sports marketing omhs 2014-2015 instructor: l. ingram

Chapter 1: The World of MarketingSports MarketingOMHS 2014-2015Instructor: L. Ingram

Overview:• Section 1.1- What is Marketing?

• Section 1.2- Economics of Marketing

Chapter Objectives:• Define Marketing.• Explain the marketing concept.• Define demographics.• Explain the marketing mix.• Explain economics and free enterprise.• Identify intellectual property rights.• Explain the different types of business ownership.• Explain the economic impact of sports and

entertainment.

Section 1.1: Objectives• To define marketing.• To explain the marketing concept.• To define demographics.• To explain the marketing mix.

Discussion Starter:• Who do you think would be the consumers of

sports and entertainment?

Marketing Defined:

• Because of competition, an organized marketing plan is essential.

• Goods are tangible items, such as sports equipment. Services are intangible products, such as a theater ticket.

• Marketing is defined as the process of developing, promoting, and distributing products, or goods and services, to satisfy customers’ needs and wants.

Promotional Slogans

• Just Do It!

• The Breakfast of Champions

• Take the _____ Challenge

• I’m lovin’ it

• If you know each of these company slogans, then you have been exposed to marketing.

• Distribution is the means of getting the product into the hands of the customer.• Directly sold to

customers.• Sold by wholesalers and

retailers.

Marketing Defined

• Successful organizations follow a marketing concept.

• The first step in creating a marketing concept is identifying the market.

• Marketing Concept: the idea that organizations need to satisfy their customers while trying to reach their goals.

• Market: potential customers with shared needs who have the desire and ability to buy a product.

Marketing Defined• Organizations spend

lots of money to learn about their customers’ needs and wants.

• Having a clear picture about the target market makes developing a marketing plan easier to accomplish.

• Needs: a lack of basic necessities such as food, clothing, or shelter.

• Wants: things that people desire based on personality, experiences, or information about a product.

• Target Market: specific group of consumers that an organization selects as the focus of its marketing plan.

Independent Practice

• Each row get together as a group and choose one movie that the majority of you have seen most recently.

• Identify the target market that the marketing people probably had in mind for this movie.

• What do you believe were the promotion decisions involved in marketing this movie to the target market?

Marketing Defined

• The United States census provides useful information about the demographics of our nation.

• Businesses use demographic information to develop their marketing plans.

• Demographics: statistics that describe population in terms of personal characteristics.

Enrichment: Demographics• Each of you belong to

more than one demographic group.

• Example: A high school student belongs to a demographic group named “high school students.” But that same student may be part of a “teen-dominated families.” See pg. 8 for examples.

• Consider the demographic groups to which you belong and write them down on your paper.

• Let’s see how many classmates might be considered in the same demographic groups.

The Marketing Mix

• Marketers use a tool to develop strategies called the marketing mix.

• To be effective, all 4 P’s in a marketing plan must focus on the target market.

• Marketing Mix: a combination of four basic strategies know as the 4P’s—product, price, place, and promotion.

The Marketing Mix

• Marketing mix strategies involve product, price, place, and promotion decisions.

• Place decisions include determining the channel of distribution.

• Channel of Distribution: path a product takes from the producer to the consumer.

The Marketing Mix—The Four P’s

Product Decisions •Involve the goods, services, or ideas used to satisfy customer needs.

Price Decisions •Involve the exchange process between the customer and the seller.

Place Decisions •Involve making the product available to the customer.

Promotion Decisions •Involve how the goods or services are communicated to the consumer.

Section 1.2: Objectives• To explain economics and free enterprise.• To identify intellectual property rights.• To explain the different types of business

ownership.• To explain economic impact of sports and

entertainment.

Discussion Starter:• Why do you think the economics of marketing

sports and entertainment have global impact?

Economic Basics

• The economics of marketing sports and entertainment have a great impact globally as well as locally.

• A measure of economic growth is the gross domestic product (GDP).

• Economics: the study of the choices and decisions that affect making, distributing, and using goods and services.

• GDP: (gross domestic product) the value of all goods and services produced within a country.

Economic Basics• Profit allows companies

to stay in business.

• As with most businesses, there is a financial risk involved with sports and entertainment events.

• Competition is the basis of the free enterprise system.

• Profit: the money left after all costs and expenses of a business are paid.

• Competition: as a characteristic of free enterprise, the struggle among companies for customers.

Activity

• Risks• Let’s all brainstorm and think of all the different risks moviemakers would have.

• How might these risks change the way moviemakers do business?

• Connect• Have you ever bought a ticket to see a performer and paid more than the normal price Was the show sold out?

Property Ownership and Intellectual Property Rights• Inherent in the free

enterprise system is the right to own property and start a business.

• Intellectual property rights are protected by the following:• Copyrights• Patents• Trademarks

• Copyright: legal protection of a creator’s intellectual property or products.

Types of Business Ownership• Types of business ownership include:• Sole Proprietorship• Partnership• Corporation• Subchapter S Corporation

Sole Proprietorship• Involves only ONE owner.

• Advantages• Ease in starting and ending a business.• Complete control.• All profits belong to the one owner.

• Disadvantages:• Lack of finances to expand.• Unlimited liability (creditors may take an owner’s personal

property to satisfy a debt)• Time devoted to the business.

Partnership• Two or more owners of a

business.

• Advantages:• Shared financial investment.• Shared responsibilities.• Shared expertise.• Ability to expand.

• Disadvantages• Unlimited liability.• Difficulty withdrawing.• Death of a partner dissolves

the partnership.

• “Silent Partner” makes a business a limited partnership.

• There must be at least one general partner who assumes unlimited liability.

Corporation

• Business entity that has the ability to conduct business and enter into contract apart from its owner or owners.

• Must be chartered.

• Owners are called stockholders.

• Advantages:• Ability to generate capital

investment.• Limited liability for its owners.• Ability to expand.• Ease of owners joining and

leaving.

• Disadvantages:• Complex structure.• Higher tax rate.• Double taxation (taxes on

company and shareholder)• Increased government

regulations.

Subchapter S Corporation• Must follow all the same government regulations

as a corporation, but it is taxed like a partnership.

• Restrictions to Qualify:• No more than 35 shareholders.• No more than 80% of it’s revenue can come from foreign

sources.

Independent Practice Activity• You will be divided into 4 groups. The first group will be a

sole proprietorship, second group a partnership, third group a corporation, and the fourth group a Subchapter S Corporation.

• Each group is to determine the nature of the sports or entertainment business and why it is well suited for that kind of business ownership.

• List the types of jobs in each business.

• A spokesperson from each group will explain to the class how the group has set up the jobs for that particular business.

Economic Impact• Location benefit economically from sports and/or

entertainment events and marketing.

• On a local level, sporting events and entertainment venues economically impact areas in which they operate because they draw audiences.

• Hosting the Olympics has a huge economic impact on a region before, during, and after the event.

Figure 1.2—Event Impact pg.19

EVENT

Hotel

Concessions

Media

Ticket Sales

Product Sales

Restaurants

Employee

Venues

Airlines/Transpor

tation

Other recreatio

n

Security Services

Local Merchan

ts

• Ticket sales to major events like the Olympics and world fairs are only one source of revenue. Everyone involved in these events can profit before, during, and after the event.

• Name three businesses that might benefit from the Super Bowl taking place in their community.

Homework • Look up in the newspaper two major events soon

to take place in Birmingham or a nearby city. Make a list of the businesses that will be most affected by these events. This will be due at the beginning of class tomorrow.