Report:

Analysis of the

Arena’s Marketing Activity

Samuel Taylor

ID: 6858834

Contents:

Marketing Environment______3-4

Current Segmentation, Targeting and Positioning Strategies ______4-5

Existing Marketing Mix Strategy ______5-6

Recommendations______6

Reference list______7

2

Marketing Environment

The marketing environment is split in two parts: macroenvironment and microenvironment. Fahy and Jobber (2015:335) define the macroenvironment as a number of broader forces that affect the company and other actors in the environment. For example, technological, political, economical and social are measured using the PESTEL model. The microenvironment is defined by Fahy and Jobber (2015:335) as the actors in the firm’s immediate environment that affect its capability to operate effectively in its chosen markets; examples include customers, suppliers, distributors and competitors.

Looking at the Ricoh, we’ll firstly examine the microenvironment beginning with the competition it faces. The entertainment industry has a wide variety of competitors from watching tv on the sofa, going to another venue/club or a completely different sport/hobby. Therefore, during Wasps rugby games and City FC (CCFC) home games, the focus is to host a top quality matchday experience as the most popular aspect of attending games is the atmosphere according to 68% of people and 56% say its about having the day out with family and friends (Mintel, 2017). To create a USP, Wasps hosts a fan village before home games where there are activities, food and drink which ‘is fun for all the family’ (Wasps, 2017). With this idea, the Wasps can identify and target several customers as the fan village hosts different attractions with the aim to have something for everyone. The Ricoh ensures that it’s partners and suppliers that will satisfy customers by linking with brands such as Purity Ale and Heineken which are considered a more high-end alcoholic beverage. Again, increasing the enjoyment of the experience that customers would receive whilst at the stadium. Businesses can also act as a supplier for the Ricoh by hiring out conference rooms and suites and provide a new segment of customers therefore widening the target audience of the Ricoh. However, business involvement within the Ricoh Arena would be dependent on macroenvironment factors like the economy and its success relation to profit and revenue. If businesses don’t have disposable income for conferences or corporate suites, then demand declines and would lead to these rooms possibly being remarketed at a lower price. Likewise, this applies to consumers who would visit the Ricoh to watch Wasps or CCFC whose attendance would depend on their disposable income. Next, Kitchin (2007) shows that the developments in technology allows for an increased ability to administer different products and offerings. This is shown by the Ricoh as technology has allowed for digital room keys to be used at the on-site DoubleTree Hilton hotel, the first Hilton hotel to do so in the country (Ricoh Arena, 2017a). Furthermore, concerts can be held on the pitch within the sporting off-season by transforming the pitch into a standing area. The increased audience thus appeals to bigger artists in the music industry such as Jess Glynne, and Robbie Williams who hosted a crowd that would’ve been too large for the Ericsson Exhibition hall. The resulting impact is that the Ricoh Arena has been able to host 19 artists across 4 stages over an 18-month period leading to 150,000 being attracted (Sanders 2017). One issue however is the legal matter of any performances should be fully complete and finished before 11:00pm to limit noise disruption to the community.

3

Current Segmentation, Targeting and Positioning Strategies

Consumer segmentation is broken down into Behavioural, Psychographic and Profile (Fahy and Jobber 2015:119). But numerous conditions need to be met to ensure that segmentation can be effective within a marketing strategy such as clearly defining the characteristics of identified members of the segment (Dawson 2015). Fahy and Jobber explain that these conditions are effective, measurable, accessible, actionable and profitable (2015:127). Simply, the Ricoh Arena segments itself into business, entertainment and sport which allows it to then approach relevant target markets. Yet, looking at how they sell for entertainment events, they may segment this into those who would purchase tickets for a special occasion such as a birthday, favourite artist or a Christmas present. Whereas, Wasps and CCFC, observe the usage of the games by fans by examining the typology of sports fans. Hunt, Bristol and Bashaw (1999) classified fans into 5 categories: temporary, local, devoted, fanatical and dysfunctional. Wasps and CCFC would want to market to progress fans into, at least, devoted fans where being attached to the club would influence resulting behaviours e.g. buying merchandise and attending games regularly (Hunt, Bristol, Bashaw 1999:445). This links to the psychographic factor of lifestyle where for sports teams, they aim to grow a large fanbase wherein they gain larger ticket and merchandise revenue. Profiling the customers can be done by identifying social classes, so for the DoubleTree by Hilton hotel, they segment this towards business class members of society however entertainment and sports events are available to all social classes. In addition, Fahy and Jobber (2015:122) state that household spending is significantly influenced by children, showing that there is scope for the Ricoh to use this to capture customers. Examples from within the Ricoh would be community programs ran in schools by Wasps and Sky Blues in the Community. Based on the variety of segments, it’s noted that the Ricoh Arena would use differentiated marketing to reach a target market. Kotler (1980) suggests that for targeting to become successful, three main pieces of criteria must be taken into consideration: size and growth, structural attractiveness and the company’s objectives and resources. For the business class segment, conferencing and corporate hospitality would be large and attractive as this would have a higher sale price than a single matchday/event ticket. The structural aspect of this is appeals as there are very few substitutes for hosting conferences, there is are a high amount of businesses which would provide competition thus maintaining demand. Plus, the threat of a new entrant into the industry is low due high start-up costs acting as a high barrier to entry. A resulting advantage is benefitting from economies of scale as costs are spread over each sector; business, hotel, sports and events therefore reducing any risk of future investments as costs could be covered (adapted from Fahy and Jobber 2015: 128). Alternatively, a disadvantage could be the confusion caused over what the Ricoh is as a product, for example, as Wasps are the owners, people may perceive the venue as a rugby stadium and not a conference centre. Likewise, as CCFC play their home games there along with other international football matches, it then could be viewed as a football stadium and not a concert venue.

4

This could be avoided with a strong positioning strategy that reaches the consumers mind with a clear idea of what their brand is. The Ricoh’s simple tag line ‘Sport|Business|Entertainment’ clearly highlights what the venue is about and providing the assumption that the order of those being the priority of the arena. It provides clarity; clear message, consistency; themes won’t change, credibility; consumers know what to expect, competitiveness; few venues are able to offer the same. These four criteria are what Fahy and Jobber (2015:132-133) use to determine a successful position in the market.

Existing Marketing Mix Strategies

The marketing mix, defined by Fahy and Jobber (2015:335), is a framework for the tactical management of the customer consisting of product, place price and promotion; for services this also includes people, processes and physical evidence. A product can be broken down into three levels: core product, actual product and augmented product (Kotler et al. 2005). An example of this at the Ricoh would be the selling of replica shirts by Wasps and CCFC. The core product is the shirt that fans receive to wear to matchdays or casually. The actual product focusses on the material of the shirt and the size, this can also mean the quality of it and what packaging it’s presented in. Finally, the augmented product may be the customer service that’s given or the delivery speed to their door; having the option for name printing on the reverse is a practical example in relation to the replica shirt. Music events are also products of the Ricoh; it could also be a service due to some of the characteristics. The first being perishability, as the consumer can’t keep it once it’s been used, once the music is played, it’s consumed. Therefore, it also makes it inseparable because the consumer and producer can’t be apart for it to be consumed. Price is the most flexible aspect due to offers, discounts etc. so the need for a strategy is crucial to the success of the organisation as it can affect the overall success of the marketing plan (Schwarz and Hunter 2008). Companies should focus on selling value and not the price (Kotler et al. 2005) but could be drawn from this that the price reflects the value as that is how consumers would see it. Gloucestershire Live (2017) undertook a study that showed that Wasps offered amongst the cheapest adult tickets within the Aviva Premiership, £44 being most expensive adult and £17, the cheapest. This is in comparison to the £70 most expensive ticket sold by Bath and £63 by local rivals . The reflection of value to price would be true if Wasps were to incorporate a value pricing strategy however, that they may be using penetration pricing to get into the market in and around Coventry as they are still relatively new to the area. It is important for the place of the venue to be convenient for the consumers so then they have no issues in going to any of the events and can reach the product easily. The Ricoh now has an onsite train station to accompany that they are within a two-hour drive of 75% of the population (Ricoh Arena, 2017b). The Ricoh also boasts its own online ticketing office thereby allowing them to go direct to the consumer, giving them easier access to purchasing tickets. Moreover, it allows them to track the number of visits to the ticket office and to identify a conversion rate of how many customers go on the ticket office website and then 5 go on to buy tickets. Crucially, this is not on all events that they host as businesses can use the Ricoh as an intermediary to sell tickets from their websites. There are five promotional tools used in the promotional mix which are: advertising, personal selling, sales promotion, public relations and direct marketing. Sales promotion can be a good to stimulate purchases and to get people into the arena with the aim to make sure they enjoy the event so much that they’ll return. One example is the Wasps offering a discount for Coventry University students thus taking advantage of the new surge of students entering the city. It is also key to use the media and public relations to try and boost awareness. This was shown with the use of the Rugby World Cup in 2015 which gained mass media attention where the Premiership division saw attendances rise 12% and attendances averaging above 14,000 for the first time (Premiership/Mintel, 2017).

Recommendations

Taking all these findings into account, the diversity of the Ricoh opens many possibilities for future investment and attraction for customers. Although, to increase their global position, the Ricoh ought to build up more of a brand image that transforms it into an increasingly regular household name. An extension of this has already taken place within Wasps as they launched a netball team thereby reaching into that community and allowing a more diverse range of people to get involved with the club. In terms of the Ricoh, they could use their promotional mix to help leverage sponsorship to create a synergy leaving a greater impact on consumers (Smith and Stewart 2015). There is scope for this on a worldwide scale by teaming up and expanding with nearby Jaguar Land Rover. This is already a well established global brand hence giving opportunity to use their partners as clients for conferencing or by giving employees within the company competitions to win tickets for events. Consequently, a long-term relationship can be formed which is pivotal to cementing a brand plus giving customers faith that the Ricoh Arena is a high-quality venue for many occasions. A knock-on effect is that word-of-mouth advertising then intensifies, creating long term benefits plus proving that the marketing campaign is successful. To reach more diverse customers, the Ricoh Arena could expand away from hosting business exhibitions and explore reaching the ethnic minorities and holding events that can attract those communities. For example, building on the polish choir that performed in front of a packed-out crowd (Ricoh Arena 2016) is something that could be considered. Possibly, in this example, the Polish media could’ve got hold of this event hence generating media exposure abroad thus increasing global awareness for the Ricoh. With the magnitude of the venue, there is scope for many opportunities that can be looked in to that would make sure that the Ricoh Arena becomes a world-renowned venue with world-class facilities.

6

Reference List

Dawson, J. (2015). The Marketing Environment (RLE Marketing). 1st Edn. : Routledge

Fahy, F. Jobber, D. (2015). Foundations of Marketing. 5th edn. Berkshire: McGraw-Hill

Hunt K.A, Bristol, R.T., Bashaw R.E. (1999) ‘A conceptual approach to classifying sports fans’. Journal of Services Marketing, [online] 13 (6), 439-452. Available from [15 November 2017]

Iles. R. (2017). ‘How ’s matchday ticket prices compare to other Premiership clubs’. Gloucestershire Live. [online] 21 July. Available from [17 November 2017]

Kitchin, P. (2007). ‘Understanding the Sport Marketing Environment’. in The Marketing of Sport. ed Beech, J. Chadwick, S. Harlow: Prentice Hall, Pearson Education, 61-82

Kotler, P. (1980). Marketing Management: Analysis, Planning, Implementation and Control. New York: Prentice Hall.

Kotler, P. Wong, V. Saunders, J. Armstrong, G. (2005). Principles of Marketing. 4th Edn. Harlow: Pearson Education Ltd.

Lightspeed/Mintel (2017) Spectator Sports, UK – Infographic Overview. [online] available from [17 November 2017]

Premiership Rugby/Mintel (2017). Spectator Sports - Market Segmentation [online] available from [17 November 2017]

Ricoh Arena (2016) Polish Choir preparing for biggest crowd ever. [online] available from [17 November 2017]

Ricoh Arena (2017a). Digital room key introduced at Ricoh Arena. [online] available from [14 November 2017]

Ricoh Arena (2017b). Ricoh Arena brochure. [online] available from [17 November 2017]

Sanders, I. (2017). ‘City of Culture bid: Coventry’s Ricoh welcomes 1.4million visitors a year’ [online] 2 November. Available from [15 November 2017]

Shwarz, E.C. Hunter, J.D. (2008). Advanced Theory and Practise in Sport Marketing. 1st Edn. Oxford: Elsevier

Smith, A.C.T. Stewart, B. (2015) Introduction to Sport Marketing. 2nd Edn. London: Routledge

Wasps (2017). Fan Village Experience [online] available from [12 November 2017]

7