Section One: Company Overview
Fanatics Inc. is a subsidiary of Kynetic, a holding company put together by Michael G. Rubin. The company has a rich history relating to how in just two decades, it grew from a family business with one unit into the multimillion giant that it is today. Well entrenched within this story, is the innovative marketing philosophy that will form the core of the instant assignment. The word Fanatics has its roots in the word fans and defines the core business of the company (Donato-Weinstein, 2016). It deals in selling products that fans of sports events like to purchase as memorabilia. This includes clothing and other paraphernalia. Having begun with one shop selling memorabilia for one football team; the Jacksonville Jaguars in 1995, the company managed to achieve monumental growth within a very short period (Fanatics, 2017). Today, the company sells memorabilia for major teams in all important leagues in the USA as well as major sports channels.
From the perspective of ownership, the company was started by two brothers Alan and Mitch Trager in 1995. Their first shop was at The Orange Park Mall before opening a second outlet at the Avenues Mall. The company opened just in time to take advantage of the advent of the proliferation of the internet as a marketing tool. Through the combination of mainstream and internet-based promotion, the company grew rapidly and attracted the interest of GSI Commerce in 2011. This led to a purchase worth in excess of US$ 276 million in both cash and GSI Commerce stock (Fanatics, 2017). The company has also been making major purchases more so of businesses that stand in competition to it. One such key purchase was that of Florida based Dreams Inc. recently . Today, Fanatics run a set of robust online and physical shops and employs over 1800 people. It is one of the leading internet vendors in the USA with a net worth estimated at over US$ 4.5 billion (Bloomberg, 2017).
Delegate your assignment to our experts and they will do the rest.
Section Two: Current Structure
The area of focus for the instant essay will as aforementioned be the marketing structure of Fanatics. It is indeed its prowess in marketing that has led the company to achieve its current level of success. The greatest move that the two initial partners may have made and one that transformed their startup into great success was inviting Mitch’s son Grant Trager to assist them in marketing (Hrushka, 2013). The youngster was aware of the capabilities of the internet and set to use this important tool to expand the customer base of the new company. This led to a series of successes that still continue to benefit the company to date. When Grant ventured into internet based marketing, the fortunes of the business began to change. The partners noticed this and elected to invest heavily in online marketing eventually eliciting a great reward (Hrushka, 2013).
The company moved from using the internet for just promotions into actual e-commerce, which was by then an emerging concept (Donato-Weinstein, 2016). They found in Peter Dobbs an expert in e-commerce who assisted in setting up and running the internet based segment of the business. Through the internet, customers could make orders and payments then the finished products would be delivered. This mode of business sounds extremely familiar today but at the time, Fanatics were actual pioneers. As the company expanded its ability to market on a wider geographical area due to e-commerce, the company created a demand for memorabilia for more teams (Donato-Weinstein, 2016). It, therefore, expanded its client base from the perspective of client teams and was soon selling memorabilia for most teams. This expanded client base can be fully credited on the marketing regimen that focused on internet-based sales.
Venturing into e-commerce was not an automatic guarantee of success for Fanatics. An aggressive marketing philosophy was developed by the company, based on three pillars. These pillars are affiliate marketing, repeat customer business, and acquisitions. Affiliate marketing is an innovative means of using customers as part of the marketing team (Fanatics, 2017). Under this regimen, the marketer will have an open agreement with all customers that they can have a cash payment of discount for every successful referral made. This successful referral includes a visit or purchase by the referred potential customer. Therefore, all Fanatics needed to do was get one customer in a social unit. This one customer will, in exchange for rewards gradually rope in the entire group. Therefore, the marketing team of Fanatics kept growing just as its customer base grew, premised on this innovative strategy.
Repeat customer business was also another tactic employed by Fanatics. Affiliate marketing ensured that the company kept contact with most of its customers. The company then sought to ensure that they made more out of this relationship than the customers did. Albeit the customers would earn from Fanatics through affiliate marketing, Fanatics ensured that the company earned even more through repeat business (Fanatics, 2017). This was an innovative marketing formula that even roped in a psychological perspective. Affiliate marketing meant that the customers would have to talk about Fanatics products with their friends and relatives. This would automatically make the products look more attractive to the customers and marketers. It would then be easier for Fanatics to market repeat business to them. Fanatics, therefore, developed a firm base of loyal customers.
Finally, Fanatics also decided to eliminate its most fierce rivals through acquisitions. As the company expanded sold memorabilia in a wider scale, it kept on encountering competition from smaller local players who were, however very well entrenched in the localized markets. Instead of having to fight it out with this local players, Fanatics adopted a marketing philosophy of avoiding competition through buying out the competition (Fanatics, 2017). To this very date, Fanatics still seeks to buy the companies that give it the most competition.
The products that Fanatics sell fall into two main categories. First, there are the memorabilia owned by specific sports associated companies that Fanatics sell on their behalf. It also enters into contracts with sports companies and organizations to make and market memorabilia for them. Fanatics Apparel is a company that focuses on manufacturing apparels and other memorabilia for Fanatics and its clients. The goods manufactured by Fanatics, however, are not just sold at the company’s branches (Fanatics, 2017). Instead, Fanatics has entered into contracts with most leading sports retail companies who now also stock Fanatics manufactured products. This has increased its market base to areas that it would not be able to open own branches.
Evaluation and Assessment on Fanatics Marketing Structure
It is hard to convince anyone today that e-commerce is an innovative and revolutionary marketing strategy. Indeed, an overwhelming majority of American adults today use e-commerce on a regular basis even for the purchase of basic commodities. Market chains are now even offering e-commerce deals for perishable groceries. In 1995, however, the internet was a new tool in the marketplace and it was only in 1993 that platforms had begun to be developed for using credit cards remotely to make sales and purchases. Investing heavily in e-commerce as Fanatics did soon after commencing their venture in the 1990s was a great gamble. Indeed, these activities would have been judged as rush and careless had it failed. Fortunately, the company invested in great expertise and also their timing happened to have been right. Its venture into e-commerce as a marketing philosophy can, therefore, be accurately said to be one of the bases for the success of the company (Bloomberg, 2017).
With foresight, the two main techniques of repeat business and affiliate marketing can be considered as relationship-based marketing. Relationship-based marketing is a very recent concept where the marketer and the customer have a close relationship, mainly buoyed by social media. Indeed, this form of marketing is still prominent in Fanatics. Credit must, however, be given to Fanatics based on when the company began implementing this form of marketing. Indeed, this happened well before the advent of social media and the ease it has brought to communication. The fact that in the 1990s a company could be futuristic enough from a marketing perspective to see a customer as a marketing partner is commendable (Bloomberg, 2017). Taking advantage of this very same relationship to build a sales line in repeat business is an actual marketing genius. Further, the concept that Fanatics was investing into was quite novel itself and commercialization of sporting activities was by then much different from what it is today. Fanatics took an innovative approach to sell a new line of business. Its marketing strategists thought outside the box and became extremely innovative. Venturing into a totally new way of doing business was a great risk, which eventually paid off. The end result was a multibillion-dollar company, built almost from nothing and in a very short span of time. This was exemplary marketing.
References
Bloomberg Aug 9, 2017. (2017, August 09). Fanatics is about to score a $4.5 billion valuation with a big SoftBank investment. Retrieved October 06, 2017, from https://www.digitalcommerce360.com/2017/08/09/fanatics-score-4-5-billion-valuation-softbank-investment/
Donato-Weinstein, N. (2016). Why the world's largest licensed sports merchandise retailer is moving hundreds of jobs to San Mateo. Retrieved October 06, 2017, from https://www.bizjournals.com/sanjose/news/2016/05/04/why-the-worlds-largest-licensed-sports-merchandise.html
Fanatics Inc. (2017). History. Retrieved October 06, 2017, from http://fanaticsinc.com/about/our_history/
Hrushka, A. (2013). Forty Under 40. Retrieved October 06, 2017, from http://www.sportsbusinessdaily.com/Journal/Issues/2013/03/18/Forty-Under-40/Brent-Trager.aspx
