Segmentation/Target Marketing

For our organization to successfully market our team and brand and drive ticket sales, we
need to examine our field of consumers and break them down based upon their common needs
and wants. By segmenting them into these groups, we can develop marketing and sales schemes
that apply to each specific group in a much more easy and efficient fashion. There are several
ways to categorize these classifications, whether its by demographic (age, gender, ethnic
background, or family cycle), socioeconomics, psychographic (lifestyle), geographic, behavioral,
or benefits segmentation. According to www.seattle.gov, here are some of the Seattle
demographic statistics:

2012 Estimated Population

o Seattle- 616,500 (and growing)
o SeattleTacomaBellevue, WA Metropolitan Statistical Area- 3,500,026

Age (According to 2010 U.S. Census)- City of Seattle

% of
% of male
Age

Population

% of total

Male

Female

female

total
total
20 to 29
122,306

20.1%

60,933

20.0%

61,373

20.1%

111,604

18.3%

57,974

19.1%

53,630

17.6%

years
30 to 39
years

% of
% of male
Age

Population

% of total

Male

Female

female

total
total
40 to 49
88,192

14.5%

47,101

15.5%

41,091

13.5%

78,345

12.9%

39,316

12.9%

39,029

12.8%

9.5%

29,500

9.7%

28,479

9.3%

52,676

8.7%

25,980

8.5%

26,696

8.8%

52,175

8.6%

25,270

8.3%

26,905

8.8%

23,477

3.9%

10,451

3.4%

13,026

4.3%

21,906

3.6%

7,505

2.5%

14,401

4.7%

years
50 to 59
years
Under 10 57,979
10 to 19
years
60 to 69
years
70 to 79
years
80 and
older
Total

608,660

100%

Race/Ethinicity- City of Seattle

304,030

100%

304,630

100%

Socioeconomic

Per Capita Personal Income in Seattle-Tacoma-Bellevue, 2012 (Federal Reserve

Bank of St. Louis)- $53,328

Percent with Bachelors Degree or higher in Seattle-Tacoma-Bellevue, 2012 (U.S.

Census Bureau, American Community Survey)- 37%

When deciding which target markets we want to pursue, and the order in which we will
rank them in, it is essential to use these segments to make the most logical and profitable
selections. Also, we must consider how our product, professional basketball, pertains to these
segments. According to Scarborough, a marketing insight company, the 2012 avid NBA fan was
26% more likely between ages 18-34 and 69% more likely men 18-34 (Scarborough, 2012).
Just in the city of Seattle alone, our biggest population segments consisted of males from ages
20-39. In the greater Seattle-Tacoma-Bellevue area, according to the 2010 U.S. Census, the 2534 age group holds 15.23 % of the population, 35-44 holds 14.82% of the population, and 45-54

holds 15.25% of the metro area population (usa.com). This makes sense to the fact that when
people start to have families, it is very common for them to flock from the city to the suburbs.
Thus, we believe that single men from the city and men with families in the surrounding area of
the city carry the most potential for profits. Being that men are the predominant fan of NBA
basketball, it is in our best interest to market their needs. Although, this does not necessarily
mean we are avoiding women, because as all men know, wherever single women go, men will
follow. Also, if we can attract men already with families to our games, it could mean double,
triple, quadruple, or more in terms of revenue if he brings his family with him. These two
groups have very distinguished and different needs, so we must definitely specialize our
marketing schemes towards each specific segment.
There is another segment that we feel can be tapped into that can help our business
prosper. According the 2010 U.S. Census, Washington ranks only behind California and Hawaii
in terms of the highest percentage of Asians of their population at 9%. Not only does this attract
our attention, but the same 2010 Census said that Asians are the fastest growing ethnicity in the
United States, increasing by 43% from 2000 through 2010, and these rates do not give any
indication of slowing down. With the growing NBA popularity in Asia at an exponential rate, it
can be very prosperous down the road for us if we target this group.

Sales
Any successful organization needs to have a successful sales team in order to prosper in
the sporting world, whether you are a sporting goods store or an NBA franchise in Seattle. Our

sales team must be properly trained and prepared when the time comes to persuade people to
come to our games. A group of experienced salespersons would be hired to lead our staff
initially, due to the importance of creating the best first impression on potential buyers as we can.
The main focus of this sales team is to not only attract people to buy season tickets for our
inaugural year, but to establish relationships with these consumers to have them return year in
year out. John Lombardo of Street and Smiths Sports Business Journal reported in 2012 that
75% of the NBAs full season ticket sales are derived from season-ticket holders alone. Clearly,
season-ticket selling will be the bulk of our sales campaign. Personal selling is going to play a
huge role in this effort, and our staff must be able to effectively communicate with our leads.
Some of the qualities these employees must possess, according to Lauren Wray of Forbes, are
good listening, integrity, teamwork, follow-through, and swagger. We hear it often, but it is
essential to remember that the customer always comes first. One should listen to what the
consumer wants and strive to satisfy their needs, because if their intentions are not met, the sale
will not be made. Integrity is important because people are more likely to purchase from
someone they can trust, and honesty will lead to a healthier partnership. In order to maximize
our selling, our team must work as a cohesive unit, by feeding off each other in terms of internal
and external information, resources, and methods of selling that work and do not in certain
situations. In order to establish these season ticket holder relationships, our salespeople must be
Johnny-on-the-spot for our customers, making sure they are always satisfied, and always seeing
what would make them happier. Wrays last component, swagger, deals with deals with ones
own confidence in their ability to make the sale. If they wouldnt buy it from themselves, then
who would? Through these qualities, our team is set up to succeed given the right target market
and marketing scheme.

In our initial sales ambush, we would present our offers to all the members of the groups
that have campaigned to bring back basketball to Seattle. As a sort of thank you and
appreciation to these fans who made the effort over the years to make our cause known, we will
hold a celebratory gathering for all these members to start out on the right foot; we want to create
the best first impression we can with the public. Well bring out some former players and
coaches such as Gary Payton or Lenny Wilkins. During this function, we will have an
abundance of sales staff available at any time to inform those in attendance, and hopefully, set up
and establish their season ticket plans. Also, we can create a simple incentive program with
these people so that theyre virtually working as salesmen for us. For example, for every new
buyer a current season-ticket holder recruits, they can get free apparel or even a discount off their
own price.
It would be very useful if we were able to obtain the list of the season-ticket holders from
our previous stay. These people are probably more likely to be interested than the average
person in purchasing ticket plans from our organization. Instead of firing shots in the dark in
hopes of finding customers, it would be more efficient and cheaper to focus our time on people
we know have a liking for basketball and a history for purchasing season tickets. Patching
together these broken relationships that the previous franchise caused will lead to a better view
of our new organization in the publics eye.
Just because the sale was made though, does not mean we are finished with the customer.
It is extremely important to follow up with them to make sure they are completely satisfied over
the entirety of our relationship. There is much more revenue to be made from these customers
after they have purchased their tickets. If they ever feel neglected or look at us in a negative
fashion, there is very little chance they will be spending additional money either for apparel or in

our restaurants or any other secondary markets. Salesmen should be expected to be in contact
with their customers at least once every two weeks, checking to see if their experiences were all
that they could have been, and what we could do better next time to enhance their experience.
In order to maximize our sales, we need to be issuing the right sales pitch that matches
the potential customer. It is marketing suicide to not have a variety of ticketing packages for the
wide variety of consumers we are trying to pursue. Every single person in Seattle and its greater
area has a schedule unique to them, and we must cater to that as close as possible. Some of the
following examples illustrate how we can adjust to our buyers needs.
Single Men and Women:
When single men and women go to our games, they will be looking for more than just to
watch a basketball game; it is more of a social event than a sporting event for some of them.
Whether it is our customers bringing dates to the game with them or our customers trying to
meet others while in our venue, we must be able to provide the type of experience they are
looking for. That is why we should create a specific plan that caters to these customers needs
that is affordable at the same time.
Families:
Men and women who bring their families to games are most likely looking for a different
experience than their younger, single counterparts. Instead of focusing on meeting others and
socializing, their focus would be on having a fun and affordable experience that entertains the
entire family. It is important for us to be able to not only keep the children entertained, but to
make them have enough fun to want to come back again and again. If we want to establish long

lasting relationships with family based season ticket holders, our organization must influence the
kids of these families so that theyre begging their parents to renew their plans.
Season Ticket Plan Options

Basic ticket plan for all home games

Group ticket purchasing

Half-season plan

Mini-Plan (designated number of games)

Benefits

Access to exclusive bars, restaurants, and lounges in our arena

Parking Discounts

Team Store Discounts

First chance at Playoff ticket purchasing

Meet and greets with players and coaches

Pre-paid food and drink specials at a discount

Commemorative Team items

Ticket exchange option

Locker room access (only available at certain times)

Legal Issues
When it comes to running an NBA franchise, there are many legal concerns to consider

because our organization extends into such a wide variety of areas. Not only do we have to
pertain to U.S. legalities, but the NBA itself has its own constitution in the Collective Bargaining

Agreement (CBA). Agreed upon on December 8th, 2011, this CBA can be terminated at the end
of the 2016-2017 season if either side wanted to do so. The CBA can be broken down into
hundreds of legal issues alone, stretching from salary cap, contract, free agency issues to tax and
escrow issues within the league itself.
Another important area we must consider is our brand trademark and licensing.
Professional Basketball Club (PBC), who moved the Sonics originally, hold the rights to the
Supersonics logo and brand. Although, in the agreement between PBC and the city of Seattle,
these rights would be returned if an NBA team were to return to Seattle (seattle.gov/law):
6. Seattle Sonics/Supersonics Team Name(s), History, Memorabilia, Colors,
Intellectual Property Rights. PBC agrees that it will not use the Seattle Sonics/Supersonics
team name or any logos, symbol, designs, trade dress(including, but not limited to, team colors)
or other indicia associated with the Seattle Sonics/Supersonics (the Intellectual Property) for
purposes of identifying its NBA team in game competition, marketing, promotional, or other
similar purposes following relocation of the team to Oklahoma City other than as permitted in
this Section 6. PBC further agrees that if (i) the NBA grants approval for a new NBA team to be
located in Seattle and plays its games in a renovated Key Arena, (ii) the pending litigation
between PBC and the former owners of the Sonics is fully resolved, and (iii) PBC has
permanently relocated its NBA team to Oklahoma City, then, following the NBA approval
referenced in subparagraph (i) above and upon request of the owner of the new NBA team to be
located in Seattle, it will transfer at no cost al right, title and interest in the Intellectual Property
to such new owner, such rights being subject to NBA rules, agreements, and approvals.

Therefore, upon our franchises return to Seattle, we would be able to retain the rights of
the logos, colors, and titles without any cost.
Also, in terms of branding, we must be able to defend our intellectual property rights
against those that do not rightfully pay us to use our brand. According Matthew Shank, Due to
the billions of dollars of sports-licensed merchandise sold each year, a more common form of
legal issues in sport is a trademark violation (Shank, 59). With all that money to be made, we
should do everything in our power to relinquish all fraudulent merchandisers of our product and
retain those revenue streams for ourselves.
Our arena must also be held to the standards of the Americans with Disabilities Act
(ADA). Our facility must meet with the Americans with Disabilities Act Accessibility
Guidelines statutes so we can accommodate people with disabilities. This will include building
extra ramps, openings on curbs, elevators, and providing accessible seating, bathrooms,
doorways, food vendors, and all other features given to the rest of the people.
Risk Management
Obviously, a great amount of liability comes with the territory of owning a professional
sports team and hosting that vast amount of people in your venue. It is in our best interest to
eliminate or reduce the risk of injury within our arena to avoid lawsuits as well as maintain our
reputation. Three main categories of risk management that we must take into heavy
consideration are health, safety, and crowd control. Planning and preparing will be the vast
majority of our risk management process. Our employees must be kept up to date on our policies
and procedures and be able to act appropriately when the time arrives. Outside consultants
should also be brought in at least once a month to tour our facility and determine where we are

vulnerable to risk. We should also look to the standards of care of professional venues such as
ours, which may include certain safety guidelines, safety laws of the state of Washington as well
as federal law, and other statutory mandates within our interest. It is important that we are able
to communicate these policies weve created to our guests, so they know what is expected from
us as well as from them prior to them entering our venue. In order to do this, these policies must
be paced on our website, on the ticket itself, on pamphlets at information desks, in our team
programs, signs in and around the stadium, and be announced during the game. If we
accomplish this, we are able to transfer the liability from us to the consumer and avoid certain
lawsuits.
Not every potential injury or accident can be avoided though, so we must be prepared for
when these occurrences take place. Emergency action plans must be developed so that we can
provide the proper care when these things happen. According to John Spengler, Paul Anderson,
Daniel Connaughton, and Thomas Baker*, an emergency action plan should include the
following:

Knowing the distance of local EMS from our facility

Knowing the response of local EMS to our facility

Purchasing and locating emergency medical equipment

Having staff properly trained and certified in CPR and first aid

Having athletic trainers on staff where feasible

Proper communication devices and phone numbers available at hand

After we develop our emergency action plans, it is imperative to communicate this to our

Employees and rehearse these procedures often. Rehearsing these will have our staff ready to act
when these emergencies occur.
Along the same guidelines as an emergency action plan, but dealing with larger scope
and more devastating happenings, is a crisis management plan. This can deal with extreme
weather conditions to fires to even terrorist threats. Just as we had with our emergency action
plans, it is imperative to develop our plan, communicate it with our employees, and then practice
it. It would be wise to research past crises that could potentially happen in our arena. We could
see what that particular organization did during the crisis, critique it, and then implement our
plan based off what we feel would work in the safest and most efficient manner.
It is extremely important for our organization to be prepared for these types of situations.
If they are not handled in the correct manner, our companys reputation can be ruined, and more
importantly, people can get hurt. Fans should be able to feel safe and in good hands when they
visit our venue.
Projections
As a new professional franchise coming to a city that has been longing for a basketball
team, we believe that we will be able to sell out our arena night in night out for the first couple of
years. Annually, we predict roughly$45 million in ticket sales, which could rise or fall
depending on the teams play (added revenue if we make the playoffs). In terms of our
licensing, we feel that we would be able to sell a large amount of apparel the first few years
being that no one has any clothing of our new franchise. We feel that we would be able to
collect around $25 million annually in terms of our brand licensing for the first five years.
Another heavy source of revenue are T.V. contracts; from the NBAs deal worth over $7 Billion

over eight years with ESPN, ABC, and TNT that expires at the end of the 2015-2016 season, a
new contract may lead to us earning around $40 million annually. This does not include our
local T.V. contract, of which we would estimate at around $20 million a year. In total, we feel
that we can produce roughly $130 million a year in revenue for our first five seasons.
In terms of expenses, just our team salary has the potential of being as high as $70
million, which would be over the salary cap and would lead to a luxury tax. Along with
operating our arena, paying organizational salaries and other expenses, we feel our total expenses
could reach to $100 million.
Therefore, we estimate that we can average around $30 million in profit for our first
couple of seasons, and then this total may drop after the new car smell wears off, which could
see our profits drop to around $20-$25 million a year (depending on how the team does).
Although, with the NBAs plans of lowering the players percentage of basketball related
revenue from 57% to around 40% (Ozanian, 2011), as well as other revenue sources to be tapped
into overseas in Asia and Europe, we feel that our profits will surge alongside the growing global
interest in our league.