The case for the development of an information-based approach to market. ing was made extensively in Chapter 9. In this chapter the elements of the data storage system (called a marketing information system (MIS)J are outlined. In addition, the types of data which a marketer needs to collect are discussed. The major contribution of the chapter is to highlight the use of the data in determining the most appropriate target segments which marketing strategy is later developed to reach.
An MIS can be as simple as a system of index cards, or it can be as complex as a fully integrated database, stored and retrieved on a mainframe computer. Obviously there are many alternatives in between these two polar extremes, and just where an organization chooses to make its stand depends upon the following factors:
1. The size and geographic dispersement of the market for the organiza¬tions product or service:
The larger the market, and the more geographically dispersed the market, the larger and more complex the MIS.
2. The availability of data on consumers and potential consumers.
The more data available, the larger the MIS.
3. The budget allocated to the development and maintenance of the MIS.
The larger the budget, the more sophisticated the MIS.
Whether the index card system or a computerized system is chosen makes no difference in the type of data needed to be collected, nor to the analysis and manipulations to be performed with the data.
The difference between manual (paper) and computerized (electronic) systems is that electronic systems permit storage and analysis of much greater volumes of data, the data can be analyzed much more quickly and accurately, multiple departments in the organization can access the data at the same time, and data from various sources can be integrated. While the differences are significant and permit much more powerful marketing data to be generated in electronic-based systems and hence more sophisticated marketing strategy to be developed; the time taken to maintain a simple index card or paper file system is still worth the effort. Even for the sport. entrepreneur working in the smallest of organizations the payback is considerable. The problem with manual systems is that they require long hours of tedious work, and this often deters all but the most ardent of sport managers. With the continual decline in the prices of mini computers and software programs, there appear to be electronic systems which fall into the price range of even the smallest of organizations (For example, the IBM Personal Computer IBM-PC), with sufficient memory capacity to handle the records of 1.000 customers, and a printer costs around $4,000; for a capacity sufficient to handle tens of thousands of records it would cost under $7,000, An additional E50U-S1,000 would be required for database and word-process. ing software, making the capital outlay a quickly cost -justified investment, particularly when the computer could be used for other management functions such as accounting, inventory control, etc.). It is relatively clear that in the next rive years we can expect the overwhelming majority of sport organizations in all rectors of the industry to be employing computers to manage their MIS databases.
Below, the characteristics of an effective MIS are developed, along with some guidelines of how the system should be used, and the potential benefits which can accrue for those taking the time to develop and maintain an MIS.
Characteristics of a Marketing Information System (MIS).
An M1S should have the following characteristics:
1. It must be centralized.
An organization needs to have all of its data located in one centralized system.
2. The carious data bases (consumer files, accounting records, sales records, etc.) need to be fully integrated so that, the data from one source can be contrasted and/or combined with data from another source.
3. The data must be retrievable in a form which the marketer can use for decision-making.
Only if all three of the above conditions are met, does an MIS reach its full potential. As a simple rule, the MIS must contain only the information that -ill be used by the marketer, yet it must contain all of the information that t he marketer needs to make effective decisions. One caution needs to be offered at this time, many marketers fall into the trap of feeling that the only data which is relevant is that which they collect themselves about their market, and their own consumers (called primary data). In almost all industries there is a wealth of data which has already been published (called secondary data), which is invaluable to the marketer. Much of the aao0ndary data used by marketers comes from federal, state or county government sources (such as population demographics); or from public sources (such as local chamber of commerce data), or from trade and industry associatl0ne and publications (industry averages, profiles and standards performance and cost ratios). Additional information from independent market research agencies such as the A.C. Nielson Co., Simmons Market Research Bureau, and Louis Harris, Inc., all of whom collect data on consumer preferences, viewing and participation habits, product purchases, etc., is extremely valuable but can be expensive. Data from all of the above primary and secondary sources should become part of the overall MIS, and should be updated at least once a year.
For many sport industry segments, external secondary-data sources provide the sole "yardstick" by which the organizations' own data can be contrasted.
For example, in 1981 a major New England college contacted the author to perform market research for them concerning their intercollegiate football program. The team had suffered significant and continual declines in paid attendance despite a steadily improving won-loss record. One of the most relevant pieces of information which the athletic administration had ignored was the fact that their attendance decline rate was significantly lower than comparative schools throughout New England, and far below the drop-off in interest being experienced at New England high school football games over the same time period. While this information did not solve their problem perse, it did provide a most critical backdrop in deciding which media alternatives should be employed to boost sagging attendance. and particularly in estimating the probability of favorable advertising response.
The author stated in an earlier article that "Marketing without a marketing information system (MIS) is like taking a trip without a road map!" (Ref. 1). Simply put, smart marketers do not do it'. Every marketing decision should be made only after the impact on all of the key elements of marketing have been fully considered. A list of the major information needs of a marketer is given below, broken down under the headings of the key elements of marketing.
16-3. Informational Needs of the Sport .Marketer.
The first thing that a marketer needs to do is to define the extent of his market area. A concept which has been used in the retail industry is that of the "critical trading radius" (Ref. 2). The critical trading radius was initially conceived as a system of concentric circles of mileage using the facility location as the center and 6-, 7- and 10-mile radii as milestones. The concept has now been refined as a series of no concentric radii based upon consumer traveling time to the sport facility rather than straight mileage. The size of the critical trading area varies with each segment of the sport industry. Commercial recreation clubs (racquet sports and health clubs, etc.) would have a 20-minute driving time radius from the facility in which 80-85% of members and potential members would reside; retail sporting goods stores in urban and suburban areas would have a similar trading area to the health clubs. In rural areas, the radius naturally expands considerably. The trading radius increases as the degree of competition decreases, for professional sport team; Intercollegiate athletic events; and coliseum, stadium and arena events, 8096 of the market resides within a one-hour driving or traveling time radius, (longer for weekend afternoon events). For small ski resorts near population areas, the radius will be an hour or less. For all destination resorts (the more popular ski resorts; sport resorts such as Hilton Head Island in South Carolina and Disneyworld, in Orlando, Florida) the trading area is almost unlimited. The concept of traveling time rather than straight mileage reflects more accurately the decision criteria of a consumer. and consequently is a more accurate predictor of potential demand.
The data which is critical to be kept on hand concerning the nature and extent of the market is as follows:
1. Size of the market (total number of individuals living within the critical trading area).
This outlines whether or not the market has sufficient size to support the product.
2. The demographics of Individuals residing in the critical trading radius. Specifically, the major factors are:
a. Total population within trading radius (year round residents and commuters),
b. Breakdown by age, sex and income relevant to the profile of target consumers.
From these data, the marketer is able to make predictions on total market potential. When industry averages are available, it is possible to predict quite accurately the total demand for a particular product. For example, in the bowling business, it has long been an industry standard that one bowling lane is demanded per 10,000 population. More recently, similar "rules of thumb" have been used for court and health clubs which are based upon age, sex and income.
3. The purchase behavior and consumption patterns of those living and residing within the market.
Where possible, data on the spending patterns of consumers are helpful in determining potential market demand. Marketers have found demographics to be extremely useful in determining the profile of potential consumers, and yet demographics have their limitations. For example, a 35-year-old college educated, white professional male living in Iowa is simply not the same "animal" b0 a marketer as the similarly-profiled individual residing in, New York City. The major difference is life-style characteristics. Life style characteristics are called psychographics and are usually captured through A.I.O. (activity, interest, and opinion studies (Ref. 3)). Psychographic studies tend to be expensive and they are difficult to undertake. Data take much more effort to solicit ad respondents are not always forthcoming in offering opinions and attitudes. Consequently, many decisions are made in the absence of such research. When no hard demographic date are available or when the data bear no relationship to the product being marketed, it is essential that at least a "quick and dirty" pulse-check of consumer attitudes be performed concerning key product attributes. Illustrations of this latter process might be a verbal sampling of opinion of participants in a road race as to in aspects of the race's total organization, form and marketing a more comprehensive study might be to ask individuals to complete surveys on their attitudes concerning running shoes, where several products are compared. The first series of questions would concern the product attributes which the individuals felt were more critical in their choice of shoe. The second would deal with their subjective ratings of each shoe on each of the attributes they identified.
From these data e strong idea of key product attributes can be developed which determine product choice. The strength of one's own product can also 6e "guesstimated," along with the areas of weakness according to consumer perception. Similarly, some general ideas about the competitors’ strengths and weaknesses can also be developed.
4. The level of spectatorship and/or participation level by sport(s), broken down by demographic categories.
This identifies the profile of the target consumer of any given sport. A11 promotional strategies and advertising media choices are then designed to reach this target market segment
One leading expert in Sport Marketing, Matt Levine, once said that all of marketing boils down to how well you know the market (Ref. 4). There can be little doubt that knowledge of the market is critical to marketing success, even if there are other important factors impacting on success.
A. The Consumer.
The ideal situation for a marketer is to be able to identify all of his consumers by name, address and phone number, so that they .can be communicated with directly. In private clubs, this is quite easily accomplished, and yet the author's research has revealed that the majority of sport clubs which have more than 1,000 members at any one time have only a superficial idea of their demographic breakdown of the membership, and often only a crude. "guesstimate" of the total head count. Of course those with computerized membership databases are able to keep completely accurate information (assuming that the database is kept current!). Comprehensive consumer information is often collected by sport organizations as a regular business practice, but much of this data goes unused. Baseball franchisee that make it to the play-offs often throw away the names and addresses of unfilled ticket applications, when these individuals clearly should be added to the mailing list. Retail sporting goods stores ask for customers' names and addresses when they fill out the sales receipts but these names and addresses are rarely recorded in an MIS for marketing use; instead they lie in an accounting or tax records file.
The data on existing customers which are most critical to be kept for marketing decision-making are as follows:
1. The name, address and phone number of consumers.
Used for communication and correspondence, and for direct mail¬ings.
2. Frequency of purchase/use of the product; type and quantity of product purchased/when purchased.
Used for tracking usage frequency, targeting low-frequency users, and upgrading existing consumers from lower-priced products to higher priced products.
3. Method of payment/location where purchased/purchase lead time. Used in determining price, distribution outlets and lead time in promoting events and ticket distribution.
4. The media read/viewed or listened to; which media/message led them to purchase the product?
Used to determine promotional effectiveness end lead analysis.
5. The pattern of consumption -- Does (s)he consume alone, with family, or friends? What does the consumer do before, during, and after consuming the sport?
This information la extremely valuable in marketing planning, particularly In deciding such strategies as what promotional items to offer (is a particular event-day more likely to attract families, couples, business groups or friends?). Whet kind of concessions would be best? Is a post-event disco party likely to succeed? Should ,we promote more to the father, mother, single female, etc.?.
In short, the major goal of a marketer in establishing an MIS should be to know the name; address, phone number, sex, occupation and income of a11 consumers, along with information about what product(s) they buy, when and in what quantities, and with whom they consume the product. If possible, additional information on what media they view read or listen to is extremely valuable; as well as any information on which promotional message or media helped to attract the consumer.
B. Competitors.
The MIS should contain up-to-date information on competitors which would include complete price list(s), product line(a) offered, promotional strategies, sample advertisements, promotions strategy and special promotions, et0, Any organization offering a similar product or service whose critical trading radius overlaps more than 25% with your own trading radius is to be considered a competitor: Usually this means that the competitors' facility or retail outlet will be located within 30 minutes traveling time of your own. facility.
One strategy which the author uses in sales-training seminars for court, health and fitness facilities is to require all sales staff to visit all competing facilities and to critique competitor' strengths and weaknesses.
C. Future Trends.
No organization can exist. without strong consideration being given to the future. In sport the ability to project future trends may be even g than in other industries. Sport continues to operate in a highly volatile marketplace, with fads coming and going. With sport trends apparently running in seven-year cycles, the industry is not one which can be taken for granted. Perhaps the most vivid illustration in this regard is the court and health club business. The majority of facilities in this industry segment started in the eastern USA 20 years ago as indoor tennis clubs. New trends started in California and spread east as clubs added bars and lounges weight rooms. (later Nautilus centers); racquetball courts; aerobic dance studios; cardiovascular fitness centers; pools, saunas and Jacuzzis; multi-purpose rooms; day-care centers and pro shops. The more sophisticated clubs now have moved into stress management,. diet and nutrition education classes and cardiovascular-risk screening so that they are now really "Wellness Centers."
Few other industries have experienced such marked changes, in such a short period of time, and yet it is clear that evolutional in this segment of. the sport industry still have some way to go! Other sport industry segments have not changed their concept quite as drastically; however, changes in the market for their product have been equally volatile.
Integration of the Data Sources.
Invariably, the full, value of an MIS is realized only when data from various sources are integrated into a common database. As discussed earlier, given the size and complexity of the information, this often requires a computer in - order to manage the system. For example, a small, retail sporting-goods store as part of it's existing procedure collects the customer’s name, address, item(s) purchased, the amount purchased and date of purchase. Currently this information is written onto the multi-copy sales slip (receipt) given to' the customer at the time of the purchase. All that is required for the development of an effective MIS is to organize these receipts by alphabetical order, or better yet, to log them onto 5" x 7" index cards and the store owner now has an MIS!
When the sales slips, data from telephone inquiries and information on institutions/groups, etc., in the market area are all logged into the database, integration can then occur.
Application of the MIS.
Even the smallest of sport organizations, such as a sporting goods retailer, can use a simple manual system quite effectively. Each customer record (an index card) would contain a customer's name and address and the marketer would log the purchase date, item(s) purchased and amount of purchase on the columns beneath. Sophisticated anytime would maintain a running total of the amount purchased broken down by product categories. Perhaps a coding system would be used (football - 1, tennis - 2, swimming - 3, etc.). Cards would then be scanned at regular intervals. Prior to the fall football season, any card showing a check in the football column, indicating that the customer , made a purchase of football equipment, would then be pulled out and that person's name would be placed on. a mailing list to receive a football. equipment catalogue, or a flyer announcing a sale on football equipment. For those customers who spent say, more than fifty dollars in the store over the preceding six months, a personal invitation could be mailed to them for a special pro-sale evening at the store. These "heavy spenders" would have first choice of sale merchandise, would be allowed to nitrite a friend, and might be treated, to a floor chow of next-season's merchandise, hot hors d'oeuvres and champagne. Inviting a friend makes the consumer feel like a "big shot," gives: them greater satisfaction and, more importantly, attracts new customers. BY Bernard Mullin;
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