_______________________________________________________________________ Instructions: Respond to 3 of 5 questions. Each response should be approximately 1.5 to 2 pages in length. Please double space your work.
Instructions: Respond to 3 of 5 questions. Each response should be approximately 1.5 to 2 pages in length. Please double space your work.
Scenario 1 – Euroleague: A League of its Own
Previously, basketball in Europe was governed by FIBA in a setup that began to alienate its members. Clubs felt ignored and eventually lost faith in a format that offered them a meager portion of the proceeds from television rights.
In the summer of 2000, some of Europe’s biggest teams and most important national competitions took the decision to withdraw from FIBA and start their own league. The idea had been mooted in other major sports, such as with the proposed formation of the G14 soccer league in Europe, but this was the first time clubs had actually taken control.
Euroleague Basketball (EB) agreed on a constitution that gave clubs collective rights and a three-year license, affording them greater stability and the right to have major input in commercial decisions. All EB had to do was devise a business model that would ensure long-term, sustainable success. This case study by IESE Prof. Antonio Dávila and Euroleague communications director Kirsten Haack charts the rise of Euroleague Basketball.
Building the Experience: EB didn’t want to just sell air time; it wanted to sell a full match experience. It built its commercial strategy on three pillars.
Marketing: On Euroleague nights, the experience is re-created across Europe through on-court branding, half-time shows and sponsored activities, all designed and encouraged by the EB marketing team. Teams can engage in marketing summits, ticket conferences and educational programs to improve theirmarketing strategies.
Flagship Events: The final stage of the competition, The Final Four, has been made an important event on the European sporting calendar. The old format failed to have a significant impact beyond the two finalists’ markets. Now, the four best teams in the Euroleague play a final event at the same venue, over one weekend. This allows fans and partners not only to savor the basketball on offer, but also to enjoy the attractions of the host city, which can earn as much as 30 million euros in direct and indirect revenue.
Media Coverage. Until 2005, the Euroleague had a minor presence in the media, which heavily restricted its commercial possibilities. EB’s media objective was to have the competition seen in as many countries across the world and on the best possible TV networks. EB elected to sign an agreement with a large edia distributor to reach European national television networks as well as global broadcasters. This, in turn, enabled the Euroleague to offer more attractive sponsorship packages.
Dávila Parra, Antonio; Haack, Kirsten www.iesep.com/euroleague-basketball-the-challenges-ofgrowinga-new-league-78713.html
1. After several years of continued success, interest in the Euroleague has recently waned. Although there is no danger of the league folding, EB President Jordi Bertomeu would like to revitalise the league. Indeed, he hopes to grow the Euroleague and expand its market globally. With Bertomeu’s objectives in
mind, develop at least three sure fire strategies to increase global awareness of Euroleague. Draft a business letter to Bertomeu in which you outline your three strategies. Be detailed and specific. Invent details if necessary.
2. EB President Jordi Bertomeu is aggressively pursuing new sponsors for the league. He has already secured sponsorship from Coca-Cola, Nike and Turkish Airlines, but would like to add a few others. You’ve been asked to identify three other major sponsors to approach. Draft an e-mail to Bertomeu with your recommendations. Specifically detail which companies to approach and explain why. In addition, tell Bertomeu which of the three target companies is most desirable. Be specific. Invent details if necessary.
Scenario 2 – A Shot of Gin, Please
Larios Dry Gin was the leading gin in Spain, the top-selling gin brand in continental Europe and the third best-selling brand in the world in 2000. Eighty-five percent of total production of Larios was sold in Spain, while the rest was exported to 60 countries, notably Italy, France, Greece, the United Kingdom, Venezuela and Colombia. Despite its age (it was produced for the first time in 1866 by the company
Jiménez & Lamothe), Larios was a modern and sophisticated brand that was synonymous with nightlife, parties, happiness and fun.
The European spirits market was mature and very competitive. Sales were shrinking, mostly due to the decline in per capita alcohol consumption, the worldwide recession, and the shift in consumer tastes towards other types of drinks (energy drinks, ready-to-drinks, beer, etc.). Gin represented 4.3% of the total market for strong alcoholic beverages. United Kingdom, Germany, and Spain accounted for more than two-thirds of Western Europe’s spirit drinkers, which made Spain an interesting target for many alcoholic beverage producers.
The Spanish spirit industry, and the gin segment in particular, was highly concentrated and controlled by multinationals. Important brands such as Beefeater, Gordons, MG, Rives, Bombay Original, andTanqueray battled to wrest market share from one another. One particularity of the spirits industry was the heavy tax burden, composed of a special tax (7.52 euros per liter of 100% alcohol) and VAT (16%). In
addition, legal restrictions on advertising were tight and this trend looked set to continue, with a severe pending Law for the Prevention of Alcohol Consumption.
Gin was considered a seasonal product, with consumption fluctuating over the year, peaking during summer and the Christmas holidays. Like most alcoholic beverages in Spain, it was consumed in hotels, bars and restaurants, in groups, and at night, during weekends. Larios Dry Gin was the leader in brand awareness and advertising recall in the gin segment. It was targeted at price-conscious young people aged 18 to 35 with medium-high purchasing power.
Larios’ very successful campaigns combined press, radio, cinema and outdoor media with online advertising. Also, the company organized events hosted by personalities, to which the media were invited, and published a fashion calendar.
Communication revolved around the concepts of “Dry,” which was synonymous with having strong convictions and being audacious, non-conformist, and a rule-breaker, and “Dry world,” which meant setting the night on fire, loosening inhibitions and creating a provocation.
Launched in June 2000, two Larios web sites (lariosdrygin.com and realidaddry.com) offered information about parties, water volleyball championships, the fashion calendar and the company, while also serving
as a platform from which users could download electronic greeting cards, screensavers, horoscopes, etc., making Larios a constant presence in their lives. Larios was very pleased with the results of its online communication and was determined to press ahead with it.
In order to differentiate itself from the rest of the competitors, Larios created its own line of snacks called “los Picks de Larios” – and Larios brand apparel. Although both endeavors failed, Larios was assessing a number of possibilities for brand diversification: restaurant-clubs in Spain, similar to Larios Café in Madrid; another venture in the world of fashion (as some competitor brands had done); sports sponsorship; travel events; leisure establishments or hotels; etc. Pernod-Ricard, the owner of Larios, was also considering the option of entering the fashionable segment of alcoholic ready-to-drink beverages, or alcopops, which would give the brand a younger image. However, the company was hesitant about this project, as the domestic market did not have much experience with this category of products.
In 2002, sales of gin fell by 3.3%, and sales of Larios in particular by 4.5%, while competitors such as Rives, Bombay and Beefeater reported huge increases in sales. In these circumstances, what should Larios do to ensure success and hold on to its leadership position in the future? How should it position itself? How could it differentiate itself from the rest? How could it keep up with its consumers? How could it surprise and retain them?
Armengol, Eva; Oliver Conti, Xavier http://www.iesep.com/larios-dry-gin-8285.html
1. Pernod-Ricard/Larios does not have an in-house customer relations department. Instead, your agency takes care of this aspect of the business. Part of your job is to provide Larios CEO Santiago Luna with updated numbers every second month. Usually you are the bearer of good news; however, for the first time in years, you have to tell Luna his company’s sales fell by 4.5%. In an e-mail, detail the bad
news for Luna. How can you carefully report the loss to Luna? In addition to delivering the bad news, explain why Larios’ product is failing. Be specific. Invent details if necessary.
2. Pernod-Ricard/Larios CEO Santiago Luna is disappointed to hear that sales have declined by 4.5%.
Obviously, he worries about the bottom line, but he also worries that news of the loss will impact employee morale. He asks you to write a company-wide memo in which you deliver the bad news. How can you inform employees of the bad news gently? Be specific. Invent details if necessary.
3. Upon learning of his company’s declining profits, Pernod-Ricard/Larios CEO Santiago Luna is determined to prevent further decline. He believes the best approach is to heavily market Larios in Europe and North America. Your firm has been hired to run Larios’ marketing campaign. In a letter to Santiago Luna, detail your approach. Give Luna at least three advertising approaches. Who should be
Larios’ target market? How can you effectively reach the target market? What type of ads might you run? Be specific. Invent details if necessary.
REMEMBER TO RESPOND TO 3 OF THE 5 WRITING PROMPTS
DOUBLE SPACE YOUR WORK. 1.5-2 PAGES PER RESPONSE