New name, fresh start? This philosophy seems to be behind the re-branding campaign recently announced by the Tampa Bay Devil Rays of Major League Baseball. Uh, wait, that is the Tampa Bay Rays (hold the Devil). The team is changing its name to “Rays” and unveiled a new logo and color scheme that it will don next season. The makeover is part of an effort by team owner Stu Steinberg to invigorate the franchise after years of mediocrity under previous ownership.
The Rays have nothing to lose by re-branding the team. AirTran was formerly known as Valujet, but a wave of negative publicity (including a fatal crash) left the Valujet name “valueless,” so re-branding the airline in the late 1990s gave it a needed clean slate. Unfortunately, it takes more than renaming a product to enhance its value. If the Rays continue to be among the worst teams in MLB every season, then there is little marketing can do to influence the team’s image.
Perhaps the wisdom of NBA star Allen Iverson applies here. When the NBA implemented a dress code for players, Iverson said “Put a murderer in a suit, and he’s still a murderer.” Following that logic, changing the name and uniform colors will not lead to a World Series championship.
The Internet has proven to be a great innovation for shoppers. The assortments of merchandise available to us have grown dramatically, not to mention the convenience of shopping in the comfort of your home and having your purchase delivered to your door. But, making purchases online can become a source of great frustration when you are denied the opportunity to make a desired purchase.
That’s the feeling thousands of people have experienced in recent weeks. First, it was parents of children desperately wanting tickets to Hannah Montana concerts. Then, it was excited fans of the Colorado Rockies seeking World Series tickets. In both cases, intense demand for tickets left thousands empty-handed and crying foul about the online buying process. The culprit appears to be ticket brokers and sophisticated technology some employ to scoop up tickets ahead of individuals.
The result is that many tickets are made available for sale on the aftermarket for event tickets. Brokers profit handsomely as they command prices that are substantially higher than face value. A check of prices on the web site of ticket reseller Stub Hub found tickets for Game 3 of the World Series in Denver are going for between $325-$4900. Some people who are angry about the unfair advantage held by ticket brokers suggest that ticket sales for high demand events should not be conducted online. Such a move might punish brokers, but it probably has more of an impact on the average consumer who values the convenience of shopping online. It beats having to camp out for tickets!
It seems a better way to punish brokers would be for consumers to pass on buying tickets at inflated prices. But, as long as people are willing to pay above market prices for event tickets, brokers will be angling to beat consumers to get highly coveted tickets. While I am bashing ticket brokers, I give kudos to ticket reseller sites like Stub Hub. They provide a valuable service to people wanting to unload event tickets. Ticket reseller sites are a great marketplace for bringing buyers and sellers together.
Cats may have 9 lives, but the Nashville Kats of the Arena Football League may be done after only 2! Team owner (and Tennessee Titans owner) Bud Adams has decided to cease operations after only 3 seasons. His operation of the Kats followed a 4-year absence after the first version of the Kats franchise was sold and moved to Atlanta in 2001. The demise of the Kats is not surprising given declining attendance each season. Also, the Kats competed with college basketball, Nashville Predators, and Nashville Sounds at different times throughout their season.
The surprise is the failure of the franchise to gain traction despite having access to the marketing resources and relationships of the Titans. There is no sport property stronger in Tennessee than the Titans. It was expected that the expertise of the Titans in the areas of operations, ticket sales, marketing, and sponsorships could be leveraged to help the Kats. It seemed to be a perfect situation- the AFL season begins shortly after the NFL season is completed. Marketing the Kats could satisfy fans’ appetite for football into the spring. Also, the Kats had a high profile minority owner in singer Tim McGraw. His involvement, which included a free concert for season ticket holders, added excitement initially.
Why did the Kats fail a second time? It wasn’t the price of tickets as they were a great value. There was too little interest in the product; middle Tennesseans are passionate about “regular” football, but the arena product never really caught on. How much of the failure was the product? How much of the failure was how the product was marketed? Those questions must be answered before a third life for the Kats could ever happen. Link
A common pricing technique in service businesses is variable pricing. The rationale behind variable pricing is that consumers place different values on consuming based on time service is available or quality. The result is that demand for a service often varies. Some examples include a hotel that has high demand from business travelers during the week charge higher rates on weeknights than on weekends when business travelers are usually not on the road. Or, a movie theater charging $8.00 for an evening showing might only charge $5.75 for a matinee showing because of less demand for tickets in the afternoon. Adjusting the price downward during off-demand times allows capture of some revenues to offset fixed costs. Adjusting the price upward during peak-demand times is a way to reap the full value consumers place on your offering.
The practice is gaining increased use in sports marketing. For example, the Nashville Predators of the NHL have created a 3-tier pricing structure: non-premium, premium, and premium plus. Non-premium games include most weeknight games and represent the base ticket prices. Premium games are weekend games, and premium plus games are the games for which tickets are in the highest demand (4 games against Detroit and season finale vs. St. Louis). Some fans are angry about the new pricing structure, but a business should set prices based on the value of their offerings. Tickets for weekend games and games against Detroit are typically in greater demand. The team has a right to seek out a price premium as long as the market is willing to pay it.
Nike has temporarily suspended Michael Vick from its roster of product endorsers in light of his indictment stemming from dog-fighting activity on a property he owns. Vick’s indictment was a case of very bad timing for Nike as it was about to launch a shoe endorsed by the Atlanta Falcons star QB. Perhaps the timing could have been worse if the indictment came down just after the shoe had been released.
The sticky situation in which Nike finds itself is a reminder of the perils of associating a brand with a person or entity outside the walls of your organization. The rationale for hiring an endorser is to take advantage of the endorser’s brand associations with the expectation that his or her associations transfer to the brand. Unfortunately for Nike, the associations transferred can be positive or negative. A “morals clause” can be written into endorsers’ contracts to shield companies from situations like the one that Vick’s indictment presents for Nike, but there is still a risk that a brand can be damaged or at least embarassed by an endorser’s actions.
The exposure and popularity benefits a celebrity endorser can bring to a brand must be weighed against the loss of control the marketer relinquishes by associating with someone beyond its direct control. The consequences are even greater when the relationship between the marketer and endorser go beyond name or likeness association and products or entire product lines are developed around the endorser. Link
NASCAR has enjoyed tremendous growth in popularity, television audiences, and sponsorship revenues over the past decade. The growth seems to have hit a bump in the road (make that track) as a combination of higher prices for race tickets and gasoline are negatively impacting attendance and leading many race fans to stay home and watch on TV. Check that, they’re not watching on TV either, as ratings for NASCAR Nextel Cup races have been down from 2006 for almost every race so far this season.
If NASCAR didn’t have enough worries with fan interest, it finds itself entangled in a major sponsorship controversy. NASCAR is fighting to keep AT&T from being a sponsor of driver Jeff Burton and Richard Childress Racing. Burton was sponsored by Cingular Wireless, but when the brand was replaced with the AT&T name the company naturally wanted to shift its association with Burton and RCR to the AT&T brand. NASCAR has 700 million reasons to keep out AT&T as a team sponsor, as in the $700 million, 10-year deal NASCAR has with AT&T rival Nextel. Sport properties should take steps to protect their sponsors from having to fight for the audience’s attention. After all, breaking away from media clutter is one of the attractions of sponsorship as a marketing communications vehicle.
It is admirable that NASCAR is vigorously defending the value of its property and seeking to protect category exclusivity for Nextel. However, preoccupation with this issue could be more harmful than helpful. Despite Nextel’s established association with NASCAR, the fact remains that many NASCAR fans are AT&T customers. Taking aggressive measures to shut out fans’ wireless provider may be received negatively. Management focus would seem to be better utilized by examining how to rekindle fan interest in attending NASCAR races and watching races on TV. Otherwise, NASCAR will continue to lose a point of difference it has enjoyed over other professional sports: its intimate relationship with the everyday fan. Other major leagues are viewed as having “sold out” to the interests of corporate sponsors and media partners. While NASCAR may still have an advantage when it comes to fan access to the sport, it could easily lose that advantage if becomes too distracted with sponsorship issues. Link