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
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
Lesson 7.1The 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 • 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 • 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
#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
#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
#3 ~ Brand • trademark • 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 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”.
What are the components of the product mix? • Product Mix: • total assorted features associated w/ the product • product line • product packaging • brand name
Lesson 7.2Recruiting 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: • 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.
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.
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 7.3Customized Entertainment Goals • Define customizing. • Describe the financial impact of Baby Boomers on the entertainment industry.
CUSTOMIZING PRODUCTS • customizing • 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 • 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