Sports & Entertainment Marketing II 3.06A Employ product-mix strategies to meet customer expectations

Examples of Merchandising Opportunities for Sports/Events Merchandising opportunities for sports/events include: Licensed sale of merchandise such as apparel and other souvenirs Signage at the sport/event promoting the sponsor Stationary signage – does not move Rotating signage – toggles between advertisers Virtual signage – appears only on television

Risks Associated with Merchandising Opportunities Risks include: Logo abuse and counterfeit merchandise Damage to the event’s reputation, especially if an advertised sponsor goes encountered legal difficulties or declares bankruptcy (e.g., Enron Field—Enron was an oil distribution company whose illegal practices led to its bankruptcy and imprisonment of some top company executives) Damage to the advertised sponsor’s reputation, especially if the sport/event goes poorly (e.g., XFL professional indoor football league, which ended after only one season)

Advantages of Using Branded Merchandise Advantages: Development of profitable new product lines Greater exposure to the market Enhanced sales Positive attributes associated with the sport/event Development of universally identifiable brands (e.g., Nike Swoosh) Positive attributes of the sports entity transferred to the sponsor Licensee and/or sponsor attains better brand recognition Less time and money required to build high levels of brand equity Higher prices for “official” branded merchandise

Disadvantages of Using Branded Merchandise Disadvantages: Possible loss of control over the brand (e.g., licensee may produce inferior goods and offer them at a lower price, leading to a lessening of the perceived image of the sport/event) Expense required to seek out counterfeit merchandise

Sources of Merchandising Ideas Marketers generate merchandising ideas by: Identifying the target audience and selecting products based upon its demographics Knowing what products have sold well in the past Identifying target audience’s lifestyle models to determine appropriate products: Needs-driven consumers: Farthest removed from mainstream culture, unaware of events, seeking only the bare necessities Outer-directed consumers: Affected by others around them – Belongers: Traditional, conservative, conforming, sentimental, and nostalgic – Emulators: Upwardly mobile, status conscious and competitive – Achievers: Materialistic, self-reliant, geared toward success, driven to preserve their status quo and comfortable lifestyle, likely to purchase high-end merchandise as status symbols

Factors Affecting the Choice of Merchandising Options Factors affecting the choice of merchandising options include: Planning: Merchandise to be sold in the future must be bought now Analysis: Customers’ needs must be correctly identified to determine their needs, wants and desires Acquisition: Who will produce the products Control: Quality control is necessary as the product will reflect upon the company whose name and logo appear on it

3.07 Control sales activities to meet sales goals/objectives. Establish barter agreements

Bartering Trading or exchanging a good or service for another good or service. – Ex: Posting Fresh Water Company’s sign at the event participant registration desk in exchange for bottles of water to give the runners who participate in the event.

What is a barter agreement? Barter Agreement is an agreement to exchange goods or services directly without the use of money. The form can be customized to fit the needs of the user by stating which types of goods or services are to be exchanged, time for delivery, payments, warranty, identity of witnesses and termination procedure.

Reasons for Barter Agreements Helps to decrease cost – If you are getting an item at no cost, your overall out of pocket expenses are lower. Win for both parties involved – Both parties get the desired outcome they want per the agreement.

Terms/Considerations in Making a Barter Agreement Determine what each party has to trade. – Could be one item/service or multiple items/services. Determine exactly what each party wants to trade the other for. – Only trade for items/services you will actually need/use. Determine the value of the items/services bartering for. – Make sure they are equal or that Clearly spell out the terms of the agreement. – Leave nothing for interpretation. Limited the terms of the agreement. – Don’t make an open ended agreement, keep it to a certain event or timeframe. Put the agreement in writing and obtain signatures. – Do not settle for a verbal agreement. Be flexible, but let the other side take advantage of you.

Discuss advantages/disadvantages of establishing barter agreements Advantages – Bartering is flexible Disadvantages – Can't guarantee the trustworthiness of your fellow trader