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Sports and Entertainment Marketing Unit 2 Lesson 1 Sports Marketing Overview What are some items sports fans purchase? Hour 4 Hats Tshirts Sweatshirts Foam fingers Stickers Flags License plates Food Earrings Jackets Pants Seat cushions Socks Bags Pom poms Sticks Keychains Coffee cups Sports and Entertainment Marketing: Unit 2 Hour 6 sports marketing: using sports to market products. A company with a product or service to sell must first identify the customer and learn specific information about that customer. target market: specific group of people you want to reach. age gender marital status attitudes beliefs educational level income -also known as demographics Sports and Entertainment Marketing: Unit 2 Three levels of sports: amateur sports: a sport which an individual pursues without payment, but for enjoyment, challenge or both college sports: any organized sport affiliated within a college or university budget (male, female) professional sports: teams in which athletes, organizations and leagues are involved where all receive some sort of payment for services. Sports and Entertainment Marketing: Unit 2 Opening Act: page 9 Select your favorite sport. Who is the target market for that sport? Why? Who would be a good sponsor for this sport? (College football: 15-40 year old males who like football, sponsor: Coke) Sports and Entertainment Marketing: Unit 2 Hour 4 disposable income income freely spent This area of demographics is very important to marketers…..WHY? Price fans pay for a ticket depend on interests of the target market national importance of the event popularity of the participating athletes rivalry (competition) Sports and Entertainment Marketing: Unit 2 Sports marketing strategies Logos on merchandise Create new sports Gross impressions Perfect timing Sports and Entertainment Marketing: Unit 2 Clothing Fans buy sports logo clothing for a variety of reasons: loyalty value is high because of the team name/logo feel more successful if you own products endorsed by successful teams/person Sports and Entertainment Marketing: Unit 2 new sport: Arena football Started in 1987 Affordable tickets Accessible athletes Fast paced (clock doesn’t stop) High scoring game Sports and Entertainment Marketing: Unit 2 gross impression: number of times per advertisement, game, or show that a product or service is associated with an ATHLETE, TEAM or ENTERTAINER. Every time you see a product or logo on the back of a pair of shoes, a jersey, around the arena or the media mentions a player, team, or product your brain records that image. Sports and Entertainment Marketing: Unit 2 Timing Winning is EVERYTHING! Popularity of teams and individuals is based almost entirely on winning. Even tragic events can spark sales— Herb Brooks and Kirby Puckett…… Unit 2 Lesson 2 Amateur Sports softball golf cup stacking skateboarding frolf running cross country skiing poker swimming downhill skiing body building bocce ball Have you SEEN cupstacking? amateur athlete: someone who does not get paid but plays for enjoyment, challenge or both professional athletes: usually young, strong, healthy amateur athletes: any age, physical condition or challenge (all that’s needed is a want to be one) Sports and Entertainment Marketing: Unit 2 Read the Opening Act page 41 Answer these questions: 1. What amateur sports interest you? 2. Do you participate or spectate? 3. How much money do you spend on each sport? (see back of lesson 2 worksheet) Be ready to report your results to the class. Sports and Entertainment Marketing: Unit 2 Marketing is essential in EVERY sport. amateur athletes (and spectators) need equipment, and money to participate Both athletes and spectators need equipment: uniforms, shoes, pads, bags, lawn chairs, portable stadium seats, coolers, food and……… Sports and Entertainment Marketing: Unit 2 Read page 45 question 4. Discussion What do you think the phrase “soccer moms” means? Why would someone running for political office pay attention to soccer moms? Sports and Entertainment Marketing: Unit 2 Unit 2 Lesson 3 College Sports COLLEGIATE SPORTS Winning Strategies p. 29 Why is Tostitos a good sponsor for a bowl game in the Southwest? Name three other sponsors of bowl games..... Sports and Entertainment Marketing: Unit 2 NCAA (National Collegiate Athletic Association): governing body of most college and university athletic programs. It creates and enforces guidelines and rules that schools must follow in order to remain in good standing. (areas: recruitment, gender equity, scholarships, gambling prohibitions, ethical issues such as illegal activities...drugs, alcohol, other offences). Sports and Entertainment Marketing: Unit 2 How to join: college or university must be accredited four men, four women’s sports (one in each season) follows NCAA rules cooperates with NCAA enforcement and accepts penalties. Current NCAA news: Beginning February 2006 no nicknames or mascots deemed “hostile or abusive” will not be allowed on team uniforms or other clothing. 18 schools affected: UND Fighting Sioux is one Goal: promote college athletics with integrity and focus on athletes and their game. Sports and Entertainment Marketing: Unit 2 Effects of College Sports 1. Ranking of teams is important! teams get more exposure for their sponsors. 2. Women’s Collegiate Sports It wasn’t until 1980 that NCAA focused on women’s sports. Female athletes and sports continue to grow and continue to have challenges on increasing attendance/sales/enrollment Sports and Entertainment Marketing: Unit 2 Effects of College Sports 3. Community Benefits events impact more than just that team and the school. Each event brings in spectators from all over. Spectators provide business to: hotels restaurants shopping malls concession gas stations souvenir shops Sports and Entertainment Marketing: Unit 2 Effects of College Sports 4. sponsorship: provides money for college programs, and exposure for sponsoring company It’s about financing or generating revenue for programs. And corporations also sell their products and services on site. There are 2 winners with sponsorship….. the team benefits from the revenue the sponsor benefits from higher sales of their merchandise Sports and Entertainment Marketing: Unit 2 A city with a popular college team can expect these revenues for ONE football game: Ticket sales: $3 million Stadium food: $380,000 Hotel sales: $210,000 to $420,000 Restaurants, shopping, transportation: $210,000 to $420,000 Sports and Entertainment Marketing: Unit 2 Read Judgment Call page 39 ~Alcohol abuse has emerged as one of the biggest social problems on college campuses. Rape, assaults, property damage - all are part of the numbing toll drinking contributes to. The NIAAA report presented the alarming statistic that drinking contributed to 1,400 student deaths each year, 500,000 injuries and 70,000 cases of sexual assault. ~A 2001 study observed that athletes engage in binge drinking at higher rates than non-athletes. Like these athletes, fans of college sports tend to drink more heavily than non-fans. Sports and Entertainment Marketing: Unit 2 ~Dr. Anderson's study found that two-thirds of all property damage, 64 percent of violent behavior, 42 percent of physical injury, 37 percent of emotional difficulty, and 38 percent of poor academic performance could be attributed to alcohol abuse. http://www.csmonitor.com/durable/1999/09/29/text/p2s1.html By Mark Clayton, Staff writer of The Christian Science Monitor ~NCAA tournament games led all other sports events in alcohol-related TV ads in 2002. (939 ads NCAA vs 925 in Super Bowl, World Series, college bowl games and Monday Night football combined!) Sports and Entertainment Marketing: Unit 2 Alcohol & Academic Performance This table describes the relationship between the average number of drinks consumed per week and grade point average. 3.6 Drinks 5.5 Drinks 7.6 Drinks 10.6 Drinks A B C D/F *sponsored by FAU Center for Alcohol and Other Drug Prevention Sports and Entertainment Marketing: Unit 2 Is this sponsorship sending a mixed message to students that alcohol is acceptable since it is big money for sponsorship? Why is it unusual to have beer corporations sponsor sporting events with athletes who are in top physical shape? Sports and Entertainment Marketing: Unit 2 Effects of College Sports 5. license: legal right to reproduce a team’s logo in exchange for payment (another method of revenue for a team). Licensing is used to protect the use of the name and symbols of a school/team/band/etc. so that the public won’t confuse the image or identity. conference: group of college athletic teams within the same region (Big 12: Kansas State, Nebraska, Missouri, Colorado, Kansas, Iowa State, Texas A &M, texas, texas Tech, Oklahoma, Oklahoma State, Baylor, PAC 10: UCLA, Arizona, Oregon, USC, Washington, Arizona State, California, Oregon State, Stanford, and Washington State) Can anyone name the Big 10? 1. 2. 3. 4. 5. Minnesota Illinois Indiana Ohio State Iowa 6. Michigan State 7. Michigan 8. Penn State 9. Wisconsin 10.Northwestern 11.Purdue Sports and Entertainment Marketing: Unit 2 To go pro, or not to go pro? Read page 47, #12 List five questions you can think of that an amateur/college athlete must ask themselves when deciding to become professional. Unit 2 Lesson 4 Professional Sports Survey: What are your favorite professional sports? Opening Act p. 52 (Private ballot) How much money are you willing to pay for a ticket to the Super Bowl? Discuss differing answers.........why, why, why? Sports and Entertainment Marketing: Unit 2 Financial Impact of Pro Sports Top Football Franchises The Washington Redskins are owned by Daniel Snyder, who bought them in 1999 for $750 mil. Team Value: $1.3 billion! – Revenue – Operating Income – Player Expenses – Gate Receipts $287 million $53.8 million $133 million $79 million Sports and Entertainment Marketing: Unit 2 Financial Impact of Pro Sports Top Football Franchises Dallas Cowboys New England Patriots Owner: Jerry Jones (net worth: $1 bil) 1989 Owner: Robert Kraft 1994 Bought team: $150 mil Current value: $1.1 bil Revenue: $231 mil Op. Income: $54.3 mil Player Exp: $81 mil Gate Recpts: $31 mil Bought team: $172 mil Current value: $1 bil Revenue: $236 mil Op. Income: $50.5 mil Player Exp: $92 mil Gate Recpts: $66 mil Sports and Entertainment Marketing: Unit 2 You better believe MARKETING is in on this business! There is marketing teams, athletes, coaches, stadiums, leagues, cities, apparel/equipment, technology, movies, food/restaurants, etc. Top 5 Highest Paid Athletes Tiger Woods $80.3 million Michael Schumacher $80 million Peyton Manning $42 million Michael Jordan $35 million Shaquille O’Neal $31.9 million 6-KG $30 mil 8-Beckham $28 mi 10- Kobe $26 mil 7-Agassi $28 mil 9-Rodriguez $26 mil Sports and Entertainment Marketing: Unit 2 professional athlete: someone who earns a living participating in a sport “big league sports”=professional sports “BIG” stands for revenue potential or commercial value just as much as it stands for “big” as in physical size and competition Sports and Entertainment Marketing: Unit 2 Financial Planning for a Team Goal of a business: PROFIT! Professional Teams are BUSINESSES! Sports and Entertainment Marketing: Unit 2 Others benefit from professional teams as well… A city can benefit from a professional team especially if: everyone and everything involved with the team (staff, headquarters, practice areas, and preseason training facilities) stays within the home city. –not like the Vikings/Twins the stadium/arena is used for events other than those for which it is built. –like the Vikings/Twins the team attracts other business development like hotels, restaurants, and retail shops. (***Remember the Vikings and Twins represent not only the Twin Cities, but others in North Dakota, South Dakota, Iowa, and even other states that don’t have Sports and Entertainment Marketing: professional teams). Unit 2 PRESTIGE, POWER, PROFITABILITY What a pro team does for the community: local employees might get perks from their employer..... owners of teams get a place politically community members get more enthusiasm and morale more jobs for the community families get a place to go for wholesome entertainment (so watch your mouths....) more money for the local businesses Sports and Entertainment Marketing: Unit 2 There are the benefits to a professional team, but in the end…... who pays the bill? The new Paul Brown Stadium opened for the Cincinnati Bengals in 2000. Some of the costs paid by taxes include: Scoreboard: $5.4 million New offices, not including furniture: $2.67 million 679 wooden-backed chairs etched with team logo: $135,000.00 Window treatments (curtains/blinds) for offices $48,106.00 ONE custom made desk: $4,854.00 Sports and Entertainment Marketing: Unit 2 Loss of a team can bring on depression in a community.... (owners have been known to get bomb threats, hate letters, death threats.....HOW PATHETIC!) Can you say Norm Green? (MINNESOTA North STARS now Dallas Stars) but since winning is everything, was the move a good decision (Stars won the Stanley Cup just a few years after moving!) Sports and Entertainment Marketing: Unit 2 Winning is everything good players go to winning teams. winning teams have happier fans. tickets sell faster (and sell out). teams get more tv/radio airtime for games and mention. teams get bigger/better sponsors. Sports and Entertainment Marketing: Unit 2 Read Judgement Call p. 54 Is it right for athletes to earn so much money? Is it right for attendees to pay so much for a few hours of pleasure? What does this say about what Americans stand for? Sports and Entertainment Marketing: Unit 2 league: sports leagues control where the teams are located, number of teams etc. (National Football League, National Basketball Association, National Hockey League, Major LEAGUE Baseball) cartel: a combination of businesses formed to regulate production, pricing, and marketing of a product. (In pro sports it would be the “league”) Cartels are prohibited by federal law, but in sports they are allowed. Hmmmm….can you say MONEY talks? Where to put a new team? Here’s what to look for: Large potential customer base Owners usually want public funds (so a supportive local government) Support of other owners (must vote in a new team/location) Owner financing (NFL requires from $450 million to $600 million for an expansion team—that money is split between existing owners-the league) A facility (another LARGE issue, how to pay for it) Some leagues are managed better than others…compare NFL to MLB. Sports and Entertainment Marketing: Unit 2 Are you ready for some FOOTBALL? Super Bowl Stats 2006 More Americans watched the 2005 Super Bowl than voted in the 2004 presidential election (133.7 mil vs. 122 mil) There are more parties for the Super Bowl than New Year’s Eve. Domino’s Pizza sales are higher on Super Bowl Sunday than any other day…duh! National impact of this event is in the millions of dollars – Many buy new furniture, TV’s etc. for the game and even antacids the day after Detriot reaped est. $350 mil from hosting in 2006 (with only a few mil invested and 3 years to plan) Average cost of a ticket: $500 at Ford Field (seats 65,000) – =$32,500,000 Emerald Nut’s Company advertised the SB and their sales tripled: 2004: $12.9 million 2005: $42.2 million Sports and Entertainment Marketing: Unit 2 Are you AWAKE now? Sports and Entertainment Marketing: Unit 2 Unit 2 Lesson 5 Role of Products Read Opening Act p. 283 What logos used to be popular? What logos are popular now? Why? When you wear/carry anything with a logo you are a Walking Billboard! Sports and Entertainment Marketing: Unit 2 licensing: permission to copy the logo of a league, athlete, team, entertainer, film or TV show for a fee to the owner of the image. Steps for licensing complete business plan Can you say ENTREPRENEURSHIP? a sample or drawing of the product the costs of production and distribution a marketing plan the existing distribution channels for the product Sports and Entertainment Marketing: Unit 2 Strategies for maximizing profits – change the logo, color or uniform or use “old” versions (nostalgic) – add new items, licenses for use, sales methods – widen the market to the world Sports and Entertainment Marketing: Unit 2 ~TAKE NOTES…. NOT IN BOOK!~ Product Life Cycle Stages Product Life Cycle Introduction Growth Maturity Decline Sports and Entertainment Marketing: Unit 2 Product Life Cycle Introduction – first stage, new product introduced, quite different from other products, customers don’t know what it is or how it might satisfy their needs – Basic product, few features, higher price Growth – new product introduced, attracts more customers, sales grow rapidly, competitors counteract – added features, brand important, range of prices Maturity – sales peak, profits decline, all customers and all competitors are in the market, intense competition – price adjustment, more customer service, competitive pricing/promotion Decline – sales rapidly drop, little profit, businesses get out, additional uses of product – prices need to be high to compensate for low sales. Sports and Entertainment Marketing: Unit 2 Stages in a Life Cycle sales time profits introduction growth maturity Sports and Entertainment Marketing: Unit 2 decline brand: a name, term, design or symbol, that identifies a business or organization and its products (unique) trademark: a LEGAL protection for words, symbols for use by one company Do you own a piece of clothing with a professional team logo on it? What other items (besides clothing) are popular for sports logos? Sports and Entertainment Marketing: Unit 2 Unit 2 Lesson 6 Role of Pricing and Place Computer Lab Introduction: p. 60 Cyber Marketing Think about buying products on-line vs. in store vs. at arena/stadium. Where is selection best? Where were prices higher? Why? Were there items on-line that you wouldn’t find in a mall? Why? Sports and Entertainment Marketing: Unit 2 ~TAKE NOTES…. NOT IN BOOK!~ price: the value of money placed on a good or service (Source: Marketing Essentials-Glencoe 2002 p. 451) A price must be set that is high enough to make a profit ,but not so high that consumers will not want to buy. (Source: South-Western Marketing 2002) Does higher price means better product? – (local game vs. Super Bowl) Sports and Entertainment Marketing: Unit 2 What factors cause concession prices to be higher than store prices? Sports and Entertainment Marketing: Unit 2 break-even point: point where sales and revenue equal cost of making and distributing a product (administration, concession staff, security, coaches, players) This is where PROFIT begins! PLACE/DISTRIBUTION channel of distribution: path a product takes from producer or manufacturer to final user wholesalers: buy large quantities of goods and re-sell them to smaller businesses. retailers: sell goods to the final user Sports and Entertainment Marketing: Unit 2 Unit 2 Lesson 7 Role of Promotion magazines web sites billboards radio PROMOTION Focus: How do you hear about products? What influences what you buy? newspaper movies television bathroom stalls video games ~TAKE NOTES—NOT IN BOOK~ promotion: publicizing or advertising a product, service or event with the goal of selling it. Two purposes of promotion/increase sales: 1. maintaining current customers/markets 2. attracting new customers/markets Sports and Entertainment Marketing: Unit 2 Promotion Promotion Mix Publicity Sports and Entertainment Marketing: Unit 2 Sales Promotion Personal Selling Advertising 4 Types of Promotion (learn these, love these) advertising publicity personal selling sales promotion Sports and Entertainment Marketing: Unit 2 4 Elements of the Promotional Mix (learn these, love these) advertising – paid communication between a product maker and the audience (tv, magazine, newspaper, billboard, etc.) publicity – free notice about a product, service or event (tv, newspapers, radio, magazines, speaking at events, volunteering, donations etc.) personal selling – door to door, in the home, sales person to customer sales promotion – action or communication that will encourage a consumer to buy a product – specials, limited-time offers, giveaways, coupons, free samples Sports and Entertainment Marketing: Unit 2 Promotional Planning Process (Marketing, South-Western 2002 p. 416) Analyze the Market (competition etc.) Identify the Target Market Develop Promotional Objectives (inform, persuade, change attitudes, broaden awareness, action customer to take: try product, come to an event, buy more) Develop Promotional Budget Select Promotional Mix Implement Promotional Plan EVALUATE RESULTS!! Sports and Entertainment Marketing: Unit 2 Na na na na, na na na na, hey hey hey……. Goodbye!