1. Sports and Entertainment Means Business2
Sports and Entertainment Means Business
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2. Lesson 2.1 Sports and Entertainment Economics
Learning Targets
I can define profit and explain the profit motive.
I can list and describe the FOUR types of economic utility.
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3. Terms Profit Profit Motive Microeconomics Macroeconomics Economics
Economic Utility
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4. THE PROFIT MAKERS Revenue
the money a business receives from the sales of goods and services.
Money coming “in” to the business.
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5. Profit
the amount of money remaining from revenues after all expenses have been paid.
Goal of any business is to earn (make) a Profit.
Profit Motive
making decisions to use resources in ways that result in the greatest profit.
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6. Opportunities for Profits
Worldwide distribution revenue is critical for profits.
Example: Movies
Avg. Box Office income increases 50% to 100%
Avatar - highest ticket sales in last 100yrs with $2,788,007,625
Domestic (released just in USA) $760,507,625
vs.
International (released in multiple countries) $2,027,500,000 (+70%)
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7. Marketers must always understand the markets in which they target and sales occur.
China’s market - over 1.3 Billion people
Sounds like a good market for movie makers correct?
Not so fast……
the government censors movies for content.
pirated movies diminish theater sales.
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8. Rentals (Redbox, Netflix, etc). Movie Merchandise
In addition to U.S. ticket sales, name two other large sources of revenue for U.S. film studios.
International Sales
DVD Sales
Rentals (Redbox, Netflix, etc).
Movie Merchandise
In addition to ticket sales, name two other large sources of revenue for the Cincinnati Bengals.
Apparel and Merchandise Sales
Broadcast (TV / Radio)
Licensing Agreements
Sponsorships
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9. ECONOMICS Economics the study of how goods and services are; Produced
Distributed
Consumed
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10. Macroeconomics Microeconomics
the study of the economics of the entire society.
Microeconomics
the study of the relationships between individual consumers and producers.
Macro (large scale) / Micro (small scale)
NOTE - Sports and Entertainment marketers are focused on Microeconomics.
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11. Economic Utility
Ability of a product/service to satisfy one or more needs or wants of a consumer.
the amount of satisfaction a person receives from the consumption of a particular product or service.
NOTE – consumers (fans) are more likely to purchase products/services if it provides higher utility than their other choices/options.
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12. Four Types of Marketing Utilities
Form, Time, Place, and Possession make up the Utility Marketing Model.
Utility Marketing – Benefits
Helps businesses to make better choices by allowing them to gain a better understanding of consumer demands
Utility Marketing – Drawbacks
Consumers purchase products for reasons than the four types of utilities….emotion, necessity, boredom, etc.
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13. Types of Utility Form Utility Time Utility
when the physical characteristics of a product/service are improved thus increasing the attractiveness of the product/service to a group of consumers.
Can result in changes to tangible parts of the product/service.
Time Utility
making the product or service available when the customer wants it.
24/7 Grocery Stores, Gas Stations, Wal-Mart, McDonalds
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14. Types of Utility Place Utility Possession Utility
the product is available where it is wanted.
Note – making things convenient for consumers is a good business practice.
Possession Utility
the product or service is available at an affordable price.
Offering options to consumers regarding payment options;
24months Same as Cash, Cash Back, Credit Cards, Rent-To-Own,
Installment Loans, % off Coupons.
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15. Example: __________ Utility
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16. Example: ___________ Utility
Then… Now…
Appearances can be deceiving…
Same great taste as always…
Something’s never change…
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17. Example: __________ Utility
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18. Example: _________ Utility:
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19. Textbook Assignment: Encore pg. 36 Answer questions: 1, 2, 3
Utilize Microsoft Word – type your answers.
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26. Economic Utility Ad Assignment: 25pts
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Economic Utility Ad Assignment: 25pts
4/21/2017
List examples of FIVE products/services that have been updated (changed or modified) via one or more of the economic utilities - Form, Time, Place, Possession.
Research
Internet
Newspaper
Magazines
you need to find
Do not use any of the examples we have discussed in class (exit slip Examples from Wednesday)
Utilize PowerPoint to demonstrate a “Compare / Contrast” of your findings.
New vs. Old
List which utilities you believe have been changed
Describe how this was accomplished/why you feel this is so.
You must have addressed each of the four economic utilities (Form, Time, Place, Possession).
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27. Campbell’s Soup
Change in Form Utility – changed physical appearance to a smaller more colorful “microwavable” container.
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28. Textbook Assignment pg. 36
1.) B – the study of the economics of the entire society. 2.) D – making decisions to use resources in ways that result in the greatest profit. 3.) Think of a sports or entertainment event you have attended. How could the form utility have been improved?
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29. Lesson 2.2 Risk Management
Learning Targets
I can define risk and list the categories and classifications of risk.
I can name and describe two of the four strategies for risk management.
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30. Terms
Risk
Risk Management
Liable
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31. RISKING IT ALL
Risk
the possibility of financial gain or loss or personal injury.
There are 3 Main Categories of Risk
Natural Risk
Human Risk
Economic Risk
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32. Categories of Risk Natural Risk
occurs from unavoidable weather conditions.
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33. Categories of Risk Human Risk dishonest customers and employees.
inadequately trained employees.
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34. Categories of Risk Economic Risk occurs due to changes in the economy.
Note - No guarantee that consumer demand will remain consistent.
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35. Classifications of Risk 1. Gain/Loss 2. Controllable/Uncontrollable 3
Classifications of Risk 1. Gain/Loss 2. Controllable/Uncontrollable 3. Insurable/Uninsurable
Speculative Risk (Gain)
Three possible outcomes exist in speculative risk:
something good (gain)
something bad (loss)
nothing (staying even)
Investing in the stock market and Gambling on sports are two examples of Speculative Risk(s). Each offers a chance to make money, lose money or walk away even.
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36. Pure Risk (Loss) There are only two possibilities;
something bad happening
nothing happening.
It is unlikely that any measurable benefit will arise from a pure risk.
Example – a flood closes a golf resort for 2 months, the loss of business is a Pure Risk since there is no possibility of gain from the event.
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37. Controllable Risk
loss can be prevented or the likelihood of its occurrence can be reduced.
Example – if your home has Smoke Detectors and a Fire Extinguisher your family has taken steps to control the risk of loss due to fire.
Example – our school?
- Extreme Weather and Fire Drills
- Lock Down Drills
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38. Uncontrollable Risk nothing can be done to prevent the risk.
No control.
Example – nothing you could do to prevent the loss if a sinkhole swallows your car.
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39. Insurable Risk Uninsurable Risk
(pure risk) loss is predictable and the amount of the loss can be estimated.
Example – car accident….loss can be calculated using statistics based on similar losses in the past.
Uninsurable Risk
dollar loss could occur…loss cannot be estimated.
Example – REDS 2014 season is a bust. REDS have losing season, don’t make the playoffs causing ticket sales to drop, the loss of revenue is an uninsurable risk.
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40. Movie Theater Golf Resort Risk Classifications Risk Type – Tornado
Risk Type – Fire
Golf Resort
Risk Type – Heat Wave
Risk Type – Golf Cart in the lake
Risk Classifications
Uncontrollable Risk
Controllable Risk
Uninsurable Risk
Insurable Risk
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41. MANAGING RISK Risk Management
preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk;
Risk Avoidance
Risk Insurance
Risk Transfer
Risk Retention
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42. Risk Avoidance Jury: Dodgers negligent in Giants fan's beating
(must) need to plan to avoid risky situations.
Liable
the business/team is legally responsible for damages/injuries that occur.
Jury: Dodgers negligent in Giants fan's beating
The jury found damages of about $18 million but said the Dodgers were responsible for only a quarter of the sum. The rest of the responsibility was split between the two men who beat fan Bryan Stow
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43. Risk Insurance Risk Insurance Premium Deductible
pays for predictable losses.
Premium
amount (cost) paid for insurance.
Typically paid monthly, Quarterly, Semi-Annually, or Annually
Deductible
amount (payment) due to receive insurance benefits.
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44. Textbook Assignment: Encore pg. 41 Answer Questions: #1, #2, and #3
your responses to the questions.
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45. Textbook Assignment: Encore pg. 41 B – Thunderstorm A –
Gain or Loss Risks
Insurable Risks
Controllable Risks
Make the facility is well-lit, has adequate fire exits, staffed with security personnel, employees have been trained for emergency situations.
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