How Does The Sports Industry Affect Market Share?
Sport, undoubtedly, possesses great power. It has the power to unite towns, cities or nations behind a team or athlete and capture our imagination in a way little else is able to do.
Its impact goes beyond the sheer emotional, though. Sport, in fact, has the ability to make a very real economic impact on those towns, cities and nations and the companies that operate within them. In the right place at the right time, a business is able to tap into the power of sport and expand its share of the market.
Here’s how sport can have this effect:
The first thing you must consider is the sheer size of the audience that major sporting events command. This audience is often global in a way that only the biggest of box office films can match – and crosses a whole host of different target markets in a similarly rare way.
This audience makes sponsorship deals particularly lucrative. Companies want their name to be associated with success and quality – and top level sport carries that association in the mind of the customer. Individual brands – and indeed whole markets – can benefit from a big boost by this association, one so seismic that it can be measured by financial indices. The ten biggest companies in Scotland, for example, benefitted from a 7.5% rise in share price during Andy Murray’s victorious Wimbledon tournament in 2013, a move that will have helped them all claw a valuable chunk of market share in their favour.
Trendsetting and emulation
Sport is also influential in the way it inspires others to want to mimic the achievements of their heroes. This can be particular strong for brands who sell the clothing worn by the biggest names – Nike, for example, benefits hugely from this – or manufacture replica shirts worn by fans in their droves across the world. Making the clothes for the best sports teams in the world helps to take a share of the market for these clothing companies.
Another avenue open to a brand is to get a leading sporting star to endorse their products. By attracting the likes of David Beckham or Cristiano Ronaldo to a brand, a little of that sporting stardust is added to a product. That too can help to set a brand apart from rivals in tough-to-crack fashion markets, for example – helping one to gain a greater share of the market. There’s certainly a reason for H&M teaming up with Beckham and it will hope that the results will show up in its share of sales in that sector.
The sporting world is supported by a huge infrastructure. Stadium construction, transport for fans, hospitality and catering all offer associated opportunities for business. Many of these functions come with multi-million pound contracts and the chance for a business to succeed and edge ahead of rivals in their sector.
With a huge audience and an association with quality, top level sport is something that any business should want to rub shoulders with. Sponsorship, endorsements, infrastructure or the sale of the kit and equipment used by sporting stars offer brands an opportunity to forge ahead and steal a greater share of their respective markets.