 Copyright 1999 Prentice Hall 8-1 Lesson 6.4 – Merchandising Copyright © 2011 by Sports Career Consulting, LLC

Merchandising When the demand for licensed products is minimal, an organization may choose to handle their merchandising in-house In-house Merchandising: Refers to managing the merchandising process within the organization itself, rather than outsourcing or acquiring licenses LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Steps in the in-house merchandising process Merchandising 1) Design the logo and slogan or tagline (if it is not already available) 2) Determine merchandise type, quality and quantity 3) Interview local merchants (vendors) and select the company that can best fit the organization’s needs 4) Determine distribution outlets 5) Train sales staff 6) Prepare on-site merchandising strategies LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

If an organization feels an in-house merchandising approach may not be the most efficient strategy, they may choose to outsource the effort to a third party Merchandising LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC Outsourcing the merchandising effort

Merchandising LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC In 2009, the NFL’s Minnesota Vikings signed a 10-year deal to outsource retail and merchandise sales to MainGate Inc., naming the company the exclusive retail and merchandising company for the franchise. As part of the deal, MainGate agreed to operate all three of the Vikings Locker Room mall stores, all retail locations in the Metrodome (Vikings home stadium) and at the team’s training camp in Mankato, MN. It will also manage the Vikings online merchandise sales.

Merchandising Organizations maximize income through the sales of food and beverage and merchandise On-site Merchandising: Refers to the process of selling merchandise at the physical location of the event LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Four key considerations of on-site merchandising Merchandising 1)The location of where the merchandise is being sold 2)The physical layout and appeal of where the merchandise is being sold 3)How well the sales operation is performed 4)The appeal of the merchandise or product itself LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Best practices for selling on-site merchandise Merchandising  The heaviest traffic for merchandising is upon arrival and departure  Test marketing is important to ensure the effectiveness of a good or service  Training of sales personnel varies with the event LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Merchandising Making merchandise available online opens up a new sales channel for a sports or entertainment organization to purchase related goods and services Online Merchandising: Refers to the process of selling merchandise on the Internet LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Online Merchandising Merchandising  Organizations maximize income by providing a customized shopping environment and allowing consumers access to a wider variety of products and services  U.S. e-commerce sales totaled $165.4 billion in 2010, up 14.8% from the previous year, according to estimates released in 2011 by the U.S. Commerce Department LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Online Merchandising Merchandising  Canadians spent $16.5 billion online in 2010, and are expected to shell out $30.9 billion in 2015 LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Online Distribution Methods Merchandising LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC  Direct shipping to consumer  In-store pickup

Online Advantages Merchandising  Easier to control inventory  Opportunity to offer exclusive merchandise  Opportunities to reach out-of-market consumers LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Reaching out-of-market customers Merchandising LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC In 2010, Kansas State University’s online store sold $131,500 of Wildcats merchandise and of that revenue, Kansas residents were responsible for just $56,100 of the purchases

Reaching out-of-market customers Merchandising LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC Minor League Baseball’s Omaha Royals launched an online gift shop, creating opportunities for fans to shop and purchase items directly on the website while allowing the team to tap into the Internet’s global reach

Inventory Control Merchandising LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC In just hours after news broke that Brett Favre would be joining the team, the Minnesota Vikings website had Brett Favre jerseys, mugs, earrings, footballs, t-shirts and bumper stickers available for sale because stocking the inventory in advance was not necessary

LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Online Disadvantages Merchandising  Security concerns in making transactions online  Potentially higher distribution (delivery) costs  Consumers inability to touch, feel or “test-drive” products before buying can be a deterrent and lead to higher return rates LESSON 6.4 Branding & Licensing Copyright © 2011 by Sports Career Consulting, LLC

Branding & Licensing LESSON 6.4 REVIEW (ANSWERS) 1) Identify the four key considerations of on-site merchandising Copyright © 2011 by Sports Career Consulting, LLC 1-The location of where the merchandise is being sold 2-The physical layout and appeal of where the merchandise is being sold 3-How well the sales operation is performed 4-The appeal of the merchandise or product itself