Transcript Chapter 2
Chapter 2 Sports and Entertainment Means Business Sports and Entertainment Marketing © Thomson/South-Western Lesson 2.1 Sports and Entertainment Economics Learning Targets I can define profit and explain the profit motive. I can list and describe the FOUR types of economic utility. Chapter 2 Slide 2 Sports and Entertainment Marketing © Thomson/South-Western Terms Profit Profit Motive Microeconomics Macroeconomics Economics Economic Utility Chapter 2 Slide 3 Sports and Entertainment Marketing © Thomson/South-Western THE PROFIT MAKERS Revenue the money a business receives from the sales of goods and services Chapter 2 Slide 4 Sports and Entertainment Marketing © Thomson/South-Western Profit the amount of money remaining from revenues after all expenses are. Goal of any business is to earn (make) a Profit. Profit Motive making decisions to use resources in ways that result in the greatest profit. Chapter 2 Slide 5 Sports and Entertainment Marketing © Thomson/South-Western Opportunities for Profits Worldwide distribution revenue is critical for profits. Example: Movies Avg. Box Office income increases 50% to 100% Titanic - highest ticket sales in last 100yrs. Domestic (released just in USA) $600,800,000 vs. International (released in multiple countries) $1,234,600,000 Chapter 2 Slide 6 Sports and Entertainment Marketing © Thomson/South-Western Marketers must always understand the markets in which they target and sales occur. China’s market - over 1.3 Billion people Sounds like a good market for movie makers correct? the government censors movies for content pirated movies diminish theater sales Chapter 2 Slide 7 Sports and Entertainment Marketing © Thomson/South-Western In addition to U.S. ticket sales, name two other large sources of revenue for U.S. film studios. International Sales DVD Sales DVD Rentals Movie Merchandise Chapter 2 Slide 8 Sports and Entertainment Marketing © Thomson/South-Western - ECONOMICS Economics the study of how goods and services are; Produced Distributed Consumed Chapter 2 Slide 9 Sports and Entertainment Marketing © Thomson/South-Western Macroeconomics the study of the economics of the entire society. Microeconomics the study of the relationships between individual consumers and producers. Macro (large scale) / Micro (small scale) NOTE - Sports and Entertainment marketers are focused on Microeconomics. Chapter 2 Slide 10 Sports and Entertainment Marketing © Thomson/South-Western Economic Utility the amount of satisfaction a person receives from the consumption of a particular product or service. NOTE – consumers (fans) are more likely to purchase products/services if it provides higher utility than their other choices/options. Chapter 2 Slide 11 Sports and Entertainment Marketing © Thomson/South-Western Types of Utility Form Utility when the physical characteristics of a product or service are improved. Can result in changes to tangible parts of the product/service. Time Utility making the product or service available when the customer wants it. 24/7 Grocery Stores, Gas Stations, Wal-Mart, McDonalds Chapter 2 Slide 12 Sports and Entertainment Marketing © Thomson/South-Western Types of Utility Place Utility the product is available where it is wanted. Note – making things convenient for consumers is a good business practice. Possession Utility the product or service is available at an affordable price. Offering options to consumers regarding payment options; 24months Same as Cash, Cash Back, Credit Cards, Rent-To-Own, Installment Loans, % off Coupons. Chapter 2 Slide 13 Sports and Entertainment Marketing © Thomson/South-Western Economic Utility Ad Assignment: 20pts Utilizing the Internet, Newspaper or Magazines, you need to find FIVE products/services that businesses/companies have changed one or more of the economic utility (Form, Time, Place, Possession) in regards to their product/service. Can’t use any of the examples we have discussed in class. Do a compare/contrast (New vs. Old) and be sure to list which utilities you believe have been changed and describe how this was accomplished/why you feel this is so. You must have addressed each of the four economic utilities (Form, Time, Place, Possession). Chapter 2 Slide 14 Sports and Entertainment Marketing © Thomson/South-Western Example: ___________ Utility Then… Now… Appearances can be deceiving… Same great taste as always… Something’s never change… Chapter 2 Slide 15 Sports and Entertainment Marketing © Thomson/South-Western Example: __________ Utility Chapter 2 Slide 16 Sports and Entertainment Marketing © Thomson/South-Western Example: _________ Utility: Chapter 2 Slide 17 Sports and Entertainment Marketing © Thomson/South-Western Example: __________ Utility Chapter 2 Slide 18 Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 19 Sports and Entertainment Marketing © Thomson/South-Western Lesson 2.2 Risk Management Learning Targets I can define risk and describe the categories and classifications of risk. I can name and describe four strategies for risk management. Chapter 2 Slide 20 Sports and Entertainment Marketing © Thomson/South-Western Terms Risk Risk Management Liable Chapter 2 Slide 21 Sports and Entertainment Marketing © Thomson/South-Western RISKING IT ALL Risk the possibility of financial gain or loss or personal injury. Chapter 2 Slide 22 Sports and Entertainment Marketing © Thomson/South-Western Categories of Risk Natural Risk occurs from unavoidable weather conditions. Human Risk dishonest customers and employees. inadequately trained employees. Economic Risk occurs due to changes in the economy. Chapter 2 Slide 23 Sports and Entertainment Marketing © Thomson/South-Western Additional Classification of Risk Speculative Risk either a gain or loss could result. Pure Risk a chance of an event occurring that could only result in a loss. Chapter 2 Slide 24 Sports and Entertainment Marketing © Thomson/South-Western Controllable Risk loss can be prevented or the likelihood of its occurrence can be reduced. Uncontrollable Risk nothing can be done to prevent the risk. No control. Chapter 2 Slide 25 Sports and Entertainment Marketing © Thomson/South-Western Insurable Risk (pure risk) loss is predictable and the amount of the loss can be estimated. Uninsurable Risk dollar loss could occur…loss cannot be estimated. Chapter 2 Slide 26 Sports and Entertainment Marketing © Thomson/South-Western Movie Theater Risk Type – Tornado Risk Type – Fire Uncontrollable Controllable Golf Resort Risk Type – Flood Pure Risk Type – Heat Wave Uninsurable Risk Type – Golf Cart in lake Insurable Chapter 2 Slide 27 Sports and Entertainment Marketing © Thomson/South-Western MANAGING RISK Risk Management preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk; Risk Avoidance Risk Insurance Risk Transfer Risk Retention Chapter 2 Slide 28 Sports and Entertainment Marketing © Thomson/South-Western Risk Avoidance Sports and entertainment marketers need to plan to avoid risky situations. Liable the business/team is legally responsible for damages/injuries that occur. Chapter 2 Slide 29 Sports and Entertainment Marketing © Thomson/South-Western Risk Insurance Risk Insurance pays for predictable losses. Premium amount (cost) paid for insurance Deductible amount (payment) due to receive insurance benefits. Chapter 2 Slide 30 Sports and Entertainment Marketing © Thomson/South-Western Textbook Assignment: Encore pg. 41 On paper answer questions: 1, 2, 3 Due before you leave class today! Chapter 2 Slide 31 Sports and Entertainment Marketing © Thomson/South-Western