This report examines the nature of marketing and the marketing decisions taken by The World Wrestling Entertainment (WWE). The report will look into the various elements of marketing employed by WWE, specifically; the marketing concept, the micro and macro environment, why marketing research is important, the importance and benefits of market segmentation, an explanation of the marketing theory and how WWE marketing mix responds to changing market conditions, I would also like to point out that I have been a fan of WWE for over 20 years and a lot of what I will be explaining is knowledge I have retained over the years as a fan.
The WWE is a worldwide sports entertainment company founded on 6th June 1982 by Vincent K McMahon, who purchased his Father Jessie McMahon‘s business Capitol Wrestling, who at the time was a regionalized professional wrestling business in the United States of America (USA). Vince then went on to expand his newly created business named World Wrestling Federation (WWF), by buying other regionalized wrestling companies to achieve the goal of their only being one main wrestling company in the USA. His main vision however, was to change the genre of his business from wrestling to sports entertainment. Vince created this genre where the viewer at home is aware that the wrestling element of the business is scripted or choreographed and the main focus of his product would be storytelling and theatre. By 1984 the business was starting to gather momentum, helped by the success of one man, Hulk Hogan, who became a worldwide phenomenon. This period of time became known as the ‘wrestling boom’. By 1985, Vince wanted to tour every state in USA to increase awareness and revenue, but he didn’t have the capital to do so. He decided to create a super card event named Wrestlemania, which would include appearances from mainstream celebrities and would be available only as a Pay-Per-View (PPV) event via Closed Circuit Television (CCTV). The event took place on 31st March 1985 in New York City, Madison Square Garden to an attendance of 19,121. The success of the PPV was massive, it was purchased by over One million via CCTV, the largest ever wrestling event on CCTV
The success of Wrestlemania gave WWF significant revenue and exposure, not only in USA, but Europe also which increased the popularity of the organization. By the late 1990’s WWF was in mainstream Pop Culture and Vince decided to expand the business more by offering more products, examples of this is merchandise, action figures, VHS, video games and touring 300 days a year all throughout USA and occasionally the United Kingdom (UK). Their main source of income at this point was still PPV events.
On 19th October 1999 WWF launched an Initial Public Offering as a publicly traded company on the New York stock exchange. By 2002 WWF lost a lawsuit brought on by World Wildlife Fund, over the trademark WWF, so the company was forced to rebrand and on 6th May 2002 it changed its name to World Wrestling Entertainment (WWE). On 24th February 2014, WWE launched a 24/7 streaming network, named WWE Network, with their whole back catalogue of televised shows available to subscribers. The network would also show 3 live PPV events every month as well as new original content added monthly, costing the subscriber $9.99 per month. They reached 1 Million subscribers for the network on 27th January 2015.
Present day WWE continues to grow. It’s content is available in every continent around the world, and indeed over 200 countries. It produces weekly television shows, films and music.
There is no one definition of Marketing. It can be described in many ways. Some examples being raising awareness, promoting products, targeting new customers and demographics, mass communication, finding out about customers, to get repeat business, achieving organizational goals and doing it better than competitors.
To be more specific in regards to marketing the following is widely accepted as explanations:
- Concerned with satisfying needs and wants through exchange processes.
- Determining demand for a product or service and distributing it into a profit.
- Getting the right goods, in the right quantity, to the right people at the right time.
- Identifying, anticipating and satisfying customer requirements profitably.
- Looking at the business through the consumer’s eyes.
- A Philosophy of a business, which is driven by customer’s needs and wants.
- Selling goods that don’t come back to people who do.
Ultimately though the marketing concept is all about putting the customer at the heart of the organization. For companies to use this concept, they use their knowledge of their markets to produce what customers want to make profit by making their customers satisfied. A satisfied customer creates repeat business, spends more money, promotes the business to family and friends, trusts the business and finally they become brand loyal. All of these are important characteristics in satisfying a customer and in turn making a profit.
When you have a satisfied customer is would also be reasonable to assume that the customer is happy with the price, the product, the delivery, quality service and that their needs and wants have been achieved.
Marketing is important to the success and long-term survival of a business as it creates a good reputation for satisfying needs, it creates an understanding of customer’s wants, and in return this means the customer will buy from them, which creates brand loyalty, which ultimately will create a profit.
The marketing environment is where all businesses must operate and to the conditions which exist in the market place. It consists of factors that are out with the immediate control of the business, but nonetheless will affect the businesses relationships with its customers.
There are two main factors in the marketing environment, which are the macro-environment and the micro-environment, both of which I will go on to explain about and give specific examples of how they affect the WWE.
The macro environment is major factors that affect businesses that cannot be influenced by the business itself. It comprises of six variables referred to as the PESTEC factors. PESTEC is as follows:
- P – Political
- E – Economic
- S – Social and cultural
- T – Technological factors
- E – Environmental
- C – Competition.
I will now look at WWE’s micro-environment, specifically the PESTEC factor. Political factors can have a significant impact on WWE being profitable in a certain company. As the WWE is in the entertainment market it is exposing itself to different types of political environments. Political factors could include changes of Government policy, changes to legislation, Taxation, war and terrorism. One of example of a political factor affecting WWE is in 1993 when the US government took WWE on trial for illegal drug trafficking, where it was alleged that the WWE were supplying illegal anabolic steroids to their performers to enhance the look of their body. This trial led to consumers having a lack of trust in the business and lead to a downfall on profits.
A simple economic factor, which can affect business, is employment rate. If there is a high employment rate that means that more people will have disposable income or to the contrary if there is a low employment it means less people have money to spend, both of which can have an impact on profits. Other things to consider about economic factors are interest rates, exchange rates and taxation. An example of an economic factor having an impact on the WWE is their strong stock performance on the New York Stock Exchange, as investors believe they could weather any negative economic change and indeed prosper by positive economic change also.
Social and Cultural are both two very important factors in WWE’s business environment. The attitudes and beliefs of WWE fans play a significant role in how they market the business. They need to understand different cultural needs from different countries, especially as they are in every continent around the world, they will need to be sensitive to certain things in Asia for example which they wouldn’t need to be sensitive in the USA. In 2018, the WWE and the Saudi Arabian Government signed a 10 year deal, for the WWE to host events in Saudi. WWE had to be sensitive to certain Social and Cultural differences when they hosted their first even there, The Greatest Royal Rumble on 27th April 2018.
The main things they had to be sensitive to was Saudi Arabia’s attitude towards women, and to combat this they didn’t have any Female performers on the show, however there was a significant amount of young Female fans in attendance and it is hoped over time, the Saudi attitude toward women will come in line with Western attitudes and that there will be a ‘first ever’ Female performer in Saudi, under the umbrella of performer comes Singers, Dancers and Actresses, no Woman has ever done a live performance of any kind in Saudi Arabia
Technological advances disrupt many businesses due to cost and logistics. But not many companies benefit from them. WWE is one company who has benefits massively with Technology. When WWE first started they weren’t on Television, they relied on Fans buying tickets for live shows, from this they progressed to CCTV shows with Wrestlemania 1, they then started a weekly episodic Television show called Monday Night RAW, airing every Monday. From this they went to Monthly Pay Per Views, a fully functioning interactive website, a phone app and most recently they started their own Network. WWE needs to adhere to many different Environmental standards, which could impact the business. Things such as different laws in different states within USA. Other impacts include Weather, Recycling and Green movements.
The WWE founded a program called ‘Be a Star’, which helps young children deal with being bullied, and it teaches parents what to do if their child is being bullied. They hold seminars around USA explaining why you shouldn’t be a bully and what to do if you are being bullied.