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M01SEM Marketing and Sponsorship in Sports

and Events

Coursework prepared by Efstratios Chiotis (6614067)

Date: 22 April 2016

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Marketing Consultancy Report for AEK FC – Olympic

Stadium of Athens (OAKA)

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Table of Contents

1 Introduction………………………………………………………….4

2 AEK FC – Olympic Athletic Centre of Athens (OAKA)………....4

2.1 AEK FC…………………………………………………………...4

2.2 OAKA…………………………………………………………...5

3. The Extended Marketing Mix………………………………………5

3.1 The 7 Ps and 4 Cs of Marketing……………………………….6

3.1.1 Product and Consumer Needs……………………………...6

3.1.2 Price and Cost………………………………………………..6

3.1.3 Promotion and Communication……………………………..7

3.1.4 Place and Convenience……………………………………..7

3.1.5 People…………………………………………………………8

3.1.6 Process………………………………………………………..9

3.1.7 Physical Evidence……………………………………………9

3.2 Summary of the Extended Marketing Mix…………………...10

4. Relationship Marketing……………………………………………10

5. Future Marketing Strategies………………………………………12

5.1 Customer Retention/Attendance……………………………..13

5.2 Sponsorship/Partnership Agreements……………………….14

6. Conclusion………………………………………………………….16

7. References………………………………………………………….17

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1. Introduction

Dear Mr. Alexis Dedes,

After thorough research, we have managed to identify and evaluate your

organisation’s marketing strategies and we are now in position to describe you

the current situation and most important recommend you future marketing

strategies based on the principles of relationship marketing that will produce new

sponsorship agreements and improve customer retention/attendance in your host

venue.

The report starts with a brief description of your club in terms of its current

marketplace and its presence in OAKA. Afterwards, an analysis of its extended

marketing mix is given alongside a first insight of its weaknesses. Then, the

importance of implementing a relationship marketing approach is explained.

Following this, we conclude with our recommendations for creating effective

partnerships and enhancing customer retention/attendance, as well as increasing

your fan base. Finally, we summarise all our suggestions in a section which aims

to assist you in implementing the right strategies in order to enhance your club’s

overall marketing performance.

2. AEK FC – Olympic Athletic Centre of Athens

(OAKA)

2.1 AEK FC

AEK FC was created in 1924 in Athens from a group of Greek immigrants

originated from Constantinople (Istanbul, Turkey) and has a long history full of

successes and achievements (AEK FC 2016). Today, stands out as one of the

top three football clubs in Greece, in terms of popularity and has dedicated fans

at national level as well as worldwide, mainly in the Greek communities of North

America, Australia and United Kingdom. In its recent history though has not been

so successful on field; haven’t won a championship since 1994 (Soccerway

2016). Furthermore, a financial crisis led the club to its relegation for the first time

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in the 3rd division 2 years ago. Consequently, AEK FC in its first season back to

the 1st division has several challenges to face in order to retain and increase the

number of the spectators in its stadium.

2.2 OAKA

OAKA serves as the host venue for AEK FC since 2004 and is the biggest

stadium in Greece with an approximate capacity of 70,000 spectators (O.A.K.A.

2014). The stadium is state-owned and the club has to pay a rent in order to use

it. Consequently the full exploitation of its capacity and surroundings is essential

for generating the amount of revenues needed. Although OAKA is not considered

as a proper football stadium and cannot create a unique ambience, its huge

capacity, considering the other stadiums in Greece, gives the club the freedom to

implement several marketing strategies in order to attract and retain customers.

3. The Extended Marketing Mix

Before the evaluation of the extended marketing mix for AEK FC it is crucial to

briefly mention the key characteristics of services as described by Lovelock and

Gummesson (2004). These are:

Intangibility: pure services cannot be assessed by sight, feel, smell,

taste, etc.

Inseparability: production of a service cannot be separated from its

consumption, thus making consumers co-producers

Heterogeneity: each consumer-producer encounter is unique and varies

from time to time

Perishability: services cannot be stored

Lack of ownership: services cannot be owned

Taking into consideration the above characteristics throughout the report, the

next step is the analysis the marketing strategies incorporated by AEK FC and

subsequent advices for any mentioned weaknesses.

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3.1 The 7 Ps and 4 Cs of Marketing

The traditional marketing mix conducted by McCarthy in 1964 (Goi 2009)

includes the so-called 4 Ps of marketing: product, price, promotion, place. In

addition to these there are other 3 marketing ingredients (people, process,

physical evidence) that were added later in order to better suit the marketing mix

of the services industry. Furthermore the initial 4 Ps have been associated with

the 4 Cs of marketing (customer needs, cost, communication, convenience) to

support the marketing process from the customers’ perspective.

3.1.1 Product and Customer needs

The core product in this situation is the game itself which is something that is

different every time even when playing with the same opponent. Thus, according

to Buhler and Nufer (2010) in order to maintain a good relationship with the

customer some product extensions have to be developed. These include

surrounding entertainment, hospitality packages, catering and merchandising

among others. AEK FC has implemented a policy of attracting young fans in the

recent years by either providing free entrance to kids under 10 years old or

offering 50% discount to teenagers (AEK FC 2015). This initiative should be

enhanced by a surrounding entertainment, appropriate for these group of fans,

which are not the loyal ones that will come again whatever the quality of the

competition and the performance of the team. The club has tried to segment the

market into different groups but that is not enough if you do not satisfy each

group needs. For example a family coming to the game would be interested in

the catering and the hospitality packages offered whereas a handicapped person

would seek an easily accessible stadium and a helpful service personnel.

3.1.2 Price and Cost

The price for a game varies between 5 and 120 euros depending on the

importance of the game and the quality of the opponent (Sport24 2016). Setting

such a low price for a game might result in the fans to consider it as really low

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quality, thus decreasing their interest to attend. To avoid such behaviors we

consider a price floor at 10 euros excluding the groups with discount.

Season ticket holders are categorized in different groups depending their age,

employment status (unemployed, students) and marital status (there is the family

gate where parents with kid are offered a discount) (AEK FC 2015).

A further strategy that AEK FC could follow is to bundle the price of its home

games with their traditional opponents. These 3 games in total are always the

ones that fans anticipate and by given them the possibility to attain them all can

enhance the sales.

3.1.3 Promotion and Communication

AEK FC operates a fairly updated website which includes all required

information. There is also the possibility for a fan to personify the website

according to his/her own taste through “My AEK” extension. This app is also

available for use in mobile devices (Christodoulou 2014). In an era where social

media marketing is essential for an organization to promote itself, the club owns

accounts in most of these platforms (Facebook, Twitter, etc.) and feeds them

with updated content in a regular basis. However, the content does not seem to

differentiate from platform to platform, as the same things are posted in all of

them, in the same order. In that case, we propose that unique content should be

posted in each account in order to satisfy the needs of the different groups using

each platform. Furthermore the club should consider creating a LinkedIn account

with the aim of attracting corporate clients and creating a more professional

image to the club.

3.1.4 Place and Convenience

OAKA is the largest and most modern stadium in Greece and is located in the

north suburbs of Athens. It is surrounded by other Olympic venues which all

together consist the complex of the Olympic centre. This is giving the possibility

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for fans to visit other facilities as well in a walking distance from it. Access is

possible through railway, suburban railway, busses or by car as there are plenty

parking slots for visitors (O.A.K.A. 2014).

Figure 1 (O.A.K.A. 2014)

In close proximity are located two shopping malls where fans can spend their

time before or after the game. The club should seek to create partnerships with

several companies operating in those malls. Consequently the fans could have

discounts by showing their purchased tickets and companies can increase the

volume of their clients especially during match days.

3.1.5 People

People includes everyone that can have an impact on the consumer’s visit to a

game from the professional players and coaches to employees, volunteers and

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other fans. As mentioned above inseparability is a key characteristic of a service,

which means that fans become co-producers of the game by creating the

atmosphere (chanting and celebrating or shouting and yelling). But as we said

everyone is responsible for creating the appropriate environment which will

satisfy the customer and enhance its experience. Consequently, as Gronroos

(1997) states each employee acts as a “part-time” marketer which directly

interacts with the costumer. Thus there should be a constant training to all

employees interacting with fans, from ticket servers to stewards, providing them

with the right marketing tools in order to facilitate each customer’s experience

before, during and after the game.

3.1.6 Process

Process describes the way that a service is delivered to its user and it is crucial

for the perceived quality that a fan will have from his/her game experience

(Beech and Chadwick 2007). Apparently the delivery of that service is a process

that brings together the customer and the club’s employees and it is an activity

after which the customer will decide if his/her expectations were met.

Consequently every process has to be standardised and be learned by every

single employee of the club as well as the volunteers and external staff that work

during the games but are not hired by AEK FC itself.

3.1.7 Physical Evidence

The environment in which the actual game takes place and where employees

and customers interact is called physical evidence and is the last but not least

component of the extended marketing mix (Buhler and Nufer 2010). It is essential

for the organisation to provide facilities appropriate for use, which can meet

special needs and requests and where customers can feel safe. Especially for

securing the current policy of attracting kids and teenagers, safety is of outmost

importance and has to be totally manifested inside and outside the stadium.

The stadium itself is an exemplar of high architecture after its renovation for the

2004 Olympic Games and the addition of the remarkable roof by the Spanish

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architect Calatrava. However, there is no evidence neither in the interior, nor in

the surroundings that this stadium is the host venue for AEK FC, which create

confusion and disengagement with the fans. Thus some renovation and

additional signposts and artefacts in the surroundings has to be considered in

order to increase awareness of the current user of the stadium.

3.2 Summary of the Extended Marketing Mix

In the previous section we briefly analysed the marketing tools used by the club

and we have noticed advantages as well as disadvantages. To summarise them

we can conclude with our recommendations:

Provide young fans with appropriate entertainment before, during and

after the game in order to engage with them

Offer a discount package for the 3 home games with the traditional rivals

Differentiate the content of each social platform and search corporate

clients through a LinkedIn account

Seek partnerships with companies operating in the proximate shopping

malls

Train and development of all employees which can be used as part-time

marketers

Standardisation of processes

Distinguish the stadium from the complex as your host venue

4. Relationship Marketing

According to Groonros (1997) “relationship marketing is to identify and establish,

maintain and enhance, and when necessary terminate relationships with

customers (or other parties) so that the objectives regarding economic and other

variables of all parties are met. This is achieved through a mutual making and

fulfilment of promises.” Consequently, having the appropriate marketing tools is

not enough anymore as long as you cannot use them in a way that promotes

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long-term relationships with all potential stakeholders. Thus AEK FC as a

professional sport organisation which aims at obtaining a competitive advantage

in the market has to implement the right strategies and move from the

transactional marketing to relationship marketing as a guiding philosophy that

crisscross all departments.

One aspect of the club that can distinguish it from the others is its history.

According to Barney (1991) imperfectly imitable resources dependent on unique

historical conditions are a key component of creating competitive advantage.

AEK FC has a unique history as it was founded from Greek immigrants and a

great number of its fans are dedicated to it with sociocultural bonds. This history

should be promoted and enhanced with policies that can attract new audiences.

The initiatives currently undertaking by the club in order to assist and relief the

hundreds of immigrants that arrive to Greece nowadays should be enforced by

the actual presence of these people in the stadium (AEK FC 2016). This can

increase the social image of the club as well as create new fans, not only by the

immigrants themselves who might stay in the country but also local citizens who

can emotionally be attached to the club after these initiatives.

According to Kirtis and Karahan (2011), the effective use of social media is also

essential for the club to engage with its fans and create new ones, especially

among youngsters which is a target group that AEK FC aims to bring to the

stadium. Creating live content during the games and giving the possibility to fans

to interact through the ‘My AEK’ application can lead to more close relationship

and entertain them no matter the on-field performance. As we mentioned before

different content has to be posted in the various social platforms in order to

engage with several target groups. Moreover there should be given the possibility

for current sponsors to promote themselves through those social platforms in

order to create a win-win situation for both.

The large capacity of OAKA gives the possibility to the club to host various

groups of people (families, students, elderly people, etc.) each one of them has

different needs and expectations. This is why relationship marketing has to be

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implemented in order to build a long-term relation with each one and create a

true and loyal fan base. Football fans are unique in the way that do not change

team so it is crucial for the club to engage with the youngsters from their first

attendance to the game, in order to retain them for the future. This process is

best described through the ‘Ladder of Loyalty’ (Payne et al. 1995) which

illustrates the steps that a new fan have to pass in order to become a partner of

AEK FC.

Figure 2 (LinkedIn Corporation 2016)

5. Future Marketing Strategies

Throughout the report we investigated the current marketing strategies that AEK

FC implements and we have already given some recommendations on how to

correct its weaknesses in terms of its marketing tools as well as potential ways to

move from the transactional to a more relationship marketing approach which is

essential to retain customers and increase the fan base. In this section we will

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further recommend strategies for improving customer retention/attendance at

OAKA and creating new sponsorship/partnership agreements.

5.1 Customer Retention/Attendance

As many surveys around the world have demonstrated customer retention is

crucial for any service provider nowadays. Facts show that loyal customers worth

up to 10 as much as their first purchase and that is 7 times more expensive to

acquire a new customer than to keep a current one (Help Scout 2016). AEK fans

are between the most loyal ones in Greece, however since 2008 attendance in

OAKA has steadily decreased as Figure 3 shows.

Figure 3 (Super League 2014)

In the next years the club did not participated in the 1st division but the promotion

to it in 2015 alongside the policy of the club to keep the prices at the same level

as in the lower division did not affected average attendance which remained at

around ten thousands tickets on average for the first half of the current season

(Voulgaris 2015). Fans have constantly complained that OAKA is not a football

stadium, thus cannot create the ambience needed for it to feel like real home.

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Moreover the already announced plans for the building of a new private stadium

in the next 2 years have made them less willing to attend in OAKA. However, we

recommend that the club can take advantage of it and start a campaign where

the most frequent attendants in OAKA for the next years will be rewarded by

having priority alongside some discount in purchasing a ticket to the new ground

where capacity will be approximately 30,000.

Successes on the field is what ultimately drives fan to the stadium and as we

mentioned in the beginning of the report AEK FC hasn’t got any recent ones.

Thus, it has to find other sources to retain its customers such as the cultural side

of the club and its glorious history which distinguish it from others. Furthermore it

has to implement and promote a long-term plan that will persuade its fans that

successes on the pitch will come soon and create an excitement among them.

5.2 Sponsorship/Partnership Agreements

AEK FC currently has some of the greatest companies as main sponsors which

originate from a wide range of different industries. These include:

OPAP (the biggest betting company in Greece)

NIKE (sporting goods manufacturer)

Cosmote (the leading Greek company in telecommunications)

Nova Sports (the Greek sport channel)

Piraeus Bank (the leading bank in Greece)

Globo Technologies (enterprise mobility) and

Athens Medical Group (medical services)

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Figure 3 (AEK FC 2016)

Through these sponsorships both the club and the sponsors try to create win-win

scenarios as the latter use AEK FC logos and popular image and the former their

expertise and products respectively.

However, we estimate that there are still opportunities for further agreements

with companies from different sectors. Firstly, as we briefly stated in section 3.1.4

the club should seek to create partnerships with companies located in the nearby

shopping malls. Especially, taking into consideration the high volumes of kids

and teenagers that attend the games, it seems wise to collaborate with the

relevant retail shops as well as the playgrounds located in each mall.

Another opportunity for a sponsorship would be that of a company from the

transportation industry. In this particular case our recommendation is AEGEAN

Airlines the number one airline company in Greece with a strong European

presence as well. AEGEAN connects all remote islands and places in Greece

with the capital city of Athens, home of AEK FC, thus it can be used as a vehicle

to promote the brand of the club throughout the country. Furthermore it can

connect the Greek communities of Europe with the club, thus giving it an

international appeal, which has been lost since AEK FC last played in Europe

back in 2012.

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In our concerns these are the types of agreements that are missing from AEK FC

current sponsorship portfolio and could successfully be included in it.

6. Conclusion

To sum up this report has focused on the current marketing tools used by AEK

FC, revealed their weaknesses and recommended solutions. Furthermore we

focused on the importance of implementing a relationship marketing approach.

Finally we came up with recommendations on how to improve customer

retention/attendance and we considered potential new sponsorship/partnership

agreements that can be added to your sponsor portfolio.

We can ensure you that by implementing these specific marketing strategies,

your organisation will be benefited in the long-term.

Thank you for your trust in STR Consultancy and we hope to collaborate again in

the near future.

With best Regards,

Efstratios Chiotis

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7. List of References

AEK FC (2016) History – Timeline [online] available from

<http://www.aekfc.gr/hp/i-istoria-mas-42825.htm?lang=en&path=-

234507649&tab=0&place=0> [20 April 2016]

AEK FC (2016) Social Responsibility [online] available from

<http://www.aekfc.gr/c/koinoniki-drastiriotita-

42874.htm?lang=en&path=1915581043> [10 April 2016]

AEK FC (2015) Season Tickets 2015-16 [online] available from

<http://www.aekfc.gr/Uploads/Documents/45400/xrisimes%20plirofories%202015

-2016.pdf> [15 April 2016]

Barney, J. (1991) Firm Resources and Sustained Competitive Advantage.

Journal of Management 17 (1), 99-120

Beech, J. and Chadwick, S. (2007) The Marketing of Sport. Essex: Pearson

Education Limited

Christodoulou, D. (2014) AEK Official App [online] available from

<http://www.sportman.gr/news/efarmogi-gia-ios-android-siskeves-gia-tin-a-e-k>

[17 April 2016]

Goi, C. (2009) A Review of Marketing Mix: 4 Ps or More? International Journal of

Marketing Studies 1 (1)

Gronroos, C. (1997) Keynote Paper: From Marketing Mix to relationship

Marketing – towards a Paradigm Shift in Marketing. Management Decisions

35(4), 322-339

Help Scout (2016) 75 Customer Service Facts, Quotes and Statistics [online]

available from <https://www.helpscout.net/75-customer-service-facts-quotes-

statistics/> [20 April 2016]

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Kirtis, K. and Karahan, F. (2011) To Be or Not to Be in Social Media Arena as the

Most Cost-Efficient Marketing Strategy after the Global Recession. The

Proceedings of 7th International Strategic Management Conference 24, 260-268

Lovelock, C. and Gummesson, E. (2004) Whither Services Marketing? In Search

of a New Paradigm and Fresh Perspectives. Journal of Service Research 7 (1),

20-41

O.A.K.A. (2014) Access [online] available from

<http://www.oaka.com.gr/access/?lang=en> [15 April 2016]

O.A.K.A. (2014) Main Olympic Stadium [online] available from

<http://www.oaka.com.gr/main-olympic-stadium/?lang=en> [15 April 2016]

Payne A, Christopher M, Clark M, Peck H. (1995) Relationship marketing—key

concepts. Relationship marketing for competitive advantage: winning and

keeping customers. Oxford: Butterworth

Soccerway (2016) Super League – Greece – Archive [online] available from

<http://uk.soccerway.com/national/greece/super-

league/c107/archive/?ICID=PL_3N_07> [15 April 2016]

Sport24 (2016) AEK – Tickets [online] available from

<http://www.sport24.gr/football/omades/Aek/panw-apo-15-000-eisithria-exoyn-

dothei-gia-to-aek-olympiakos.3897541.html> [16 April 2016]

Voulgaris, S. (2015) AEK fills up the stadiums of Super League [online] available

from < http://www.pamesports.gr/356128/h-aek-gemizei-ta-ghpeda-ths-

superleague> [20 April 2016]