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OBJECTIVE Explain the central focus of the marketing concept. Explain the reasons for increased sports and entertainment options. Explain the importance of buyer behavior when making decisions List and describe means of collecting marketing information. Cross Promotion CROSS PROMOTION is a marketing concept that targets buyers of a product with an offer to purchase a related product. OPENING ACT… Companies are now using a CROSS PROMOTION strategy to promote the purchase of other products/services. What are some examples of CROSS PROMOTION that you have seen used? Who is the target audience? Does the CROSS PROMOTION work? CROSS PROMOTION CROSS PROMOTION CROSS PROMOTION Marketing Concept The MARKETING CONCEPT is when a company analyzes the needs of their customers and then makes decisions to satisfy those needs better than the competition. ½ of every dollar spent pays for marketing costs. Product Development Packaging Advertising Sales Information Management Maintaining Customer Relationships SELLING Companies must listen to customers’ needs and carefully monitor the latest consumer trends. Marketing Information Management Survey Interviews Sales Customer satisfaction is the bottom line. Customers purchase goods and services and expect value for the money they have spent. Price Quality Service Anti-Concussion Football Helmets Carbon-Fiber Cleats See Through Soccer Balls Feather Weight Court Shoes Heated Blades Terrain Adjust Soccer Cleats Sporting Home Decor CUSTOMERS WHO HAVE A SATISFYING EXPERIENCE ARE LESS LIKELY TO TAKE THEIR BUSINESS ELSEWHERE! One Direction Increase in Income Over the years, the standard of living has resulted in more DISCRETIONARY INCOME (money left over after all bills and financial obligations have been met). How has prosperous times impacted the sports and entertainment industry? Has it created a more competitive market place? Has it increased or decreased ticket prices? How would a slower economy affect the sports and entertainment industry? And what would be important for business to focus on during these time? Break Even Point BREAK EVEN POINT is the minimum sales required to cover all the expenses of organizing, promoting, and running an event. Event planners must know the break even point in order to plan appropriately for an event. Any revenue or money earned above and beyond break even is considered PROFIT! Opportunity Cost OPPORTUNITY COST is the value of the next best alternative that you pass up when making a decision. Value is not always measured in money but in “benefit” EXAMPLE: You may want to go to a car race and a music concert, but you cannot afford both. If you decide to go to the car race the opportunity cost is the concert. If you decide to go the the concert the opportunity cost is the car race. As discretionary income decreases, consumers choose to stay home for entertainment. What are these consumers doing for entertainment? How has the internet and cable television impacted how we spend our discretionary income? Understanding Behavior Two major goals of marketing… What do consumer/customers WANT? How much are they willing to PAY? Example… Consumers today are more mobile than ever! Apple recognized this and developed products that catered to consumers want to be mobile. What products does Apple offer consumers that cater to mobility? What other products does Apple offer that make life “easier” for consumers? How much will they PAY? The price fans are willing to pay for a ticket depends on the degree of interest. That interest can be influenced by national importance, popularity of athletes or celebrities participating, or rivalry. The price fans are willing to pay is related to BENEFITS DERIVED. BENEFITS DERIVED: The value people believe they receive from a product or service. Enjoyment from a good game Pride from wearing your team’s clothing Comparative Advantage The global market has intense competition. Business have to determine where they have a COMPARATIVE ADVANTAGE. COMPARATIVE ADVANTAGE: The capability to produce products and services more efficiently and economically than the competition. When a company can produce products or services more economically than others, they can pass along the production cost savings to customers in the form of lower prices. Example: An apparel manufacturer may have a comparative advantage because it produces its products in another country where labor costs are lower—this allows the company to price its products lower than competitors do. The Buying Plan To increase sales, business must understand consumers’ buying behavior—the retailer must develop a plan based on “projected” consumer behavior. Projecting athletic merchandise sales and team success is a big risk that retailers must take. Will the team being marketed be successful this season, leading to an increase in sales, or will the team have a losing record, leading to poor sales. Example: Retailers need merchandise related to the winning team ready immediately following a big event. To accomplish this they must order merchandise for both teams. Based on the outcome of the game, the merchandise for the winning team is sold, making a profit, while the merchandise for the losing team is a loss for the retailer. Tim Tebow Mets Jersey Customer Buying Motives Marketing research is conducted to determine why customers spend money on goods and services. EMOTIONAL PURCHASES: When customers purchase goods or services with little or no thought during emotional highs and lows. Example: When a team is on a winning streak and qualifies for a national or world championship game, fans are emotionally influenced to purchase high-priced tickets and merchandise. Example: When a fan attends a concert of their favorite musical group, they are emotionally charged to pay top price for a T-shirt. Customer Buying Motives RATIONAL PURCHASES: When individuals recognize needs and wants, assess their priorities and budget, conduct research, compare alternatives, and then make purchases based off of careful thought and sound reasoning. Example: An avid runner makes a rational purchase when he or she shops around for the best shoes that provide support, shock absorption, flexibility, and durability. The ultimate goal of the purchase is to find the most comfortable shoes that will enhance the running experience and reduce the chance of injuries. Customer Buying Motives PATRONAGE PURCHAES: When individuals base their consumer loyalty to a particular brand or product. Example: Tennis players may purchase Nike products due to endorsements by Maria Sharapova. Example: Consumers purchase Apple products, laptops, desktops, phones, watches, etc. based on brand loyalty. Gathering Information for Marketing Decisions Marketing Research: Looks at how consumers spend money, including product and brand preferences and the frequency by which products are purchased. Data collected for marketing research fit into one of two categories. Primary Data—Generally conducted by company Surveys Questionnaires Observations Interviews Focus Groups Secondary Data—Data gather from outside resources for other purposes Government and other organizational statistics about population and demographics, income, trends, etc.