Chapter 15
Segmentation of the
Sports Market
McGraw-Hill/Irwin
15-1
©2007 The McGraw-Hill Companies, All Rights Reserved
Introduction and Review
• “The Mass Market Is Dead”
• “One-Size-Fits-All” Strategy is Obsolete
• Mass Marketing versus Differentiated
Marketing
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Differentiated Strategies
• Marketing Mix Tailored to Each Selected
Target Market
• Not Everyone:
– Wants the same products
– Shops at the same types of retail facilities
– Will pay the same prices
– Is motivated by the same promotions
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Market Segmentation
• As Relevant for Sports Products as It Is for
Non-sports Products such as Cars, Fast
Food, Restaurants, Beverages, and
University Programs
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Steps in Target Marketing
• Market segmentation
– Dividing a market into smaller groups of buyers with
distinct needs, characteristics, or behaviors requiring
separate products or marketing mixes
• Target marketing
– Evaluating each market segment’s attractiveness and
selecting one or more to enter
• Market positioning
– Setting the competitive positioning for the product and
creating a detailed marketing mix
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Market Segmentation
• No single way to segment a market
• May combine more than one variable to
better define segments
• Best to use multiple approaches in order
to identify smaller, better-defined target
groups.
– Start with a single base and then expand to
other bases.
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Key Segmentation Variables
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Geographic
Demographic
Geodemographic
Psychographic
Behavioral
Product related
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Geographic
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World region or country
Region of country
City or metro size
Density or climate
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Demographic
• Age, gender, family size, family life cycle,
income, occupation, education, race,
religion, etc.
• Most popular bases for segmenting
customer groups
• Easier to measure than most other types
of variables
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Age and Life-cycle Stage
• Example: P&G has different toothpastes
for different age groups
• Avoid stereotypes in promotions
• Promote positive messages
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Modern Family Life Cycle
15-11
Income
• Identifies and targets the affluent for luxury
goods
• People with low annual incomes can be a
lucrative market
• Some manufacturers have different grades
of products for different markets
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Demographics
15-13
Demographics
15-14
Geographics
• Urban vs. suburban
– Basketball versus soccer
• One part of country vs. another
– Skiing versus golf
• One country vs. another
– Cricket versus baseball
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Geodemographic
• Claritas, Inc.
– Potential Rating Index for Zip Markets
(PRIZM)
– Based on U.S. Census data
– Profiles on 260,000 U.S. neighborhoods
– 62 clusters or types
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Psychographic
• Social class
• Lifestyle
• Personality
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Psychographics (Lifestyle)
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Behavioral
• Occasion segmentation
– Special promotions and labels for holidays
• e.g., Hershey Kisses
– Special products for special occasions.
• e.g., Kodak disposable cameras
• Benefits Sought
– Different segments desire different benefits from
products.
• e.g., P&G’s multiple brands of laundry detergents
to satisfy different needs in the product category
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Behavioral (cont.)
• User Status
– Nonusers, ex-users, potential users, first-time
users, regular users
• Usage Rate
– Light, medium, heavy
• Loyalty Status
– Brands, stores, companies
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Product-Related Variables
• Level of Use
– Season ticket buyer versus infrequent buyer
• Loyalty
– Long-term versus new season ticket buyer
• Benefits Sought
– Social outing versus entertainment by athletes
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Six Segments of Sports Fans
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Players
Patriots
Appreciators
Socialites
Friends
Voyeurs
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Players
• Those who play a sport are more likely to
be a fan of that sport
• Example: Golfers are most likely group to
attend or watch a golf tournament on TV
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Patriots
• National Pride – England vs. France
• Regional Pride – New York vs. Boston
• Important segment for international
competitions such as the Olympics, the
World Baseball Challenge, and the World
Cup of Soccer
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Appreciators
• Admiration of players’ skills
• Desire to witness excellence
• Not as concerned about who wins
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Socialite
• Seeks sports event where interaction with
friends is facilitated
• Tailgating
• Members may not be very knowledgeable
of the sport or event they are attending
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Friends
• Watch friend or family member compete
• May have limited knowledge of sport
• Important for minor sports and events
– High school sports
– Amateur recreational sports
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Voyeurs
• Drawn by the sex appeal of sport or
individual athletes
• Skimpy attire (Beach volleyball)
• Attractive participant (Anna Kournakova)
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Criteria for Segment Sports Fans
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Involvement
Participation
Social needs
Identification
Appreciation of sport
Sex appeal
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Overview of Fan Market
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Participation Market
• Players rather than spectators
• Segmentation still important
• Same basic categories of segmentation
criteria can be applied
– e.g., demographics, psychographics
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Aggregate Participation Market
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Excitement-seeking competitors
Getaway actives
Fitness driven
Health-conscious sociables
Unstressed and unmotivated
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Excitement-Seeking Competitors
• Prone to engage in risky activities
– Bungy jumping, extreme sports
• Predominantly male
• Relatively young
• Generally single
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Getaway Actives
• Fun with family and friends
– Skiing, camping, hiking, golf
• Vacation prone
• Social motives
• Both sexes
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Fitness Driven
• Activities requiring strength and stamina
– Running, aerobics, martial arts
• College graduates dominate this group
• Predominantly female
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Health-Conscious Sociables
• Activities that foster good health
– Walking, light cardiovascular exercise
• Older participants
• Predominantly female
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Unstressed and Unmotivated
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Prone to be inactive
Generally older (both sexes)
Few activities appeal to this segment
Little marketers can do to induce activity
by members of this segment
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Sport-Specific Segmentation
• More insight than with segmentation of the
aggregate participation market
• Used to identify homogeneous segments
• Applicable for any participation activity
– Golf, bowling, poker, skiing, tennis, hunting
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Targeting
• Evaluating various segments and selecting
the one(s) that promise(s) the best ROMI
• Successful targets must be:
– Sizable
– Measurable
– Reachable
– Demonstrate behavioral variation
– Actionable
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Evaluating Market Segments
• Segment Size and Growth
– Analyze current segment sales, growth rates, and
expected profitability
• Segment Structural Attractiveness
– Consider competition, existence of substitute
products, and the power of buyers and suppliers
• Company Objectives and Resources
– Examine company skills & resources needed to
succeed in that segment
– Offer superior value and gain advantages over
competitors
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Target Marketing Strategies
• Undifferentiated (mass) marketing
– Ignores segmentation opportunities
• Differentiated (segmented) marketing
– Targets several segments and designs
separate offers for each
• Concentrated (niche) marketing
– Targets one or a couple small segments
• Micromarketing (local or individual
marketing)
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Micromarketing
• Tailoring products and marketing programs
to tastes of specific people and locations
– Local Marketing: Tailoring brands and
promotions to the needs and wants of local
customer groups
– Individual Marketing: Tailoring products and
marketing programs to the needs and
preferences of individual customers
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Factors in Choosing a Market
Coverage Strategy
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Company resources
Product variability
Product’s life-cycle stage
Market variability
Competitors’ marketing strategies
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Positioning for Competitive
Advantage
• Product’s position is the way the product is
defined by consumers on important
attributes, or as the place the product
occupies in consumers’ minds relative to
competing products.
– Perceptual position maps can help define a
brand’s position relative to competitors
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Perceptual Mapping
Positioning - Finding a way to fix your product in
the minds of consumers
high price
conservative
extreme
low price
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Perceptual Map for Sports
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Choosing a Positioning Strategy
• Identify a set of possible competitive
advantages on which to build a position
• Choose the right competitive advantages
• Select an overall positioning strategy
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Identifying Possible Competitive
Advantages
• Key to winning target customers is to
understand their needs better than
competitors do and to deliver more value
• Competitive advantage – extent to which a
company can position itself as providing
superior value
– Achieved via differentiation
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Identifying Possible Competitive
Advantages
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Product differentiation
Services differentiation
Image differentiation
People differentiation
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Positioning Errors
• Underpositioning
– Failing to really position the company at all
• Overpositioning
– Giving buyers too narrow a picture of the
company
• Confused Positioning
– Leaving buyers with a confused image of a
company
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Choosing Right Competitive
Advantages
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Important
Distinctive
Superior
Communicable
Preemptive
Affordable
Profitable
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Overall Positioning Strategy
• Full positioning of the brand is called the
brand’s value proposition
• Potential value propositions include:
– More for More
– More for the Same
– The Same for Less
– Less for Much Less
– More for Less
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Communicating and Delivering
the Chosen Position
• Company must take strong steps to deliver
and communicate the desired position to
target consumers
• Marketing mix efforts must support the
positioning strategy
• Must monitor and adapt the position over
time to match changes in consumer needs
and competitors’ strategies
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Segmenting the Golfer Market
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Different levels of playing ability
Different motives for playing
Different attitudes toward practice
Differing frequency of play
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Five Segments of Golfers
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Competitors
Players
Sociables
Aspirers
Casuals
• Recognizing different segments allows golf
marketers to better satisfy various groups
of customers
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Closing Capsule
• “One-Size-Fits-All” clothing results in
consumers wearing clothes that don’t fit
• Developing one marketing mix for all
consumers is equally ineffective
• Market segmentation and resulting
differentiated marketing strategy provide
better fit for each consumer
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Closing Capsule
• Market is segmented using relevant
criteria
• Target markets are selected from array of
identifiable market segments
• Corresponding marketing mix is developed
for each selected target market
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Closing Capsule
• Segmentation is appropriate for:
– Aggregate fan market
– Fans of a particular spectator sport
– Aggregate participation market
– Participants of a particular activity
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