VIEWS: 127 PAGES: 16 POSTED ON: 3/4/2010
Maria Sharapova: Marketing a Champion Team 1 Christie Cook, Danielle McReynolds, Bret Leatherwood, Nathan Dr. Vince Howe MKT 445 21 April 2008 Executive Summary The first issue facing Max at IMG is to differentiate Maria Sharapova from Anna Kournikova. Both are attractive, blonde, Russian, tennis players. Kournikova was a promising athlete as a teenager, but never won a major singles title and ended up being recognized for her tabloid presence more than her tennis career. Sharapova wants to make sure that the public knows her goal of being a winner. Max must also determine the best approach to the management and marketing of Maria Sharapova. A balance of short term and long term opportunities that will propel Sharapova‟s career and image must be implemented. To find this balance, Max must decide which endorsement offers would be worthwhile to pursue. Finally, it has to be decided how to best leverage the resources available to Max at IMG. IMG represents clients from all areas of entertainment. Max will have to best utilize IMG‟s expansive network and salespeople and be able to make smart connections through the company. Our consulting team has come up with a list of recommendations on how to best market Maria Sharapova as a Champion. To allow sufficient time for training, only take on a maximum of ten endorsement deals at a time. We are also recommending that all of those ten deals should be products that strengthen Sharapova‟s image as a champion. We also feel that taking the deal with Motorola would be a good move due to the upcoming release of the Razor phone as well as being a high quality, tech savvy company. Other recommendations include creating a Sharapova clothing line for Nike, and taking advantage of Public Relation opportunities by appearing in relevant publications and television appearances. Relevant Background Maria Sharapova possesses an extraordinary story of success. She and her father relocated to the United States from Russia, not speaking any English, and carrying only $700 dollars. Through hard work and dedication, Sharapova was able to secure a scholarship to IMG‟s Nick Bollettieri Tennis Academy at nine years old. By the age of 13, Sharapova was winning professional tournaments. She was well on her way to tennis stardom (Elberse). After winning Wimbledon at 17, Maria Sharapova became the third youngest and first Russian female ever to win the elite tournament. She is represented by her agent Max Eisenbud of IMG. IMG is one of the leading agencies in sports, entertainment and media. Headquartered in Cleveland, OH, IMG became so large that it had to break down into smaller businesses to better serve its clients. One of those businesses is IMG Tennis (Elberse). Eisenbud has been advising Sharapova on her on-court success as well as creating successful business relationships off the court since she was 11 years old. Eisenbud represents an extensive list of clients but allocates most of his time and effort to Sharapova. Working for IMG, Eisenbud has access to a large team of people to assist him in making contacts and deals. With his expertise in the tennis industry, Eisenbud tends to personally attend to all tennis related business, but he relies heavily on global sales teams to assist him with any business outside of the tennis industry (Elberse). Shortly after Sharapova won Wimbledon, Eisenbud received almost 700 emails requesting her for media appearances. It was quite obvious that Sharapova would be in high demand all over the globe. Before winning Wimbledon, she had contracts with Nike and Prince Tennis Rackets which she signed six and three years ago (Elberse). Management Issues There are many issues facing Max Eisenbud with regards to marketing Sharapova as a champion. The first is to market Sharapova in a way that differentiates her from Anna Kournikova. Both girls are blond, Russian tennis players, but Kournikova is known for her looks and tabloid presence more so than her tennis career. Eisenbud must be careful not to let Sharapova fall into the celebrity spotlight. He must make sure that she is known for her athletic ability rather than solely focusing on her appearance. Eisenbud must also determine the best balance of short term and long term opportunities that maximize the management and marketing success of Sharapova. Eisenbud must find a way to capitalize on her Wimbledon victory while keeping in mind the long term goal of being the number one tennis player in the world. This can be done by establishing a general direction for an overall marketing strategy that does not interfere with the demands of a first class athlete. Winning Wimbledon opens the door to a plethora of endorsement opportunities. Eisenbud must pick endorsement opportunities that align with the desired perception and brand of Sharapova. Once Sharapova commits to an endorsement, it will shape the path of her future opportunities. Sharapova already has deals with Nike and Prince, and is now facing the decision of taking on the cell phone company Motorola. Other endorsement opportunities include a U.K. based furniture company, a French luxury goods company, a personal fragrance line, attending a launch even in Dublin, a British luxury goods seller and a skin care treatment endorsement. IMG represents clients from all areas of entertainment, giving Eisenbud a multitude of resources to utilize. Eisenbud must use IMG‟s expansive network of salespeople to maximize time and effectiveness. IMG has many businesses such as Academies, Broadcasting, Consulting, Fashion, Licensing, Live, Media, Models, Olympics, Speakers, Special Projects, and Stadium and Arena Groups. Eisenbud must effectively leverage his resources at IMG to effectively and efficiently market Sharapova as a champion. Internal Analysis IMG claims to be “the world‟s premier sports, entertainment and media company.” IMG originally started its operations as a sports marketing agency that represented sports figures. Their first client was the great golfer, Arnold Palmer. Since then IMG has grown tremendously, operating offices in more than 30 countries. IMG has many strengths. They have successfully diversified by moving away from only representing athletes. Their operations also include representation in broadcasting, music, fashion, licensing and consulting services, event ownership and management, management of sports academics, and golf course design. According to Max Eisenbud, “talent is about one-fourth of what IMG does.” This has given IMG many other markets to compete in. They represent clients around the world. Globalization has given them another form of diversification. IMG now has a chance to tap into many markets. Diversifying gives the company more risk aversion. The company has divided operations into business units according to the industry. IMG tennis, which represents the top tennis players around the world, is the unit that deals with Maria Sharapova. Even the tennis unit has diversified their operations and now not only represents players, but is also active in teaching academies, tournament and tour management, television-related initiatives, and corporate sponsorship. Dividing the company into business units gives each entity the ability to focus on the specific industry. IMG‟s success also stems from their commitment to a team-oriented, global approach to representing their tennis players. IMG‟s athlete representation depends on synergy from the agents and salesmen worldwide. In order for Maria Sharapova and other athletes to be represented well, agents and salespeople must maximize their relationships with corporate clients. IMG‟s agents will manage the athlete‟s overall brand, deciding what offers and opportunities to partake in, while the salespeople find the corporate clients and opportunities. Having a team of salespeople worldwide gives the agents more time to focus on other areas of their operations. Although IMG is strong in many areas, they must monitor the internal environment for weaknesses and determine what those weaknesses are so they can improve their operations. IMG has diversified their company in many ways. IMG has successfully diversified dealing mainly with areas in entertainment. IMG must constantly assess what markets they should enter. Too much diversification can lead to unfocused operations and loss of resources. Having a specific specialty will help the organizations focus. In addition to observing the internal environment, IMG must also scan their external environment for opportunities and threats. IMG always has new opportunities in athlete representation. There is always emerging talent to discover. IMG‟s investment in athletic academics like the Bollettieri Tennis Academy has given them a chance to be on the front lines scouting young talent. After all, IMG found Sharapova at the Bollettieri Academy at age 11. IMG can also gain more corporate clients which will unlock more opportunities for them. Their sales force can find new companies that would like to utilize IMG‟s services and clients. IMG also needs to recognize threats in the external environment. IMG must prevent clients from going to the competition. Athletes sometimes will want to switch agencies, so IMG must offer good services to keep their talent content. Another threat could potentially be dying interest in sports. If certain sports loose popularity, then the athletes that compete in them will loose popularity too. IMG cannot control the world‟s interest in sports; the diversification of athletes in their agency helps combat this threat. The changing economic conditions can affect IMG too. When the economy suffers, many companies will cut back on their marketing expenditures. This means IMG can loose endorsements and revenues from corporate clients. The agents at IMG are not paid on a commission basis. Eisenbud claims he does not earn commissions, but that bonuses can be earned at the end of a year. If IMG gave agents commissions, the agents might not act in the best interests of their clients. The agents might try to make as much money as possible and loose sight of the interests of the firm and client. The agents cannot forget that the success of their client is most important. Too many endorsements can take away from players‟ training schedules. IMG is a strong company that excels in many areas. Their strong relationship with corporate clients is a core competency. A long history in the marketing industry has earned them respect and many contacts. Companies know that IMG has quality services and players, and they are more prone to use IMG because of their extensive line of services. This means IMG has another core competency in their diversification and line of clients and services. IMG represents many people in the entertainment industry and a corporate sponsor will choose IMG because of their wide variety and top names. Another core competency of IMG is their ability to scout and retain talented clients. IMG found Sharapova at age 11 and they strive to keep her and many other top athletes and entertainers. IMG must provide quality services and representation to keep their clients satisfied. External Analysis Macro Trends The sport industry has accounted for almost $40 billion in revenues in the US, and $80 billion worldwide in 2003. This is up from $32 billion and $68 billion just two years earlier. There is also a lot of growth stemming from new forms of media that can provide alternate revenue. This is done by allowing new areas for endorsements, sponsorships and merchandising to grow. Favorable economic trends will also allow people to spend more on sports and entertainment. Industry Environment WTA players earn money playing in tournaments with varying prizes. The highest tier tournaments have prizes of at least $1.3 million and the lowest tiered have prizes of around $10,000. The all time prize money leader is retired German player Steffi Graf who earned in her entire career $22 million. The average player makes about $100,000 a year, before expenses such as travel to tournament and coaching. This is not much money compared to athletes in other sports such as Football, Basketball, or Baseball who sign multimillion dollar contracts and can earn over $10 million a year for star players. Sponsorships and endorsements are so important to tennis players because it is where the majority of their revenue comes from. It very important to stay on top of the game and not slip in the rankings because the top players will get the best sponsorship and endorsement deals. Competition Competition for Maria Sharapova comes from two different sources. The first is competition from other tennis players. This is more of a direct competition because she must do better in the sport than the other players to be at the top of the rankings. Sharapova must strive to stay high in rankings in order to get the best sponsorships and endorsements. The other form of competition for Maria Sharapova is from outstanding athletes in other sports. All top athletes are competing for deals outside of their sport in many different areas such as cars, watches, clothing, etc. There is a list of the top 25 compensated athletes which shows the breakdown of how each athlete makes their money. 19 of the top 25 athletes play team sports and make most of their wealth from their team salary rather than endorsements. Consequently, athletes in individual sports must work that much harder to earn endorsements. For example, the top rated athlete on the list is Tiger Woods who earns a total of $76 million a year. $70 million of that he earns through endorsements. On the other hand, the 12th ranked athlete on the list makes a total of $22 million a year. Only $250,000 of this comes from endorsements. Maria Sharapova must work hard on and off the tennis court to earn money from endorsements because in order to get the deals, she must be one of the perennial top athletes not just in her own sport, but in the entire industry. Recommendations Limit the number of endorsement deals to no more than ten at a time. Limiting the number of endorsement deals to ten at a time will allow Sharapova to focus on her tennis career. This will also help to maintain an image of an athlete rather than that of a celebrity. The following is a statement made by Jeff Chown of The Marketing Arm in reference to not taking too many endorsement deals "She has great marketing potential. She has the looks of Kournikova, but the game will keep her in the public eye” (Isidore). It is also noted that “any deal she signs now would probably be at a steep discount to the money she'll be able to command in a few years if she continues to win on the court” (Isidore). Keeping endorsements to a minimum will eliminate the risk of overexposure and present an elite image, differentiating Sharapova from Kournikova. The market most interested in Kournikova tends not to care as much about her tennis career as they do her status as a sex symbol (Isidore). Some things to be aware of when implementing a low volume endorsement strategy is the potential sacrifice in revenue and name awareness among non-tennis markets. Only take endorsement deals that strengthen Sharapova’s brand image. It is important to maintain a consistent image when marketing a brand. Since Sharapova‟s goal is to be the number one women‟s tennis player in the world, it is important to market her as such (Elberse). This can be accomplished by being particular with the brands an athlete endorses. “Because star athletes and other celebrities are „brands‟ that have certain meanings for consumers, companies can spend millions of dollars to align themselves with those celebrities. They hope those celebrities' brands „rub off‟ on the products they are trying to sell, be it apparel, cars, or beauty products” (Gilbert). Sharapova must be sure to align herself with brands that match the image she wants to portray. By being selective, more time will be available for her tennis career. Also, by associating with only high quality products, she will continue to attract quality endorsement deals that could equate to larger revenues in the long run. One drawback to this recommendation is the potential loss of revenue due to the selectiveness of endorsement deals. Sign with Motorola for the release of the new Razor phone. Signing with Motorola can be a very lucrative deal for Sharapova. We feel that the Motorola image aligns nicely with that of Sharapova‟s and the launch of the new ultra-sleek phone should make its debut with the athlete. The new “high-buzz, high- fashion product” will surely be a marketing success for both Motorola and Sharapova (In Search of the “Hero” Product). Sharapova‟s phone ordeal after winning Wimbledon will make for good promotional footage to use for Motorola ads. This will save time by not having to do extensive filming for commercials and advertisements. Substantial time investment might be an obstacle with the Motorola deal. Also, as the Razor is a new product, there is potential for the product to fail, ultimately tarnishing Sharapova‟s image. Continue to strengthen contract with Nike by developing a Sharapova clothing line. Because she already has a contract with Nike, Sharapova should capitalize on her recent Wimbledon win by creating a women‟s tennis clothing line with Sharapova‟s name. Nike‟s high brand awareness caters to Sharapova‟s image as an athlete as well as increasing the Sharapova name awareness. This clothing line has potential for high revenues, but could also be time intensive. Nike and Sharapova would have to work out a way to minimize Sharapova‟s time spent on the line. Highly utilize IMG’s resources to increase public relation opportunities. Appearing in popular tennis and sport publications, on sports related talk shows, doing interviews for sports illustrated, etc. will highly benefit Sharapova by portraying her more as an athlete than a celebrity. Eisenbud can accomplish this by educating IMG sales teams about Sharapova and by building and maintaining strong relationships with IMG Broadcasting, Live, and Special Projects. Time management is an issue and must be utilized to maximize Sharapova‟s training schedule. Implementation and Control The recommendations we have chosen are ones that we feel will be most beneficial to Maria Sharapova‟s career as an internationally recognized tennis champion. However, in order for these recommendations to be carried out successfully, Maria Sharapova must collaborate with her agent, Max Eisenbud, and IMG in order to designate a profitable plan. They must use time management and personal judgment in order to make a timeline of events that will not only achieve these short-term goals, but also create opportunities for Sharapova in the long run. Implementation of these suggestions will be based on the affordances and constraints of Sharapova and IMG. In applying these recommendations, Sharapova and her agent should develop a basic time-line to follow, which will put the most favorable recommendations in the very near future, and then work towards completing all of the recommendation within a set time frame. Setting a time schedule will give the team something to work towards and will create a more concrete visual effect instead of just ideas. Of the five proposals we have offered to the Sharapova team, we suggest that the first to take place is the Motorola partnership. Being the face for the new Motorola Razor will be an excellent opportunity to increase awareness of Sharapova, as she is not yet a widely recognizable name. Putting her face on a product that is created by a widely recognized and accepted company will be a good start for Sharapova. By endorsing Motorola, Sharapova will also be implementing the recommendation to only support high-quality brands. This will strengthen her image not only among fans and consumers, but also among other companies that may wish to use her as an endorser in the future. This project may lead to prospects with other high-quality, high-technology products, such as cameras or ipods. In order to further awareness of her name, Sharapova should focus on several public relation opportunities in the months after her Motorola commercial has been released. The commercial will hopefully spark an interest with the public, who will then want to see more of Sharapova. Instead of plastering her name all over billboards and magazine covers like another blond tennis star, we will make the public wait awhile before they get what they want. After some time, Sharapova should attend certain events that will enhance her brand image. To begin with, she should play at a charity tennis event. This will create an image of benevolence in addition to furthering the awareness of her name. After the charity event, Sharapova may choose to appear in a sports magazine, preferably on the front page to create an appearance of importance. By appearing on sports magazines as opposed to popular culture magazines, Sharapova will be enforcing her image as a professional athlete, not a celebrity. This is a very important aspect of her image. The preceding recommendations will undoubtedly have increased awareness of the Sharapova name and created an interest in her and her brand. Sharapova will hopefully have been winning tennis matches throughout this entire time and now may wish to create a clothing line with Nike. This venture may prove to be the most time intensive of all of our recommendations, but also may be the most profitable. In order to reduce the time commitment that Sharapova herself has to make, she may wish to choose several people with similar interests and tastes as her own to create the clothing line. After the items have been designed, she could either approve them or suggest changes to be made. This will allow Sharapova to release a clothing line she is proud of, without having to waste time that could have been spent making her a better tennis player. Throughout all of her endeavors, Sharapova must focus the majority of her time on playing tennis. She is first and foremost a tennis player and without any skill to back her, she will be just another Anna Kournikova and the efforts of IMG and Eisenbud to prevent this will have been futile. One very important part of preventing a likeness between Sharapova and Kournikova is to limit the availability of Sharapova. She should only choose ten endorsements at a time. As a tennis star, endorsement offers will be flying at her, and it may be tempting to accept as many as possible, but eventually the public will get sick of seeing her. The aforementioned recommendations, if implemented successfully, will not only advance the creation of an international tennis star, but will create a high quality brand image that will be profitable for years to come. Works Cited Elbernese, Anita, Golod, Margarita. "Maria Sharapova: Marketing a Champion." Harvard Business School (2007): 1-17. Gilbert, Sarah Jane. "Marketing Maria: Managing the Athlete Endorsement." Harvard Business School 29 Oct 2007 17 Apr 2008 <http://hbswk.hbs.edu/item/5607.html>. Isidore, Chris. "A Kournikova Who Wins." Sports Biz. 02 Jun 2004. CNN Money. 18 Apr 2008. <http://money.cnn.com/2004/07/02/commentary/column_- sportsbiz/sportsbiz/index.htm>. McEwen, William J. "In Search of the "Hero" Product." Gallup Management Journal Online (13 July 2006): 1. Business Source Premier. EBSCO. Randall Library, Wilmington, NC. 18 Apr. 2008 <http://0- search.ebscohost.com.uncclc.coast.uncwil.edu:80/login.aspx?direct=true&db=buh &AN=21835541&site=ehost-live>.
"Maria Sharapova Marketing a Champion"