American Journal of Business Six Sigma sales and marketing: application to NCAA basketball Peter A. Salzarulo Timothy C. Krehbiel Stephen Mahar Lance S. Emerson
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To cite this document: Peter A. Salzarulo Timothy C. Krehbiel Stephen Mahar Lance S. Emerson, (2012),"Six Sigma sales and marketing: application to NCAA basketball", American Journal of Business, Vol. 27 Iss 2 pp. 113 - 132 Permanent link to this document: http://dx.doi.org/10.1108/19355181211274433 Downloaded on: 20 June 2016, At: 17:57 (PT) References: this document contains references to 31 other documents. To copy this document:
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Six Sigma sales and marketing: application to NCAA basketball
Six Sigma sales and marketing
Peter A. Salzarulo and Timothy C. Krehbiel Department of Management, Miami University, Oxford, Ohio, USA
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Stephen Mahar
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Information Systems & Operations Management Department, University of North Carolina at Wilmington, Wilmington, North Carolina, USA, and
Lance S. Emerson Bluegrass Division, Southern Wine & Spirits of America, Louisville, Kentucky, USA Abstract Purpose – Today’s economic climate has fueled intense competition for entertainment dollars, including those spent on professional and intercollegiate sports. The purpose of this paper is to provide insight and demonstrate the use of the Six Sigma methodology as a way to improve event attendance in a sports marketing setting. Design/methodology/approach – The research utilizes the define-measure-analyze-improve-control (DMAIC) sequence to evaluate customer requirements and develop recommendations. Surveys, focus groups, and descriptive statistics comprise an important set of tools utilized to accomplish this aim. Findings – The paper concludes that Six Sigma can be readily applied to a sports marketing setting by explicitly demonstrating the steps employed to reverse a four-year decline in attendance for a collegiate men’s basketball program. Originality/value – The paper is unique in detailing the use of Six Sigma, a traditional quality improvement methodology, in a sports marketing setting. It also highlights the unique elements associated with fully implementing a Six Sigma project in such a seasonal setting as an athletic enterprise. Keywords United States of America, Six Sigma, Marketing strategy, Sporting events, Attendance, DMAIC, Sports marketing Paper type Research paper
1. Introduction A sports enterprise has a variety of sources from which it may obtain revenue. These include ticket sales, concessions, endorsements, sponsorships, and television revenue. As well, intercollegiate athletic enterprises obtain revenue from donations and private funding. Similar to other industries, both professional and intercollegiate sports enterprises face constant competition to attract and retain customers. In this case the competition comes in the form of other sports options in addition to other sources of entertainment. To the extent that these alternative entertainment options exist, some of the sports enterprise’s revenue is at risk. One method of reducing this risk is to increase the value which customers obtain by improving their satisfaction with various facets of their experience at the event. Six Sigma is well suited to contribute to and support these efforts due to its focus on problem identification, process improvement, and its emphasis on the customer.
American Journal of Business Vol. 27 No. 2, 2012 pp. 113-132 q Emerald Group Publishing Limited 1935-5181 DOI 10.1108/19355181211274433
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Six Sigma is a quality management system that evolved in the manufacturing areas of Motorola during the 1980s. Its original focus was the rigorous pursuit of variance reduction leading to the design of business processes that produce approximately 3.4 defects per million opportunities. This emphasis on defect reduction is what Six Sigma guru Mikel Harry terms Generation I (Harry and Crawford, 2004; Dusharme, 2004). Today many companies, including Motorola, GE, and Bank of America are experiencing bottom-line benefits from applying Six Sigma to service processes, including accounting and finance (Krehbiel et al., 2007). Harry describes this phase of Six Sigma, where the focus is on economics and cost reduction, as Generation II. Generation III, value creation, is in its early stages and includes applications to sales and marketing (Carnell, 2010). Value is created by listening to the market and applying what is learned to increase both the market size and the organization’s market share (Goeke et al., 2008; Redenbacher, 2009a, b, c). As with other quality management systems, Six Sigma is a packaging of statistical and managerial methods. The managerial aspects are result-oriented and not as deeply rooted in theoretical management ideals as the systems popularized in the 1980s, e.g. TQM, which was heavily influenced by the work of W. Edwards Deming. Six Sigma focuses on linking together statistical and management tools into a logical flow. Perhaps, the most appealing aspect of the Six Sigma approach is its five-step process improvement model: define, measure, analyze, improve, and control (DMAIC). Although the DMAIC model has been around for nearly 25 years, it continues to prove itself as an effective method of data-driven decision making that can lead to quality improvement and improved business performance. While Six Sigma is popular in manufacturing and service process management, its use in marketing has not received much attention in academic literature despite the fact that its problem focus should translate readily into marketing activities. At the heart of Six Sigma is the DMAIC process being applied with the ultimate goal of customer satisfaction (Carnell, 2010). At its core, DMAIC compels Six Sigma team members to address specific problems being experienced by a system, conjecture which system elements could potentially be causing the problem, determine the core group of elements most responsible for the problem, and then adjust the system so that the problem is mitigated or eliminated. To aid in this problem solving approach, the DMAIC process utilizes a set of statistical and visual tools (Table I). Some tools have been commonly adopted by businesses outside the realm of quality initiatives, such as focus groups and surveys, while others are more specific to process improvement. Examples of the latter include SIPOC diagrams which specify a process and its suppliers, inputs, outputs, and customers as well as cause-and-effect diagrams which depict potential factors related to the quality problem being addressed. Hambleton (2008) provides an excellent summary of the various tools commonly used in Six Sigma projects. The field of sports marketing has expanded at a fast pace over the past decade, fueled by the large revenues associated with professional and collegiate sports. There are at least five journals dedicated solely to sports marketing and there is a long list of marketing journals which include sports marketing articles. The field and academic literature can be categorized into two areas: marketing of sport and marketing through sport (Shank, 2009). Marketing through sport includes the marketing of sports products and non-sport-related products through affiliation with (or sponsorship of) sports, sporting events, and athletes. Of great interest in this area are brand management
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Define
Identify the problem being addressed, the customers being affected, what they view as important, what performance metrics will be used, and the metrics’ goals Tools: problem statement, project charter, cost of quality analysis Measure Determine what processes are potentially contributing to the problem, develop a data gathering plan and system, and collect data, establish the base-line performance level Tools: SIPOC, cause-and-effect diagram, focus groups, surveys, product/market matrices Analyze Use statistical techniques to narrow the list of possible causal elements to those that contribute the most to the problem. Find the root causes Tools: regression and correlation, Pareto charts, cross-tabs, scatter plots Improve Develop plans to change the process involved to eliminate or reduce the effect of the root causes. Test these plans, establish their efficacy, and then implement Tools: design of experiments, brain storm, fool-proofing, performance/importance gap analysis Control Maintain changes made to the process and monitor process performance Tools: standard operating procedures, training, control charts, checklists, surveys
and consumer behavior. Our paper fits into the marketing of sport category, which includes the promotion of participation or viewership of sports, sports events, or athletes. Sub-topics of central concern include investigations into game-day experiences and consumer attitudes. As previously stated, Six Sigma and its emphasis on customers, problem identification, and improvement seems well positioned to become a useful tool in the sports marketing field and we demonstrate its use in improving the game-day experience of a university’s basketball program. Although no publications were found which directly apply Six Sigma to sales and marketing operations in a sports setting, the observed successes in other sales and marketing applications (Maddox, 2004b, 2006; Pestorius, 2007; Redenbacher, 2009c) suggest opportunities for success in this area. Obviously, issues of quality improvement and increasing customer satisfaction are present in a sports setting. Moreover, when an enterprise experiences attendance declines in an environment of increased competition for sport and entertainment dollars, it is recommended that it should develop a better understanding of what motivates customers to attend games (Rein et al., 2006; Funk et al., 2009). Quantitative approaches to determine why people attend sporting events are numerous. For example, Kwon and Trail (2001) noted that entertainment is the most important factor for American college students to attend games, followed by eustress (pleasant stress derived from the drama of an event), and far ahead of self-esteem benefits, escape from everyday life, economic factors (i.e. gambling), aesthetics, group affiliation, and family needs. A more recent study found that the attributes most important to college students attending games were the sport itself, and specifically, the amount of physical contact displayed during the contest (Ferreira and Armstrong, 2004). Other highly significant factors included game attractiveness, game and pregame entertainment, and the facility. Not of statistical significance were cost, convenience and accessibility, and promotions. Another reason to believe Six Sigma is an applicable methodology is to realize that dissatisfied customers are really just service defects. Six Sigma was originally developed to minimize defects, so the fit appears natural. There are of course, differences. Unlike many service providers who can try to limit customer dissatisfaction by providing compensation equal to or above the value of the service they purchased, dissatisfied
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Table I. Overview of the DMAIC process
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customers at a sporting event are hard to appease through monetary compensation (Greenwell et al., 2008). To illustrate the use of the DMAIC process we present our work with the athletic department of an NCAA division 1 university during the 2009-2010 basketball season. The medium-sized public university competes in a mid-major conference, i.e. one generally perceived as near the middle (in terms of overall strength of play) of the 33 conferences competing in division 1 basketball. A major concern of the athletic department was that attendance at men’s basketball games had been in a gradual decline despite the team’s relative success over the same time frame (six consecutive winning seasons with one NCAA tournament berth, two NIT tournament appearances and one appearance in the Collegiate Basketball Invitational). It was the university’s desire to not only reverse the trend but also achieve higher levels of attendance than previously experienced. Several obstacles to achieving the desired level of attendance included a small local market from which to draw attendees and the team’s participation outside one of the prestigious conferences. Using the DMAIC process, the athletic department reversed a four consecutive year attendance decline and managed to increase attendance by 12.1 percent. As our intention is to demonstrate the use of Six Sigma in a sports marketing context, the paper is structured in such a way as to emphasize the fit between the two. We do not generate hypotheses, for example, but rather focus on the elements of the DMAIC process and how the continuous improvement methodology translates into a successful sports marketing initiative. The rest of the paper is structured as follows. We begin with a review of the Six Sigma sales and marketing literature. We then present a more detailed overview of the individual DMAIC steps. As we go through each step, we highlight some of the activities we completed to illustrate how the Six Sigma approach can be translated into a sports marketing setting. Finally, we discuss some of the lessons we learned while undertaking this exercise and their implications for using Six Sigma in a sports marketing context. 2. Review of the literature Publications concerning the application of Six Sigma to sales and marketing can be categorized into three groups: articles focusing on the philosophical and academic merits, articles focusing on case studies of successful applications, and handbooks and practitioner guides. 2.1 The philosophical discussion of Six Sigma sales and marketing Niemes (1999) is one of the first scholars, if not the first, linking Six Sigma to sales and/or marketing. The article provides a broad-brush approach of how some companies (e.g. GE, Allied Signal) are implementing Six Sigma company-wide and therefore to sales and marketing. Niemes suggests that companies can apply Six Sigma principles to the reengineering of sales and marketing operations and identifies five critical points: (1) think process; (2) tear down departmental silos; (3) develop a passion for measuring company performance; (4) invest in training at all levels; and
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(5) senior management must be fully engaged and push the initiative for it to become an effective initiative. Niemes stresses that understanding the customer is vital and companies can use Six Sigma to increase customer satisfaction by increasing the speed, quality and efficiency of its services. Companies that led the charge in Six Sigma manufacturing (such as GE, Motorola, Dow Chemical, Honeywell) have also realized efficiencies in their marketing processes (Maddox, 2004b). The article claims that companies are using the standard DMAIC quality improvement model, but that the processes are linked people-to-people, not by pipes and wires. Successful applications lead to improved customer relationships, reductions in marketing costs, and ultimately, increasing profits. Donath (2005) suggests that Six Sigma can lead to improved customer relationships by improving the process that delivers the product or service to the customer, and that the key is for companies to recognize the entire system, and not to focus on optimizing individual departments such as advertising, sales, or operations. Numerous authors have argued that Six Sigma can and should be applied to sales and marketing processes with the ultimate goal being customer satisfaction (De Mast and Bisgaard, 2007; Redenbacher, 2009c; Carnell, 2010). There is also some evidence that Six Sigma can be successfully applied to pricing (Sodhi and Sodhi, 2004). Applications of Six Sigma to sales and marketing are not common, but the potential for huge benefits exists (Pestorius, 2006, 2007). Specifically, Pestorius provides four main reasons why sales and marketing applications are uncommon: (1) In manufacturing processes, it is often believed that almost every variable can be controlled. (2) Six Sigma consultants are typically from manufacturing and do not understand transactional processes such as sales and marketing. (3) There is no strong call for actions such as the quality concerns and global pressures in manufacturing that fueled total quality management and Six Sigma. (4) The existing entrepreneurial spirit in sales and marketing encourages individual thinking and actively resists standardized processes. In conclusion, Pestorius argues that Six Sigma should be applied to those variables that can be controlled. The core analysis should be finding root cause of problems using the softer tools such as priority matrices and process maps. These softer tools often identify a number of simple changes which can produce significant results. Generations I and II are both about cost reduction, i.e. the bottom line. The transition from I to II is easy, but Generation III is about increasing top-line revenue and the transition is in motion, but it is more of a leap than an evolutionary step (Redenbacher, 2009c). Even with the hurdles inherent in applying Six Sigma to the top line, Redenbacher expects a long, promising future for Six Sigma sales and marketing. Not all authors are convinced that Six Sigma can be effectively applied to sales and marketing. Guaspari (2001) provides a very negative commentary on applying Six Sigma to sales and marketing. The article argues that the manufacturing sector is full of numbers-oriented people accustomed to the process concept while those people involved in sales and marketing are not. On the positive side, Guaspari admits that
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one size does not fit all, and if Six Sigma is going to be successful in sales it has to be tailored so that the sales people see that the outcome will be winning more sales before buy-in occurs. 2.2 Case studies of Six Sigma sales and marketing Reports of Six Sigma’s application to sales and marketing have recently appeared in the literature. GE, Dow Chemical, Honeywell and Cummins Engines have saved time and money on marketing tasks and bring overall strategy and discipline to the management of marketing activities (Maddox, 2004a, 2006). Xerox has started applying Six Sigma to their sales and marketing functions and has experienced its effectiveness in manufacturing. In 2006, Xerox had 80 black belts in its sales and marketing group (Calabro, 2004). Bank of America and National City Corporation have for several years embraced the application of Six Sigma to operations and IT functions and are now recognizing its place in marketing (Carlivati, 2007). The many different contexts for applications make a “one size fits all” definition for Six Sigma difficult, but provide a broad landscape for applications and case studies (Firka, 2010). Perhaps, the most insightful case study was written by Quelch and Harris (2005) concerning the success story of Six Sigma to marketing functions at Young & Rubicam Brands. The article begins by noting that marketing departments have shown little enthusiasm for adopting the disciplines of process management – the area has been dominated by right-brain thinkers. But Six Sigma best practices are starting to creep into marketing for three reasons: (1) calibrating the returns on marketing investments is a pressing challenge; (2) cost-control pressures; and (3) pressure to deliver their services better, faster, and more efficiently regardless of cost pressures. The project was a major undertaking beginning with 30 senior executives attending a two-day off-site Six Sigma training session. 15 months later, 90 top executives had completed training and the key measurements of process cycle time and rework had been reduced between 25 and 40 percent. More importantly, customer satisfaction and profits both increased. The authors conclude by claiming that marketing services firms will start to use Six Sigma competency as a point of differentiation, especially with global clients. The key, according to the article, is that Six Sigma applications to sales and marketing bring valuable process discipline and emphasis on performance measurement. 2.3 Handbooks and practitioner guides to Six Sigma sales and marketing From 1995-2005 there was a proliferation of handbooks and practitioner guides to Six Sigma. Since then, several books specifically addressing the sales and marketing applications have been published. Many focus on the traditional DMAIC quality improvement model (Pestorius, 2006; Webb and Gorman, 2006; Redenbacher, 2009a, b). Other authors claim that the DMAIC model is not applicable in this setting and suggest alternatives (Creveling et al., 2006). These authors claim that the next wave of Six Sigma applications will be marketing processes. The book discusses marketing’s role in the strategic, tactical, and operational triangle and develops separate problem solving methodologies for each. The authors argue, however, that the specific nuances
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of sales and marketing processes require modifications to the DMAIC model. In fact, they present three different quality improvement models – one each for strategic, tactical and operational processes. Hambleton (2008) published a general Six Sigma handbook, however, several chapters are devoted specifically to marketing. In addition to the keen insights provided to sales and marketing applications, this 995-page book contains a nearly encyclopedic description of quantitative and non-quantitative tools. 3. Application of DMAIC DMAIC’s rigorous problem solving approach holds a great deal of potential in sports marketing. There is a wide variety of areas where it could be utilized in a sports marketing setting. For example, DMAIC could be used to improve game attendance, the effectiveness of advertising and game awareness, merchandise sales, fan loyalty, season ticket sales, and so forth. Of course, the respondents need not be limited to current customers; they could also include previous customers (for example those who no longer purchase tickets), potential customers, and even employees who have an intimate knowledge of the problem being addressed. In the following sections we detail how the DMAIC process was applied to a university athletic department to increase men’s basketball attendance. 3.1 Define phase One of the primary steps at this formative stage of the project is selecting a project team. In this project in particular, the team was comprised of individuals whose positions related directly with game attendance and who could provide valuable insight and possible solutions for the project. In addition to the authors, the team included the director of marketing, promotions, and sales, assistant director of sales and service, associate athletic director, assistant director of promotions, and the director of ticket operations. The athletic director was identified as the process owner and his support throughout the process was instrumental in securing buy-in from all the team members. The athletic director was also responsible for identifying and gaining commitment to the overall goal of the project – a 10 percent increase in overall attendance (including both paid attendance and student attendance) for the season. Of utmost importance in this first step of the DMAIC process is a clear understanding of the problem being addressed by the Six Sigma team and any key restrictions to the project, including budgetary, resource, or timing constraints. This information is often presented in the form of a project charter and problem statement. The charter includes this information as well as a list of Six Sigma team members, their expected availability to work on the project (per week), and the “start” and “stop” points of the process to be considered. Table II provides a summary of the project charter developed by this project’s team. 3.2 Measure phase With the problem clearly understood and agreed upon by all, the measure phase of a Six Sigma project establishes key drivers of the problem being addressed and sets a baseline level of performance. From a sports marketing perspective, this may first involve identifying potential attendees to the athletic events and establishing their importance as a group in regards to improving attendance. Ultimately, a determination
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will be made as to what features or facets of the sporting event’s atmosphere are most important to each market segment so that emphasis can be placed on improving those elements. Conceptually, in the measure phase factors which are likely causing the problem are established and data on these possible causes are collected so that their relationships with the problem can be later ascertained in the analyze phase. In our case the attendance issue was thought to be brought on by both a lack of awareness and by the product (the games) not meeting customer expectations. It was decided by the project team at this stage that there was a significant difference between student and non-student attendees in terms of how they are reached for marketing purposes and how they value various experiential elements of a basketball game. This stems largely from the fact that, at the university under study, students pay an annual athletic fee which enables them to enter any sporting event without charge. As well, the university has practically no commuter students, with the vast majority of students living within three miles of campus. This makes marketing to students very different than to other potential attendees. Consequently, the project team gathered and analyzed data from students in a different manner than for other market segments. These results are addressed later in the paper. To help determine what group should be the point of emphasis on marketing to the general (non-student) population, the project team developed a list of potential customer segments and ticket packages. Ticket packages were identified as the vehicle through which customers would be attracted to games. The resulting product/market matrix in Table III shows the importance placed on each cell of the matrix by the most senior members of the athletic department and others directly involved with men’s basketball (the athletic director, deputy athletic director, director of marketing, promotions, and sales, associate athletic director, and the director of ticket operations). In the matrix, the importance of each combination of product and market was scored with “5” being most important and “1” being least important. Problem statement Goal statement Timing
Table II. Project charter
Last season’s men’s basketball attendance is 7.5 percent below the previous year’s and continues a three-year trend where attendance declined an average of 14.2 percent per season To increase overall attendance (both paid and student) by 10 percent, thereby regaining last season’s loss while allowing for a slight attendance increase The project will be conducted during the 2009-2010 men’s basketball season and will consider the process beginning with the scheduling of opponents and ending with game day operations
Product/market
Table III. Product/market importance for paid attendancea
Season tickets Bundled tickets Single-game tickets Walk-up tickets
Existing ticket holders
Alumni Faculty
City residents
County residents
Local organizations
4.75 1.75
5 2.25
5 1.75
5 1.75
5 1.75
3.75 4.25
2.5 1.75
4.25 3.5
4 3.25
4.25 3.5
4.25 3.5
4.25 2
Note: aAverage scores across the respondents
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Table III provides insight into which combinations of ticket packages and customer segments are believed to be most important for increasing attendance. With this result, the athletic department can focus their efforts on specific segments or combinations of segments rather than spreading resources across all possible customers and possibly including some which are unlikely to result in additional attendance. We observe agreement among the senior athletic department members that emphasizing season ticket sales is the most important avenue to increasing attendance from the non-student population. Specifically, the results indicate that alumni, faculty, and city and county residents are the most important markets. This is followed by sales of single game and walk-up tickets to all of the aforementioned groups. Conversely, bundled tickets (tickets for only a portion of the season’s games) are seen as the least important avenue to address attendance. Across all products, it is felt that alumni are the most important market to consider, followed closely by faculty and local organizations. Given that the problem centers on basketball attendance, the team determined that a likely “process” affecting attendance was the manner in which the games are conducted from an attendee’s perspective, i.e. the game-day experience. As such we developed a questionnaire to measure the elements which might influence the utility obtained by an individual attending a game and which are based on the findings of Ferreira and Armstrong (2004). The questionnaire established the importance placed on each element as well as the respondent’s view of the element’s current level of performance. It was believed that students will likely place a different value on the importance and performance of the various elements than will other potential attendees and so data were gathered and analyzed separately for the students. For the student survey, a convenience sample was collected by randomly selecting classes across the university. For the season-ticket survey, a convenience sample was collected by providing season-ticket holders the opportunity to complete a survey during a home basketball game. Ultimately, the questionnaires were completed by 659 students and 119 season-ticket holders. A list of the key elements included is shown in below. Game-day experience elements investigated: respondents were asked the importance they place on the following elements as well as their current level of satisfaction with the current state of performance for each: . halftime entertainment; . basketball band performance; . music selection (over speakers); . music volume (over speakers); . in-game promotions; . quality of the opponent; . team performance; and . game times. A copy of the full questionnaire used for students can be found in the Appendix. The survey used for season ticket holders was identical to the student questionnaire except for first four survey questions, which gather information on the respondent’s status as an alumnus, whether they are employed by the university, where they live, and the number of years they have owned season tickets.
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Figure 1. Student perspective on game-day experience elements
3.3 Analyze phase In the analyze phase of the DMAIC process, the data collected in the measure phase are scrutinized and used to illuminate sources of potential problems and solutions. The results highlighted the problem facing the university from a student attendance standpoint. The typical university student is only “moderately interested” in college basketball (question 2 on the survey) as a whole and a large number, 57.7 percent, have never attended a game anytime during their college career (question 3). The two most common reasons students gave for not attending games were that they do not know about them and they are just not interested (question 4). This points to the need to do a better job communicating with students the timing of games. With respect to non-students, the results highlight the need to use the results of Table III to extend ticket sales beyond that of the existing customer base; of the season-ticket holders who completed the survey, over 90 percent were university employees and over 98 percent of them live within 35 miles of campus. With respect to the game-day experience factors, results are shown in Figures 1 and 2, with Tables IV and V providing descriptive statistics and frequency of responses on the five-point scale. Figures 1 and 2 plot the relative importance (X-axis) for each game-day element (1 – very unimportant, 5 – very important) against the respondents’ overall satisfaction (Y-axis) with that element (1 – very dissatisfied, 5 – very satisfied) and thus yields insight into how well the university does at providing the elements. Conceptually, it is desirable for the scatter plots to show upwardly sloping data points as this would indicate that the respondents are most satisfied with the elements they view as most important and vice versa. To help visualize this performance benchmark, we have included lines with positive slopes (equal to 1) in the figures. Specifically, with regards to the game-day experience factors, progressively increasing data points would indicate that the athletic department is not
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Figure 2. Season ticket holder perspective on game-day experience elements
Importance Halftime Band Music selection Music volume Promotions Quality of opponent Team’s performance Time of day Performance Halftime Band Music selection Music volume Promotions Quality of opponent Team’s performance Time of day
n
Mean
SD
1
2
Percentage 3
4
5
279 279 279 279 279 279 279 279
2.92 2.52 3.15 3.03 3.44 4.28 4.68 4.00
1.02 1.03 0.96 0.96 1.00 0.82 0.58 0.73
9.0 16.5 6.1 7.9 3.6 0.7 0.4 0.4
24.4 35.8 16.9 16.9 12.9 2.9 0.0 2.9
36.9 30.1 38.0 43.4 32.6 10.8 3.6 15.4
25.1 14.3 34.4 28.0 37.3 38.7 23.3 58.4
4.7 3.2 4.7 3.9 13.6 47.0 72.8 22.9
247 244 250 246 253 262 263 263
3.13 3.10 3.29 3.24 3.06 3.15 2.73 3.37
0.84 0.78 0.76 0.77 0.85 0.95 1.00 0.80
3.6 3.7 2.0 1.6 3.6 3.4 9.9 2.3
14.6 13.5 9.6 12.6 20.6 22.9 33.8 8.4
51.4 53.3 49.2 48.0 44.7 34.4 31.9 44.9
26.3 28.3 36.0 35.4 29.3 34.0 21.7 39.5
4.1 1.2 3.2 2.4 2.0 5.3 2.7 4.9
needlessly expending resources to elevate customer satisfaction on elements which are not viewed as important. We observe from these figures that the string of data points does not necessarily display the desired upward slope, particularly with the students. Consider the students’ responses related to team performance. Unfortunately, it seems that while students
Table IV. Summary statistics for student survey
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Table V. Summary statistics for season ticket holder survey
Importance Halftime Band Music selection Music volume Promotions Quality of opponent Team’s performance Time of day Performance Halftime Band Music selection Music volume Promotions Quality of opponent Team’s performance Time of day
n
Mean
SD
1
2
Percentage 3
4
5
94 94 94 90 93 94 94 94
3.40 4.04 3.17 3.91 2.90 3.92 4.27 3.75
1.00 0.97 1.43 1.28 1.13 1.00 1.12 0.97
6.4 3.2 19.2 7.8 14.0 5.3 7.5 2.1
7.5 4.3 10.6 7.8 18.3 4.3 0.0 8.5
36.2 12.8 29.8 15.6 39.8 9.6 7.5 24.5
39.4 44.7 14.9 23.3 19.4 55.3 28.7 42.6
10.6 35.1 25.5 45.6 8.6 25.5 56.4 22.3
89 89 89 89 87 88 89 88
3.28 4.24 2.36 2.05 3.10 3.76 3.12 3.57
1.10 0.95 1.19 1.14 0.89 1.03 1.20 0.96
10.1 3.4 32.6 42.7 6.9 3.4 9.0 3.4
9.0 2.3 21.4 25.8 9.2 12.5 28.1 8.0
33.7 9.0 27.0 19.1 55.2 9.1 15.7 31.8
37.1 38.2 15.7 9.0 24.1 54.6 36.0 42.1
10.1 47.2 3.4 3.4 4.6 20.5 11.2 14.8
view this element as the most important, they reported that of all factors, they were least satisfied with the team’s performance. Similarly, the second most important element to students, opponent, did not fare much better. Students were equally as satisfied with opponents as with the other factors, even though these other factors were viewed as less important. Students were relatively insensitive to the performance of the various factors, rating most everything between the “neither satisfied nor dissatisfied” line and the “satisfied” line, on average. These results provide strong evidence for why student attendance is so low; they do not view the team’s performance as favorable and are not excited with the competition. In comparison, season-ticket holders reported that they were generally satisfied with the band’s performance and the opponent played. The team’s performance was once again seen as most important, but season ticket holders were much less satisfied with it than several of the other elements. They were neither satisfied nor dissatisfied with the promotions, halftime entertainment, and the team’s performance. Surprisingly, season-ticket holders were most dissatisfied with the music played over the loudspeakers. They did not enjoy the selection of music and thought the volume was too loud. The analyze phase also included a focus group of students interested in seeing basketball attendance increased. In the focus group, the issues raised by the survey results were explored in more detail in order to obtain deeper insight. Three key issues emerged from this discussion. First, students’ perceptions of the quality of the team were diminished because of a mediocre record that results from playing highly rated teams on the road. Two, many students simply do not know when the games are played. And three, for the majority of the students, the only convenient transportation to the game is to drive their own car, but they do not want to pay to park at the arena.
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3.4 Improve phase In a typical Six Sigma project, the improve phase begins once problems are clearly understood and data have been collected and analyzed to determine what factors may be contributing to those problems. In this phase the project team generates plans for addressing the problems. It is good to note here that the recommendations follow directly from the results of the analyze phase. In this project in particular, having established the elements which are most important and the respondents’ level of satisfaction with these elements, the problem becomes determining what can be done to address the elements where gaps in customer satisfaction persist. The recommendations for improvement were given to the athletic director. The specific recommendations which were made are as follows: (1) Increase the perception of the team’s performance. The team’s perceived performance is the most important element in game-day experience, although the quality of the opponent and team performance are intimately related. Given a team of a certain strength, scheduling more highly respected opponents will typically translate into more losses for that team which could make the team’s “performance” appear to be worse than if the same team had played an easier schedule. Our results indicate that season-ticket holders are mostly satisfied with the level of the team’s opponents (3.76). However, they are less satisfied with the team’s performance (3.12). Given that performance is seen as being more important than the quality of the opponent, scheduling some less powerful opponents in place of stronger teams is one avenue to improve the season-ticket holders’ and students’ evaluations of the team’s performance. (2) Develop new ways to attract students. Low student attendance is problematic not only for the obvious reason of student head-count, but also because students add to the atmosphere of the games which helps the game-day experience of others, specifically the season-ticket holders. All students will be targeted, regardless of whether or not they have attended a game in the past, as few students consistently attend games. There are several potential ways to cost effectively increase student attendance: . Students reported that they do not know when games are and rely on word of mouth to get their basketball information. Of the eight methods of relaying information to students (including the student newspaper, signage, the university web site, etc.) the most preferred method of receiving information, according to 27.7 percent of students, is e-mail. As such, the athletic department should begin utilizing e-mails to provide information about games, players, stories, and the schedule to students. . Use text messaging in conjunction with promotions (such as free parking passes for use across campus) to motivate students to attend the games. . Allow students to park for free at the games. . Create a collection point where students can be bused in from the further areas of campus for at least some of the games. This could be combined with providing a promotion/contest for an entire dormitory, sorority, etc. for attending the game.
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(3) The band should play more and music over the speakers should be turned down or eliminated. A major problem that is viewed as important by the vast majority of season-ticket holders is the selection and volume of music played during the games. Surprisingly, season ticket holders reported that the volume of music played was nearly as important as the quality of opponent (3.91 versus 3.92). (4) Increase marketing to nearby residents. The closer a resident is, the less costly it is for them to attend a game in terms of time and effort. Within local residents, we know that the vast majority of season-ticket holders are affiliated with the university. Hence, it would make sense to first market to individuals who have some bond with the university, regardless of whether they are alumni, employees, or parents of current students.
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3.5 Control phase During the control phase of the project, responsibility for maintaining improvements is turned over to the personnel involved with the processes in question. There are several methods which may be used to ensure the changes made in the previous phases of the Six Sigma project are preserved. One of the primary methods is the use of standard operating procedures. For example, plans should be in place to follow-up with season-ticket holders, offer promotions as well as advertising, and query students at predetermined dates. Also, there should be a standard template used for games so that music selection and volume, halftime entertainment and the other factors viewed as important are consistently offered across all games. Finally, a schedule should be set to regularly check fan satisfaction with the various game-day experience facets. All these should be monitored and the results published (along with previous results) so personnel can see the level of progress and problems can be quickly identified and corrected. A brief summary of the major steps undertaken during this project in each DMAIC step can be found in Table VI. 4. Epilogue Based on the data uncovered as part of the DMAIC process and the recommendations included therein, the athletic department made several changes to their existing business processes and undertook several new approaches during the 2010-2011 basketball season. new customers and improving the game-day experience for both student and non-student populations. By adjusting the department’s standard procedures, the athletic Define
Table VI. DMAIC summary
Need for action quantified, Project Team formed with Athletic Dept. personnel, opportunity and goal specified and incorporated into project charter Measure List of potential markets and game-day experience factors developed. Surveys were administered to students and season ticket holders, gathering data on importance and performance of game-day experience dimensions Analyze Patterns in data illuminated using frequency tables, scatter plots, and descriptive statistics. Areas in need of improvement identified as primarily the perception of team performance and opponent (students) and music volume (season ticket holders). Student focus group conducted Improve Manners to address shortcomings found in analyze phase were developed. Recommendations submitted to athletic director Control Responsibility for improvements turned over to Athletic Department
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department realized a 12.1 percent increase in men’s basketball attendance (approximately 250 additional attendees per game) from the previous season, ultimately surpassing the project’s stated goal of a 10 percent attendance increase. This increase was realized even though the team’s performance and record did not improve. With respect to increasing new ticket sales, several new actions were taken. The department decided to focus sales efforts on potential customers who possessed two important characteristics. First, they would have some connection to the university either as an alumnus or as a “defector” – a person who had formerly purchased a season ticket but no longer does so. The second factor considered was distance from campus. Using these characteristics as a guide, the department utilized student interns to contact individuals who were either alumni or defectors and who lived within 50 miles of campus. The interns attempted to sell full season tickets to the potential customer and, if the individual declined, the intern then worked down the list of bundled-ticket packages, hoping at least to sell a single-game ticket from the phone call. The athletic department also created new products (ticket packages) designed to maximize value to potential customers. These packages involved bundling higher profile rivalry games with other out-of-conference and in-conference games. In addition, the packages included giveaways such as free food, drinks, and apparel. The results of this new marketing effort were considerable. In addition to a small increase in the number of season tickets, sales of bundled tickets increased dramatically. During the 2009-2010 basketball season, the program averaged only 66 tickets per game that were part of some form of bundled ticket package. In fact, over the previous five-year period, the highest yearly average for bundled tickets was only 84 tickets per game. In contrast, for the 2010-2011 season, the program averaged 150 bundled tickets per game. The weekend package, for example, sold 364 tickets while one of the rivalry packages realized sales of 500 tickets. In addition, several hundred single-game ticket sales were generated as a result of this effort. The second major area where changes were made was to the game-day experience. As the results of the DMAIC process indicated, quality of competition is a key concern of both the students and the season-ticket holders. As the schedule for the season was developed (which can often extend into the summer immediately before the season) effort was made to bring in better competition. As a result, the schedule included two home opponents who were ranked in the USA Today Top 25 poll at some point during the season. Effort was also made to improve the perception of the team’s performance. This was also accomplished through scheduling, however, this time by providing more home games. As a result of this effort, the home schedule included 16 games, three more than the previous season. Other changes were made to improve the game-day experience for both students and season-ticket holders. During the project, it was discovered that the season-ticket holders were not satisfied with the selection and volume of music played over the speaker system during games and changes to these areas were made as a result, including having the band perform more often. During the DMAIC process it was also revealed that student participation was viewed as an important element in the game-day experience for the season-ticket holder, an important insight as it makes marketing to students, who get into games for free, a more palatable option. As a result, more student promotions (giveaways) were developed and plans put in place to include a student giveaway at every home game in the 2011-2012 season.
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5. Lessons learned The project demonstrated that Six Sigma’s DMAIC methodology can be readily applied to a sports marketing setting. This seems intuitive as the area of sports marketing is not immune from problems; it is just that these problems may differ slightly from those encountered in other service settings. Our experiences with this project lead to several insights that are worth reporting. To begin, the structure of Six Sigma fits well with a sports setting due to the use of seasons. The define phase can be completed prior to the start of the season as can the initial portion of the measure phase where the parameters to be measured can be ascertained. Data collection can then begin with the start of the season. Depending on the length of the season, the number of games, and the speed with which results can be analyzed, it may be possible to attempt some improvements in the first season, such as varying the promotion level. However, it is more likely that improvement plans will be addressed after the first season and arranged before the start of the following season. There are other lessons which can be drawn from this project that are applicable to the use of Six Sigma in a sports marketing setting. We found it important to use several methods of data collection and analysis. We utilized several tools including a product/market matrix, scatter plots, Pareto diagrams, surveys, histograms, and data stratification. Further, we sought out multiple stakeholders to develop improvement ideas, including students, faculty, and members of the athletic department. As well, it is apparent that in a sports marketing environment, recommendations may change over time due to the seasonal nature of the business. While several specific recommendations were provided in early June of 2010, by the start of the following basketball season in November the recommendations had been altered somewhat due to information that arose as implementation was attempted. For example, while in the beginning the project team clearly identified season tickets as the most important product to sell, in actuality it was realized that there was also a large benefit that could be obtained through selling bundled tickets. In summary, Six Sigma and the DMAIC model provided a structured framework for improvement. Generating attendance was viewed as part of a system comprised of several important interconnected processes. Critical factors were identified, and decisions made on how to improve them were facilitated by data-driven analyses. The success of the project helps establish the usefulness of Six Sigma as a tool in the sports marketing context. 6. Limitations and directions for future research As with all studies, the current undertaking faced several limitations. Foremost among these limitations is that the current study had but one participating institution. Because each institution may be unique in certain attributes or face challenges which are distinctive, perhaps student culture or alternative entertainment options, the results may not be generalizable. A second possible limitation of the study is the timing of the Six Sigma projects. While the define, measure, and analyze phases of the Six Sigma project were completed before and during the season in question, the improve and control phases were not implemented until the following basketball season. This lag in time enables factors other than the improvements made to the sports marketing area to influence attendance. Such factors could include changes to the roster, the schedule, etc. Of course, the extended duration of this project is likely not only a problem with the present study, but will likely be faced by others as they attempt to implement Six Sigma in a sports marketing setting.
With respect to future work, there are many avenues that may be taken. In keeping with the limitations mentioned above, future work should consider multiple universities to further examine how well Six Sigma translates to sports marketing in an intercollegiate setting. As well, the present study focuses primarily on the game-day experience factors. Further work should be done on the use of Six Sigma in other sports marketing areas, such as advertising, ticket pricing, and game promotions.
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129 References Calabro, S. (2004), “Selling by numbers”, Sales & Marketing Management, Vol. 156 No. 12, pp. 30-4. Carlivati, P. (2007), “Six Sigma: a new path to perfection”, ABA Bank Marketing, April, pp. 24-9. Carnell, M. (2010), “Chief concerns”, Six Sigma Forum Magazine, Vol. 9 No. 3, p. 28. Creveling, C.M., Hambleton, L. and McCarthy, B. (2006), Six Sigma for Marketing Processes: An Overview for Marketing Executives, Leaders, and Managers, Prentice-Hall, Upper Saddle River, NJ. De Mast, J. and Bisgaard, S. (2007), “The science in Six Sigma”, Quality Progress, Vol. 38 No. 1, pp. 25-9. Donath, B. (2005), “Six Sigma’s true meaning lies with customer”, Marketing News, May, pp. 9-10. Dusharme, D. (2004), “Quality conversation with Mikel Harry”, Quality Digest, February, available at: www.qualitydigest.com/feb04/articles/06_article.shtml Ferreira, M. and Armstrong, K.L. (2004), “An exploratory examination of attributes influencing students’ decisions to attend college sport events”, Sport Marketing Quarterly, Vol. 13 No. 4, pp. 194-208. Firka, D. (2010), “Six Sigma: an evolutionary analysis through case studies”, The TQM Journal, Vol. 22 No. 4, pp. 423-34. Funk, D.C., Beaton, A.A. and Pritchard, M. (2009), “Measuring the motives of sport event attendance: bridging the academic-practitioner divide to understanding behavior”, Sport Marketing Quarterly, Vol. 18 No. 3, pp. 126-38. Goeke, R., Marx, M. and Redenbacher, E. (2008), “Hearing voices: how businesses listen to the customer”, iSixSigma Magazine, July/August, pp. 31-8. Greenwell, T.C., Brownlee, E., Jordan, J.S. and Popp, N. (2008), “Service fairness in spectator sport: the importance of voice and choice on customer satisfaction”, Sport Marketing Quarterly, Vol. 17 No. 2, pp. 71-8. Guaspari, J. (2001), “Six Sigma for sales”, Across the Board, September/October, pp. 67-8. Hambleton, L. (2008), A Treasure Chest of Six Sigma Growth Methods, Tools, and Best Practices, Prentice-Hall, Upper Saddle River, NJ. Harry, M.J. and Crawford, J.D. (2004), “Six Sigma for the little guy”, Engineering Management, November, pp. 8-10. Krehbiel, T.C., Havelka, D. and Scharfenort, M. (2007), “Process monitoring in accounting: implementing pre-control charts”, The Journal of Applied Business Research, Vol. 23 No. 4, pp. 93-103. Kwon, H. and Trail, G. (2001), “Sport fan motivation: a comparison of American students and international students”, Sport Marketing Quarterly, Vol. 10 No. 2, pp. 147-53. Maddox, K. (2004a), “GE measures rep in marketplace”, B to B, Vol. 89 No. 2, p. 27. Maddox, K. (2004b), “Marketers embrace Six Sigma strategies”, B to B, Vol. 89 No. 10, pp. 1-32. Maddox, K. (2006), “Marketers embrace Six Sigma strategies”, B to B, Vol. 89 No. 10, pp. 1-32.
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Niemes, J. (1999), “Taking sales success to new heights with Six Sigma”, National Productivity Review, Autumn, pp. 37-41. Pestorius, M.J. (2006), Applying the Science of Six Sigma to the Art of Sales and Marketing, ASC Quality Press, Milwaukee, WI. Pestorius, M.J. (2007), “Apply Six Sigma to sales and marketing”, Quality Progress, Vol. 38 No. 1, pp. 19-24. Quelch, J. and Harris, B. (2005), “Six Sigma comes to marketing”, European Business Forum, Vol. 22, Autumn, pp. 32-5. Redenbacher, E. (2009a), Six Sigma Marketing: From Cutting Cost to Growing Market Share, ASQ Quality Press, Milwaukee, WI. Redenbacher, E. (2009b), The Voice of the Market: Listen, Learn, Lead, Productivity Press, New York, NY. Redenbacher, E. (2009c), “To market, to market”, Six Sigma Forum Magazine, Vol. 9 No. 1, pp. 25-7. Rein, I., Kotler, P. and Shields, B. (2006), The Elusive Fan: Reinventing Sports in a Crowded Marketplace, McGraw-Hill, Boston, MA. Shank, M.D. (2009), Sports Marketing: A Strategic Perspective, 4 ed., Prentice-Hall, Upper Saddle River, NJ. Sodhi, M.S. and Sodhi, N. (2004), “Six Sigma pricing”, Harvard Business Review, Vol. 82 No. 5, pp. 135-42. Webb, M.J. and Gorman, T. (2006), Sales and Marketing the Six Sigma Way, Kaplan Press, Chicago, IL. About the authors Peter A. Salzarulo is an Assistant Professor of Supply Chain Management in Miami University’s Farmer School of Business. He received his PhD in Operations Management and Decision Sciences from the Kelley School of Business at Indiana University. His work appears in such publications as Production and Operations Management, European Journal of Operational Research, Journal of Supply Chain Management, Computers and Operations Research and Decision Sciences Journal of Innovative Education. Peter A. Salzarulo is the corresponding author and can be contacted at:
[email protected] Timothy C. Krehbiel is Senior Associate Dean and Professor of Management. His work appears in numerous journals including Quality Management Journal, International Journal of Production Research, Journal of Purchasing and Supply Management, Journal of Marketing Management, Sport Marketing Quarterly, American Journal of Business and Communications in Statistics. He is also a co-author of Business Statistics: A First Course, Basic Business Statistics, Statistics for Managers Using Microsoft Excel, and Sustainability Perspectives in Business and Resources. Stephen Mahar is an Associate Professor of Operations Management in the Cameron School of Business at the University of North Carolina Wilmington. He received his PhD in Operations Management and Decision Sciences from the Kelley School of Business at Indiana University. His work appears in such journals as Production and Inventory Management Journal, European Journal of Operational Research, Mathematical and Computer Modelling, Computers and Operations Research, Computers and Industrial Engineering, and Decision Sciences Journal of Innovative Education. Lance S. Emerson is Director of Pricing and Analytics – Bluegrass Division at Southern Wine & Spirits of America, the largest marketer and distributor of alcohol beverages in the USA. He received his MBA from Miami University’s Farmer School of Business. Currently he is located in Louisville, Kentucky. To purchase reprints of this article please e-mail:
[email protected] Or visit our web site for further details: www.emeraldinsight.com/reprints
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Appendix
1. What is your current classification? (First Year, Sophomore, Junior, Senior, Graduate Student) 2. Please rate your level of interest for college basketball. I have no interest 1
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3. Have you ever attended a men’s basketball game? (Yes, No)
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4. If you answered “No” to the previous question (i.e., that you have never attended a men’s basketball game), please state briefly the primary reason(s) that you have never attended a game. After completing this question you are finished with the survey. We thank you for your input, it will be very useful in helping attract more students to basketball games. If you answered “Yes” to the previous question, please proceed to question 5 *** The rest of this survey is only for students who have attended a men’s basketball game*** For the questions below, please indicate how important various factors are to you when evaluating your experience at a men’s basketball game. Very Unimportant Unimportant 1
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5. How important to you is the half-time entertainment when evaluating your experience at a game? 6. How important to you is the performance of the Basketball Band when evaluating your experience at a game? 7. How important to you is the selection of music played over the loud speakers when evaluating your experience at a game? 8. How important to you is the volume of the music played through the loudspeakers when evaluating your experience at a game? 9. How important to you are in-game promotions (pizza giveaways, tshirt tosses, etc.) when evaluating your experience at the games? 10. How important to you is the quality of the opponent when evaluating your experience at a game? 11. How important to you is the men’s team’s performance when evaluating your experience at a game? 12. How important to you is the time of day the games are played when evaluating your experience at a game?
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For the questions below, please indicate how satisfied you are with the different elements listed above based on your experiences at men’s basketball games. If you cannot recall your level of satisfaction, please respond by circling “N/A” Neither Satisfied or Very Dissatisfied Dissatisfied Dissatisfied
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21. How many games have you attended this season? __________ 22. How many games did you attend last season? (If you are a first year, please state “fy”) _________ 23. What time would you like to see weeknight games tip-off? _____________________ 24. What time would you like to see Saturday games tip-off? _____________________ 25. What time would you like to see Sunday games tip-off? _____________________ 26. Do you prefer Saturday or Sunday games? _____________________ 27. Where do you normally obtain information about men’s basketball (e.g., The Athletic Department’s Website, the student newspaper, word-of-mouth, etc.)?____________________ 28. How would you prefer to receive information about Men’s basketball? ____________________ Thank you for your time. Our hope is to use this survey to better serve you and other fans. Are there any comments you would like to make concerning men’s basketball?
