Sports & Entertainment: Connections & Contrasts Chp. 2-1, 2-2, 2-3

Sec. 2-1 History of Sports & Entertainment Marketing

Sports & Entertainment connections Overview: What are the connections between sports & ent.? They have both thrilled & entertained people for centuries Concessions, seats, anticipation, excitement, action

A brief history of leisure Sports & ent. are leisure activities for the purpose of enjoyment Marketers sell participation Consumers = people who use products Growth of these industries has relied on: Consumers having free time Consumers having discretionary income ($ left over after expenses) Consumers desiring recreation

A brief history of leisure (cont.) Organized sports & ent. used to only be for the wealthy (mid to late 1800’s) Changes: Labor unions – fight for better working conditions & better pay Development of technology & new inventions

Entertainment for everyone Public transportation Inventions: Late 1890’s – Thomas Edison invented the kinetoscope/vitascope = a device for viewing moving pictures This device signaled the birth of the film industry

Entertainment for everyone (cont.) Inventions: Lumiere Brothers & George Eastman Nickelodeon Industry leader scavenger hunt Activity

Entertainment for everyone (cont.) 1920’s – Sports & ent. became staples in everyday life This was vital for 2 reasons: Depression (‘30’s) WWII (‘40s) 1950’s – further advancement in technology: Television sets in the home Local movie theaters Local sports franchises disneyland *Sports & Ent. was a welcome distraction *more time & money spent on Sports & Ent.

Development of s & e Mktg. Sports: William “bill” veeck was a pioneer in the sports mktg. field Drafted the 1st African American baseball player to the american league (Larry Doby, Indians, 1947) Brought a grandstand style of ent. to the fans Fireworks at games Dazzling/exploding scoreboards Special event nights Players names on the back of jerseys Giving ballparks “flair” Took the game of baseball and made it more enjoyable for fans and media = more profitable

Development of s & e Mktg. Entertainment: Adolph zukor was a pioneer of the film industry Founder of paramount studios and created what we know of as the Hollywood studio system Took the concept of taking move from the kinetoscope to the theater Owned a chain of theaters Capitalized on telling dramatic stories and creating “big stars”

Marketing today Both compete: Athletes competing in games Tv/film competing for ratings Both competing for share of market Vendors = people who sell products Marketers’ goal is to sell entire package, not individual product or service An organized strategy that targets specific consumers Is essential b/c media and s & e are vying for consumer attention = this is the foundation of s & e Mktg. Line has become blurred between s & e = many athletes & celebs. Branch off and sell other products

Sec. 2-2 Similarities in marketing

Similarities in marketing Some changes continued to take place over time: 5th P? = People – focus on target market Promotion = any form of communication used to persuade people to buy products through advertising, publicity, personal selling, or sales New technologies has broadened scope and reach of marketing messages while also entertaining us Internet, e-commerce, on demand tv, interactive gaming, virtual advertising

Marketing similarities Different than all other products in the 4 P’s S & E Products All other products

Marketing similarities (cont.) Product – s & e are different from traditional consumer products b/c they are often not physical goods but rather services s & e products are both dynamic and used to promote extension products Endorsements – approval or support of product or idea by a celeb. Lending their image to product all celeb. Have public persona = personality perceived by public Core & ancillary products Core = main product (e.g. sporting event, movie, book, etc.) Ancillary = product created off of core product (e.g. amusement park ride, programs, souvenirs, food, kids line, etc.) Marketers promote both the core and/or ancillary product Can earn additional revenue on these 2 types of products to promote even more unrelated products

Marketing similarities (cont.) place – changing nature of place has affected traditional products more than s & e E-commerce or online shopping is quickly replacing brick & mortar stores (traditional places to get products) – s & e locations haven’t changed Both s & e offer the occasion appeal = consumers still enjoy going there for the event price – pricing s & e events is dramatically different than traditional products Based on what they can charge and what people are willing to pay All about perception with s & e marketing Price problems – price becomes an issue when: Highly paid players & celebs. Go on strike for salary increases piracy = unauthorized use of product without owner’s permission Ticket scalping = unauthorized ticket sellers who stand outside event and sell tickets for higher price these are considered intellectual property which is being used without permission since it is copyrighted & bootlegged – production and distribution without authority When done correctly portion of profit goes to owner = royalty

Marketing similarities (cont.) promotion – S & e marketing uses 2 tools to promote goods: Product tie-ins – use of ancillary products such as merchandise to promote event (e.g. Mcdonald’s happy meal) Cross promotion – any form of communication through which 1 industry relies on another industry to promote its products (e.g. jimmy fallon) convergence – overlapping of product promotion expands the potential for profit in s & e marketing (e.g. web sites are used both as promotional tools and as sources of revenue, hosting links and online shopping for merchandise) Synergy = cross promotion + convergence (e.g. oprah winfrey) Risks & risk management – synergy is goal for s & e mktg. but not easy to achieve Risks = unforeseen events that can negatively affect a business Athletes can get injured Singers/bands get sick Celebrities get in trouble w/ decisions they make So to offset risks, businesses develop good risk management and purchase insurance

Sec. 2-3 Differences in marketing

Different players, different games 3 areas for differences for s & e marketing: Consumer loyalty Product Revenue stream

Consumer loyalty When consumers are happy with a company’s product and become repeat customers (e.g. support your favorite team) Sports fans usually support 1 or 2 teams Sports marketers usually target core groups of fans and work on maintaining team loyalty Sports franchises spend more time marketing winning season to target market then attracting new consumers Entertainment ent. consumers not motivated by team loyalty but for desire to be entertained Marketers target each product to well-defined consumer groups Ent. industry is affected by trends and consumers will stop purchasing if they don’t like it Record labels and production companies struggle to have consumer loyalty because we’ll purchase from anyone

Find Winning . . . Know . . . Product . . . Sports Team What consumers want Deliver it Entertainment Formula Create it

Difference in product Sports Product Is consistent and stable Time in on their side when marketing Entertainment Product is always changing (fads/trends) Everything must be done immediately ahead of time (time is of the essence) – have to predict trends

Difference in revenue stream Sports Doesn’t produce the amount of revenue that entertainment does Exception - big time sporting event (e.g. march madness, super bowl, world series) However, additional streams of revenue exist through ticket sales, media advertising video games, ancillary products Entertainment Ent. products can be developed into merchandise used for promotion Large profit through sale of products, licensing and royalties Streams of revenue are diverse b/c of variety of ent. products

Difference in revenue stream (cont.) Sponsorships = promotion of a company in association with a property (e.g. nascar) Sponsorship is different from endorsement The sponsoring company is not lending a name or image to a sports product tiger woods nike = sponsorship buick, Gillette, Gatorade = endorsement Corporate boxes and stadium naming Advertising and broadcast rights Sports get money from virtual advertising (advertisements overlaid on existing promotions Get money by landing broadcast deals