Chapter 2 Sports and Entertainment Means Business Sports
Chapter 2 Sports and Entertainment Means Business Sports and Entertainment Marketing © Thomson/South-Western
Lesson 2. 1 Sports and Entertainment Economics Learning Targets n I can define profit and explain the profit motive. n I can list and describe the FOUR types of economic utility. Chapter 2 Slide 2 Sports and Entertainment Marketing © Thomson/South-Western
Terms n n n Profit Motive Microeconomics Macroeconomics Economic Utility Chapter 2 Slide 3 Sports and Entertainment Marketing © Thomson/South-Western
THE PROFIT MAKERS n Revenue n the money a business receives from the sales of goods and services Chapter 2 Slide 4 Sports and Entertainment Marketing © Thomson/South-Western
n Profit n the amount of money remaining from revenues after all expenses are. n Goal of any business is to earn (make) a Profit. n Profit Motive n making decisions to use resources in ways that result in the greatest profit. Chapter 2 Slide 5 Sports and Entertainment Marketing © Thomson/South-Western
Opportunities for Profits n Worldwide distribution revenue is critical for profits. Example: Movies n Avg. Box Office income increases 50% to 100% Titanic - highest ticket sales in last 100 yrs. Domestic (released just in USA) $600, 800, 000 vs. International (released in multiple countries) $1, 234, 600, 000 Chapter 2 Slide 6 Sports and Entertainment Marketing © Thomson/South-Western
n Marketers must always understand the markets in which they target and sales occur. n China’s market - over 1. 3 Billion people Sounds like a good market for movie makers correct? n the government censors movies for content n pirated movies diminish theater sales Chapter 2 Slide 7 Sports and Entertainment Marketing © Thomson/South-Western
n In addition to U. S. ticket sales, name two other large sources of revenue for U. S. film studios. n n International Sales DVD Rentals Movie Merchandise Chapter 2 Slide 8 Sports and Entertainment Marketing © Thomson/South-Western
ECONOMICS n Economics n the study of how goods and services are; n Produced n Distributed n Consumed Chapter 2 Slide 9 Sports and Entertainment Marketing © Thomson/South-Western
n Macroeconomics n the study of the economics of the entire society. n Microeconomics n the study of the relationships between individual consumers and producers. Macro (large scale) / Micro (small scale) NOTE - Sports and Entertainment marketers are focused on Microeconomics. Chapter 2 Slide 10 Sports and Entertainment Marketing © Thomson/South-Western
n Economic Utility n the amount of satisfaction a person receives from the consumption of a particular product or service. NOTE – consumers (fans) are more likely to purchase products/services if it provides higher utility than their other choices/options. Chapter 2 Slide 11 Sports and Entertainment Marketing © Thomson/South-Western
Types of Utility n Form Utility n when the physical characteristics of a product or service are improved. n Can result in changes to tangible parts of the product/service. n Time Utility n making the product or service available when the customer wants it. n 24/7 Grocery Stores, Gas Stations, Wal-Mart, Mc. Donalds Chapter 2 Slide 12 Sports and Entertainment Marketing © Thomson/South-Western
Types of Utility n Place Utility n the product is available where it is wanted. Note – making things convenient for consumers is a good business practice. n Possession Utility n the product or service is available at an affordable price. n Offering options to consumers regarding payment options; 24 months Same as Cash, Cash Back, Credit Cards, Rent-To-Own, Installment Loans, % off Coupons. Chapter 2 Slide 13 Sports and Entertainment Marketing © Thomson/South-Western
Economic Utility Ad Assignment: 20 pts n Utilizing the Internet, Newspaper or Magazines, you need to find FIVE products/services that businesses/companies have changed one or more of the economic utility (Form, Time, Place, Possession) in regards to their product/service. Can’t use any of the examples we have discussed in class. n Do a compare/contrast (New vs. Old) and be sure to list which utilities you believe have been changed and describe how this was accomplished/why you feel this is so. n You must have addressed each of the four economic utilities (Form, Time, Place, Possession). Chapter 2 Slide 14 Sports and Entertainment Marketing © Thomson/South-Western
Example: ______ Utility Then… Now… Appearances can be deceiving… Same great taste as always… Something’s never change… Chapter 2 Slide 15 Sports and Entertainment Marketing © Thomson/South-Western
Example: _____ Utility Chapter 2 Slide 16 Sports and Entertainment Marketing © Thomson/South-Western
Example: _____ Utility: Chapter 2 Slide 17 Sports and Entertainment Marketing © Thomson/South-Western
Example: _____ Utility Chapter 2 Slide 18 Sports and Entertainment Marketing © Thomson/South-Western
Chapter 2 Slide 19 Sports and Entertainment Marketing © Thomson/South-Western
Lesson 2. 2 Risk Management Learning Targets n I can define risk and describe the categories and classifications of risk. n I can name and describe four strategies for risk management. Chapter 2 Slide 20 Sports and Entertainment Marketing © Thomson/South-Western
Terms n Risk Management n Liable Chapter 2 Slide 21 Sports and Entertainment Marketing © Thomson/South-Western
RISKING IT ALL n Risk n the possibility of financial gain or loss or personal injury. Chapter 2 Slide 22 Sports and Entertainment Marketing © Thomson/South-Western
Categories of Risk n Natural Risk n occurs from unavoidable weather conditions. n Human Risk n dishonest customers and employees. n inadequately trained employees. n Economic Risk n occurs due to changes in the economy. Chapter 2 Slide 23 Sports and Entertainment Marketing © Thomson/South-Western
Additional Classification of Risk n Speculative Risk n either a gain or loss could result. n Pure Risk n a chance of an event occurring that could only result in a loss. Chapter 2 Slide 24 Sports and Entertainment Marketing © Thomson/South-Western
n Controllable Risk n loss can be prevented or the likelihood of its occurrence can be reduced. n Uncontrollable Risk n nothing can be done to prevent the risk. n No control. Chapter 2 Slide 25 Sports and Entertainment Marketing © Thomson/South-Western
n Insurable Risk n (pure risk) loss is predictable and the amount of the loss can be estimated. n Uninsurable Risk n dollar loss could occur…loss cannot be estimated. Chapter 2 Slide 26 Sports and Entertainment Marketing © Thomson/South-Western
Movie Theater Risk Type – Tornado Risk Type – Fire Uncontrollable Controllable Golf Resort Risk Type – Flood Pure Risk Type – Heat Wave Uninsurable Risk Type – Golf Cart in lake Insurable Chapter 2 Slide 27 Sports and Entertainment Marketing © Thomson/South-Western
MANAGING RISK n Risk Management n preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk; n n Risk Avoidance Risk Insurance Risk Transfer Risk Retention Chapter 2 Slide 28 Sports and Entertainment Marketing © Thomson/South-Western
Risk Avoidance n Sports and entertainment marketers need to plan to avoid risky situations. n Liable n the business/team is legally responsible for damages/injuries that occur. Chapter 2 Slide 29 Sports and Entertainment Marketing © Thomson/South-Western
Risk Insurance n pays for predictable losses. n Premium n amount (cost) paid for insurance n Deductible n amount (payment) due to receive insurance benefits. Chapter 2 Slide 30 Sports and Entertainment Marketing © Thomson/South-Western
Textbook Assignment: n. Encore pg. 41 On paper answer questions: 1, 2, 3 Due before you leave class today! Chapter 2 Slide 31 Sports and Entertainment Marketing © Thomson/South-Western
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