What is Sports and Entertainment Marketing?

Chapter 1Chapter 11.1 Marketing Basics1.1 Marketing Basics

1.2 Sports Marketing1.2 Sports Marketing

1.3 Entertainment Marketing1.3 Entertainment Marketing

1.4 Recreation Marketing1.4 Recreation Marketing

Sports & Entertainment Sports & Entertainment IndustriesIndustries• Today, more than any other time in history,

are the two most profitable industries in the U.S.

• Fans spend billions of dollars each year on recreation

• Reaches around the globe as well

• Entertainment is a main export of the U.S.

What is Marketing?What is Marketing?

If you know:If you know:• Nike: • “Just Do It”• Wheaties: • “Breakfast of Champions”• Under Armour: • “Protect this house”• Lowes: • “Lets build something together”• Butterfinger: • “Nobody better lay a finger on my butterfinger”• Apple: • “There’s an app for that”

You have been exposed to marketing.

Marketing Defined:Marketing Defined:The process of planning, pricing, promoting, selling,

and distributing ideas, goods, or services to create exchanges that satisfy customers

• To sum it up – Marketing is the creation and maintenance of satisfying exchange relationships.

• Marketing is an “umbrella” term

• Current marketing practices focus on customers and maintaining a close relationship with them

Marketing MixMarketing Mix• Describes how a business “blends”

the four marketing elements. • The 4 P’s

– Product– Place (Distribution)– Price– Promotion

Marketing MixMarketing Mix– Product—what a business offers customers to

satisfy needs

– (Place) Distribution—the locations and methods used to make products available to customers

– Price—the amount that customers pay for products

– Promotion—ways to encourage customers to purchase products and increase customer satisfaction

ProductProduct• Goods

– Tangible items that have monetary value and satisfy your needs & wants (can touch them)

– Examples: sports equipment, TV, clothing, candy.

• Services– Intangible items that have monetary value and satisfy

your needs & wants (can’t touch them)– Examples: tickets, banks, dry cleaners, amusement

parks.

Place (Distribution)Place (Distribution)• Involves the locations and methods

used to make products available to customers.

Place (Distribution)Place (Distribution)• Where do you buy a pair of sneakers

or a theater ticket?– Internet?– Retail Store?– Theater?– Telephone Solicitation?– Wholesaler?– Retailer?

PricePrice• Amount that customers pay for

products/services.

• Approximately Approximately 50%50% of an item’s price is for the marketing costs!

• Did you know? – On average, stores raise the price around 50% more than what they paid for it?

PromotionPromotion• ways to encourage customers to

purchase products/services.• increase customer satisfaction.• includes: advertising, publicity,

personal selling, and public relations

Buy 2, get 1 free!!

Our product will make you better at everything!

What are some forms of What are some forms of Promotion?Promotion?• Newspaper• Magazine• Radio• Television• Direct Mail• Internet Advertising

Satisfying Customer Needs Satisfying Customer Needs pg 5pg 5

• MOST important aspect of marketing!• Must perform the following:

– Identify customer needs– Develop products/services that

customers consider better than other choices

– Operate business profitably

Functions of MarketingFunctions of Marketing

1. Product/Service Management

2. Distribution3. Selling4. Marketing-

Information Management

5. Financing6. Pricing 7. Promotion

• Every marketing activity can be classified into seven functions of marketing

Functions of MarketingFunctions of Marketing

Key Marketing FunctionsKey Marketing Functions– Product/Service Management

• Designing, developing, maintaining, improving, and acquiring products/services so they meet customer needs.

– Ex: Focus groups

– Distribution• Determining the best way to get a

company’s products/services to customers.– Ex: Best Buy

Key Marketing FunctionsKey Marketing Functions– Selling

• Direct and personal communication with customers to assess and satisfy their needs.

– satisfying customers– anticipating customers’ future needs

– Marketing-Information Management• Gathering and using information about

customers to improve business decision making.

– Marketing research» Domino’s pizza expanding to Japan

Survey Says….Survey Says….• TV Sports Survey Questionnaire

Survey ResultsSurvey Results• Why do you watch TV sports?

– To relax (2)– For entertainment (19) – I do not watch TV sports (1)– Other “Watch when I’m bored” (2)

• Approximately how many hours do you spend watching sports during the week?– 1 or less (13)– 2-4 hours (6) – 5 or more hours (5)

Survey ResultsSurvey Results• How many tv sets do you have in your

household?– 1-2 (3)– 3 or more (21)

• Approximately how many live sports events do you attend during the week?– 0-1 (15)– 2-3 (9)– 1 student did not respond

Survey ResultsSurvey Results• Which of these tv sports do you watch?

– Basketball (11) – Football (15) – Hockey (5) – Tennis (2)– Curling (2) – Swimming (1) – Other—baseball (11) – Other—soccer (2)– Other– racing (2)– Other – wrestling (2)– Other – golf (1)– Other – boxing, UFC (1)

Survey ResultsSurvey Results• Would you be interested in a cable

channel that showed classic sports events?– Yes (6)– No (5) – Maybe (13)

Key Marketing FunctionsKey Marketing Functions• Financing

– Requires a company not only to budget for its own marketing activities, but also provides customers with assistance in paying for the company’s products/services.• Ex: General Motors

Key Marketing FunctionsKey Marketing Functions• Pricing

– Process of establishing and communicating the value or cost of goods/services to customers.• Ex: Concert tickets. Consumers like, price high

• Promotion– Used in advertising & other forms of

communicating information about products/services, images, and ideas to achieve a desired income.• Ex: coupons on back of tickets

Chapter 1.2 Page 9Chapter 1.2 Page 9What is Sports Marketing?What is Sports Marketing?• Spectators of sporting events

are the potential consumers of a wide array of products/services.

• Sports marketing– Using sports to market

products

Sports MarketingSports Marketing

• Target Market– A specific group of people you want to reach.

• Ex: Reebok & Nike have a large market for athletic shoes, but smaller, homogenous (similar) group for tennis, golf, running, walking, and so on.

• Demographics– Specific info. such as the age ranges in the

group, marital status, gender, educational level, attitudes and beliefs, and income.

Sports MarketingSports Marketing• Disposable Income

– Income that can be freely spent.

• Spending Habits of Fans– Important to research spending habits of

fans – Maximize profits on items they purchase

at sporting events

Marketing StrategiesMarketing Strategies• Sports Logos on clothing

– Shows team loyalty, value of merchandise is increased in the eyes of the buyer, consumers feel more successful.

• Royalties - (% of sales)

• New Sports, New Opportunities– Arena Football League (AFL) was one of the

fastest growing sports in the country.

Ambush (or Stealth) Ambush (or Stealth) Marketing Marketing (page 11 Marketing Myths)(page 11 Marketing Myths)

• When organizations participate in events to some degree rather than sponsor the event.

• Why would companies want to do this?

Marketing StrategiesMarketing Strategies• Gross Impressions

– Number of times per advertisement, game, or show that a product or service is associated with an athlete, team, or entertainment.

– Product Placement

• Timing– The popularity of teams and sports figures is

based almost completely on continued winning.

Entertainment MarketingEntertainment MarketingLesson 1.3 pg 14Lesson 1.3 pg 14

• Entertainment Marketing-Influencing how people choose to use their time and money

• First, Entertainment is looked at as a product to be marketed.

• Second, use EM to attract attention to other products– Ex: hiring celebs to endorse related mdse. or

events.

Entertainment MarketingEntertainment Marketing• Entertainment

– Whatever people are willing to spend their money and spare time viewing rather than participating in.

• Any examples?• Ex: movies, theatre, circus, or even

athletic events

Modern Entertainment Modern Entertainment MarketingMarketing• Beginning of 20th Century

– Performing arts were the major form of entertainment

– Live theater, ballet, opera and concerts• Marketing was limited

– Posters, newspapers, magazines and word-of-mouth

• People had to travel to the show– Show wasn’t brought to the consumers as

it is today

The beginning of change• Louis Le Prince

– Made the first moving pictures (movies) – first made in Britain in 1888

The big eye in every room

• 1950s- TV began to arrive in great numbers in American homes

• Sports and Entertainment marketers found a wide-open distribution channel into the homes of Americans

Early days of TV and Marketing

•Early 1940s - Nine TV stations and fewer than 7,000 working TV sets existed in the US

•October 1945 – Gimbel’s Department Store in Philly had over 25,000 people come to watch the first demonstration of TV

•Soon after, advertising on TV was encouraged

Television’s increasing influence• Ratings – the number of viewers the

programming attracted– Elvis #1 – September 1956– Elvis #2 – October 1956 Forrest Gump! – Beatles

Recreational SportsRecreational SportsLesson 1.4 pg 20Lesson 1.4 pg 20

• Recreation– Renewing or rejuvenating your body or

mind with play or amusing activity.

• Recreational Activities– Activities involved in travel, tourism, and

amateur sports that are NOT associated with educational institutions.

Recreational SportsRecreational Sports• No Couch Potatoes

– Participation requires purchase of a combo. of products/services

• A Better Image– LPGA

• Annika Sorenstam – first woman in over 50 years to play in men’s PGA tournamnet

• Michelle Wie – first LPGA tournament at 13!

Travel and TourismTravel and Tourism• World’s largest industry• Tourism

– Traveling for pleasure– Vacations, honeymoons, conventions,

and family visits• Data Mining

– Collecting data about which people travel, where, and when.

Travel and TourismTravel and Tourism• Niche Travel

– Recreational travel or tours planned around a special interest.

– Ex: Caribbean Cruise for Singles or Vacation package for college spring breakers

• Disney now offers travel packages that include hotel, airfare, rental car and park tickets

• Thomas Cook – first to introduce package tours to seaside resorts