Project Milestone Three: Draft of Marketing Strategy (Section IV)

9

Target Market Analysis and Organization Factor Analysis Draft

SPT-608-X3492 Sport Marketing and Media 23TW3

Antonio McClan

3/5/23

Target Market Analysis

Current and Future Trend of the Market

The current and future trends of the market for NBA League Pass indicate that it is an appropriate service to serve the needs of customers in the present and future. There are several factors that support this assertion. Firstly, the trend towards digital media consumption is on the rise, especially among younger generations. According to a report by Deloitte, 53% of millennials and 65% of Generation Z prefer to watch TV shows and movies on streaming services rather than traditional TV (MBA Skool Team, 2021).

Secondly, the NBA has been successful in expanding its global fan base, which presents significant growth potential for NBA League Pass. The NBA is one of the most popular sports leagues worldwide, with an estimated global fan base of 1.5 billion people. In recent years, the NBA has made significant efforts to expand its international presence, with games played in countries such as China, India, and Mexico.

Target Customers

The target customers for NBA League Pass are NBA fanatics who are primarily digital natives and are likely to be interested in accessing NBA games through digital media. This demographic is characterized by the following characteristics:

1. Age: The target audience for NBA League Pass is predominantly between 18 and 34 years old. This demographic is considered digital natives and is more likely to consume content through online media platforms.

Market Research Methods

To retrieve information about the target market and consumers, a combination of primary and secondary data sources will be used. Surveys will be conducted to gather quantitative data on the target market's preferences, behaviors, and attitudes towards NBA League Pass. Surveys will be administered online and in-person, targeting individuals within the age range of 18 to 34, who are likely to be the primary users of the service (Chen et al., 2022). The survey will include questions about the customers' current viewing habits, their willingness to pay for the service, their preferred features, and their overall satisfaction with the service. Focus groups will be used to gather qualitative data on the target market's perceptions and opinions about NBA League Pass. Focus groups will consist of individuals who meet the demographic criteria and are likely to be interested in using the service (Trautman, 2022). The focus group discussion will be centered around the service's features, pricing, and positioning in the market, among other topics.

Internal Market Factors

Internal market factors are the factors that exist within the sport organization and can have a significant impact on its performance and success. The National Basketball Association (NBA) is no exception, and several internal market factors influence the organization's operations.

Corporate culture is an internal market factor that shapes the NBA's decision-making processes and overall performance. The NBA is known for its player-centric culture, which prioritizes the players' voices and opinions (MBA Skool Team, 2021). This culture has helped the NBA attract and retain top talent, and also contributes to the league's overall popularity among fans.

The NBA's financial state is another critical internal market factor. The league generates significant revenue from various sources, including media rights, ticket sales, merchandise, and sponsorships (Trautman, 2022). The NBA's financial strength allows it to invest in its teams, players, and infrastructure, which helps the league remain competitive and attract top talent.

External Market Factors

External market factors refer to the factors that exist outside the sport organization and can significantly impact its performance and success. The National Basketball Association (NBA) is subject to several external market factors that affect its operations and growth.

One of the most significant external market factors that affect the NBA is the competition. The NBA competes with other professional sports leagues, such as the National Football League (NFL), Major League Baseball (MLB), and the National Hockey League (NHL) (Zhang, n.d). The competition for fans, viewership, and sponsorship can have a significant impact on the NBA's financial performance and overall success.

Business Data

There is ample business data that supports the decision to undertake a marketing plan to promote NBA League Pass. Below are some examples of such data:

1. Growing digital consumption: According to a report by eMarketer, digital video consumption in the US is expected to grow by over 8% in 2021. This growth trend suggests that there is a growing demand for digital content, which can benefit NBA League Pass, a streaming service.

2. Increasing popularity of the NBA: The NBA is one of the most popular sports leagues in the world, with millions of fans worldwide. According to Forbes, the NBA is worth over $8 billion, and its revenue has grown by an average of 9.5% per year over the last decade.

Industry and Organization Factor Analysis

Status of the Industry

The current status of the industry related to the NBA and NBA League Pass is strong and growing. Below are some of the needs and business opportunities in the industry:

1. Growing demand for digital content: As mentioned earlier, there is a growing demand for digital content, and the NBA has been proactive in meeting this demand. NBA League Pass is a key product in the NBA's digital strategy, and its popularity is growing (Zhang, n.d). As more consumers cut the cord on traditional cable and satellite TV, the NBA has an opportunity to capture this audience with its digital products.

2. Increasing popularity of the NBA: The NBA has seen its popularity soar in recent years, with an increasing number of fans worldwide. The league's star players, exciting gameplay, and global appeal have contributed to its success.

SWOT Analysis

Strengths:

1. Popularity and global appeal: The NBA is one of the most popular professional sports leagues in the world, with fans all over the globe.

2. Star players: The NBA boasts some of the most recognizable and marketable athletes in the world.

3. Strong revenue streams: The NBA generates significant revenue from a variety of sources, including ticket sales, merchandise, and media rights.

Weaknesses:

1. Player injuries: Injuries to star players can have a significant impact on the league's popularity and revenue.

2. Competitive balance: The NBA has faced criticism for a lack of competitive balance between teams, with some teams dominating the league for years at a time.

Opportunities:

Growing global market: The NBA has an opportunity to continue expanding its global reach, especially in countries such as China and India.

1. Growing demand for digital content: As mentioned earlier, the NBA has an opportunity to capitalize on the growing demand for digital content.

2. Expansion of the league: The NBA has been exploring the possibility of expanding the league, which could present new revenue opportunities.

Threats:

1. Competition from other sports leagues: The NBA faces stiff competition from other professional sports leagues, including the NFL, MLB, and NHL (Chen et al., 2022).

2. Economic uncertainty: Economic uncertainty and recessions could impact the league's revenue streams.

Readiness

Based on the SWOT analysis, it appears that the sport organization has both strengths and weaknesses that could impact its readiness to enter the target market for the product or service.

The organization's strengths, such as its strong brand image, existing fan base, and partnership with technology firms, may provide it with an advantage in promoting and selling the NBA League Pass (Trautman, 2022).

Economic Condition

The SWOT analysis suggests that the current economic condition of the sport organization may be a weakness. One of the key weaknesses identified is the potential lack of willingness to invest in digital marketing efforts. This may indicate that the organization is facing financial constraints that prevent it from making necessary investments in marketing and promotional activities.

Moreover, the potential for competing services to emerge and the lack of control over broadcasting rights could also impact the economic condition of the organization.

References:

Chen, M., Su, F., & Tai, F. (2022). Major league baseball marketing strategies and industry promotion approaches.  Frontiers in Psychology,  13. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9261281/

MBA Skool Team. (2021, October 2). NBA (National Basketball Association) Marketing Strategy & Marketing Mix (4PS). MBA Skool. Retrieved February 9, 2023, from: https://www.mbaskool.com/marketing-mix/services/17801-nba-national-basketball-association.html

Trautman, L. J. (2022). Visual Art, Galleries, Collectibles, and NFTs.  Visual Art, Galleries, Collectibles, and NFTs, In The Cambridge Handbook on Law and Policy for NFTs (Nizan Geslevich Packin, Ed.),(Forthcoming). https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4311387

Zhang, J. J., Pitts, B. G., & Johnson, L. M. (n.d) International Sport Business Management. https://api.taylorfrancis.com/content/books/mono/download?identifierName=doi&identifierValue=10.4324/9781003155874&type=googlepdf