1. 3.06A Employ product-mix strategies to meet customer expectations
SEM II

2. Examples of Merchandising Opportunities for Sports/Events
Merchandising opportunities for sports/events include:
Licensed sale of merchandise such as apparel and other souvenirs
Signage at the sport/event promoting the sponsor
Stationary signage – does not move
Rotating signage – toggles between advertisers
Virtual signage – appears only on television

3. Risks Associated with Merchandising Opportunities
Risks include:
Logo abuse and counterfeit merchandise
Damage to the event’s reputation, especially if an advertised sponsor goes encountered legal difficulties or declares bankruptcy (e.g., Enron Field—Enron was an oil distribution company whose illegal practices led to its bankruptcy and imprisonment of some top company executives)
Damage to the advertised sponsor’s reputation, especially if the sport/event goes poorly (e.g., XFL professional indoor football league, which ended after only one season)

4. Advantages and Disadvantages of Using Branded Merchandise
Development of profitable new product lines
Greater exposure to the market
Enhanced sales
Positive attributes associated with the sport/event
Development of universally identifiable brands (e.g., Nike Swoosh)
Positive attributes of the sports entity transferred to the sponsor
Licensee and/or sponsor attains better brand recognition
Less time and money required to build high levels of brand equity
Higher prices for “official” branded merchandise
Disadvantages:
Possible loss of control over the brand (e.g., licensee may produce inferior goods and offer them at a lower price, leading to a lessening of the perceived image of the sport/event)
Expense required to seek out counterfeit merchandise

5. Sources of Merchandising Ideas
Marketers generate merchandising ideas by:
Identifying the target audience and selecting products based upon its demographics
Knowing what products have sold well in the past
Identifying target audience’s lifestyle models to determine appropriate products:
Needs-driven consumers: Farthest removed from mainstream culture, unaware of events, seeking only the bare necessities
Outer-directed consumers: Affected by others around them
Belongers: Traditional, conservative, conforming, sentimental, and nostalgic
Emulators: Upwardly mobile, status conscious and competitive
Achievers: Materialistic, self-reliant, geared toward success, driven to preserve their status quo and comfortable lifestyle, likely to purchase high-end merchandise as status symbols

6. Factors Affecting the Choice of Merchandising Options
Factors affecting the choice of merchandising options include:
Planning: Merchandise to be sold in the future must be bought now
Analysis: Customers’ needs must be correctly identified to determine their needs, wants and desires
Acquisition: Who will produce the products
Control: Quality control is necessary as the product will reflect upon the company whose name and logo appear on it