without borders, Read to Achieve, NBA CARES
• Storied Franchises — New York Knicks, Boston Celtics, LA Lakers, etc.

Weaknesses

• Anti-progressive outlook — Stern enforced strict anti-drug policies, salary cap restrictions, and numerous rules and regulations, which have led to public perception of him as a conservative enforcer/lawmaker for the sport
• Weak properties — WNBA, NBADL
• Previous marketing emphasis on individual players — Bird, Magic, Jordan .

Threats

• Game formats not made for TV — risk of losing recreational target market altogether
• Bad PR — athletes' legal problems, referees fixing games, etc.
• Long regular season
• Risk of competitive icons/brands (Maria Sharapova, Derek Jeter, Tiger Woods, etc. )

Keys to Success

The keys to success are expanding the league to countries outside the United States and winning fans over from other sports in these countries. Additionally, the NBA must ensure that its employees — athletes, team officials, referees, etc. — upheld a high standard of conduct and remain professional in their behavior. If these keys to success are achieved, then the

NBA will continue to be viewed as a premier sports league in the world.

Critical Issues

Over the years, the NBA has had to face and overcome some critical issues:

• Combination of racial slurs / prejudices, drug-related inquiries, and fights between athletes. Many writers and sports journalists have captured the essence of these problems — Larry Platt documented it in his book, titled "Keepin' It Real: A Turbulent Season at the Crossroads with the NBA", the synopsis of which reads as follows — "those who stereotype the NBA players as thugs and drug users will find that their ideas are confirmed here." Additionally, articles in peer-reviewed journals also documented some of these critical issues. The NBA has responded to these issues by demonstrating leadership through social responsibility, demanding a high standard of conduct from its employees, enforcing a strict anti-drug policy, and a salary cap/profit sharing mechanism for better distribution of pay between players and officials of different franchises.
• Dwindling TV audiences in the US. Although league officials have underplayed the rate of decrease of TV viewers of the game, it is fair to note that this presents a critical issue for the NBA. For instance, the graph overleaf [10] shows that while record highs were set during Michael Jordan's last season, record lows were set during the 2006-07 finals. The y-axis is number of viewers in millions and the x-axis is for each year between 1987 and 2007.
• Constantly monitor emerging markets in global territories ensuring that local fans are not disenfranchised and that growth strategy does not compromise fan's experience and satisfaction levels.

Marketing Strategy

The key to the marketing strategy for the NBA is focusing on

interacting more personally with the basketball fan. The NBA has already created a fan portal (website where fans interact and can set up communities) called Fan Voice. Additionally, it has most recently created the "There can only be one" marketing campaign that highlighted constructive rivalries in the NBA and pitched a star player of one prominent team against that of another. The short advertisements ran through the length of the playoffs, and athletes spoke about their emotions while playing the game of basketball.

For instance, Fear, Win, Dreams, Respect, and Remembrance were some of the emotions covered in the ads. The NBA opened this campaign to its fans by giving them rich media and asking them to use it as they please. Some of the results of images created by fans are shown overleaf. NBA: A Case Study 8 Inspired by the campaign, and seizing on the political frenzy that accompanied the democratic primaries earlier in 2008, TIME magazine used the concept in the May 2008 issue of the magazine depicting the (now) Democratic presumptive nominee, Barack Obama, and his Democratic opponent, Hillary Clinton. These images show that the NBA's marketing campaign paid ividends in involving its fans and interacting with them more closely so as to build better relationships.

Mission

The NBA's mission is to be the most successful and respected professional sports league in the world, guided by two principles:

• We will grow and celebrate the game of basketball..
• We understand that the popularity and the visibility of our teams, players, and league obligate us to demonstrate leadership in social responsibility.

The NBA's marketing objectives consistent with its mission could be drafted as follows:

• Maintain positive, strong
  

relationships with basketball fans around the world.

Recommendations

The following recommendations may aid the NBA's marketing team to achieve its objectives and also position the NBA toward long-term growth.

• Rededicate focus to online TV, YouTUBE, Social networking (facebook, MySpace, and twitter) tools aid further in community building and interaction between like-minded basketball fans
• Everybody loves apologies. Athletes should directly apologize for misconduct, especially those acts that are inexcusable and punishable by law
• Conduct marketing research about various formats that may work for TV audiences. Refereeing must become more transparent (the style of the NFL seems to be popular).
• "Threat of financial loss versus Fines". Contractual realignment based on conduct for referees and team personnel with the possibility of losing a contract based on the seriousness of misconduct.

Controls the purpose of the NBA's marketing plan is to serve as a guide for the organization. The following areas need to be monitored to gauge performance and efficacy of marketing activities:

• Revenue: annual
• Expenses: monthly and annual NBA: A Case Study 10
• Nielsen TV ratings
• Number of ticket-holders and stadium/arena statistics Influx of International players into the NBA for upcoming season
• Number of viewers in countries outside the United States

Contingency Planning Difficulties and Risks

• Problems generating and maintaining good PR as incidents of misconduct increase
• Problems entering global markets where basketball is not a major sport Worst-case Risks
• Determining that the NBA is losing athletes to international markets and there
  

is a dearth of talent

References

1. Hoover's Company Records, Accessed on July 27, 2008. Document ID: 168178731.Coverage by Joe Bramhall.
2. Basketball - The official website of the Beijing 2008 Olympic Games, Accessed on August 04, 2008. http://en.beijing2008. cn/sports/basketball/index. shtml.
3. FIBA. com - FIBA World Ranking for men, Accessed on August 04, 2008. http://www. fiba. com/pages/eng/fc/even/rank/p/openNodeIDs/943/selNodeID/943/rankMen. html.
4. NBA Players From Around The World: 2007-08 Season (Posted Jun 11 2008 4:52PM), Accessed on July 28, 2008. http://www. nba. com/players/int_players_0708. html.
5. NBA Names Tim Chen CEO of NBA China (Posted Sep 19 2007 7:01AM), Accessed on August 04, 2008. http://www. nba. com/news/chen_named_ceo.html.
6. Stern: NBA Europe a work in progress (Feb 17, 12:43 am EST), Accessed on August 04, 2008. http://sports. yahoo.com/nba/news? slug=txnbaeurope=st=lgns, By Anthony Olivieri PA SportsTicker Pro Basketball Editor.
7. LeBron inc. - the building of a billion-dollar athlete, Fortune, November 28, 2007. Accessed on July 27, 2008.
8. NBA. com: HR, Accessed on August 04, 2008. http://www. nba.om/careers/index. html
9. NBA. com: David J.Stern, Accessed on August 04, 2008. http://www. nba. com/careers/executives/stern. html
10. NBA Postseason Broadcast Ratings, 1987-2007 (Posted on April 20, 2008); Nielsen Ratings. Accessed on July 27, 2008. http://tvbythenumbers. com/2008/04/20/nba-postseason-broadcast-ratings-1987-2007/3413
11. Nielsen Ratings Top 20 (18-49 Demo): NBA Finals and Hell's Kitchen, Again (Posted on June 26, 2008). Accessed on August 04, 2008.
12. http://tvbythenumbers. com/2008/06/26/nielsen-ratings-top-20-18-49-demo-nba-finals-and-hells-kitchen-a gain/4231
13. An Interview with Adam Silver, President and Chief Operating Officer, NBA Entertainment. Adam Silver and William A Sutton, International Journal of Sports Marketing and Sponsorship, June-July 2000 Vol 2 Issue 2, Pg 101 (9).
14. League Launches "NBA CARES" Global Outreach Initiative, Posted Oct 18, 2005 at http://www. nba. com/community/NBACARES_051018. html,
    

Accessed on July 27, 2008.