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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.