Transcript The primary challenge for today`s sports/entertainment business

Lesson 2.5
Understanding the
Sports & Entertainment Product
Copyright
© 2010 by Sports Career Consulting, LLC
What is SEM?
UNIT 2
The Sports Product
Products:
Tangible products are capable
of being physically touched
Tangible, physical
goods as well as
services and ideas
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What is SEM?
UNIT 2
Primary Functions of Marketing
Sports products are the goods and services designed to
provide benefits to a sports spectator, participant or
sponsor
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What is SEM?
UNIT 2
The Sports Product
Sports Product: The goods and services designed to provide benefits to a sports
spectator, participant or sponsor
 Licensed merchandise
 Promotional items
 Participation
 Sports facilities
 Entertainment
 Marketing research
 Equipment and apparel
 Management services
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What is SEM?
UNIT 2
The Sports Product
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What is SEM?
UNIT 2
The Entertainment Product
The entertainment industry’s top revenue producing products and services include:
 Film & Cinema
 Video Games
 Television
 Theme Parks
 Music & Concerts
 Publications
 Radio
-
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Newspapers
Books
Magazines
What is SEM?
UNIT 2
Unique Nature of
Entertainment Products
Sports &
Sports and entertainment products often share common
characteristics of services:
Services are perishable
Services are intangible
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What is SEM?
UNIT 2
The Sports Product
Many sports and
entertainment products are
perishable
Perishability is the ability
or need to store or
inventory a product
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What is SEM?
UNIT 2
Unique Nature of
Entertainment Products
Sports &
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?
UNIT 2
Unique Nature of
Entertainment Products
Sports &
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.”
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What is SEM?
UNIT 2
Unique Nature of
Entertainment Products
Sports &
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?
UNIT 2
Unique Nature of
Entertainment Products
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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Sports &
What is SEM?
UNIT 2
Unique Nature of
Entertainment Products
Sports &
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
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Lesson 2.6
Competition for the
Entertainment Dollar
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© 2010 by Sports Career Consulting, LLC
What is SEM?
UNIT 2
Competition for the Entertainment Dollar
Discretionary Income:
Money left to spend after
necessary expenses are paid
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What is SEM?
UNIT 2
Competition for the Entertainment Dollar
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?
UNIT 2
Competition for the Entertainment Dollar
The results of a Fortune poll released in May of 2009 showed discretionary
in America to be at a thirty year low
spending
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?
UNIT 2
Discussion Topic:
Competition for the Entertainment Dollar
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?
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What is SEM?
UNIT 2
Discussion Topic
Competition for the Entertainment Dollar
Let’s examine the many entertainment
possibilities available to residents in the Denver
Metro Area…
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What is SEM?
UNIT 2
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Lesson 2.7
Reaching Consumers
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What is SEM?
UNIT 2
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?
UNIT 2
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?
UNIT 2
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?
UNIT 2
Discussion Topic:
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?
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What is SEM?
UNIT 2
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?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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?
UNIT 2
Challenges for Today’s Sports
Business Professionals
Because loyalty is so important, many sports and entertainment organizations implement
“loyalty programs” to reward core customers
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
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What is SEM?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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?
UNIT 2
Challenges for Today’s Sports
Business Professionals
In a sport once publicly denounced by Senator and Presidential Candidate John McCain,
Mixed Martial Arts (MMA) has gained mainstream appeal
The sport is now sanctioned in every state with an athletic
commission except New York
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What is SEM?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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
Nearly ever major MMA event today results in a sold out venue
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What is SEM?
UNIT 2
Challenges for Today’s Sports
Business Professionals
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?
UNIT 2
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?
UNIT 2
Examining the Elusive Fan
Innovation, enhancement of the overall fan (consumer)
experience and careful market research become
essential components of marketing plans and strategies
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What is SEM?
UNIT 2
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?
UNIT 2
Seven Characteristics of the “Elusive Fan”
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?
UNIT 2
Seven Characteristics of the “Elusive Fan”
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?
UNIT 2
Seven Characteristics of the “Elusive Fan”
Paradox of Commercialism
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)
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What is SEM?
UNIT 2
Seven Characteristics of the “Elusive Fan”
Paradox of Commercialism
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?
UNIT 2
Seven Characteristics of the “Elusive Fan”
Paradox of Commercialism
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?
UNIT 2
Seven Characteristics of the “Elusive Fan”
New Technology
 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
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What is SEM?
UNIT 2
Seven Characteristics of the “Elusive Fan”
New Technology
 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
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What is SEM?
UNIT 2
Seven Characteristics of the “Elusive Fan”
Individualism
 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
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What is SEM?
UNIT 2
Seven Characteristics of the “Elusive Fan”
Change in Family Structure/Behavior
 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
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What is SEM?
UNIT 2
Seven Characteristics of the “Elusive Fan”
Time Pressure
 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
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What is SEM?
UNIT 2
Discussion Topic
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?
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What is SEM?
UNIT 2
Discussion Topic
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!
Copyright © 2010 by Sports Career Consulting, LLC
Lesson 2.8
Introduction to
Event Marketing & Management
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What is SEM?
UNIT 2
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?
UNIT 2
Event Examples
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What is SEM?
UNIT 2
Event Marketing
Event marketing has become a profitable segment of the sports/entertainment
industry
Marketers spent over $9.0 billion on event marketing in
2010
The 2010 FIFA World Cup generated a record $3.2 billion
in revenue (representing a forty eight percent increase
over 2006 World Cup revenues)
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What is SEM?
UNIT 2
Event Marketing
Event marketing has become a profitable segment of the sports/entertainment
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?
UNIT 2
Event Marketing
Event marketing has become a profitable segment of the sports/entertainment
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?
UNIT 2
Event Marketing
For sports events, event marketing can involve a number of different marketing activities
 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
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What is SEM?
UNIT 2
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?
UNIT 2
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?
UNIT 2
The 5 P’s of Event Marketing
Participation: Getting consumers to attend the event and interact with the company,
whether visually, verbally or interactively
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What is SEM?
UNIT 2
The 5 P’s of Event Marketing
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?
UNIT 2
The 5 P’s of Event Marketing
Promotion:
Generating media exposure by creating
stories within the event and further
increasing corporate awareness through
promotions
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What is SEM?
UNIT 2
The 5 P’s of Event Marketing
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?
UNIT 2
Event Planning
Key factors to consider when planning an event
 Working with vendors
 Ticketing & Admissions
 Facility selection
 Sponsorship
 Staffing & Volunteers
 Award Ceremonies
 Traffic & Parking
 Special Accommodations
 Security
 Weather
 Concessions
 Hotels & Lodging
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What is SEM?
UNIT 2
The Event Triangle
The 3 Key Components of the Triangle
1) The Event
2) The Sponsor
3) Spectators
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What is SEM?
UNIT 2
The Event
The Event:
 Can be amateur or professional
 Typically provides some form of
entertainment for spectators
A function that will draw participants,
spectators and sponsors
 Provides exposure for sponsors
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What is SEM?
UNIT 2
Event Examples
 Super Bowl
 Olympic Games
 Local “Blues”
and Music Festivals
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What is SEM?
UNIT 2
The Sponsor
The Sponsor:
Will utilize the event to market its
products or services
Will leverage its relationship to advance
future business opportunities
A company using the
event to reach important
consumers
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What is SEM?
UNIT 2
The Spectator
The Spectator:
Typically must pay to attend the event
Exposed to promotions for the event
and event sponsors
Those attending the
event as a source of
entertainment
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What is SEM?
UNIT 2
Blank Slide Available
for Teacher Edits
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UNIT 2 REVIEW (ANSWERS)
What is SEM?
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
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UNIT 2 REVIEW (ANSWERS)
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
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UNIT 2 REVIEW (ANSWERS)
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
Copyright © 2010 by Sports Career Consulting, LLC
UNIT 2 REVIEW (ANSWERS)
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.
Copyright © 2010 by Sports Career Consulting, LLC
UNIT 2 REVIEW (ANSWERS)
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
Copyright © 2010 by Sports Career Consulting, LLC
UNIT 2 REVIEW (ANSWERS)
What is SEM?
7) Identify the five P’s of event marketing
1- Participation
2- Product/brand experience
3- Promotion
4- Probe
5- Prospect
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UNIT 2 REVIEW (ANSWERS)
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
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End Unit 2
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© 2010 by Sports Career Consulting, LLC