ENDURANCE
Entrepreneurial Capacity-building for Sport

In business, the concept of value is very flexible and can have different interpretations:

• Value as QUANTITY – the amount of something produced, achieved, reached, etc. in a given period, also in terms of time invested.
• Value as QUALITY – the quality standards of that given something generated in a given period, also in terms of time invested.
• Value as OUTPUT – tangible results, more or less concrete as a product, a service or a strategy.
• Value as OUTCOME – impact(s) that generates from OUTPUT(s), benefits that come in shapes and forms of, for instance: better expertise, higher profitability and competitiveness, market’s awareness of our offer, etc.
• Value as REVENUES (R) – Price (P) * Quantity (Q) of a given product / service placed on the Market.
• Value as PROFIT (∏) – R - Costs (C), i.e., salaries.

In a broader sense, business value builds from three key pillars:

Socio-economic context of reference.

It refers to the overall scale of phenomena that might have an influence on your business idea. Technologies and market trends represent two of the most impactful trends that (aspiring) entrepreneurs look into to design and scale-up their business idea.

Generally speaking, this dimension refers also to:

• Competitors – strengths and weaknesses
• Customers – actual and potential

Due to the typical scale and scope of sport-related business ideas, it is relatively easier to find specific market segments at high profitability margins. More than in other markets, clients of sport industry:

• Are very well-informed
• Tempt to aggregate in (online) communities
• Cluster in well-recognizable segments
• Have higher spending potential

Inputs’ processing

The value generation process falls under a framework that is common to all business.

It is the so defined IPO model:

→ Input

                → Process

                               → Output

In business studies, we tempt to consider Marketing among those activities defined as Primary*: contributing in first hand to reach the final client and generate revenues.

* Interpretation based on Porter’s Value Chain: Competitive Advantage, 1985, p.87

People

With People, we refer both to:

• Internal workforce* – knowledge, expertise, skills and competences

! Those who make things happen!

• External Stakeholders – groups of interest, and more in general, whoever might have an interest on business’ activities

*Contrary to Marketing, HR and People Management fall under Support activities – instrumental for a smooth implementation of Primaries.

This section of the training module is dedicated to introduce participants to what we refer to in business environment when we talk about Marketing.

Generally speaking, people have a “sort of” idea on what is Marketing, as it is normally associated to promotion, advertising and communication. Although this is technically true, it is a very limited and reductive perception of Marketing and its focuses…

Any activity/task/effort/initiative formally aimed at stimulating customers’ interest can be intentionally considered as “Marketing”. A definition as such of Marketing cover a much larger area of interest that includes communication and promotion and goes way beyond it.

In the context of this training module, our favourite definitions of reference are represented by the ones from:

• American Marketing Association (AMA)

[Marketing is] the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

• Philip Kotler – considered by many as one of the most representative Marketing’s expert worldwide

[Marketing is] the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.

Relevant to notice is the difference between the twos:

AMA’s Marketing definition is very market-centred, including a wide range of activities and tasks aimed at satisficing not only customers’ satisfaction, but that of civil society and general public at large. Compared to AMA, Kotler’s definition is much more customer-centred.

Regardless of the specific contributions academics and practitioners, all definitions applied to marketing revolving around to three everlasting pillars:

Depending on the operative context and the specific market that the organisation looks into, there are several Marketing’s frameworks:

• Business to Customers (B2C), the form of marketing that we’re most used to and familiar with. B2C Marketing refers to that implant of activities and strategies implemented and carried out by an organisation to reach for consumers of product and services (i.e., the avarage Joe).
• Business to Business (B2B), when companies and organisation are targets themselves of other organisations’ supply (raw materials, services, equipment and machinery, etc.).
• Customer to Business (C2B), this format is the reversed version of B2C. C2B Marketing always existed and never expired from the scene. Nowadays, in the era of social media influencers, online reviews, blogging, etc., it is becoming even more tangible and valuable for organisation. When people participates in focus groups, surveys, interviews, etc. they a providing to businesses data (i.e., services) of great values that organisations will further process as inputs from the market.
• Customer to Customer (C2C), made popular by e-bay and now normalised by the numerous online platforms that made of sharing economy their business model. C2C Marketing is when customers purchase goods/services one another through a third party mediator.

In practice, there are some quite significant implications for businesses operating in B2B markets, compared to B2C ones. The terms of this distinction are:

1. Demand
2. Purchasing volume
3. Number and concentration of customers
4. Distribution
5. Negotiating power
6. Promotion and advertising
7. Other Influence variables

In the case of sport-related industries, for B2B and B2C, it is most likely that you will orientate your marketing activities to final consumers (B2C) or retailers / other actors of the production chain. In C2B, it is most likely that you will rely on this kind of formula when experiencing with influencers’ social media campaigns. C2C is a Marketing framework that applies to sharing economy’s businesses – very unusual (but not impossible) for sport-related industries.

It is commonly accepted by theorists and professional that since 1930s, Marketing evolved through fours well-distinct eras. As we speak, we are culminating at the peak of the so defined “relationship” era.

The PRODUCTION era    →           focus on product

The SALES era                →           focus on brand

The MARKETING era      →           focus on advertising

The RELATIONSHIP era →           focus on customer-centred experience

Which one should you opt for in sport industry?

…there is not a unilateral answer, it really depends on what is the underlie value of your offer.

Are you developing high-tech running sneakers?                           Product

Are you developing a webzine for off-road bikers?                         Relation

Are you developing a new hydrophobic swimsuit?                         Product

Are you developing eco-friendly gym elastic band?                        Sales

Are you developing an app to monitor athletic performance?         Sales

The Marketing Mix is the most important tool at the disposal of Marketing specialists to generate product/service awareness and place their offer to the final market. For decades, the model of reference to design the marketing mix has been represented by the 4Ps model, originated in the 60s:

• Product
• Price
• Place
• Promotion

Around the 80s, two variants found a consolidated consensus among theorists and practitioners: the 7Ps and 4Cs models.

For the sake of this training module, let’s look at the left one only. Each of the mentioned represents an asset on which entrepreneurs rely on to give content and format to the many possible way they can reach their market of interest (e.g., off-road bikers, runners, swimmers, etc.).

1. Product                                            What are you selling
2. Price                                                 At what price
3. Place                                                Where – physical store? Online?
4. Promotion                                         How are you going to communicate it – eMedia?
5. People                                              Who’s collaborating with you in this journey?
6. Process                                            Organisation of primary and secondary activities
7. Physical evidence                            Product design and branding
8. Partnership                                      Cogenerating value for the whole production chain

Tips:

Bear in mind

1. Even the slightest change in one of the aforementioned will impact (at least!) one of the others.
2. Make sure to compile all information into a formal Marketing Plan

When we talk about “Marketing Mix”, we refer to the formal document in which organisation, entrepreneurs and marketing specialists detail the marketing strategy for the overall organisation or for a specific service/produce launched in the market.

Generally speaking, the marketing planning is included already into the overall business plan of the organisation:

• Executive Summary              Summary of the business plan
• Business leadership              Founders
• Offer                                      Product / service, and how they mix
• Covered market(s)                Customers & competitors
• Distribution and Marketing
• Business model                    Coordination of activities and processes
• Legal form
• Risk assessment                  Mapping & identification
• Capital requirements
• Financial projections            Cash flow, balance sheet, income statement
• Miscellaneous, i.e. Staff’      CVs, surveys and analysis, etc.

The ones highlighted in blue represent the typical sections in which you will provide for very precise information about your marketing mix.

Recommendation:

For a better reader’s understanding, you can attach your whole marketing plan in annex to the business plan. The general outline of a Marketing Plan is a narrative disclosure of the 8 key elements of the Marketing Mix, with specific reference to:

• Summary
• Market and competitors’ analysis
• Marketing strategies (i.e., Marketing Mix)
• Budgeting and financial resources
• Monitoring and evaluation mix

Extra reading no. 1: New marketing frontiers

In globalised economies and societies, Marketing specialists are particularly responsive to the wide cultural diversity within their audience. Diversity Marketing is about fine-tuning organisation’s communication and messages to the cultural background of potential recipients.

Even for large organisation, understanding the intrinsic diversity of their customers (loyal as well as potential) is a very delicate and time-demanding process, but it is also instrumental in reflecting, portraying and valorising a trustworthy and reliable image: the one that people would expect before establish any sort of relation with that given organisation.

Diverse-sensitive marketing strategies comply with a three-dimension relationship model:

• In-culture, when organisations manage to relate successfully with cultural values of minorities and/or specific niche of reference
• In-language, when organisations manage to “interpret” rather than “translate” the cultural values defended by minorities. For instance, it is frequent for organisation to employ or consult representatives of the groups of interest targeted by their Marketing strategies – so as to avoid any unpleasant misunderstanding or misjudgement.
• In-person, when organisation manage to interact with the audience of reference in a two-way dialogue, much more preferred to a top-down approach.

Extra reading no.2: Word of mouth: a threat or an opportunity?

It really depends on how your offer is perceived by clients.

Positive reviews – it’s free publicity, customers contribute to market the product themselves, without even being aware of it…

Tip: surf the wave and let the momentum going…

Negative reviews – for a reason or another, you failed to satisfy a customer. Any negative-positive ratio greater than 1:5 (2:5 or worse) should concern you, dropping exponentially your opportunities to engage you customers.

Tip: take action immediately, be polite and seek for more precise feedbacks from the very same “angry” customers…you want to do whatever possible to increase your chances to establish a clean reputation.