MARKETING PLAN EXPLORER

Copyright 2002, Professor Jerome M. Katrichis

 

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Sports Authority Example

 

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III. External Situation Analysis

 

A. Nature of Demand

The level of interest and participation in a sports activity, governs the demand for and the division of the sporting goods industry. The amateur market includes sports enthusiasts and those individuals that participate in sports on a leisurely basis, while the professional market includes individuals that participate in organized team sports. Organized team sports have direct relationships with sporting goods retailers or even the manufacturers of sporting goods products such as clothing, footwear, and equipment. Members of organized team sports do not purchase goods through the same channels as the amateur market. Oftentimes, a contractual relationship exists between these groups and the sporting goods retailers or manufacturers requiring the players/coaches to promote the company’s products. In return, the athletes and coaches are compensated with promotional items. Marketing to this segment, as a result, is on a different scale with varied product offerings based on the type of sport played by the team. Therefore, this last group will not be included in the discussion that follows.

 


Exhibit 10.

 

According to the National Sporting Goods Association (NSGA), persons under the age of 18 totaled 72 million in 2000 or 25% of the U.S. population. Further statistics from the NSGA indicate that people between the ages of 25-44 comprise 30% of the U.S. population or approximately 85 million. Finally, those individuals who are 45 and older comprise 35% of the population or 99 million people. Those between the ages of 18-24 comprise 5% of the population, but will be excluded from this analysis due to their small population percentage.

 

 

 

 

 

 

 

 


Exhibit 11.

 

 


Within the amateur market, differences exist in buying behavior between age categories. Age segmentation is noted in Exhibit 10. The amateur market will be analyzed through two segments, sports enthusiasts and the leisure group. Additional details will be given by age group.  

 

Sports Enthusiasts Segment

 

Sports enthusiasts can be defined as those individuals participating in a sports activity at a minimum of 5 hours per week. This group can also include those individuals that play on team sports either in school or for recreational purposes. It is estimated that this group is comprised of 60% males and 40% females.

 

People who fall under the category of the serious sports enthusiast, primarily purchase sporting goods equipment for their own recreational purposes, such as organized sports leagues to which they may belong or simply for staying in shape on a daily basis.  These “serious sports enthusiasts” are selective in choosing their sporting goods retailers for their equipment and clothing purchases because they value an extensive selection of quality name brands through the type of channel that is most suitable to their needs. They also appreciate strong customer service for any questions or concerns they may have when making their purchases.

 

This group of serious sports enthusiasts frequently purchase sporting goods equipment and clothing merchandise.  They have to compensate for the wear and tear from daily fitness routines and weekly organized team sports; therefore, tend to use their product more often because the product does not last as long. Footwear and apparel is discarded upon end use, while equipment  purchased by serious sports enthusiasts is either resold, discarded, or handed down to someone else for future use. The serious sports enthusiasts usually do not wait for price reductions to make their sporting goods purchases.  They generally buy from the same company and purchase the same brands that best suit their needs.  They also read news articles and updated information about the sports they are interested in and the latest equipment available for that sport. 

 

The serious sports enthusiasts purchase a wide range of fitness and team sport equipment.  In general, there are minimal product service requirements in the sporting goods industry with the exception of electronic equipment, such as treadmills and stairmasters. Customers who are serious sports enthusiasts have customer service requirements such as returns and exchanges to maintain customer satisfaction.

 

Under 18 Age Group

 

The NSGA reports that 72% of people under the age of 18 made team sports purchases last year. Survey results indicate that this segment purchases equipment and other merchandise on average between one and four times per month. Purchases by this group are primarily made by parents or by the individual on Saturdays and Sundays.  Quantities purchased will significantly vary depending on the sport.  Young consumers are part of the dissonance attribution hierarchy level. They typically make impulse purchases and are heavily influenced by brand recognition.  Television advertisements and word of mouth trends have a strong affect on this market.  They follow popularity trends and are brand sensitive for footwear and apparel, while they are more quality sensitive when making equipment purchases.  They tend to make their purchases for footwear and apparel at malls and large format stores while for equipment, they make purchases at specialty and traditional sporting good stores.  Typically only one store is visited before purchasing a product. 

 

25 – 44 Age Group

 

In the 25-44 age group, 14% of the population made team sports equipment purchases in 2000, while 44% made fitness equipment purchases. Survey results indicate that people in this segment purchase equipment and other merchandise on the average of once per month. They typically make high involvement purchases by researching the product through consumer reports with the exception of low priced items. This group visits more than one store to compare selection and prices.  Purchases are made Monday through Friday during the evening hours and this segment primarily purchases for themselves.  Quantities may vary depending on the sport. This segment purchases a wide range of fitness equipment.  The majority of their equipment purchases are made for in-home use, while footwear and apparel purchases are primarily used outside of the home. Equipment that is frequently purchased for home use commonly consists of aerobic and non-aerobic workout videos and equipment, which includes treadmills, stationary bicycles, steppers for aerobics, weight benches, dumbbells, and free weights. This segment is quality sensitive for equipment, apparel, and footwear.  They tend to make their purchases at specialty and traditional stores.

 

 

 

 

45 and Older Age Group

 

Approximately 4% of individuals aged 45 and older, made team sports equipment purchases in 2000 according to NSGA, while 46% of the age group made fitness equipment purchases. Survey results indicate that people in this segment purchase equipment and other merchandise on an average of once per month. Market research indicates that the majority of purchases are made Monday through Friday during the daytime or evening hours. This segment primarily purchases for themselves.  Quantities may vary depending on the sport. This segment is quality sensitive for equipment, apparel, and footwear. They prefer to purchase high end products.  They primarily make their purchases at specialty stores. 

 

Leisure Segment

 

Individuals who participate in sports on a leisurely basis only do so when they have the opportunity or desire. It is estimated that the gender composition of this group is equal between males and females.  This group primarily purchases sporting goods equipment that suits their weekend or hobby activities. They are selective in choosing a sporting goods store and prefer the large format stores because they are able to offer, under one roof, an extensive selection of merchandise for sports and leisure activities that ordinarily are associated with specialty shops and pro shops.

 

The leisure group does not need to purchase equipment or clothing as often as the serious sports enthusiasts; therefore, their products tend to last longer.  This segment tends to purchase items priced on sale or clearance. Members from the leisure group typically consume sporting goods one to four weeks per month, which will vary depending on the season.  Consumption increases during the summer months for this group.

 

Customer service requirements for this group are not as demanding as for the serious sports enthusiasts segment. 

 

Under 18 Age Group

 

People under the age of 18 primarily purchase sporting goods products for traditional sports such as, baseball, basketball, soccer, and hockey. They typically make sporting goods purchases once every six months.  This group does not typically “price shop” but rather purchases merchandise at the first store that they visit. These purchases are primarily made by parents or by the individuals themselves on Saturdays and Sundays.  Quantities purchased will significantly vary depending on the sport. Young consumers are part of the dissonance attribution hierarchy level. They typically make impulse purchases and are heavily influenced by brand recognition.  This group prefers higher-end brand name products specifically for footwear purchases.  Television advertisements have a strong affect on this market. This segment is price sensitive for sporting equipment and is brand sensitive for apparel and footwear. They tend to make their purchases at mall based, large format and mass merchandise outlets.

 

25 – 44 Age Group

 

Some activities in which this group participates in and make purchases for include camping and golf.  The NSGA reports that 35% of people between the age of 25 – 44, purchased camping equipment in 2000 and 32% purchased golf equipment. Market research indicates that other sports popular with this group include: basketball, soccer, running, and skiing.  People in this segment make sporting goods purchases one to two times per year. This group usually reads articles and searches vigorously for discounts and coupons before they make their purchases. They usually visit more than one store before making a purchase. These purchases are primarily made for family members or themselves. The majority of purchases are made on Saturdays and Sundays or during the evening hours during the week.  Quantities purchased will significantly vary depending on the sport. This segment is price sensitive for equipment, apparel, and footwear.  They typically purchases at large format and mass merchandise stores.

 

45 and Older Age Group

 

The NSGA reports that 52% of this group purchased golf equipment in 2000.  Market research indicates that other favorite sports activities for this group include fishing and swimming. People in this segment make sporting goods purchases one to two times per year. This group usually reads articles and searches vigorously for discounts and coupons before they make their purchases. They usually visit more than one store before making a purchase. The purchases are primarily made for family members or themselves during the daytime or evening hours, Monday through Friday.  Quantities purchased will significantly vary depending on the sport.  This group is price sensitive when purchasing equipment, apparel, and footwear.  They tend to shop at large format and mass merchandisers when making their sporting goods stores.

 

 

 

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