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What is Sports and Entertainment Marketing? Chapter 1 1.1 1.2 1.3 1.4 Marketing Basics Sports Marketing Entertainment Marketing Recreation Marketing Sports & Entertainment Industries • Today, more than any other time in history, are the two most profitable industries in the U.S. • Fans spend billions of dollars each year on recreation • Reaches around the globe as well • Entertainment is a main export of the U.S. What is Marketing? If you know: • • • • • • • • • • • • Nike: “Just Do It” Wheaties: “Breakfast of Champions” Under Armour: “Protect this house” Lowes: “Lets build something together” Butterfinger: “Nobody better lay a finger on my butterfinger” Apple: “There’s an app for that” You have been exposed to marketing. Marketing Defined: The process of planning, pricing, promoting, selling, and distributing ideas, goods, or services to create exchanges that satisfy customers • To sum it up – Marketing is the creation and maintenance of satisfying exchange relationships. • Marketing is an “umbrella” term • Current marketing practices focus on customers and maintaining a close relationship with them Marketing Mix • Describes how a business “blends” the four marketing elements. • The 4 P’s – Product – Place (Distribution) – Price – Promotion Marketing Mix – Product—what a business offers customers to satisfy needs – (Place) Distribution—the locations and methods used to make products available to customers – Price—the amount that customers pay for products – Promotion—ways to encourage customers to purchase products and increase customer satisfaction Product • Goods – Tangible items that have monetary value and satisfy your needs & wants (can touch them) – Examples: sports equipment, TV, clothing, candy. • Services – Intangible items that have monetary value and satisfy your needs & wants (can’t touch them) – Examples: tickets, banks, dry cleaners, amusement parks. Place (Distribution) • Involves the locations and methods used to make products available to customers. Place (Distribution) • Where do you buy a pair of sneakers or a theater ticket? – Internet? – Retail Store? – Theater? – Telephone Solicitation? – Wholesaler? – Retailer? Price • Amount that customers pay for products/services. • Approximately 50% of an item’s price is for the marketing costs! • Did you know? – On average, stores raise the price around 50% more than what they paid for it? Buy 2, get 1 free!! Promotion • ways to encourage customers to purchase products/services. • increase customer satisfaction. • includes: advertising, publicity, personal selling, and public relations Our product will make you better at everything! What are some forms of Promotion? • Newspaper • Magazine • Radio • Television • Direct Mail • Internet Advertising Satisfying Customer Needs pg 5 • MOST important aspect of marketing! • Must perform the following: – Identify customer needs – Develop products/services that customers consider better than other choices – Operate business profitably Functions of Marketing • Every marketing activity can be classified into seven functions of marketing 1. Product/Service Management 2. Distribution 3. Selling 4. MarketingInformation Management 5. Financing 6. Pricing 7. Promotion Functions of Marketing Key Marketing Functions – Product/Service Management • Designing, developing, maintaining, improving, and acquiring products/services so they meet customer needs. – Ex: Focus groups – Distribution • Determining the best way to get a company’s products/services to customers. – Ex: Best Buy Key Marketing Functions – Selling • Direct and personal communication with customers to assess and satisfy their needs. – satisfying customers – anticipating customers’ future needs – Marketing-Information Management • Gathering and using information about customers to improve business decision making. – Marketing research » Domino’s pizza expanding to Japan Survey Says…. • TV Sports Survey Questionnaire Survey Results • Why do you watch TV sports? – – – – To relax (2) For entertainment (19) I do not watch TV sports (1) Other “Watch when I’m bored” (2) • Approximately how many hours do you spend watching sports during the week? – 1 or less (13) – 2-4 hours (6) – 5 or more hours (5) Survey Results • How many tv sets do you have in your household? – 1-2 (3) – 3 or more (21) • Approximately how many live sports events do you attend during the week? – 0-1 (15) – 2-3 (9) – 1 student did not respond Survey Results • Which of these tv sports do you watch? – – – – – – – – – – – – Basketball (11) Football (15) Hockey (5) Tennis (2) Curling (2) Swimming (1) Other—baseball (11) Other—soccer (2) Other– racing (2) Other – wrestling (2) Other – golf (1) Other – boxing, UFC (1) Survey Results • Would you be interested in a cable channel that showed classic sports events? – Yes (6) – No (5) – Maybe (13) Key Marketing Functions • Financing – Requires a company not only to budget for its own marketing activities, but also provides customers with assistance in paying for the company’s products/services. • Ex: General Motors Key Marketing Functions • Pricing – Process of establishing and communicating the value or cost of goods/services to customers. • Ex: Concert tickets. Consumers like, price high • Promotion – Used in advertising & other forms of communicating information about products/services, images, and ideas to achieve a desired income. • Ex: coupons on back of tickets Chapter 1.2 Page 9 What is Sports Marketing? • Spectators of sporting events are the potential consumers of a wide array of products/services. • Sports marketing – Using sports to market products Sports Marketing • Target Market – A specific group of people you want to reach. • Ex: Reebok & Nike have a large market for athletic shoes, but smaller, homogenous (similar) group for tennis, golf, running, walking, and so on. • Demographics – Specific info. such as the age ranges in the group, marital status, gender, educational level, attitudes and beliefs, and income. Sports Marketing • Disposable Income – Income that can be freely spent. • Spending Habits of Fans – Important to research spending habits of fans – Maximize profits on items they purchase at sporting events Marketing Strategies • Sports Logos on clothing – Shows team loyalty, value of merchandise is increased in the eyes of the buyer, consumers feel more successful. • Royalties - (% of sales) • New Sports, New Opportunities – Arena Football League (AFL) was one of the fastest growing sports in the country. Ambush (or Stealth) Marketing (page 11 Marketing Myths) • When organizations participate in events to some degree rather than sponsor the event. • Why would companies want to do this? Marketing Strategies • Gross Impressions – Number of times per advertisement, game, or show that a product or service is associated with an athlete, team, or entertainment. – Product Placement • Timing – The popularity of teams and sports figures is based almost completely on continued winning. Entertainment Marketing Lesson 1.3 pg 14 • Entertainment Marketing-Influencing how people choose to use their time and money • First, Entertainment is looked at as a product to be marketed. • Second, use EM to attract attention to other products – Ex: hiring celebs to endorse related mdse. or events. Entertainment Marketing • Entertainment – Whatever people are willing to spend their money and spare time viewing rather than participating in. • Any examples? • Ex: movies, theatre, circus, or even athletic events Modern Entertainment Marketing • Beginning of 20th Century – Performing arts were the major form of entertainment – Live theater, ballet, opera and concerts • Marketing was limited – Posters, newspapers, magazines and word-of-mouth • People had to travel to the show – Show wasn’t brought to the consumers as it is today The beginning of change • Louis Le Prince – Made the first moving pictures (movies) – first made in Britain in 1888 The big eye in every room • 1950s- TV began to arrive in great numbers in American homes • Sports and Entertainment marketers found a wide-open distribution channel into the homes of Americans Early days of TV and Marketing •Early 1940s - Nine TV stations and fewer than 7,000 working TV sets existed in the US •October 1945 – Gimbel’s Department Store in Philly had over 25,000 people come to watch the first demonstration of TV •Soon after, advertising on TV was encouraged Television’s increasing influence • Ratings – the number of viewers the programming attracted – Elvis #1 – September 1956 – Elvis #2 – October 1956 Forrest Gump! – Beatles Recreational Sports Lesson 1.4 pg 20 • Recreation – Renewing or rejuvenating your body or mind with play or amusing activity. • Recreational Activities – Activities involved in travel, tourism, and amateur sports that are NOT associated with educational institutions. Recreational Sports • No Couch Potatoes – Participation requires purchase of a combo. of products/services • A Better Image – LPGA • Annika Sorenstam – first woman in over 50 years to play in men’s PGA tournamnet • Michelle Wie – first LPGA tournament at 13! Travel and Tourism • World’s largest industry • Tourism – Traveling for pleasure – Vacations, honeymoons, conventions, and family visits • Data Mining – Collecting data about which people travel, where, and when. Travel and Tourism • Niche Travel – Recreational travel or tours planned around a special interest. – Ex: Caribbean Cruise for Singles or Vacation package for college spring breakers • Disney now offers travel packages that include hotel, airfare, rental car and park tickets • Thomas Cook – first to introduce package tours to seaside resorts