Objectives Explain how sports and entertainment marketers use tools to sell their products. Explain risks and risk management of sports and entertainment events. Identify differences between marketing sports and entertainment products.

Changes in Marketing Communicating through promotion is more important than ever. promotion any form of communication used to persuade people to buy products New technologies have broadened the scope and reach of marketing messages, and they can be entertainment products themselves. 2

Marketing Similarities The marketing of sports and entertainment products differs from marketing traditional products in the following four areas: endorsement approval or support of a product or idea, usually by a celebrity core product the main product, such as sports event, movie, stage show, or book Product Endorsement Core product Ancillary product Revenue ancillary product a product related to or created from the core product revenue gross income continued 3

Marketing Similarities continued Place piracy the unauthorized use of another’s music, movies, or copyrighted material Price Piracy Royalty Copyright royalty a payment for material that has been copyrighted, or legally declared as belonging to the creator continued 4

Marketing Similarities continued Promotion Product tie-in Cross-promotion product tie-in use of ancillary products such as merchandise as promotional tools cross-promotion any form of communication through which one industry relies on another industry to promote its product 5

Marketing Similarities Convergence expands the potential for profit in sports marketing and entertainment marketing. convergence the overlapping of product promotion Convergence and cross-promotion help to develop synergy. synergy a combined action that occurs when products owned by one source promote the growth of related products 6

Risks and Risk Management In any industry, including the entertainment industry, there are risks. risks unforeseen events and obstacles that can negatively affect business Successful sports and entertainment marketers develop risk management strategies. risk management a strategy to offset business risks 7

What is celebrity endorsement? 1. What is celebrity endorsement? What is the difference between core and ancillary products? Give an example of synergy. 2. Quick Check Answers A celebrity gives approval or support of a product by lending his or her name or image. The core product is the event or film or show itself; ancillary products are related to or created from the core product. Answers will vary, but many will use the Oprah Winfrey example in which a magazine and television show create synergy. 3. 8

Different Players, Different Games The differences between sports and entertainment can be found in three areas: Consumer loyalty Product Revenue stream 9

Differences in Consumer Loyalty If sports fans feel their team is trying to win, the team can retain its consumer loyalty. consumer loyalty consumers’ attitude that occurs when they are happy with a company and become repeat customers The entertainment consumer is not motivated by brand or team loyalty, but by a desire for satisfying entertainment. 10

Differences in Product The sports product is consistent, or stable. The entertainment product is variable, or changeable. 11

Differences in Revenue Stream The streams of revenue created by marketing products in entertainment are very diverse. Sporting events do not usually produce the same amount of revenue from merchandising and royalties as entertainment events. 12

Differences in Revenue Stream Sports franchises earn revenue from sponsorship. sponsorship the promotion of a company in association with a property Sports franchises also earn revenue from advertising and broadcast rights. 13

Similarities and Differences in Marketing Sports Marketing Entertainment Marketing Lack of Consumer Loyalty Consumer Loyalty Product Place Consistent Product Variable Product Price Few Ancillary Products Many Ancillary Products Promotion Convergence 14

1. List two differences in consumer loyalty between sports and entertainment. What are differences between marketing sports product and entertainment product? In what one way does the stream of revenue in sports differ from the stream of revenue in entertainment? 2. Quick Check Answers In sports, consumers usually support one or two teams they like, whereas the entertainment consumer is not motivated by brand or team loyalty; film and music fans will see films made by more than one production company, or buy CDs produced by many different record labels, whereas a sports fan maintains his loyalty. The sports marketer knows what the consumer wants and then tries to deliver it; the entertainment marketer will try to know what consumers want and then create that product. Entertainment products can be developed into merchandise. A sporting event primarily develops a revenue stream from ticket sales, media advertising, and video games, and so on. 3. 15

Assign groups to look up online and present 1. Define and Give an example of a royalty. Find an example of cross-promotion for a film. 2. Checking Concepts Answers A royalty is a payment for material that has been copyrighted, or legally declared as belonging to the creator. Answers will vary because anything that can be copyrighted can earn a royalty if it is used by a person or entity other than the creator. Some examples might be books, songs, scripts, etc. Answers will vary but may include the star of a new movie can appear on a talk show. Many answers are possible, including damaged property, cancellation, injury to audience, damage to equipment. Describe one risk involved in a sports event and find an example online 3. 16