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What Is Marketing? Economics of Marketing 2 Chapter Objectives Define marketing. Explain the marketing concept. Define demographics. Explain the marketing mix. Explain economics and free enterprise. Identify intellectual property rights. Explain the different types of business ownership. Explain the economic impact of sports and entertainment. 3 The Importance of Sports and Entertainment Marketing The sports and entertainment industries have become two of the most profitable industries in the United States. 4 Marketing Defined Because of competition, an organized marketing plan is essential. Goods are tangible items, such as sports equipment. Services are intangible products, such as theater tickets. marketing the process of developing, promoting, and distributing products, or goods and services, to satisfy customers’ needs and wants 5 Marketing Defined Successful organizations follow a marketing concept. marketing concept idea that organizations need to satisfy their customers while also trying to reach their organizations’ goals The first step in creating a marketing concept involves identifying the market. market potential customers with shared needs who have the desire and ability to buy a product 6 Marketing Defined Organizations spend lots of money to learn about their customers needs and wants. Having a clear picture about the target market makes developing a marketing plan easier to accomplish. needs a lack of basic necessities such as food, clothing, or shelter wants things that people desire based on personality, experiences, or information about a product target market specific group of consumers that an organization selects as the focus of its marketing plan 7 Marketing Defined The United States census provides useful information about the demographics of our nation. demographics statistics that describe population in terms of personal characteristics Businesses use demographic information to develop their marketing plans. 8 The Marketing Mix Marketers use a tool to develop strategies called the marketing mix. marketing mix a combination of four basic strategies known as the 4 Ps—product, price, place, and promotion To be effective, all 4 Ps in a marketing plan must focus on the target market. 9 The Marketing Mix Marketing mix strategies involve product, price, place, and promotion decisions. channel of distribution path a product takes from the producer to the consumer Place decisions include determining a channel of distribution. 10 The Marketing Mix—The Four Ps Product P Decisions involve the goods, services, or ideas used to satisfy consumer needs. Price P Decisions involve the exchange process between the customer and the seller. Place P Decisions involve making the product available to the customer. Promotion P Decisions involve how the goods or services are communicated to the consumer. 11 Buzz Power “Word-of-mouth ramped up to warp Operating an e-tail business andefinition electronicofchannel—the speed” ison one Internet buzz, Web—can be costly,says due BusinessWeek. to design, delivery, and It’s returns, the marketing operating expenses. by-product of e-mail, instant messaging, boards, and chat rooms. Though Many largerbulletin dot-com companies crashed in the The influence buzz is soHarris powerful that researchers monitor 1990’s, smallofstores like Cyclery of West Newton, consumer opinionsactually online. increase Positive buzz increase Massachusetts, salescan using a basicprofits Web forsite. products, TV, music, fashion,rides andin on Today,books, a third films, of Harris’s bicycleand business the Web popularity to get hard-to-find parts personalWith service. determine of athletes andand celebrities. public resistance to banner ads and pop-ups, a little buzz “zooms” Describe a long way. an e-business’s home page to your class after viewing one through marketingseries.glencoe.com. For more information on sports and entertainment marketing, go to marketingseries.glencoe.com. 12 1. Define marketing and the marketing concept. 2. Explain the concept of a market. 3. What is the marketing mix and what is its relationship to a target market? 13 Economic Basics The economics of marketing sports and entertainment have a great impact globally as well as locally. economics the study of the choices and decisions that affect making, distributing, and using goods and services A measure of economic growth is the gross domestic product (GDP). GDP (gross domestic product) the value of all goods and services produced within a country 14 Economic Basics Profit allows companies to stay in business. As with most businesses, there is a financial risk involved with sports and entertainment events. profit the money left after all costs and expenses of a business are paid competition as a characteristic of free enterprise, the struggle among companies for customers Competition is the basis of the free enterprise system. 15 Property Ownership and Intellectual Property Rights Inherent in the free enterprise system is the right to own property and start a business. copyright legal protection of a creator’s intellectual property or products Intellectual property rights are protected by the following: Copyrights Patents Trademarks 16 Types of Business Ownership Types of business ownership include: Sole proprietorship Partnership Corporation Subchapter S Corporation 17 Economic Impact Locations benefit economically from sports and/or entertainment events and marketing. On a local level, sporting events and entertainment venues economically impact areas in which they operate because they draw audiences. Hosting the Olympics has a huge economic impact on a region before, during, and after the event. 18 1. Explain the concept of economics. 2. What are three characteristics of a free enterprise system? 3. What is the economic impact of sports and entertainment events on a community? 19 Checking Concepts 1. Define and give an example of the term marketing. 2. Explain the marketing concept. 3. Describe the concept of demographics. 4. Explain the marketing mix. continued 1.. The 2. 3 4 Demographics Marketing marketing is themix are process concept statistical is a combination of states that of developing, organizations characteristics product, price,need that promoting, to help place, satisfy describe andtheir and distributing customers people promotion andwhile target products, also markets. decisions. tryingortogoods reach and theirservices, organization’s to satisfy goals. customer needs and wants. 20 Checking Concepts 5. Explain the concept of economics. 6. Name four types of business ownership. 5. The 6. 7. Intellectual Economics four types property is the of business rights study of arethe intangible ownership and choices are protected and are sole proprietorship, by decisions patents,that partnership, copyrights, affect making, and limited partnership, trademarks. distributing, and and corporation. using goods and services. 7. Define intellectual property rights. continued 21 Checking Concepts Critical Thinking 8. Describe how sports and entertainment impact national and local economies. 8. Sports and entertainment local events draw audiences. That means workers are needed for crowd control, ticket collection, concession sales, and security. These customers may also hire local people to work for them. Nationally, events that increase tourism contribute to the GDP. 22 23 End of