Fundamentals of Marketing Management
1.- What is the NFL Media Group's general strategic direction?
With a fan base of 181 million in the US, the National Football League (NFL) has a clear branding strategy based on a message that is intense, meaningful and unifying. This message is based on its core values: excellence, community, teamwork, innovation and tradition.
The NFL receives over $4 billion annually from major media television and cable partners CBS, FOX, NBC and ESPN. This media licensing agreement represents its main source of annual income (which is about $8 billion). The NFL executives have set an ambitious target of $25 billion in revenues by 2027, which requires them ...view middle of the document...
Considering how quickly a new technology may skyrocket to success (we must bring the iPhone and iPad as obvious examples) or fail miserably (like Apple's Newton or Microsoft's Zune) we consider that creating a bond in this rapidly evolving area is shortsighted. Nevertheless, having exclusive rights create an atmosphere of 'uniqueness' among its users. Just to illustrate this, while preparing this report we found some interesting comments on Sprint's blog about the NFL-Sprint mobile application and one just says it all: “… (it was) the one thing I could tell made my iPhone having friends and family a bit jealous". ( http://community.sprint.com/baw/thread/27696 )
A non-exclusive agreement lets all parties participate and compete and, as mentioned above, may (immediately) benefit from any new technology that flourishes, as well as getting rid of any obsolete one. If played wisely, non-exclusive partnerships may be used as an incentive to expand through future partnership ventures worldwide so new markets will be accessible.
Another obvious benefit is that it has a broader target of end consumers since no one will be forced to go to a company they are not using (say Sprint) just to get an NFL application for their wireless device.
On the downside, non-exclusive agreements are usually 'punished' by a lower royalty from its licensees.
3.- If your Group were an advisor of Rolapp, which of the 3 strategic approaches described in the case would you pursue?
There are 3 proposed approaches:
1. Pursue an exclusive partnership with one wireless carrier.
2. Form non-exclusive partnerships with multiple wireless carriers.
3. Include wireless rights in partnerships with one or more television networks.
We find the second approach -a non-exclusive partnership- it’s more workable. There are many factors to support this (many mentioned on...