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What do Sports and Entertainment have in common? They have thrilled and entertained people for centuries—since the ancient Olympic games and Greek plays. 2 A Brief History of Leisure Marketers sell participation in sports and entertainment events to consumers. The growth of the sports and entertainment industries has relied on consumers with free time, discretionary income, and a desire for recreation. Consumers people who use products Discretionary income money left to spend after necessary expenses are paid 3 By the late 1880s, both wealthy and working-class families could seek similar forms of entertainment, thanks to public transportation. In the late 1890s, Thomas Edison invented the kinetoscope. Kinetoscope a device used to view a sequence of moving pictures 4 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) 5 Babe Ruth sets records in baseball that would stand for decades. The development of television Development of Sports and Entertainment Marketing William “Bill” Veeck Key figure in the development of sports marketing He conceived of marketing activities and events that surround baseball games 7 Drafted the first African- American player Lou Doby Believed consumers wanted more than the final score Introduced “grandstand events” : dazzling scoreboards, special event nights Took a game and turned it into a concept that appealed to the media and fans and made it more profitable! Marketing of sports became a more interesting show and sold more advertising Adolph Zukor Founder of Paramount Pictures, One of the first film producers to draw big boxoffice crowds Owned a chain of movie theaters. Capitalized on the appeal of dramatic stories and popular stars Marketing Today.. Its all about Competition Sports and entertainment vendors compete for a share of the money people spend on recreation. The marketing directs consumers toward sports and entertainment products. vendors sellers of products Product a good or service that any for-profit industry sells to its customers 12 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 dueInternet, to design, delivery,ofreturns, thousands official and 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 of site. Today, a third of Harris’s bicycle business in 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. 13 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. 14 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 15 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 17 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 18 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 19 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 20 Examples Athletes/ Entertainers injured or ill Bad Publicity Drug use / suspension Injury to audience / damaged equipment Different Players, Different Games The differences between sports and entertainment can be found in three areas: Consumer loyalty Product Revenue stream 22 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. 23 Differences in Product The sports product is consistent, or stable. The entertainment product is variable, or changeable. 24 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. 25 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. 26 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 27