An Examination of Marketing Resource Allocation in NCAA Division I Athletics

Administrators at NCAA Division I institutions have multiple sport programs to market, yet resource limitations challenge these administrators to identify efficient and equitable resource allocation strategies. Therefore, the purpose of this study was to determine how NCAA Division I marketing administrators allocate marketing resources to their various sport programs. Three norms of exchange: rationality, distributive justice, and power, are used as a conceptual framework, and primary marketing administrators at NCAA Division I institutions were surveyed. Results revealed past results and perceived scarcity of both monetary and non-monetary resources predicted allocation norms used to distribute marketing resources. Marketing administrators who agreed with distributive justice as a resource allocation norm were likely to allocate more monetary and nonmonetary resources to women's sports. Administrators agreeing that power influenced marketing resource allocations were more likely to allocate both monetary resources and non-monetary resources to men's sports over women's sports. An Examination of Marketing Resource Allocation in NCAA Division I Atbletics Intercollegiate athletic programs consist of many different sports, each with different levels of fan support and opportunities for increased support. One goal of many athletic departments is to effectively market each of its teams. Limited marketing resources, however, often prevent administrators from marketing each T. Christopher Greenwell, PhD, is an associate professor in the Department of Health and Sport Sciences at the University of Louisville. His research interests include customer service and customer satisfaction. Daniel F. Mahony, PhD, is an associate university provost and professor at the University of Louisville. His research interests include sport consumer behavior and resource distributions in intercollegiate athletics. Damon P. S. Andrew, PhD, is an assistant professor in the Department of Exercise, Sport, and Leisure Studies at the University of Tennessee. His research interests include human resource management and organizational behavior/theory in sport. ". legal requirements, such as TitleIX, challenge marketers to make decisions that not only maximize financial returns hut promote equality. " sport to its fullest. Therefore, athletic marketers are challenged to identify resource allocation strategies that are both efficient and equitable. Distribution decisions are rarely easy. For example, marketers may question whether they should allot resources into marketing soccer or football. Football is the traditional money maker in many Division I-A athletic departments (Fulks, 2004), but soccer is a growing sport with established popularity worldwide. If more attention were paid to soccer, could it grow into a sport which produces significant revenue? Similarly, marketers may struggle with whether to distribute more resources into marketing their men's or women's basketball programs. Marketers often struggle with the decision of whether to continue to invest resources into men's basketball which typically draws larger crowds (NCAA, 2005), or invest in women's basketball in an attempt to enhance the experiences of the athletes and increase revenue production. These dilemmas are just a few of the decisions faced by marketers trying to maximize returns from marketing resources for a large number of sport programs. There are several reasons why resource allocation decisions are particularly challenging in intercollegiate athletics. First, intercollegiate athletic departments consist of mviltiple sport programs, each having different qualities and needs. For instance, most athletic departments have both men's and women's teams, teams with varying levels of success, teams with assorted levels of tradition, and teams competing in sports with different levels of consumer interest. Second, limited resources often prevent administrators from marketing each sport to its fullest. This scarcity of resources restricts marketers and impels them to provide resources to some teams at the expense of others. Third, various forces make it difficult to develop distribution patterns that are both efficient and equitable. For example, outside entities such as donors or other powerful constituents may exert pressure to promote certain sports. Further, legal requirements, such as Title IX, challenge marketers to make decisions that not only maximize financial returns but promote equality. 82 Volume 16 • Number 2 • 2007 • Sport MarHeting Quarterly In addition, these decisions are complex in that multiple resources and rewards are exchanged in intercollegiate athletics (Greenwell & Armstrong, 2002). Marketing resources are generally thought of as being monetary in the form of dollars spent on advertising, promotions, and publicity campaigns, but non-monetary resources are exchanged as well. Time spent by staff, facilities used for events, and other non-monetary resources also must be allotted. In exchange for tbese resource allocations, multiple rewards are expected from sport programs. In some traditional business settings, revenue may be tbe one and only reward expected from a marketing allocation. However, in athletics, marketers may seek non-monetary rewards in addition to monetary rewards. In intercollegiate athletics, marketers may allocate marketing resources to a specific sport program to promote equality in order to meet Title IX expectations, improve the experience of all participants, or support neglected sports or athletes (Greenwell & Armstrong, 2002). Also, marketers may allocate resources to promote a sport program's image within the community or its conference. These allocations may be made to bring prestige to the university, attract recruits, draw students, and/or display the university's assets. ". do marketers make allocation decisions to be fair, or do they base them on maximizing returns? " Social Exchange Theory Despite tbese challenges, little is known about how administrators make these difficult decisions. Therefore, the purpose of this study was to better understand how NCAA Division I marketing administrators allocate marketing resources to their various sport programs. The current paper utilizes classic social exchange theory to analyze how resource allocations are made. Social exchange is defined as voluntary actions motivated by expected returns (Blau, 1964), whereby participants seek to maximize gains and minimize costs (Emerson, 1981; Homans, 1974). Social exchange theory accounts for the ways resources and rewards are exchanged beyond a merely economic level. In other words, resources and rewards are not solely monetary, but can also be social and psychological in nature (Napier & Bryant, 1980). Organizational resources may take the form of money, human resources, time, effort, and information (Sniezek, May, & Sawyer, 1990). In its simplest form, social exchange theory explains exchange relationships at an individual level, but it is also relevant on an organizational level as organizations are forums for transactions (Cropanzano, Howes, Grandy, & Toth, 1997; Randall, Gropanzano, Bormannn, & Birjulin, 1999). Exchange theories have been used to evaluate how resources and rewards are exchanged in a variety of settings such as cooperation between police and the media (Simmons, 1999), labor markets (Van Dyne & Ang, 1998), salesperson relationships (Ramaswami, Srinivasan, & Gorton, 1996), community support for tourism (Kayat, 2002), employee mentoring (Ensher, Thomas, & Murphy, 2001), business-to-business relationships (Lambe, Wittmann, & Speckman, 2001), and supplier relationships (Hallen, Johanson, & Seyed-Mohamed, 1991). Principles of exchange have also been applied in the sport and leisure literature to understand leisure participation (Auld & Gase, 1997) and corporate sponsorship (McGarville & Gopeland, 1994). The current study seeks to better understand how NGAA Division I marketing administrators allocate marketing resources to their various sport programs by addressing three key areas. First, it seeks to address which norms impact the decision making process. Specifically, do marketers make allocation decisions to be fair, or do they base them on maximizing returns? In addition, this study examines whether other parties are influential in the decision making process. Second, tbis study seeks to address which antecedents predict exchange norms. For example, if monetary resources are perceived to be scarcer, does tbis impact the norms used in making distribution decisions? Third, this study seeks to address how norms of exchange influence which types of sport programs receive resources. The findings from this research should clarify how resource allocation decisions are made and identify sources of inequitable or inefficient marketing resource allocations. The results can be useful in predicting decisions and in suggesting ways to influence and change distribution patterns in order to maximize returns. Norms used for making allocation decisions Using social exchange theory as a framework, Greenwell and Armstrong (2002) identified a number of bases for making exchange decisions. Their conceptual paper utilized principles of exchange to examine forces influencing how resources and rewards are exchanged in multi-sport athletic organizations such as intercollegiate athletic departments, and their work illustrated some of the challenges that athletic administrators may face in the allocation of marketing resources. Further, their work used key exchange norms to explain why inequitable and inefficient decisions are made. The three most prominent exchange norms presented were rationality, distributive justice, and power. A more detailed description of each follows. Volume 16 • Number 2 • 2007 • Sport Marheting Quarterly 83 The rationality proposition suggests actors will base their decisions on the probability of accruing returns and will