Essay Example on Sports: A Profitable Business in the Modern World

Introduction

Sports is one of the most profitable business sectors in the contemporary world. Numerous people religiously follow major sports like soccer, American football, wrestling, boxing, UFC, rugby, and tennis. According to the National Football Foundation, about 50illion people attended NCAA football games in 2011 while more than 98.2 million people watched the 2019 Super Bowl with the 2015 Super Bowl recording the highest viewership of 114.4 million people (Handley, 2019). That figure is dwarfed when the viewership of the 2018 World Cup is considered. Statistics provided by FIFA show that more than 3.5billion people or half the total world's population watched at least one minute of the competition (Clinch, 2018). The data further shows that the finals between France and Croatia were watched by more than 1.12 billion people (Clinch, 2018). The high viewership, which comprises casual viewers to fanatics indicates that sports attract people's attention than any other event. That high popularity is a major issue of concern for marketers who have increasingly created marketing campaigns around sports. Just like business organizations that have exploited major sports events to popularize their promotional activities, sports marketing has become inevitable and invaluable activity to sports teams. In this view, it is critical to explore how understanding the topic of sports marketing is of value to sports team in the contemporary world.

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According to Mihai (2013), sports marketing entails the promotion of products via sports events as well as the endorsement of sports teams and players. The promotion of sports teams, players, and events is carried out mainly to create public interest and in turn, raise revenue. Typically, sports marketing does not necessarily rely on a particular strategy but rather focuses on exploiting the interest of public in the sporting event to market a product. However, it is important to understand that sports marketing does not entirely ignore the use of strategies as the strategies used are anchored on the principles of the four "P"s of marketing that include product, price, promotion, and place (Mihai, 2013). Given that sports fall under the services category, another four "P"s are included in the strategies. They include planning, packaging, positioning, and perception, which are broadly referred to as the sports marketing mix (Mihai, 2013).

Sports Marketing FunctionMany sports teams derive benefits from the three types of sports marketing that include marketing of sports, marketing via sports, and grassroots sports marketing. As such, understanding sports marketing helps a sports team discover the different opportunities available for exploitation.

Marketing of Sports

Marketing of sports comprises of promotional activities that seek to popularize a sporting event, a sporting team, or a sports association. Typically, it involves creating a live activity with a defined theme. According to Ferrand and McCarthy (2008), marketing of sports is perhaps the best type of sports marketing that illustrates how sports teams utilize sports marketing to further their agenda. Sports teams use this type of marketing to exhibit or publicize events, the team, and affiliated groups. Examples of marketing of sports include the UEFA Champion League finals which are organized by UEFA (body comprising of football associations from 55countries) and the opening and closing games of the English Premier League. England's Football Association (FA) which organizes the EPL just like UEFA buys numerous adverts and promotional spaces to publicize these matches and the entire competition. On the other, Fifa conducts several promotional activities like worldwide tour of the golden world cup to promote the competition and the competing teams. In addition, the teams participating in these competitions engage in different marketing and promotional activities like giving fans free tickets in an attempt to elicit as much public interest as possible. The more the public interest is generated, the more the teams benefit. Such benefits include sponsorships, increased fan base, and fan loyalty.

Marketing Through Sports

Marketing through sports is a type of sports marketing that is conducted after the completion of the first type of marketing, marketing of sports, discussed in the above section. This category encompasses activities that focus on the promotion of products and services by riding on the huge audience and popularity of the sporting event and athletes (Burnett, Menon, & Smart, 1993). Amongst the three categories, marketing through sports generates the most revenues as sports teams and athletes are paid to endorse various products and services. In the contemporary sporting world, teams reap huge benefits from sponsorships who, in turn, benefit from publicization of their products. Also, sports teams use sporting events to promote and sell their merchandise like club uniforms, balls, and shoes. It is a common occurrence for sports teams to change their playing kits, and whenever new kits are unveiled, the teams utilize the sporting events to market and sell the new merchandise to their fans.

Grassroots Sports MarketingGrassroots sports marketing is the third category of sports marketing and involves a more direct and interactive approach to popularize a sport among the general population. In most cases, grassroots sports marketing is carried out to present the sport or make the public perceive the sport as a way of exercise and not as entertainment. The main objective is to increase the participation rate as more people partake in the exercises. Typically, grassroots sports marketing is carried out by sports organizations that want to increase the public interest in their sport, governmental organizations, and non-governmental organizations that seek to attract more public participation in the exercises-sporting event hence lead healthy lifestyles (Shank, & Lyberger, 2014; Fullerton & Merz, 2008).

How Sports Teams Use Sports MarketingSports teams utilize sports marketing is several ways to further their agenda by partnering with business organizations and establishing a solid loyal fan base. A review of the contemporary sports world and sports marketing shows that sports teams use sports marketing in the following ways: to enhance brand recognition, to promote new products, to increase revenue by attracting more viewership, and for public service (Ioakimidis, 2010).

To Enhance Brand Awareness

The majority of the popular sporting events are watched repeatedly by the same audience. For instance, the English Premier League comprises of 17 teams which play 35 games each over a span of 9 months. Each of these teams has a huge fan base that watches the matches and follows the performance of the team religiously. Sports teams take advantage of this huge following by advertising products of different businesses in their home stadiums, in their websites, and during the broadcast of events. Given that the same audience repeatedly watches the teams, sports teams earn revenue through advertising and ensuring that the viewers are constantly exposed to the said product.

In addition, sports teams take advantage of popular sportsmen to advertise and enable paid promotions. That is done by leveraging the love and faith of the fans of the said athlete such that when the athlete or the team endorses a product/brand, the consumer (who is a fan of the athlete) in turn develops a sense of trust in the brand. Popular athletes bag a lot of money from such endorsements, and the team gets a given percentage of the endorsement. In some cases, brands establish a long-term relationship with an athlete or team, and due to seeing the same logo and brand repeatedly, the fans/consumers develop a somewhat permanent link between the two hence a deep sense of trust (Bauer, Stokburger-Sauer & Exler, 2008). Typically, sports teams prefer long-term endorsements because they not only offer vast amounts of revenues but also ensure stability in the team's finances.

Introduce and Promote New ProductsAccording to Desbordes and Richelieu (2012), typical consumers are reluctant to trust a new product or make a purchase. However, studies show that consumers have higher trust levels in new products endorsed by popular figures like athletes than when the products are new, and the consumers do not have knowledge or experience with the services or products. This strategy is highly used by sports teams to promote their sportswear as well as to popularize other companies' products. By approving and giving a testimony of the product, the sportsmen elevate the trustworthiness of the products.

Increase Viewership and IncomeFor any product or service, the primary objective behind marketing is to attract as much attention and elicit public interest as possible. In the same way, the marketing and promotion of sports events and teams in various platforms like social media, TV, print media, and billboards help to invoke huge public interest in the teams and events. An increase in viewership, in turn results in increase in fees charged by teams for promotion, sponsorship, and advertisement. For instance, Sky Sports charge different rates for different matches. A 30-seconds commercial advert during a Sunderland vs Hull City match costs about $50 but that cost sky rockets during big matches like those between Chelsea vs Arsenal to reach $750 (McCarthy, 2018). The difference between the charges for different events shows that increase in viewership results in increase in revenue. Just like TV stations hike charges for events with high viewership, so do the sports teams by raising the broadcasting rights. Therefore, sports teams use marketing to increase viewership hence increase in revenue.

Apart from team-oriented objectives, sports teams use sports marketing to further charitable causes. In the recent past, it has become a common occurrence for teams to wear armbands, ribbons, pause for a few moments before start of a game, or sing anthems dedicated to a given charitable cause (Manoli, 2017). For instance, players sometimes pause for a moment and wear armbands to evoke public interest in fight against cancer. In particular, the English Premier League has encouraged teams to call out racism acts by printing banners in their stadiums and having moments of silence before the start of a game (American Cancer Society, 2019). By having athletes of celebrity status lead and take part in such activities, the sports teams help to raise awareness about the issue as well as increase public support and participation in the furtherance of the cause.

Use of Marketing Mix to Influence Consumers and Decision-MakingAs noted earlier, the success of sports marketing is largely dependent on how well the organization identifies the business function and applies the marketing concepts to deliver the product to the consumer. Given that the sports audience is huge and diverse, it is vital to divide the population into subgroups and then develop a positioning strategy and marketing mix for every group. The marketing mix is a cocktail of strategies and activities that encompass a product, price, promotion, and place (four 'P's). All four elements must be considered thoroughly and applied together (Silva & Las Casas, 2017). The figure below shows the structure of a marketing mix of sports marketing.

Besides the four 'P's, the marketing mix comprises of the other three additional 'P's to the total "the seven Ps." The other three "P"s include people, physical evidence, and process.

At the center of the marketing mix is the Product element, which encompasses the provision of the right products and services as well as the creation of strong relationships between the consumers and the products. In sport...