Professional Sporting Organisations and their Relationships
Chapter Discussion Questions:
1. Why can the sports business be seen as extraordinary?
The unique features of sport that are absent in any other business sector are what deem the sports business as extraordinary – particularly in the marketing of a core sports product.
According to Buhler and Nufer, sports have an extraordinary public perception through their extensive media coverage and the consumer’s personal involvement in the core product (whether as a participant or spectator). Robinson (2012) reinforces Buhler and Nufer’s idea of the public’s investment in sports. He explains that sports fulfil human’s innate desire to belong, which is a “big part of why sports fans congregate” in public and personally identify with teams.
However, this extraordinary characteristic of the sport can also pose as problematic. With sport often acting as a conversation aggregator in society, sports organisations sometimes feel they cannot make decisions independently without being subject to external pressure from fans and the media.
The extraordinary nature of sports can also be accredited to the uncertainty of outcome in sport. Buhler and Nufer state that the quality of a core sports product cannot be controlled or planned “because every game and/or competition is highly spontaneous and unpredictable… one cannot be certain how the competition will end” (p. 49). This heterogeneity of sports has the capacity to prompt a range of emotions in the participant and the spectator, which in turn contributes to the consumer’s personal investment in the core product.
2. How would you describe the sports product?
The sports product can be described as its core product (the sporting event) or as the product extensions that are based on the core product.
The core product is founded on the characteristics of a service, and can be differentiated between participant sports - which are played at grassroots level - and spectator sports - professional leagues and competitions, while product extensions can be goods (such as merchandise) or services (such as hospitality and catering services) that relate to the sporting event.
Both aspects of the sports product are designed to benefit a sports spectator, participant or sponsor and are unique to the sports business.
3. Who are the main stakeholders of the sports business?
The main stakeholders of the sports business are as follows (in no particular order):
Clubs Sports clubs help create a sports product through their participation in the competition.
Associations Associations help create a sports product through their hosting and governing of the competition.
Players Players help create a sports product through their participation in the competition, as well as lending their profiles that entices publicity.
Agencies Agencies often broker marketing rights on behalf of a particular sports entity.
Fans/Spectators Fans, supporters and spectators all have a stake in the sport through their financial contribution (purchasing product extensions and event tickets) and their personal involvement/identification with the sport and its organisations.
Governments Major sporting events have the capacity to attract international attention and an influx of sports-goers, which creates governmental and community interest in tax and employment. Governmental support is also vital for organisations when securing a major sporting event as well as subsidies to build sporting venues.
Media While sport generates content for the media, the media provides organisations with the publicity they need to develop their brand and raise their profile.
Sponsors Commercial companies use sports products as a medium for communication with their target markets. The revenues generated through commercial sponsorship are relied on to operate a sports organisation.
4. How do these stakeholders interrelate with each other?
The business of sport is a net of relationships, as described through the following interrelations:
Clubs, Players and Associations create the sports product, which is then transferred by the Media through broadcasting the competition and the wider media coverage the competition receives.
Sponsors and Governments contribute financially to the sports product through sponsorship and subsidies, which benefits their profile and tax income.
Agencies intermediate between the Media and Sponsors when brokering media rights and sponsorship, while they often advise Players in contract negotiations.
5. Who are the main customers of professional sporting organisations?
Customers of the sports business are identified as primary and secondary customers:
Primary customers consist of groups that all pay sports organisations for something in return: fans, sponsors and the media.
Secondary customers consist of all other internal and external groups that do not pay the sport organisation: employees, governments, agencies, competitors, investors/shareholders, suppliers. Sports organisations must treat these groups as customers in order to engage in positive relationships that benefit both parties.
6. Why is it appropriate to view stakeholders such as employees or suppliers as customers?
It is in the interest of sports organisations to treat their employees as customers to ensure good and efficient working relationships to attract and subsequently retain professionals.
The same principle applies with suppliers. A positive relationship between the organisation as a buyer and the supplier is valuable in order to retain the suppliers service, which may come at a reduced cost through the organisation’s loyalty.
7. How would you describe the relationships between sports entities and their customers?
The relationships between sports entities and their customers follows the principles of relationship marketing. In order to protect their revenue streams from fans, sponsors and the media, and ensure the service and cooperation of agencies, employees, governments and suppliers, sports organisations must maintain healthy relationships with these stakeholders.
