Submitted by Kevin D. Rubel, Dr. Randall Griffiths and Dr. Annette Craven
The golf industry has become a highly volatile space due in part to recent economic troubles. Combining an increase in the number of courses with a shrinking number of rounds of golf being played has resulted in competition reaching new levels of intensity. Golf course managers are seeking new ways to respond to the increased competition. Some are introducing new and interesting amenities to retain and attract golfers to their courses. Recently, amenities in the form of new technologies have been developed and made available that aim to enhance the golfers playing experience. Websites now have the capability to provide online tee reservation systems similar to hotel reservations systems that allow golfers to start their game with a minimum of disruptions upon arriving at the course. Global Positioning Systems (GPS) make it easier to see where you are in relation to the hole, how far you are from the green, and which particular club you choose to make each shot. Radio Frequency Identification (RFID) is a new technology that includes putting a transmitter in the ball and using handheld receiver to track the ball, allowing the golfer to find the ball quicker. However the return for investing in these new technologies has not been assessed. The need to assess the impact of this technology is especially important given that the typical golfer is older and my not value the types of technology being implemented. A survey of 56 golfers of all ages, playing levels, and experience was conducted to determine which factors impact a golfer’s choice to play a particular course, with technology being the main focus. The results indicate there are moderate correlations between demographics items and these new technologies. However, these correlations do not provide as much predictability as other factors typically used in customer segmentation. Several interesting significant correlations were found between gender and price as well as gender and location that could be of beneficial use for future study. Implications for golf course practice are discussed.
Outsourcing is a crucial tool that allows sport organizations to turn over their noncore processes to external service providers. The outsourced service providers help sport organizations focus on sales efforts to maximize revenue. The purpose of this study was to examine outsourced marketing in NCAA Division I institutions from the outsourced marketing companies’ perspective. A survey was conducted to gather information from the general managers at the primary outsourced marketing company’s property affiliated with select schools in NCAA Division I conferences. Collected data were analyzed with descriptive statistics along with qualitative responses. The study found that the outsourced marketing firms focus on revenue generation through securing corporate sponsors. Primary inventories sold included commercials during radio broadcasts of games and signage at athletic facilities. These are typically packaged with the sports of football and/or men’s basketball. The study found that many sponsorship categories remained unfulfilled. There was also growing concern by the companies regarding the escalading financial guarantees paid to the schools. The findings and recommendations are valuable to college administrators, athletic directors and outsourced marketing firms as the parties strive to find outcomes beneficial to everyone involved in the partnership.
More and more collegiate athletic departments have adopted outsourcing as a strategy which uses their corporate partners, such as State Farm, Burger King or Verizon Wireless, to help them earn additional revenue in exchange for advertising at the sporting events. Outsourcing is a crucial business strategy that allows companies to turn over their noncore processes to external service providers while the company concentrates on its core competencies (18). In the highly competitive environment of intercollegiate athletics, some schools are able to handle its corporate partnerships with in-house marketing departments. However, the growing trend for major NCAA Division I schools is to outsource its marketing efforts to an outsourced marketing company that specializes in the sales of inventory such as commercials on radio broadcasts or coaches’ television show, corporate hospitality at home sporting events, signage at athletic facilities and more (24, 38).
The athletic department will typically sit down and outline what they would like to see from an outsourced partner (2). For most schools, outsourced companies offer the opportunity to streamline operations or provide resources that might not otherwise exist, such as sales expertise (24). Li and Burden (24) add that the athletic department may want a company to produce radio call-in shows or coaches’ television shows in addition to the sales efforts. The outsourced companies would have a greater opportunity to improve the quality of the broadcast and simplify the production efforts.
Host Communications, International Sports Properties (ISP Sports) and Learfield Communications were viewed as the main outsourced marketing companies in the early 2000’s (38). Nelligan Sports was also seen as an emerging outsourced marketing company. These outsourced companies handle sponsorship sales while the in-house marketing department shifted its attention to promotions and increasing attendance and ticket sales. The outsourced company would maintain a “property” at the school with the property serving as an extension of the parent company. The property was responsible for the sales efforts and reporting back to the parent company.
The benefits of the outsourced marketing partnership are that of guaranteed and additional revenue (19). An outsourced marketing company will promise a financial guarantee of a set amount to the school’s athletic department in exchange for being able to sell the “rights” of that athletic department. Another option includes a simple revenue-sharing model for the “rights.” The rights could be in the form of a radio commercial, an on-field promotion, a giveaway at a sporting event, or signage at an athletic facility including on a video board (38).
To a lesser extent, the outsourced company will also sell advertising in game programs, on ticket backs and on the athletic department’s website. A fan might pick up a schedule poster and schedule card at a football game with a sponsor’s logo on it. That sponsor may also have a permanent sign at the football stadium visible to fans and may also host a corporate village for its clients prior to the game. In exchange for its advertising opportunities, the sponsor will pay the outsourced marketing company an agreed upon amount of money. The outsourced marketing company will then put that revenue towards the promised guarantee for the athletic department. Once the guarantee is met, the athletic department receives an agreed upon percentage of any future revenue, but it is there that the outsourced company earns its greatest financial sales commission. If this financial model is not used the straight revenue sharing of each sponsorship sold is another viable option.
As these outsourced marketing companies gain more schools under their watch, they spread their sales territory and can start to package a few schools with one corporate sponsor. For example, ISP Sports may approach Verizon about a national sponsorship deal that could reach the Northeast through sponsoring Syracuse University, the West Coast through sponsoring UCLA, the Midwest through sponsoring the University of Houston and the Southeast through a sponsorship of Georgia Tech Athletics. At the same time, Verizon may also discuss a similar deal with Host Communications through sponsoring the athletic departments at Texas, Boston College, Arizona, Kentucky and the University of Michigan. Companies might also pursue schools in a set geographic region, further enabling them to partner with corporate partners exclusive to that particular region. By strategically acquiring attractive schools (those with large market areas and large fan bases) around the country, the outsourced marketing companies can pool their resources, reduce their costs and diversify their portfolio of schools at the same time.
A number of studies have examined the perceptions of athletic directors and senior staff administrators from the institutions that partner with an outsourced company about their relationship with their outsourcing partners (10, 19, 24, 25, 38). Issues examined include details of the outsourcing contracts such as the length of the term, the financial guarantee, and the strengths and weaknesses of the outsourced partnership. This current study provided the outsourced company a chance to respond with its own sentiments about the relationship and future issues related to outsourced marketing. An analysis of the schools’ responses in conjunction with the responses of the outsourced marketing companies could help make for a better relationship in the future. The purpose of this study was to examine outsourced marketing in NCAA Division I institutions from the outsourced marketing companies’ perspective.
An Overview of Outsourced Marketing in Intercollegiate Athletics
The most significant outsourced marketing deal to date took place early in the fall of 2004 as Host Communications won the rights to the University of Kentucky athletics in a ten-year deal valued at more than $80 million. Host placed a bid of $80.475 million edging the bid of $80.35 million submitted by Learfield Communications, while ESPN Regional bid $74 million and Viacom Sports $55.25 (29). The previous deal was $17.65 million over the course of five years and expired April 15, 2005 (20). This deal established a benchmark that has since been surpassed, but clearly raised the fair market value.
To look at the origin of outsourced companies’ involvement with athletic departments, it is necessary to start in Lexington, Kentucky, and the origin of Host Communications. In 1973, Jim Host bid on the rights for the University of Kentucky in what is the first believed outsourced deal in intercollegiate athletics. Within ten years, Host had secured the rights to the Final Four after convincing then NCAA president Walter Byers that corporate marketing was the wave of the future (34). Host saw the opportunity that existed in advertising and licensing given the affinity associated with the college sports fan.
In working with colleges and universities and their marketing efforts, what Host strived for was a clean venue comparable to the Olympic Games where there was limited signage and less clutter in the advertising. The corporate partners who paid the most would receive these exclusive opportunities to advertise. Host notes that the philosophy is not applied to the Bowl Championship Series which is run outside the control of the NCAA (34).
Today, Jim Host is no longer head of the company he started, but he has enjoyed seeing the company grow to the point that it sells advertising on over 500 radio stations for the Final Four (5). This is up from the 200 radio stations the company partnered with in 1982 (12). Host also prints game programs for over 43 NCAA championships and operates most marketing and promotional aspects of the NCAA events. It annually earns over $100 million in revenue (7) and has not limited itself to just intercollegiate athletics. Event marketing in junctures as diverse as Streetball and the National Tour Association (tourism industry) have led the company to be recognized by the SportsBusiness Journal as one of the top five marketing companies in the world and the premier in intercollegiate athletics (6). In 2007, global sports marketing giant IMG purchased Host Communication, as the company exists today as IMG College (17).
In time, other companies began to surface to challenge Host Communications as the “one-stop” shopping point for colleges and universities. The companies realized what athletic departments were failing to grasp, that season-ticket holders were more than just fans who wrote a check once a year for seats to a sporting event. These fans were consumers that could spend up to $100,000 or more during a lifetime on tickets, concessions, and parking (22). In addition, the fans were loyal to their teams and everything associated with their team.
Corporate partners began to realize this and wanted to partner with schools. With money to be made and Jim Host demonstrating some early financial return on investment for the University of Kentucky, more start-up outsourcing companies wanted to become involved in their revenue opportunity. Some of the companies were locally owned and operated, but others were more regional like an ISP Sports, Learfield Communications, or Nelligan Sports. Companies and athletic departments sat down to best figure out which schools were good fits for which company and how to best utilize the relationships over the long-term. After that outsourced companies began to provide sponsorship options or packages to corporate sponsors based on what other schools were doing (22).
In creating packages of what could be sold, the typical items included signage at the athletic facilities, television rights and radio broadcast rights (14). Cohen adds that higher dollar values were attached to such sponsorship packages and enabled athletic departments to offset growing expenses including scholarships and rising facility costs. Schools would “bundle” their inventory and see more of the revenue return directly to the school instead of multiple outside parties (13). Outsourced marketing enabled corporate sponsors to visit one individual or company instead of stopping at the radio station to gain radio advertising during game broadcasts, stopping at the local television station to gain on-air advertising during coaches’ television shows, then concluding with a visit to the athletic department for additional advertising signage at the athletic facilities. This is especially true as video boards became more and more detailed in intercollegiate athletic facilities starting with the University of Nebraska in 1994 (31).
As scoreboards have been supplemented or replaced with video boards fans are now afforded instant replays and advertising messages. A full-color video board could now offer “fan of the game” or “play of the game” or “great moments in history” segments that are presented in collaboration with a corporate sponsor. It could also roll a commercial exactly like the ones seen on television at home. Steinbach (31) noted that with their addition of video boards, Michigan State experienced a sponsorship revenue increase from $400,000 in the pre-video days in 1998 to more than $3 million annually by 2002.
While these video board improvements provided new fan entertainment and sponsorship revenue, they did not come without a price. Many older fans thought the video board was too much like the television they chose to leave at home. Others felt the noise was too distracting and took away from the natural elements of the sporting event including the fans’ cheering, the band and cheerleaders (15). Athletic administrators and outsourced companies had to evolve to package their advertising in subtle fashion around trivia contests, historic moments, replays and scores from around the country. Pure video commercials advertising products were not welcomed in the stadium as it distracted from the entertainment aspect of the game itself. Furthermore, sponsors recognized that if fans were not happy with the advertising, their affinity to the sponsor would not be positive either. Too much advertising could also lead to a clutter of sponsors with their advertising messages being lost on the fans (15). The message was heard by the outsourced companies which now included Viacom Sport and Action Sports Media in the mix.
Recent Concerns in Outsourced Marketing
Arizona State University completed a study in 2004 on a small sample size that found that in intercollegiate athletics, sponsorships are typically formed in the categories of: airlines, auto parts, beer, credit cards, DSL, gas/oil, health and fitness, long distance, paging devices, and tires/auto services (3). The same group also found that categories frequently ignored include: auto parts, boats/marines, computer hardware/software, delivery services, department stores, drug stores, electronics, hardware/home improvement, music stores, pharmaceuticals, personal hygiene, video game systems and video stores. One major concern is that ignoring these categories can result in significant lost revenue. Tim Hofferth, president and chief operating officer of Nelligan sports stresses that outsourced companies cannot ignore pre-existing business relationships between schools and area businesses as those are additional sponsorship opportunities waiting to happen (23). This is particularly important as the parent outsourcing companies, with a greater portfolio of schools, pursue national sponsorships that are more financially viable to the parent company relative to the schools’ properties pursuing regional and local sponsorships. Therefore another concern is that local relationships can be impaired or even lost.
Additional research by Walker (36) noted that it is important that communication between the outsourcing property and the school remain a high priority. Because of the athletic department’s affiliation with an institution of higher education there are certain restrictions that exist that may not be as prevalent in professional sports. Such restrictions may central on alcohol, gambling or lottery sponsorships or trying to maintain a “clean” image at the sporting events to avoid concerns of excess commercialization within higher education. Goals, philosophy and objectives between the school and property must be aligned (11).
Future research needs to also explore whether the escalating guarantees paid to schools have grown too rapidly for the outsourcing companies to keep pace. After Kentucky signed their landmark deal, Connecticut, Arizona, Tennessee, Alabama, Michigan, Texas, North Carolina, Florida, Ohio State and Nebraska have since signed contracts guaranteeing at least $80 million to their schools from their respective firms (29). Wisconsin, Oklahoma, LSU and Arkansas are all guaranteed at least $73 million through their school’s contractual obligations with outsourced marketing firms.
Outsourcing as a Strategic Alliance: A Brief Overview
As competition becomes more and more intensified, individual firms have to seek out strategies to stay competitive. One of such strategies is strategic alliances (16). The age of in-house operations is quickly being replaced by the age of alliances (16).
According to Spekman and Isabella (30), an alliance is a close, collaborative relationship created between two or more firms for the sake of accomplishing some goals that would be difficult for each to accomplish alone. By collaborating, alliance partners will not act in self-interest, but will promote the partnership and foster its strengths. There are several benefits of forming a strategic alliance. According to Parise and Casher (26), a strategic alliance is characterized as “an open-ended agreement between two or more organizations which enables cooperation and sharing of resources for mutual benefits, as well as enhancement of competitive positioning of all organizations in the alliance” (p. 26).
1. Strategic alliances exist to create value. Whether or not it is in the form of new market penetration, increased profit sharing, or competitive opportunities, companies join to reap the benefits that neither partner could enjoy alone.
2. Strategic alliances are developed to create a number of advantages. Some of these advantages are opportunity-based alternatives. In other words, strategic alliances can provide firms in the alliance with many opportunities to reposition themselves in the market because the infrastructure network created by the alliance gives all members access to a range of information, markets, technologies, and ideas that would be far beyond their reach otherwise (16, 27). Due to the fact that it is often difficult for a particular firm to possess all the resources required to meet new challenges and opportunities, the formation of an alliance can be extremely advantageous (16).
3. Strategic alliances are developed to divert corporate attention away from nonessential efforts where the firm lacks expertise, cost advantage, or scale. The skills gained through new partnerships can introduce new techniques, market segments, or new geographic markets, and the addition of complementary skills also helps boost revenue opportunities by gaining greater returns from existing customers, channels, and products (1, 30).
Outsourcing within intercollegiate athletics is a viable means for an athletic department to utilize strategic alliances to create value and take advantages of skills that may not be found with the in-house marketing staff. The outsourced marketing firm can focus on revenue generation while the in-house marketing staff enhances event atmosphere and boosting attendance.
The general manager at the primary outsourced marketing company’s property affiliated with select schools in NCAA Football Bowl Subdivision conferences was the original subject of this study. The select NCAA Football Bowl Subdivision conferences included such six conferences as the Atlantic Coast Conference (12 schools), Big East Conference (12 schools, including four independents), Big Ten Conference (11 schools), Big Twelve Conference (12 schools), Pacific Ten Conference (10 schools), and Southeastern Conference (12 schools). Each of these six conferences is a member of the Bowl Championship Series, the leader in the Football Bowl Subdivision, formerly Division I-A, post-season play. Furthermore, earlier research by Zullo has indicated that a majority of schools outside of these six selected conferences affiliated with the Bowl Championship Series do not have an existing relationship with an outsourced marketing group (19).
With the six BCS conferences, there are a total of 69 schools. Among these 69 schools, 13 handle their marketing in-house and an additional seven were marketing in-house and recently reached an agreement to start a relationship with an outsourced marketing partner (19). That left 49 schools with outsourced marketing relationships. However, seven schools used multiple companies in their outsourced marketing efforts rather than pooling their efforts bringing the number of included participants down to 42. For example, one firm may sell signage at the stadium while a second sells radio inventory. These schools were not included as this research focused on school’s exclusive outsourcing partnerships only.
The main outsourced parent companies include ESPN Regional, Host Communications (presently called IMG College), International Sports Properties (ISP Sports), Learfield Communications, Action Sports Media, Nelligan Sports, and Viacom Sports (presently called CBS Collegiate Sports Properties). An examination of these companies found an additional 19 Division I schools with outsourced marketing relationships. These 19 schools are not in the six major conferences but have been included in the study to increase the sample size to 61.
To achieve the objectives of this study, a questionnaire was designed and utilized to examine the outsourced marketing companies’ perspective pertaining to their affiliations with NCAA Division I institutions. The researcher designed the questionnaire in consultation with four account executives from two major sports marketing firms. These four reviewers were not general managers with the outsourced marketing properties thus they could freely express their suggestions and concerns. This collaboration enabled further critique, expertise and anonymous feedback to enhance the instrument’s validity. Further review by academic colleagues aided in the process of eliminating biased questions or clarifying wording. The questionnaire and consent form were then sent to the general managers of the outsourced marketing companies’ operations at 61 major NCAA Division I institutions.
Both close-ended and open-ended questions were included in the survey instrument. There were nine open-ended questions. They were (a) what is the property’s best method of soliciting sponsors? (b) what are the primary goals of outsourced companies? (c) how often do outsourced companies fail to meet their financial guarantee to their schools? (d) what inventory sells the most, the least and why? (e) what sponsorship categories are presently being sold and which are ignored in sales? (f) why do outsourced companies sell certain sports and not others? (g) what are the strengths and weaknesses of outsourced marketing companies? (h) what do outsourced marketing companies perceive as the future problems with outsourced marketing? and (i) at what level is outsourced marketing a good fit within college athletics?
Data Collection and Analysis
The survey instrument was mailed to the respective general managers with a second mailing added to heighten the response rate. Descriptive statistics, such as frequencies were used to analyze the collected data. Qualitative responses were also analyzed to identify reoccurring themes.
RESULTS AND DISCUSSION
As mentioned previously, the purpose of this study was to examine outsourced marketing in NCAA Division I institutions from the outsourced marketing companies’ perspective. Twenty-eight general managers of the identified sixty-one NCAA Division I institutions responded to the survey, which accounted for a 46% response rate.
Primary Goals of Outsourcing Marketing Operations
In conducting their sales efforts, most surveyed properties (93%) focus on personal selling efforts as their means of reaching out to potential partners or sponsors. Telemarketing and using a database are secondary methods of soliciting sponsors or partners. These sponsorships or partnerships are secured for the primary purpose (68%) of generating revenue for the overall parent company to meet the guarantee to the school. After that goal is met then the secondary focus becomes trying to bring in additional revenue beyond that initial guarantee. This is consistent with previous literature by Burden and Li (9-10) and Zullo (38). The findings are also congruent with the strategic alliance research that place an emphasis on the value of partnerships yielding enhance values to both parties (26).
Table 1 Property’s Best Method of Soliciting Sponsors/Partners/Clients
Table 2 Primary Goals of Outsourced Marketing Properties
As mentioned earlier, this revenue is ultimately shared with the affiliated institution of higher education’s athletic department. It should be noted that the surveyed general managers indicated that outsourced properties focus on sales and not on the business of enhancing an athletic department’s marketing or promotional efforts. The outsourced properties responding also did not indicate a willingness to boost ticket sales or create awareness for the athletic department. This is also in line with past research by Zullo (38) and Burden and Li (9). Consistent with research in strategic alliance the in-house marketing departments focus on the areas of ticketing and brand awareness while the outsourced firms avoid such areas where they lack expertise and experience (1, 18, 30)
Duration of Relationship and Success Rates
Of the outsourced properties responding, 42% have been working with their current school for over six years and 54% have worked with their school for less than six years. There was one non-response. Twenty of the twenty-eight properties have successfully met their financial guarantee to the school’s athletic department throughout the duration of the relationship with the remaining eight respondents choosing to not answer the question. Of those eight, the subsequent question found that two of them have failed at least once to meet its financial obligation to the school’s athletic department. That is collectively a success rate of greater than 90% for the outsourced marketing properties in meeting their financial guarantees to the schools.
Table 3 Number of Years Property Has Worked With School
Table 4 Number of Years Property has Successfully Met Financial Guarantee
Table 5 Number of Years Property has Failed to Meet Financial Guarantee
If one tallied the cumulative number of years that all of the respondents have partnered with their respective outsourced marketing firms, factoring in the two years the guarantee was not met, that pooled annual success rate improves further thus supporting the philosophy of such alliances as advantageous (16, 30). Why companies failed to meet their guarantee could be asked on further questionnaires to help facilitate what factors impact not meeting the guarantee. Additional questions could also explore whether the escalade in financial guarantees paid to the schools by the properties has hindered the success rate. Furthermore, questions could also ask whether joint bids have become a necessity with the higher paid guarantees. ISP Sports pursued joint bids with IMG College before the latter company acquired the former in 2010 (4).
Attractiveness of Marketing Inventory
In examining what inventory items are sold most by the outsourced properties, the respondents cited radio broadcast of games (61%) and permanent signage (57%) at athletic facilities as the best selling inventory. These findings are consistent with Cohen’s findings (13-14) and Zullo’s research in 2000 (38). Video board advertising and ribbon signage at athletic facilities are other top sellers on the second tier of inventory, along with game day promotions and print media. Steinbach noted (31) that while start-up expenses for video boards may be higher the boards can offer a significant return investment. A third tier of inventory would consist of coaches’ radio shows, coaches’ TV shows, corporate hospitality, and the athletic department’s internet advertising rights.
Table 6 Best Selling Inventory Items
The idea of an interactive marketing area or fan zone that is increasingly being found at professional sporting events has not caught on as a popular inventory item at the college level yet. This may be due to the greater expense of such a project relative to the production of a radio commercial or one time cost of making a sign to display in an arena or stadium. An interactive area or fan zone’s costs and expenses could offer a lower financial return on investment for the outsourced marketing property.
The findings indicate that inventory provided by the athletic department and sold by the outsourced marketing company is limited. As professional sports are quick to sell more creative inventory, including corporate hospitality, ribbon stripe advertising in arenas and more fan friendly websites, institutions of higher education, athletic departments and outsourced marketing companies appear to continue to do business in the same way over the last decade as shared by Zullo’s (38) research. Athletic departments that prefer the permanent signage route over ribbon advertising or video board are not maximizing their revenue opportunities. Though accompanied by greater start-up costs, the ribbon advertising and video board messages garner greater fan interest and can be sold at a higher rate to the corporate sponsors. Outsourced companies may provide greater access to this newer technology enabling schools to add inventory they could not otherwise do on their own thus demonstrating another value of the strategic alliance (16, 27).
In terms of which sponsorship categories have been filled by the outsourced marketing property in the last three years, 71% of the respondents maintained some form of sponsorship in the categories of sit-down restaurants, fast food, hotel, soda/cola, banking, cellular service provider, car insurance, hospital/medical center, grocery store, automobile brand, life insurance, pizza and airlines. What is notable is the wide range of categories left unfulfilled by outsourced marketing properties including: water, health clubs, credit cards, real estate, tires, military, home improvement, dairy, automotive repair, motor oil, office supply store, tools/power equipment, coffee, satellite television, batteries, delivery services, boats/marinas, and candy. These findings are consistent with the study conducted at Arizona State (3).
Table 7 Sponsorship Categories Successfully Filled in Last Three Years
There are many categories typically sold in professional sport that are ignored in intercollegiate athletics. Future research is needed to address why this is the case. Is the sponsorship not a good fit for the college setting? Have companies tried approaching these categories and failed in their sales efforts? Or are companies aware that a greater financial return can be found with select categories relative to others? Additional research is warranted in this area as strategic alliances may yield new revenue opportunities and open new markets (1, 30), but only as these questions are explored further.
Attractiveness of Sports as Outsourcing Inventories
When surveyed general managers were asked what sports sold well when working with corporate sponsors or partners, the overwhelming response indicated football first and men’s basketball second. Women’s basketball and baseball were second tier sports in the sales effort. However, football and men’s basketball sold the best because that is what the sponsor/partner demanded (79%) in the sponsorship package first and it was demanded based on the historical perception of greatest return on investment value.
Table 8 Top Three Sports Outsourced Properties Sell
Table 9 Reasons for Selling Such Sports
Other sports simply did not garner the sponsor’s interest (71%), offer a significant return on interest (18%), or yield a past history of success in sales (11%). This was especially true of Olympic Sports and women’s athletics excluding women’s basketball. Low regular attendance at Olympic Sporting events equates to low return on investment from the sponsor’s perspective.
Table 10 Top Three Sports Outsourced Properties Did Not Sell
Table 11 Reasons for Not Selling Such Sports
This should not be interpreted as a dislike of these sports, but rather as a financial decision by corporate sponsors. A State Farm or AT&T corporate sponsor has the ability to reach many more fans at a football game then at a tennis match due to the larger attendance of patrons at the football games. Such a sponsor may also have the capability to advertise to a broader audience on the radio and television via the broadcast of the football and men’s basketball games. These findings are consistent with Zullo’s study (38).
Though this may be an area of concern between athletic administrators and outsourced marketing companies, most schools’ administrators understand the financial implications if an outsourced marketing company focuses too much time on selling sponsorships for a softball game instead of football or men’s basketball. The financial guarantee would not be met by the outsourced company and their services would not be retained. While the guarantee would be paid by the property’s parent company, the school would lose confidence in the property’s ability to sell and would look to partner with another company. It is a balancing act by the outsourcing marketing companies and many of these companies have offered to package Olympic Sports or women’s athletics with football and men’s basketball sponsorship packages provided that the corporate sponsor did not object. That noted, schools such as Georgia, Texas, or Stanford may need to explicitly state in their contracts with an outsourcing company that Olympic Sports and women’s athletics must be sold, given the high status of such programs at these schools.
Strengths and Weaknesses of Outsourced Marketing
Respondents noted that the major strength of outsourced marketing properties includes revenue generation (57%) with service quality ranking second. The weaknesses of outsourced marketing properties range from lack of control over content to lack of interest and promotion for certain sports. This reaffirms the previous research of Zullo (38) and Li and Burden (24).
Table 12 The Major Strengths of Outsourced Marketing
Table 13 The Major Weaknesses of Outsourced Marketing
Future Problems/Issues Facing Outsourcing Marketing
The respondents indicated the biggest future problem in outsourced marketing is too great of a financial guarantee for a school (50%), one that an outsourced marketing parent company may have trouble meeting on an annual basis. Smith (29) found that an increasing number of schools were surpassing the 2004 benchmark Kentucky deal as financial guarantees to school were reaching the $100 million mark. Secondary problems include clearly demonstrating a return on investment for sponsors (18%), an oversaturation of the marketplace with sponsorships, and turnover in sales personnel (both 14%). Tertiary concerns include ambush marketing, faculty concerns of over commercialization, increased operational expenses, and lack of control over the inventory and sponsorship content.
Table 14 Biggest Future Problems of Outsourced Marketing
Overwhelmingly, the respondents supported NCAA Football Bowl Subdivision institutions (96%) and conferences (61%) when they were asked the level of intercollegiate athletics outsourced marketing that is best suited for outsourcing. Lower levels of intercollegiate athletics simply did not catch the interest of outsourced marketing properties. Their response is consistent with Tomasini’s (35) findings, as well as those of Zullo (38) and Li and Burden (24). It is hypothesized that this is due to the smaller audience in attendance at sporting events at these levels compared to the NCAA Football Bowl Subdivision institutions.
Table 15 Level of Intercollegiate Athletics Outsourced Marketing is Best Suited For
CONCLUSIONS AND APPLICATION IN SPORT
Direct Practical Recommendations
Given the limited amount of research concerning outsourced marketing in intercollegiate athletics, research on outsourcing in higher education in general is important to consider when deciding whether to outsource sports marketing efforts. In examining the findings of this study and turning it into practical applications for presidents, athletic directors and general managers of outsourced marketing companies, the author would suggest the following recommendations for improving the business relationship and being pro-active in addressing future issues in outsourced sports marketing within the context of higher education:
1. Utilizing their acknowledged strengths, outsourced marketing companies should offer their consulting services in the area of marketing and sales to “smaller” Division I schools in non-BCS conferences that would not otherwise be financially attractive to partner with for an extended relationship. Their sales expertise would be considered invaluable to a smaller school and could be an extended revenue stream for the outsourced company collectively. Smaller schools could be packaged by entire conferences, or by several schools in same geographic region, or other characteristic (ex. HBCUs); outsourced companies could sell their season ending tournaments or championships, or “classic” games, etc. Smaller schools should also think in terms of packaging their entire campuses and not just the intercollegiate athletics department. This would help outsourced marketing companies address their concerns with the escalating financial guarantees paid to certain school that reduce the profit margin of the parent company.
2. Outsourced marketing companies must include new categories in their sales efforts as today’s sponsors simply have more places to spend their advertising dollars. Without a clearly defined return on investment, long term corporate partners may consider advertising elsewhere. Before this occurs, outsourced companies need to pro-actively evolve and consider alternative sponsorship categories that have been largely ignored in intercollegiate athletics as demonstrated by the research findings. This can alleviate departing sponsors due to the untapped revenue streams with new categories while also providing support in the escalating financial guarantees owed to schools.
3. In similar fashion, outsourced marketing companies need to continue to expand their inventory options in collaboration with the athletic department. As more options arise for corporate partners to spend their advertising dollars elsewhere, including professional sports, outsourced marketing companies need to be pro-active in offering new and exciting inventory and not remain stuck in the status quo option of radio commercials and permanent signage.
4. Along those lines, athletic departments who think they might not be able to afford new inventory items, particularly video boards and ribbon advertising, need to consider the option of letting an outsourced marketing company buy or finance the technology as they can earn a greater financial return on investment from the corporate partners with new capabilities.
While the arms race in intercollegiate athletics continues to press on and excessive spending in intercollegiate athletics is being criticized by detractors such as the Knight Commission (37), there exists the opportunity for compromise. As administrators in higher education begin to accept this belief as truth, Myles Brand, the former head of the NCAA, insisted that not all external involvement with intercollegiate athletics has been bad be it from alumni, supporters or corporate partners.
Brand (8) stressed that how you utilize the money contributed is of the greatest importance. He stressed that intercollegiate athletics focuses on opportunities for student-athletes namely in the means of scholarships and a quality education. It is not profit-driven like professional sports and owners of the teams. And funding for these scholarships and athletic department operating budgets can derive from corporate partnerships. The key is maintaining a clean fit for the corporate sponsor on the school itself and not just in the athletic setting (21). Outsourced marketing companies can play a vital role in these efforts through collaboration with their school’s mission thereby appeasing such groups as Faculty Athletic Representatives, the American Association of University Professors, the Drake Group, Coalition on Intercollegiate Athletics (COIA), the NCAA and others.
Commercialization is not a bad thing as it occurs all over campus and it frequently comes with initial resistance. Fans and faculty may not initially like the addition of sponsorships, but it does offset the budget for the athletic department without relying too heavily on the university for financial support. As faculty groups arise around the country to denounce athletics’ place in higher education (32-33), it is important to realize that the excessive spending in big-time intercollegiate athletics is the problem and not necessarily the commercialization as that is occurring everywhere on campus.
In examining outsourced marketing companies and their relationship to colleges and universities around the nation, evolutionary and creative thinking needs to occur more frequently. If the outsourced marketing company continues to think from the mindset of the institution of higher education and not purely as a sales group, future relationships will continue to prosper. It is when outsourced marketing companies lose that train of thought that problems start to arise. Ideally, greater communication and utilization of these findings and similar research will enable future relationship between the school, the athletic department and the outsourced marketing company to create a “win-win” situation for all parties involved. In turn, this can also extend over to better benefit the corporate partners for the duration of the partnership.
Limitations and Delimitations of the Study
A number of limitations existed in this study. The willingness of the surveyed general managers to participate and answer the questionnaire honestly, and to share detailed information about their specific marketing contracts and relationship. Another limitation is that some schools may have several outsourced companies overseeing their sales efforts. One company may handle sales for the radio and television while a second company may direct the sales for the athletic department’s signage at athletic facilities. A third may manage the sales for corporate hospitality and promotions. To address this concern, only schools with a single outsourced marketing partner were selected to participate in this study. In-house marketing and multi-sourcing efforts were not addressed.
Finally, as noted above, not all schools in the six major conferences have an outsourced marketing relationship thereby limiting the initial sample size. However, this was offset with the addition of 19 schools that are not in the six major conferences but have existing relationship with the major outsourced marketing companies. All participating respondents shared the characteristics that they are Division I in nature and have an exclusive outsourcing relationship with one of the leading outsourcing sports marketing firms.
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Submitted by Sungick Min, WonYul Bae, David Pifer and Colin Pillay
World Wrestling Entertainment, Inc. (WWE), which is headquartered in Stamford, Connecticut, produces one of the most popular sporting events in the world, spans a diverse audience, and has a fanatical base and following for its entertainment value. This study was designed to investigate the numerous ways in which the company promotes and markets its brand, its programming, its events, and its products. Drawing from 107 randomly collected survey questionnaires, the results of this research indicated a variety of significant differences in the effects of WWE marketing promotions on the age, income, marital status, and ethnicity demographics. These findings can in turn be used to help the WWE target designated consumer segments with the appropriate resources and marketing strategies as the company strives to increase future opportunities for success. Further samples from other areas in the country are needed, though, to verify if the regionally recognized inclination is consistent across the country. In addition, research should be performed at different times of the year to clarify seasonal sport preferences.
Professional wrestling fans receive different reactions from people. Some people think it is “cool” to be a fan; others are disappointed because they consider it to be faked. Fans respond that they enjoy the entertainment value of professional wrestling. According to Ball (1990), wrestling fans tend to be stereotyped as the “dregs of society,” a group composed mainly of lower-class people.
Nevertheless, professional wrestling is also a tremendous entertainment business and has become an addiction for a large portion of young Americans. Ball (1990) stated, “Professional wrestling in the United States provides an ideal platform for the study of entertainment-culture and portrays some of the richest symbolism in society today” (p. 4).
It incorporates action in the arena, and sometimes outside the arena. It is an action adventure show, a cartoon, drama, and a sitcom. It is like a big soap opera for men, a hybrid of everything ever seen on television. World Wrestling Entertainment, Inc. (WWE), which produces some of the most popular shows in the world and reaches a diverse audience, has an enormous fan base and following for its entertainment value. As one of television’s most unique shows, it draws upon many other successful forms of entertainment. The continuing story lines are familiar to viewers of soap operas. The action, adventure, and racier elements draw their motivation from the best that sports and Hollywood have to offer. According to Gresseon (1998), professional wrestling has gone from a dull participant ritual to an exciting, action-filled form of entertainment.
The action in WWE events may be “fake,” but the entertainment value of World Wrestling created by Vincent and Linda McMahon is very real. Gresson (1998) asserted that wrestling has taken into consideration the audience’s needs and successfully translated them into spectacular shows that draw spectacular profits. The WWE has dominated its market and has established its brand in the minds of the American public. As an integrated media and entertainment company, the WWE is principally engaged in the development, production, and marketing of television programming, pay-per-view programming, live events, and the licensing and sale of branded consumer products featuring its successful World Wrestling Entertainment brand.
REVIEW OF LITERATURE
In WWE’s 2006 annual report, net revenues of $400.1 million were generated, while an income from continuing operations of $55.2 million, before interest, taxes, depreciation, amortizations, stock options, and other non-cash charges, was reported.
WWE is incredibly prevalent in the male demographic, especially those aged 14 to 34. The company has been involved in the entertainment business for over 20 years and has established the brand as one of the most popular forms of entertainment today. According to Stotlar (2005), demographic changes in the United States population have directly influenced sport marketing. Brenner (2004) indicated that population trends have caused organizations to take a long, hard look at marketing efforts as teams and leagues find that there is no single, correct approach. To increase market penetration, marketers often discuss how to reach Hispanic, Asian, or other ethnic consumer groups, but oversimplify the challenge by applying such labels. According to WWE, its operations are organized around two principal activities:
1. Creation, marketing and distribution of live and televised entertainment, including the
sale of advertising time on its television programs; and
2. Marketing and promotion of its branded merchandise.
In an effort to further exploit and bolster its business, WWE launched a brand extension that created two separate and distinct brands, “Raw” and “SmackDown!” Each extension has its own distinct story lines, thus enabling the company to have two separate live event tours. The two tours permit the company to visit new domestic markets while touring internationally on a more frequent basis. In addition, WWE currently maintains licensing agreements with approximately 70 licensees worldwide. The company logo and images of WWE characters appear on thousands of retail products, including various types of apparel, toys, video games, and a wide assortment of other items.
According to WWE’s 2006 annual report, the company produces and promotes wrestling matches for TV and live audiences. Its nine hours of TV programming each week include “Raw”, a top US cable program, and “Smackdown!”, the highest-rated UPN show. Most of its programming airs on Viacom outlets, including MTV, TNN, and UPN. WWE also produces 14 pay-per-view programs and about 240 live events each year, licenses characters for merchandising, and sells videos and DVDs that showcase such wrestling stars as “The Rock”, “Hollywood Hulk Hogan”, and “The Undertaker.”
WWE’s success prompted this study, which set out to investigate the numerous ways in which the company promotes and markets its brand, its programming, its events, and its products. Kwon and Armstrong (2004) asserted that one of the most crucial elements of sport marketing involves segmenting the market of sport consumers into smaller, homogeneous groups for which specific marketing strategies can be cultivated. Accordingly, this study examined the different results of WWE promotions and marketing based on age, income, marital status, and ethnicity.
Pitts and Stotlar (2002) defined sport marketing as “the process of designing and implementing activities for the production, pricing, promotion, and distribution of a sport product to satisfy the needs or desires of consumers and to achieve the company’s goals” (p. 80).
Understanding the “4 Ps of Marketing” is crucial to any successful marketing channels in an organization. In traditional marketing, the “4 Ps of Marketing”, a concept coined by E. Jerome McCarthy (McCarthy & Perreault, 1990), specifically refers to the following:
Product: the essence of the product or service that includes product lines, product extensions, and the meeting of new consumer needs within the targeted group of customers.
Price: shows the desired image a company wants to portray about a product or service while taking into consideration competitors’ prices, available discounts, and market share.
Place: the actual, physical distribution of a product or service. This can include the transporting of goods to wholesale and retail outlets or the geographic location of a business or organization.
Promotions: carrying messages about products and services to potential consumers. This can be performed through publicity, advertising, or other means of communication.
A brief overview of the 4 Ps as they relate to the WWE will serve as a base from which to understand WWE’s success. To begin, the WWE “products” are its superstars – “The Rock”, “Trish Stratus”, “Stone Cold Steve Austin”, and “The Undertaker”. These superstars are professional and skilled in the portrayal of popular characters. One of WWE’s top superstars, “The Rock”, the son of a Samoan homemaker and an African-American pro wrestler, became a feature film action hero in Universal’s blockbuster, “The Scorpion King”. WWE has a vastly increased talent pool that translates directly to brand extension and additional revenue streams producing more pay-per-view events, more live events, more international tours, more branded merchandise, and more new television programming with new stars and new brands outside the genre.
Compared to other sports leagues, the WWE ticket “price” is one of the most expensive. According to the WWE website (2007), the average ticket price for three live events in Asia in March 2002 was $63.00 and the average ticket price for live events in the United States was $36.00. Each of WWE’s other 11 domestic pay-per-view events have a suggested retail price of $34.95, up from $29.95. Compared to the baseball ticket, ESPN (2007) indicates that the lowest average price is $13.79.
According to the WWE annual report (2006), it has major arenas, such as Madison Square Garden in New York City, Arrowhead Pond of Anaheim, California; Allstate Arena in Chicago, First Union Center in Philadelphia, Fleet Center in Boston, and Earls Court in London, England. These major arenas represent the “place” in the marketing mix. WWE has a 46,500-square-foot entertainment complex located in Times Square. The complex boasts a 600-seat restaurant and 2,200 square feet of retail space. The complex provides for a variety of entertainment uses, including:
1. Airing WWE’s regularly scheduled TV shows and pay-per-views;
2. Hosting concerts and other live events, including press conferences,
stockholder meetings and product launches;
3. A night club;
4. Appearances and autograph sessions featuring performers; and,
5. Banquets, birthday parties and other social and corporate functions.
“Promotion” is the final P in the marketing mix to be discussed. According to WWE, the company promotes and markets its brand, its programming, its events, and its products in numerous ways, including:
1. Approximately 200 live events are held each year in major stadiums and arenas
throughout the world, including Madison Square Garden in New York City, Arrowhead
Pond of Anaheim, California; Sky dome in Toronto, Canada; and the Manchester
Evening News Arena in Manchester, England;
2. Nine hours of original television programming are produced, 52 weeks per year;
3. 12 domestic pay-per-view events are produced each year;
4. Programs and pay-per-view events are distributed in over 150 countries in nine languages;
5. Branded merchandise is marketed and sold directly to consumers and to major retailers
6. The branded merchandise is licensed to approximately 85 companies to produce and distribute thousands of retail products worldwide;
7. Two monthly magazines are published with a combined annual circulation of
approximately 5.8 million; and,
8. News and information is distributed about the WWE’s story lines, performers, and
programming and, consequently, affects e-commerce sales through Internet sites.
For years, a great deal of research has been undertaken in an effort to understand the behavior of sport marketing strategies. However, most studies have focused on direct sport marketing strategies, while studies examining the factors that influence indirect consumer behavior have been neglected. At present, studies investigating the effectiveness of WWE marketing strategies have not been well designed, thus creating a need for further research. The purpose of this study is to examine the effectiveness of various WWE marketing platforms and the demographic composition of its fan base. An empirical analysis looks at the numerous ways in which the company promotes and markets its brand, its programming, its events, and its products.
Furthermore, this study also examines the effectiveness of WWE promotions and marketing based on age, sex, educational level, and ethnicity. Differences based on age, sex, educational level, and ethnicity may compel sports marketers to adapt current marketing approaches.
Best marketing practices of current WWE are also examined, and recommendations for sports marketers on how to successfully target the population segment are provided.
In sum, the general research question for this study is: How do WWE marketing channels affect various fan bases?
METHODS Sample and data collection
As mentioned, WWE’s 2006 annual report showed a strong following of fans in males aged 14 to 34. Taking this into account, the designated target population of this study was university students aged 18-34. In addition to its representation of the WWE fan base, this demographic was also deemed appropriate due to the fact that university students fall into the age demographic (18-34) that is most sought after by sport producers. According to Turco (1996), college students differ significantly from other markets in their consuming behaviors. Therefore, surveys were distributed to over 500 students and a total of 107 viable questionnaires were obtained using SurveyMonkey. Within the collected sample, 40 students were from a public university in South Korea and 67 students were taking Sport Exercise and Science (SES) activity classes from April 23 to May 4, 2007, at the University of Northern Colorado. This sample size was intended to be used as a pilot study for future research.
The questionnaire was comprised of several sections with a total of 35 items. Part of the survey contained questions to gain information about general demographics of spectators, WWE-related information, and marketing-related information. Requested demographic information included age, sex, marital status, and household income. This survey was formulated to WWE marketing channels before the questions for demographic information. The objective of the study was to provide other related information necessary to assist WWE in developing effective marketing strategies. It took respondents approximately 15 minutes to complete the questionnaire.
The data was collected through SurveyMonkey from April 23 to April 30 in 2007. The researcher contacted course instructors and obtained consent from them to disseminate the surveys. Permission to conduct the study was obtained from the author’s Institutional Review Board, which approved the methodology and survey instrument. All participants were informed in advance that participation was voluntary and that all information would remain confidential and anonymous. They were able to refuse and decide to stop responding at anytime. 107 survey questionnaires were distributed randomly. A total of 103 usable surveys were collected. All questionnaires were answered anonymously. It was assumed that the participants in the survey gave honest and thoughtful responses to each question.
A cross tabulation is the process of taking two variables and tabulating the results of one variable against the other variable. A cross-tabulation gives us a basic picture of how two variables inter-relate. It aids us in searching for patterns of interaction. Each cell indicates the number of respondents that gave a specific combination of responses, that is, each cell contains a single cross tabulation. A cross tabulation was performed to examine the correlation between the different variables and various demographic make-up of its fan base. Descriptive statistics were also calculated for each of the demographics. SPSS 13.0 for Windows was utilized to perform the above statistical analyses.
The participants of this study included Caucasian, Asian, African-American, and Hispanic populations. Of the 107 total respondents, 55% considered themselves Caucasian and 38% considered themselves Asian. Only 7% of the responses gathered this study were from African-American and Hispanic (Chart 1). Figure 1 indicates that there is a significant difference between various ethnic groups. The majority of Caucasian respondents indicated that they made their decision to go to the WWE event to entertain guests, while most Asian respondents preferred attending the event to spend time with their families.
CHART 1 Demographics of Participants
FIGURE 1 Factors to Go to the WWE Event
Overall, giveaways were not seen as a significant factor in determining whether or not to go to the WWE event. In addition, in the question regarding the importance of the excitement offered by WWE, approximately 90 % of female respondents provided a response of neutral or less. 29% of male respondents produced a neutral response (Table 1).
TABLE 1 The Levels of Excitement by WWE
One of the interesting findings in this study is that while the majority of Caucasian respondents watched over 3 hours of television a week, their Asian counterparts reported watching less than 5 hours of television in a single week (Table 2). According to the WWE Report (2006), the majority of the WWE fan base was Caucasian. However, the results of this study indicate that 52% of Caucasian respondents were not watching WWE events on television. In general, the results of this study indicated that there were more male than female spectators at WWE events. The majority of the respondents who attended the events was from middle-income families and was Caucasian.
TABLE 2 Hours of Watching WWE on Television
A large proportion of the spectators were single. The people in different age groups differed significantly in the marketing channels. Those 30 years of age or younger appear to be more interested in attending the events, ordering pay-per-view, and visiting the WWE site. In regards to ethnicity, not only did very few Hispanic people attend WWE events, but very few participated in or were affected by the other marketing strategies.
According to the responses, pay-per-view and the website were the most effective sources of information about WWE. CD’s, home videos, print media, and other items were relatively less effective sources of information for WWE. Consequently, WWE should develop additional weekly television programming through creative and entertaining events while strengthening its pay-per-view marketing efforts to reach new consumers.
In essence, WWE must strengthen its existing television and pay-per-view distribution relationships and develop broader distribution arrangements for WWE branded programming worldwide. This can be accomplished by continuing to produce high quality, exciting live events, branded programming, and consumer products for global distribution.
In addition, WWE must develop its story lines by further integrating contemporary themes and increasing its focus on the continuous cultivation of skilled, young, entertaining characters to complement its pool of established talent. This can be accomplished by recruiting, developing, and maintaining a roster of highly skilled athletes who possess the physical presence, acting ability, and charisma to develop into popular performers. WWE should also augment the licensing and direct sales of WWE branded goods through its distribution channels while cultivating its Internet operations to further promote the brand and develop additional sources of revenue. In addition, the organization should also inflate the licensing and direct sale of WWE branded merchandise, and bring the distribution of home videos, CD’s and publications in-house.
WWE must meet certain objectives if it wants to achieve its goal and be the number one entertainment business in the United States or among the Hispanic Community. While advertising and broadcasting in Spanish may invite Latino and Hispanic consumers to the arena, the presence of Spanish-speaking ushers, vendors, and customer service representatives will ensure an enjoyable experience. According to Sergio Del Prado, Los Angeles Dodgers’ Vice President of sales and marketing (summarized in 10 Tips for Reaching Hispanic Consumers, 2007), “one thing where people really drop the ball, you get [Latinos] to commit, and then they come to the ballpark and nobody speaks the language and they feel different than anyone else.”
A Hispanic marketing blitz should contain promotions in the Hispanic newspapers, on Hispanic TV channels, and on Hispanic radio stations. Heavy advertising through all these media outlets will enhance the WWE brand name and symbol in the Hispanic community. Spending on advertising to Hispanic media outlets should be double that of English speaking outlets. WWE does not want to be an organization for the elite, but an organization that all of the country, regardless of income and race, can enjoy and love. This end message has to be communicated to WWE’s prospective Hispanic fan base in order for WWE to become profitable in the Hispanic community.
In addition to Hispanics, young people are a second market that WWE must target in order to achieve lucrative success. WWE must gear its consideration toward the young generation, a mission that can be accomplished by concentrating on young people while they are at school. WWE must work with the schools to generate programs and initiatives that spark the students’ interests. This can be accomplished through WWE ticket and merchandise giveaways. For instance, students who accomplish a certain GPA receive four tickets to a WWE live event. At the event, WWE will acknowledge their accomplishments with either scoreboard or public address recognition during a break in activities. This sort of program could generate short-term expenses, but will benefit WWE in the end. These students and their parents will become consumers of the WWE’s brand and will subsequently be more interested in WWE’s product. This interest will bring them back to the live events, where additional marketing strategies can move them up the consumer escalator.
Considering the time people normally spend on watching TV, television promotion showed high efficiency to communicate the information about WWE events to the respondents. However, it is obvious that TV advertising is the most expensive means to promote any event. Due to the fact that most people who attend WWE events are working class and spend plenty of time in their automobile driving regularly, radio is a comparatively cost-effective and efficient method to market a WWE event.
The aim of this study was to analyze the effectiveness of various WWE marketing platforms and the demographic composition of its fan base. What was discovered was that many people cannot pay for the price of a WWE event. The price is too costly for many people living in the United States at the present time and many of WWE’s prospective consumers consider a live event as a novelty and not a usual night of entertainment. Providing new ticket plans that are reasonable for the majority of U. S. residents would be exceedingly favorable to WWE. It would augment its revenue and attendance in a very short period of time and supply WWE with a stronger fan base for the future.
APPLICATIONS IN SPORT
WWE should implement new forms of entertainment and build brands that harmonize its existing businesses, including the improvement of new television programming that will extend beyond its current offerings. Such formulations will appeal to WWE’s targeted demographic market and build up branded location-based entertainment businesses directly or through licensing agreements, joint business enterprises, and other preparations. For the promotion to be flourishing and fill the stands, this decision must be made based on knowledge of WWE’s prospective spectators, their characteristics, and behavior patterns.
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Submitted by Lawrence Judge, Don Lee, Jeffrey Petersen, David Bellar, Karin Surber, and Chelsie Krill
The Olympic Games are an established sports festival garnering a tremendous amount of public attention and awareness, while the X Games and the Youth Olympic Games are relatively new events targeted toward a younger audience. The purpose of this study was to collect awareness and opinion data from undergraduate students in sport administration, exercise science and sport pedagogy from a university in the Midwestern United States regarding the then upcoming Winter Youth Olympic Games, London Olympic Games and Winter X Games. The level of familiarity and public awareness of the 2012 Youth Olympic Games was generally very low (mean scores for both were 1.9 out of 7.0). In contrast, the participants expressed more familiarity with X Games as indicated by higher mean scores (4.4 and 4.6 measured out of 7.0, respectively). Similarly, the participants expressed greater familiarity with 2012 London Olympic Games as evidenced by higher mean scores (5.6 and 5.7 measured out of 7.0, respectively). Additional correlation and multiple regression analyses examined the relationships of event awareness, familiarity, social media and other marketing efforts on the intent to attend these sport festival or to watch them on television. The results of this study indicate rather poor results for the social media campaign promoting the Youth Olympic Games. ANOVA tests additionally indicated that participants’ intention to watch games and follow social media on the events were significantly different as the levels of both familiarity and public awareness changed.
The Olympic Games (OG) are a historic, century’s old world-wide sports festival garnering extraordinary amounts of public attention and awareness (13). The X Games and the Youth Olympic Games, on the other hand, are comparatively new events that are targeted toward a younger audience (3, 9). The 2010 Youth Olympic Games (YOG) became the third sport festival event ever introduced by the International Olympic Committee (IOC), while the X Games (XG) and Winter X Games (WXG) began in 1995 and 1997, respectively (7). The world-wide exposure of the OG has increased dramatically during recent decades primarily due to the advances in media coverage and technology. Younger generations, however, may be losing interest in Olympic Sports due to the proliferation of extreme sports and becoming more interested in non-traditional sporting events like the XG. To create excitement and interest in these newly created events with the millennial generation (born between 1980-2000), the effective use of social media marketing can be used to specifically target this audience with messages tailored for each market segment (10). Social media could prove to be an effective communication channel for the millennial generation because the social media platform has become an essential part of their everyday lives (10).
Social media marketing utilizes various forms of internet-based electronic communication tools, forums and sites that offer customized messaging to very specific audiences. By utilizing social media marketing, the events associated with the Olympic movement may experience greater success with communicating to intended audiences with more relevant messaging. Likewise, the IOC has actively been encouraging its participants to use social media to blog, post, comment, and tweet during the OG (8). However, the IOC has implemented strict guidelines for participants and other accredited persons related to what and how he/she shall post, blog, or tweet while at the OG. The primary goals of the Olympic movement are to be associated with youth, health, sportsmanship, peace, education, and enjoyment; ideals encapsulated in the Olympic Charter (13). However, the youth of today have far more varied interests and distractions than during past decades when the Summer and Winter Olympic Games, each contested every four years, were more eagerly anticipated. Through events and marketing efforts targeting youth, the International Olympic Committee seeks to reignite interest in Olympic sports within a generation of increasingly inactive and overweight adolescents.
The IOC’s strategy for marketing the upcoming London Olympic Games (LOG) and the subsequent Youth Olympic Games (YOG) includes efforts to help create new generations of young athletes that have an ethical approach to sport with strong values and principles (8). They also look to educate young people on the importance of living healthy lives and lower the climbing youth obesity rate. Another goal of the committee is to inform young people about the problems that arise from doping and excessive training (8). IOC President, Jacques Rogge has taken it a step further and stated that he wants the YOG to be more about education than about competition. The main goal, according to Rogge, is to give the young athletes an education based on Olympic values. He elaborates further by stating that the main emphasis of the YOG is for athletes to enjoy the event. Not only was the event about the athletes gaining an education based on Olympic values, but the YOG has also established several related programs such as a Young Reporters program and a Young Ambassadors program to give invaluable Olympic experience and education. The Culture and Education Program (CEP) was designed to promote skill development, social responsibility and expression to the YOG participants through digital media efforts (8). The Culture and Education Program (CEP) was formed to create an atmosphere that would inspire the athletes to view their competitors not as mere competitors, but as lifelong friends (12). This can be seen carried over in the Olympic Games as well with distance runners Mo Farah (Great Britain) and Galen Rupp (U.S.A.) who became training partners due to their coach Alberto Salazar and British intermediaries. Rupp and Farah became great friends through the process and talked about anything but running; encompassing the Olympic ideals throughout the way (12). In promoting the YOG, they needed not concern themselves with the singular focus on winning and competing typically associated with the larger Olympic Games. Krieger’s (11) study of a group of (German) athletes showed that they were dissatisfied with what the IOC saw as one of the success stories of the first YOG in Singapore, the Culture and Education Program (CEP); yet, the athletes enjoyed the unplanned or unexpected experiences that come with being at an international multi-sport event and staying at the athletes’ village. Such a finding supports Gold and Gold’s (5, p. 405) assertion that the YOG are “an important step in helping to return the Olympics to something of their roots” and could help the IOC consolidate and enhance the Olympic brand. To do so, however, requires innovation in discipline selection and the cooperation of the international sport federations (2).
Since the ability to impact sport and engage a younger audience will initially hinge on audience awareness, it is important to understand how the event is viewed by various stakeholders. The external stakeholders of the YOG (athletes, international delegations, athletes and their mission/support staff, media, sponsors, and the community) can to be explored by using the network approach to gain a better understanding of how the various pressures created by the YOG are experienced (8). The network approach is a construct that allows examination of changes in the interconnections between the actors involved (6). A variety of internal and external stakeholders exist with the OG, those organizations, groups, individuals which have an impact or are impacted by the local organization (4). Exploring the newly framed YOG using a network approach helps to explain how various stakeholders exert various forms of pressure on YOG (19). The IOC, the media, and the parents were the three primary stakeholders with the most influence on the development of the YOG. Two main points can be made in this regard. First, utilizing the network analysis, independently and in relation to each other, the YOG needs to take into account the needs of all three stakeholders. The high salience of these three stakeholders means that the organizational survival of the YOG is dependent on all of them; they must be satisfied to a sufficient level, as determined by the stakeholders, in order for the YOG to gain legitimacy and survive, as well as be successful (1,15,17).
The network approach could help in understanding certain processes and activities connected with the YOG’s sustainability potential (19). The stakeholders have a bigger impact on the sustainability potential of the YOG than they would in the OG because less attention is paid by the media by design (19). Sponsors could have a different degree of involvement with less attention paid to the YOG by the media, and this could affect the sustainability potential because they are a primary funding source for the Olympic Movement (19). However, the stakeholders’ expectations, needs, and interests should be considered as they may change as the YOG changes with time, especially with the emergence and impact of social media (19). Public awareness and effective messaging of the LOG and YOG will play a critical role in drawing advertising and sponsorship dollars for future OG and YOG events. The economic and tourism impact are key determining components of the legacy that the YOG will leave for Nanjing. In addition, it is important to understand present and future coach and sport practitioner awareness and how they view the creation of such an event. The purpose of this study was to collect awareness and opinion data from undergraduate students in sport administration, exercise science and sport pedagogy from a university in the Midwestern United States regarding the then upcoming winter YOG, upcoming LOG and upcoming WXG. This manuscript will review the basic characteristics and behaviors of millennial consumers, effective marketing techniques to reach this audience in meaningful ways and the marketing strategy changes adopted by the IOC to increase their reach and impact for future Olympic events.
METHOD Sample and Procedure
Students majoring in sport management, exercise science and sport pedagogy were surveyed during the 2012 winter YOG to assess the event’s global marketing efforts. The survey instrument was composed of six demographic elements and five research-related questions, and was modeled upon a previously developed and tested instrument (9). This current survey was modified from the original instrument with changes to the demographic elements and the addition of scaled questions related to intention to attend or view the London Olympic Games (LOG), Winter X Games (WXG) and future Youth Olympic Games (YOG) events. In order to verify both content and face validity, the instrument was reviewed by a panel of experts in the area of youth sport. The demographic components included: gender, coaching experience, sport administration/management experience, athletic background, parental status, and nation of residency. A seven-point Likert-scale method was used for ranking the dependent variables of the study which included: perceived personal awareness of the YOG, perceived public awareness of the YOG, intention of YOG event attendance, and intention to view the YOG on television. Questions were added to the present study to measure the social networking habits and behaviors of the subjects. The final question was a multiple choice element requiring the recognition of the correct logo of the YOG, WXG and the LOG from a selection of five similar graphic designs. Both the survey and the research protocol were reviewed and approved by the appropriate university Institutional Review Board (IRB).
Descriptive and analytical statistics were calculated for the overall variables using SPSS version 18.0. Two multiple regression analyses were conducted to examine the extent to which the independent factors (familiarity with the YOG initiative, level of general public awareness, accessibility to social networking/media sites, advertisements on social media sites, importance of traditional means of newspapers and magazines, importance of traditional means of TV and radio, and utilization of World Wide Web to gain information) influenced 1) the intention to watch televised Youth Olympic Games, and 2) the intention to attend future Youth Olympic Games. The sample (N = 256) consisted of 58% of males and 42% of females with ages ranging from 18 to 50 with the mean age of 21.0 (SD = 4.58).
RESULTS Descriptive Statistics
From the descriptive statistics, nearly 54% of the participants had no coaching experience while 41% and 7% of them had coaching experience in youth sports and public/private school, respectively. A total of 73% of the participants were former athletes, while 18% and 10% of them are current athletes and had no athletic experience, respectively. Participants’ sport leadership background was assessed, and the following was found: no leadership background (83%), local sport official (15%), and local sport administrator (3%).
The level of personal familiarity and perceptions of general public awareness of the 2012 Y OG was generally very low (the mean scores were below 2.0 out of 7.0). In contrast, the participants expressed more familiarity with the WXG as indicated by higher mean scores (4.4 and 4.6 measured out of 7.0, respectively). Similarly, the participants expressed more familiarity with the 2012 LOG as evidenced by higher mean scores (5.6 and 5.7 measured out of 7.0, respectively; (see Table 1).
Table 1 Descriptive Statistics
Statistically significant correlation values were found between independent factors (familiarity and general public awareness) and dependent measures (intention to attend, watch, and follow social media). The only exception was that general public awareness of the 2012 London Olympic Games was not statistically significantly correlated with intention to attend the event (see Table 2).
Table 2 Correlations
Multiple Regression Analysis
Multiple regression analyses were performed to examine the extent to which independent factors (the level of familiarity with and the general public awareness of the designated sporting events) influence participants’ intention to watch televised coverage of the YOG, WXG and the LOG, follow social media related with the three events, or attend the three events. The overall results revealed that the two independent variables collectively explained small to large amount of variance in the dependent measures (variance explained ranged from 9% to 55%). At the univariate level, several significant findings were revealed. First, the level of familiarity with the designated games and the general level of public awareness of the games consistently impacted participants’ intention to watch and follow social media related with 2012 YOG, 2012 WXG, and 2012 LOG. However, none of the examined independent factors had statistically significant impact on the participants’ intention to attend any of the three tested sport festivals. The overall regression results confirmed consistent patterns observed in the mean scores and correlation values (see Table 3).
Table 3 Summary of Significant Multiple Regression Analysis Results of the Independent Variables on the Intention to Watch Events on Television or Follow Events on Social Media
Analysis of Variance (ANOVA)
As a post hoc test, ANOVAs were used to examine statistical differences in the dependent behaviors due to different levels of familiarity and public awareness of the games. The analyses were all significant, F values ranged from 47.53 to 96.12. The overall results indicated that participants’ intention to watch games and follow social media on the events were significantly different as the levels of both familiarity and public awareness changed (see Table 4).
The IOC’s good intentions, regarding the establishment of the YOG, were not met with the requisite effort to draw sufficient public attention to the event (9). Olympic competition, in general, draws great world-wide attention, with the 2008 Games in Beijing drawing the largest global audience in Olympic history (9). As for the LOG it appears to have a high level of awareness from the students in the present study. In Table 1, the descriptive statistics show the mean number of students’ in the present study “intention to follow social media” of the YOG (2.10) is nearly two-thirds that of the WXG (3.31) and even less than half the mean of the LOG (4.68). This means that even with the impact social media has on the millennial generation, it is not impacting the YOG as much as it has with the popular X Games and Olympic Games. As the winter YOG approached, the event received very little attention from the mainstream media and the personal awareness and perceived public awareness of the students in the present study was very low. With the addition of 966,110 Google followers, 1,931,365 Facebook fans, and 1,686,762 Twitter followers to its social media fan base the LOG has been nicknamed the “Social” OG (13). While 166 networks worldwide covered the 2010 summer YOG, high levels of coverage on top networks were lacking (9). Perhaps the IOC selection of a non-American broadcast company for the broadcasting rights of the 2010 YOG demonstrated their commitment to avoiding the evolution of becoming a commercialized mega-event and to consider the best interests of the participants. The IOC appointed Media Corp, SingTel, and Star Hub as the official broadcasters within Singapore for the inaugural YOG in 2010. However, Olympic Broadcasting Services, the host broadcast subsidiary that is wholly owned by the IOC, was responsible for delivering to these three organizations and broadcasters around the world, a number of live broadcast feeds and a 24-hour Youth Olympic News Channel, which incorporated two daily highlight programs. The coverage embraced all broadcast platforms, including free-to-air television, radio, cable television, mobile phone and online (9). This greater level of IOC control over the media coverage may have been put in place to guard against an over-commercialized and nationalized message. But, based on the results of the present study there may have been a lack of interest in the event by U.S. television networks because of a limited audience for the new event. In contrast, the XG’s were arranged and are controlled by the U.S. sports broadcaster ESPN (with coverage also shown on its sister network ABC)(3) .
The authors recently reviewed the new marketing assets for the 2012 Innsbruck YOG and found some improvements. The website content has been updated and is more interactive than the inaugural YOG site. The primary focus on the front page was on a contest for youth around sending photographs of their personal performance of a YOG sporting category. Additionally, the site offered various school focused initiatives including a program to connect various schools across the globe to encourage international collaboration and communication. A second program, the YOG School Sports Challenge, was designed to introduce youth to the 15 sport categories included in YOG and encourages a local school led sporting challenge to be held during the 2012 YOG (7). In addition, the site asked visitors to identify themselves as one of the following: a youth, a fan, or a volunteer. Visitors were then directed to customized content. These enhancements to the site added significant relevance to millennials and should impact the number of repeat visitors to the site. In contrast, the Facebook site, which is a primary social media vehicle, was static and did not appear to have any updated information. Ideally, the Facebook site would have content updated several times a week if not daily to drive adoption of members and sharing of content. There were no additional social media sites available or mentioned from the Facebook site. However, on the YOG website there are other social media sites available such as Twitter, YouTube, Flickr, and Google Plus. There is even a large Twitter bird logo stating “Check out our Twitter feed” showing what the YOG has previously tweeted to help promote itself with the growing social market. The @innsbruck2012, which was the Twitter screen name during the 2012 YOG, currently has 2,901 followers during its YOG period. On the @innsbruck2012’s profile it also shows other screen names fans could have also followed to stay up-to-date on the 2012 YOG. The fans could have also tweeted about their favorite “trend”, for example the website had #innsbruck2012 to spread the excitement of the YOG as a “trend” (7).
The Nanjing Youth Olympic Games Organizing Committee announced that the Internet Services sponsor will be Tencent for the 2014 Youth Olympic Games (18). Tencent, using its already strong influence among young audiences, plan to include key features on the Nanjing Youth Olympic Games website such as sports program and results, culture and educational activities, and interactive games targeted at youth (18). One Olympian diving champion relates her excitement about her ability to share her experiences at the upcoming 2014 YOG with the World (18). However, there has yet to be additions of any social media sites to the website such as Facebook, YouTube, Twitter, Google +, or the like, but this could be due to the newness of the website and the announcement of Tier One sponsor Tencent (18).
Based on these results, it can be extrapolated that the general publicity and marketing activities surrounding the YOG event were not as effective as needed to drive event attendance or television viewing, and thus, self-sustaining revenue to fund the events. The participants in the present study were more aware of the X Games and the LOG. Sport marketers can take from the results of the present study and learn how to better market toward the millennial generation. For example, marketers can utilize social media during the more popular XG and OG to promote the YOG. The LOG website started promotion of the Second YOG that will be held in Nanjing. There is a direct link from the LOG’s website to the Nanjing YOG’s website for fans to explore and begin learning about the 2014 YOG (13). Sport marketers could also expand their study on social media by taking a methodological approach to the social network theory in the future. The social network theory could solidify the measurement and analysis of how the relational properties of social media impact the YOG, XG, and the OG (19). An alternative route that researchers may take is a type of cross-sectional study. Researchers may consider conducting a study that compares behavioral variations of millennial generation who may associate themselves as a fan of professional sports than collegiate sports. Analyzing the efficacy of the marketing and awareness campaigns is an important step in improving future results, and insuring the long term success of a relatively new event like the YOG. Analyzing these campaigns can be difficult due to the numerous variables involved, and the fact that the “newness” of the YOG provided little historical comparative data.
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The meeting, incentive, convention, and exhibition (MICE) industry has gradually flourished. However, the market encountered at exhibitions has increasingly changed into the commercial buyers’ market. Through experiential marketing, the industry can enhance its contact and communication with potential customers by participating in exhibitions, and thus, increase customer intent to purchase for products highlighted and exhibited at this specific type of venue. In recent years, one industry, in Taiwan has used sports marketing through MICE as a platform to market sport bikes. Manufacturers and business owners alike used the exhibition to reach the potential customer base, and as a result, this study conducts a questionnaire-type survey at the Taipei International Sports Cycle Show. The main purposes of this study are to investigate the degree to which experiential marketing influences customer intent on purchase choices and to assess differences in experiential marketing across different demographic variables. The results of this study are as follows:
• There is a significant difference in experiential marketing across different demographic variables, including age, educational level and average monthly income.
• There is a significantly positive correlation between experiential marketing and the purchase intention of customers participating in exhibitions.
• All attributes of experiential marketing have a significantly positive influence on purchase intention.
Taiwan is highly regarded worldwide as having an excellent reputation for its outstanding manufacturing of bicycles. In the past, the bicycle was considered merely a traditional transport vehicle; however, recently and in a very short period of time for many Taiwanese, cycling has become a popular recreational activity because of the rising awareness of environmental protection, energy saving and carbon reduction policy, and an increased focus on exercise, attention to health issues and seeking an improvement in overall quality of life (21). Until very recently, the bicycle industry was monopolized by a single giant manufacturing company and this corporation was one of the most dominant manufacturers of bicycles, having occupied the largest output of all bicycles within the sports cycling market. As a result of this company having the monopoly for the production of sports cycles, the global revenues amounted about $ NT 300 million, and annual production and sales targeted about $ NT 4.8 million bicycles (5). In 1985, Taiwanese manufactured bicycles were far greater in overall annual production than the amount produced in Japan. This earned Taiwan the reputation as “World Bike Kingdom” (20). Additionally, with the extremely rapid progress of information and technology, not only did the development of the national economy advance quickly, but also international businesses had increased growth as well. As these companies grew, many of them began utilizing the marketing strategy of exhibition venues, which contributed to the development of the meeting, incentive, convention, and exhibition (MICE) industry (32). Recently, the bike industry in Taiwan is without exception. It has held lots of international sports cycling exhibition for selling its own brand of sports bike by means of the MICE promotion platform, the Taiwanese sports bike industry has participated lots of international sports cycling exhibition for selling its own brand of sports bike. These products do not only sell in the Taiwanese domestic market, but also globally, using exhibition venues such as the Taipei International Sports Cycle Show, Taichung Bike Week, and Taiwan Cycle Night.
Compared to the consumers who do not attend exhibitions, the visitors to the MICE have a higher level of product consumption, and vendors positively appraise their experience in host countries (22). Moreover, numerous cities regard the development of the MICE as a strategy for a new era of urban development and a path to the development of local infrastructure. The statistical results of the research showed that the average consumption of the visitors brought by conventions and exhibitions was two to three times that of normal tourists; the travel consumption brought by conventions and exhibitions accounted for 30 percent of the total travel consumption (22). The Sydney Convention and Visitors Bureau (SCVB) surveyed conference representatives. The survey results showed that 67% of the representatives participating in international conferences in Australia would revisit Australia in the next five years, showing that the MICE has enormous potential in promoting the development of the tourism industry (26).
Exhibition activities in the MICE have gradually transformed from the traditional “sample display,” provided by vendors and ordering services; however, more recently, the exhibition theme and format are further subdivided according to economic specialization (6). In 2009, Yin’s research (32) notes that an exhibition is regarded as a crucial instrument in marketing for information exchange and merchandise trade; an exhibition not only integrates the functions of advertisement, personal selling, sales promotion, and public relations, but also provides manufacturers and customers with abundant face-to-face opportunities. Furthermore, Breiter and Milman (2006) explain that most exhibitions held at convention centers are annual or circulating ones as well as consumers with positive experiences in attending exhibitions should increase their willingness to revisit these type of venues. Consequently, whether exhibition activities are held successfully depends on whether the marketing service techniques of the hosting organizations are good enough to attract people.
Presently, the economic consumption style of Taiwan has changed from the “Agricultural Economy” into the “Experiential Economy” (12). According to numerous studies, with the advancement of the experiential economy, the concept of marketing has become a heavily discussed issue among management scientists and economists (24,16,23). Hence, the marketing concept has gradually evolved from product-, sale-, society-, and relation-oriented into the experiential-oriented marketing as the primary core of business activities. In 1999, Schmitt (28) is the first person who integrates experiential marketing concepts and compares traditional marketing with experiential marketing comprehensively. He argues that the traditional marketing method, which focuses on the benefit and function of products, has not been appealing to customers; therefore, enterprises should focus on customers’ experiences. With the coming of the age of the experiential economy, not only marketing methods but also customers’ experiences should be emphasized; and entrepreneurs also need to consider experience as a crucial factor in running a successful brand. Differing from traditional marketing, which emphasizes the performance and function of products, experiential marketing focuses more on the function and efficiency of products and the brand image (7,24). Thus, the experiential method has become a popular trend in increasing the performance of various industries. Based on these findings, experiential marketing has a great influence on customers’ consumption behavior. If entrepreneurs can understand a customer’s reaction to experiential marketing through activities held by exhibitors and relevant research in experiential marketing, they should be able to enhance the performance in selling their products at exhibitions.
This research aims to understand differences in experiential marketing across different customers through participating in exhibitions as well as investigate whether customers’ feelings towards experiential marketing at exhibitions are helpful in managing and developing the Taiwanese sports bike industry. In 1991, Kotler (17) suggests that management should satisfy customer demands. He further encourages businesses to develop marketing strategies by looking from the viewpoint of its customers. The assumption is that if enterprises focus on what the customer wants, this form of marketing should increase customer purchase intention, and moreover, companies will obtain increased profits from these customers. A higher degree of customer satisfaction will lead to higher customer purchase intention, positive public praise, greater competitive advantages, and higher market share (1,10). Purchase intention means the likelihood that a consumer will buy a particular product; the higher the purchase intention, the greater the purchase probability (8,29). Fishbein and Ajzen (1975) confirmed that purchase intention can be used as a key index in predicting consumption behavior; it represents consumers’ subjective preferences for purchasing products and in recommending products to their family and friends. Furthermore, establishing a good relationship with customers to promote customer purchase intention is the most important task for industries in marketing (2). Through experiential marketing strategies, if customers actually experience products, their intent to actually purchase the exhibited products is usually also increased (12). Hence, selling products through experiential marketing not only enables customers to “understand” products on exhibition, but also maintains a suitable product value, and provides better sales performance (18,19). Through sensory and emotional experiences, consumers are both directly or indirectly influenced which, in turn, increases the likelihood of customer purchase intention. Customer satisfaction is the main factor influencing consumer behavior (30). To maintain sustainable development on the market, modern enterprises should increase their profits mainly by increasing customer purchase intention (10). Therefore, through the techniques, assessments and applications of experiential marketing, exhibitors can determine whether the real effect and performance of experiential marketing are helpful in promoting consumer purchase intention.
Several scholars, including Hsieh and Li (2008), Blackwell, R. D., Miniard, P. W., and Engel, J. F (2006), and Holbrook (2000) indicate that there is a positive correlation between experiential marketing and purchase intention. These findings show that through experiential marketing, customers attending bicycle product exhibitions can provide immediate feedback on the products on display at these venues. Having this “hands-on” experience allows the potential customer to immediately achieve full understanding of the functions, safety, and price of the sports bicycles and related products. Based on the literature review, experiential marketing can certainly establish an interactive relationship between customers and service personnel at exhibitions, and customers are more likely to have positive evaluations of these products. Consequently, this research sets out three hypotheses as follows:
Hypothesis 1: There is a significant difference in experiential marketing across different demographic variables.
Hypothesis 2: There is a significant correlation between experiential marketing and the purchase intention of customers participating in exhibitions.
Hypothesis 3: Experiential marketing has a significantly positive relationship and influence on purchase intention.
Methods Research Subjects
The subjects for this study consisted of the customers participating in the 2012 Taipei International Sports Cycle Show. The investigation of this study lasted for four days, from March 17th, 2012 to March 20th, 2012. The researcher stayed at the 2012 Taipei Sports International Cycle Show from 9 a.m. to 5 p.m. each day for study. Then, the researcher conducted convenience sampling, selecting 650 questionnaires for research investigation.
There were three research instruments used in this study. The first instrument was personal information including gender, age, marital status, education level, monthly income, residence, and so forth. The second one was an experiential marketing scale revised from Huang’s scale (11), which is based on Schmitt’s (27) experiential marketing scale. The experiential marketing scale of this study included 14 questions on five experiential attributes: emotional, thought, action, associative, and sensory experiences. The third instrument was a customer purchase intention scale revised from Hsu’s scale (15), which is based on Dodds, Monroe, and Grewal (8). Dodds, Monroe, and Grewal’s questionnaire on customer purchase intention and attitude toward recommending products to others. To ensure that the scales used in this study were consistent, efficient, and suitable, a validity and reliability analysis was implemented after the scales were gathered. Concerning the validity analysis, the questionnaires were created based on the theories and measurement instruments of Huang (11) and Hsu (15).
Then, the questionnaires were examined by scholars and experts, and a factor analysis was conducted to increase the efficiency of the content, thus building the content validity of the questionnaires. The factor analysis showed that the cumulative explained variance of both experiential marketing and purchase intention are up to 77.73 ％. Hence, the measurement instruments used in this study meet the expected standards of validity. To analyze the reliability of the results, the Cronbach’s Alpha of purchase intention and experiential marketing scales were calculated for internal consistency. Both scales have an overall internal consistency up to .71, meaning they both have high reliability.
Number of Observations
This study adopted a more conservative method under the restriction of accuracy and reliability. Under the condition (α＝.05, Cp＝.05, and p＝.5), the number of samples required was at least 384 (25). Based on the requirements for data analysis and the writing of the report, a return rate of at least 50 % as adequate, at least 60 % as good, and at least 70 % as very good (31). Thus, questionnaires were effectively gathered from 536 participants, return rate was 82%.
Results and Discussion Differences in Experiential Marketing of the Taipei International Sports Cycle Show across Different Demographic Variables
Differences in overall experiential marketing of potential consumer from different demographics were examined by an independent sample T test and a one-way ANOVA. The analysis showed that there was a significant difference in the variables of age and educational levels ( p＜.005), while there was no significant difference in any other variables. Through a post hoc comparison, the researcher discovered that customers of 30 to 39 years of age had a stronger impression of “emotional experience” than those who were 40 years old or above. A post hoc comparison concerning the variable of education level showed that customers whose educational level was senior/vocational high school had a higher evaluation of experiential marketing activities than those with a college or graduate degree did. Furthermore, a one-way ANOVA was conducted to examine differences in all attributes of experiential marketing across customers with different backgrounds, as can be seen in the Table 1.
Table 1. Analysis of variance assessing differences in the five attributes of experiential marketing across customers with different backgrounds
As can be seen from Table 1, differences in the five attributes of experiential marketing across customers of different ages, educational levels, and average monthly incomes reached a significant level ( p＜.05), while there was no significant difference in any other variables. Furthermore, through a one-way ANOVA, the researcher discovered that there was a significant difference in the “emotional experience” attribute across customers of different ages ( p＜.005). Based on the results of Scheffe’s post hoc test, compared to customers of 40 to 59 years of age, those 20 to 29 years old had a significantly higher perception of the “emotional experience” attribute; among customers with different education levels, compared to customers with a college degree, customers whose education level was senior/vocational high school had a significantly higher perception of the “thought experience” attribute ( p＜.005); there was a significant difference in the “sensory experience” attribute across customers of different average monthly income ( p＜.005). The results of Scheffe’s post hoc test also showed that compared to customers who have an average monthly income of $30,001 to 50,000 NTD, those who have an average monthly income of 5,000 NTD or below had a significantly higher perception of the “sensory experience” attribute; there was no significant difference in all attributes of experiential marketing of the Taipei International Sports Cycle Show across customers of different marital status, gender, or residence.
Correlation Analysis between Experiential Marketing and Customer Purchase Intention
This study implemented a Pearson correlation coefficient to analyze the correlation among the averages of each variable. The overall correlation between experiential marketing and purchase intention reached a significant level, as can be seen in Table 2. There was a moderate positive correlation between most of the five attributes of experiential marketing and purchase intention, as can be seen in Table 3. Among all correlation coefficients, there was the highest degree of correlation between “customer purchase intention” and “action experience” – a correlation value of 0.667.
Table 2. Correlation between experiential marketing and purchase intention
Table 3. Correlation between purchase intention and the five attributes of experiential marketing
Table 3 showed that the higher the experiential evaluation those customers obtained from the Taipei International Sports Cycle Show, the higher their purchase intention would be. Customers gave a fairly high evaluation of the perception and reaction to this exhibition.
Regression Analysis of Purchase Intention on Experiential Marketing
This study aims to investigate whether an experiential marketing method will be transferred to customer purchase intention of a certain product. First, a regression analysis was conducted to investigate the influence of experiential marketing on customer purchase intention. The analysis resulted in an F-value of 339.272, a p-value of 0.000, and an adjusted R2 of 0.477, showing that the regression of purchase intention on experiential marketing reached a significant level, and had an explanatory power of 47.7 %.
Table 4. Regression of purchase intention on experiential marketing
Table 4 showed that experiential marketing had a significantly positive influence on customer purchase intention (t = 18.335, p = 0.000, Beta coefficient = 0.9270＞0). Therefore, if enterprises can emphasize experiential marketing activities at exhibitions, customer purchase intention of a certain product on exhibition can be promoted.
Second, another regression analysis was conducted to investigate the influence of the attributes of sensory, emotional, thought, action, and associative experiences on customer loyalty. The analysis result produced an F value of 81.591, a p-value of 0.000, and an adjusted R2 of 0.526, showing that the regression of customer purchase intention on the five attributes of experiential marketing reached a significant level, and had an explanatory power of 52.6 %.
Table 5. Regression of purchase intention on five attributes of experiential marketing
Table 5 showed that the attributes of sensory, emotional, thought, and action experiences had a significant positive influence on customer purchase intention (t = 2.693, 3.006, 2.381, 9.550, respectively; p = 0.007, 0.003, 0.018, 0.000, respectively; and the standardized Beta coefficient = 0.121, 0.145, 0.133, 0.471, respectively). Among all five attributes of experiential marketing, only “associative experience” had no significant influence on purchase intention (t = -0.353; p = 0.721; standardized Beta coefficient = -0.017).
Consequently, if exhibitors at the Taipei International Sports Cycle Show can emphasize sensory, emotional, thought, and action experiences, this will help stimulate customer purchase activity at the exhibition.
The main purposes of this study are to investigate the degree of influence of experiential marketing of the Taipei International Sports Cycle Show on customer purchase intention as well as to assess differences in experiential marketing across different demographic variables. The results show that there is a significant difference in experiential marketing at the Taipei International Sports Cycle Show across different demographic variables including age, education level, and average monthly income. There was a significant difference in “emotional experience” across customers of different ages. Among all age groups, customers 20 to 29 years old had higher perception of emotional experience than those 40 to 59 years old. Consumers in the age bracket of 20 to 29 years old placed more emphasis on “emotional experience.” Therefore, exhibitors should properly control the overall atmosphere of exhibitions, and maintain a sincere and professional attitude among service personnel. Moreover, exhibitors need to improve the cleanliness of their exhibition halls to enhance customer comfort and foster their “emotional experience” at the Taipei International Sports Cycle Show. Additionally, the Taipei International Sports Cycle Show appealed a lot of enthusiastic cyclists; hence, exhibitors should attempt to establish a relationship with customers to exchange information even after the exhibition is over. Compared to customers with a college degree, those who have a vocational or senior high school level of education have a significantly higher perception of the “thought experience” attribute. The researcher believes that customers who have an education level of college or above have a higher quality of cognitive ability than those with a general education degree; thus, they are more sensitive to the marketing necessity of exhibitions. There was a significant difference in the “sensory experience” between customers of different average monthly incomes. Through a post hoc comparison, the researcher discovered that compared to customers who had an average monthly income of$30,001 to 50,000 NTD, those who had an average monthly income of 5,000 NTD or below had a significantly higher perception of the “sensory experience” attribute.
There was a significant correlation between customer purchase intention and all attributes of experiential marketing. The experiential marketing of the Taipei International Sports Cycle Show is effective in predicting customer purchase intention. From the study results, it is known that experiential marketing is certainly helpful in increasing customer purchase intention. Customers are profoundly influenced by the attributes of emotional, thought, action, associative, and sensory experiences, and show a positive evaluation of products. Among all attributes of experiential marketing, the highest degree of correlation is between “customer purchase intention” and “action experience” – a correlation value of 0.667 according to Table 3. Hence, exhibitors can bring in more experiential marketing activities for promoting customer purchase intention.
Examining the influence of customer experiential value of the Taipei International Sports Cycle Show on customer purchase intention from viewpoint of marketing, the study results showed that all attributes of experiential marketing had a significant positive influence on purchase intention (t = 18.335; Beta Coefficient = 0.927). This result confirmed that past experiential marketing is a fairly crucial factor for impacting customer purchase intention. Furthermore, as the research supports the idea that purchase intention is influenced by experiential marketing, the creation of experiential marketing can be emphasized in marketing strategies. Experiential value can be created through experiential marketing including emotional, thought, action, associative, and sensory experiences. Through suitable experiential mediums, unique experiences can be passed onto customers to create high experiential value, which can be useful for further research. Enterprises can utilize experiential marketing, while paying close attention to whether the experience provided its customers is both holistic and irreplaceable. Moreover, enterprises can relate unique experiences with marketing strategies to offer customers a holistic experience to facilitate their future purchase decisions.
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