Chapter 5

Segmentation, Target Marketing, and Positioning in Sport Business

Company

Research & Information Collection

Company Mission & Goals

Consumer Competitor Climate

Segmentation

Target Market Decisions

Sport Marketing Mix Decisions & Strategies

Marketing Management Strategies Implementation – Management – Evaluation – Adjustment

The Sport Marketing Management Model

PriceProduct Place Promotion

Important Statistics

• World population – 7 billion

• USA population – 311 million

(might reach 404 million by 2050)

• USA population shifting from a majority Euro-white population to a society characterized by several groups:

• Hispanic – now the largest minority population at over 15%; is still fastest-growing

• African American – expected to grow from 12.8 to 14%• Lesbian & Gay – Third-largest minority—estimated at 10%• Asian – now the fourth-largest minority• Many others

• Marketing professionals must monitor the population and must shift marketing theories and models to fit consumer markets.

• New marketing strategies are emerging

to keep pace with the changing

demographics in the United States.• Segmentation is used by the marketing

professional to target specific groups (target markets) and their characteristics and behaviors.

Segmentation and its Uses

•Segmentation—using one factor/variable selects members from a group that share a particular characteristic

– Specialization—Using segmentation, a company can select one or more markets in which to specialize in order to meet the subject’s needs.

– Dividing the whole into parts—puts things into order– Understanding consumer groups, determining target

markets, and informing marketing mix and positioning strategies.

– Monitoring changes in the segments.

The Segmentation Process

1. Select a market or industry.

2. Select one or more segmentation bases.

3. Select specific variables for bases.

4. Identify and define each segment.

5. Select one or more as target markets.

6. Develop marketing mix strategies.

Defining a Viable Segment

Identifiability: segments must be identifiable and measurable.

Substantiality: segments must be of a size large enough

to justify marketing mix attention.

Accessibility: segments must be reachable with the

customized marketing mix.

Responsiveness: segments must respond to a marketing

mix customized to that segment.

Consumer Segmentation Bases

Demographic Variables

• Age• Gender• Relationship Status – changes over a lifetime• Income – discretionary vs. disposable income• Occupation• Education• Race• Nationality

Psychological Factors

• Personality: values, beliefs, habits• Physiological: food, drink, sleep, shelter• Psychological: affiliation, beauty, belonging, curiosity,

esteem, independence, love, motive• Lifestyle: household style, parent style, importance of life

comfort, culture, financial resources, occupation and education, community

• Desire for: acceptance, achievement, comfort, fame, happiness, identification, prestige

• Freedom from: anxiety, depression, discomfort, fear, harm, pain, sadness

Consumer Decision-Making Process

All are affected and influenced by personal and social factors.1. Problem Recognition

2. Information Search

3. Evaluation of Alternatives

4. Purchase

5. Post-purchase Behavior

Product Usage and Benefits

• A consumer needs a product to satisfy a need or desire. The product is the tool for the consumer to perform certain functions and realize certain benefits.

• Examples:

Softball Bat: Tool to hit a softball. Benefit: improve hitting percentage, etc.

Go to a WNBA game: Tool to be entertained; to seal a business deal. Benefit: have fun; transact business.

Go to the fitness center: Tool to lose weight, get in shape, or other. Benefit: same.

Subscribe to ESPN Magazine: Tool to keep up with sports news. Benefit: same.

Business Consumers

• Types of business consumers: manufacturers, resellers, retailers, sports governing bodies, institutions, media sports enterprises

Business to Business (B2B) marketing involves the marketing of products to individuals and organizations for purposes other than personal consumption. These consumers typically acquire products and services for purposes of manufacturing, production, resale, operations, enhancement of a company’s position, or other business related reason.

• Segmenting business consumers is similar to segmenting end consumers.

Bases for Business Segmentation

• Geographic Location• Customer Type• Customer Size (can be volume)• Product Use• Purchase Criteria (price, quality,

reputation, delivery)

SPORT INDUSTRY SEGMENTATION: BY PRODUCT AND BUYER TYPE

Sport Performance Segment:Sport performance as offered to the consumer as a participation or spectatorial product

Sport Production Segment:Those products needed or desired for the production of, or to influence the quality of, sport performance

1. Outfitting Productsa. Equipmentb. Apparel

2. Performance Production Productsa. Fitness Trainerb. Medical Carec. Sport Facilitiesd. Governing Bodies and

Officials

1. Athleticsa. Amateur Sportb. Professional Sport

2. Private Business Sport3. Tax-supported Sport4. Membership Supported Sport

Organizations5. Non-profit Sport Organizations6. Sport Education7. Fitness and Sport Firms

1. Professional Merchandising Products

2. Promotional Events3. The Media4. Sponsorship

a. Single Event Sponsorshipb. Multiple Event Sponsorshipc. Single Team Sponsorshipd. Individual Sponsorshipe. Circuit or League

Sponsorship5. Endorsement

a. Individual Endorsementb. Team Endorsementc. Full Organization

Endorsementd. Nonspecific Sport Use

Sport Promotion Segment:Those products offered as tools used to promote the sport product

SPORT INDUSTRYAll sport and related products – goods, services, places, people, and ideas – offered to the customer

Positioning the Sport Product/Business

• Positioning is the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization.

• It is how potential buyers see the product, and is expressed relative to the position of competitors.

The Positioning Process

•Identify market preferences.

•Identify current positioning strategy.

•Does the current strategy match the market preferences?

•Develop positioning strategy.