An Empirical Analysis of the Effectiveness of World Wrestling Entertainment Marketing Strategies
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?
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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