The Product Is Sports and Entertainment Chapter 7 The Product Is Sports and Entertainment 7.1 The Product Mix 7.2 Recruiting Athletes & Entertainers 7.3 Customized Entertainment 7.4 Product Marketing Strategies

Introduction Product Mix in Sports Marketing

Winning Strategies Fame and Fortune Used to Benefit Those in Real Need Brad Pitt has used his fame to draw attention to those in need. children with AIDS in Africa the plight of Haitian children global poverty conditions helped sponsor architectural competition to rebuild part of New Orleans

Goals Define product mix, product extension, and product enhancement. Lesson 7.1 The Product Mix Goals Define product mix, product extension, and product enhancement. List and describe the components of the product mix.

WHAT IS A PRODUCT MIX? tangible parts intangible parts physical features that can be seen and felt i.e. Soft Red Blanket intangible parts nonphysical service features i.e. Pedicure

Tangible & Intangible The sport product is a complex package of the tangible and intangible as well as the experience. E.g. GOLF Tangible Elements of the Golf Product: Little dimpled balls Oversized ‘metal’ woods that are in different ways, standardized Intangible Elements Golf club membership

Product Mix Product Extensions the total assorted features associated with the product product line - various products offered under the brand product packaging brand name Product Extensions items added to a product to make it more attractive to the target market guarantees warranties instructional CDs

The marketer has little control over the core product, and consequently must focus efforts on product extensions. E.g. Real Madrid of Spain’s La Liga fashioned a strategy that leveraged the core product (soccer games) to generate product extensions. The team broke world “transfer” (purchase price) records in buying the contracts of star players (e.g. Beckham). Although Real Madrid was confident that it was going to win games, it was more confident that it would expand its global sales of merchandise and sponsorships. Even though the stars stumbled (failing to win a major trophy in 2004), strategy worked.

Basic vs. Enhanced Product product enhancements features added to the basic product that satisfy additional needs and wants with the same purchase add value to the product and may increase the purchase price It is important to give customers options so that products can be matched to their budgets and individual needs.

Provide three examples of a product enhancement. Basic: Automobile Enhancements: Heated Leather Seats, Sun Roof, Bose Sound System, Upgraded Engine Basic: Athletic Shoe Enhancements: Air-cushioned Soles, Lightweight Fabric Basic: Stadium Seating Enhancements: Air-conditioned Suites

PRODUCT MIX COMPONENTS In an attempt to satisfy customers, marketers must make many decisions about their product and Product mix. Product Mix the total assorted features associated with the product product line product packaging brand name

See Book Page 174 for further examples. #1 ~ Product Line product line a group of similar products with slight variations to satisfy the different needs of consumers Coca-Cola (Soft Drink Product Line) Classic, Diet, Caffeine-Free, Cherry, Coke Zero, etc. Variations in sizes Variations in packaging See Book Page 174 for further examples.

#2 ~ Packaging Product packaging components to consider include ease of use safety accessibility environmentally friendly

Why are the shoes yellow and black?

#3 ~ Brand brand the name, symbol, word, design, or combination of these elements that identifies a product, service, or company represents the company’s reputation of quality, reliability, and status in the marketplace

CHAPTER 19 4/20/2017 http://kotaku.com/5985078/lays-chicken-and-waffles-sriracha-and-cheesy-garlic-bread-potato-chips-the-snacktaku-review

#3 ~ Brand trademark licensed brand the legal protection of words and symbols used by a company makes it illegal for other companies to use the brand name. licensed brand a well-known name and/or symbol established by one company and sold for use by another company Disney: sells licenses to use their characters on toys and clothing. They then receive a % of the sales from the merchandise bearing their name.

5 stages of brand recognition CHAPTER 19 4/20/2017 5 stages of brand recognition non-recognition unable to identify brand - consumers don’t know or trust the brand yet rejection will not purchase that brand - poor quality, recalls for safety, too pricey recognition know brand, but has little influence preference brand is valuable to consumer - will purchase brand if readily available but may purchase another brand if it is not. insistence must have this brand - rejects all other even if their preferred is not available http://kotaku.com/5985078/lays-chicken-and-waffles-sriracha-and-cheesy-garlic-bread-potato-chips-the-snacktaku-review Page 175

Brand Recognition GOOGLE Google has successfully made its brand, a household name. If you want to search for something on the internet, instead of saying, “Search it”, we now say, “Google it”.

Nike’s Marketing Strategy

Product Mix: What are the components of the product mix? product line total assorted features associated w/ the product product line product packaging brand name

Lesson 7.2 Recruiting Athletes and Entertainers Goals Define the bottom line for sports. Explain the high cost of sports and entertainment events.

THE BOTTOM LINE FOR SPORTS blue-chip athletes excellent athletes demonstrate good character and leadership qualities on and off the field The bottom line for sports is winning. The bottom line for business is profit. Winning teams generate profit.

NCAA Regulations NCAA National Collegiate Athletic Association a voluntary organization through which the nation’s colleges /universities govern their athletic programs Over 1,250 institutions, conferences, organizations Committed to the best interests, education & athletic participation of the student athletes

NCAA Regulations Recruitment Violations: NCAA Punishments: paying recruits bribes, giving incentives recruit families, altering transcripts NCAA Punishments: Limiting scholarships offered prohibiting post-season play suspending players forfeiting games and even shutting down entire programs.

Compensation for Athletes? Athletes receive scholarships and grants for their college education. After signing with an agent, a college athlete can no longer participate in college sports. In some states, proposals have been brought to the legislature to pay college athletes.

What is the bottom line for sports and how is it related to the bottom line for business? The bottom line for sports is winning. The bottom line for business is profit. Winning teams generate profit.

THE COST OF SUCCESS Success requires skilled coaches top-notch players popular entertainers

Attracting and Keeping Coaches The best coaches can command annual salaries in excess of $1 million. Success = large bonuses, salary increases, etc. fringe benefits incentives received in addition to base salary ~ Medical Insurance ~ Endorsements ~ Company Cars ~ Radio Shows ~ Paid Travel ~ Extra Income Opps

Attracting and Keeping Star Athletes Competition for top athletes is fierce. Recruiters compete w/ professional & college teams. Recruiters need a well refined sales and marketing effort to attract talent to their schools. (Personal Selling, Financing, & Marketing Info Management) Convincing while upholding honesty & integrity. Economic Concept Supply for Top Athletes Limited Demand for them is High.

Getting a Top Athlete for NY Jets

The Price for Top Musicians and Other Entertainers Popular performers can attract large enough crowds to make an event profitable. Requires legal contracts and large budgets. Popular celebrities help increase the advertising revenue of their TV shows. Requires larger salaries for more popular stars

Marketing Women’s Sports Women’s sports are seriously neglected U.S. Women’s Soccer Team won the World Cup in 1991 and barely made the news. They received more exposure in 1999 due to their continued success since 1991.

Why do Women’s Sports Get Less Attention?

Marketing Women’s Sports Relative to male counterparts, women athletes receive far less pay. More money and exposure of the male sports means more fans. Fan support = profit. Creative marketers may develop new products to appeal to females who are relatively new sports fans.

Why is it important for young, talented, and highly sought-after athletes to hire trustworthy agents to represent them? Unscrupulous (crooked) agents and recruiters may take unfair advantage of poorly informed athletes. They need trustworthy agents who will look out for their best interests and negotiate a fair deal.

Lesson 7.3 Customized Entertainment Goals Define customizing. Describe the financial impact of Baby Boomers on the entertainment industry.

CUSTOMIZING PRODUCTS customizing impromptu changing a product to fit the needs or wants of a particular market impromptu spontaneous and changing Example: comedian altering their act based on audience reaction and participation

Local TV American Style Product planning for the majority of national network TV shows take place in L.A. Expensive and require large audiences to attract advertisers to cover the production costs. Local programming is less expensive to produce, but has fallen out of favor with major networks. Does not attract enough viewers to draw in advertisers.

Children’s Programming Used to be produced locally and developed specifically for the children in that area. Had large impact on children, so parents requested that hosts not endorse products. So, advertisers lost interest in sponsoring locally produced children’s shows.

Sports Programming tiering Sports broadcasted local until Cable changed the distribution system drastically. National Broadcast, Pay-Per-Views, etc. Excessive salaries of sports figures have helped drive up the costs of television coverage of sporting events. tiering specific sports programs will be offered outside the basic cable or satellite package consumers choose their level of service/channels

Public TV and Radio Public TV and Radio are viewer- and listener-supported. Mission: entertain and educate audience Usually non-profits financed through grants, corporate donations and listener contributions programming is tailored to local audiences know their audiences & work to please them

Why is different TV programming shown in different cities or regions of the United States? Programming is customized for the audience. San Fran Giants (West) vs. Boston Red Sox (East) 49ers (West) vs. Eagles (East)

Who are the Baby Boomers? Baby boomers are a huge group of Americans who have affected the nation’s social, political, and economic life from the day they were born. The birthrate in this country jumped after World War II and stayed high up until the mid-1960s, directly related to both the hordes of soldiers, sailors, and marines returning from their service in World War II, and a booming economy that encouraged family-making and children. The result was a very large number of children born between 1946 and 1964 who have had an impact on society at each stage of their lives. Now, as boomers have reached at least the 50-year mark and as the oldest have moved past age 65, boomers will continue to have a dramatic effect on many aspects of American life in the years to come.

MARKETING TO BABY BOOMERS Baby Boomers, born between 1946 and 1964, are one of the best-known market segments. (over 76 million) What are they buying??? 1946: Baby Formula and Clothing 2012: Leisure/Retirement activities

Boomers Won’t Retire Baby Boomers are softening the line between career and retirement Many will work beyond retirement age Enjoy recreational activities and entertainment And have the discretionary income to pay for the products and services they desire.

Segmenting the Group The U.S. population is aging. Marketers will need to focus their efforts on this aging market. Customer preferences Spending habits Incomes Occupations Area of residence Census ~ Average Age 1994 – 34 2000 – 35.5 2035 – 39.1

Entertaining the Boomers Baby Boomers are finding more time to “Go Out” & increased their movie attendance. Reel Source – attendance tracker company Baby Boomers = 1/3 of movie attendance Movie Producers noticed! Filling niche for Baby Boomers’ tastes Use actors in their age range to increase popularity

Understanding All Parts of the Group Through 2002, Baby Boomers will continue to be a major target of entertainment marketing. As the Boomer group is so large, marketing messages need to be developed for specific subgroups of Boomers. Fine-tuned for each age group HUGE potential customer base

Why are Baby Boomers important to entertainment marketers? Baby Boomers are important because there are so many of them and they have a large amount of disposable income to spend.

Lesson 7.4 Product Marketing Strategies Goals List and describe the stages of the product life cycle. Explain how products are positioned in the marketplace.

THE PRODUCT LIFE CYCLE introduction growth maturity decline product life cycle (Described over next 4 slides…) introduction growth maturity decline

Introduction Stage skimming price strategy penetration price strategy product is a novelty, only one of it’s kind only one brand of product is available skimming price strategy introduces new products at a very high price quality & uniqueness justify high price higher profits encourages more competition penetration price strategy uses low pricing to help capture a large market share early Establish a customer base Lower prices discourage the competition

Growth Stage Sales of a product and profits increase Target market knows of and purchases the product regularly Advertising focuses on customer satisfaction Competition increases (alternate products) Products modified/improved to maintain customer loyal

The Maturity Stage Sales are level or slowing down Target market already purchased product Marketing costs increase, more promotions due to more competition Commercials mention/mimic competitors Sale prices offered to hold off competition

The Decline Stage (Pages 190-191) sales decrease may no longer generate enough revenue to justify marketing costs alternatives include: drop a product regionalize sell/license modernize/alter discount recommit

Decline Stage Options drop product: cut company losses, cut completely sell/license: minimize losses, sell or license to another company discount: reduce prices to sell remains faster regionalize: commit to geographical location where product is most popular and profitable modernize/alter: “NEW” and/or “Improved” recommit: a new purpose found for the product

What are the stages of the product life cycle? Introduction Growth Maturity Decline

Product Life Cycle Examples

POSITIONING A PRODUCT positioning used by a company to differentiate its products or services from its competitors’ products or services status, price, brand recognition & other factors

POSITIONING A PRODUCT Positioning Example Honda: safe family car Commercial focuses on family use, safety awards BMW: luxury sports car Commercial focuses on looking fast, expensive Both provide means of transportation. Both positioned very differently

List three ways a product may be positioned in the marketplace. Status Quality Price Features Brand recognition Benefits