Chapter 3 Extra Vocabulary Help

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Chapter 3

Version 4E

Vocabulary Review PPT

Sports and Entertainment Marketing Class – Mr. Sherpinsky

Council Rock School District

profit profit motive economics economic utility

Profit

 the amount of money remaining from revenues after all expenses are paid

revenue

 the money a business receives from the sales of goods and services

profit motive

 making decisions to use resources in ways that result in the greatest profit

The greatest reason for being in business!

Worldwide distribution revenue is critical for movie profits.

Movie ticket sales in the United States have increased each year for more than a decade.

Typically a studio’s average cost of marketing a film is roughly fifty (50% ) of the costs to producing a film

Results: Movie tickets sales increased every year for last decade

Economics

 the study of how goods and services are produced, distributed, and consumed

Why is it important?

Because people have limited time and money to spend on entertainment, they must make specific decisions about how to spend their limited resources.

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Macroeconomics

 the study of the economics of the entire society (big picture or global)

Microeconomics

 the study of the relationships between individual consumers and producers

Sports and entertainment marketers are focused on microeconomics.

relationships with consumers

Economic Utility

 the amount of satisfaction a person receives from the consumption of a particular product or service

Form Utility

 when the physical characteristics of a product or service are improved

Time Utility

 making the product or service available when the customer wants it

Place Utility

 the product is available where it is wanted

Possession Utility

 the product or service is available at an affordable price

risk risk management liable

Risk

 the possibility of financial gain or loss or personal injury

Risk can be controlled!

Risk can be classified as:

Controllable

Insurable

Involving gain or loss

Natural Risk

 occurs from unavoidable weather conditions (tornados, blizzards, etc)

Human Risk

 dishonest customers and employees

 inadequately trained employees

Economic Risk

 occurs due to changes in the economy

Gain or Loss Risk

speculative risk

▪ either a gain or loss could result

purchase of a new sports franchise would be considered speculative pure risk

▪ a chance of an event occurring that could only result in a loss

controllable risk

 if a loss can be prevented or the likelihood of its occurrence reduced

uncontrollable risk

 nothing can be done to prevent the risk

insurable risk

 a pure risk for which the chances of loss are predictable and the amount of the loss can be estimated

uninsurable risk

 the chance that a dollar loss could occur

 the amount of the loss cannot be estimated

Risk Management

 preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk avoidance, risk insurance, risk transfer, and/or risk retention

Risk Insurance

 pays for predictable losses

Premium

cost of insurance

Risk Retention

 assuming the cost of an uninsurable risk

Risk Retention Groups

 similar businesses facing similar risks pool resources resources are distributed to members that have a loss

ethics principles

Ethics

 a system of deciding what is right or wrong in a reasoned and impartial manner

Business should be conducted with integrity, trust, and fairness.

Principles

 high standards of rules and guidelines

“Don’t Kill” or “Don’t Steal” or “Don’t Cheat”

Character Development

a progression in behavior where people

advance from childish behavior to mature behavior based on principles

Young people need good role models.

return on investment forecast budget balance sheet income statement

Profit is the primary purpose of sports and entertainment marketing.

Return On Investment

return on investment

 the income from a venture that is distributed to investors

Forecast

 a plan that predicts the expenses to be incurred and the revenues to be received

Budget

 a plan for how available funds will be spent purpose of a budget is to control costs so they do not exceed the funds available.

A=L+O or Assets = Liabilities

+ Owner’s Equity

Balance Sheet

 net worth = assets – liabilities

 shows net worth at a specific point in time

Income Statement

 shows revenues and expenses for a specific period of time reveals company’s profit or loss

Review pages 51, 52, 53

Class Discussions, pages 54, 55

Case Study, pages 56

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