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Analysis Of The Factors Affecting Fan Loyalty Marketing Essay

Introduction

Cricket is not a gentlemen’s game anymore. It has become a profession and therefore is about the greenbacks it rakes in. Reason, it caters to people; the fans. Be it the chest beating kind, the always praying ones and even the swearing category. Fans are now the end consumers and to make the sport or a team for that matter successful, the fans need to be catered to efficiently.

A broad classification of fans based on motivational and behavioral attributes sets them into five categories-temporary, local, devoted, fanatical and dysfunctional (Hunt, Bristol, Bashaw, 1999). It is important for sports teams to recognize that these classes exist, each of whom must be dealt with and marketed to separately.

This dissertation aims to deal with this issue in the context of the Indian Premier League (IPL) in lieu of the fact that this year the league is going to be restructured with 2 more teams coming in and the first player transfers taking place. Therefore it becomes even more important for the teams to know the aspects that are going to affect their fan following.

The launch of the Indian Premier League (IPL) in 2008 led to commercialization of cricket on a scale that had never been witnessed before. TV rights were sold for close to a billion dollars and players were traded in an auction that saw salaries for an eight week period rise several times past annual incomes. It created a sports property which was akin to European and American sports leagues like the EPL and NBA respectively.

As the IPL, like other top sports leagues, would allow player migration across clubs, and consistent on-field success would be hard to come by in a league as competitive, team owners would need to focus on strengthening the brand and building a loyal fan base as it would be the only pivot around which business value could be unlocked.

The biggest challenge for the teams would be to build an army of die-hard fans from across geographic regions to keep gate and merchandising revenues flowing in as the Indian cricket enthusiast- not being used to the culture of clubs in sports- would take time to warm up to the concept. More importantly India being a land of hero worship, be it sports or entertainment, it would definitely come in handy knowing whether the consumer is evolving with the advent of this westernization. This paper seeks to address that issue especially because the existing loyalties might go for a toss once the league is restructured.

Literature Review

The globalization of sport, marked with major development due to the emergence of new forms of media ever so often over the past century has led to the unfolding of a literature which is associated with sports management, which allows for researchers to attend to them. One of the focal points for sports management research, in the area of marketing, is the acquisition and retention of customers (fans) in the face of competition from other leisure options. The challenges faced will include retaining the core appeal of the sport while addressing the issues and lifetime value of fans.1

The effectiveness of this identification process can be measured, in one way, through the brand affiliations that a team has. Brands must make a conscious decision to see how fans of a particular team identify with the team and they can then enjoy the advantage of receiving the trustworthiness from them. The sports team can also enter into financially healthy associations with brands based on the level of identification that fans have with the team. A study has shown that higher levels of identification with the team relate to a higher tendency to purchase the sponsor brand.2

We can broadly see therefore, that most sports marketing dealings have some aspect of relationship marketing tied to them. It becomes important that the sports team gets its fans to comply with its identity and internalize it through a commitment which is spread over a long duration of time as relationships based on affiliation tend to be much more robust. The promotion of values of a team which fans can identify with is an important step in this process which can be preceded by the promotion of merchandise which could incorporate a fan into identification. This strengthens internalization and will result in long term benefits 3

Manchester United is an example of an organization which has managed the relationship with its 50 million fans from around the globe extremely well by making an effort to understand them better and developing a relationship with them through a dedicated customer relationship management scheme which included the conversion of its home website into a fan-focused, interactive online community.4

The Indian Premier League (IPL) is one of the first sporting leagues in India which is based on the professionally run franchise system popular in the United States. With the inception of the IPL happening only in 2008, there is a race to establish a loyal fan base by all the eight teams and establishing long term relationships would be one of the key focus areas for the clubs, especially with the IPL returning to India.

There has been ample amount of work done to identify constructs that enable efficient measurement of attitudinal behaviour of fans. Some models propose that understanding attitude formation and change should begin with examining the internalisation of a sport identity. Sport identity represents a determinant of attitude importance that is influenced by the interaction between dispositional needs and endearing features. The process through which an individual chooses to form a psychological connection with a sport team promotes expressions of desired traits, characteristics and self-concept. Utilising sport identity to examine attitude formation in team sport would further our understanding of how individual motives and experiences combine with social norms and situations to influence self-definition and behaviour (e.g., repeat purchase behaviour, soccer riots, etc).5

Why this study becomes all the more important in these times is because of the fact IPL has been an absolute phenomenon in India. It even surprised all of us by hosting a successful season in South Africa. Today though as IPL stands without its erstwhile Commissioner Lalit Modi, there is a lot of bad blood in the cricket circles and relocation and chopping and changing may affect the overall experience of the fan. Research shows that nostalgia represents a phenomenon that begins in childhood, adolescence or early adulthood and lasts for a lifetime. Like intense brand loyalty in another context, the bonding of objects to emotional memories endures and therefore often carries considerable relevance to consumer-goods marketers. Like nostalgia itself, sport fandom represents a similar phenomenon. It is common for fans to become emotionally attached to a favourite sport team in childhood or adolescence and to become attached to certain objects associated with the team (team logo, home venue, players or coaches) as the bond with the team grows into loyalty. While most fans presume their favourite teams will be theirs for a lifetime, the moving and renaming of a professional team can leave the fans still loyal to the organization’s previous incarnation without an obvious channel to continue expressing their attachment to their now-relocated former team.6

Traditionally research with sport consumers has used Social Identity Theory to illustrate how athletic teams can provide individuals with a sense of belonging that fosters an in-group identity. Previous work suggests that group membership is an important component of an individualʼs self-concept. Other investigators have the alternate view that attraction to an athletic team may stem from projecting one’s in-group status. The perceived psychological benefits derived by sport enthusiasts produce a psychological connection with a specific team and are thought to induce positive moods that in turn produce positive feelings, thoughts and preferences. In contrast, some researchers have demonstrated that individuals will avoid projecting an association with an unsuccessful team when in-group status is perceived as having negative consequences (e.g., a threat to self-esteem or oneʼs public image). Now the concept of an ‘unsuccessful team’ itself is an interesting one e.g. Kolkata Knight Riders have been one of the most disappointing teams as far as success in winning matches is concerned, however They were one of only two teams who were in the green at the end of the first three seasons. Taken together, this evidence suggests that adoption and confirmation of an identity may guide attitudinal formation and change towards an athletic team.

If we only talk about the Attitudinal approach to Fan Loyalty then there is some interesting work that has been done on it, here I would like to showcase a model named The FAN Model or the Fan Attitude Network.

It says that fans have various Dispositional Needs that represent various individual motives that directly influence the adoption of a particular Sport Identity. Dispositional needs represent social psychological factors that account for motives of sport spectators such as vicarious achievement, self-esteem, drama, diversion, entertainment, aesthetics, or sensation-seeking. Sport identity refers to an individual’s internalisation of a particular group or subculture and/or traits (e.g., competitive, athletic, lazy) into the self concept. An individual can develop a sport identity based on any of the following, a psychological connection with a particular sport, sport personality, or a product used in a sport. However, this internalisation process is moderated by the interaction between dispositional needs and the presence of Endearing Features that represent various sport characteristics within a given situation. Endearing features refer to attractive characteristics found in sport settings that highlight the significance and value of a sport object for satisfying dispositional needs. The features include, but are not limited to, performance outcomes, wholesome environment, geographic proximity and experiential risk. Attitude formation and change occurs when the psychological significance and value derived from a sport identity become salient to an individual. In other words, the extent to which attitude formation and change takes place depends upon the perception that the sport identity satisfies dispositional needs. If the identity does fulfil a specific need, then the individual places importance on his/her evaluations or responses relative to the sport identity since it has become an integral part of the self concept. Hence, Attitude Importance reflects the degree and valence of formation as well as the structural characteristics of that formation as they relate to subsequent attitude change or stability. The structural characteristics of attitude importance are thought to influence four potential outcomes related to attitude strength denoted in the box Consequences. The more importance an individual places on his/her sport identity, the more likely subsequent evaluations and responses elicited by the team will persist over time, resist counter information and preference for alternative teams, bias the types of thoughts generated about the team, and be more consistent with past behaviour and behavioural intent6.

Talking of previous attempts right after IPL 1 a month-long online research study was carried out by Dentsu India in March 2009 to find out how fans decide on team loyalty. Dentsu India’s study is a combination of data collected through primary and secondary research. Primary data was collected through 2,099 respondents in over 30 cities. The study found a number of reasons or factors that helped people decide on team loyalty – viz., Human Factor, which shows that fans get greatly affected by the players in a team and other celebrities that are attached to a team. Perceived Energy, which means fans are influenced by advertising or press coverage of the team and its players to decide on team loyalty. Performance, that is, the show of success in the matches played; and finally, Engagement, which means a measure of how involved the fan is with his team. The study also found that the first two platforms – Human Factor and Perceived Energy – create short term following, while Performance and Engagement create long term following.9 Now this is interesting because both the investors as well as the team sponsors are the stakeholders of a team. While the investor seekd profits and ROI in the long run, the sponsors want soft benefits like awareness, recall, brand association etc.

Also the kind of sponsors that the franchises have been able to rope in may play a major part in swaying fans towards their teams. The fan following that the brand has, if it is a strong brand like Nokia, might be able to rope in fans towards its IPL franchise. Over the years the number of sponsors per team has multiplied and this has increased clutter not only on the player jerseys but also in the consumers’ mind. Therefore it remains to be seen whether sponsoring brands maintain a recall with the identity they endorse or not.

Fan following has also got to do a lot with the sort of off field initiatives that the teams are willing to take to open their arms up for the fan community. Cricketnext.com for example tied-up with Delhi Daredevils, and like most tie-ups, it was based on mutual benefit to both sides, wherein cricketnext.com got special interviews and participation from players on blogs and chats, besides exclusive team videos and interesting inside news on behind the camera and off-field exploits of the team during the tournament. In return, Delhi Daredevils got the platform to engage with millions of cricket lovers visiting cricketnext.com. Last year, the site received 46 million page views during IPL alone, of which 3.9 million were unique users. However getting hits on a website is one thing and retaining the fans is another. It would be interesting to see therefore the amount of time, say weekly, these fans spend on the team’s website or their Facebook pages.

However IPL is just three years old and before IPL India had never seen something even remotely equivalent to it. Abroad though fan following for clubs, be it the English Premier League, The NBA or the Major League baseball is huge and in a very matured state. For this study we need to look at constructs that apply to the fan following there and check which of those is applicable in India. A particular study demonstrates the significant role that a club’s brand image (i.e., fans’ perceptions of a club’s attributes and benefits) plays in fostering loyal fan behaviour. Most important, a club’s brand image consists of product- and non-product related brand attributes, as well as brand benefits and brand attitudes. The explicit classification of items within these categories advances the modelling of brand associations. Product-related brand attributes constitute the core product of a team brand and consist of the team, head coach, star player, success, and team play. The non-product-related brand attributes are defined by club history and tradition, logo and club colours, fans, and stadium. The perceived benefits are multifaceted and include identification with the team, peer-group acceptance, escape, socializing and companionship, emotions, nostalgia, and entertainment.

Interestingly the effect of the non-product-related attributes on benefits is almost triple that of product-related benefits. This might come as a surprise because one could logically expect product-related attributes (e.g., the team, star player, head coach, play, success) to be of greater importance to fans. This result is consistent, however, with previous research on brand associations in team sport (Bauer, Sauer, & Schmitt, 2004). Because most of the fans have a long fan history, they have all experienced ups and downs of their team such as player and coach changes, for example. Perhaps for that reason contextual factors (i.e., the stadium atmosphere, other fans, club history and tradition) have greater relevance to them. This result suggests neither competitive success nor the team itself is a central driver of fans’ utility perception. 7 Therefore it will be interesting to see whether these constructs hold true in the Indian context where the non-product benefits are not so evolved. Moreover culturally also we are more of a Hero worshipping nation, therefore these constructs might not hold true in IPL’s case.

Research Problem

Since the inception of the Indian Premier League in 2008, the biggest challenge for the eight city-based franchises has been to build a loyal fan base from its catchment area and other geographic regions as the Indian cricket enthusiast- not being used to this club culture of sports- is taking time to warm up to the concept. This thesis seeks to address the issue by identifying and then analyzing the factors that lead to or affect the Fan Loyalty of IPL teams, be it behavioral or attitudinal.

Research design

Research objectives

To understand the needs and expectations of fans from IPL teams and vice versa

To understand the level of involvement that fans have with IPL teams

To understand the different segments of fans that exist based on lifestyle factors

To understand the factors that lead to fan loyalty

Methodology

This study will follow Churchill 1979 methodology8. Initial interviews with the team management will provide data on involvement level with fans leading to fan loyalty. This will also explore the management’s definition of loyalty. This will be followed by in depth interviews with hard core sports enthusiasts which will further the notion of Fan Loyalty in the specific context of The Fan. This will be followed by a survey to validate the involvement level factors that cause fan loyalty and to profile the fan segments based on lifestyle factors.

Data Analysis

Churchill 1979 methodology will be used to arrive at suitable constructs or metrics which depict fan loyalty adequately.

Two Step clustering will be used to self generate the suitable number of clusters that emerge from the research data and profiling will be done based on the descriptive generated.

Definition of Constructs

Involvement means following the team through:-

Watching the match live in the stadium

Watching the match on TV

Paying to watch the match in a pub/bar/lounge

Interacting with the team on social media

Lifestyle inculcates of

Behavior

Attitude

Opinion

Target Population

Qualitative: Depth Interview with the Fan Club Manager of an IPL Team.

Depth Interview with five Hard core sports fans.

Quantitative: IPL fans aged 18-35 residing in one of eight IPL home cities; namely Bangalore, Delhi, Kolkata, Mumbai, Chennai, Hyderabad, Jaipur and Chandigarh.

Sampling Frame

College students and early working professionals residing in these cities who follow cricket and might be IPL fans.

Sampling Technique

Judgmental sampling

Sampling size

160

Execution of Sampling

The survey questionnaire was administered online. Final number of usable responses received: 146

Scope of Study

Restricted to the variables chosen to analyze the different behavioral traits of fans

IPL fans who are not from Home cities will not be covered in the study

IPL fans that do not fall in the 18-35 age brackets have not been covered in the study.

Utility to the industry

This piece of work aims at establishing constructs that has not been done before in the Indian sporting scene thus the research holds immense value for the sporting culture of the country. Moreover it will also enable us to look at the macro environment and deduce strategically about which constructs from the international industry are applicable to us as it is and which need a bit of tinkering. From a micro level it will introduce the IPL teams to distinct facets of their end consumers and will give them some guidelines regarding development of a loyal fan base. It will also enable the marketers to look at their consumers as not only customers but fans, and thus help them understand the difference between the two. The above facet will also be a contribution to the literature related to the topic. The factors that govern the fan following will benefit the research fraternity for further use. Above all it will give the sporting fraternity of the country an opportunity to fulfill the unmet requirements of the people who worship the sport and make cricket a religion in India.


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