Process of the project — Sydney Swans

Process of the project — Sydney Swans

24706 Strategic Services Marketing – autumn 2020

Group 1G

1. Information gathering

1.1 Introduction

The Swans is an Australian football club that participates in the AFL. The club was established in Melbourne in 1874 as South Melbourne Football Club. However, they later relocated to Sydney in 1982 and since then their home ground has been the Sydney cricket ground. Currently, the club is among one of the sports clubs that has been affected by the coronavirus pandemic. The pandemic has led to the suspension of various leagues across the world. As a result, many clubs, the Swans being one of them are facing financial difficulties in the future given that there are no revenue streams and there is a likelihood that the league would be suspended if the current situation does not improve. Besides, there is no matchday commercial assets, no ticket sales, and limited member benefits.

1.2. Analysis of the situation present and future

1.2.1 5C analysis

1.2.1.1. Company:

The Swans is considered as one of the most popular football clubs in the AFL. Currently, the club has an estimated following of 1.31 million fans, which is considered as the highest following in the country for a club. They are also ranked as the first club which has avid fans and fans who consider them as their second team. Their membership has also been on the rise. One of the club’s weaknesses is that it does not have a large financial base and this is likely to rake havoc on the club with the expectations of the impact of the covid-19 pandemic. In 2019, the club reported a financial loss of $509,625 for the period ending October 31, 2019. Also the worth of their reported assets for that financial year was $2,201,819 (Sydney Swan’s website, 2019). The reported loss was the first one in nine years and the cause was reported to be due to increasing operational cost and failure of the team to qualify for the AFL finals. At the moment, the club is position 8 and this could jeopardize their chances of qualifying for the finals this year.

The club’s objective is to be successful both and off the pitch. This can be done by winning more titles and expanding their brand, as well as the number of their fans. The goals of the club also keep changing depending on the season. For example, they are aiming to qualify for the finals so that they can boost their revenue.

On the other hand, the club has always branded itself as a family-friendly club and they always play with high energy to engage their fans. This explains why the number of fans and membership has been on the rise. The club’s headquarters, training facilities, and the home ground are located at the Sydney Cricket Ground, which has been their ground since they relocated there in 1982.

1.2.1.2. Customers

Based on certain research, 50% of the Swans are ready to use products or services of brands that support their club while another 44% are ready to recommend the products and services of a brand that is associated with their club to other people. Moreover, 39% of the club fans have managed to buy products and services of the brand that supports their team. Generally, a majority of Sydney Swans fans are willing to use products and services that are offered by the brands supporting their team.

With the current season halted, fans have decided to look for ways in which they can be connected with the cub. While fans podcasts and YouTube channels have in existence for quite sometimes, at their moment their impact is easily felt considering that every fan is trying hard to find avenues in which they can be informed on the league and club progress. Earlier podcasts could even be posted once a week, but as of now, they can be posted even thrice a week. Besides, social media has proven to be a significant resource for most brands, sports teams included. Currently, many fans cannot wait for normalcy to return (DW, 2020). However, with the current situation, there is no indication that fans would be able to attend matches in stadiums (DW, 2020).

1.2.1.3. Competitors:

Business-wise, the club has no major competitors since its brand has been growing over the years. They are among the most successful clubs in the Australian football league having missed only reaching the finals four times since 1995. However, sports-wise, their main competitors are the West Coast Mariners football club. Over the years, their rivalry has been growing and currently it is one of the leading rivalries to be ever witnessed in the league. While the club has a huge and growing fan base, the impacts of the covid-19 pandemic are likely to hit the club hard financially. Considering that the last year the club also recorded a financial operating loss, this year the number could be doubled. Currently, there is no sale of tickets, matchday revenue form advertisements. Besides, there is a risk that the clubs would likely play their remaining games behind closed doors. With no fans attending a match, the club is likely to undergo a massive financial loss.

1.2.1.4. Collaborators: Suppliers; Distributors; Alliance and partners

Currently, the club has more than 20 sponsors and this constitutes the principal partners, premier partners, major and associate partners. Their principal partner is the QBE insurance company. This company is one of the major insurers in the Australian market. As a result, the brand of both companies has managed to grow over their years. On the other hand, the other partners are mostly showcased during match days and are the ones who enable the club to generate match day commercial assets.

1.2.1.5. Climate: Regulation and government oversight; Social and cultural; Business cycle, inflation, and other economic factors; Legal; Technology

Currently, the league has halted and the league position of the Swans is eight.

The league has been looking for ways of restarting the league as well as cushioning itself from the impacts of the coronavirus. Most teams and players are keen to restart the league while others are not keen to do so (Fox sports, 2020). The AFL has already taken precautionary measures on the financial impact of the pandemic by securing loans from two banks. These funds will help the league continue and it comes after the AFL and all of its clubs were forced to stand down about 80 percent of staff in the face of the biggest financial crisis to hit the sport (ABC News, 2020). At the same time, the federal sports minister on May 4th that the AFL league can restart without the corona hubs if the number of reported cases of coronavirus infections starts to decline. Many teams have started to recall their players to hand back to their main stations in jurisdictions such as Melbourne and Queensland. The AFL has also stepped in to ensure that the 10 Victorian clubs are not affected by baby the restrictions that exist in their place (The Guardian, 2020). However, Australia is still under lockdown, and states have put measures in place to ensure that rules such as social distancing and gatherings are discouraged and there is an indication that these restrictions are likely to continue for a while. Individuals are not allowed to go to the park but they are allowed to visit their partners. The main restriction is the observation of social distancing and banning of gatherings.In terms of the legal environment, the club is governed by the government and it observes all the legal arrangements that govern sports clubs, for instance, the registered club Acts of 1976.

1.2.2. SWOT Analysis

1.2.2.1. Strengths

The club has a large following on social media and generally and this makes their brand to potential sponsors. At the same time, the club’s training facilities and the home ground is located at the Sydney cricket ground and it is highly rated. On the other hand, the AFL brand has been growing over the last few years, for instance, at the end of the 2019 season total attendance was 6.95 million. As a result, the clubs associated with the league can benefit from growing income flowing in.

1.2.2.2. Weaknesses

The club has no strong financial base and this explains why the club suffered an operating financial loss in 2019. Besides, the cub had also borrowed money to revamp its headquarters for $70 million. However, they have had to halt the plans due to the expected impacts of covid-19.

1.2.2.3. Opportunities

Over the years, the number of club membership has been increasing. In 2019 alone, the club had 61, 912 members compare to the 60, 923 for 2018.Therefore, the club membership increased with at least 1, 000 members. Also the average age of the members is 39years and this is considered a great age since most of the embers will be able to be associated with the club for a long time. With the growing fan base the brand of the club is likely to increase e and in no time more sponsors would want to be associated with the cub. With the AFL hoping to restart, the club still has an opportunity of reaching the finals, and this would boost their overall income.

1.2.2.4. Threats

The club could still miss reaching the finals. As mentioned above, in 2019, the club recorded a financial loss, and one reason behind a reduction in income was the club failing to reach the finals. With the uncertainties that the league is facing, there is a likelihood that the club finances would shrink massively. On the other hand, there is no income-generating from matchday advertisements and when the league resumes there is a higher likelihood it would be played behind closed doors. With no fans, the club would not be able to renew season tickets and the sale of tickets. Besides, the next season could still be played in empty stadiums.

1.3. Diagnosis (Market literature)

While the AFL is considering restarting their season, some leagues, especially in football have canceled their leagues. For example, League One in France and the Eredivise in the Netherlands have canceled their season (DW, 2020). The France government came to this conclusion since they could not fathom the idea of any sports activity starting before September. Also, other sports as such Grand Prix and tennis have canceled the major activities that complement their season (DW, 2020). It should be noted that this, not the first time that these leagues and sports associations have been forced to suspend their activities. Other crises occurred in the past. For example, the world war was also an event that made all leagues in the world to be canceled, specifically World War II. Many clubs were affected as they had to release their personnel to participate (Bummer, 2015). In England before world war II, football had broken ground and the craze and football momentum had started to pick up. However, world war II brought a stop to this momentum, and upon the end of the war, football clubs had to pick themselves up despite some of them losing a large percentage of their players and staff to the war (Bummer, 2015). Since most clubs not only in England but across the world had lost their personnel to the war, amateur players were recruited to perform to play for these clubs. After the war clubs created tournaments since such competitions would attract huge crowds and with time the sport would start to become appealing (Bummer, 2015)

In times of a crisis like a coronavirus, organizations must come up with approaches that would help safeguard the company or the brand. One of the approaches is a crisis communication strategy. Under this strategy, the company has to examine what to say and how to say it. Based on a study conducted by Huang (2008), the most effective forms of crisis response include timely response, consistent response, and active response. On the other hand, other forms such as excuse, denial, diversion, concession, and justification were found to be relatively effective. The effective factors relate to the trust and commitment of the company during the crisis.

When managing a big brand such as the Swans, challenges are always inevitable. The customer-based brand equity framework reflects on the behavior of consumers to a brand marketing action. Therefore, there is a need for big brands to reflect on the long-term effect of decisions before implementing them. Also, when marketing brand equity, they have to be managed actively by revitalizing the brand as well as boosting it (Keller, 1999). Brand reinforcement can be done by expanding brand awareness as well as improving the brand image.

On the other hand, revitalization can be done by creating new sources and refreshing old sources of brand equity. In sociocultural brand revitalization, consumer plays a vital role in the success of failure of a brand (Närvänen & Goulding, 2016). Therefore, there is a need for brands to stress the importance of consumers as stakeholders in the development of a brand as well as the corporate values of the brand. Companies ought to come with customer-centric strategies (Närvänen & Goulding, 2016). Besides, they should also stress the use of meaning and practices when revitalizing brands.

Based on a study done by Hollebeek (2011) the main themes of customer-based engagement include passion, immersion, and activation. These themes represent the amount that a customer is willing to exert in terms of behavioral, cognitive, and emotional resources which are specific to a given brand of their preference. The Swans as a sports team can use these themes to their advantage. For example, passion and immersion would prove to be the ideal themes in the case of the fans.

2. Formulate a set of recommendations for the Swans to achieve their objectives.
   • Short-term tactics:

Australia is locked down currently because of the COVID-19, and it will not unblock in the short term. Therefore, it is hard for Sydney Swans to attract new members and fans since all the events and matches were suspended indefinitely. That is, how to retain existing members and fans play a decisive role in such a special term, and social media will have a critical influence.

As for their current members, the benefit and privilege of them were limited during the virus without any matches. To be specific, online activities via social media can help the club to keep the current members. For example, the club can upload some exclusive videos that only members can see on social media such as Youtube and Tiktok to keep existing members, which will let them feel the privileges of members. What is more, providing the sort of unique presents and opportunities which the members would like but can only be obtained after unlocking, which is also a good way to attract members to pay attention to the company for a long time.

While as for fans, who are supporting the club but are not members, Sydney Swans can hold some online communication meetings. For example, online life is an increasingly popular way around the world. Therefore, Sydney Swans can use video applications such as zoom to hold online meetings between players and fans. This practice can increase exposure. Besides, players can promote the advantages of being a member through a live broadcast, which can attract some fans to become members as well.

All of these activities improve the exposure, and at the same time, the budget of then is much lower than the off-line promotion.

• Long-term strategies:

For a longer time, the main strategy of Sydney Swans should focus on the development of new members and fans. Compared with commercial brands, football clubs have a lot of differences. Football clubs will not lose their fan audience because they would be more royal to the clubs for their idols. Club brand building is mostly a process of self-reinforcement and self-improvement. Football club brand formation is closely related to winning championships and trophies, but this is not the whole of a club brand formation (Geoff, & Walters, 2011). Therefore, Sydney Swans needs to win more games and champions to show the brand image to the public, so that it can attract more new members and fans, and the fans can have higher royalty to the club.

Secondly, Sydney Swans should establish the brand image of this club. Taking the example of EU football clubs, we can see that the standards of many European football clubs for measuring brands mainly include the intrinsic value based on league rankings, winning games, number of championships, and profit, as well as the external value based on attendance, number of fans, and public image (Desbordes, 2019). In the development of professional football clubs, the value brought by its brand is an indicator of the competitiveness of a team. Modern football is not only a sport, but also an industry in a sense. The industry needs brand marketing to maximize profit value. The experience of EU football clubs can provide great experience for Sydney Swans.

Thirdly, Sydney Swans can apply more social media to increase the exposure frequency to the public. Especially with the deepening of the industrialization of football and social media broadcast technology, Sydney Swans has gained a lot of fans worldwide (Anne Bourke, 2008). Sydney Swans has long been not only a club, but also represents a new trend in the football world and its influence It has long been beyond the scope of football. In addition, Sydney Swans has always attached great importance to its own brand building and has close links with the market. The Sydney Swans brand has gradually grown up.

More important, Sydney Swans should establish its own feature of club to attract the members and fans. For example, in terms of player training, Sydney Swans’s youth training model has a top scout system, innovative training concepts, a perfect growth and promotion mechanism, a fully implemented football concept, academy-style cultural class learning, and excellent ideological education. The combination of the above factors has contributed to the continuous infiltration of Sydney Swans’s unique style and culture into the club (Miles, & Louella, 2004). More importantly, in order to enable the outside world to better understand the Sydney Swans-style culture. Meanwhile, we can see that the youth for clubs can receive more information from social media, which can be the important way to spread the brand image to them.

Besides, Sydney Swans can cooperate with other famous organizations and celebrities to enhance the brand image. Brand promotion can also quickly expand its brand image by cooperating with other brands to create more added value. Companies in the market have joined forces with leaders in other industries to strengthen brands in order to expand in greater market depth and breadth to strengthen their brand image (Cong, 2013). The football club has always been committed to finding partners that match the values of the club. Both parties were founded in Sydney Swans and hope to spread the image of the city to all parts of the world. Both parties share a common global mission and values of aggressive collaboration. Meanwhile, they can attach great importance to innovation and the cultivation of talents. There are two basic principles in the production of content for overseas markets. One is to transform global-oriented content into products that meet local market conditions (Enrico Giardina, 2010). Another point is to create truly locally made content. For example, Sydney Swans can explore the market in China to seek more cooperation. Sydney Swans has established good relations with some key players, such as cooperation with the Football Association and the Chinese Super League. Through communication with them, Sydney Swans can better understand the Chinese market. In addition, the interaction between Sydney Swans and Chinese fans is completely different from EU and Chinese markets. Here you want fans to keep their attention, not only have football content, but also have many entertainment factors and star effects. Therefore, Sydney Swans strategy is to first understand the importance of market information in detail, including understanding the culture of the local market, sports infrastructure construction and media communication environment, etc., and then adapt the local conditions and build channels to take advantage of local fans to produce content and provide more needs of services, thereby exploring a virtuous cycle system that promotes brand marketing (Paraschiv, 2012). Thus, the cooperation strategy of Sydney Swans can promote the brand image in longer time.

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