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Sports Marketing Report : New York City FC

New York City FC

Introduction

The chosen organization in this report is New York City FC (NYCFC), a professional football (soccer) club playing in the Major League Soccer (MLS), the top-flight soccer league in the United States (MLS 2017a). It was founded in 2013 by Manchester City (majority owner) and New York Yankees (minority stakeholder) and became the 20th franchise of the MLS (Manchester City 2013; Conn 2013).

This report will examine the strengths and weaknesses of the organisation, the environment it operates in, the marketing mix strategies of the club, its brand equity and will make suggestions of new sponsors and strategies to improve the fans involvement and loyalty towards the club.

SWOT analysis (see Appendix A)

Concerning the organisation itself, potential strengths comprise being part of the City Football Group (CFG) and sharing commercial partnerships across the group (CFG 2017), while weaknesses include little experience or being a mere tenant of the stadium it plays in (Parker 2017). Concerning the club’s environment, the MLS closed league structure and salary regulations (Szymanski 2015: 237-238; MLS 2017b) and international and domestic competition must be considered.

Marketing mix

The set of tools used to market a product or a service has been traditionally known as the marketing mix. It consists in managing the product, price, place and promotion. Additionally, managing people, process and physical evidence can be included (Beech and Chadwick 2007:167-168).

For NYCFC, the core product represents the game of soccer, to which supplementary services such as entertainment with halftime shows, cheerleaders, mascots, hospitality and food can be added to enhance the appeal of the matchday. Adaptations and innovations to the core product are possible through changes in how the competition is organised (play-offs, which teams can compete) or how technology influences the game’s regulation (video assistant referees).

The price signals what consumers have to pay and provides the income for the organisation (Beech and Chadwick 2007: 168). The pricing strategies of NYCFC are limited as it can set prices for match and season tickets but not for merchandising, which is controlled by the MLS.  The club’s strategy is to charge above-average prices for match tickets (Lawrence 2015), assuming that consumers use prices as a proxy for quality (Yoo et al. 2000: 206) and that NYCFC does not want to be seen as an inferior brand or as offering a service of a lesser quality.

The place is the location where product and customer are brought together (Beech and Chadwick; 169). In the case of NYCFC, this is the Yankee stadium, and given that it is a mere tenant of it, the club finds itself in a vulnerable position (Williams 2017; Boehm 2017). Additionally, NYCFC uses indirect channels of distribution to meet customer’s needs, such as online ticket sales in partnership with Ticketmaster and IOMedia (Ticketmaster 2017). 

The promotion is used to ensure consumers are aware of the product or service, where it can be purchased and how it can be used (Beech and Chadwick: 170). Promotions involves among others a communication strategy, advertising, incentives and social media presence. NYCFC makes use of 6 social media platforms (NYCFC 2016). When the club was founded, players from Manchester City promoted football and NYCFC in New York (Youtube NYCFC 2014), which gave a certain credibility to the new project and encouraged a sense of fan community that has shown to be vital (Yoshida et al. 2015).

The process refers to the way a service is delivered to its user (Beech and Chadwick: 171) and it is composed of a set of steps involved in its delivery. In NYCFC the process of selling tickets is standardized through online ticketing, which allows a constant quality and can deal with a great number of customers at the same time.

The physical evidence is the environment in which the service is delivered. It consists in the ambient conditions, spatial and functionality, signs, symbols and artifacts (Lovelock and Wirtz 2011:284). The fact that the Yankees stadium has the characteristics of a baseball stadium, which involves converting it (including its capacity and pitch) up to 20 times per season may bring operational problems to NYCFC and may not be visually appealing to football fans (Williams 2015).

Managing people is especially important in the service industry, given that customers will certainly have an interaction with the producers of the service and staff. NYCFC ensures quality recruitment of staff through a partnership with Hays (Hays 2017) and through promotion of jobs on the MLS website (MLS 2017c).

Brand equity:

According the to the American Marketing Association (2017) a brand is a "name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers". If an organisation achieves a strong image in consumer’s minds when they encounter these aspects, it is accomplishing brand equity (Mullin, Hardy, Sutton 2014: 164). It is therefore adding value to a product or a service in the eyes of the consumers. In the context of sport, brand equity is important not only because it can create emotional connections and bonds between a sports organisation and its customers but also because the organisation can charge price premiums (Mullin, Hardy, Sutton 2014: 165), leading to an increase in revenues.  Brand equity should be distinguished from brand value, that can be assessed through the price of the trademarks of the business (Szymanski 2015: 196). David Aaker identified 4 sources of brand equity: brand awareness, brand associations, perceived quality and brand loyalty (Aaker 1996:8).

Brand awareness relates to how familiar a consumer is with a brand, namely the ability of a consumer to recall the brand when its product category is mentioned or to recognize it (Aaker 1996: 10). For NYCFC, it could be measured with surveys seeking to know how many people recognize it when seeing the club’s badge or how many people name it when asked to cite a soccer club in New York.

Brand associations are the feelings and thoughts consumers hold for a brand (Aaker 1991). Several aspects of a brand are able to develop strong brand associations, including logo, marks, nickname, mascot, players, owners, coaches, rivalries and stadiums (Mullin, Hardy, Sutton 2014 : 168). A method to assess these brand associations for NYCFC could be qualitative research including interviews to understand if fans feel identified with the CFG and with players who have been in the team since its foundation (David Villa).

The perceived quality of a brand refers to consumer’s evaluation of it  (Aaker 1991),  mainly related to the product or service it proposes. For NYCFC, the perceived quality is linked to the quality of players, coaches and performance on the pitch. Its strategy to increase perceived quality has been to attract household names like Villa or Pirlo, youthful talent like Harrison and a renowned coach like Patrick Vieira (Young 2017).

Brand loyalty consists in the ability of a brand to keep its customers (Aaker 1991). For NYCFC, it is measured through attendance to games, the price premium customers are willing to pay when purchasing match tickets compared with other clubs and customer satisfaction (Aaker 1996: 320-322). Since the inaugural season of the club (2015) attendance has waned, which may indicate that NYCFC is struggling to keep the excitement of the new project (Young 2017). However, NYCFC fans seem to be paying a premium for tickets in comparison with other clubs (Lawrence 2015) which could imply a degree of loyalty and satisfaction among fans.

 Sponsorship agreement

Sponsorship involves an exchange between a sponsor and a sponsee, where the former earns monetary support or other in-kind fees while the latter obtains tangible and intangible benefits of being associated with the sport entity (Yang 2008). From sponsorship awareness to sponsor-team fit, perceived goodwill, attitudinal team brand loyalty and perception of exclusivity, several factors can impact consumer’s attitudes towards the sponsor and intentions to purchase its products (Biscaia et al. 2017).

Given the fierce competition from other leagues and the singularities of the MLS, a possible sponsorship strategy would be to concentrate on the American market through domestic sponsorships. This would give the club an American identity, and given that consumers tend to have a bias in favour of domestic produce over foreign (Wall and Heslop 1986 cited in Kipnis et al., 2012:  838), having a domestic sponsor could increase local fans and ultimately revenues. An adequate sponsor could be Powerade, an American sports drink brand which sponsors the US soccer team (US Soccer 2017). For Powerade, this sponsorship could have the benefit of counteracting the partnership of the New York Red Bulls with a potential competitor like Red Bull. Moreover, the perceived fit between the team and the sponsor, which can be defined as a match between sponsor and sponsee in mission, target audience and values (Becker-Olsen and Hill 2006: 75), would be high as both brands share the same industry, are located in the United States and reach a similar audience. This fit can prompt a positive effect of consumer’s intention to use the sponsor’s product (Speed and Thomson 2000), which would be a significant advantage for Powerade. Strategies to enhance this sponsorship agreement could include giveaways of Powerade bottles during NYCFC games or a partnership to sponsor a five-a-side football tournament involving fans where the winners could get a season-ticket sponsored by Powerade.

Furthermore, the industry of sports seems well suited to emotional branding, a process by which brands engages consumers on the level of senses and emotions (Gobé 2001: xv). Indeed, customers not only buy football jerseys, but they display them, they use them as social markers and pride themselves when wearing them. Being sponsored by an American company, partner of the U.S Soccer team could touch on feelings of national pride, which could encourage consumption.

Consumer loyalty and involvement

Fans satisfaction with team games has a strong link with their loyalty (Bodet and Bernarche-Assolant 2011). Therefore, a club should implement measures that can positively act on it, such as team and player performance (Ross et al. 2008), pre-and post-game entertainment (Gladden and Funk 2002) and visual appeal and atmosphere (Couvelaere and Richelieu 2005). Performance on the field is difficult to predict, but higher revenues and wages are on average correlated to better performance (Symanski 2015: 44, 89). Therefore, a potential strategy would be to invest more in the team. However, investment in controllable aspects like the service environment seems more reasonable. Given that attendance has declined over the past years despite a similar team performance, NYCFC is seemingly in need to bring more pre-and post-game entertainment and could do so through special line-up introduction of players, post-match interviews to fans, co-creation of content, fan contests and autograph sessions. A close working relationship between the sponsors and the team to provide a good service delivery, complementary events and ultimately increase attendance would demonstrate commitment to fans and would be beneficial to both parties given that a goodwill of fans towards the team can be transferred to the sponsor’s brand (Biscaia et al. 2017:392; Madrigal 2001). A major change this report deems necessary to improve the visual appeal of the game experience is the relocation to a new stadium, in which stands could have the club’s colours, the pitch could be better maintained and regulations over the flags or banners used to build up the match atmosphere would depend on NYCFC and not on the Yankee stadium. Taking into account the fans’ opinion for its selection, as the club did for the selection of the badge (NYCFC 2014), could make fans feel more engaged.

Conclusion

Based on arguments of team-sponsor fit, emotional branding and benefits of domestic sponsors, a sponsorship agreement with Powerade was suggested. Measures to improve consumer involvement and loyalty such as the relocation to a new stadium or pre-match and post-match entertainment were recommended as well. A further analysis of the environment and of the objectives of both the MLS and the CFG is encouraged to assess the feasibility of these recommendations.

LIST OF REFERENCES

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Aaker, D. (1996) Building Strong Brands. New York: The Free Press

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Becker-Olsen, K. and Hill, R. (2006) "The Impact Of Sponsor Fit On Brand Equity". Journal Of Service Research 9 (1), 73-83

Beech, J. and Chadwick, S. (2007) The Marketing Of Sport. Harlow, England: Prentice Hall/Financial Times

Biscaia, R., Trail, G., Ross, S. and Yoshida, M. (2017) "A model bridging team brand experience and sponsorship brand experience". International Journal Of Sports Marketing And Sponsorship 18 (4), 380-399

Bodet, G. and Bernache-Assollant, I. (2011) "Consumer Loyalty In Sport Spectatorship Services: The Relationships With Consumer Satisfaction And Team Identification". Psychology And Marketing 28 (8), 781-802

Boehm, C. (2017). “No room to breathe: Yankee stadium remains MLS' weirdest venue.” FourFourTwo. [online] available from: <https://www.fourfourtwo.com/us/features/yankee-stadium-small-field-nycfc-mls> [Accessed 26 November 2017].

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Conn, D. (2013) "Manchester City And New York Yankees Join Forces To Create New MLS Team". The Guardian [online] available from <https://www.theguardian.com/football/2013/may/21/manchester-city-new-york-yankees-major-league-soccer> [23 November 2017]

Couvelaere, V. and Richelieu, A. (2005) "Brand Strategy In Professional Sports: The Case Of French Soccer Teams". European Sport Management Quarterly 5 (1), 23-46

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Gobé, M. (2001) Emotional Branding: The New Paradigm For Connecting Brands To People. New York: Aalworth Press

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Lawrence, J. (2015) "NYCFC Tickets Continue To Be Among Highest Priced On Secondary Market". Forbes [online] available from <https://www.forbes.com/sites/jesselawrence/2015/05/27/nycfc-tickets-continue-to-be-among-highest-priced-on-secondary-market/2/#7a8f267b3578 > [28 November 2017]

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Williams, B. (2017) "For New York City FC, There's Literally No Place Like Home". The Guardian [online] available from <https://www.theguardian.com/football/blog/2017/sep/25/for-new-york-city-fc-theres-literally-no-place-like-home > [27 November 2017]

Williams, B. (2015) "New York City FC's Home Truth: Yankee Stadium Will Never Be Their Field Of Dreams". The Telegraph [online] available from <http://www.telegraph.co.uk/sport/football/teams/usa/11464640/New-York-City-FCs-home-truth-Yankee-Stadium-will-never-be-their-field-of-dreams.html > [27 November 2017]

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Appendix A: SWOT analysis

Strengths

  • ● NYFC is owned by the City Football Group (CFG), which owns as a majority shareholder 3 football clubs playing at the highest level
  • ● International commercial partnerships shared across the group
  • ● Acquisition of players and coaches from Manchester City and CFG: Patrick Vieira, David Villa, Frank Lampard, Andrea Pirlo.
  • ● Pathways for players to develop their career and stay part of the City football group.

Weaknesses

  • ● The club is relatively new, so it has little experience in competing at the highest level.
  • ● NYFC does not own a stadium, it is a mere tenant of the Yankee stadium and has had problems in finding its own venue. The fact that it plays in an important baseball field can also attract opposition from baseball purists (Parker 2017).
  • ● Scheduling conflicts with baseball club.

Opportunities

  • ● Based in New York City, with a population of over 8 million, there is seemingly a huge potential to attract crowds.
  • ● Capitalise on a young audience following the MLS
  • ● The closed league structure of the MLS in which the club operates provides financial stability as the threat of relegation and its subsequent damaging consequences do not exist.

Threats

  • ● Consumer tastes in United States and a crowded sports market with American Football, Baseball. Ice Hockey or Basketball.
  • ● Competition, rivalry with New York Red Bulls, an older club (founded in 1996), that also attracts New Yorkers interested in soccer.
  • ● MLS can lose appeal because it does not implement the conventional promotion and relegation system (Szymanski 2015: 240). Fierce competition from football leagues elsewhere and the salary cap of $3.845 million per team (MLS 2017b) implies that NYCFC can lose out on audiences from foreign markets, broadcast contracts and world-class football players (Szymanski 2015: 238). 

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