Lesson 2.5 Understanding the Sports & Entertainment Product Copyright © 2010 by Sports Career Consulting, LLC

Lesson 2.5

Understanding the Sports & Entertainment Product

Copyright © 2010 by Sports Career Consulting, LLC

UNIT 2

What is SEM?

Products:

Tangible, physical goods as well as services and ideas

Tangible products are capable of being physically touched


The Sports Product

Primary Functions of Marketing

Sports products are the goods and services designed to provide benefits to a sports spectator, participant or sponsor


UNIT 2

What is SEM?

UNIT 2

What is SEM?

The Sports ProductSports Product: The goods and services designed to provide benefits to a sports spectator, participant or sponsor

Licensed merchandise

Participation

Entertainment

Equipment and apparel

Promotional items

Sports facilities

Marketing research

Management services


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What is SEM?

The Sports Product


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What is SEM?

The Entertainment ProductThe entertainment industry’s top revenue producing products and services include:

Film & Cinema

Television

Music & Concerts

Radio

Video Games

Theme Parks

Publications

- Newspapers- Books- Magazines


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What is SEM?

Unique Nature of Sports & Entertainment Products

Sports and entertainment products often share common characteristics of services:

Services are perishable

Services are intangible


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What is SEM?

Perishability is the ability or need to store or inventory a product

Many sports and entertainment products are perishable


The Sports Product

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What is SEM?


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!


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What is SEM?


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.”


Intangible Product Attributes:

The unobservable characteristics which a physical good possesses, such as style, quality, strength, or

beauty


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What is SEM?


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What is SEM?


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


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What is SEM?


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


Lesson 2.6

Competition for the Entertainment Dollar



Discretionary Income:

Money left to spend after necessary expenses are paid


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What is SEM?



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What is SEM?

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



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What is SEM?

The results of a Fortune poll released in May of 2009 showed discretionary spending in America to be at a thirty year low

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

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What is SEM?


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?

Discussion Topic:


UNIT 2

What is SEM?


Let’s examine the many entertainment possibilities available to residents in the Denver

Metro Area…

Discussion Topic


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What is SEM?


http://www.blockbuster.com/bb/0,7478,,00.html?

http://www.denverzoo.org/index.html

http://vail.snow.com/index.asp

http://pfp.citysearch.com/url/?aid=66916&ltid=28&eid=1880230&rank=1&atid=1&total_ads=2&rmid=30&brand=citysearch&rpt=search_all&ad_key=e71af45ae3f45bed9107e5e168a45531887d1f23231082078363670

Lesson 2.7

Reaching Consumers


UNIT 2

What is SEM?

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

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What is SEM?

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…”

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What is SEM?

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.”

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What is SEM?

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?

Discussion Topic:


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What is SEM?

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

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What is SEM?



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)

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What is SEM?



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

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What is SEM?



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

Because loyalty is so important, many sports and entertainment organizations implement “loyalty programs” to reward core customers

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What is SEM?



New and emerging sports and entertainment properties keep the marketplace in a constant state of competition and evolution

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What is SEM?



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.

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What is SEM?



ESPN’s action sports X Games franchise’s consumer products and licensing business does more than $120 million in retail sales each year

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What is SEM?



The sport is now sanctioned in every state with an athletic commission except New York

In a sport once publicly denounced by Senator and Presidential Candidate John McCain, Mixed Martial Arts (MMA) has gained mainstream appeal

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What is SEM?



Nearly ever major MMA event today results in a sold out venue

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

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What is SEM?



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

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What is SEM?


Examining the Elusive Fan

Primary influencers of the fan decision making process are money and time

Other factors can include personal issues like spending time with family, camaraderie among friends and relaxation

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What is SEM?


Innovation, enhancement of the overall fan (consumer) experience and careful market research become essential components of marketing plans and strategies

Examining the Elusive Fan

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What is SEM?


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

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What is SEM?



Pressurized Competitive Environment

The sports marketplace is extremely crowded

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

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What is SEM?



Higher Fan Expectations

Fans demand a higher consumer experience than ever before with more concessions options, newer facilities and advances in broadcast technologies

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What is SEM?



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)

Paradox of Commercialism

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What is SEM?



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


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What is SEM?



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)


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What is SEM?



Never before have consumers had so much information or access to sports and entertainment products at their fingertips with the proliferation of media channels

The fan experience is being consistently upgraded as a direct result of new technologies as consumers can absorb the sport experience from almost anywhere

New Technology

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What is SEM?



Devices like the Slingbox or iPhone enable users to watch live sports or television programming remotely

In a poll conducted by thebusinessofsports.com, nearly 2/3 of survey participants indicated they use Twitter to consume sport-related content

New Technology

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What is SEM?



Society as a whole has become less focused on group interaction and developed more specialized interests

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

Individualism

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What is SEM?



Today, more than half of all U.S. families are divorced, single parent or diverse groups of unrelated people

As a result, the decision making process for sports and entertainment participation becomes more complicated

Change in Family Structure/Behavior

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What is SEM?



The time demands Americans face today offer fewer hours for the consumption of sport in any capacity, be it as a spectator or participant

It is not simply the activity itself that poses challenges for consumers

Time Pressure

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What is SEM?

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?

Discussion Topic


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What is SEM?

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!

Discussion Topic


Lesson 2.8

Introduction to Event Marketing & Management


Event Marketing

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


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What is SEM?

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What is SEM?


Event Examples

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What is SEM?

The 2010 FIFA World Cup generated a record $3.2 billion in revenue (representing a forty eight percent increase over 2006 World Cup revenues)


Event MarketingEvent marketing has become a profitable segment of the sports/entertainment

industry

Marketers spent over $9.0 billion on event marketing in 2010

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What is SEM?



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

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What is SEM?



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

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What is SEM?

Recruiting athlete participation in event

Creating a publicity strategy to increase coverage of the event

Promoting the event to boost attendance

Selling sponsorships to corporations


Event MarketingFor sports events, event marketing can involve a number of different marketing activities

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What is SEM?


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

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What is SEM?

The 5 P’s of Event Marketing

1) Participation

2) Product / Brand Experience

3) Promotion

4) Probe

5) Prospect


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What is SEM?



Participation: Getting consumers to attend the event and interact with the company, whether visually, verbally or interactively

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What is SEM?



Product / Brand Experience : Distributing samples or having the consumer try on or try out your product at the event

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What is SEM?



Promotion:

Generating media exposure by creating stories within the event and further increasing corporate awareness through promotions

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What is SEM?



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

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What is SEM?

Working with vendors

Facility selection

Staffing & Volunteers

Traffic & Parking

Security

Concessions


Event Planning

Key factors to consider when planning an event

Ticketing & Admissions

Sponsorship

Award Ceremonies

Special Accommodations

Weather

Hotels & Lodging

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What is SEM?

The Event Triangle

1) The Event

2) The Sponsor

3) Spectators


The 3 Key Components of the Triangle

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What is SEM?

The Event

Can be amateur or professional

Typically provides some form of entertainment for spectators

Provides exposure for sponsors

The Event:

A function that will draw participants, spectators and sponsors


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What is SEM?

Event Examples

Super Bowl

Olympic Games

Local “Blues” and Music Festivals


http://www.sfblues.com/

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What is SEM?

The Sponsor

Will utilize the event to market its products or services

Will leverage its relationship to advance future business opportunities

The Sponsor:

A company using the event to reach important consumers


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What is SEM?

The Spectator

Typically must pay to attend the event

Exposed to promotions for the event and event sponsors

The Spectator:

Those attending the event as a source of entertainment


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What is SEM?

Blank Slide Available

for Teacher Edits


What is SEM?

UNIT 2 REVIEW (ANSWERS)UNIT 2 REVIEW (ANSWERS)

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


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

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

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.

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

What is SEM?


7) Identify the five P’s of event marketing


1- Participation

2- Product/brand experience

3- Promotion

4- Probe

5- Prospect

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


End Unit 2

Documents

Lesson 2.5 Understanding the Sports & Entertainment Product Copyright © 2010 by Sports Career Consulting, LLC