8 THEME 8: CHANNELS OF DISTRIBUTION

Learning Objectives

*Discuss the importance of operations and facility management in sport marketing

*Appreciate the marketing mix associated with facility elements such as accessibility, design, venue amenities, and staffing

*Understand the scope, impact, and effectiveness that new technology and social media have   brought to the sports world.

Introduction

FYI. The standard chain of delivery system:

There are four involved group with two levels of intermediaries:

• (a) inventory
• (b) marketing communications
• (c) physical distribution
• (d) information
• (e) direct

Q2. The total number of sports retailers in the U.S. is _____.

(a) growing

(b) shrinking

(c) staying the same

(d) expanding in size

(e) none of the above

Sports Distribution Topics

While addressing sports distribution channels, the authors will examine three specific areas pertaining to how products and services are offered to the consumers: (1) sports retailing, (2) sports facilities, and (3) sports media.

Sports Retailing Mix

Having a great location/accessibility seems to be the number one priority in the success of a sports retail store. Therefore, we see so many sports retail stores, such as Dick’s Sporting Goods, Foot Locker, Champion Sports, Finish Line, and Hibbett Sports stores located in huge malls and plazas where shopping crowds will gather. Each store usually has its special design and atmosphere to showcase the image (or the store personality). Placements of products, merchandise assortment, and lighting of the facility can all present an appealing sense that stimulates the consumers’ purchasing impulses. Well-trained employees or sales personnel who wear unique outfits (e.g. the referee shirts worn by the Foot Locker salesperson) are often friendly and courteous while interacting with the potential consumers. They will assist the consumers by offering their professional opinions about the products. The physical stores usually will post promotional flyers or posters on the wall or all over the windows to inform the consumers about their seasonal and clearance sales. Because the major sporting goods chain-stores are located in large malls or busy plazas, there will be crowds to shop. Due to their excellent locations, the rental cost for the physical store will be expensive, so the mark-up prices of the sales items usually are higher than the online prices. However, the physical stores can offer greater convenience and opportunity for actually trying the products.

FYI; Learn more about the Sporting Goods Industry check out the following website: https://nsga.org/ (National Sporting Goods Association)

Q3. _________ still seems to be the number one priority to the success of a sport retailing store. (Answer: Location)

Photo 1. Example of a Concession Stand

Sports Facilities

For spectators who attend these sports events, the arena or stadium would serve as the “Place” that provides service onsite. The marketers and facility managers’ primary responsibility are to create a consistently safe, aesthetically appealing and easily accessible environments for game attendees or participants. One may argue that sport facilities are no different than any other real estate venue. Location is still the most important factor. A convenient sports facility should have easy accessibility to major highways or public transportation systems. It should also have adequate parking spaces. Facility managers also need to solve the issue of traffic flow in order to reduce the time that consumers need to get into and leave the facility parking lots (Parkhouse, 2005).

Building new sports venues has been a standard trend during the last two decades for the purpose of enhancing the fan experience at sporting events (Parrish, Lee, & Kim, 2014). The aesthetic appeal of a new facility is designed to satisfy sport fans’ five sense, hearing sight, touch, taste, and smell. The essence of sportscape or entertainment experience is about satisfying fans’ sensory excitement (de Carvalho, Boen, & Scheerder, 2015). So music, scoreboard video, food, and merchandise are all part of the game experience that are as important as the on-field competition. Table 1 addresses the elements that should be focused on to provide a high quality entertainment experience to satisfy the fans and stimulate repeat consumption. Studies have shown that new sports venues have positive influence on game attendance within the first three to five years of its completion, then that effect will fade. This is known as the novelty effect (Howard & Crompton, 2003; Love, Kavazis, Morse, & Mayer, 2013). Whether or not it is worth the teams spending over several hundred-million dollars to build or renovate their facility, this practice seems to be an on-going trend. In collegiate athletics, constructing new facilities are viewed as a form of armed races. The institutions’ administrators often believe this practice will also bring recruiting advantages for the institution.

Table 1. Accommodations for Enhancing Fan Experience

AJP: One of the industry leaders in A/V consulting and representation

Daktronics

Octagon:

Aramark:

Centerplate:

-Hot Dogs: 21500

-Sausages: 20000

-Pizza: 5000 slices

-Hot chocolate/Coffee: 50000 cups (10 oz.)

-Pretzels: 12000

-Soda: More than 30000 bottles or cans

-Chicken tender: 75000

-Cheese steak sandwiches: 7000

-Meatball: 20000

Q4. The essence of ___________ or entertainment experience is about satisfying fans’ sensory excitement. (Fill in the blank:)

Q5. Concession sales, food, drinks, beer, snacks are items that satisfy which element of fan experience?

(a) sight

(b) sound

(c) touch

(d) none of the above

For most newly constructed sports venues, not only the comfortable seats and clean restrooms are available for everyone to use, the “rich and famous” have fancier luxury suites, boxes, or club seats reserved for them to enjoy the game. Like the ancient times in the Coliseum, the Emperor and Senators would have designated luxurious areas that separated them from the commoners to watch the gladiators’ fights. From the marketing perspective, these luxury suites bring in a sizable additional ticket revenue to the four U.S. major professional sports. On average, each league of the Big Four has 101 suites for its stadium or arena. They account for 20% of NFL team revenues, and 35% of NHL team revenues, respectively. The average price of a suite in the Citi-Field ranges from $275,000-$500,000. The average cost of the Cowboys suites (n = 300) is about $500,000.

Sport fans in arenas and stadiums expect to totally immerse in the events (games) they are consuming; therefore, digital deployments are found in all those newly built high-tech facilities to enhance consumer experience and capture data that help improve overall stadium operations (Belcore, 2019). In addition to the on-the-court performance, a way that a sport organization can do to boost or maintain attendance is improving and increasing the level of fan engagement and interactivites (Walsh, 2019). For this reason, more new and in-depth AV integrations are required and emergent. Outdoor TVs and Direct-view LED (dvLED) (a technology for powering scoreboards) are all common platforms for wayfinding, advertising, and upgrading interactive experience (Belcore, 2019). Integrated kiosks can offer entertainment and information to encourage fan engagement. They are another smart option to have in arenas for designing customizable brands and logos. Fans are pleased to use digital menu in concession areas, since the menu and contents are customized to reduce wait time (Belcore, 2019). The home of six-time NBA champion, Golden State Warriors, Chase Center is the new standard that one can expect from a contemporary sport venue. The center boasts quintessential amenities such as weight room, a sauna, a theater, a cryo-chamber, a barbershop, a kombucha bar, nap pods, and state-of-the art AV systems. Its monstrous center-hung scoreboard simply raises the stakes of the potential future “scoreboard war” (Daley, 2019).

Ticket distribution is an extremely important service provided at the arena or stadium. Teams need to distribute tickets to fans in the fastest, most convenient, and most attractive way. The teams usually must decide how to handle this important service either in-house, or by outsourcing the task to another agency. Since the ticketless systems and online purchases have become so popular today, most of the professional leagues and many major colleges and universities may rely on Ticketmaster to handle online sales and reservations. With the support of mobile phone and devices, ticketless event attendance quickly surfaces due to saving money and time and being environmentally friendly. However, the onsite ticket purchases have not completely disappeared, and it is still the primary way to sell event tickets for small colleges and universities. In general, the onsite ticket offices will open two and a half hours before the event. There must be an easily identifiable “Will Call” window or isle for those who have reserved their tickets to pick up.

A great majority of sport marketers will probably have to deal with the issue of unsold tickets and empty seats in the arena or stadium. Football games are often likely to get packed with a consistent high demand. However, for professional baseball with more than 80 home games, having a sell-out crowd is almost impossible. It is suggested there is an untapped revenue potential of $99 million for the league to more successfully secure the luxury suite sales. Sports teams are aggressively engaging in the resale of secondary tickets. The StubHub is the most predominant leader in the secondary ticket sales market. Reselling tickets in the secondary market has become a standard practice for all of the professional leagues now. However, the practice of dynamic practice for generating more team revenues has been viewed as a terrible consequence for driving fans away due to the high ticket prices. Evidently, only 27.4$ of NFL logo apparel buyers are likely to attend the game physically according to the report of 2015 SBRnet report. The leagues really need to pay attention to understand the excessive emphases in luxurious accommodations and dynamic pricing strategy can cause the exclusion of the ordinary fans who cannot afford to pay for the expensive ticket prices.

To ensure every spectator has a great fan experience while attending the event, security is a vital process that must be provided. Facility managers understand whenever there is a large gathering of people, there are potential risks. The organization has the ethical responsibility to ensure the safety of all attending participants and spectators. Numerous stadiums and arenas have earned notorious reputations as the toughest stadiums to play for visiting teams. These places include Lincoln Financial Field, Citizen Bank Park, TD Garden, and Wells Fargo Center according to the SportsBusiness Journal. As the rivalry spirit and competitiveness of players arise, the crowd may gradually become obnoxious and unruly, facility and event managers must be well prepared to prevent any violence both inside and outside of the facility.

There are a great number of examples of fan violence within the sports venues (to name a few: Auburn Hills Palace; a man beaten to death outside of Citizens Bank Park in 2009; a fan was tasered at the 2010 PGA Championship for disorderly conduct). In general, sports fans have considered NBA and MLB as the safest sports to attend. NASCAR, NFL and NHL are classified as unsafe sports.

6. In general, NASCAR are rated by the fans as one of the safest spectating sports. True/False

Another important issue that facility and event managers must carefully manage is the potential excessive consumption of alcohol (e.g., on the Thirsty Thursday nights). Practical techniques for effectively monitoring and managing responsible alcohol sales are suggested by the International Association of Venue Managers (Adelman, 2010) (see Table 2). In addition, there are professional agencies such as TEAM Coalition and others that help teams and institutions educate their fans on drinking responsibly, and executing effective tailgate policies (TEAM, n.d.). It would be a useful idea for the sports teams to collaborate with these types of agencies to manage consumers’ behavior. MetLife Stadium has its own version of a fan behavior course to guide fans in behaving responsibly. Alcohol sales at the college sports venues can be a very sensitive and controversial problem as collegiate administrators continue to struggle in balancing the role of satisfying the patrons and discouraging students from drinking. Since there will be a lot of under legal drinking age students attending the event, it makes screening both vital and challenging. When University of Northern Florida decided to ban alcohol sales in its basketball arena, it was noted that the average student attendance dropped sharply from the 500s to the 200s (personal conversation with UNF Marketing Director, 2018). This dilemma will continue to haunt many collegiate marketers while striving for the sales revenues and at the same time protecting the students.

q7. Name a professional agency that may help teams and institutions educate their fans on drinking responsibly, and execute effective tailgate policies: (Fill in the blank:)

Lastly, the facility security has become an alarming concern for event managers and organizers, as more news of terrorist attacks and shooting incidents occur at the large spectating events (i.e.., Boston Marathon and Summer Concert in Las Vegas). In fact, about 57% of people do not believe that Minor League game-day staff can handle emergency evacuations properly. The sport teams must rethink this vital issue and upgrade their risk management practices, staff training, implementation of security staff, and collaboration with local law enforcement agencies.

Table 2. Best Practices for Alcohol Sales

FYI: What should facility managers and teams focus on? Here is a list of recommendations provided by avid sports fans. SportsBusiness Journal, 14(30), 25-33

Since the first sporting event was televised in 1939 (college baseball game, Columbia vs. Princeton) (Sage & Eitzen, 2013), the growth and popularity of sports in this country has exploded exponentially. It is quite fair to claim if it was not for television, sports may not be such an important culture in American lives. Sports and media have developed into a symbiotic relationship, the survival of professional sports literally depends on media (particularly television). All the traditional media such as books, magazines, radio, and newspapers still provide sports information, stories, and statistics for the consumers to consume. We can all agree there are just two forms of media outlets that dominate today’s sports landscape. They are television and new digital media (including Internet and social media).

(a) Television viewing

Television viewing is one of the key ways for fans to consume sports. We watch games, sports news, replays, documentaries, and talk shows daily. Advertising on television is still probably the most powerful promotional tool to reach mass audiences. Americans are exposed to more than 5,000 advertising messages every day (Story, 2007). On average, men and women spend 4.5 and 5.0 hours to watch television daily. Among all the TV viewers, about 33% men and 27% women claimed that they frequently watched college football and college basketball, respectively (Sports Business Research Network, 2016). The power of the TV exposure is strong enough to convince the companies to spend more than $4 million dollars for a 30-second Super Bowl Commercial. The TV advertising revenues for the NCAA March Madness gained $307 million in 2012. Advertising spending on television is worth $68 billion a year.

(b) New Digital Media

New media mentioned in this section is a merging product of traditional media forms (audio, video, and written words) with interactive digital technology. In general, the contents and messages of new media are more interactive and personalized (Parkhouse et al., 2012). The contents of new media are frequently communicated through the moderating factor of the Internet. One should realize that the representation of traditional media within the new media realm still cannot be considered true “new media”, because the interactive element may be missing. A standard college athletic website merely gives information to the users and cannot be viewed as a new media, unless the readers are given the ability to comment on team stories and correspond with Media Relations staff. Social media (a true new media format) is a form of digital, interactive communication that can be for both public relations and marketing. Social media creates a two-way dialogue between the sports organizations and consumers. It engages all involved individuals and builds relationships. When sports organizations utilize the social networking concept to engage fans at the personal level, it can do the following tasks: (1) provide exposure for players, coaches, and team personnel, (2) promote the use of blogs, and (3) encourage fans to comment on issues, and (4) conduct sweepstake contests or offer giveaways. More advertisers and companies are advertising on social media platforms because they believe this practice will help them market to intended target markets quickly and effectively. The social networking functions of social media automatically screen and connect individuals with similar social backgrounds, habits, social and musical interests, and behavioral patterns. More importantly, the interactive feature of social media will allow the companies and organizations to learn more about the users and foster a relationship with them.

9. A college’s athletic website that merely give information to the users can still be view as a new media. True/False

Today, the most popular existing social networking sites include Facebook, Twitter, YouTube, Instagram, and Snapchat. Sports fans will use these platforms for tracking sports stories, highlight clips and statistics, posting opinions, comments and promotional messages, and viewing games. Readers can gain a better perspective from the following statistics concerning the use of electronic devices and social media nationally and globally (Outside, 2014). It is not difficult to understand why the advertisers and marketers would want to engage potential consumers on social media platforms.

*73% of Americans who are under age 50 own a smart phone.

*58% check their phones at least once an hour.

*On average, 42 messages per day were sent by adult cell-phone users.

*Six billion “likes” are posted and 300 million photos are posted on Facebook every day.

*Between 2012 and 2013, there were an increase of 48.4% on mobile screen time.

*2.13 billion people are monthly active Facebook users (as of Dec. 31, 2017) (Kirkpatrick, 2018)

Photo 1. Being Connected Through Your Mobile Device and Social Media

In terms of online viewing or video-streaming, among the online viewers for all types of programs, 67% male and 60% female viewers stated that they often watch college basketball and college football, respectively (Sports Business Research Network, 2016). In 2016, NFL decided to select Twitter as their new partner for streaming 10 Thursday Night Football games. Twitter only paid $10 million a year for broadcasting feeds. Recently, marketing reports have shown that young viewers tend to consume sport games via streaming and cellphone devices. The Millennial generation does not watch TV as much as their parents (Levin, 2018). Peter Katsingris, the Senior Vice President of Nielson stated that younger generations are growing up with more choices at their fingertips. This new trend should make the marketers aware of the change of sports contents consumption thus affecting the future value of the TV broadcasting deals. In 2018, number of people ages 18 to 34 watching TV has plunged 15% from 2017 and is down 36% from 2014 (Levin, 2018). The definition of TV watching is changed. A broader measure of TV usage that includes streaming through any device connected to a TV, but not website or mobile apps.

It is projected that 47% of the video watched by the 18-34 crowd is streaming, it is expected to reach 50% by 2019. Two-thirds of all TV homes in the USA now subscribe to Netflix, Amazon and/or Hulu. Many networks are going to be under stress to adapt, and some are not going to make it. Advertisers should be smarter about how to reach younger people on traditional TV or be cooler with targeting older demographics than we used to.

Will younger viewer mimic their parents’ behavior as they age and return to TV or the pace of technology will defy the TV watching behavior? Perhaps only the time will tell.

FYI. TV Viewing Among Young Millennials from 2014-2018

The unique interactive capability and networking features have made many sport marketers believe social media will be the most economical and convenient method to promote college sports. So it is logical to examine how the athletic programs in the country utilize the new media for promotional purposes. Based on the authors’ own research, there were a total of 2.3 million subscribers of all SEC schools’ official Athletics Facebook webpage. University of Florida alone had 1.5 million Facebook subscribers. However, the Gators only posted 82 messages for men’s basketball during the2 2014-15 season. Mississippi State reported the highest number of posts (n = 112) on Facebook, but it had only 9,015 subscribers. Vanderbilt, Georgia, and South Carolina did not even have an official Facebook page or their athletic program at that time (2014-15 season). We can optimally assume that all the SEC schools should have official webpages for various social media accounts and far more followers or subscribers now. As for the use of Official Twitter page, readers can find the breakdown analysis of tweets based on school and gender in Table 3.

Table 3. Total Tweets and Followers by SEC Teams for Men’s and Women’s Basketball

Q10. According to the researching finding, total amount of tweets for female basketball are greater than the number for male basketball. True/False

At the authors’ institution, there were 670 and 622 tweets sent to the official athletic Twitter page during Fall 2017 and Spring 2018, respectively. During the football season, the tweets related to promotional messages (n = 42), interactivity (n =37) and information sharing (n = 25) only equal to 14% of total tweets. On a weekly basis, about 56 tweets were sent by the Athletic Department, with four tweets (7.1%) relating to game promotion. During the basketball season, the interactivity (n = 37) and promotional messages (n = 41) accounted for 5.9% and 6.6% of total tweets (n = 622), respectively (Frye & Chen, 2018).

In terms of the usage of conference’s free streaming services, surprisingly 70% of students claimed they watch school’s athletic games via the digital network, at the very least, “occasionally”, if not “frequently” or “always”. Like many findings concerning the millennial sports viewers (Deitsch & Wertheim, 2017), students have claimed that attendance to live events has not been a priority. More than half (51%) of respondents stated they typically attend 5 or less events per school year (Lambert & Chen, 2018).

Online Retail Platforms

Although this product distribution channel seems to be more relevant to sporting goods industry and tends to be overshadowed by the broadcasting channels, nevertheless, it still contributes a great amount of revenues for sports products sales. It was found, MLB fans tend to less likely purchase logo apparels online (at least 10% lower than the other leagues), MLS fans would use mobile devices to purchase sports logo apparels.

Conclusions

Based on the aforementioned information, we can conclude there is still plenty of room for the small colleges and universities to further utilize social media and develop more aggressive strategies to stimulate interactivities and deliver promotional messages. According to the analysis of SEC’s tweets, total amount of tweets for female basketball actually are greater than the number for male basketball. This is a very encouraging sign, because women’s sports may not be able to attract as much traditional media attention as men’s sports do; however, they can still outpost and out-market men’s events through the use of Twitter and Facebook. Basically, many schools still use one-way communication through their athletic websites to communicate with their supporters and clients. The authors wonder if there is a need for all schools to hire a social media coordinator to conduct and manage promotional tasks different from the “old school style”. Here is a list of instructional tips, the 7Cs for a successful and modern web content management, that help guide the administrators in providing the best service.

*Content: beside the general features, provide more interactive activities, survey, and opinion polls,

*Context: be current, connect the dots, and don’t leave some one confused

*Channel: partner with proper social media platform, enhance connecting speed,

*Consistency: maintain accuracy, strong connectivity,

*Community: Try to be inclusive and friendly,

*Customization: Satisfy everyone’s unique needs and interest

*Creativity: Introduce “cool” feature and contents, always adopt best practice

Last, the authors would like the readers to contemplate the following questions, as we witness the evolving changes of viewing patterns and consumption behaviors with the additional shift of viewers’ demographics.

(1) Will advertisers be willing to pay as much advertising fee online as for TV broadcasting?

(2) Will online viewership generate at least the same frequency of viewing as TV advertising?

(3) Is the value of a frequent online viewer to an advertiser equal to, less than or more than the value of a frequent TV viewer.

(4) What, if anything, can TV broadcasters do to eliminate the downward trend in terms of frequency of viewing due to the introduction of video-streaming and online viewing?

Brainstorming Activities

In order to enrich students’ campus life experiences, the Office of Student Life at Fathead State University utilizes several campaigns (e.g., Leave Your Suitcase Behind, Residential honor’s college) and sponsors numerous programs/activities to entice students to participate in weekend activities, such as athletics. The FSU football team competes in the NCAA FBS division and plays a competitive schedule. Recently FSU reinitiated its tailgating on campus grounds. However, state law prohibits any alcohol consumption in public areas. The challenging question students may ask administrators is why can other regional public institutions in the state host tailgate parties on campus with beer onsite?

The new President of FSU, Dr. Jay M. Disney, cares about the students’ social lives. He fully supports the idea of hosting the tailgate parties on campus. However, Dr. Disney insists that only non-alcoholic beverages can be consumed at tailgate parties. He believes it is the institution’s ethical responsibility to maintain a safe environment by minimizing the occurrence of alcohol-induced accidents.  In an effort to provide safe and non-alcoholic tailgating parties, President Disney has asked the Vice President of Student Life and the Athletic Director to explore viable options and strategies for ensuring that tailgating events on campus will serve the needs of both students and community members.

You are to assume the role of the Athletic Director of FSU and identify solutions to the following issues:

(1) Could you convince the fans and students to participate in tailgate parties without consuming alcohol? How could the university prevent people from bringing alcohol to the tailgate parties on campus?

(2) Discuss various activities and ideas for FSU to host tailgating parties/events and increase football attendance.

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