strategic marketing plan: denver broncos -...

Strategic Marketing Plan: Denver Broncos

Joni Colburn

MKT 300-01

University of Nebraska at Kearney

STRATEGIC MARKETING PLAN: DENVER BRONCOS 2

I. Company Overview

The legacy of the Denver Broncos football team dates back over fifty years. The team

played their first game on September 9, 1960 as a member of the American Football League.

Some of the team’s fondest memories include the first Super Bowl win against the Green Bay

Packers at the completion of the 1997 season, as well as the 41 years of football action in the

original Mile High Stadium (The Denver Broncos, 2013). Today, the Denver Broncos, a member

of the West Division of the American Football Conference, are a team focused around tradition,

community involvement, and fan appreciation. The company is presently owned by Pat Bowlen,

with John Ellis serving as the current President (The Denver Broncos, 2013). In combination

with the mission statement and value set that the National Football League (NFL) strives to abide

by, the executive members of the Denver Broncos are focused on incorporating integrity,

performance, teamwork, tradition, innovation, diversity, and learning into the daily values of the

company as a whole (The National Football League, 2013).

The consumer market for the Denver Broncos includes a large array of individuals. The

largest target market is the group of loyal fans who support the Denver Broncos regularly. This

market can be divided into local, television, and online fans. The Denver Broncos have

international fans as well. When considering the demographics of Denver Broncos fans, men,

women, and children of nearly all ages are included. Both the young and the old are interested in

supporting Colorado’s professional football team. More specifically, the target market most

certainly is made up of individuals who have a close relationship with the players, as well as the

executive, coaching, and business staffs. On a broader basis, the target market for the Denver

Broncos may include anyone who is interested in the sport of professional football. For example,


some football fans support a team who is not generally their favorite if that certain team is

competing against a personal rival.

The psychographics of Denver Broncos fans are focused around individuals who enjoy

the competitive nature of professional football games, while also finding pleasure in leisure

activities. This group of people is also fond of spending time with family and friends. While the

current Mile High Stadium holds over 76,000 fans, many individuals still choose to watch the

games on television or online (Saccomano, 2013). This adds to the convenience factor that many

American citizens appreciate in life. Some Denver Broncos fans are also simply interested in

idolizing a particular player. Current quarterback, Peyton Manning, is surely admired by many

fans leading to an increase in the Denver Bronco’s popularity. In addition, Tim Tebow was a

very popular member of the Denver Broncos football team during the 2010 and 2011 football

seasons, before being drafted to play for the New York Jets. Tim Tebow, an outspoken Christian,

attracted many fellow Christians to the sport of football, specifically the Denver Broncos, during

his time with the team. Today, The Tim Tebow Foundation stands by their mission, “To bring

faith, hope, and love to those needing a brighter day in their darkest hour of need”. (Tim Tebow

Foundation, 2013). The Denver Broncos faced a possible reduction in Christian-based fans at the

end of Tebow’s career with the team.

Although the Denver Broncos team is ultimately interested in selling football tickets to

fans, the company also places a high priority on the sale of branded merchandise. The official

Denver Broncos online Pro Shop, powered by the popular online retailer known as Fanatics,

offers a variety of items ranging from apparel and accessories to home and automotive décor.

The items available for sale are targeted to men, women, and children of all ages. According to


the Denver Broncos Pro Shop website, a list of the branded merchandise that is available

includes:

Apparel such as t-shirts, jerseys, sweatshirts, pants, shorts, golf gloves, hats, jackets,

polos, sleepwear, shoes, socks, swimwear, intimates, dresses, skirts, and baby rompers.

Accessories such as belts, wallets, checkbooks, purses, tote bags, electronic cases and

decals, headbands, wristbands, jewelry, key chains, pins, buttons, sunglasses, ties, toys,

games, and watches.

Home décor such as lamps, clocks, candles, photo frames, flags, banners, coasters, door

mats, mirrors, switch plate covers, blankets, bedding sets, shower curtains, nightlights,

soap dishes, and lawn decorations.

Automotive accessories such as seat covers, car magnets, license plate holders, steering

wheel covers, and hitch covers.

Kitchen items such as toasters, water glasses, coffee mugs and cups, coaster sets, flasks,

shot glasses, salt and pepper shakers, lunch coolers, ceramic platters, cutting boards,

koozies, water bottles, wine glasses, storage containers and aprons.

Pet supplies such as vests, beds, food and water bowls, leashes, collars, and

identification tags.

Autographed items such as footballs, jerseys, and helmets.

All merchandise items can be purchased online. Current prices range from $749.95

(Peyton Manning Denver Broncos Autographed Duke Pro Football with Multiple Inscriptions) to

$0.50 (game day beads in orange, blue, and white). The Pro Shop offers flat rate standard,

ground shipping for $4.99. This applies to any size of order. Faster shipping can be applied with

charges ranging from $9.99 to $35.00. International shipping charges vary from $12.95 to

$39.95. The company also offers 365-day money back guaranteed returns for any items that are

not customized (The Denver Broncos Pro Shop, 2013).

II. SWOT Analysis

The next section will highlight the Denver Broncos overall strengths, weaknesses,

opportunities, and threats as a competitive company within the National Football League. Such


an analysis can be used to assist in determining the direction the company wishes to take in

future years. The SWOT Analysis has been summarized in Figure 1 on page 11.

Strengths

A well-known and respected team within the National Football League.

A community-based fan sector that includes local, national, and international individuals.

The understanding of the importance of supporting the local community, with

involvement in the following programs: Habitat for Humanity of Metro Denver, Rocky

Mountain Hospital for Children, Susan G. Komen for the Cure Metropolitan Denver

Affiliate, Bonfils Blood Center, Boys and Girls Clubs of Metro Denver, American Heart

Association, FoodWorks Colorado, Colorado Youth Football, Inner City Health Center,

Denver Rescue Mission, Denver Public Schools, and Mile High United Way (The Denver

Broncos, 2013).

Weaknesses

The aspect that the professional football season only lasts a certain portion of the year

may inhibit the growth of sales during the off-season months.

The company may have already reached the extent of product possibilities.

Opportunities

With the success so far during the 2013 football season, the company has the ability to

increase the fan base.

The company already has a firm grip in the community service sector. This will increase

their overall credibility and provide for additional non-profit service projects to be

proposed to the company.

Threats

The potential loss of some fans as Tim Tebow was drafted to play for another competing

team.

Fans will become interested in the Denver Broncos simply because they are doing well

during the current season. Such fans may not be loyal if the success of the team decreases

in the future.

III. Competitive Analysis

As one of thirty-two teams in the NFL, the Denver Broncos must remain competitive at

all times. The company encounters two strongly competitive forces each year. They are:

Thirty-one NFL teams across the nation.


Other sports teams in the state including the Colorado Rockies, the Colorado

Avalanche, and the Colorado Nuggets.

Both of these forms of competition have the potential to impact the success of the Denver

Broncos as a branded retailer. With 32 total NFL teams across the national, the marketing

department cannot be surprised that the fan base has a tendency to become thinly spread. The

Denver Broncos also face a direct form of competition with the New York Giants, as Peyton

Manning’s brother, Eli, is their current quarterback. Moreover, with four well-known

professional sports teams in the area, the Denver Broncos must also compete for fans that may

prefer to watch baseball, hockey, or basketball. As a means of remaining competitive within the

Colorado region, the Denver Broncos plan to use the other professional sports teams as a vehicle

to bring prospective football fans to the state.

IV. Marketing Potential in the United States

The marketing potential for the Denver Broncos is very high within the United States.

Even though the Denver Broncos and other NFL teams have gained international presence, the

company’s most dominant existence lies within the United States, more specifically in the state

of Colorado. With the increase of available Denver Broncos branded merchandise, as well as the

influx in individuals who participate in fantasy football leagues, the popularity of NFL teams is

expected to increase as well. In order to remain competitive, the Denver Broncos have

established the following marketing objectives for 2014:

Increase sales of clothing items by 10% by focusing on the female target market.

According to Dosh, sports business writer for ESPN, “marketing experts say

women are a prized demographic for the NFL because of their value to

advertisers” (2012).

Establish a new line of Denver Broncos products that is focused on food items,

such as branded candy, crackers, chips, and drinks.


Provide a greater amount of Denver Broncos Pro Shop promotions including

coupons, rebates, and frequency programs to reward loyal customers.

V. Integrated Marketing Communications Plan

In order to promote the Denver Broncos and their extensive array of branded

merchandise, a media schedule has been designed. A media schedule is “the plan that specifies

the exact media to use and when to use it” (Soloman, Marshall, and Stuart, p. 399). Advertising

via the media can come in a variety of different forms including through television, radio,

magazines, national newspapers, Sunday coupons, Web site advertising, e-mail campaigns,

social media, and mobile media. Figure 2 on page 12 summarizes the multichannel promotional

strategy that has been proposed for the Denver Broncos for 2014.

The first item on the media schedule is the use of television for advertising. The two

television programs that the advertisements will play on are Monday Night Football and NFL

Total Access. These advertisements will begin in September and continue through the end of

February. The cost per promotion for television is $100,000, which makes the total cost for

television advertisements $1,200,000. Next, three magazines will be utilized to promote the

Denver Broncos and the available merchandise. The magazines that will be used are ESPN,

NFL, and Shape. Shape magazine has been added to the list in order to draw attention from

women to the Denver Broncos. These advertisements will be added to the magazines on an

irregular basis, yet an advertisement will appear each month of the year. The cost per promotion

for magazines is $30,000, making the total cost for the promotions $390,000. Social media, a

driving force within the advertising world, will be used to promote Denver Broncos merchandise

all year long. Millions of people check their Facebook and Twitter accounts daily; therefore, both

mediums will be used regularly to keep the Denver Broncos fresh in the minds of social media

users. The cost per promotion for social media is $30,000. The total cost for this promotion is


expected to be $720,000. The official website for the Denver Broncos will also constantly

promote the fan-based merchandise. In addition, nfl.com will be used during the months

preceding the holidays to promote the merchandise. The cost per promotion for website

advertising is $40,000; therefore, the total cost for web advertising equals $600,000. Finally, The

Denver Post will contain advertisements for the Denver Broncos throughout the year. This will

enable the company to have a constant presence for local fans. The cost per promotion for

newspapers is $50,000, making the total cost for this promotion $600,000. The total cost for all

of the media campaigns for 2014 equals $3,510,000.

VI. Breakeven Analysis for Marketing Plan

The top three selling items for the Denver Broncos will be analyzed to complete a

breakeven analysis for the company. According to the Pro Shop Website, the three top selling

products are the Nike Peyton Manning Denver Broncos Game Jersey in orange for $99.95, the

Nike Peyton Manning Denver Broncos Player Silhouette T-Shirt in orange for $27.95, and the

New Era Denver Broncos Salute to Service On-Field 59FIFTY Fitted Performance Hat in orange

for $37.95.

The breakeven analysis serves as “the point at which the total revenue and total costs are

equal and beyond which the company makes a profit; below that point, the firm will suffer a

loss” (Soloman, Marshall, and Stuart, p. 309). To determine the breakeven analysis for each

product, the gross margin is applied to the selling price for each item. That equation is used to

find the profit the company makes per sale of each product. At that point, the total campaign

promotion price is divided by the profit per item. The number of items that must be sold to

breakeven is discovered as a result.


Assuming a 15% gross margin for all products, the following breakeven analyses have

been conducted:

Nike Peyton Manning Game Jersey

Product Price: $99.95

Gross Margin: 15%

Profit per Jersey: $14.99

Breakeven Point: 234,156 jerseys

Nike Peyton Manning T-Shirt

Product Price $27.95

Gross Margin 15%

Profit per T-shirt $4.19

Breakeven Point 837,708 t-shirts

New Era Fitted Performance Hat

Product Price $37.95

Gross Margin 15%

Profit per Hat $5.69

Breakeven Point 616,872 hats

shop.denverbroncos.com




As the preceding tables indicate, the company receives a profit of $14.99 for each jersey

that is sold. For this reason, based on the advertising campaign that has been proposed, 234,156

jerseys will need to be sold in order to breakeven with that particular product. Moving on to the

t-shirts, the company makes a profit of $4.19 on each one, meaning that 837,708 t-shirts must be

sold to breakeven. Finally, the profit for each hat is $5.69. In order to breakeven, 616,872 hats

must be sold.

VII. Conclusion

In summary, with the successful football season during the current year, the Denver

Broncos hold a strong stake within the professional football merchandise market. The strengths

the company possesses, such as being a prominent NFL team and having local, national, and

international fans, certainly outweigh the company’s weaknesses. Nevertheless, the weaknesses

and threats that the company faces will not be overlooked within the coming months. Looking

forward, the company plans to extend their current women’s merchandise line, add food items to

the product line, and provide additional promotions, such as coupons and rebates, to their set of

offerings. The proposed media schedule will sufficiently promote the Denver Broncos, leading to

an increase in merchandise sales. Overall, the company is looking forward to continuing the

company’s values of tradition, community involvement, and fan appreciation.


Figure 1. SWOT Analysis for the Denver Broncos

SWOT The Denver Broncos

Strengths Well-known team in NFL

Local, national, and

international fans

Community involvement

Weaknesses Seasonal product line

Exhaustion of product

possibilities

Opportunities Successful 2013 season

Potential for additional

community service projects

Threats Potential decrease of fans

due to the loss of Tim Tebow

Fans only interested in a

successful team


Figure 2. Media Schedule for the Denver Broncos. 2014 Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.

Television Monday

Night FB

NFL Total

Access

Magazine ESPN

NFL

Shape

Social Media Facebook

Twitter

Web

Advertising Official

website

nfl.com

Newspaper The Denver

Post

2014 Media Campaign Expenses

Television advertisements: $1,200,000

Magazine advertisements: $390,000

Social media advertisements: $720,000

Web advertisements: $600,000

Newspapaer advertisements: $600,000_____

Total amount spent for all media campaigns: $3,510,000


References

Denver broncos. (2013). Retrieved from http://www.denverbroncos.com.

Denver broncos pro shop. (2013). Retrieved from http://shop.denverbroncos.com.

Dosh, K. (2012, February 3). NFL may be hitting stride with female fans. ESPN. Retrieved from

http://www.espn.go.com.

National football league. (2013). Retrieved from http://www.nfl.com.

Saccomano, J. (2013). The Denver broncos and the mile high stadium. Sports authority field at

mile high. Retrieved from http://sportsauthorityfieldatmilehigh.com.

Soloman, M.R., Marshall, G.W., & Stuary, E.W. (2012). Marketing: real people, real choices, 7th

Edition. New Jersey: Prentice Hall.

Tim Tebow foundation. (2013). Retrieved from http://www.timtebowfoundation.org.

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