Sports Marketing Management Exam 2 Defining the product offering – Flashcards

Growth is essential for an organization's survival and prosperity. Products are an essential element of a firm's growth strategy given that developing new products is one of two options for business growth (targeting new markets being the other option).

Kevin Plank's entrepreneurial spirit is typical of how many product ideas are borne: an unmet need is recognized and a solution developed to meet it. The story of how Plank began the business in his grandmother's house and had a company presence that consisted of only a post office box is motivational to aspiring entrepreneurs who see the result today, Under Armour having revenues of nearly $1.5 billion. The foundation of Under Armour's success is the original wicking t-shirt product. Quality influenced positive word-of-mouth, increasing demand for the product and eventually creating growth opportunities for Under Armour through new products.

The vignette illustrates important product marketing concepts. The main point communicated is the importance of a product's ability to deliver value to users in marketing success. Athletic apparel was not a new category, but the benefits of Under Armour's compression t-shirt differentiated the brand from existing products. And, the point of difference possessed by Under Armour met a relevant customer need. The acceptance of Under Armour's original product led to brand extensions within the core category (other apparel products) and outside of the core category (footwear and athlete training).

Two options: 1.) New customer markets 2.) New products Of course, deciding how to pursue business growth is more complex than an either/or decision. But, for marketers, wrestling with how to grow these two options is the most viable general path to take.

A product is defined as the value a buyer receives in exchange with a seller. This broad view means that a product is more than tangible goods. Five types identified: 1.) Tangible Products --> Something you can hold (golf ball; hot tub; etc.) 2.) Intangible Services --> (Tickets; benefits you receive; betting on games) 3.) Live events/experiences 4.) Digital experiences 5.) Personalities

The most obvious type of product is goods that can be experienced with one or more senses. In the sports industry, products include licensed merchandise, sports venues, or physical spaces where sports are played, sporting goods and apparel, and products used in support of sports property operations such as scoreboards. A company may sell only a single product, or it may have multiple products that are extensions of the core product

The intangibility of spectator sports is characterized by the emotionally-based relationships many fans have with their favorite team or players. Leagues, conferences, and teams are different sports properties whose primary product is an intangible service delivered directly to spectators at live events or indirectly to viewers of event broadcasts. Spectator sports are often positioned as sports entertainment, which is also classified as an intangible service. Sponsorships are another service; there is no tangible product bought by a sponsor.

The primary product delivered by spectator sports properties is the live event. Without games or events, these properties would not exist! The importance of events and experiences has been amplified in recent years by a trend toward branding more individual events. For example, the NHL's branding of key events such as NHL Premiere (early season games in Europe), Face-Off (season opening), All-Star Game, Winter Classic, and Stanley Cup Playoffs creates experiential brands around marquee events. Sponsorships can integrate an experiential component via activation of the service product (i.e., rights fees paid for a brand to be associated with a sports property).

A fast-growing category of sports products is digital experiences. Three types of digital experience products: 1.) Game broadcasts (Long-term subscriptions and streaming of sporting events) 2.) Smartphone apps (Content for mobile devices) 3.) Internet content (News, blogs, games, and other information or entertainment content) From a historical perspective, digital products may have the same impact on sports consumption in the early 21st century as radio and television had on the first and second halves of the 20th century, respectively.

Apps make it easy for fans to connect directly to a website or social network. Content of apps can be customized to create a branded experience that enables a sports brand to engage customers through an additional channel. Many smartphone apps are free, offering new value to fans by allowing them to consume sports on their personal wireless devices using what is known as the "third screen." Fantasy sports and sports media are two categories that have successfully integrated apps into their product offerings.

A type of product somewhat unique to sports is 1.) Personalities - 2.) Players (If a player is traded or otherwise is removed from a team, his or her star power is no longer a marketable asset to associate with that team) 3.) Coaches, 4.) Broadcasters, 5.) Executives (the people who are associated with a sports brand) Two risks exist when marketing personalities as a sports product: 1.) The personalities being marketed are not perfect like a manufactured product; if they get into trouble or are embroiled in controversy it can have a negative effect on the brand. 2.) Personalities' association with a team is not necessarily permanent.

The term "product" suggests that it is a single-dimension concept. In fact, a product is comprised of three layers, or levels: 1.) Core product (benefits provided) 2.) Actual product (Characteristics or attributes) 3.) Augmented product (Value added features) Marketers must understand the products they offer in terms of these three levels in order to effectively appeal to buyers by focusing on elements of the product that are crucial in adding value.

The core product considers the benefit that users seek from product consumption. Definition of the core product should respond to the question "Why do consumers use the product Motives for sports consumption differ across consumers but can be for entertainment, escape, to have a vicarious experience, or enjoy the thrill of athletic competition. Understanding the core product is essential because customer needs/wants should influence design of the actual and augmented product.

Actual product elements are required for operation or execution of the product. --> An example provided in the chapter of the actual product for a baseball team is two teams, a baseball field, a game consisting of nine innings, umpires, and unique features of baseball such as home runs, strategic decisions made by managers, and the warm-up period between innings A salient characteristic of the actual product is that although it is vital for successful delivery of a product, this level of product may not be the motivation for users' consumption. Buyers are driven to product use by the benefit delivered (the core product) and may be persuaded to take action because of the augmented product.

The augmented product contains features whose presence in a product adds value for users. Unlike actual product elements, the augmented product is nonessential for a product's function or execution. However, the presence of augmented product elements contributes to utility, pleasure, and overall perceived value of consumption. The augmented product can differentiate a sports product from other entertainment offerings and attract people who may be less interested in the actual product, especially for a discretionary purchase like sports entertainment (core product).

Actual product elements are augmented with "extras" that create value for attendees of a college football game. Service quality and experiential events (an integration of two products into the delivery of a live sporting event) are two ways that the augmented product is activated.

Innovation has drawn great interest among managers because of the realization that a firm perceived as innovative can create a competitive advantage. The concept of innovation is simplified somewhat in the context in which it is presented in the chapter. A straightforward definition of innovation that is adopted is "the ability to deliver new value to a customer." Innovations can be technology-based, but it is not a must. Any way in which value creation and delivery is enhanced can be classified as an innovation.

Innovation, like the concept of a product, is not a single-dimension concept. Classification of innovations can be done along a continuum based on the degree of newness an innovation represents. Three types of innovation: 1.) Continuous innovation 2.) Dynamically continuous innovation 3.) Discontinuous innovation Continuous and dynamically continuous innovations are considered evolutionary and discontinuous innovations are revolutionary in terms of the degree of change an innovation represents.

They are minor changes or adaptations to the actual product or augmented product. An example of actual product continuous innovation is a rule change that the NFL implements to increase player safety. An augmented product continuous innovation is a change or addition of a value-added feature to enhance customers' experience. The NFL's adoption of a Fan Code of Conduct is an example of a continuous innovation of the augmented product. Continuous innovations are the most frequently developed because they typically contain less risk to implement given that they are minor adaptations of existing products.

A dynamically continuous innovation represents a more significant change from existing products than continuous innovations. Customers will have some familiarity with the innovation, but greater learning and persuasion are often needed in order for adoption to occur. An example given in the chapter is arena football. When the sport is introduced to a new geographic market, there is some familiarity with it given similarities to NCAA and NFL football. However, differences between arena football and the game fans know already mean that football fans have to be persuaded that the innovation fits within what they know already about football but has value of its own

The rarest type of innovation is classified as discontinuous. It is a significant departure from the status quo; they are often considered "new to the world" innovations. Technology plays a role in creating discontinuous innovations, but information technology-based developments are not the only source of discontinuous innovations.

Given the high failure rate of new products, it would seem that marketers are helpless bystanders when it comes to launching new products, hopeful that they have done their homework correctly and developed a product that the market will accept. However, there are steps that managers can take to help navigate an idea through the product development process and its introduction to the market. Four variables that influence successful adoption of an innovation: 1.) Relative advantage 2.) Compatibility 3.) Complexity 4.) Trialability

The point of difference that an innovation possesses is important to customer adoption of an innovation. Defining and communicating that point of difference are critical to an innovation's success Three characteristics needed to create a relative advantage with an innovation: 1.) Real (Relative advantage is not based on words or slogans; It must exist) 2.) Relevant (Advantage matters to the target market) 3.) Recognizable (Point of difference must be observed by target market and perceived as an advantage

A new product has a greater chance of successful adoption when it fits with the target market's values, beliefs, behaviors, and lifestyles. Innovations that are incongruent with how people think or behave require adaptation in order to be adopted. People may be unwilling to change, even if an innovation possesses a relative advantage. Football is discussed in the chapter as a sport in which compatibility has affected adoption of challengers to the NFL over the years. Upstart leagues that have possessed a relative advantage struggled to gain acceptance as their product was not well received by fans accustomed to the game played by NFL rules.

The more learning or behavior modification that must occur in order for consumers to adopt a new product, the more challenging it is for marketers to gain acceptance of the innovation. Thus, education and customer support are important for helping customers understand and adopt new product offerings. An innovation that possesses a relative advantage and perceived as compatible can still fail if product acquisition or use is seen as inconvenient or difficult.

A final hurdle to adoption of an innovation is the ease with which it can be tried and evaluated by the target market. Before a person can become a loyal user, she must be able to first use a product in order to determine if it possesses sufficient value to justify continued use. Sampling is a tactic that marketers can use to encourage first-time product use.

New products play an important role in helping a sports property achieve its growth goals. But, product strategy must be developed in concert with a strategy for targeting customer segments. Three strategies that link product development with market segmentation strategies: 1.) Expand existing customer relationships 2.) Attract customers in existing segments 3.) Break into new markets

Using new products to expand existing customer relationships is a logical strategy because it focuses on leveraging the goodwill already created among a customer base. New products that are continuous innovations that are extensions of products customers have adopted already have a better chance of success than more drastic innovations. In the sports industry, two examples of product introductions that can take advantage of existing customer relationships are media products and licensed merchandise. Media products like smartphone apps and premium online content typically are targeted to fans that already are "sold" and have a relationship with a sports property

A growth strategy that combines products and markets is to seek to attract new customers that are part of existing markets. These prospects are not necessarily fans or customers currently, but they are accessible and can be targeted through cross-marketing tactics with other brands and licensed products Licensed products is another strategy for attracting customers in existing markets by offering products of interest to people who do not necessarily have a strong identification with a particular brand. For example, the NFL has sought to attract new female fans through expanding licensed products aimed at women

Cross-marketing utilizes relationships a partner has with consumers to reach them and gain their interest. An example of cross-marketing from the team sports sector of the sports industry is for teams with non-competing schedules to help market each other's product. For example, the NFL has sought to attract new female fans through expanding licensed products aimed at women

New audience segments can be geographic areas, demographic groups, or based on value proposition. Products may need to be modified or adapted (i.e., innovations developed) in order for new audiences to be interested in a marketer's offerings. Business-to-business marketers can pursue this strategy by leveraging expertise in marketing a product or service to target prospective clients with other products or services.