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History of Sports and
Entertainment Marketing
Similarities in Marketing
Differences in Marketing
2
Chapter Objectives
Discuss the history of sports and entertainment.
Discuss the impact of sports and entertainment
history on today’s markets.
Explain how sports and entertainment marketers
use tools to sell their products.
Explain risks and risk management of sports and
entertainment events.
Identify differences between marketing sports
and entertainment products.
3
Sports and Entertainment
Connections
What do sports and entertainment have in
common? They have thrilled and entertained
people for centuries—since the ancient Olympic
games and Greek plays.
4
A Brief History of Leisure
Marketers sell participation
in sports and entertainment
events to consumers.
consumers people who
use products
The growth of the sports
and entertainment
industries has relied on
consumers with free time,
discretionary income,
and a desire for recreation.
discretionary income
money left to spend after
necessary expenses are
paid
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A Brief History of Leisure
By the late 1880s, both
wealthy and working-class
families could seek similar
forms of entertainment,
thanks to public
transportation.
kinetoscope a device
used to view a sequence
of moving pictures
In the late 1890s, Thomas
Edison invented the
kinetoscope.
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A Brief History of Leisure
Other milestones in the history of leisure include:
Mary Pickford becomes the first international
movie star in 1918.
The first talking movie in 1927 (The Jazz Singer)
Babe Ruth sets records in baseball that would
stand for decades.
The development of television
7
Development of Sports and
Entertainment Marketing
William “Bill” Veeck was a key figure in the
development of sports marketing. He conceived of
marketing activities and events that surround
baseball games.
Adolph Zukor, founder of Paramount Pictures, was
one of the first film producers to draw big box-office
crowds and own a chain of theaters.
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Marketing Today
Sports and entertainment
vendors compete for a
share of the money people
spend on recreation.
vendors sellers
of products
Sports and entertainment
marketing directs consumers
toward sports and
entertainment products.
product a good or
service that any for-profit
industry sells to its
customers
9
Fan Clubs Grow Online
Fan clubs for athletes and celebrities
Operating an e-tail business
on marketing
an electronic
channel—the
make good
tools.
Thanks to
Web—can be costly,the
due
to design,
delivery,ofreturns,
and
Internet,
thousands
official and
operating expenses.
unofficial clubs are formed. They are run
fans, corporations,
and
Though Many largerby
dot-com
companies crashed
in the
celebrities.
Some
fan clubs
charge
fees, such
as Tiger
1990’s, small
stores
like Harris
Cyclery
of West
Newton,
Woods’
tigerfans.com
at $30.
Other sales
Web sites
free. Web
For
Massachusetts,
actually
increase
usingare
a basic
example,
fanemporium.com,
which
operates
for arides
group
site. Today,
a third of Harris’s
bicycle
business
in of
on
the Web
to get hard-to-find
parts
and
personal
service.
musical
celebrities,
charges no
dues.
Sites
offer newsletters,
merchandise, contests, event updates, and more.
Describe an e-business’s home page to your class after
viewing
one throughon
marketingseries.glencoe.com.
For
more information
sports and entertainment marketing,
go to marketingseries.glencoe.com.
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1.
Name two inventions that helped to enable more
equal access to entertainment for the wealthy and
the working classes in the 1890s.
2.
Who was a key figure in the development of sports
marketing?
3.
How did Adolph Zukor help the entertainment
market grow?
11
Changes in Marketing
Communicating through
promotion is more
important than ever.
promotion any form of
communication used to
persuade people to buy
products
New technologies have
broadened the scope and
reach of marketing
messages, and they can be
entertainment products
themselves.
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Marketing Similarities
The marketing of sports and
entertainment products differs
from marketing traditional
products in the following four
areas:
Product
– Endorsement
– Core product
– Ancillary product
– Revenue
continued
endorsement approval or
support of a product or
idea, usually by a celebrity
core product the main
product, such as sports
event, movie, stage show,
or book
ancillary product a
product related to or
created from the core
product
revenue gross income
13
Marketing Similarities
continued
piracy the unauthorized
use of another’s music,
movies, or copyrighted
material
Place
Price
– Piracy
– Royalty
– Copyright
royalty a payment for
material that has been
copyrighted, or legally
declared as belonging to
the creator
continued
14
Marketing Similarities
continued
Promotion
– Product tie-in
– Cross-promotion
product tie-in use of
ancillary products such
as merchandise as
promotional tools
cross-promotion any
form of communication
through which one
industry relies on another
industry to promote its
product
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Marketing Similarities
Convergence expands the
potential for profit in sports
marketing and entertainment
marketing.
convergence the
overlapping of product
promotion
Convergence and crosspromotion help to develop
synergy.
synergy a combined
action that occurs when
products owned by one
source promote the
growth of related products
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Risks and Risk
Management
In any industry, including the
entertainment industry, there
are risks.
risks unforeseen events
and obstacles that can
negatively affect
business
Successful sports and
entertainment marketers
develop risk management
strategies.
risk management a
strategy to offset business
risks
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1.
What is celebrity endorsement?
2.
What is the difference between core and
ancillary products?
3.
Give an example of synergy.
18
Different Players,
Different Games
The differences between sports and entertainment
can be found in three areas:
Consumer loyalty
Product
Revenue stream
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Differences in Consumer
Loyalty
If sports fans feel their team
is trying to win, the team can
retain its consumer loyalty.
consumer loyalty
consumers’ attitude that
occurs when they are
happy with a company
and become repeat
customers
The entertainment consumer
is not motivated by brand or
team loyalty, but by a desire
for satisfying entertainment.
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Differences in Product
The sports product is consistent, or stable.
The entertainment product is variable, or
changeable.
21
Differences in Revenue
Stream
The streams of revenue created by marketing
products in entertainment are very diverse.
Sporting events do not usually produce the same
amount of revenue from merchandising and
royalties as entertainment events.
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Differences in Revenue
Stream
Sports franchises earn
revenue from sponsorship.
sponsorship the
promotion of a company
in association with a
property
Sports franchises also earn
revenue from advertising
and broadcast rights.
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Similarities and Differences in Marketing
Sports Marketing
Consumer Loyalty
Consistent Product
Few Ancillary Products
Entertainment Marketing
Product
Place
Price
Lack of Consumer
Loyalty
Variable Product
Many Ancillary Products
Promotion
Convergence
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1.
List two differences in consumer loyalty
between sports and entertainment.
2.
What are differences between marketing
sports product and entertainment product?
3.
In what one way does the stream of revenue
in sports differ from the stream of revenue in
entertainment?
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Checking Concepts
1. Identify three people in
sports and entertainment
history.
2. Discuss one way that
sports and entertainment
history has affected
marketing today.
3. Name three different
marketing tools.
continued
Veeck and
As
new “Bill”
inventions
1.. William
2.
3
endorsements,
conceived
ofmade
marketing
technology
ancillary
products,
activities
and events
entertainment
more that
convergence,
and
surround
available baseball
to the working
games.
Zukor
synergy
classes,Adolph
marketing
was
was
one of
first to
affected;
it the
is currently
market
dramaticby
stories
being affected
and
popular
stars in
computer
technology
movies. Charles
and the Internet.
Howard marketed
Seabiscuit well enough
that some say he
invented sports
marketing. Other
answers are possible.
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Checking Concepts
4. Define royalty.
5. Give an example of a
royalty.
6. Give an example of
cross-promotion for a film.
7. Describe one risk
involved in a sports event.
4. Answers
5.
6.
7.
Many
A
royalty
answers
is
willa vary
are
because
but
possible,
payment
may include
anything
for
including
the
that
star
damaged
material
can
of a be
that
new
property,
has
movie
copyrighted
can
cancellation,
beenappear
copyrighted,
on
can
injury
a
earn
talk
to
or audience,
legally
show.
a royalty
declared
if it is
used
damage
as belonging
by atoperson
to the
or
equipment.
creator.
entity other than
the creator. Some
examples might be
books, songs,
scripts, etc.
continued
27
Checking Concepts
Critical Thinking
8. Explain one method of
risk management for one
risk.
8. Answers will vary.
One possibility is
purchasing
insurance policies to
protect clients from
industry-related
risks.
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