Primary Marketing Functions Lesson 2.4 Primary Marketing Functions Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Pricing Distribution Promotion Financing Selling Information-Management Product and Service Management Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Pricing: Assigning a value to products and services Price is determined on the basis of supply and demand Tickets to the Super Bowl are very expensive because demand is high. At Super Bowl 50 at Levi's Stadium, a hot dog cost $8 ($6.25 during the regular season) and a bottle of water was $7 ($5.75 in the regular season) while souvenirs and merchandise prices reportedly doubled (via fox sports.com). Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Pricing: Assigning a value to products and services The New Orleans Pelicans reduced ticket prices by 10% forthe 2014-15 NBA season in an effort to attract more fans to the stadium, resulting in a 19% increase in ticket sales for the season. Copyright © 2016 by Sports Career Consulting, LLC 4

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Pricing: Assigning a value to products and services Despite the fact that Disney announced ticket price increases at both Disneyland and Disney World while eliminating many of the traditional discounts given to local residents, the majority of Disney parks enjoyed attendance increases. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing When demand fluctuates as frequently as it does in the ticketing world, companies must implement strategies to help identify the best price points to match demand. This is why many organizations are moving toward a “dynamic pricing” structure where games in higher demand cost more than the same ticket for a game with lower demand… Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Pricing: Assigning a value to products and services The secondary and broker markets have a large impact on ticket pricing and availability. According to CBS, at the 2016 Indianapolis 500, general admission seats originally sold for $40 and then were resold for upwards of $140, while seats initially priced between $50 and $230 were resold for $180-$860. Copyright © 2016 by Sports Career Consulting, LLC 7

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Pricing: Assigning a value to products and services Tickets to the 2016 Wimbledon Final sold out just 27 minutes after going on sale online. Event officials anticipated a high demand for tickets and raised prices accordingly, yet The Guardian reported that over 111,000 fans were waiting in an online queue when only 22,000 total tickets were available. As a result, tickets being resold on the secondary market commanded outrageous prices, starting at over $3,000 with the most expensive selling for nearly $25,000. Copyright © 2016 by Sports Career Consulting, LLC 8

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Distribution: Determining how best to get products and services to consumers EA Sports sells their video game products at Target and Best Buy stores, knowing that consumers shop at those stores for video games and entertainment Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing On Demand and streaming services have become prevalent options for consumers in today’s marketplace In 2015, the NBA announced it would begin offering individual, out-of-market games for $6.99 available either via streaming on smartphones, tablets, and PCs, or by tuning in from any cable / satellite provider that currently carries NBA's League Pass subscription package. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing On Demand and streaming services have become prevalent options for consumers in today’s marketplace NCAA March Madness Live was available to stream on a record 12 different platforms in 2016, including Amazon Fire TV, Roku players and Roku TVs, Apple TV, Amazon Fire tablets, iOS and Android mobile devices, Windows handsets, Web browsers, and the Apple Watch. Copyright © 2016 by Sports Career Consulting, LLC 11

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing On Demand and streaming services have become prevalent options for consumers in today’s marketplace In 2016, Apple TV partnered with and launched Sling TV on their platform to give users increased and improved access to stream live sports. Copyright © 2016 by Sports Career Consulting, LLC 12

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing On Demand and streaming services have become prevalent options for consumers in today’s marketplace Twitter live-streamed Wimbledon in 2016, then signed a one-year $10 million deal with the NFL to stream ten Thursday night games during the 2016 season while also coming to terms with the NBA for an exclusive live programming agreement. Copyright © 2016 by Sports Career Consulting, LLC 13

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Sports and entertainment companies must determine which distribution strategies will help to maximize sales, whether that is mass distribution in as many outlets as possible or partnerships with individual retailers to create exclusivity and drive demand. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing According to the Sports Business Journal, in 2015, a sports performance beverage brand aiming to compete with Gatorade (called Glukos) elected to pursue a distribution strategy that focused on special retail stores in several specific categories: sporting goods, running, outdoors, cycling, golf and vitamin retailers Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Retail chain Sports Authority provided an excellent distribution channel for Under Armor to sell its products. San Francisco Gate reported that when Sports Authority filed for bankruptcy in 2016 (and announced it would be closing all its stores),Under Armour executives were forced to cut the company’ s sales forecasts by nearly $5 billion. Subsequently its stock quickly dropped by almost 4% the next day Copyright © 2016 by Sports Career Consulting, LLC 16

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing To promote last year’s release of his album Magna Carta Holy Grail, Jay-Z inked an exclusive (and lucrative) partnership with Samsung to provide free copies of the album to one million Samsung cell phone and tablet owners before it was available for sale. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing In 2016, Billboard reported that Lady Gaga and Elton John partnered with Macy's to create a new line of products focused on the theme 'Love Bravery' - products were sold exclusively at Macy's, with portions of the proceeds going to charity. Copyright © 2016 by Sports Career Consulting, LLC 18

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing In 2015, on the heels of the launch of Apple’s new streaming service, rap artist Dr. Dre released one of the most highly anticipated albums in history exclusively on the Apple Music platform. According to Billboard, the album sold nearly 300,000 units in its first week and cumulative sales have already reached over 500,000. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Exclusive distribution doesn’t always guarantee success however, illustrated by the disappointing sales of Sears’ “Kardashian Kollection” Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Promotion: Communicating information about products and services to consumers One of the Cincinnati Reds’ most popular season-long promotions involves a free pizza giveaway from local pizza chain LaRosa’s every time Reds pitchers strike out at least 11 batters in a home game. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Promotion: Communicating information about products and services to consumers According to bizjournals.com, LaRosa’ s gave away an average of $900,000 worth of pizza the last in three years as a result of the promotion but has only given away $62,000 in pies halfway through the 2016 baseball season (which isn’ t necessarily a good thing for the company) Copyright © 2016 by Sports Career Consulting, LLC 22

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Promotion: Communicating information about products and services to consumers Short-term promotions are often created in an effort to drive immediate sales. In conjunction with Pepsi’ s 2016 emoji marketing campaign, the New York Yankees offered a simple twist on one of the oldest promotions in sports by giving away Yankees’ caps featuring a PepsiMoji logo to the first 18,000 fans to the ballpark. Copyright © 2016 by Sports Career Consulting, LLC 23

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Promotion: Communicating information about products and services to consumers Pepsi also rolled out team-branded emoji packaging in certain markets as part of their PepsiMoji campaign (like the Marlins and Dolphins in Miami). Copyright © 2016 by Sports Career Consulting, LLC 24

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Financing activities could include: Creating a budget for a company’s marketing plan Analyzing the cost effectiveness of existing or past marketing efforts Providing customers with flexibility in purchasing company products or services Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing In 2016, Nike confirmed long term revenue projections of $50 billion by 2020, up from $32 billion today. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Budgets and projections/forecasts are never an exact science. The 2015 release of the film Jupiter Ascending was forecast by some analysts to gross $200-220 million has made just $56 million domestically (as of July 2015), not good news for the studio after budgeting a reported $180 million to produce and market the movie Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing The US Army chose to end it NASCAR sponsorship after the Air National Guard spent $650,000 to sponsor a NASCAR Sprint Cup race that resulted in just 439 recruitment leads, none of which ended up joining the Army. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Like many professional sports franchises, MLB’s Washington Nationals offer payment plans for customers purchasing ticket packages. According to the team’s website, the Nats’ “Grand Slam E-Z Payment Plan allows season ticket holders to pay a fraction of the total cost of their tickets in easy monthly payments. This is available for either Full, Half, or Partial Season Ticket Plans.” Copyright © 2016 by Sports Career Consulting, LLC

LESSON 2.4 What is SEM? Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Selling: Communicating with consumers to assess and fill their needs, as well as anticipating future needs Cultivating prospective buyers (or leads) in a market segment Conveying the features, advantages and benefits of a product or service to the prospective buyer Closing the sale Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Many professional sports teams utilize a call center to revenue generated by ticket sales A call center is a physical location where calls are placed, or received, in high volume for the purpose of sales, marketing, customer service; typically through the use of telemarketers Call centers employ a staff to perform telemarketing activity with the goal of selling ticket packages over the telephone Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing The University of Minnesota athletics department outsourced their ticket sales operation to a third party organization (Aspire Group) to help boost ticket sales for Gopher athletic events. Aspire deployed a full-time sales staff to work in Minneapolis on the effort. Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Marketing Information-Management: Gathering and using information about customers to improve business decision making Professional sports teams began offering smaller ticket packages (half-season, quarter-season, five-game packages) after determining through customer research that full season ticket plans were often too costly and/or time consuming for many fans to purchase Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing As visitors pass through the turnstiles at Disneyland in California, guests are randomly selected to answer interview questions from friendly staff members equipped with hand held data recording devices. This provides Disney management with up to date information about park guests, such as where they are from, how many are in their group, and how many times they have visited the theme park in the past. Copyright © 2016 by Sports Career Consulting, LLC

Product/Service Management: LESSON 2.4 What is SEM? Primary Functions of Marketing Product/Service Management: Designing, developing, maintaining, improving, and acquiring products or services so they meet customer needs Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing In an attempt to strengthen their position in the U.S. market and attract top creative talent, Adidas opened a design studio in Brooklyn in 2016 BrooklynFarm houses elite designers and developers but also encourages collaboration with music, film and technology personnel Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing Executives from professional sports teams are always working to improve their product, recognizing the importance of fielding a competitive team to meet the demands of consumers (fans) Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing In 2015, Major League Baseball made a tweak to its annual “Home Run Derby” event by adding a clock, an adjustment to the product that left fans very pleased with the results Copyright © 2016 by Sports Career Consulting, LLC

Primary Functions of Marketing LESSON 2.4 What is SEM? Primary Functions of Marketing In an effort to appeal to more families, the Atlanta Falcons took the unconventional approach of lowering concessions prices at their new stadium by introducing $2 hot dogs and sodas (less than half what most stadiums charge) as well as a handful of other low cost items for the 2016-17 NFL season. Copyright © 2016 by Sports Career Consulting, LLC 40

LESSON 2.4 REVIEW (ANSWERS) What is SEM? 1) 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 © 2016 by Sports Career Consulting, LLC

Blank Slide Available for Teacher Edits LESSON 2.4 What is SEM? Blank Slide Available for Teacher Edits Copyright © 2016 by Sports Career Consulting, LLC