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CHAPTER 8
SPORTS PRODUCT CONCEPTS
Sports Product Concepts
• Sports Product - Good, Service or
Combination of the two that is designed to
provide benefits to a sports spectator,
participant, or sponsor.
Goods and Services as Sports Products
(The Good/Service Continuum)
• Intangibility – cannot be seen, felt, tasted
• Inseparability – simultaneous production
and consumption
• Heterogeneity – potential for high
variability
• Perishability – cannot be inventoried or
saved
Classification Of Sports Products
• Product Mix - All the different products and
services a firm offers
• Product Line - Groups of individual products
that are closely related in some way
• Product Item - Any specific version of a
product that can be designated as a distinct
offering
Product Characteristics
Branding
Total
Product
Product Quality
Product Design
Branding
• Name,design, symbol, or any combination
• Broad purpose of branding is for a product to
distinguish and differentiate itself from all other
products
• Some great sports names include the Macon
Whoopie, Louisiana Ice Gators
Brand Names
• What’s in a name?
– Easy to say, generates positive feelings and
associations
– Translatable into a successful logo
– Consistent with rest of product lines, city, or
organization
– Legally and ethically permissible
Branding Process
Brand Awareness
Brand Image
Brand Equity
Brand Loyalty
Model of Brand Equity
Licensing
• Contractual agreement whereby a company
may use another company’s branding in
exchange for a royalty or fee
• Booming business (e.g., NBA has 150
licenses) with $13.65 billion
• NFL (3.6) NBA (2.6) Colleges (2.0) MLB (1.9)
NHL (1.2)
• CAPS (Coalition to Advance the Protection
of Sports Logos)
Sports Product Quality
• Quality of Services
• Quality of Goods
Nature of Service Quality
EXPECTED SERVICE LEVELS
PERCEIVED SERVICE LEVELS
Expected Service Levels
• Service Promises (ads, price)
• Word-of-Mouth
• Past Experience
Perceived Service Levels Service Quality Dimensions
• Tangibles – Physical facilities, appearance of
personnel, equipment
• Reliability – Ability to perform the service
dependably, accurately, consistently
• Responsiveness – Willingness to provide prompt
service to customers
• Assurance – Trust, knowledge, and courtesy of
employees
• Empathy – Caring, individualized attention to
customers
Quality of Goods Dimensions
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Performance
Features
Conformity to Specifications
Reliability
Durability
Serviceability
Aesthetic Design
Product Design - Aesthetics, Style and
Function of the Product
RELATIONSHIP AMONG PRODUCT DESIGN,
TECHNOLOGY, AND PRODUCT QUALITY
Technological Environment
Product Design
Product Quality
CHAPTER
9
Marketing Entertainment
9.1 Customized Entertainment
9.2 Entertainment Technology and
Marketing
9.3 World Entertainment
Marketing
LESSON 9.1
Customized Entertainment
GOALS
• Explain customizing entertainment
products for a market segment.
• Describe customized entertainment
marketing for Baby Boomers.
Customizing Products
• Market segment—a group of people who
have the ability and the desire to purchase
a specific product
• Customizing—changing a product to fit the
needs or wants of a particular market
Local TV American Style
• Number of viewers
• Cost
Children’s Programming
• Locally produced programs
• Advertising
Sports Programming
• Regional broadcast
• Cable, satellite, and pay-per-view
• Cost of programming
• Tiering—certain sports programs outside
the basic cable package would incur extra
costs for the viewers who choose them
Public TV and Radio
• Viewer- and listener-supported
• Non-profit organizations
• Created locally and tailored to the viewers
or listeners
Marketing to Baby Boomers
• Baby Boomers
– Generation born between 1946 and 1964
– 76 million people
• Boomers won’t retire
– Work beyond normal retirement age
– Remain active
– Discretionary income
• Segmenting the group
Entertaining the Boomers
• Attendance at movies
• Movie reviews
• Movie stars of similar age
Understanding
All Parts of the Group
• Diverse in opinion
• Marketing message must be fine-tuned
• Major target of entertainment marketing
through 2020
LESSON 9.2
Entertainment
Technology and Marketing
GOALS
• Explain the economic utility of
entertainment.
• Discuss the impact of technology on
entertainment.
Entertainment Economics
• Economic utility—the amount of
satisfaction a person receives from the
consumption of a particular product or
service
Types of Utility
• Form utility—when the physical characteristics of
a product or service are improved
• Time utility—the result of making the movie
available when the viewer wants it
• Place utility—ensures that the movie is available
where the viewer wants it
• Possession utility—results from making the movie
available at an affordable price
Utilities on Broadway
• Broadway productions taken on the road
and produced in many major cities
• Economic utility is improved when people
are able to choose from multiple forms of
the same entertainment
Techno-Vision
• Through a child’s eyes
– Early adoption of new technologies
– Innovative
• Speed is the key
– Speed depends on bandwidth
– Bandwidth—the technical term for the
capacity of communication channels
– Personalized television in the future
More about the Internet
• Access to information on practically every
subject
• You must have an Internet Service Provider
(ISP)
• Entertainment distribution
Technology
• The Internet
• TV and the Internet
Cookies, Anyone?
• Clickstream data—collected at each mouseclick within a web site
• Cookie—a small data file placed on the
hard drive of the web site visitor
Consumer Privacy
• Concerns about how personal information
is used
– Information gathered from children
– Credit card information
• Entertainment industry
– Collecting data to protect copyrights
Movies or
Toy Commercials?
• Blurring the line between movies and
commercials
• Merchandising plans in place in advance of
upcoming films
LESSON 9.3
World Entertainment Marketing
GOALS
• Discuss the economics of global marketing
entertainment.
• Describe global distribution of
entertainment.
Global Marketing
• Research
– Culture
– Economic development
– Economic conditions
• Technology and distribution
Global Challenges
• Government policy
• Interest in developing national
entertainment industry
• Interest in protecting culture
• Tariffs
Global Distribution
• Disney in Europe
• Elvis in Israel
• Country all over the world
• International music
• International showcase
• International sports
Disney in Europe
• Disney merchandise can be purchased
throughout the world
Elvis in Israel
• Israelis gather at the Elvis Inn
• Appeal of an icon
Country All Over the World
• American country music is popular all over
the world
• Kumamoto Country Gold Festival
International Music
• Eurovision Song Contest pop music
competition
International Showcase
• Cannes International Film Festival
• Jury reviews films for the Cannes Awards
International Sports
• NFL Europe League
• Television coverage expanding both in
Europe and the United States
CHAPTER
10
Recreation Marketing
10.1 Recreational Sports
10.2 Travel and Tourism
10.3 Resorts and Theme Parks
10.4 Recreation Marketing Careers
LESSON 10.1
Recreational Sports
GOALS
• Explain marketing strategies based on
changing demographics.
• Apply market information to recreational
events.
Fitness and Fun
• Facilities versus wilderness
– Recreational space for local residents
– Environmental impact
– Must balance needs
• Managing customer information
– Customer database
– Product planning and promotion
Is Fitness a Trend?
• Changing demographics
• Senior Olympics
• Participation of youngsters
Event Marketing
• Sponsorship
• The future is here
– Inline skating
– Mountain biking
– Snowboarding
Snowboard Madness
• Sport continues to grow
• Indoor snowboard facilities
• Marketers looking for new areas
LESSON 10.2
Travel and Tourism
GOALS
• Explain the importance of the travel and
tourism industry to sports and
entertainment marketing.
• Describe how technology has changed
travel marketing.
Road Trip
• Travel and tourism supporting business
• Traveling to sporting events
The Products
• Transportation
• Accommodations
• Meals
• Other attractions
Travel Technology
• Online tickets sales and reservations
• e-tickets—electronic tickets
Lean Times
for Travel Agencies
• Traditional ticket distribution channel until
recently
• Newer channel is direct sales through web
sites
Price Versus Convenience
• Online travel service
• Priceline.com
Small World
• The business traveler
– Major source of profit for the travel industry
– Airline member-only clubs
• The tourist
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Self-indulgence travel
Cultural travel
Activity tours
Reality tours
Ecotourism
• Ecotourism—responsible travel to natural
areas that conserves the environment and
sustains the well-being of local people
• Fast-growing segment of travel industry
LESSON 10.3
Resorts and Theme Parks
GOALS
• Understand the importance of partnerships
between airlines and recreation
destinations.
• Discuss the popularity of halls of fame as
destinations.
• Explain the marketing strategies of theme
parks and resorts.
Traveling to Destinations
• Short-haul destinations
• Low seasons
• Getting there is half the fun
– Resorts and theme parks depend on airlines to bring
customers to them
– Partnerships to coordinate efforts
• Resort tech
– Online sales strategies
– Direct sales of tickets and hotel rooms
Halls of Fame
• Travel destination
• Sports and non-sports interests
• A hall is not always a hall
– No specifications for the site of a hall of fame
– Must attract visitors
– Promotion by word of mouth
• A complete destination
Resorts and Theme Parks
• Popular tourist destinations
• Theme parks are family-oriented
• Resorts aimed at adults
• Children have a major influence on choice
of destination
Theme Park Central
• Disney is the world leader in the theme
park industry
• Tiering for premium services
• Creating an attraction requires customizing
It’s Not Orlando
• Amusement parks in China
• Inadequate or inaccurate marketing
information about potential customers
LESSON 10.4
Recreation
Marketing Careers
GOALS
• Describe careers in recreation marketing.
• Develop a recreation marketing career
plan.
Building a Career
• Planning the trip
– Wide selection of career paths
– Research jobs and what they require
• What’s out there?
– Marketing positions in every firm in the
recreation business
– Searching for jobs using the Internet
– Research national travel agencies
Getting Ready
• What’s school got to do with it?
– Education requirements
– Tech Prep program
• How About the Real Thing?
– Internships
– Part-time work
– Job shadowing —spending active work time
with someone in a certain job or career
People Skills Are Critical
• Manage your behavior
• Adopt appropriate behavior for success
Recreation
Marketing Careers
• Recreation marketers needed to develop
and execute the seven marketing functions
• Communication and presentation skills
• Most positions require a bachelor’s degree
• Salary and perks
CHAPTER
11
Marketing Plans
11.1 Advertising
11.2 Marketing Research
11.3 Develop a Marketing Plan
11.4 The Bottom Line
LESSON 11.1
Advertising
GOALS
• Explain the steps in the advertising process.
• Understand the importance of measuring
advertising effectiveness.
Advertising
• Advertising—paid, non-personal
communication between an identified
sponsor and a potential customer about a
product or service
Step By Step
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Set measurable advertising goal
Develop the advertising budget
Create an advertising theme
Choose the advertising media
Create the advertisement
Develop an advertising schedule
Measure the effectiveness of the advertisement
The Goal
• Determine a specific measurable goal
• Ad effectiveness
• Brand recognition—the number of people
who recognize the brand name of a
product
The Budget
• Marginal analysis
• Percent of sales
• Bartering
• Fixed sum per unit
• Payout planning
• Competitive parity
The Theme
• Tag line—theme of an ad
• Conveys the main message of the ad
The Media
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Print
Broadcast/cable
The Internet
Media strategy—choosing the media that will
bring the most effective advertising message to
the targeted consumer
• Reach—information about which targeted
demographic segments are most likely to be
reached
The Advertisement
• Copy
• Art
• Wear out—when an ad loses its
effectiveness due to overexposure or poor
message quality
The Schedule
• Cost-effective media
• Concentration strategy of scheduling
• Dominance strategy
The Effectiveness
• Response rate
• Ad effectiveness helps to shape and
improve a business’s future media strategy
Pulling It All Together
• Dominance strategy
• Running the show
– Shows “pitched” to advertisers
– Primetime advertising
– Expected audience ratings
LESSON 11.2
Marketing Research
GOALS
• Define the purposes of marketing research.
• Understand the human element in
marketing research.
Researching the Market
• New marketing medium
– 1940—television
– Early 21st century—Internet
• Mass market—broad categories of people
Marketing Information
• Marketing research—the process of determining
what customers want
• Define the problem
• Analyze current conditions
• Develop the process
• Collect, organize, and analyze the data
• Determine a solution to the problem
• Evaluate the results from the changes
Data Mining
• Data mining—digging up data needed to
make decisions
• Nielsen Media Research
• Sample—an estimate of how many people
watch a TV show
School’s Out
• School holiday and weekends
• U.S. youth ages 8–21
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52 million
Annual income of $211 billion
Harris Interactive YouthPulse
E-commerce
Who Is Asking?
• Specialized marketing research
• Custom research
• Syndicated research
• What’s in it for me?
Worldwide Data
• Global market continues to grow
• Culture of potential new customers
• Marketing information must be used to
shape its product for new customers
Careers in
Marketing Research
• Collect data
• Track sales
• Monitor advertising spending
LESSON 11.3
Develop a Marketing Plan
GOALS
• Explain the purpose of a marketing plan.
• Describe the components of a strategic
marketing plan.
Know Where
You Are Headed
• Marketing plan—a written component of
the strategic plan that addresses how the
company will carry out the key marketing
functions
• Mission statement—the identification of
the nature of the business or the reasons
the business exists
A Sense of Direction
• Analyze data
• Decide what your customers want
• Delivery
• Customers’ future needs
• Specific needs of the firm and the products
Focusing on the Customer
• Blockbuster
• Overhauled business model and marketing
strategy plan
• More of what the customer wants
What’s The Plan?
• Perishable product
• Pre-sale
Components of a
Strategic Marketing Plan
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Mission
Goals
Product planning
Marketing-information
management
Distribution system
Pricing
Promotional strategies
Financing
Purchasing
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Risk management
Selling
People
Internal communication
systems
• Timelines for
implementing the plan
• Intervals of review and
evaluation
• The future
LESSON 11.4
The Bottom Line
GOALS
• Discuss the profit motive behind sports and
entertainment marketing.
• Describe the types of financing related to
sports and entertainment marketing.
Let’s Make Money!
• Profit—the amount of money remaining
after all costs, including salaries,
advertising, utilities, and other
expenditures, have been paid
• Who gets the money?
And More Money!
• Challenges of physical limits
• New homes for sports teams
• Did we make money?
Challenges of
Physical Limits
• Limited number of seats
• Sources of revenue with potential growth
– Personal seat licenses
– Concessions
– Commercial licenses
New Homes
for Sports Teams
• Professional sports stadiums costly
• Public subsidy
• Higher ticket prices
Did We Make Money?
• Forecast—predicts the cost of expenses and expected
revenues from an event
• Budget—provides estimates of expected expenditures
and revenues
• Balance sheet—shows the company’s current assets,
including cash, property, and equipment, and it
current liabilities, including debts owed and loans
• Income statement—a record of all revenue received
and all expenses incurred
CHAPTER
12
Legal Issues For Sports and
Entertainment
12.1 Laws and Contracts
12.2 Unions
12.3 Licensing
LESSON 12.1
Laws and Contracts
GOALS
• Explain risk management in the distribution
of sports and entertainment marketing.
• Describe the importance of copyright law
to pricing.
• Discuss the need for contracts.
The Law
• Managing risk
– Liable—legally responsible for damages
– Risk—the possibility of financial loss or
personal injury
Steps to Risk Management
• Identify risks.
• Estimate the possibility of each risk.
• Determine how great the consequences
are.
• Determine how to control the risk.
Control the Risk
• Limit the possibility of risk through
planning.
• Purchase insurance that transfers the cost of
the risk to the insurance company.
• Transfer liability through a contract.
• Cover the risk in the event budget.
• Avoid offering the risky event.
Who Has The Rights?
• Copyright laws—protect the unique work
of the originator within the geographic
boundaries to which the laws apply
• Royalty—payment made to the owner of a
copyright for the use of a copyrighted
work
U.S. Laws
• International copyright convention
• Celebrity marketability
Legal Listening
• Recording Industry Association of America
(RIAA)
• File sharing
• Apple’s iTunes Music Store
Federal Laws
• Sherman Antitrust Act (1890)
• Clayton Act (1914)
• National Labor Relations Act (1935)
• Contracts the bind
– Contracts—agreements enforced by law that
detail the transaction of business
– Contract law
LESSON 12.2
Unions
GOALS
• Analyze the public relations impact of
labor laws on sports.
• Assess the financial harm that strikes may
cause to a sport.
• Analyze the impact of labor unions on
sports and entertainment pricing.
Organized Labor
• Players’ associations—professional athletes
organized into labor unions
• Collective bargaining—a group of
employees joining together as a single unit
to negotiate with employers
Bargaining Rights
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Minimum and maximum salaries
Grievance procedures
Contract lengths
Rules of operation
Negotiations with skilled communicators
Higher salaries
Higher percentage of revenue from the game
Increased costs passed along to the fans
Topping the Salary
• Salary cap—a maximum amount that a
team can spend on players’ salaries
Owners Versus Players
• Lock-out
• Strike
Picking up the Pieces
• Work stoppages
• Loss of revenue for all parties
• Congress
• Winning back fans
Labor Relations
• Soccer success
– Single-entity league
– Owners are business partners
• Entertainment labor
– Screen Actors Guild (SAG)
– American Federation of Television and Radio Artists
(AFTRA)
– Union power
• Getting along
LESSON 12.3
Licensing
GOALS
• Explain licensing.
• Describe the financial value of licensing
sports and entertainment merchandise.
Walking Billboards
• Reaching agreement
– Licensing—giving permission to copy the logo
of a league, athlete, team, entertainer, film, or
TV show for a fee paid to the right holder of
the image
– Licensing allows unions to focus on their
primary business
Worldwide Publicity
• Availability of licensed items
• New opportunities in Europe
Getting Licensed
• A complete business plan
• A sample of drawing of the product
• The costs of production and distribution
• A marketing plan
• The existing distribution channels for the
product
Easy to Apply,
Hard to Obtain
• Immediate recognition and honor to a
product
• Limited number of licenses granted
Keeping Current
• Fashions, uniforms, and team logos change
• Promotional strategies
– Changing logo, color, or uniform
– Adding creative new items, licensees, and sales
methods
– Widening the marketing to the world
Managing Licensing
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License applications
Selection of licensees
Minimum guarantees
Design handbook and marketing plan
New product lines and number of designs
Approval process guidelines
Design review
Accounting
Counterfeit merchandise
New Success Story
• NASCAR Nextel Cup Series
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ten-year agreement
36 championship-point races
23 tracks
19 states
• Target market
Legal Protection
• Federal registration as a trademark—
• Civil and criminal penalties for violation
CHAPTER 13
DISTRIBUTION CONCEPTS
Distribution Concepts
• Ability of consumers to gain access to
products in a timely and convenient fashion
• Moving product from producer to consumer
via the various channels of distribution
Sports Distribution Issues
• Sports Retailing
• Stadium as “Place”
• Sports Media
Sports Retailing Mix
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Products
Pricing
Distribution
Promotion
Retail Image/Store Personality
• Factors include (in general):
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atmospherics
location
employees/sales personnel
clientele
merchandise assortment
promotional activities
Stadium as “Place”
• New Sports Venues
• Ticket Distribution Issues
Sports Media as Distribution
• Delivering the Sports Product to Consumers Via
Media
• Rising Cost of Media Rights
• Media as a Portion of the Revenue Mix
• New Trends in Sports Media
CHAPTER 14
PRICING CONCEPTS
Pricing Concepts
• Price is a Statement of Value
• Value = Perceived Benefits
Price of Sports Product
• Essence of pricing is the exchange process
- An attempt to quantify the value of what
is being exchanged
Internal and External Determinants
of Pricing
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RELATIONSHIP OF PRICE TO SOME OTHER
MARKETING MIX ELEMENTS
Related to product life cycle
Communicates something about the product
Promotion geared towards information
about price
Product lines with different prices attract
different segments of consumers
Estimating Consumer Demand
• Consumer Tastes
• Availability of Substitute Sports Products
• Consumer Income
Price Elasticity of Demand
Consumer Pricing Evaluation Process
CHAPTER 15
PRICING STRATEGIES
Pricing Strategies
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Differential Pricing Strategies
New Sports Product Pricing Strategies
Psychological Pricing Strategies
Product Mix Pricing Strategies
Cost-Based Pricing Strategies
Differential Pricing
• Second Market Discounting
New Sports Product Pricing
• Penetration Pricing
• Price Skimming
Psychological Pricing
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Prestige Pricing
Referent Pricing
Odd-Even Pricing
Traditional Pricing
Product-Mix Pricing
• Bundle Pricing
• Captive Pricing
• Two-Part Pricing
Cost-Based Pricing
• Cost-Plus Pricing
• Target Profit Pricing
• Break-Even Pricing
Price Adjustments
• Price Reductions and Price Increases
• Price Discounts
CHAPTER 16
IMPLEMENTING AND CONTROLLING
THE STRATEGIC SPORTS MARKETING
PROCESS
Implementation Issues
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Communications
Staffing and Skills
Coordination
Rewards
Information
Creativity
Budgeting
Implementation Phase
Strategic Control Issues
• Planning Assumptions Control
• Process Control
• Contingency Control
Planning Assumptions Control
• “Are the premises or assumptions used to
develop this marketing plan still valid?”
• Examine the external environmental factors and
the sports industry factors
Process Control
• Monitoring Strategic Thrusts
• Milestone Review
• Financial Analysis
Contingency Control
• “How can we protect our marketing strategy
from unexpected events or crises that could
affect our ability to pursue the chosen strategic
direction?”
• Developing a Crisis Plan