Distribution channels are developing, changing, evolving and converging at an ever increasing rate and sports brands and retailers have to adapt to these changes.
Whilst there are still dominant brand players, in every sports category there is now an ever ending choice of brands for the retailer and whilst it is critical for any business to recognise and react to these changes it is also vital that the business as a whole does not lose sight of the basic principles of marketing – the 4 P’s.
In the 1960′s the marketer E Jerome McCarthyproposed a four Ps classification which has since been used by marketers throughout the world – Product, Price, Promotion,Place.
Today those P’s have expanded to become 7 or 8 (or even more) to address the different nature of services, however their impact on business development and go-to-market strategies should not be underestimated and are equally applicable to the sports industry;
This is still key. Whether sports brand or retailer, without appropriate, attractive and relevant product the business cannot evolve.
Over the past ten years we have seen more and more niche areas of the industry being driven by product development as eCommerce, in particular, has allowed retailers to exploit the long tail and push more and more specialist products into a bigger specialist market place.
Innovative product development continues to be a key business driver here as the specialists (retailer and brands) demand more “fit for purpose” products than those in the “general” sporting goods category.
New brands to market are doing so by taking on either a new niche with a ground breaking product or developing something totally unique.
Brands like Inov8 are a prime example of taking a niche area (trail running) of a bigger mature market (running) and using this as a launch pad to drive wider business development once the anchor has been established.
Going back further Under Armour not only invented a product (or re-invented depending on your view) but created an entire new product category (baselayers) in the sporting goods industry.
Price is one of the key components when it comes to driving market penetration and there are a number of strategies that can be employed within this category to generate demand:
Market penetration – introducing a new product at a lower price to help gain market share.
Competitive pricing – often used for well-known products or brands that are in high demand. Prices are similar to competitors. To be competitive, retailers must ensure it doesn’t charge higher prices for the same goods (or similar) than other sports and fashion retailers.
Strategic pricing – This might be used to position an exclusive product or brand to make it more desirable for consumers and generate demand or demonstrate value.
In sport retail Sports Direct are perhaps recognised as the finest exponent of integrated pricing strategies and has cleverly mixed these strategies with a wider in-house brand development strategy.
It is the authors view that, as an industry, the sports trade can still learn from our FMCG cousins in this area.
If we compare brand and retailer activity with, for example, that of the grocery trade we often fail to address some powerful tools that are available to the brand and retail businesses.
Added value promotions, Buy One Get One Free (BOGOF), voucher redemptions, staff incentives, gondola end promotions (or equivalent), and direct call to action initiatives are all areas that we recognise as end consumers in other marketplaces but not necessarily throughout the sports market.
When used strategically these types of tools can be extremely beneficial and allow additional points of difference versus the competition.
Often you will hear marketers saying that marketing is about putting the right product, at the right price, at the right place, at the right time. It’s critical then, to evaluate what the ideal locations are to convert potential clients into actual clients.
From a brand perspective this might be a trade show, shop visits or dealer trips.
For sports retailers it may depend on your route to market – shop, mail order, eCommerce, event – but the same principles apply.
This fourth marketing P is the one that on the surface appears less relevant but is the one that, arguablyis having the biggest impact on the sporting goods marketplace. Put simply the “places” where goods are being purchased are changing.
Channels are merging – running and outdoor; embroidery/embellishment and sport; mail order and eCommerce etc. For sports brands to evolve they must address these changes and “find” this new business and the “place” where this new business exists.
With a continued decline in the sports independent base and a consolidation of sports multiples these changes will be fundamental for sports businesses to evolve.
It may seem simplistic to view our industry within these basic four parameters, however if explored in depth then the answers to all successful business sales and marketing strategies can be embraced under these umbrella terms.
In recent years new P’s such as Passionate People, Packaging, Performance, Persona and more have been put forward as being equally and/or more important than the four terms outlined in this article, however it is clear that whatever your final list of P’s the discipline of reviewing your business in these terms may just help you find the answers you are looking for to help grow your business.