Download Chapter 1 – World of Marketing

Chapter 2 – Sports & Entertainment: Connections & Contrasts
Section 2.1: History of Sports and Entertainment
Sports and entertainment are
Marketers have always sold
leisure activities for the purpose of enjoyment.
participation in sports or entertainment events to consumers.
The growth has relied on consumers with
pastimes just for
free time.
In America, organized S & E used to be
wealthy consumers.
Workers had little time away from labor and earned lower wages.
Labor Unions fought
and won higher wages and reasonable working conditions, allowing workers to attend these events,
as well.
public transportation meant working-class families could attend games,
Creation of
plays, etc. across town.
In the late 1890’s
the birth of the
Thomas Edison invented the kinetoscope for moving pictures, signaling
film industry.
The era of “silent movies” came to an end in 1927 with the release of
first talking movie.
The Jazz Singer the
Bill Veeck was a key figure in the development of sports marketing.
He believed that
consumers wanted to be involved in more than just the final score. Marketing activities he
created include:
Fireworks
b.
Dazzling Scoreboards
c.
Special-event nights
d.
Grandstand Managers’ Day
By taking a game and turning it into a concept that appealed to both fans
a.
media he made sporting events more profitable.
show or product and sold more advertising.
and
Bill Veeck created a more interesting
Adolph Zukor was the founder of Paramount Pictures and pioneer in creating the
Hollywood studio system. He was one of the first film producers to draw big crowds and own a
theater chain.
organized
strategy that targets specific consumers to specific products is essential.
With many new forms of media competing for consumer attention, an
This is
the foundation of S & E Marketing.
Sports has spawned a huge entertainment-based industry beyond competition. It has produced:
TV Channels, Movies, Books, Video Games, Theme
Restaurants, Fashion Trends, and Magazines.
Section 2.2: Similarities in Marketing
Once again, the 4 P’s of Marketing are:
Product, Place, Price, and
Promotion
Some people consider
people to be the 5
th
P in the marketing mix.
New technologies
have broadened the scope and reach of marketing messages, and
they can be entertainment products themselves.
Marketing professionals are
split over whether S & E belong in same category, as a sports event
However, professionals do agree that both S & E products are
is a form of entertainment.
similar in that they are marketed differently than traditional products.
physical goods
By nature, S & E products are often not
that can be stacked on a store
shelf. Entertainment presentations and athletic competitions are both dynamic and can be used to
promote unrelated products
Endorsement is approval or support of a product or idea, usually by a celebrity lending
his/her image to a product. It is an important tool in both sports and entertainment marketing.
All celebrities have a
be based on their
public persona or a personality perceived by the public.
skills and behavior in public.
and this makes them feel
connected to them.
This may
Fans identify with and admire celebrities
However
marketers must match their products with the correct celebrities.
To create an
effective endorsement the celebrity who endorses a product should be popular with
people who would buy it.
An example of a core product is the sports event, movie, stage show, or book, and an ancillary
product would be related to it. Some examples would be:
DVD, amusement park ride, toys, lunchboxes, shirts,
Movie:
etc.
Stage Show:
DVD recording, Musical soundtrack
Sports Event:
watching on TV, jerseys, bumper stickers, hats,
etc.
posters, action figures, etc.
Book:
Companies can earn additional
revenue
by using those core and ancillary products as
promotional tools to promote and market even more unrelated products.
The changing nature of the
marketing
place component in the marketing mix has affected traditional
more than S & E marketing.
Successful S & E
to the desire to go out to a special event. The
the
strategies have always appealed
occasion appeal of the event contributes to
entertainment value of the process.
Pricing S & E products is radically different from pricing traditional consumer products.
Price is
set and adhered to uniformly based on what they can charge and what people
will pay.
However, customers may believe that they are
money. This kind of
products.
getting more for their
perception is what separates S & E marketing from other consumer
Price becomes an issue when highly paid players/celebrities go on strike for salary increases.
Fan Loyalty can be damaged.
piracy.
Other pricing issues include
ticket scalping and
Unauthorized ticket sellers who stand
outside a game or concert and offer tickets at a higher price
and keep any profit that they make.
Define “Ticket Scalpers”.
use file-sharing software to
download copyrighted material without permission.
Piracy can occur online when consumers:
Street vendors also sell copies of
copyrighted goods that are pirated or
bootlegged which means produced & distributed without authorization.
When
consumers copy and distribute illegal copies of entertainment material, they cut the property
owner out of the
profits.
S & E marketing uses two tools to promote goods:
Product tie-ins and Cross-
promotion
An example of a product tie-in is:
Happy Meals®.
Free toy included in McDonalds®
Star of a new movie appears on
various talk shows to promote their new movie and give
interviews to magazines and newspapers
Examples of cross-promotion include:
Web sites are another important cross-promotional tool.
and
They provide both
highlights of a product, while hosting links to other products.
information
They also market by
word-of-mouth which can increase ticket sales.
Examples of word-of-mouth include:
voting surveys
Chat rooms, user ratings, online
Using TV advertising to promote a movie
that will one day be shown on TV.
An example of convergence is:
convergence and
cross-promotion, which help to develop product synergy.
One of the biggest similarities between S & E Mkt. is the potential for
Oprah created her image as a “lifestyle guru” and
used the TV to promote her other businesses, such as her
magazine, TV network, and products she endorses.
Example:
Synergy is not easy to achieve due to risks. Example of a risk that sports teams face is:
Unforeseen events and obstacles, such as injury, illness,
suspension due to illegal substances, etc., like a musician
cancelling a show due to a sore throat.
contracts and insurance
policies. These policies will reimburse business owners for both direct and indirect
Successful S & E mkt. realize these risks and purchase
losses.
Example:
Stadium fire causes cancellation of event, insurance will pay
for cost to repair/reopen stadium, but it will also pay for the
loss of profit from event cancellation.
Section 2.3: Differences in Marketing
Entertainment is based on
creative ideas that can be fashioned to fit the tastes of a
target audience, but sport is based upon athletic ability and
competition.
You probably would not go see a terrible movie twice, but you might keep going to a sports game,
even if your team was experiencing a losing streak. Sports fans enjoy the drama of
competition & unpredictability of each game.
real
If sports fans feel their team is trying to win, the team can retain its
consumer loyalty,
like watching one team play continually because it’s your favorite.
Fans usually
support one or two teams.
and work on maintaining their
Sports marketers target a
team loyalty.
core group of fans
Most sports marketers spend more effort
marketing a winning season to their target markets than trying to appeal
to new and different consumer groups.
Entertainment consumers are not motivated by brand or team loyalty, but by a
satisfying entertainment.
that dictate
desire for
The entertainment industry is subject to
“what’s hot and what’s not“.
trends
If a company’s book, movie, sitcom,
etc. does not deliver the expected level of entertainment, the consumer will quickly
turn to
the competition.
Entertainment marketers target each product to a
group.
made by
well-defined consumer
Unlike fans that follow only one sports team, film and music fans will usually see films
more than one production company or will buy CD’s produced by
many different
record labels.
Find a Winning Formula. Try to
KNOW what consumers want. CREATE that product.
JOB OF ENTERTAINMENT MARKETER:
Find a Winning Team. KNOW what
consumers want. Try to DELIVER that product.
JOB OF SPORTS MARKETER:
Another big difference between sports and entertainment products is the
stability of the sports product and the
marketers have plenty of time to
consistency or
variability of the entertainment product.
Sports
conduct research, run tests, and plan
launches and promotions, because its core product remains the same.
Entertainment marketers have to
satisfy
predict a trend or fad then change the product to
audience demand.
Movie released is postponed due to subject is too
sensitive for current events, like Phone Booth’s release in
2003 being delayed due to real-life shootings in D.C.
EXAMPLE:
Entertainment products can be developed into
and create profit through sales of
royalties.
merchandise, used for promotion,
ancillary products, licensing, and
Because there are so many different types of ent. products, the
streams of
revenue created by marketing products are very diverse.
A single film can be sold to cable and Pay-Per-View
TV, rented as DVD/Blu Ray, and be the basis for a game, TV
series, book, or clothing line.
EXAMPLE:
One sporting event doesn’t usually produce the same amount of
revenue from merchandising
and royalties as an entertainment event. Sports events do have their own revenue streams from
tickets sales, media advertising, video games, etc.
With
sponsorship, a company gives money to another in exchange for something, like
advertising. Watch a NASCAR race to see this illustrated greatly! Sponsorship is different from
endorsement.
Another example is corporate boxes, used by corporations as a
marketing tool to entertain and network with their own clients (Pursuit of Happyness
movie). A final source of sponsorship revenue comes from selling
rights.
stadium naming
(Quicken Loans Arena, First Energy Stadium, and Progressive Field)
Virtual advertising is a new phenomenon where companies pay to have their logos
digitally overlaid onto a billboard during a TV game.
Fans at the game do not see it, but
viewers at home see it.
Sports teams also earn
revenue by landing local broadcast deals with local TV
companies. TV networks make million/billion dollar deals with sports leagues for
rights to broadcast games.
exclusive
EXAMPLE: NBC is the only network to show home Notre Dame
Football games and the Olympics.