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Arena Football in London, Ontario

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Arena Football in London, Ontario Arena Football in London, Ontario Group Research Report Carleigh Lewis Danielle Greene Kyle Wingrove Sean Wood Chris Perrin Daniel Rahman Secondary Market Research Darren Johnson November 19, 2010 2 Table of Contents Table of Contents…………………………………………………... 2 Executive Summary…………………………………………………3 Introduction………………………………………………………… 9 Detailed Findings and Marketing Implications……………………..10 Category Analysis………………………………….. 10 Consumer Analysis………………………………….14 Porter‘s Analysis…………………………………….20 Competitor Analysis…………………………………26 London Knights……………………………………………. 26 Western Mustangs………………………………………….. 27 London Beefeaters…………………………………………. 28 Toronto Argonauts…………………………………………. 29 Hamilton Tiger-cats………………………………………... 30 Detroit Lions……………………………………………….. 31 Buffalo Bills………………………………………………... 32 John Labatt Centre…………………………………………. 33 London Music Hall Entertainment Complex………………. 34 Grand Theatre……………………………………………… 35 London Ski Club – Bolar Mountain……………………….. 36 OLG – Western Fair Raceway…………………………….. 37 Cineplex Odeon……………………………………………. 40 Mustang Drive-in Theatre………………………………….. 41 Fleetway……………………………………………………. 42 PEST Analysis………………………………………43 Limitations…………………………………………………………..45 Conclusions and Recommendations……………………………….. 46 Appendices…………………………………………………………. 47 References………………………………………………………….. 53 3 Executive Summary Before completing conducting research to complete this report, five research objectives were determined: - Researching the size, growth rate, profitability, product life cycle stage, sub- categories, and seasonality/cyclicity - Research specific consumer needs and effective ways to segment the consumer market - Research the risks associated with new entrants, substitutes, customers, suppliers, and rivals - Research the specific competitors of an AFL expansion franchise in London, Ontario - Research the political, economic, social, and technological factors affecting the proposed business environment It was also determined that this research would be conducted primarily through print and web based resources. Through completing this report, many topics were discussed: In this report, a category analysis was conducted. In this analysis, category measures relating to the size, growth rate, profitability, product life cycle stage, sub- categories and seasonality/cyclicity were studied. In these, it was found that the John Labatt Centre‘s seating capacity in comparison to the average attendance of an AFL game. This however, could present a benefit, as it could influence a demand for the product, which will raise the value of tickets and potentially aid in expanding the consumer base. There are also a variety of sub-categories that the entertainment industry has to offer, which defines the competition that an AFL expansion franchise in London, Ontario is to face. The growth of the AFL is a positive indicator of further expansion, as the only way to reach more consumers is to expand to untapped markets, such as London, Ontario. Another encouraging stat is that the population of London, Ontario far exceeds the population of Spokane, Washington, which suggests that London, Ontario is an appropriate market size for this form of entertainment. In this report, a consumer analysis was conducted. In this analysis, the consumer needs relating to customer and customer segments, substitutes, and competitors, and how this market can be segmented (geographic, demographic, benefit, behaviour/usage, buying situation, and psychographic) were studied. In these, it was found that the success and failure of this venture is based on the ability for this service to satisfy the entertainment needs of the target market, influencing them to spend their disposable income on means of entertainment provided by the AFL over the other options available to them. An important trend to consider is how the target market seeks information, where web-based resources are becoming more commonplace in today‘s society, specifically in Canada (Internet Usage, Broadband, and Telecommunications Reports, 2010). 4 In this report, a Porter‘s analysis was conducted. In this analysis, the risks relating to the 5 Force‘s (new entrants, substitutes, customers, suppliers, and rivals) were studied. In these, it was found that there are few risks associated to the new entrants, subsidiaries, customers, suppliers and rivals. Among these forces, there are many present advantages associated with introducing an AFL expansion franchise into the market. These advantages provide an outline of the steps an AFL expansion franchise would have to take to be successful in this market. In this report, a competitor analysis was conducted. In this analysis, each competitor was individually studied. These competitors include: London Knights: The London Knights are a major competitor to arena football in London, Ontario. They currently compete at the John Labatt Centre, which is the proposed venue for the arena football team. They have experienced a lot of success lately, and the team is well beloved in London, which will pose difficulties when introducing a new rival. Western Mustangs: The Western Mustangs are an interuniversity football team that serves as entertainment for local football enthusiasts; they are one of the highest levels of football stationed in London, Ontario. Introducing a new football franchise will directly affect both teams, as fans will need to make a decision of who to see and which team they favour over the other. To be successful, an arena football team would need to lead their target market to favouring their franchise over the Western Mustangs football team. London Beefeaters: The London Beefeaters are a junior football team that serves as entertainment for local football enthusiasts; they are the one of the highest levels of football stationed in London, Ontario. Introducing a new football franchise will directly affect both teams, as fans will need to make a decision of who to see and which team they favour over the other. To be successful, an arena football team would need to lead their target market to favouring their franchise over the London Beefeaters football team. Toronto Argonauts: The Toronto Argonauts are an obvious competitor of an arena football team in London, Ontario, as they are also a form of football entertainment that is striving to compete with the popularity of the NFL. They pose as strong competition because they are Canadian based, unlike the Detroit Lions and Buffalo Bills. The level of talent is very similar between the two, and both brands hold unique characteristics that separate them from the rest of the competition. The ultimate goal is to convert local football fans consuming patterns, from that of traveling to view games to viewing games in their hometown. 5 Hamilton Tiger-cats: The Hamilton Tiger-cats are an obvious competitor of an arena football team in London, Ontario, as they are also a form of football entertainment that is striving to compete with the popularity of the NFL. They pose as strong competition because they are Canadian based, unlike the Detroit Lions and Buffalo Bills. The level of talent is very similar between the two, and both brands hold unique characteristics that separate them from the rest of the competition. The ultimate goal is to convert local football fans consuming patterns, from that of traveling to view games to viewing games in their hometown. Detroit Lions: The Detroit Lions are a competitor of a potential arena football team in London, Ontario, as it is a team that competes at the highest level of the featured sport. Many football fans in this area are fans of the Detroit Lions, and are dedicated to that football franchise, specifically. This poses an issue to placing an arena football team in this area, as fans may prefer to invest in tickets to a Lions game over the local alternative. This is, however, something that can be overcome through the test of time and strategic marketing. The goal over time is to have consumers prefer to purchase tickets to the local arena football team, rather than purchase tickets and travel to watch an NFL football game. Buffalo Bills: The Buffalo Bills are a competitor of a potential arena football team in London, Ontario, as it is a team that competes at the highest level of the featured sport. Many football fans in this area are fans of the Buffalo Bills, and are dedicated to that football franchise, specifically. This poses an issue to placing an arena football team in this area, as fans may prefer to invest in tickets to a Bills game over the local alternative. This is, however, something that can be overcome through the test of time and strategic marketing. The goal over time is to have consumers prefer to purchase tickets to the local arena football team, rather than purchase tickets and travel to watch an NFL football game. John Labatt Centre: This is the venue in which the arena football team is being proposed to compete in. The competition presented by the other events at the John Labatt Centre is a very strong. It is imperative to establish a competitive advantage over these specific competitors, as the key to succeeding relies on consumers choosing arena football over whatever else the John Labatt Centre has to offer. London Music Hall Entertainment Complex: This competitor presents its services to a wide range of consumers, of all ages and genders. Its performances are all unique from one another, constantly repainting the companies image. This competitor presents the target market of an arena football team an alternative mode of entertainment.
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