Similarities in Marketing Chapter 2 Section 2 Changes in Marketing Many marketers consider People to be the fifth P in the marketing mix. Marketers have new tools to work with that they did not have years ago. Direct TV, TiVo, video, CD’s, CD burners, DVD’s, MP3’s, PC’s, PDA’s, interactive gaming, and virtual advertising. New technologies have broaden the scope of marketing messages. Marketing Similarities Sports and Entertainment products are similar in that they are marketed different from traditional products They differ in four areas: product, place, price, and promotion. Product S and E products are not often physical products that can be stacked on a shelf. Entertainment presentations and athletic competitions are both dynamic and can be used to promote unrelated products. ESPN restaurants do not sell tickets to the game, and Tiger Woods sells everything from cars to clothing. Product EndorsementsIs approval or support of a product or idea, usually by a celebrity lending his or her image or name to a product. Have you ever purchased a product based on an endorsement? Marketers must match the celebrity with a proper product. George Foreman and makeup do not mix. Product A Core product- is the main product. The sporting event, the play, the movie, etc, etc. The ancillary product- is a product that is created from the core product. A ride in an amusement park based on a movie. A DVD recording from a play is another example. See page 34, figure 2.1 Product Companies can increase their revenue by using the core product and the ancillary product together as promotional tools. Place The changing nature of the place component in the marketing mix has affected traditional marketing more than sports and entertainment marketing. E-commerce has changed where people buy their products. Place Successful S and E marketing strategies have always appealed to the desire to go out to a special event. Price Pricing S and E products is different from traditional products. S and E product pricing is never lowered and has risen steadily over the past few years. Price is set and adhered to uniformly based on what theaters and sports teams can charge and what people can pay. Box seating vs outfield seating- a customer gets more for their money in a box seat. Price Problems Actors Guild strike Players strike Piracy- unauthorized copying of a movies or songs. Invades the intellectual property rights of the producer of the movie or song Ticket Scalping Price Royalties When people purchase entertainment in a store, or use it in another form for profit, a portion of that profit called a royalty usually goes to the artist or owner. It is a payment for material that has been copyrighted, or legally declared as belonging to the creator. North Penn plays for example. Promotion S and E marketing uses two tools to promote goods. The first one is Product tie ins- it is the use of ancillary products such as merchandise as promotional tools. Example would be a Happy meal from Micky D’s. Promotion Cross-PromotionIs the second type of promotion used. It is any form of communication through which one industry relies on another industry to promote its product. NASCAR racing is an example. Promotion Convergence- is the overlapping of product promotion. A studio may use TV advertising to promote a movie that one day may be sold to television. Promotion Synergy- one of the biggest similarities between S and E marketing is the potential for convergence and cross-promotion. These two entities help create a product’s synergy. Synergy is a combined action that occurs when products owned by one source promote the growth of related products. Oprah’s magazine and her show. One feeds off the other. Risks and Risk Management Risks are unforeseen negative events which affect a business. Injuries to players and illness to actors are examples. Risk Management is the legal aspect of a business. People are hired to identify possible business risks. Risks and Risk Management Writing contracts Writing insurance policies See page 37 for different types of risk insurance coverage.