While a feasibility study is executed once at the start of the project, the business plan represents a dynamic document which is also used and regularly updated during the operational phase of the project.
A typical table of contents of a stadium business plan is displayed in Figure 1.6.8.
The stadium’s commercial strategy is a key component of the business plan. It describes how the market and financial objectives, as identified in the feasibility study, could be realised.
Firstly, the market analysis should be regularly reviewed and updated.
Consideration should then be given to segmenting the stadium target user groups. The concept of market segmentation is well established in other industries, such as the airline industry. For example, the needs of the business traveller are different from those who travel for personal reasons. This is why travellers are offered different products. In addition, within economy class, the price-sensitive leisure traveller can be tempted by lower early-bird prices, whilst those travellers who might only be able to book at a later stage or require the option to make changes will pay a different price for a ticket on the same flight.
Similar segmentation principles could also be applied to a football stadium, for example by providing a hospitality offering or by applying segmentation to areas of seats within the stadium. The wants or needs of fanatical supporters can differ to those of family groups.
Segmentation is an important tool as a one-size-fits-all approach will not lead to an optimum yield. Different segments or user groups have different needs, and if these are not addressed properly, some users might be neglected or the opportunity to upsell might be lost.
By differentiating in terms of overall experience, status, service levels, seat location and quality, food and beverage offering, parking, etc., tickets for the same match could be sold at various price levels. The main level of differentiation is between the various types of hospitality seats and the general admission seats, but more segments can be distinguished between these two main segments, as shown in the example below:
1. Hospitality seats
• Hospitality boxes
• Premium seats – Gold, Silver and Bronze
• Young entrepreneurs
2. General admission tickets
• Premium GA
• Kids’ club
• General admission
• Fans’ section
In some scenarios, a relatively small proportion of hospitality seats is able to generate revenues that are equivalent to a much higher number of general admission seats.
The 7 Ps methodology (product, place, price, promotion, people, process, physical evidence) can be a useful tool for evaluating each segment — see Figure 1.6.9. This analysis will help to optimise the income (or yield) from each segment. Finally, the structure of the organisation must be capable of delivering the commercial strategy.