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NBA Market Selection
1. Bryan Davidson NBA Market Selection
In professional sports, teams must be able to make market selection decisions in
order to segment the different markets that they may appeal to, choose their targeted
consumers within those markets, and position their product (team) against their
competition. Each team must figure out their own unique way to appeal to their markets,
and establish their own target fan base in order to sell their product. The teams in the
National Basketball Association, such as the Phoenix Suns, New Jersey Nets, and the
Chicago Bulls, do a great job at making their market decisions in ways that fit their
individual products. These teams, being from the east coast, mid-west, and west coast, all
have major similarities and differences in the way they segment, target, and position
themselves and their markets, helping them to be three of the most successful teams (in
terms of revenue, popularity, and ticket sales) in the entire league.
The Phoenix Suns were founded in 1968, and were the first professional franchise
to be located in the state of Arizona. In the team’s first four seasons in the NBA, they
made the playoffs only one time, but finally had their first winning campaign during the
1975-1976 season; shocking the world by making it to the NBA Finals. Although they
lost in six games, the trip to the Finals was the start of the team’s success that has lasted
until present day. The Suns have the fourth-best all-time winning percentage in the NBA,
winning 56% of their games, and making two appearances in the NBA Finals. In fact, the
Suns have the most overall wins in NBA history for a team that has never won an NBA
championship (Phoenix Suns 2011). However, even with no titles, the Suns are still one
of the most popular & successful teams in the league, thanks to their award winning
marketing team.
It is the Phoenix Suns’ sales and marketing team’s goal to “Set the standard by
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which excellence is measured throughout the sports industry” (Forro p. 3). The Suns’
sales and service culture is recognized as one of the leaders in sports industry. They have
set up a program known as S.T.A.R.S., which focuses on sales techniques, sales culture,
and new business programs that help them close deals. Like most NBA teams, gate
revenue is the most lucrative form of revenue for the Suns. That is why their sales staff
makes over “100 cold sales calls a day, host personal in-center client tours, establish
relationships with perspective clients through face-to-face meetings, and promote the
Suns product in every way imaginable” (Forro p. 5). The Suns staff prides themselves on
catering to their client’s specific needs, while always looking for ways to add value to the
overall fan experience when they attend a game. However, it is how the Suns have
segmented, positioned, and targeted the market that truly makes them stand out from their
competition.
In 2004, the Phoenix Suns had a team makeover, bringing in players such as Steve
Nash and Quinten Richardson, and head coach Mike D’Antoni. Along side Amar’e
Stoudemire, Joe Johnson, Shawn Marion, and Leandro Barbosa, the Suns jumped out to a
quick start, heading towards one of the most successful seasons in team history (Phoenix
Suns 2011). During the offseason when the team made all of the transactions that they
did, it was critical that the Suns’ sales and marketing teams let the Phoenix community
know what was going on. They had to reposition themselves in the marketplace, establish
a new target market, and segment the different potential markets in order to see the type
of success off the court (ticket sales, sponsorship, merchandise sales) that they felt they
were going to have on the court (Forro 2011). The Suns were coming off one of their
worst seasons in team history, and knew that they had a lot of work to do to prove to the
fans that they were ‘for real’ this time around.
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In order to start their campaign that a new era in Phoenix Suns basketball had
arrived, it was critical for the Suns’ marketing team to segment the Arizona market. They
needed to identify the different groups of consumers within the saturated sports
marketplace (Suns, Arizona Cardinals, Arizona Diamondbacks, Phoenix Coyotes, ASU,
University of Arizona) based on their common needs and demands. To do this, the Suns
sales team created numerous surveys and questionnaires that they gave out at local
Phoenix area ‘hot spots,’ as well as at Diamondback games, both main college campuses,
and through online email blasts. These surveys were designed to get substantial
demographic, socioeconomic, psychographic, geographic, behavioral, and benefit data,
helping the Suns to see what type of people had interest in coming to Suns games, who
had come in the past, and who new potential fans may be (Donavan 2006). After handing
out the surveys, and getting a substantial amount of feedback (45% of people filled them
out) the Suns were able to compile the data, and establish who exactly they needed to
target.
After assessing and segmenting the Arizona sports marketplace (differentiating
the potential fans based on their demographics, behaviors, and likelihood to attend Suns
games) the Suns’ next step was to choose a particular segment(s) that would allow them
to most efficiently and effectively attain their marketing goal of increasing the excitement
and ‘hype’ for the new era of Phoenix Suns basketball. The first major target market that
the Suns established was families with children. The suburbs of the regional community
that is near downtown Phoenix consist of an enormous population of young families. The
results of the Suns’ surveys showed that these families had a great deal of interest in
coming to Suns home games, but felt that they would attend even more games if “The
stadium catered more to our children’s needs” (Donavan 3). The Suns’ second target
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market that they established was “empty nesters that make over $200,000 a year”
(Donavan p. 2-3). These potential customers require special treatment before, during, and
after games, and the Suns felt that by catering to their needs, it would enhance revenues
greatly.
During this time, the team decided to renovate their stadium, spending “$70
million to include playground areas, a courtside club, and retail stores” (Donavan p. 2).
These ‘upgrades’ catered specifically to the Suns’ two main target markets, in hopes that
they would provide more incentives to attend games. The new amenities that the Suns’
stadium now offered provided families the opportunity to use the playgrounds and shops
before, during, and after games, helping to enhance their children’s game day experience.
Also, the courtside club and enhanced luxury boxes catered to the high-income, upper-
class fans so that they could utilize Suns games for networking opportunities and luxury
accommodations. Lastly, the Suns marketing staff also utilized a color-geographic grid of
the Phoenix region, depicting where the target markets live. This allows them “To send
promotional campaigns directly to the niche markets” (Donavan p. 3). The target markets
that the Suns were able to establish back in 2004 are still prominent today, helping to
make the Suns one of the most successful NBA teams in terms of ticket sales & game
attendance.
Once the Suns were able to segment and target specific groups of fans in the
Phoenix sports marketplace, it was critical that they positioned their brand and image in
the minds of their new and old consumers. In 2007, the Suns acquired center Shaquille
O’Neal in a blockbuster trade. The deal ended up not only changing the team’s presence
on the court, but off the court as well. Shaq’s aura instantly made the Suns once again the
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‘hot spot’ of Phoenix, quickly increasing attendance back to what it was when the new
era of Suns basketball started. Shaq also was able to help blow up the Suns’ social media
efforts, which had been building for years. He joined Twitter, and instantly had thousands
of followers. Suns players and front office executives quickly followed in his footsteps,
making the Suns one of the most dominant forces on the Internet. As Amy Martin put it,
“Shaq’s Twitter embrace dramatically increased the focus on social media in all corners
of the Suns organization” (Baer 2009). The Suns addition to Twitter was only the start of
their new positioning and marketing blitz that the team is still continuing to conduct.
Following the Twitter phase, the Suns truly became a digital team. The team’s
website features more than 20 different bloggers, including players and front office staff,
and granted fans access to a podcast, a widget, and a Web toolbar. The team also created
its own Facebook page (individual players have their own as well), a YouTube channel,
and launched a Suns Locker Room virtual tour that gives their targeted fans more of a
behind the scenes look at their favorite players. The biggest move that the Suns have
made was creating Planet Orange, which is “The Suns virtual online community that is
focused on user-generated content, with forums, aggregators that combine posts from fan
blogs & Twitter, photo streams, and contests” (Baer 2009). The Suns are the only NBA
team with this type of online community, which has helped them to position themselves
as the most innovative professional sports team in the mind of their consumers.
Since the Suns’ main target market is family with children, they decided that they
needed to take advantage of their Internet presence. Since 2008, they have created an
annual Tweet-Up Night where “Suns fans on Twitter can come to a game for a 33%
discount on tickets, sitting in special Twittervile seats, a Suns Twitter T-Shirt, and a
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souvenir bag” (Baer 2009). The point of these activities is to create a meaningful
experience for Suns fans where they can spread the word to other fans, helping to
increase awareness of the team. Tweet-Ups were great ways for the Suns to “Grow the
team’s social media presence overall, sell tickets, and integrate sponsors” (Martin 2011).
These fan interaction activities have helped the Suns to ‘humanize their brand,’ granting
their fans the opportunity to have personal connections with the team. These connections
have lead fans to have the perception that the Suns are a fan-first organization that is
willing to do whatever it takes to make those fans happy.
Currently however, the Suns have not had the success that they had the past few
seasons. With this underachievement has come a new team marketing approach. It
appears that “Instead of selling fans on the promise of success and hope next season, the
Suns are running out a flashy campaign recounting the glories of yesteryear” (Denny
2011). The Suns did not have the type of gate revenue success this past season that they
had in the past, and are trying to figure out new ways to reposition themselves in the
minds of their target markets. They believe that this type of campaign, promoting the
legacy of the franchise as a whole, will help to reestablish their core fan base, while
helping to inspire hope for future success. These are critical times for the Suns, where
they need to reassess the marketplace, and see who truly their target fans are. As you will
see, they are heading in a different direction then both the New Jersey Nets and Chicago
Bulls; a direction that could be deadly for the team’s overall profitability.
Just like the Suns, the New Jersey Nets franchise has had a long tradition of
success and Hall of Fame players. The team has existed in New Jersey since it’s founding
in 1967, except for playing some of its ABA years on Long Island. Although originally a
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member of the American Basketball Association, where they were known as the New
Jersey Americans, the franchise has been known by its current Nets nickname for the past
34 years. The Nets, the only professional basketball team in New Jersey, were a
successful ABA franchise winning two championships in a three-year span during the
1970s (1974 and 1976). Since that time, the team had struggled for the remainder of the
20th century, winning zero division titles between 1975 and 2001. Finally, with the arrival
of all-star point guard great Jason Kidd, the Nets got back on the right track, winning four
division titles from 2002-2006. The first two division titles during that span, 2002 and
2003, included consecutive trips to the NBA Finals, in which they lost both series as
underdogs to the Los Angeles Lakers and San Antonio Spurs. During the next few
seasons the Nets prolifically struggled, not attaining an above .500 record since 2006.
The Nets have been woeful as of late, including a 12-70 record during the
2009-2010 season. This mark is tied for the fourth worst record for a regular season in
NBA history. The team made many changes to try and prove to fans that these days were
in the past. The Nets hired former Dallas Mavericks head coach Avery Johnson in 2010
to guide them out of the dismal days. Additionally, the front office was overhauled,
hiring former Philadelphia 76ers general manager Billy King as their own GM, and
gaining a new outspoken Russian billionaire owner, Mikhail Prokhorov. Prokhorov has
changed the culture of the franchise during his one year as the owner, and has even
guaranteed a playoff appearance next season. During the team’s abysmal 12-70 season,
the Nets lowered their cost per ticket to $10 per seat to try and give fans more incentives
to come to games. Even with this lowered cost, the team struggled to get high
attendance, rarely filling more than 60% of the 18,500-seat capacity Prudential Center
(Corazza 2010). However, during the past year, the Nets front office personnel and
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strategies have changed tremendously to adapt to their fans’ needs.
Most of Nets marketing focus is internal. The team’s first overall goal and
objective is “to increase the market share and to offer superior customer service” (Varlaro
2011). Even with the Nets’ struggling income due to low game-night attendance, the
team has decided to hire more ticket sales representatives to try and increase personal
connections with customers. The Nets’ main marketing goal is “to increase ticket sales by
5%, generate 500 more ticket season holders and to increase awareness” (Varlaro 2011).
The team plans to achieve these goals by examining flexibility, commitment, people
participation, and suitability. The Nets want to focus on getting more involved with the
community, both in Newark, NJ, and Brooklyn, NY where they will be moving to within
the next three years. The Nets believe that by strengthening their public relations through
community relations, they will also be able to increase their market share. The franchise
intends to host charities with proceeds going toward Brooklyn schools. They want to also
be more financially profitable by offering discounts that combine ticket sales and team
merchandise. These tactics offer more incentives for fans to come to a game, than just the
talent of play on the court itself.
The Nets are also trying to improve their image by playing to the market
strengths, and by frequently wearing their old ABA jerseys. Prokhorov, the Nets’ owner,
wants to also try and prove that he is one of the locals. He rides the train to work every
day, and often sits in the nosebleed section at the Prudential Center in order to further
understand how the average customer feels. The Nets’ marketing team also wants to
increase attendance through higher sponsorship exposure. This includes having more
frequent game day themes (e.g. family night), and more entertaining events at the
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Prudential Center (e.g. concerts, carnivals, other sporting events). The team wants to
become more involved with the community by giving back to & working with local high
schools, colleges, and community youth organizations as well. This would truly allow
them to reach out to their different markets, and help segment those fans that truly want
to attend games.
After reassessing the market place, the Nets have proclaimed three main target
markets that they believe will be the best candidates to promote and market their team to.
The first main target audience that the Nets have established is families with children
between the ages of 8-17, who are predominantly upper-middle class to middle class
Caucasians, and males & females between the ages of 21-45, who are college educated
Caucasian or African-American individuals. The team’s second target audience is middle
class males and females between the ages of 26-39, who have purchased team
memorabilia and attended a few games. The Nets’ last main target audience is lower
class males and females between the ages of 18-45, who are Latinos and Asians with
their GEDs (Varlaro 2011). Prokhorov and the Nets believe that if they are able to
properly reach out to these target markets, it will open up opportunities for the team to
enhance its attendance, and establish new fans who might not have been consumers ever
before or who used to be fans before the team’s recent struggles.
In terms of positioning, the Nets want to use marketing tactics to position
themselves through the market niche of their opponents. For instance, when the Nets host
the Celtics or Heat, they promote the game as the Nets vs. “the big three,” and when they
host teams such as the Lakers, Knicks, or Thunder, they promote the game as the Nets
team vs. Kobe Bryant, or Amar’e Stoudemire & Carmelo Anthony, or Kevin Durant.
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Additionally, as mentioned above, the Nets want to find ways to increase branding by
using their retro ABA jerseys more often, helping to tap into the team’s glory days
(Varlaro 2011). They also want to increase promotions through print and electronic
advertising, social media, email, television, music & radio, and the internet, in order to
appeal to their target markets, and stay up to date with the changing times of society’s
ways of communication.
Currently, the Nets are only one year into fully utilizing their new strategies, and
the results of their marketing plans are still somewhat unknown. However, this season
marked major steps in the right direction with the addition of All-Star guard Deron
Williams, and having a record of 24-58, a large improvement from the year before.
Although they have not had the type of success that the Suns have had as of late, the
future for the Nets looks extremely bright. In terms of talent, the team is one or two
pieces away from becoming a contender again in the Eastern Conference, and it is up to
the Nets’ front office to make sure that their target markets know just how bright the
team’s future really is (New Jersey Nets 2011). During their next few seasons, both in
New Jersey and Brooklyn, the Nets will still have to prove their worth to fans, in order to
become more profitable. The Nets’ struggles on the court during the past five seasons
have been evident in all areas of the franchise. Now the Nets must fully utilize & buy into
the new marketing strategies that they have established. Although they are not where the
Chicago Bulls are just yet, the opportunities are truly endless for the Nets, and fans have
high hopes for seeing the success of the past become evident in the present and future.
Similarly to both the Suns and the Nets, the Chicago Bulls are one of the most
successful franchises in the NBA. Since being founded in 1966, the Bulls have gone on to
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win six NBA championships behind the legendary play of Michael Jordan and the
coaching of Phil Jackson. The Bulls won two three-peat to get their six championships,
and are the only team in NBA history to have a season with 70 wins or more (going
72-10 during the 1995-1996 season). Never loosing an NBA Finals appearance, the Bulls
helped to regain interest in the NBA, and quickly became one of the most popular teams
in the league. Unfortunately, since Jordan’s departure, the team has not had nearly the
type of success that they once had. They had numerous of non-playoff seasons, with a
diminishing amount of ticket sales. Finally in 2008, the Bulls regained their ‘luck’ and
won the Draft Lottery, landing them the best player in the country at that time Derrick
Rose (Chicago Bulls 2011). With Rose, the Bulls are now back in the playoffs and is one
of the most exciting teams in the NBA. The new changes has also lead the Bulls’
marketing team to create new ways to reach out to the team’s targeted markets, helping to
bring the team back to the Jordan years.
After Michael Jordan retired, the Chicago Bulls franchise went through an
extensive rebuilding process. Within this rebuilding process the Bulls had five very
dismal years; recording a franchise worst record of 15-67 during one of the seasons.
They also went through a few different coaches, and often found themselves picking in
the NBA Draft Lottery year after year. During this time, ticket sales were also averaging
a $2,000-$3,000 dip per night. The Bulls tried to use marketing strategies that were
strongly rooted in tradition and what the Chicago Bulls were. Finally, during the
2004-2005 season, the Bulls returned to the playoffs. They were able to do this with the
young nucleus of Ben Gordon, Luol Deng, and Kirk Hinrich. During his rookie
campaign, Gordon became the first rookie to ever win the 6th Man of the Year award, and
Bulls fans once again had hope in their team (Chicago Bulls 2011). However, the team
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continued to struggle, not making the playoffs during the 2007-2008 season, forcing them
to once again have a lottery pick in the Draft, which ultimately landed them Derrick
Rose.
The Derrick Rose and New Bulls Basketball Era officially began in 2008. During
this time, the Bulls have made the playoffs three straight years, and are currently the
Number One seed in the Eastern Conference playoffs, with the best record in the NBA.
During this New Bulls Era, the team’s marketing group is trying to reach the same type
of audience as the other NBA teams. However, the Bulls are doing it in their own unique
way. The majority of the other NBA teams are targeting a younger audience, through
grassroots, youth leagues, or interactivity throughout the community. One way the Bulls
are trying to reach their target market is through technology. Earlier in April, the Bulls
began a program with SMS messaging that is able to personalize the experience for the
team’s consumers and fans. With this program, fans are able to text the word SCORE to
BULLS, and be able to receive real time updates and scores via their cell phone (NBA’s
Chicago Bulls 2011). The Bulls plan is to continue to use these types of innovative
marketing approaches in order to truly engage the fans, and grant them the opportunity to
interact with the team as a whole.
The Bulls have also been able to connect to a different type of audience through
BullsTV. With BullsTV, fans are able to see their favorite players in action, both on and
off the court. The TV programing provides exclusive interviews, practice videos, and an
overall behind the scenes look into the Bulls players’ daily lives. This program has
helped to enhance team, sponsorship, and advertising revenue each year since it has been
in existence, and the viewership of the different programs has also grown exponentially
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(NBA’s Chicago Bulls 2011). Although there has only been a short period of time since
the new Bulls marketing strategies have been put into place, there has already been
tremendous feedback. With the recent success of the Chicago Bulls, an already loyal fan
base, and these new marketing strategies, the Bulls are headed straight to the top of the
NBA in terms of attendance and profitability. Like the Nets, the future is extremely bright
for the Chicago Bulls, with endless possibilities for further success to be seen.
Although the Phoenix Suns, New Jersey Nets, and Chicago Bulls all have
different personnel, goals, and on the court success, the teams are all able to use similar
marketing strategies within their communities, in order to segment the market place,
establish specific target markets, and position their brands within the minds of
consumers. All three teams have been able to assess their specific market places in order
to determine who to target. While they do not all share the same exact target markets (all
target the youth in one way or another), they all have tapped into the social media and
technology craze in one way or another, helping to better reach out to those targeted
consumers. Also, all three teams have tried to use their teams past historical success in
order to market the future (reliving the past, usage of retro jerseys, etc.). Even though the
Suns, Nets, and Bulls may be headed in different directions on the court, all three teams
have successfully used their marketing abilities to keep their product relevant within their
specific marketplaces, allowing for enhanced revenue opportunities. If the teams are able
to continue this trend, and also establish consistency with their on the court product, then
all three teams will be relevant within the elite class of the NBA for a long time to come.
Bibliography
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