CHAPTER 8 SPORTS PRODUCT CONCEPTS Sports Product Concepts

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 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 • • 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 mouse-click 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 – 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 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 GOALS Recreation Marketing Careers • 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 • • 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 • • 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 21 st 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 – 52 million – Annual income of $211 billion – Harris Interactive Youth. Pulse – 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 • • • Mission Goals Product planning Marketing-information management Distribution system Pricing Promotional strategies Financing Purchasing • • 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 i. Tunes 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 • • 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 • • • 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 – 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 • • Products Pricing Distribution Promotion

Retail Image/Store Personality • Factors include (in general): – – – 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

• • 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 • • • 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 • • 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 • • 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