29
Apr

SPORTS RETAILING REDUCES POLLUTION.

Image: Josep María Martínez

ABSTRACT

There is no reason for suporting Real Madrid or Barcelona or Ceuta. Indeed, there are emotions and shared social values.

Without them, a sports club has no future as a business model that hinges on implicit aspects in common sense.

Although it may seem strange, that’s totally applicable to the marketing of any company in retail.

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“The referee’s whistle is the only thing capable of stopping traffic in Barcelona,” declares Xavier Querol, a researcher at the Institute of Environmental Diagnosis (Idaea-CSIC). Car emissions dropped sharply around 9 pm on March 6th, 2007, just before the start of the exciting Champions match between Barcelona and Liverpool.

40% of football clubs’ income stems directly from this type of consumer behaviour, while teams in the Spanish BBVA League only earn 33% of their income from ticket sales.

Despite the industry’s importance, however, their general economic results are very poor, including some in a critical situation.

Sports clubs’ retail marketing strategies

The marketing aim is – to succeed, in becoming the preferred option in a sustained way, all the while being profitable. It is not just about advertising or promotions.

Continued preference translates into sustained cash flow. For top competition sports club management, the sustainability of this cash flow has been demonstrated to be directly related to the sports teams’ performance. Over the long term, the latter is determined by the quality of a club’s players and trainers. As such, being able to have the economic power to be able to hire the best ends up being a key factor for their success.

It’s a bit like the fish biting its own tail: if there is a chronic lack of titles, that team’s supporters will flounder and, in the end, so will its sponsors, leading to insufficient income with which to sign on great players who will contribute to the club earning more victories.

The aim is not to win titles every year, but to ensure that there isn’t a chronic lack of titles. A bad season doesn’t imply a serious problem so long as that sports club shares certain human or social values with its supporters. Without these values, a sports club has no future because it is a business model, which hinges on implicit elements and commonly shared feelings.

There is no specific reason why people support Real Madrid, Barça or Ceuta. What there is are shared emotions and social values. Barça’s slogan Más que un club (“More than just a club”) offers a glimpse of this. The same can be said for Atlético de Madrid’s (Atleti) famous ads, a team which succeeded in not losing any of its supporters when it fell to the second division.

Industry concentration

 

The current situation in the first division is no different to that occurring in other industries: a special type of de facto oligopoly. The Pareto Principle is also valid here: the top two Spanish clubs concentrate 53% of all income, and 25% of the income in Europe as a whole is channelled to only 20 clubs.

What is different compared to other industries is that this small number of very powerful clubs needs others to be able to compete. Without matches against these adversaries, they cannot demonstrate their superiority. A league is like an ecological system, similar to that occurring in nature.

That notwithstanding, there is greater unpredictability in sports retailing. In fact, teams train all week long, while their actual “production time” tends to represent only 90 minutes per week. The ratio between the time a club has to “demonstrate its power” versus the time to prepare, implies great risks in terms of guaranteeing results for its supporters.

Are we talking about football or about retail sector?

 

Don’t the growing concentration of protagonists, the sector’s poor economic results and the fight for sustained preference sound familiar?

Perhaps a lesson that can be learnt from sport teams is that the enormous power they have regarding customer preferences is based on sharing strong emotions and human values with their supporters.

References

www.lavanguardia.es/vida/20110312/54125164753/gol-a-la-contaminacion-del-aire-en-la-ciudad.html

Havas Media: www.slideshare.net/dolivo/foro-futbol-espaol-marcas-y-negocio

Gay de Liébana, J.M., Futbol español: Marcas y negocio. Univ de Barcelona.

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Lluis Martinez-Ribes

Source: Distribución Actualidad, the spanish retail magazine

(nº 424, april 2011)

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