Using Sports to Reach Your Fans

Using Sports to Reach Your "Fans"

Much can be learned from how companies use sports to reach their end users. It is undeniable that big business in this country actively pursues consumers in virtually all demographic groups through sports marketing. This "cradle to grave" exposure—from Little League to the senior leagues—targets every consumer that has, or is likely to have, purchasing power.

Corporations use sports marketing to achieve numerous, and often times simultaneous, objectives when targeting these customers. Knowing they have a relatively captive audience tuned in during "TV timeouts," fast food companies, for example, frequently reinforce their relationships with sports fans by running commercials intended to persuade couch potatoes to buy the advertised brand of burger or pizza the next time they need their fast food fix.

Appreciating the sheer volume of people in attendance at sports venues, it is not unusual for cell phone companies to distribute surveys to sports fans or have them test market new products to assist in the product development process.

Knowing that sporting events can be used as a relaxing backdrop to conduct external business development, many companies lease luxury boxes to close important deals. These same companies often rely on the cache of a luxury box to reward employees for their achievements or dedication to the company.

Regardless of which objectives or combinations of objectives are sought, the primary goal of sports marketing is to drive sales and increase shareholder value. This is frequently accomplished by supplementing great advertising with showing (potential) customers that your brand is prevalent where targeted consumers expect to see it, namely, attached to sports via sponsorship, promotion, or other marketing vehicles.

To validate that the use of sports makes sense in an organization's marketing pursuits, successful businesses revisit their corporate mission and goals, and identify internal and external strengths and weaknesses before giving sports marketing serious consideration.

Once this review is completed to management's satisfaction, attention can then be turned to conducting the requisite research to validate that the organization's customers can indeed be reached because of their connection to sports. Companies, regardless of their size or resources, that are successful in sports marketing then turn their attention to segmenting markets.

Market Segmentation

To properly segment markets, marketers must divide potential customers into homogeneous groups. Doing so is more expensive and complex than simply taking a mass-market approach, but it makes it easier to reach customers while differentiating a firm from its competitors.

In addition to targeting particular customer groups for the express purpose of selling them a product or service, successfully segmenting markets will also enable a company to gather valuable feedback from, and information about, potential customers.

There are five primary techniques that marketers use to segment markets. [1] Some techniques require more time and resources than others, but these typically yield more valuable information that makes it easier for companies to reach intended customers. The five primary segmentation techniques are based on the following factors:

[1] Tellis, Gerard, Advertising & Sales Promotion Strategy (p. 21). Addison-Wesley, 1998.

  • Geography

  • Demographics

  • Usage patterns

  • Lifestyles

  • Benefits

The most basic of the segmentation techniques utilizes geography to differentiate consumers. Marketers understand that preferences can vary greatly from country to country or, for that matter, from neighborhood to neighborhood. Marketers routinely use geographic segmentation as a starting point from which they further narrow the customers they seek.

Segmentation occurs when a new business determines how many local publications it can afford to advertise in, or how many and which mailboxes it should be dropping its take-out menu into. It continues with regional stores that have effectively used hometown professional athletes that have a strong connection to the community. They utilize these athletes at store grand openings and in local cable ads blanketing the region where the team plays.

The Wiz, an electronics chain in New York, New Jersey, and Connecticut, has used former Jets and Giants quarterbacks Joe Namath and Phil Simms as spokesmen, both of whom were used on special editions of the chain's phone cards.

The next method of segmentation is more refined and considers a potential market's specific demographic qualities. This includes grouping consumers by age, ethnicity, gender, income, education, or occupation.

Ace Hardware and Tinactin antifungal foot products not only utilize former NFL coach and current ABC broadcaster John Madden as their spokesman, but they also run commercials featuring Madden during games, clearly targeting football-watching males.

Simply segmenting a market by age, such as middle-aged men, might not sufficiently narrow a market. However, combining it with the previous geographic technique, such as the New England area, might yield an adequately segmented target market.

A local Lexus car dealership can target an age group of 35- to 54-year-olds, but it also has to determine a cost-effective territory in which to advertise. Does it have a database that reveals that customers have come from 30 miles away because Lexus dealerships are few and far between? What information, if any, does it share with other dealers outside its core territory? What is the dealer's relationship with other car dealers in the same area? Is it purely adversarial or might the Lexus dealer also own the Volvo and Saab dealership in a neighboring city? Are the potential buyers of these three models a homogeneous group? How much will it cost to find out?

Another valuable way to segment markets is by lifestyle. This technique groups individuals based on their personal values and the way they live. It is more time-consuming and cost-prohibitive, but if done successfully, this technique provides marketers with target rich segments. Combining the previous two techniques with lifestyle segmentation delivers a more distinct homogeneous group that marketers strive to reach.

For instance, if a baseball team wants to sell a grandstand seat to a blue-collar worker it should focus on how inexpensive the seat is. This same team would be well advised to focus on the proximity of the seats to the action when attempting to sell a field-level seat to a small company hoping to impress a client. For a team's most affluent potential customers that are considering the purchase of a luxury suite, the amenities—such as how comfortable the seats are, the promptness of the wait service, and the variety of exotic hors d'oeuvres—might be stressed.

Usage segmentation further refines the target marketing process by grouping consumers based on how they use or consume a certain product. This segmentation technique can reveal the extent to which customers are brand loyal or even provide information about why customers choose to switch brands.

For example, credit card companies can customize and direct promotional campaigns based on where and to what extent its card-members use its credit cards. Billing inserts sent to American Express Platinum cardholders differ from those found in American Express' standard "green" card billing statements.

Defining markets based on the product benefits customers seek can be the most useful segmentation technique. A primary example of this is the aforementioned Miller Lite beer. Two different consumers might buy the same beer for different reasons. One might be inclined to purchase a six-pack because the beer "tastes great" whereas the other might make his purchase decision because it is "less filling."

Consumer perceptions and values are changing more rapidly than ever because the sheer number of commercial messages consumers are exposed to continues to increase. If a company can access and understand the wants and needs of its customers, it will be poised to market its product to the ideal segment(s).

Each of these techniques has its own merits and advantages. Marketers have to make sure that they utilize the appropriate number of segmentation methods and weigh the feedback accordingly. Ideally, marketers will segment based on perceived product benefits and then combine remaining techniques to create an ideal segmentation mix.

Once potential markets are segmented, marketers must turn their attention to selecting the best target market to pursue. Selecting the right segment of the market is critical if a business is to survive. Accordingly, viable market segments have three important attributes:

  • Quantitatively measurable

  • Reachable

  • Able to generate sufficient sales volume

At their core, viable market segments allow companies to forecast demand (quantify) and determine precisely how many resources should be allocated to not only accessing a particular market (reach), but also to ensuring a sufficient return on investment (sales volume) exists.

MasterCard, which has been consistently among the top 25 highest spenders in sports marketing, uses sports to target middle to upper class adults ages 18 to 44. As evidenced in its "Priceless" advertising campaign, MasterCard has targeted parents that not only possess discretionary income, but also have families that enjoy conveniently located sports and entertainment events.

It is useful to consider a company such as MasterCard because it has not only extensively used sports marketing, but has done so effectively, forging one of the closest relationships between corporate America and the world of sports.