Transcript Chapter 2
Do Now What is risk? What does Harbor Yard or Bluefish Stadium do to reduces the risk of injury to an attendee during a concert or game? Chapter 2 Slide 1 Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Sports and Entertainment Means Business 2.1 Sports and Entertainment Economics 2.2 Risk Management Sports and Entertainment Marketing © Thomson/South-Western Lesson 2.2 Risk Management Goals Define risk and describe the categories and classifications of risk. Name and describe four strategies for risk management. Chapter 2 Slide 3 Sports and Entertainment Marketing © Thomson/South-Western RISKING IT ALL risk the possibility of financial gain or loss or personal injury Chapter 2 Slide 4 Sports and Entertainment Marketing © Thomson/South-Western Three Categories of Risk 1. Natural risk occurs from unavoidable weather conditions 2. Human risk dishonest customers and employees inadequately trained employees 3. Economic risk occurs due to changes in the economy Chapter 2 Slide 5 Sports and Entertainment Marketing © Thomson/South-Western Three Additional Classification of Risk 1. gain or loss 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 6 Sports and Entertainment Marketing © Thomson/South-Western Three Additional Classification of Risk 2. controllable or uncontrollable risk controllable risk if a loss can be prevented or the likelihood of its occurrence reduced uncontrollable risk nothing can be done to prevent the risk Chapter 2 Slide 7 Sports and Entertainment Marketing © Thomson/South-Western Three Additional Classification of Risk 3. Insurable or Uninsurable risk insurable risk a pure risk for which the chances of loss are predictable and the amount of the loss can be estimated uninsurable risk the chance that a dollar loss could occur the amount of the loss cannot be estimated Chapter 2 Slide 8 Sports and Entertainment Marketing © Thomson/South-Western What are four steps a sports venue could take to avoid risk of injury to fans attending games? Chapter 2 Slide 9 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 avoidance, risk insurance, risk transfer, and/or risk retention Chapter 2 Slide 10 Sports and Entertainment Marketing © Thomson/South-Western Strategies to Manage Risk 1. Risk Avoidance – precautions to avoid risky situations 2. Risk Insurance – buy insurance for predictable risk 3. Risk Transfer – put the liability on another company or even the customer 4. Risk Retention – retain money to cover the cost of a given risk Chapter 2 Slide 11 Sports and Entertainment Marketing © Thomson/South-Western Lesson 2.1 Sports and Entertainment Economics Goals Define profit and explain the profit motive. Describe types of economic utility. Chapter 2 Slide 12 Sports and Entertainment Marketing © Thomson/South-Western THE PROFIT MAKERS profit the amount of money remaining from revenues after all expenses are paid revenue the money a business receives from the sales of goods and services profit motive making decisions to use resources in ways that result in the greatest profit Chapter 2 Slide 13 Sports and Entertainment Marketing © Thomson/South-Western Cultural Opportunities for Profits Worldwide distribution revenue is critical for movie profits. China has a tremendous movie market. The government censors movies for content Pirated movies diminish theater sales Chapter 2 Slide 14 Sports and Entertainment Marketing © Thomson/South-Western ECONOMICS economics the study of how goods and services are produced, distributed, and consumed - Chapter 2 Slide 15 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 Sports and entertainment marketers are focused on microeconomics. relationships with consumers Chapter 2 Slide 16 Sports and Entertainment Marketing © Thomson/South-Western Sports and Entertainment Economics economic utility the amount of satisfaction a person receives from the consumption of a particular product or service Chapter 2 Slide 17 Sports and Entertainment Marketing © Thomson/South-Western Types of Utility form utility when the physical characteristics of a product or service are improved time utility making the product or service available when the customer wants it place utility the product is available where it is wanted possession utility the product or service is available at an affordable price Chapter 2 Slide 18 Sports and Entertainment Marketing © Thomson/South-Western List four types of economic utility. Chapter 2 Slide 19 Sports and Entertainment Marketing © Thomson/South-Western