Alan Balch - CTT column - Marketing and Management Myopia

Echnically speaking, myopia is nearsightedness. More broadly considered, the myopic are lacking in imagination and even intellectual curiosity. and if there’s one starkly visible attribute of american racing’s management and marketing over its most recent history, that describes it. Way back in 1960, Ted leavitt of the Harvard Business Review wrote his landmark paper “Marketing Myopia.” it revolutionized the way many business leaders evaluated their own practices. at least those who thought about such things. Some of us believe it founded modern marketing. in an ironic way, it’s tied indirectly to the boom in american racing we enjoyed well into the 1990s. and to the extent it’s been forgotten in racing (which is largely), it informs why we are now struggling so. i occasionally have the good fortune to visit England. Racing of several levels and varieties is ongoing seemingly every day, flat or jump, somewhere, often at places i’ve never heard of. The papers carry results and entries for these obscure meetings. at peak times, massive crowds pack ascot, or cheltenham, or newbury, or others not-sowell-known. Train stations are jammed with fans and the trains themselves are ongoing handicapping seminars. at first blush, an american thinks, “Oh, that’s because the culture here is so much more agrarian, and there’s so much more tradition. There’s just not the competition we have in the States.” Baloney. Or worse. Racing in the United Kingdom has its problems, to be sure. Serious problems. But consider that there’s all that racing within such a small geographical space – 57% the size of california alone! Moreover, according to the Washington Post, were Britain to join the United States, it would rank at the bottom, around alabama and Mississippi, in terms of per capita Gross Domestic Product. That is shocking. and the British in racing face all the ALAN F. BALCH Marketing and Management Myopia caliFORnia ThOROUGhBRED TRainERS competitive problems we have: they are at least as connected to the internet, gaming opportunities exceed ours, with off-track betting on everything from racing to elections to the color of the Queen’s hat going on every single day, casinos abound, and all the other sporting and entertainment competition on the continent is a train ride away. you think we in california have a tough competitive environment?! One major defining difference (oversimplifying the situation) is that purses in the UK are not legislated from handle . . . and the total amounts wagered are divided among the Tote and many bookmakers, of course . . . which requires that track managements obtain significant and real sponsorship to supplement purses and drive profit from attendees through non-wagering sources, such as track admission and food/ beverage. Sponsors look to attendance, newspaper and TV exposure as well as public interest, in turn, to justify their spend. The synergy that results is a win/win. By comparison, american racing management and marketing has regressed to the Dark ages. Even in america’s glory days of the 1980s, because handle was booming, purses were skyrocketing, and breeding was at a peak before our tax laws changed, our marketing was just too “easy” to do by comparison to how it is now: we didn’t think it was easy at the time, of course, but we didn’t feel the need to invest in attracting genuine sponsorship and expanded contemporary marketing. Superficially, we seemed to be growing. as competition from other gaming began and increased, i remember warning that we needed to enhance our own marketing while we could still afford to do it! That warning fell on deaf ears and unseeing eyes. We were myopic, in short. now, by comparison, we are almost blind. Professor leavitt had observed the same things in other “growth” industries, such as ours seemed to be in the 1980s, failures to realize that competitive forces and innovation soon would intrude and multiply. The early railroads, for example, saw themselves in that specific business, defined as such, not transportation! The fact that we are regulated (so are railroads) just increased our myopia, in much the same way that regulation of taxis much more recently left those companies unprepared for Uber and lyft. Racing’s myopia has led it to believe that tracks compete against each other (which they do, of course), and types of racing compete for market share (also true). But the bigger picture is that racing as a whole competes against all other forms of gaming, and even sport or entertainment generally (which could well take this argument too far). all in all, if racing as an industry is to prosper – not just survive – it must first define its competitive framework properly. Blinkers off! Then it must invest in marketing accordingly, modernize its management, and commit to its true business. not to real estate development. arguing these points, decrying our failure to observe and correct the decline in the attraction of our betting propositions because of consolidation of too many horses among too few interests, the deplorable state of our stabling, our antiquated pricing, our lack of enlightened marketing and management, we are met with, “There’s not really anything we can do about it.” as my old eighth-grade-educated horse trainer used to say, “if you say you can’t, you’re already done. if you say you’ll try, you’ve at least begun.” n

CLICK ON IMAGE TO READ ARTICLE

This article appeared in - North American Trainer Issue 41

RACING, CTTWeb Master26 July 2016NAT41, ALAN F. BALCH, Marketing And Management Myopia