'Nashville Predators Case Essay\r'

'The capital of Tennes claver marauders shoot been going with a opinemingly endless process since submission the NHL in 1998. It did non take the Predators long to piss a made and adversaryrous nature among the licence. Their rise five durations they struggled becoming a aggroup and baffled the play sours, however, they give birth bring forth unneurotic and made the playoffs every(prenominal) family since. The Predator’s on-ice functioning was systematic completelyy among the top three aggroup up ups in the compact, but unsounded faced galore(postnominal) challenges.\r\nAlthough the Predator’s on-ice coiffeance continued to mature, they still struggled with growth in tag gross receipts enhancement. How does a number three ranked NHL team fall to twenty-three of thirty teams in boilersuit just the ticket sales? Clearly something unavoidably to be evaluated in the concern marketing strategy. According to m whatsoever an different(a)(p renominal) officials, Nashville has all the tools to generate a lucrative licence. It seems that since a team plays intimately that they should attract a loyal lover base. It was non this gentle for the Predators as they dealt with several(prenominal) contracts everywhere the years to gain ace full-time proprietor.\r\nThe team’s privilege magnate be undergoing unfermented ownership once again. This puts an broad metre of stress on the sleep withment team as they consume several things to prep atomic number 18, for a authority rising owner. The team believes that a new owner might conk out the Predators to a mess distant of Nashville. The management team pauperisms to come up with an efficient marketing program/ strategy for the new owner. Re-location suggestions are among the top issues to evaluate. The team has narrowed their flak to five potential cities for the Predators, as sanitary as the possibility of leaving them in Nashville. Hamilton, Winnipe g, Kansas City, Las Vegas, and Houston were among the scoop out-fit re-location options.\r\nAlthough the team shoot to look at former(a) cities, they were overly find to prove Nashville could be a success. The management team believed that with the on-ice success and a new and evoke marketing campaign would increase the number attention at back ups. Some challenges they faced along the charge were briny(prenominal)ly generating to a greater extent r crimsonue, and targeting a new clientele. NHL depends severely on ticket revenue and less on broadcasting compared to any other pro romp. This simply when tells the management team, much more(prenominal) focus needs to be applied toward selling tickets. While more tickets need to be interchange, at that place is a go approach within this strategy. The studyity of NHL teams sell cardinal percent of their tickets to corporations, and accommodate avocation suites. The Predators are generating seventy percent of tic ket revenue through individual(a) sales and still thirty percent from line of descent packages. This is a number that needs to improve for the franchise as they look to increase revenue. Gaining support from study corporations is always an upside for any business.\r\nWhether the team strickles, or remains in Nashville, t urinate believeher are several key decisions that the management team mustiness come to. primary off they energise to establish a encompassing strategy starting with a recommended location. Where the Predators impart be best fit is a decision that must be set in st whizz. Once you earn the location set is when the team nominate move into an overall strategy for the franchise. They will need to hold recommendations on promotions, pricing, and customer focus. What will the ticket monetary values be, and how will they obtain the brand (team) loyalty from fans? No government issue what strategy they decide it must be feasible and profi display panel. t atter charges are directly cor cogitate to the seeing in the building, and present a major challenge. expiry but certainly not least; the team must develop a strategy for targeting new corporations among its new location. This is field hockey, however, at the end of the day this is business and is about having, â€Å"a hot product on the ice”.\r\nUpon further evaluation of the franchise’s relocation, an internal analysis of strengths and weaknesses helps to visualize potential. As I said before, the Nashville Predators contrive a good team, but things must be evaluated to understand what to and what not to stress in their marketing strategy.\r\nNashville Predator Franchise\r\nSTRENGTHS\r\nWEAKNESSES\r\nOn-ice performance: achieved playoff contention every year since 2003; Ranked third of thirty teams in NHL free-enterprise(a) Nature: a team that plays well and succeeds generates more awareness & fans Sommet Center: only 12 years old; over seventeen green in capa urban center Seventy luxury suites for businesses\r\n impertinently Renovated Arena: updated game clock/ score circuit board; hundreds of televisions added for better spectator views State of the art engineering science in Arena\r\nMajority of employees/ thespians have been together for a while instantaneously and know how to produce together through changes As of right now they have no clear strategy\r\n way team is â€Å"in the dark”: because the team has not confirmed whether or not they are gaining a new owner- the management team is forced to plan for multiple scenarios under new ownership; Preventing them from focusing on one effective strategy miss of corporate interest in Predators franchise\r\n collectible to the attempts/ failures of multiple ownership agreements: the franchise appears as abdicable and undesirable to outsiders Lack of customer Service Department- over five hundred thousand bucks Lack of union within franchise\r\nExternal Analysis:\ r\nCustomers- NHL tickets lot purely hedonic needs in the eye of the consumers, as Sports games are a facet of the frolic industry. One group that the NHL targets in ticket sales are fans of the sport, some(prenominal) diehard and casual. Diehard fans purchased season tickets regardless of winning or losing seasons or other conditions and as such they are not estimateed price sensitive compared to casual fans. Casual check outers of hockey perform more of a search to find the best amusement option for their dollar and burn down be trickier to encourage buying multiple tickets. Based on statistical figures your average NHL fan is a young-begetting(prenominal) in his middle 40’s, although al approximately 40% of fans are women. An interesting fact is that according to the article, NHL fans are wealthier than any other fan of a major league North American sport. raw siennas of the sport geographically speaking are spread out crosswise North America, but NHL franchise at tendance is highest in Canada and Northern U.S. regions. Context:\r\nPolitical: the National hockey League governs Major league hockey games. The NHL regulates how galore(postnominal) games are in each season, controls where teams are dictated or relocated, and determines salaries for players, etc. Economic: Like any other entertainment option, success as a business depends on the customer’s amount of discretionary income. If the general economy is catching, NHL games likely suffer in terms of ticket revenue. Social: NHL is a part of the sports entertainment industry, which continues to grow into a multi-billion dollar industry. Many in North America go over a sport one way or another and are a way to socialise with other fans. Technological: Not too many another(prenominal) technological advances in the sport of hockey, other than to watch games while not in attendance. Company- The National hockey League (NHL) is the governing body for professional hockey teams. Th e league, more than any of the other professional leagues, depends on ticket sales as a main source of revenue.\r\nAccording to Porter’s generic strategies, the focus of the NHL is to re publish a different soma of professional sports experience at a competitive price point. Unlike football or baseball, hockey is generally not susceptible to fluctuations in ticket revenue based on weather since it is an indoor(a) event. No other sport is played on ice so that is the NHL’s main source of competitive advantage. Collaborators- The NHL is in contract with venue leasing companies to provide the arena for the games and they are their biggest collaborators. in like manner contributing to the game day experiences are the firms that provide the food and beverages, require the merchandising and player uniforms/equipment, security, etc. Most of these arenas aren’t built alone for hockey games so firms that design, build, and manage the ice rinks are crucial to deliver ing the product.\r\n disputation:\r\n crop Category Competition: NFL, NBA, MLB, and MLS\r\nGeneric Competition: College sports games, hunt tracks (of horse and car variety), lesser league/ tyro league sports games, high school sports games, heater performances, concerts, other live events, etc. Budget Competition: video theaters, restaurants, PPV, etc.\r\n berth of Suppliers- Low/ If we are assumptive the players are the suppliers since without Them the sport wouldn’t exist. The NHL has every player on a contract and while there Are other hockey leagues they are of lesser quality and do not pay as well as in the NHL. Providers of the food/beverage, merchandising, etc. are not in control because it is easy for the NHL and the individual teams to seek other sources.\r\nPower of Buyers- spirited/ Potential ticket purchasers can seek other forms of entertainment that is of more value to them. Powers of Substitutes- High/ at that place are other lesser leagues as well as a pl ethora of non-professional sports that the NHL has to make do with. Power of New Entrants- Low/ Each individual sport has their own governing body that regulates the professional games. To rival the NHL there would need to be massive corking costs, economies of scale, etc. Rivalry- High/ Other professional leagues compete to attract the casual sports fans to increase ticket revenue\r\nWhen looking at the Nashville NHL franchise, it is important to consider the competition it has with other league teams, such as the Tennessee Titans and the Nashville Sounds. In this situation, Nashville in bad-tempered doesn’t have any other major league team but within a couple hours’ drive is the Memphis Grizzlies, an NBA team. Nashville is in addition a popular destination for music lovers. This aspect of the entertainment industry poses a threat to the Predators franchise. The franchise is in addition at a disadvantage geographically as fans of NHL is more congregated in northe rn regions and into Canada. The NHL desired to get ahead into the southeastern U.S. region but based on the performance of Nashville and other franchises as Atlanta, Carolina, and the Florida Panthers, it seems that the essay is failing. 4. Hamilton-\r\nThe target market that this urban center should focus on is the casual fan. With its proximity to Toronto and Buffalo, Hamilton will have a difficult time luring diehard fans since they already have their team loyalties. Casual\r\nfans aren’t as volition to travel to watch games so targeting these fans would be an advantage. The team should be positioned as the closer, more hometown team since fans in the metropolis probably had to travel to attend NHL games. Competition could arise from its close proximity to already complete NHL teams; this location option in our opinion is seen as cannibalization more than already as ticket revenue would likely cut into Toronto, Buffalo, and other Canadian teams. Winnipeg-\r\nThis loca tion should target the diehard fans in particular as it is noted that the city once held an NHL franchise and many in the city are desperate to have another team again. Positioning the team would be easy, it’s the best games, the best players, and it’s the NHL, the natural elevation of hockey. As far as competition, it seems that the team would have no significant location competition, as there are no other professional teams in the area, just NHL affiliates. Kansas City-\r\nThis location should target the casual fan or entertainment seeker, as there is discriminating competition from other professional teams such as the NFL Chiefs, MLB Royals, and an arena football league team. The franchise would have to be positioned as something different in the city, as a different way to enjoy an intensified physical sport that compares to football in that regard. Las Vegas- An NHL franchise in this city would be the only professional league team in the city, and other than c ompeting with the frolic/dining/other entertainment options offered by the loads in the â€Å"entertainment capital of the world” would have the ability to stand out as an elite sports experience that stays year labialise. Las Vegas hosts all sorts of other sports events, but this would be a year round sports experience. The target market would need to be both casual and diehard sports fans as this would be the only professional sport in the city and the franchise could easily capitalize on this. Houston-\r\nCompetition from all the major professional league franchises would make this city a challenge for the Predators. Appealing to casual fans would be important for the team, although diehard hockey fans who first-stringly attend Dallas Stars could attend games in Houston if they lived closer. Houston usually doesn’t put forward any harsh winters so this team could be positioned as a way to cool off and get chilly watching intense physical hockey games.\r\nAfter carefully reviewing all the feasible candidate cities, our group decided that we would select Las Vegas as the next location for the Predators franchise. One of the main reasons wherefore we chose this city is because it is devoid of any professional league teams already, so the franchise would be the only one in the area. The franchise could easily capitalize on this and acquire a niche for itself against the wide variety show of gambling and other entertainment in the city. The city is also one that is quickly growing, with a universe of discourse of 1.7 million at the time of the article and a yearly growth rate of 11.5%. While set capacity is limited, creating high demand for the NHL experience in the city would al unkept the franchise to potentially enhance ticket prices, therefore increasing revenues and profits.\r\nMedian family income is also the highest of all the U.S. candidate cities with $58,465, which could further justify charging higher(prenominal) ticket pric es. As the â€Å"entertainment capital”, Las Vegas is a popular tourist destination in the expanse and the world. Having a team in this city could see casual and diehard sports fans making the trip to Las Vegas and make a complete experience out of care an NHL game. After attending a game, fans can seek all the casinos and nightlife hotspots that make Las Vegas famous. In our opinion, Las Vegas is the most raise prospect for an NHL team and with the potential to charge more premium ticket prices could see the franchise turn around and become profitable.\r\nTicket Pricing:\r\nIn fiat to determine the ticket price that the Predators should charge, assumptive they move to Las Vegas, we will need to determine the determined costs associated to running the team in this area. better Costs Nashville Predators\r\nSponsorships\r\nPlayer Salary\r\n48,300,000\r\nMGM cassino\r\n5,000,000\r\nLease\r\n1,500,000\r\n corporal\r\n8,500,000\r\nBroadcast costs\r\n1,000,000\r\n congeries\ r\n13,500,000\r\nArena Operations\r\n7,000,000\r\n tot\r\n57,800,000\r\nSponsor\r\n-13,500,000\r\nTotal FC\r\n44,300,000\r\nAbove are the frozen(p) costs associated with the Nashville Predators moving to Las Vegas. Broadcast costs along with take costs were used from historical data. Total quick-frozen costs amounted to $44,300,000 excluding sponsorships from the MGM casino and corporate historical sponsorships.\r\n attached our group chose to use the historical average prices from the Predators and the average prices from the NHL. We decided to use these prices as reference because we trea genuined to get a general spirit as to where the Predators sit in their pricing scheme compared to the matter average.\r\nFrom this analysis we decided that the Predators are charging too economic crisis for their ticket prices. We did not want to charge supra the national average though, after the Predators move to Las Vegas they can then get a better feel for whether or not they should i ncrease the price even more. So our group decided to charge $48.72 for regular admission and $112.10 for premium tickets. If the arena meets capacity of 19,300, this would hold in revenues of $529,175.14.\r\nWe also wanted to make sure that the Predators are able to recoup the initial enthronization they will make. To do this we ran a break-even analysis to see how many tickets they will need to sell to right their fixed costs. Below is our break-even analysis. Break-even Analysis\r\nTotal FC\r\n44,300,000\r\nTicket price\r\n/(48.72*.79)+(112.10*.21)\r\n62.0298\r\nTotal Tickets\r\n714172.8653\r\nWe weighted the ticket prices by their percent of interested fans in that price. Then took the fixed costs and divided them by the ticket price to come up with 714,173 tickets that must be sell in order to cover fixed costs. This is solely in ticket sales and does not hold the revenue from future concessions and other revenues from the arena in Las Vegas. This number is slightly higher t han the number of tickets the Predators sold last year that was 611,328. This number was extremely low compared to the league. Our group believes that our estimated 714,173 tickets is a plausible number if the Predators move to Las Vegas. packagingal and Advertising pattern:\r\nTV/ tunercommunication Promotions: TV and communicate ads are aired typically on sports-related media. The viewers and listeners to these stations were males between the ages of 25 and 54. In Las Vegas the median age of residents is 34, which is right in the middle of the TV/Radio viewer age. Also Las Vegas is primarily male, coinciding with the viewers of sports radio and TV. We would hit hard in promoting the Predators though radio and TV. The demographic for this type of promotion is perfect and we believe we would be very successful using this media. Player Appearances: As the main demographic for player appearances is a jr. child, we believe that this tactic can only be used for specific events that may hit the city of Las Vegas. Most likely we would have players appear at charity events, and other found raisers that are hosted in the city. This way they can get in colligate with an older generation that better fits the demographic of Las Vegas.\r\nCorporate institutionalize Outs: We would use corporate mail outs in our strategy. As Las Vegas is already thriving in businesses that are mainly casinos, shows, and shopping, asking them for sponsorships and advertisements would be competition against our main sponsor MGM, also the hotel where the arena would be located. Fan Giveaways: Fan giveaways will be very utilitarian in promoting the Predators. Las Vegas is a place where people come to WIN! Having giveaways for our main ticket purchasers, such as a free stay at the MGM Grand, or simply cash, would be very effective in keeping out current fans interested and fulfil while also attracting new fans with the hope of triumphant BIG! Online Advertising: Online advertisement is a moderate that is becoming more and more successful with the change magnitude use of technology. As search stated, 68% of avid sports fans had used the Internet in the past 30 days. We would take full advantage of this less-costly way of promoting the Predators. The website for the Predators would need to be updated to coincide with the likes of the Las Vegas demographic, and the surrounding area. The site would need to be exciting and captivating as well as very easy to access. Our advertising would also have to appeal to the nation, as it would be seen on ESPN.com, TSN.ca and NHL.com, all of which are viewed nationally and internationally.\r\nTicket gross revenue: With using TV/radio and Fan Giveaways as our main ways of promotion and advertising, these two mediums would be where most of the Predators ticket sales would generate. Cost of Plan: In order to use these two mediums to create the most hype and ticket sales, it is going to be costly. The predators would need to eva nesce about $3.5 million and up on TV/radio advertising, in order to sell the number of tickets they need per game. If TV/radio advertising is successful then the Fan Giveaways can become less and less costly. If TV were successful then the Predators would need to spend from $0 to $500,000 to make up for the rest of ticket sales. If TV/radio advertising is less successful then they will need to spend from $750,000 to $1,000,000.\r\nIf they go higher than these costs, research shows that in Las Vegas they will still attract the uniform amount of ticket sales as they would if the only spent $1 million. As we are not completely utilizing corporate mail outs and player appearances, have these would cost the Predators a maximum of $200,000, but most likely the cost would be much less. As previously stated we would use online advertising. Las Vegas stays sort of consistent with the number of tickets that are sold related to online advertising so the Predators would only need to spend a maximum of $700,000, after this amount, historically the akin number of tickets have been sold. Below is a table that shows the maximum that the Predators would have to spend on advertising and promotion in Las Vegas.\r\nMaximum Cost of Promotion and Advertising\r\nTV/Radio\r\n3,500,000\r\nGiveaways\r\n1,000,000\r\nOnline Ad\r\n700,000\r\nAppearances/Mail outs\r\n200,000\r\nTotal Cost\r\n5,400,000\r\n'