Lesson 2 5 Understanding the Sports Entertainment Product

Lesson 2. 5 Understanding the Sports & Entertainment Product Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Sports Products: Tangible products are capable of being physically touched Tangible, physical goods as well as services and ideas Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Primary Functions of Marketing Sports products are the goods and services designed to provide benefits to a sports spectator, participant or sponsor Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Sports Product: The goods and services designed to provide benefits to a sports spectator, participant or sponsor Ø Licensed merchandise Ø Promotional items Ø Participation Ø Sports facilities Ø Entertainment Ø Marketing research Ø Equipment and apparel Ø Management services Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Sports Product Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Entertainment Product The entertainment industry’s top revenue producing products and services include: Ø Film & Cinema Ø Video Games Ø Television Ø Theme Parks Ø Music & Concerts Ø Publications Ø Radio - Copyright © 2010 by Sports Career Consulting, LLC Newspapers Books Magazines

What is SEM? UNIT 2 Unique Nature of Entertainment Products Sports & Sports and entertainment products often share common characteristics of services: Services are perishable Services are intangible Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Sports Product Many sports and entertainment products are perishable Perishability is the ability or need to store or inventory a product Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Unique Nature of Entertainment Products Sports & Once a game or event has already taken place, they no longer carry a value You can’t sell a seat to yesterday’s game, yesterday’s concert or yesterday’s ski-lift ticket! Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Unique Nature of Entertainment Products Sports & Perishability can also apply to playing careers which impacts product quality Dallas Mavericks owner Mark Cuban said in a recent interview, “I wrote a blog post a few years back saying that NHL players lost more than 1 billion in wages for their missed season. It could be more than that if the NFL walks out. The players can't ever get that money back. Their playing time is perishable. ” Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Unique Nature of Entertainment Products Sports & Intangible Product Attributes: The unobservable characteristics which a physical good possesses, such as style, quality, strength, or beauty Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Unique Nature of Entertainment Products Examples of intangible product attributes: The exhilaration we get from running our best marathon The thrill of winning a competition The satisfaction of scoring well on a challenging golf course The pride we feel when teams we support win Copyright © 2010 by Sports Career Consulting, LLC Sports &

What is SEM? UNIT 2 Unique Nature of Entertainment Products Sports & Examples of intangible product attributes: The emotional attachment fans invest in their affiliation with a favorite team The connection fans feel with other fans (whether they know them or not) supporting the same players or teams Copyright © 2010 by Sports Career Consulting, LLC

Lesson 2. 6 Competition for the Entertainment Dollar Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Competition for the Entertainment Dollar Discretionary Income: Money left to spend after necessary expenses are paid Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Competition for the Entertainment Dollar There is only so much discretionary income available in today’s economy The competition for entertainment dollar increases when the economy is in a recession Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Competition for the Entertainment Dollar The results of a Fortune poll released in May of 2009 showed discretionary in America to be at a thirty year low spending Regardless of economic conditions, the role of the sports and entertainment marketer is to find ways for consumers to spend those dollars with their organization Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Discussion Topic: Competition for the Entertainment Dollar Consider what you do with your leisure time… Where do you spend your entertainment dollars? What entertainment options are available to you in your community? Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Discussion Topic Competition for the Entertainment Dollar Let’s examine the many entertainment possibilities available to residents in the Denver Metro Area… Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Copyright © 2010 by Sports Career Consulting, LLC

Lesson 2. 7 Reaching Consumers Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Elusive Fan In 2006, the sports marketing book entitled “The Elusive Fan” was published to examine the volatility of the sports/entertainment marketplace and the challenges today’s sports business professionals face Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 An Excerpt from The Elusive Fan “It’s an October Saturday in Chicago. On television are two MLB playoff games, two preseason NBA games, fourteen college football games, five golf tournaments, an AHL game, an international horse race, two NASCAR races, and eight soccer matches. The University of Illinois and Northern Illinois University football teams and the AHL’s Chicago Wolves have home games. Hawthorne Race Course has a full card and there’s harness racing at Balmoral Park. There are twenty-nine high school football games and the final round of the boys and girls Illinois high school state championship golf tournaments…” Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 An Excerpt from The Elusive Fan “…Youth and recreational league games are also being played in every community of the Chicago area. What about the Chicago Bulls, Bears, Blackhawks and Northwestern Wildcats? The Bulls played at home last night, the Bears play at home tomorrow, the Blackhawks are away and the Wildcats had their midseason bye. Of course this does not include the hundreds of satellite television channels broadcasting soccer, rugby or cricket games all over the world; the millions of sports Web sites with fantasy games, insider information and gamecasts; and a wide variety of increasingly realistic sports video games. ” Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Discussion Topic: What is a sports and entertainment business and marketing professional to do? What do we mean by the term “elusive fan”? What challenges lie ahead for sports and entertainment business professionals? Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals The primary challenge for today’s sports/entertainment business professional is capturing consumer interest and building loyalty once that connection has been made Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals Why is loyalty important? Most marketers follow the widely accepted “ 20/80 rule”: 20% of customers account for 80% of company sales Fans of the popular Twilight film franchise and comic books will see the movie Twilight Saga: Eclipse whether or not the movie gets positive reviews (fans actually camped out three days in advance in Los Angeles hoping to snag tickets to the premiere) Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals Because NASCAR fans are among the most brand loyal in all of sports, more Fortune 500 companies invest in NASCAR marketing programs than any other major sports property Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals Because loyalty is so important, many sports and entertainment organizations implement “loyalty programs” to reward core customers UCLA unveiled a loyalty-based point system in 2009 that will help determine the order by which fans get to choose their seats in the new basketball arena before it opens its doors for 2012 -13 season Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals New and emerging sports and entertainment properties keep the marketplace in a constant state of competition and evolution Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals In 2010, Nike announced that its action sports division is the fastest growing category within the Nike Brand. The Company anticipates doubling its current estimated $390 million business by 2015. Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals ESPN’s action sports X Games franchise’s consumer products and licensing business does more than $120 million in retail sales each year Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals In a sport once publicly denounced by Senator and Presidential Candidate John Mc. Cain, Mixed Martial Arts (MMA) has gained mainstream appeal The sport is now sanctioned in every state with an athletic commission except New York Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals UFC's pay-per-view audience surpassed boxing and World Wrestling Entertainment for the first time in 2006, and has been on top ever since Nearly ever major MMA event today results in a sold out venue Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Challenges for Today’s Sports Business Professionals Many industry analysts are beginning to ponder the growth potential of cricket in the U. S. The American College Cricket Championship began in 2009, with five Colleges, and quickly grew to 20 Colleges in 2010 Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Examining the Elusive Fan Ø Primary influencers of the fan decision making process are money and time Ø Other factors can include personal issues like spending time with family, camaraderie among friends and relaxation Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Examining the Elusive Fan Innovation, enhancement of the overall fan (consumer) experience and careful market research become essential components of marketing plans and strategies Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” 1) Pressurized competitive environment 2) Higher fan expectations 3) Paradox of commercialism 4) New technology 5) Individualism 6) Change in family structure/behavior 7) Time pressure Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Pressurized Competitive Environment Ø The sports marketplace is extremely crowded Ø Paintball, while not a direct competitor of the NHL, poses an indirect threat as the sport gains popularity and has the potential to attract new sports fans Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Higher Fan Expectations Ø Fans demand a higher consumer experience than ever before with more concessions options, newer facilities and advances in broadcast technologies Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Paradox of Commercialism In 2010, the WNBA’s New York Liberty The New York Liberty became the fourth WNBA team to feature corporate logos on their jerseys by entering a multi-year partnership with Foxwoods Resort Casino (the jerseys say "Foxwoods" across the front with a small Liberty logo above) Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Paradox of Commercialism Also in 2010, Bank of Montreal renewed their jersey sponsorship with Major League Soccer’s Toronto FC for a reported $4 million annually through 2015 Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Paradox of Commercialism While the debut continues, sports teams who choose NOT to sell jersey advertising are passing up the potential for extremely lucrative sponsorship deals (Manchester United receives $30. 4 million annually from global insurance company Aon to advertise on their jerseys) Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” New Technology Ø Never before have consumers had so much information or access to sports and entertainment products at their fingertips with the proliferation of media channels Ø The fan experience is being consistently upgraded as a direct result of new technologies as consumers can absorb the sport experience from almost anywhere Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” New Technology Ø Devices like the Slingbox or i. Phone enable users to watch live sports or television programming remotely Ø In a poll conducted by thebusinessofsports. com, nearly 2/3 of survey participants indicated they use Twitter to consume sport-related content Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Individualism Ø Society as a whole has become less focused on group interaction and developed more specialized interests Ø Individualism has slowly resulted in the deterioration of the popularity of team sports (4 of the 5 fastest growing sports last year were the individual sports of backpacking, surfing, trail running and bicycling on non-paved surfaces Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Change in Family Structure/Behavior Ø Today, more than half of all U. S. families are divorced, single parent or diverse groups of unrelated people Ø As a result, the decision making process for sports and entertainment participation becomes more complicated Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Seven Characteristics of the “Elusive Fan” Time Pressure Ø The time demands Americans face today offer fewer hours for the consumption of sport in any capacity, be it as a spectator or participant Ø It is not simply the activity itself that poses challenges for consumers Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Discussion Topic Think about the last time you participated as a spectator in a sports or entertainment event (basketball game, movie, concert etc). How much of your leisure time was spent consuming the activity? Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Discussion Topic Consider the plight of a sports fan that purchased tickets to see a Washington Wizards game. Tip-off is at 7: 00 p. m. and the fan leaves work at 5: 00 to meet a friend at a local restaurant for a pre-game dinner. Given traffic and parking issues, that fan may not get home until 11: 30 p. m… That two or three hour game has now eaten up almost six hours of the consumer’s day! Copyright © 2010 by Sports Career Consulting, LLC

Lesson 2. 8 Introduction to Event Marketing & Management Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Marketing: Refers to the actual marketing of an event by its organizers. For sports events, this type of event marketing can involve a number of different areas of marketing Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Examples Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Marketing Event marketing has become a profitable segment of the sports/entertainment industry Marketers spent over $9. 0 billion on event marketing in 2010 The 2010 FIFA World Cup generated a record $3. 2 billion in revenue (representing a forty eight percent increase over 2006 World Cup revenues) Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Marketing Event marketing has become a profitable segment of the sports/entertainment industry The 2009 Bassmaster Classic set an attendance record by drawing more than 135, 000 fans to the event The organizer’s of Montreal’s International Jazz Festival operate on a hefty $30 million budget Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Marketing Event marketing has become a profitable segment of the sports/entertainment industry L. A. Live (the entertainment district in Los Angeles which is home to the Staples Center, Nokia Theatre, Conga Room and Grammy Museum) played host to over 1, 000 events in 2009, reaching over 10 million fans Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Marketing For sports events, event marketing can involve a number of different marketing activities Ø Recruiting athlete participation in event Ø Creating a publicity strategy to increase coverage of the event Ø Promoting the event to boost attendance Ø Selling sponsorships to corporations Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Marketing The role of corporate support in event marketing has increased dramatically in the past few decades. Without sponsorships and corporate support, many events would not be profitable. The ADT Championship, one of the LPGA's most prestigious events, was canceled in 2009 because the event sponsor, Stanford Financial, went into receivership and the event was unable to secure a new sponsor in their place Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The 5 P’s of Event Marketing 1) Participation 2) Product / Brand Experience 3) Promotion 4) Probe 5) Prospect Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The 5 P’s of Event Marketing Participation: Getting consumers to attend the event and interact with the company, whether visually, verbally or interactively Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The 5 P’s of Event Marketing Product / Brand Experience : Distributing samples or having the consumer try on or try out your product at the event Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The 5 P’s of Event Marketing Promotion: Generating media exposure by creating stories within the event and further increasing corporate awareness through promotions Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The 5 P’s of Event Marketing Probe: Conducting research before, during and after the event to make sure that you are effectively reaching and penetrating your target audience Prospect: Implies that companies should approach event marketing as a long-term commitment in order to see returns on investment Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Planning Key factors to consider when planning an event Ø Working with vendors Ø Ticketing & Admissions Ø Facility selection Ø Sponsorship Ø Staffing & Volunteers Ø Award Ceremonies Ø Traffic & Parking Ø Special Accommodations Ø Security Ø Weather Ø Concessions Ø Hotels & Lodging Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Event Triangle The 3 Key Components of the Triangle 1) The Event 2) The Sponsor 3) Spectators Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Event: Ø Can be amateur or professional Ø Typically provides some form of entertainment for spectators A function that will draw participants, spectators and sponsors Ø Provides exposure for sponsors Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Event Examples Ø Super Bowl Ø Olympic Games Ø Local “Blues” and Music Festivals Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Sponsor: Will utilize the event to market its products or services Will leverage its relationship to advance future business opportunities A company using the event to reach important consumers Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 The Spectator: Typically must pay to attend the event Exposed to promotions for the event and event sponsors Those attending the event as a source of entertainment Copyright © 2010 by Sports Career Consulting, LLC

What is SEM? UNIT 2 Blank Slide Available for Teacher Edits Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 1) Define sports marketing and entertainment marketing Sports marketing is the act of using sports as a platform to market products or services and increase sales or the process the of marketing and selling the sports property itself Entertainment marketing is the process of developing, promoting, and distributing products, or goods and services, to satisfy customer’s needs and wants through entertainment, or any diversion, amusement, or method of occupying time Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 2) Explain the two primary types of sports and entertainment marketing 1 -Marketing of sports & entertainment 2 -Marketing through sports & entertainment 3) Compare and contrast sports marketing and entertainment marketing Sports are entertainment but several key differences separate the two: sports are unscripted, sports customers are extremely loyal and an emotional attachment is very prevalent in sports Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 4) Describe the seven functions of marketing 1 - Pricing 2 - Distribution 3 - Promotion 4 - Financing 5 - Selling 6 - Marketing information-management 7 - Product and service management Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 5) Understand what makes sports and entertainment products unique Sports and entertainment products share the same characteristics as services in that they are often times intangible and perishable. Once a game or event has already taken place, they no longer carry a value and cannot be sold. Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 6) Explain the concept of competition for entertainment dollars The role of the sports and entertainment marketer is to find ways for consumers to spend discretionary dollars with their organization. The competition for those discretionary dollars is always on the rise with new, innovative ways to entertain constantly being introduced to the market Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 7) Identify the five P’s of event marketing 1 - Participation 2 - Product/brand experience 3 - Promotion 4 - Probe 5 - Prospect Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2 REVIEW (ANSWERS) What is SEM? 8) Explain the event triangle The event triangle is the model for studying the exchanges developed in sports marketing. It places emphasis on the relationships between producers and consumers. Three key components to the triangle include the event itself, the sponsor(s) and the spectators Copyright © 2010 by Sports Career Consulting, LLC

End Unit 2 Copyright © 2010 by Sports Career Consulting, LLC