OBJECTIVE:
1.02
Discuss the impact of sports and entertainment
marketing on the economy.
A. Discuss the fundamentals of sports and entertainment marketing.
1. Marketing is the process of developing, promoting, pricing and distributing
products in order to satisfy customers’ needs and wants. Marketing involves
all of the activities necessary to get a product from the producer to the
consumer.
2. Products include both goods and services.
3. Sports marketing is the involvement of sports to develop, promote, and
distribute goods and/or services to satisfy the wants and needs of consumers.
Sports marketing includes sponsorships, endorsements, promotion, and fan
clubs. Segments of sports marketing include:
a. Professional Teams (Football – Carolina Panthers/Ericsson Stadium,
Soccer – Carolina Courage, Hockey – Carolina Hurricanes)
b. Collegiate and Scholastic Teams (UNC, NC State, Duke)
c. Venues: arenas, stadiums, coliseums (Bagwell Field at Dowdy-Ficklin
Stadium, The RBC Center, Blockbuster Pavilion, Lowe’s Motor Speedway)
d. Commercial Facilities (Marina Boat Land)
e. Health Clubs (Gold’s Gym)
f. Recreation (Aerobics)
g. Camps (Tennis Camp)
h. Professional Individual Sports (PGA, World Tennis Association, PBA)
i. Amateur Sports (AAU)
j. Agencies (NCAA, ACC, SEC)
k. Sport Support Services (NASCAR Winston Cup Racing Wives Auxiliary)
l. Sporting Goods Industry (Nike, Adidas)
m. Sport Sponsors (Coca-Cola 600, Cadillac sponsoring the PGA Tour,
Wachovia Cup Tournament at Quail Hollow Country Club)
n. Sports Media (ESPN)
4. Entertainment marketing is the involvement of entertainment to develop,
promote and distribute goods and/or services to satisfy the wants and needs
of consumers. Entertainment segments include:
a. Music Industry (Quincy Jones)
b. Movie Industry (Tom Hanks)
c. Theme Park Industry (Walt Disney World in Florida, Paramount’s
Carowinds Theme Park in North Carolina/South Carolina, Emerald Point
Water Park in Greensboro, Tweetsie Railroad in Boone, The Pavilion in
Myrtle Beach, Mile High Ghost Town in Maggie Valley)
d. Radio Industry (AM, FM, country, rap, hip-hop, jazz, XM, Sirius Satellite
Radio)
e. Film Industry (Sundance Film Festival)
f. Television Industry (Dawson’s Creek was filmed in the Wilmington area)
g. Dramatic Arts Industry (Raleigh Little Theater and Rose Garden)
h. Video Game Industry (PS2, X-Box, Sega Sports, Nintendo Game Cube)
i. Fine Arts and Science Industry (Smithsonian Institution)
j. Night Club Industry (Club 2000)
k. Literacy Industry (Oprah’s Book Club, READ Foundation, Kelly Ripa’s Book
Club)
l. Casino Industry (Harrah’s in Cherokee County)
m. Hobby/Craft Industry (Southern Christmas Show)
5. Trends in sports and entertainment
a. Sports - Naming rights, X-games, and sports specific channels.
b. Entertainment - Internet web casts, MP3s, DVDs
B. Identify sports and entertainment products as either goods or services.
1. Goods are tangible objects. For example, athletic shoes and CDs.
2. Services are intangible. Services include tasks or acts performed for a
customer for a fee. For example, going to a theme park or to see the
Durham Bulls play baseball.
C. Explain the importance of the sports and entertainment industry to the economy.
1. The sports and entertainment industry generates on average $213 - $350
billion per year in revenue.
2. Approximately 800 million people watched the 2002 Super Bowl.
3. The average attendance per NFL game is 66,000.
4. It is estimated that 16,346,710 people watched a NFL game in 2000.
5. The National Football League has $17.6 billion in television deals with four
networks (CBS, Fox, ABC, and ESPN).
6. The average attendance at an National Basketball Association game is
16,804.
7. The average total Major League Baseball attendance is 20,000,000 per year.
8. Over 35 million people visit Walt Disney World in Orlando, Florida each year.
9. The movie Titanic grossed almost $1 billion in global ticket sales.
10. Over 95 million American households own a VCR.
11. Over 30 million American households own a DVD player
12. Sixty-eight percent of American households subscribe to cable TV.
OBJECTIVE:
1.03
Identify significant people and events in the
history of the sports and entertainment marketing
industry.
A. Identify pioneers in the entertainment marketing industry.
1. P. T. Barnum
a. Developed the Barnum and Bailey Circus, promoting it as “The Greatest
Show on Earth.”
b. Became one of the United States’ earliest millionaires.
c. Had a New York newspaper print his obituary before his death to generate
publicity. He died two weeks later.
2. Walt Disney
a. Created the first fully synchronized cartoon. Mortimer Mouse, later called
Mickey Mouse, was the feature character in Steamboat Willie.
b. Produced the first feature-length cartoon, Snow White.
c. Opened Disneyland in Anaheim, California in 1955.
d. Developed The Magic Kingdom, the first of four theme parks in Walt
Disney World in Orlando, Florida. The park opened in 1971.
e. Developed the “Experimental Prototype Community of Tomorrow”
(EPCOT), which was later built in 1982.
f. Died prior to seeing any of the Walt Disney World plans completed.
g. Upon his death in 1966, the Disney Corporation was worth over $100
million.
3. Charlie Chaplin
a. Responsible for “slap-stick” comedy.
b. Regarded as one of the first widely recognized movie stars.
c. Developed a character that wore baggy pants, tight coat, large shoes on
the wrong feet and a black derby hat.
d. Turned film comedy into an art form.
e. Signed with Essanay for $1,250/week to make 14 films during 1915.
4. Lucille Ball
a. Known as an actor, musician, comedian, model, and producer.
b. Won four Emmy Awards – Best Comedienne (1952); Best Actress in a
Continuing Performance, I Love Lucy (1955); Outstanding Lead Actress in
a Comedy Series, I Love Lucy (1967 & 1968).
c. Became one of television’s first leading ladies. One of the first to be the
star of the show and have “the man” as supporting role.
d. Helped advance careers of many Latino performers due to the partnership
with Desi Arnez, her husband, who was a Cuban bandleader.
5. Steven Spielberg
a. One of the most accomplished directors and producers.
b. Responsible for many of today’s popular films. For example, Jurassic Park
I – III; Men in Black I & II; Shrek; Schindler’s List; E.T., The ExtraTerrestrial, Jaws; and The Color Purple.
c. Used a commercial tie-in with a major motion picture when he used
Reeses Pieces in the movie E.T., The Extra-Terrestrial.
6. Louis Armstrong
a. Revolutionized jazz. Along with Duke Ellington and others, Armstrong
raised jazz to the level of popularity it has today. Armstrong and his
contemporaries changed the face and sound of jazz by putting the soloist
to the front of the band, emphasizing his talent.
b. Played the cornet and the trumpet, sang, and led the band.
c. Performed “Hello Dolly” and “What a Wonderful Life.”
7. The Beatles
a. Included George Harrison, John Lennon, Paul McCartney, and Ringo Starr
(Richard Starkey). Stuart Sutcliffe and drummer Peter Best were also
members in the early days.
b. “Created” the first concept album (songs unified by a common theme),
Sgt. Pepper's Lonely Hearts Club Band.
c. Band split in 1970; each member became successful as a soloist.
d. Lennon murdered in 1980.
8. Elvis Presley
a. Sold over 1 billion records worldwide, more than anyone else in history.
b. Had 131 different albums/singles to achieve gold, platinum or multiplatinum status.
c. Revolutionized television performances with his record-breaking, hipshaking, scandal-making performance on The Ed Sullivan Show. By
today’s standards, he did nothing out of the ordinary. In that day, the
way he shook his hips caused a nation-wide scandal, which caused many
advertisers to reconsider their support of Presley.
d. Pioneered “rock and roll”; one of the greatest rock performers of all time.
e. Accomplished actor. For example, Blue Hawaii, Jailhouse Rock, and King
Creole.
9. Oprah Winfrey
a. Began in Baltimore with the talk show, People Are Talking.
b. Moved to Chicago to start a morning talk show, A.M. Chicago.
c. Launched the Oprah Winfrey Show in 1986, which grossed $125 million by
the end of its first year.
d. Started her own production company Harpo Productions where she could
make more money by privately syndicating her show. (Harpo is Oprah
spelled backwards)
e. Created the “Oprah Book Club.”
f. Launched the Oxygen channel in 1999, the first major competitor for the
Lifetime Network.
g. Created the Oprah magazine known as O: The Oprah Magazine.
B. Identify pioneers in the sports marketing industry.
1. Michael Jordan
a. Considered by many as the “greatest player ever to play basketball.” His
basketball skills and charisma helped Nike and the NBA market him as “Air
Jordan.”
b. Played minor league baseball with the Birmingham Barons, the Double A
affiliate of the Chicago White Sox.
c. Starred in the movie Space Jam.
d. President of Basketball Operations for the Washington Wizards.
e. Endorses products for Nike, Gatorade (created “I Wanna Be Like Mike”),
Sara Lee Corporation’s Hanes brand clothier, Rayovac, and Chevrolet.
2. Mildred “Babe” Didrickson Zaharias
a. Considered the greatest female athlete of all time. Her goal was to be
“Greatest athlete that ever lived.”
b. Won Female Athlete of the Year award six times.
c. Participated in basketball, track, golf, baseball, tennis, swimming, diving,
boxing, volleyball, handball, bowling, billiards, skating, and cycling.
d. Created professional basketball team called Babe Didrickson’s All-Stars.
e. First female athlete to sign an endorsement contract, signed with Wilson
Sporting Goods for $100,000.
3. William (Bill) H.G. France Sr.
a. Founded the National Association of Stock Car Auto Racing (NASCAR).
b. Founded the International Speedway Corporation (ISC), which owns
and/or operates Daytona International Speedway, Talladega
Superspeedway, Michigan International Speedway, California Speedway,
Homestead-Miami Speedway, Phoenix International Raceway; Richmond
International Raceway, Darlington Raceway, North Carolina Speedway,
Watkins Glen International Speedway, Nazareth Speedway, and Kansas
Speedway.
4. Jack “Jackie” Roosevelt Robinson
a. First student to letter in four sports (baseball, basketball, football, and
track & field) at UCLA.
b. Played professional football for Los Angeles Bulldogs.
c. Broke the Major League Baseball color barrier when he was offered a
contract to play for the Brooklyn Dodgers.
d. Won the National League batting title and Most Valuable Player awards.
e. Former President of Chock Full O’Nuts, a restaurant and coffee company.
5. Jackie Joyner-Kersee
a. Attended UCLA on a basketball scholarship.
b. Featured on the cover of Sports Illustrated and labeled “Super Woman.”
c. First female to be named The Sporting News Man of the Year.
6. George “Babe” Herman Ruth Jr.
a. Considered baseball’s first “great slugger.”
b. Called “Bambino” & “The Sultan of Swat.” Got the nickname “Babe” from
Jack Dunn, former manager of the Baltimore Orioles.
c. Orioles sold his contract to the Boston Red Sox, which eventually sold it to
the New York Yankees.
d. Yankee Stadium is considered “The House that Ruth Built.”
e. Named the Associated Press Athlete of the Century.
f. Named a member of ESPN’s Sports Century/Athletes of the Century.
g. Voted Greatest Baseball player of all-time by the Sporting News.
7. Cassius Clay
a. Self-promoted as “I am the Greatest!”
b. Won a Gold Medal in the Olympics for the Light Heavyweight division.
c. Defeated Sonny Liston to become the World Heavyweight Champion.
d. Joined the Nation of Islam and changed name to Muhammad Ali.
e. Stripped of his boxing title and license when he was charged with violating
the Selective Service Act by refusing to join the Army. The Supreme
Court later reversed the conviction.
f. Regained the World Heavyweight Championship when he defeated George
Foreman in the famous “Rumble in the Jungle,” in Kinshasa, Zaire.
g. Defeated Joe Frazier in the “Thrilla in Manilla.”
h. Lit the torch at the Olympic Summer Games in Atlanta, GA.
8. Max Muhleman
a. Founded Muhleman Marketing Inc. based in Charlotte.
b. Represents clients such as Anheuser-Busch, Coca-Cola, and DuPont.
c. Created the concept of the permanent seat license. Established and
managed the strategy that helped the city of Charlotte acquire the
Charlotte Hornets and the Carolina Panthers.
9. Vince McMahon
a. Born in Pinehurst, North Carolina and a graduate of East Carolina
University.
b. Purchased Capitol Wrestling from his father in 1982. He founded what
would later be called the World Wrestling Federation.
c. Admitted professional wrestling was not a sport, but became the first
person to refer to his product as “sports entertainment.”
d. Battled with World Wildlife Fund to keep the acronym WWF. Courts ruled
the World Wildlife Fund had the name first and owned the rights to the
WWF acronym. The World Wrestling Federation is now known as World
Wrestling Entertainment (WWE).
C. Examine the evolution of sports and entertainment marketing.
1. Sports marketing
a. 1858 The first known game in which fans paid to attend was held at
Fashion Race Course in Queens, New York. It was a baseball game
between two teams in the New York City area.
b. 1906 The National Collegiate Athletic Association (NCAA) was officially
formed to govern collegiate athletics.
c. 1934 Lou Gehrig became the first athlete ever to appear on a Wheaties
box.
d. 1943 The All-American Girls Professional Baseball League was formed
while many Major League Baseball players were serving in WWII.
e. 1949 The first major endorsement deal for a female athlete. Wilson
Sporting Goods signed golfer Babe Didrikson Zaharias to an
endorsement contract worth $100,000 per year.
f.
1964
Blue Ribbon Sports, an athletic footwear company, was founded by
Philip H. Knight. In 1972, this company becomes Nike.
g. 1972 Title IX is enacted, mandating equal access to educational
opportunities for men and women. This legislation creates new
opportunities for women in sports as athletes, coaches and
administrators.
h. 1973 Rich Foods becomes the first company to pay for the right to have
their name on a venue. Rich Foods agreed to pay $60,000/year
for the naming rights to the Buffalo Bills football stadium.
i. 1980 The United States boycotts the Summer Olympics in Moscow.
j. 1984 The Olympics became commercialized, and made profitable for the
first time under the leadership of Peter Ueberoth.
k. 1996 The Olympic Park in Atlanta, Georgia is bombed.
2. Entertainment marketing
a. 1550-1700
Introduction of outdoor entertainment including bowling,
primitive amusement rides, music and dancing.
b. 1919 Development of recording of sound on motion picture film.
c. 1920 The first commercial radio stations with regularly scheduled
broadcasts were heard.
d. 1926 RCA establishes the National Broadcasting Company (NBC)
e. 1927 Farnsworth transmits first electronic television picture; receives
patent.
f. 1927 The Columbia Broadcasting System (CBS) was founded.
g. 1929 Approximately three-fourths of amusement parks close. The Stock
Market Crash leads to the Great Depression.
h. 1939 First television is sold.
i. 1948 Televisions are in over 1,000,000 homes.
j. 1951 Color television is introduced.
k. 1955 Disneyland in Anaheim, California opens costing $17 million to
build. The first national theme park drew 3.8 million visitors the
first season.
l. 1960 Over 100 million television sets can be found in homes around the
world.
m. 1961 First Six Flags opens in Texas, the first regional theme park.
n. 1971 The Magic Kingdom in Walt Disney World in Orlando, Florida opens
costing nearly $375 million to build.
o. 1980 CNN is launched by Turner Cable Network. It is the first all news
network.
p. 1980 Prince Charles and Diana Spencer are married on international
television.
q. 1981 The first IBM-Personal Computers (PC’s) are available for retail.
r. 1981 Music Television (MTV) debuts.
s. 1982 Michael Jackson's "Thriller" sells 20 million albums to become the
largest selling record ever.
t. 1983 The first compact disc is released.
u. 1985 Nintendo home entertainment system is introduced.
v. 1989
Time and Warner merge to become Time Warner Inc.
w. 1995 First television program delivered via the Internet (webcast).
OBJECTIVE:
2.01
Explain the concept of marketing.
A. Explain marketing and the marketing concept.
1. Marketing is the process of developing, promoting, pricing and distributing
products in order to satisfy customers’ needs and wants. Marketing involves
all the activities necessary to get a product from the producer to the
consumer.
2. The marketing concept states that businesses become successful by directing
all of their efforts to satisfying the needs and wants of the customers. By
offering the goods and services that consumers want, businesses will make a
profit. The marketing concept recognizes the importance of the consumer in
the buying process.
B. Describe the seven marketing functions.
1. Marketing-information management is obtaining information needed to make
sound business decisions. For example, the Carolina Hurricanes randomly
select fans to complete survey questions about the food choices at home
games.
2. Product/service management involves concepts and procedures necessary to
obtain, develop, maintain, and improve a product or service mix in response
to market opportunities.
a. Risk management is preventing or reducing business loss. For example,
the RBC Center hires security guards for events.
b. Purchasing includes buying goods and services for use in day-to-day
business operations. For example, a stadium purchases beverages for
resale.
3. Financing is obtaining the money needed to finance the operation of a
business. This includes bank loans and offering credit to customers. For
example, the city of Charlotte develops a financing plan for a new basketball
arena.
4. Pricing involves determining a value to charge for goods and services. It is
important to consider competition and the amount consumers are willing and
able to pay. For example, a retailer purchases t-shirts for $6 and sells them
for $12 at a concert.
5. Promotion is communication used to inform, persuade, or remind people
about a business’s products. For example, the Carolina Panthers use a t-shirt
launcher to give away t-shirts at home games.
6. Selling is determining customer needs and wants and responding to those
needs and wants through communication intended to influence purchase
decisions and ensure satisfaction. For example, Evadale purchases an
Eminem t-shirt at a concert.
7. Distribution involves the transporting, storing and handling of goods on their
way from the manufacturer to the consumer. For example, unprepared foods
must be transported in a refrigerated truck from the manufacturer to the
venue.
C. Identify the four Ps of marketing.
1. The marketing mix, known as the four Ps, is a combination of decisions a
business must make in order to best reach its target market.
2. The four Ps are product, price, place and promotion.
3. Products include the goods and services a business will offer to its customers.
a. Choice of product – will the business offer a variety of products?
b. Packaging – does the packaging protect the product and provide
necessary information about the product?
c. Level of quality – what level of product quality will the business ensure?
d. Brand name – what brand name products will the business offer?
e. Warranty – will the business offer a warranty to its customers to ensure
satisfaction?
4. Price is the amount a business charges customers for their products.
a. Price setting – price will be set based on product demand, cost, and
competitors’ actions.
b. Terms – will the company only accept cash? Will the company extend
credit? What type of credit will the company offer?
c. Discounts – will the business offer discounts to employees? Will the
business discount merchandise at certain times of the year?
5. Place (distribution) is making products available at the right time and
location.
a. A channel of distribution is the path a product takes to get from the
producer to the consumer.
b. What specific stores will offer the products? For example, wholesaler,
retailer, department, discount, and specialty.
c. What method of transportation will be used to get the product from the
producer to the consumer? For example, truck, train, plane, boat, and
pipeline.
d. How will inventory be handled and controlled? For example, physical,
storing, checking, and receiving.
6. Promotion is informing and reminding customers of the products available to
them. Promotion also involves persuading customers to purchase a product.
a. What will the message be?
b. When will the message be delivered?
c. Where will the message be delivered?
d. What inducements will be used to encourage customers to purchase the
product?
e. How will the message be delivered?
OBJECTIVE:
2.02
Discuss the concept of market identification.
A. Explain target marketing.
1. A market includes the group of all potential customers who share common
needs and wants, and have the ability and willingness to buy the product.
Businesses must understand who their potential customers are in order to
effectively meet their needs and wants.
2. Mass marketing is a single marketing plan that is used to reach all
consumers.
3. A target market includes the group of consumers that a company desires to
have as customers.
B. Explain the ways to segment a market.
1. Market segmentation is dividing the entire market into smaller groups who
share similar characteristics. Segmentation allows businesses to customize
products and marketing strategies.
2. Types of market segmentation.
a. Demographic segmentation divides the market based on personal
characteristics such as age, gender, income, ethnic background, education
and occupation.
b. Psychographic segmentation divides the market based on values, attitudes
and lifestyles. For example, segmenting the market based on people who
are marathon runners.
c. Geographic segmentation divides a market based on where a person lives.
Geographic segmentation can refer to local, regional, national or global
markets. For example, a new stadium will target a 100-mile radius of the
potential location.
d. Behavioral segmentation divides the market into groups based on what
they are looking for in a product and why they buy the product. For
example, purchasing Nike shoes because Michael Jordan wears them.
OBJECTIVE:
3.01
Explain the concept of economics.
A. Explain economics and identify basic economic resources.
1. Economics is the study of how to meet unlimited wants and needs of a
society with its limited resources.
2. Resources include all things used in producing goods and services.
3. Economic resources are land, labor, and capital resources that can be used
to produce the goods and services that people consume.
a. Land, also known as a natural resource, includes everything contained in
the earth and found in the sea.
b. Labor, also known as human resources, includes all workers in the
economy, including full- and part-time workers, managers, public
employees, and professional people.
c. Capital includes the money needed to start and operate a business, as
well as goods used in the production of other goods. Capital resources
can be limited because they deteriorate through use or are of poor
quality. For example, machinery such as an oven at a pizza restaurant.
4. Scarcity is a condition in which more goods and services are desired than are
available. Scarcity forces people, businesses and nations to make choices.
Unlimited wants with limited resources results in scarcity.
5. Economic goods are tangible items. For example, a television or baseball bat.
6. Economic services are intangible. For example, going to a play or attending
a baseball game.
7. Entrepreneurship incorporates the skills of people who are willing to take the
risk of starting their own business. Entrepreneurs organize economic
resources in order to create goods and/or services needed and desired in an
economy.
B. Describe the five economic utilities.
1. Utility refers to the added value or usefulness of a product.
2. Five types of economic utility.
a. Form utility is the value added by changing raw materials or putting parts
together to make them more useful. For example, wood for a baseball
bat.
b. Place utility is the value added by having a product where customers can
buy it. For example, selling movie tickets at the movie theatre.
c. Time utility is the value added by having a product at a certain time of
year or a convenient time of day. For example, selling lemonade at the
Verizon Amphitheatre for a concert in the summer.
d. Possession utility is the value added by exchanging a product for some
monetary value. For example, a consumer pays $25 for a t-shirt at a
concert.
e. Information utility is the value added by communicating with the consumer.
For example, visiting the Meymandi Concert Hall website
(www.meymandi.org) to find out information about upcoming events.
B. Discuss the three basic economic questions and the role of the government of
each system.
1. The three basic economic questions are:
a. What goods and services should be produced?
b. How should the goods and services be produced?
c. For whom should the goods and services be produced?
2. In a market economy, there is little government involvement in answering the
three basic economic questions; the market answers them. Consumers
decide what should be produced. Businesses decide how products will be
produced. The people who have the money to purchase products determine
who will receive them.
3. In a command economy, the government answers the three basic economic
questions. The government officials or leaders decide what should be
produced. The government runs the businesses and employs the workers.
The government also decides who will receive products.
4. In a traditional economy, the system is based on the ways things have always
been done. For example, the Amish community and Indian Reservations.
5. Mixed economies are not pure market systems, nor are they completely
controlled by the government. They are a mix, or blend, of the two. All
economies presently are mixed economies.
a. Capitalism. The people elect the government officials who represent their
constituents’ interests. For example, the United States and Japan.
b. Socialism. Although most socialist countries are democratic, the socialist
economy has increased government involvement. The government tries
to reduce the differences between the rich and the poor. The socialist
model is based on the welfare of the people. For example, France,
Germany, and Great Britain.
c. Communism. Communist countries have a government that is run by one
political party and that party controls everything. People are assigned
jobs. Students are told what type of schooling they will receive. For
example, Cuba and North Korea.
D. Explain supply and demand.
1. Supply is the amount of goods producers are willing and able to produce and
sell at a given price during a certain period of time. Producers prefer to
supply when the price is high; this is known as a sellers’ market.
2. Demand is a consumer’s willingness and ability to buy products at a given
price during a certain period of time. Consumers prefer to buy when the price
is low; this is known as a buyers’ market.
3. The Law of Supply and Demand is an economic principle that states the
supply of a good or service will increase when demand is great and decrease
when demand is low.
a. Elasticity is the degree to which demand for a product is affected by its
price. For example, when the price of a Tampa Bay Buccaneers authentic
jersey rises by 10% the quantity demanded falls by 26%. Demand is
price sensitive.
b. Elastic demand refers to how changes in the price of a product affect
demand for that product. For example, when the price of a CD is reduced,
demand may increase.
c. Inelastic demand refers to a condition in the market where changes in the
price of a product have very little affect on the demand for that product.
For example, some people might be willing to pay any price for Super
Bowl tickets.
4. Factors that affect the elasticity of demand
a. Availability of substitutes. If a substitute is easily obtainable, demand
becomes more elastic. For example, Walt Disney World, SeaWorld
Orlando, Universal Studios Orlando, and Busch Gardens Tampa.
b. Brand loyalty. Many customers will only purchase a certain brand of
products. In general, they will accept no substitutes. In this situation,
demand becomes inelastic. For example, fans of the Terry Labonte #5
Kellogg’s Chevrolet Monte Carlo may be more likely to purchase Kellogg’s
brand breakfast cereals over any other brand.
c. Price relative to income. When an increase in the price of a good or
service does not have a major impact on a customer’s budget, the
demand is usually inelastic. When an increase in the price of a good or
service has a major impact on a customer’s budget, the customer most
likely will no longer buy a product. In this case, the demand is elastic.
For example, luxury suites versus general admission.
d. Luxury vs. necessity (want vs. need). When a product is a necessity,
demand is usually inelastic. When a product is a luxury, demand is most
likely to be elastic. For example, season tickets to N.C. State football
versus gas for your vehicle.
e. Urgency of purchase. If a purchase must be made immediately, demand
tends to be inelastic. For example, front row tickets to Jimmy Buffett’s
last concert.
E. Identify the phases of a business cycle and the impact of each on the sports and
entertainment industry.
1. The business cycle is the movement of an economy through four recurring
phases – prosperity, recession, depression, and recovery.
2. Explain the phases of a business cycle.
a. Prosperity (Peak)
i. Highest period of economic growth
ii. Low unemployment
iii. High output of goods and services
iv. High consumer spending
v. Increased attendance and purchasing of related merchandise
b. Recession
i. Economic slowdown
ii. Rise in unemployment
iii. Production slows down
iv. Decrease in consumer spending
v. Decrease in attendance and purchasing of related merchandise
c. Depression (Trough)
i. Prolonged recession
ii. Extremely low consumer spending
iii. High unemployment
iv. Drastic decrease in production of products
v. Poverty can result
vi. Lowest point of attendance and few related items are purchased
d. Recovery
i. Renewed economic growth and an increase in output of goods and
services
ii. Reduced unemployment
iii. Increased consumer spending
iv. Moderate business expansion
v. Gradual increase in leisure time activities and purchase of related
merchandise
OBJECTIVE:
3.02
Explain the concept of competition.
A. Explain the role of competition.
1. Competition is a rivalry between two or more businesses to gain as much of
the total market sales or customer acceptance as possible.
2. Competition helps to maintain reasonable prices, and to provide consumers
with new and improved products.
3. Competition results in a wide selection of products from which to choose.
4. Competition forces businesses to operate efficiently.
B. Identify the differences between direct and indirect competition, price and nonprice competition, and monopolies.
1. Direct competition involves two or more companies that utilize the same type
of business format. For example, JaRule versus JayZ and Coke versus Pepsi.
2. Indirect competition is between two or more retailers that employ different
types of business formats to sell the same type of goods. For example,
playing Putt-Putt versus an 18 hole golf course.
3. Price competition focuses on the selling price of a product. Consumers prefer
to buy the products that are lowest in price. For example, buying athletic
shoes at Foot Locker versus purchasing from Eastbay catalog.
4. Non-price competition is based on factors that are not related to price. Nonprice competition includes the quality of products, customer services,
business location, business reputation, and the qualifications of the
salespeople. For example, the price of tickets for the Super Bowl versus
purchasing tickets for a losing team.
5. Monopolies exist when one company has exclusive control over a product or
the means of producing it. Monopolies are prohibited under the free
enterprise system, the United States Government allows an exception if it is
wasteful to have more than one company. For example, there is only one
NFL team per area.
C. Discuss profit and loss as they relate to the sports and entertainment marketing
industry.
1. Profit is the money earned from conducting business after all costs and
expenses have been paid.
a. Profit for many businesses is 1-5% of sales.
b. Ninety-five to ninety-nine percent of the selling price goes to pay costs,
expenses and business taxes.
2. Loss is a decrease in a potential profit.
a. Risk is the potential for loss or failure.
b. Risk management discusses how to effectively manage losses due to risk.
D. Identify sources of revenue and expenditures of sports and entertainment
marketing.
1. Sources of revenue
a. Admissions
b. Food & beverage sales
c. Parking
d. Merchandise sales
e. Sponsorships
f. Naming rights
2. Sources of expenditures
a. Performer fees
b. Rental or leasing of facilities
c. Advertising
d. Incentives or in-game promotions
e. Food & beverage services
f. Security staff
OBJECTIVE:
3.03
Discuss the free enterprise system.
A. Identify the basic principles of a free enterprise system.
1. The free enterprise system is also referred to as private enterprise.
a. Encourages individuals to start and operate their own business with
limited government involvement.
b. Allows the market to determine prices through supply and demand.
2. Basic economic freedoms
a. Freedom of ownership
i. The ability to choose a house, car, job or business.
ii. There are restrictions on how and where some businesses can operate.
For example, the city of Wilmington might not allow a new movie
production facility to be built in a residential area.
b. Competition
i. A rivalry between two or more businesses to gain as much of the total
market share as possible.
ii. Competition helps to maintain reasonable prices, provides consumers
with new and improved products and results in a wider selection of
products from which to choose.
iii. Competition forces businesses to operate in the most efficient manner
possible.
c. Risk is the potential for loss or failure.
d. Profit is the money earned from conducting business after all costs and
expenses have been paid.
B. Identify the advantages and disadvantages of entrepreneurship.
1. Advantages
a. Personal independence to make key business decisions
b. Personal fulfillment and feeling of self-worth
c. Potential for increased income
2. Disadvantages
a. Risk associated with potential loss of income
b. Hours can be long and often irregular
C. Discuss the forms of business ownership.
1. A sole proprietorship is a business owned and operated by one person.
Seventy percent of all businesses in the United States are sole
proprietorships.
a. Advantages:
i. Ease of startup
ii. Limited government regulations including taxes. Sole proprietorships
are taxed less than other forms of business ownership.
iii. Profits go to the owner.
iv. Freedom in making business decisions.
b. Disadvantages
i. Unlimited liability. The business owner is liable for all business losses
including the initial investment and the ability of the owner to pay.
ii. Sole responsibility for all aspects of the business including skills and
finances.
iii. Life of the business is limited to the life or interest of the owner.
2. A partnership is a business owned and operated by two or more people. Less
than 10% of all businesses in the United States are partnerships.
a. Types of partnerships:
i. General partnership.
(a) An agreement in which both partners agree to share equally in the
profit and/or loss of the business.
(b) Each partner is liable for all debts incurred by the business.
ii. Limited partnership
(a) Each limited partner is liable for any debts of the business up to
the amount of his/her investment.
(b) Limited partnerships must have at least one partner who has
unlimited liability.
b. Advantages
i. Relatively inexpensive to start.
ii. Combined financial resources and knowledge.
iii. Shared management responsibilities.
iv. Increased potential for profits.
v. Shared responsibility for risk.
vi. Taxed less than a corporation.
vii. A change in ownership does not alter the continuity of the business.
c. Disadvantages
i. Partners can disagree on business decisions.
ii. The decision or action of one partner is legally binding on the other
partner, including financial decisions.
iii. If one partner dies, the business is dissolved.
3. A corporation is a business owned by stockholders.
a. A corporation is a legal entity that is chartered by the state in which the
business is located.
b. Boards, directors and officers manage the daily operations of a
corporation.
c. The three main types of corporations include:
i. Private (closed) corporations do not offer shares of stock for sale to
the general public.
ii. Public (open) corporations offer shares of stock for sale to the general
public.
iii. Subchapter “S” corporations are taxed like a sole proprietorship and
limited to 35 or less shareholders.
(a) Advantages
(i) Delegation of specific management skills
(ii) Limited liability for stockholders
(iii) Life of the corporation is unlimited
(iv) Easier to secure capital
(v) Stockholders can easily enter or leave the business by
purchasing or selling stock
(b) Disadvantages
(i) Numerous legal restrictions
(ii) Complex to start up and dissolve
(iii) Taxed heavily
(iv) Complex record keeping
4. A franchise is a business or organization with the right to use an established
name and sell trademarked products. Franchises are granted to a retailer or
a wholesaler for a fee.
a. Advantages
i. Name recognition and common products or services result in reduced
liability.
ii. Management training is typically provided by the franchisor (parent
company).
iii. Business plan is established by franchisor, modified for the location
and franchisee (person purchasing the franchise).
b. Disadvantages
i. Freedom to make business decisions is usually limited
ii. Franchise fees may be expensive
iii. Supplies and products must be purchased directly from the franchisor.
OBJECTIVE:
4.01
Explain the importance and types of selling.
A. Explain selling.
1. Selling is the exchange of goods and services from producers to consumers
for a price.
a. Businesses and sponsors might purchase incentives, media time, naming
rights, pre-/post-game entertainment, signage, tickets (group or season),
and products designed for the corporations’ target market.
b. Fans might purchase food and beverages, merchandise, pre-/post-game
entertainment, and tickets (group or season).
c. Sales of sponsored products should increase as a result of advertising at
an event.
d. Sponsors pay a rights fee for media time to a sports or entertainment
organization for the opportunity to provide broadcasts.
2. Data-based marketing involves the collection of information about past,
current, and potential consumers. In sports marketing, a database is needed
to generate leads or sources of new customers. One common way to
generate leads is through telemarketing. Telemarketing is communicating
with customers via the telephone. For example, sales representatives from
Nike call customers who recently purchased the new Jordan shoes to offer
them a second pair at a 25% discount. In some cases, consumers will call in
response to a promotional campaign.
3. Personal selling is a two-way communication between a representative of the
company and the customer. For example, a sales associate at the Carolina
Hurricanes team store, The Eye, selling an authentic team jersey to a fan.
4. B2B (business to business) selling takes place in a manufacturer’s or
wholesaler’s showroom (inside sales) or a customer’s place of business
(outside sales). For example, GoodYear Tire Corporation making a sales
presentation at Hendrick MotorSports.
5. Direct mail is personal and received in the mailbox. Direct mail is used to
initiate the sales process. For example, the Carolina Panthers mail
information introducing their new Fan Rewards program.
6. www/Internet selling is selling executed using the Internet. For example, a
Monsters, Inc. fan purchasing the DVD, or a customer purchasing stuffed toys
from www.disney.com.
B. Recognize the importance of selling.
1. Customer vs. consumer.
a. The customer is the person who buys the product or service.
b. The consumer is the person who uses the product or service.
c. As an example, the gift Mary selected for her husband’s 40th birthday was
season tickets to the Carolina Hurricanes. Mary purchased two tickets so
her husband could take a friend. Mary is the customer, while her husband
and his friend are the consumers.
2. Need vs. want.
a. A need is anything necessary or required to live. For example, we all
need food to survive.
b. A want is an unfulfilled desire. For example, tickets to a Carolina Panthers
football game.
c. It is crucial that sports and entertainment businesses help customers
recognize the value of the products.
3. Selling helps customers make informed buying decisions, which results in
customer satisfaction and repeat business.
4. Full-menu marketing is having products or services that meet virtually any
customer’s needs and/or wants.
C. Explain feature-benefit selling.
1. Product features are the basic, physical, and extended characteristics of an
item. For example, purchasing front row seats at the Emmy Awards.
2. Feature-benefit selling is matching the characteristics of a product to a
customer’s needs and wants. For example, a company leases a suite at the
Emmy Awards to host their preferred clientele.
3. Customer benefits are the advantages or personal satisfaction a customer will
get from a good or service. For example, the benefit of being on the front
row at the Emmy Awards results in better viewing of the awards and
presentations.
D. Discuss customer buying motives and decision making.
1. Buying motives are the motives for customers to purchase a product.
a. Rational motives are based on conscious, logical thinking and decision
making. Product dependability, time or monetary savings, quality, and
price are rational motives for buying or purchasing a product or service.
For example, a mother purchases lawn seats for a Britney Spears concert
instead of the more expensive stadium seats.
b. Emotional motives are based on feelings. Social approval, recognition,
power, love, and prestige are emotional motives for buying or purchasing
a product. For example, a parent camping out overnight to get front row
seats to the JayZ concert for her daughter’s 13 th birthday.
c. Patronage motives are based on loyalty. Low prices, high quality, friendly
staff, great customer service, merchandise assortment, and/or
convenience of location are patronage motives for buying or purchasing a
product. For example, Alyssa only purchases her son’s cross country
shoes at the Run for Your Life athletic shoe store because of their
excellent customer service and close proximity to her home.
2. Customers go through a decision-making process in order to determine what
products they will buy.
a. Extensive decision-making occurs when there is a high level of perceived
risk, a product or service is very expensive or has a high value to the
customer. A customer will conduct research and evaluate product
alternatives before making a decision. For example, the Buffalo Bills
equipment manager decides whether equipment should be purchased
from All-star Athletics or Winners Incorporated.
b. Limited decision making occurs when a customer buys products that he or
she has purchased before but not regularly. The Carolina Little League
Team decides whether to advertise in the local paper this season or
continue with the same billboard ad they had last year.
c. Routine decision making occurs when little information is needed about
the product being purchased. For example, the Mountainview High School
baseball coach always purchases the teams chewing gum from the local
wholesale store.
E. Identify the activities taking place during the preapproach.
1. Product information.
a. Knowing how to use and care for a product is essential when educating
consumers and demonstrating a product. For example, demonstrating to
a customer the proper way to oil a baseball glove.
b. Four sources of product information are direct experience, written
publications, other people, and formal training. For example, Debbi is a
sales associate for Foot Locker. She attends an Adidas clinic on the
proper way to fit children for shoes.
2. Reviewing current trade periodicals is crucial to staying abreast of current
trends and industry information. For example, the sales manager for the
Carolina Hurricanes subscribes to Street & Smith’s SportsBusiness Journal.
3. Sources and methods of prospecting. A prospect is a potential customer.
Employer leads, telephone directories, trade and professional directories,
commercial lists, customer referrals and cold canvassing are examples of
prospects. For example, the Miami Heat purchases the mailing list of the top
50 Fortune 500 companies.
OBJECTIVE:
4.02
Recognize the steps of the selling process.
A. Explain the approach.
1. The approach is the first encounter with a customer. The initial approach is
critical. It should be positive, create a favorable impression, and create
interest in the product.
a. Service approach.
i. Considered the least effective approach method.
ii. Should only be used when customer is obviously in a hurry or when
selling a service. For example, “How may I help you today?”
b. Greeting approach.
i. Simple greeting such as “Good Morning! Is it still storming outside?” is
used to acknowledge customer’s presence and establish rapport.
ii. Greeting may include introduction of oneself.
iii. Can be combined with the service or merchandise approach.
c. Merchandise approach.
i. Includes comments or questions about the merchandise the customer
is looking at or handling.
ii. Considered the best approach method. For example, “The Atlanta
Braves jersey will not shrink when washed.”
2. Sales approaches used in sports and entertainment marketing include
telemarketing, direct mail, and personal selling.
B. Determine the needs of customers.
1. Observe the nonverbal communication of the customers and how they
express themselves through body language.
2. Listen to customers. Maintain good eye-contact, provide verbal and nonverbal feedback, give customers undivided attention, listen with empathy and
an open-mind, and do not interrupt.
3. Question customers. Well-chosen questions can help uncover needs and
buying motives while putting customers at ease. Begin with general
questions and then progress into specific questions. It is important to ask
open-ended questions (questions that require more than a yes/no answer).
For example, “How often do you bring your family to Paramount’s Carowinds
each year?” Then explain to the customer the benefits of an annual pass to
the park.
C. Explain product presentation and demonstration.
1. Good presentations actively involve the customer. For example, when AT&T
was making their presentation to the United States Olympic Committee,
recordings of different sound variations were demonstrated so the committee
members could hear the clarity of the sound system when making
announcements to the fans. AT&T felt this form of sales presentation would
ensure their selection as the sound system used by the Olympics.
2. Show the product to the customer and tell them about its benefits. This is
called show and tell. Never show more than three items at one time. If in
doubt, show medium-priced merchandise first, which means the salesperson
can go up or down in price based on customer’s reactions and comments.
3. Make the presentation come alive. Involve the customer by putting the
product in the customer’s hand. Demonstrate how the product works. For
example, when customers are considering purchasing season tickets, offer to
show them where they will be sitting.
D. Overcome objections.
1. An objection is a reason, concern, or hesitation a customer has for not
making a purchase. For example, “I really want both the sweatshirt and short
sleeve shirt, but I can’t afford both.”
2. Common objections:
a. May be spoken or unspoken.
b. May be logical or psychological.
c. May relate to the need, product, price, salesperson, source, store, or time.
d. May occur at any point in the sale.
e. Should be welcomed. Indicates true interest in merchandise. Indicates to
salesperson the next steps in recommending solutions.
3. To handle objections, listen, acknowledge, restate, and answer the objection.
4. Six specialized methods of handling objections.
a. Boomerang. The objection comes back to the customer as a selling point.
For example, if a customer states, “I can’t believe this concert ticket is so
expensive.” The salesperson’s response might be, “I understand, but the
view from those seats will be excellent.”
b. Question. The customer is questioned in an attempt to learn more about
the objections raised. For example, “Why don’t you want to buy running
shoes, especially if you are starting to get more involved in 5k events?”
c. Superior point. The salesperson acknowledges the objections as valid, but
offsets them with other features and benefits. For example, if a customer
states, “I went to a Charlotte Checkers game last week and the tickets
were $10 cheaper than the Hurricanes tickets.” The salesperson’s
response might be, “Yes, that would be correct, but last year the Carolina
Hurricanes were in the Stanley Cup Finals and the Checkers are not part
of the National Hockey League.”
d. Denial. Provide proof and accurate information when answering
objections. Best used when customer has wrong information or when the
objection is in the form of a question. For example, if a customer states,
“I really don’t want to pay a $150 joining fee in advance.” The
salesperson’s response might be, “You don’t have to pay in advance, we
can spread the joining fee over a six month period if you like.”
e. Demonstration. Answers objection by showing one or more features. It
demonstrates the saying “Seeing is believing.” For example, a
salesperson shows the benefits of a new MP3 player to a customer.
f. Third party. Uses a previous customer or another neutral person who can
give a testimonial about the product. It can be in the form of a letter
received from a satisfied customer. For example, “The Carolina
Hurricanes have always purchased their team equipment from us. As a
matter of fact, let me show you a letter we just received from their
equipment manager.”
E. Explain closing the sale.
1. Closing the sale. Obtaining a positive agreement from the customer to buy.
For example, “Would you like this gift wrapped?”
2. Customer readiness in closing.
a. Buying signals
i. Facial expressions or body language.
ii. Physical actions. For example, nodding, reaching for a wallet.
iii. Comments. For example, “I really like it; it fits well.”
iv. Questions. For example, “Do you have another one for my son?”
b. Trial close. This is used to get an indication of what needs to be done to
close the sale. For example, “Would you like to wear them home?”
3. General rules for closing the sale.
a. If the customer is ready to make a buying decision, stop talking about the
product.
b. When a customer is having difficulty making a buying decision, stop
showing additional merchandise.
c. Help a customer decide by summarizing the major features and benefits of
a product.
d. Do not rush a customer into making a buying decision.
e. Use words that indicate ownership, such as you and your.
f. Use major objections that have been resolved to close the sale.
g. Use effective product presentations to close the sale.
h. Look for minor agreements from the customer on selling points that lead
up to the close.
4. Specialized closing methods.
a. The “which” close encourages a customer to make a decision between two
items.
i. Remove unwanted items to bring the selection down to two.
ii. Review the benefits of each.
iii. Ask the customer, “Which one do you prefer?”
b. The standing-room-only close is used when a product is in short supply or
when the price will be going up in the near future. For example, “If you
purchase the signage at the RBC Center today, you will be saving your
club over $2,000.00. Next month, there will be a 10% price increase.”
c. The direct close is a method in which a salesperson asks for the sale. For
example, “May I initiate the paperwork for your sponsorship of our charity
event?”
d. The service close explains services that overcome obstacles or problems.
For example, “Now, let’s talk about when you would like the system
installed.”
F. Explain suggestion selling.
1. Suggestion selling is beneficial to both the customer and the salesperson.
The customer gets the benefit of goods or services that will compliment the
initial purchase. For example, “How about an ice-cold Diet Vanilla Coke to go
with that hotdog?”
2. It is performed to help or enhance the original purchase. Suggestion selling
is not intended to force unnecessary items onto the customer.
3. It takes place after the customer commits to make the original purchase, but
before the sale is entered into the register.
4. Three methods used include offering related merchandise, recommending
larger quantities, and calling attention to special sales opportunities.
G. Explain relationship marketing.
1. Relationship marketing involves the strategies businesses use to stay close to
their customers. Building a relationship with a customer is crucial to keeping
them as a repeat customer. For example, mailing or e-mailing a bi-monthly
newsletter to any customer of the stadium store.
2. Benefit selling involves informing customers of new benefits about a sports or
entertainment product. For example, rather than purchase a gym
membership that will expire in six months, a customer purchases a booklet of
“admission tickets” that do not expire until they are redeemed.
3. After-sale activities are used to develop and nurture customer relationships
and loyalty in developing on-going dialog with customers in preparation for
future sales. For example, taking payment or taking the order, departure
activities such as reassuring the customer, following-up on commitments
made, and evaluating selling skills.
OBJECTIVE:
4.03
Solve related mathematical problems.
A. Understand the cash drawer.
1. Opening cash fund
a. The opening cash drawer contains the coins and currency for the day’s
business.
b. If there is more than planned in drawer, the till is over.
c. If there is less than planned, the till is short.
d. Report discrepancies to supervisor.
B.
C.
D.
E.
F.
G.
2. Balancing the cash drawer
a. At end of shift, the drawer must be balanced.
b. The money must be counted and a balance report filled out.
Complete a sales transaction.
1. The extension is the result of multiplying the number of units by the cost per
unit.
2. Add item amounts.
3. Calculate sales tax and total.
Identify types of retail sales.
1. Cash sales include cash or checks.
2. Debit cards are bankcards or automatic teller machine (ATM) cards used to
make a purchase in the same way a credit card is used, except the funds are
withdrawn from the customers checking account.
3. Visa, MasterCard, American Express, Discover are examples of credit cards
used in credit sales.
Explain cost of merchandise sold.
1. The cost of merchandise sold is the amount a retailer actually pays for
merchandise. The cost of merchandise sold is determined by quoted
wholesale cost, discounts, and transportation charges.
2. One of the major expenses for wholesalers and retailers is the cost of
merchandise purchased for resale.
3. Factors affecting the cost of merchandise should be negotiated whenever
possible. These factors include:
a. Cost. Cost may not be “negotiable.” However, when combined with
available discounts and terms, the quoted cost is rarely the amount paid
by the retailer for the merchandise.
b. Discounts. A reduction in the selling price offered by manufacturers and
distributors to their customers to encourage prompt payment and
stimulate purchasing.
c. Allowances. A manufacturer often gives free merchandise for large orders
as a means of goodwill and to encourage future purchases.
Explain the difference between profit and markup.
1. Profit is the amount left from revenue (sales) after the costs of merchandise
and expenses have been paid. Expenses include such things as rent, utilities,
and salaries.
2. Markup is the difference between retail price and cost. In order for a business
to be profitable, its markup must be high enough to cover expenses and
maintain desired profit.
Explain and calculate gross and net profit.
1. Gross profit is a business’s income minus the cost of goods sold.
a. Income for is the total of all sales for the time period minus any sales
returns and allowances.
b. Cost of goods (merchandise) sold is the actual amount paid to the vendors
for the merchandise.
2. Net profit is what is left after all expenses have been paid by the business.
Explain basic markup calculations.
1. Calculate retail price. The most basic pricing formula is the one for
calculating retail price when given cost and dollar markup.
RETAIL PRICE (RP)
=
COST (C)
+
MARKUP (MU)
RETAIL PRICE (RP)
=
COST (C)
/
1-
MARKUP (MU) %
2. Calculate cost and markup: Formulas for cost and markup can easily be
derived from the formula, RP = C + MU.
C = RP – MU
MU = RP – C
3. Calculate markup percentage.
a. Markup percentage based on retail. To determine markup percentage,
divide dollar markup by retail price.
MU% BASED ON RETAIL
=
DOLLAR MU
/
RP
b. Markup percentage based on cost. To determine markup percentage
based on cost, divide dollar markup by cost.
MU% BASED ON COST
=
DOLLAR MU
/
C
H. Explain reductions in selling price.
1. Reasons for markdowns.
a. Buying errors. Wrong styles, color, sizes, materials, and/or quantities
have been purchased.
b. Pricing errors. Initial price may be set too high, leading customers to a
lower priced competitor.
c. Special sales. Regular stock may be marked down for a special sales
event, or a retailer may buy particular goods to sell at promotional prices.
2. Calculate markdowns.
a. Markdowns are the most common type of price change.
b. Markdowns are used as a tool to stimulate sales, dispose of slow
moving/discontinued merchandise, meet competitors’ prices and increase
customer traffic.
MARKDOWN (MD)
=
RETAIL PRICE X
MD %
3. Find markdown percentage.
a. Markdowns are expressed as a percentage of net sales and cannot be
calculated until merchandise is sold.
b. Markdown percentages are usually calculated for a specific period of time
rather than on individual items.
MD% =
OBJECTIVE:
5.01
DOLLAR MD
/
NET SALES
Identify the role of promotion.
A. Define promotion and purposes for promotion.
1. Promotion is any form of communication a business or organization uses to
encourage customers to purchase products and improve its public image. For
example, Harris Teeter sponsors a little league baseball team by purchasing
new uniforms and equipment.
2. Sport and entertainment organizations use promotion to inform a target
market of a product, persuade the target market to purchase the product,
and remind them continuously of the product. For example, web sites,
autograph sessions, fan festivals, and t-shirt give-aways.
3. Stadium event promotions are designed to facilitate fan participation and
create a cheerful atmosphere at sports and entertainment events. The two
most common types of event promotions include:
a. In-stadium promotions occur inside stadiums or arenas. For example,
lucky seat giveaways, mascot races, football tosses, and backstage access
at concerts.
b. Walk-in promotions are received as fans walk inside stadiums and arenas. For
example, T-shirts, hats, foam hands, can holders, visors and pennants.
B. Differentiate between institutional and product promotion.
1. Institutional promotion, also referred to as organizational advertising, is
designed to create a positive image, establish and maintain goodwill, and
increase consumer loyalty for the business, organization, or celebrity. As a
result, there may be an increase in sales of the good or service. For example,
the NBA Read to Achieve Program, Camp Mariah (Mariah Carey), and Daddy’s
House (P. Diddy).
2. Product promotion, also referred to as product advertising, is designed to
stimulate sales of a business, organization, or celebrity’s good or service.
Product promotion is also used to launch new products. For example, prealbum release listening parties, a musician promoting release of new single,
or Coca-Cola setting up pre-concert promotion booths to promote Diet Vanilla
Coke.
OBJECTIVE:
5.02
Explain the promotional mix and the different
forms of promotion.
A. Identify elements of the promotional mix.
1. Promotional mix is any combination of the different forms of promotion to sell
goods and services.
2. The different forms of promotion include:
a. Advertising is any paid, non-personal form of communication by an
identified sponsor. For example, TV commercials, magazine
advertisements, direct mail and the Internet.
b. Sales promotions are activities or communications that encourage
consumers to purchase products. For example, giveaways, sweepstakes,
free samples, award shows, contests, and coupons.
c. Personal selling is face-to-face, personalized communication between a
seller and a buyer. For example, the presentation of a demo from a
recording artist to a record label executive.
d. Public or community relations are activities used by a business or
organization to gain and maintain a positive relationship between
themselves and the community. The two types of public or community
relations are:
i. The internal community includes the employees of the company or
organization. For example, Coke holding an annual picnic for
employees and their families.
ii. The external community includes people outside of the company or
organization. For example, Pepsi donating circus tickets to a Big
Brother/Big Sister organization.
e. Sponsorship is the financing of a sports or entertainment entity (athlete,
league, team, concert, or event) by a business in return for recognition or
affiliation.
B. Identify the types of media used in advertising.
1. Print media is any written form of communication used to inform, persuade,
or remind consumers about products or services offered. The forms of print
media include:
a. Newspapers are the most common and the most cost effective type of
print media. Newspapers are most effective for local businesses that are
trying to reach a specific geographical market.
b. Magazines are likely to be used by advertisers to segment the market
based on demographic and behavioral segmentation. For example, men
are more likely to subscribe to Field & Stream, so this would be costeffective for a brand of men’s razors.
c. Direct mail is sent directly to customers, or potential customers of a
particular store. For example, all Blockbuster Video members would
receive a flyer announcing a special sales event.
d. Outdoor advertising includes any outdoor signs and billboards. Outdoor
advertising provides 24-hour advertising.
e. Transit advertising uses public transportation, such as buses, taxicabs,
and subways to post advertising messages.
2. Broadcast media is any visual and/or auditory form of communication used to
inform, persuade, or remind consumers about goods or services offered. Two
types of broadcast media are:
a. Radio advertisers match their target market to a radio station that
segments a particular market. Radio advertising has the ability to reach a
wide audience.
b. Television advertising includes commercials and infomercials. Television
advertising is the most effective type of broadcast media as well as the
most expensive.
3. Online media is the placement of advertising messages on the Internet and
World Wide Web. The different forms of online advertising include:
a. Banner advertisements are rectangular boxes at the top or bottom of Web
sites that are used to promote a Web site or business.
b. Pop-up advertisements are the advertisements that “pop-up” and
interrupt Internet surfing.
c. E-mail advertisements are used to tailor messages to fit individual web
surfers. E-marketers compile or purchase customer databases containing
information based on sites visited by web surfers.
4. Specialty media are “everyday” items with a company name written on them.
For example, calendars, pens, and coffee mugs.
5. There are many other creative ways of communicating advertising messages
to consumers. For example, blimps, supermarket carts, hot air balloons, and
in-theater advertisements.
C. Identify forms of sales promotions.
1. Annual award shows for sports and entertainment.
a. The Academy Awards, or Oscars, are awarded by the Academy of Motion
Picture Arts and Sciences. An Oscar nomination creates media coverage
and increases ticket sales. Movie producers and studios advertise their
films to Academy members through trade publications and the talk-show
circuit.
2.
3.
4.
5.
b. The National Academy of Recording Arts and Sciences (NARAS) presents
the Grammy Awards. NARAS is an association of more than 13,000
recording professionals. NARAS forms a committee and winning artists
are selected by a vote of membership. A Grammy Award might draw
attention to the artist, but it does not guarantee acceptance of the artist
by the public in the form of sales.
c. The Emmy Awards are awarded by two branches of the same
organization. The Academy of TV Arts and Science awards Prime-time
Emmy Awards for nighttime television, and Daytime Emmy Awards for
daytime television. The Emmy Awards draw monumental attention to
television shows, increasing the number of people who view them because
of winning actors/actresses.
d. The Tony Awards are awarded to theater professionals for outstanding
achievement.
e. The ESPY Awards were by ESPN and are awarded for excellence in sports
performance. The ESPY Select Nominating Committee (SNC) is composed
of sports executives, journalists, and retired athletes who vote on
nominees selected by the committee. Besides athletes and coaches,
many actors and musicians (some of which perform) attend the event as
well. The ESPY Awards make charitable contributions to The V
Foundation, established by ESPN in honor of the late Jim Valvano.
Trade shows and conventions are promotional opportunities for
manufacturers, wholesalers, retailers, and movie producers to learn about
and support new products in the industry.
Incentives are used to generate awareness, interest, and increase sales. The
different forms of incentives include:
a. Contests. Prizes are awarded based on contestant skill and or ability. For
example, American Idol, Fear Factor and Dog Eat Dog.
b. Sweepstakes. Prizes are awarded based on the chance or luck of the
contestant. For example, winning concert tickets from a local radio
station.
c. Rebates. Discounts offered by a manufacturer if the consumer purchases
a sports or entertainment good or service during a specified time period.
For example, mail in rebates for purchasing two DVD’s at one time or
signing up for two programs at the local YMCA and receiving a discount.
Premiums are low cost items given away with the sponsor’s product as part of
a sales promotion. For example, Powerade gives away a cooler with a
purchase of a case of powdered drink mix. Two forms of premiums include:
a. Coupons offer reductions in price and are found in print advertisements,
inserted inside product packaging, incorporated as part of the products
package, or mailed to consumers. For example, Blockbuster coupons on
popcorn packaging or coupons inserted within Sunday newspapers.
b. Traffic-builders are low cost items given to customers for attending an
event, or visiting a store. For example, the first 200 customers to attend
the grand opening of the new Sports Authority receive a Sports Authority
key chain.
Sampling refers to giving consumers a “taste” for a sporting event or concert.
For example, fan participation at a track and field event or Faith Hill selecting
a lucky member of the concert audience to join her on stage.
D. Outline the steps of promotional planning.
1. Identify target market by using one of two strategies.
a. Push strategies are used by a manufacturer to convince or “push” retailers
to carry and promote products in their retail establishments. This strategy
relies heavily on personal selling and sales promotion.
b. Pull strategies are directed towards customers to increase their interest
and demand for products. Customers will “pull” or convince retailers to
carry sports or entertainment products. This strategy relies heavily on
advertising.
2. Determine the objectives of the promotional activity. For example, is the
objective to increase sales, increase market share, or create brand
awareness?
3. Establish a promotional budget. No exact science exists for establishing a
promotional budget. The four most common methods of determining budgets
include:
a. Percentage of expected sales. This is based on a percentage of past or
expected sales to determine amount of promotional budget. The
advantage of this method is that there is limited financial risk. The
disadvantage is sales may fall which may drastically reduce the
promotional budget.
b. Objective and task method. The sport or entertainment company
determines promotional goals, the steps needed to meet the goals, and
calculates the cost for the promotional activities. This is the most cost
effective method because it takes into account what the company wants
to accomplish and how it will be accomplished.
c. Competitive equivalence. Matching the competitors’ promotional outlay.
This is the weakest method of determining a promotional budget because
it takes into account the competitors’ objective only.
d. “Whimsical” allocation. All money that can be spent after expenses is
allocated as the promotional budget. This is a short-term method used to
increase sales by building a reputation.
4. Develop a promotional mix. The specific mix chosen should take into
consideration the target market, the promotional goals, and the promotional
budget. Care should be given to aligning national and local promotional
efforts.
OBJECTIVE:
5.03
Discuss the use and importance of sponsorships
and endorsements.
A. Define sponsorship and sponsor.
1. Sponsorship is the financing of a sports or entertainment entity (athlete,
league, team, concert, or event) by a business in return for recognition
affiliation.
2. A sponsor can be a business, person, or organization that finances a sports or
entertainment entity. This financing can be in the form of money, products,
equipment, services, or any combination of the four.
B. Discuss reasons for sponsorships.
1. Increase a company’s sales and profits through affiliation with sports or
entertainment entity.
2. Increase market share for existing products or services.
3. Introduce new products or services.
4. Increase brand awareness and company image.
5. Enter and reach new target markets.
6. Build and maintain relationships with consumers.
7. Build and maintain goodwill within the community.
8. Entertain existing customers, potential customers, or employees and their
families.
C. Discuss types of sponsorships.
1. Barter sponsorship is a form of sponsorship whereby the company does not
finance a sports or entertainment entity with money only. A company will
provide products, equipment, or services in return for their affiliation with the
sports or entertainment entity. Barter sponsorship is also referred to as in-kind
or trade. Companies might choose to combine money and barter sponsorship.
For example, a company decides to sponsor a little league baseball team. The
company (sponsor) pays for the team’s uniforms and equipment. In return, the
sponsor gets to place their name and logo on the team’s uniforms.
2. Endorsements, also called testimonials, are a personal recommendation
regarding the use or quality of a good or service. Consumers are more likely to
purchase a good or service if a celebrity endorses it. For example, Dennis Franz
uses Nextel telephones in a commercial.
3. Naming rights are contractual agreements between a sponsor and a venue or
event. A company or organization will sponsor a sports or entertainment facility
or an event. In return, the company or organization’s logo will appear in
affiliation with the facility or event. For example, The FedEx Orange Bowl in
Miami, Florida or The Coca-Cola 600 at Lowe’s Motor Speedway in Charlotte,
North Carolina.
4. Personal services agreements are contracts between a company and a sports
figure or entertainer for the endorsement of a product or service. The contract
includes details of the duties and responsibilities for each party involved.
OBJECTIVE:
5.04
Describe the use of technology in promotion.
A. Define World Wide Web and e-Commerce.
1. The World Wide Web (commonly referred to as “the web”) is a collection of
internet sites that are available to users with an internet connection.
2. E-commerce is the electronic exchange of products or services.
3. A web site can contain numerous web pages.
B. Identify the key components of a web site.
1. Text is the written words coded in Hypertext Markup Language (HTML) that
tells the web browser how to view each web page.
2. Photos or video clips include team photos, footage of sports events, concerts,
or movie trailers.
3. Graphics are clip art or drawings on web pages.
4. Hyperlinks are links to other web pages within a web site, or to another web
site.
C. Describe the types of e-Commerce web sites.
1. The product information web site includes descriptions of products offered for
sale, product payment information, return and warranty policies, and other
general information about the business. Customers should also be able to
find contact information for the company.
2. The customer interaction web site provides customers with the opportunity to
place product orders, pay for them, and attain shipping costs and dates. In
addition, many web sites allow customers to attain tracking information about
product purchases.
D. Identify the advantages and disadvantages of e-Commerce.
1. Advantages include:
a. Instantaneous and direct communication with customers.
b. Customers can place orders at their convenience.
c. Lower start-up and operating costs.
d. Allows a small company to reach the global marketplace.
e. Companies can gather information on customer buying habits and
interests.
2. Disadvantages include:
a. Lack of personal contact with customers.
b. Amount of competition is increased between all companies that sell the
same products on the web.
c. Customers might use the web site to obtain product information, but
purchase from local businesses.
d. Customer service can be a challenge when a problem exists with the
order.
E. Recognize advertisements on the World Wide Web.
1. Banner advertisements are used to promote a web site or a company.
Browsers can click on the advertisement for a hyperlink to the web site or
company.
2. Advantages of banner advertisements include:
a. Opportunity to reach millions of potential customers.
b. Relatively low cost per contact.
c. Capability to use appealing graphics and sound effects.
3. Disadvantages of banner advertisements:
a. Advertisement might not reach intended target market.
b. Can be perceived as “junk” and ignored.
c. May not be cost effective based on the target audience.
F. Discuss the use of e-mail as a form of promotion.
1. E-mail advertisements can offer special offers and promotions. Sometimes
this is perceived as unwanted e-mail or SPAM.
2. E-newsletters can provide information or special offers and promotions to
customers.
3. E-marketers compile or purchase customer databases from sites visited by
consumers. E-marketers may use this information to tailor marketing
messages for target marketing.
OBJECTIVE:
6.01
Explain the concept of branding.
A. Identify the forms of branding.
1. A brand is a design, name, symbol, term, or word that distinguishes and
identifies a company and/or its products or services.
2. A corporate brand represents the entire company or organization. For
example, Coca-Cola, McDonald’s, Kraft, or Microsoft.
3. A product brand represents a specific product of a company or organization.
For example, Diet Vanilla Coke, Big Mac, or Windows XP.
4. A private distributor brand is also called a store brand. These products are
branded under the private distributor’s label. For example, the Radio Shack
brand of batteries, or the Lowes Foods brand of Macaroni and Cheese.
B. Explain the components of a brand name.
1. A brand name includes all of the combined impressions and experiences
associated with a particular company or product. For example, McDonalds
makes the customer think about quick food, low prices, and consistent
service.
2. Brand identity consists of a spoken name and the corresponding design, logo,
or symbol. For example, Coca-Cola and the Coke “swirl” or Nike and the Nike
“swoosh.”
3. Brand image is the consumers’ beliefs about the company and/or its goods or
services. Quality, price, and value may affect a brand’s image.
4. Brand equity is the perception of added value a product has as a result of its
brand name. A highly recognizable brand has a high level of brand equity.
Brand equity is an intangible perception or memory.
a. The benefits of brand equity include:
i. Brand name recognition or awareness
ii. Customer loyalty
iii. Perceived quality
iv. Strong emotional or mental associations
b. Brand equity can be a valuable asset. The following data shows the
perceived value of brand equity for a few of the top companies:
i. Coca-Cola
$69 billion
ii. Microsoft
$65 billion
iii. Disney
$32.6 billion
iv. American Express
$17 billion
v. Ericsson
$7 billion
C. Discuss the forms of trademarks.
1. A trademark is a word, phrase, symbol, or design that identifies and
distinguishes the company from others. A trademark has legal protection
through the United States Patent and Trademark Office.
2. A service mark is the same as a trademark but for a service.
3. When a company claims rights to a trademark or service mark, they may use
the “TM” or “SM” designations to indicate ownership of the mark. Once the
United States Patent and Trademark Office registers a trademark or service
mark, the company may use the  symbol.
4. A trade character is a personified symbol that represents the brand name.
For example, Mickey Mouse for Disney, Captain Fear for the Tampa Bay
Buccaneers, or STORMY for the Carolina Hurricanes.
D. Discuss the elements that make a brand successful.
1. Easy to pronounce and free from negative connotations. For example, Tide or
New Balance.
2. Short and easy to remember and recognize. For example, Nike or Epic
Records.
3. Describe the products features and/or benefits. For example, Arcticat
Snowmobiles or Goodyear Aquatred.
4. Consistent with the image of the product. For example, SnackWells or FedEx.
5. Must be distinctive enough to not infringe on any copyrights for other
trademarks, should be capable of legal protection and registration.
OBJECTIVE:
6.02
Discuss product licensing.
A. Recognize the importance of licensing.
1. Licensing is the permission to copy the name, logo, or trademark of a league,
athlete, sports team, entertainer, film, television show, or character for a fee,
also called a royalty.
2. A licensor is the rights-holder of the name, logo, or trademark.
3. A licensee is the company paying for the permission to use the name, logo, or
trademark. Well-known licensees include Nike, Reebok, Adidas, Sony,
Nintendo, and Sega.
4. Licensed products are manufactured by licensees under an agreement with a
licensor. Licensees can have a significant impact on a licensor’s perception
among consumers.
5. A license is issued to another company that will manufacture, market, and sell
the licensed products.
a. The licensor approves the product and collects the licensing fees and
royalties. For example, Warner Brothers will give permission to Electronic
Arts to use the Harry Potter character and movie scenario in a video game
or a manufacturer of children’s clothing may pay royalties to Sesame
Street in order to put Big Bird on their clothes.
b. Companies typically pay between 5 and 10 percent of wholesale sales in
the form of royalties.
6. Licensing provides greater profit, promotion, and legal protection for the
licensor.
B. Classify character and corporate licensing.
1. A sports or entertainment entity permits a licensee to use their image, name,
or character for a fee. For example, LucasArts Entertainment Company
licenses a manufacturer to use the images of the characters from Star Wars:
Attack of the Clones.
2. A corporation permits a licensee to use the corporate image or name for a
fee. For example, Coca-Cola licenses a manufacturer to use their corporate
logo on a baseball cap.
C. Consider the advantages of licensing.
1. Advantages for the licensor include:
a. Enhanced company image and publicity.
b. Increased profit from royalties.
c. Increased brand awareness or recognition.
d. Increased opportunity for penetrating new markets (especially
international) or enhancing existing markets.
e. Increased revenues from sales as a result of brand awareness and
expansion of new markets or enhancement of existing markets.
f. Limited manufacturing costs or risks.
2. Advantages for the licensee include:
a. Existing brand awareness or recognition.
b. Lower advertising and promotional costs.
c. Increased possibility of success and profitability.
d. Connection with an athlete, sports team, entertainer, or corporation.
D. Consider the disadvantages of licensing.
1. Disadvantages for the licensor include:
a. Potential for poor quality of a licensee’s manufactured products.
b. Partial relinquishment of control over the marketing mix of the brand.
2. Disadvantages for the licensee include:
a. Athlete, entertainer, or corporation may become involved in a scandal or
lose popularity.
b. Sports teams may suffer losing season(s).
c. Change in styles, trends, and consumer preferences.
d. Royalties and licensing fees can be expensive.
e. Manufacturing costs and risks.
f. Competition can drive up costs associated with licensing fees and
royalties.
g. Competition can cause a negative impact on market share.
E. Discuss the impact of licensing on consumers.
1. Increased opportunity to associate with an athlete, sports team, entertainer,
or corporation.
2. Increased supply of available products.
3. Competition can result in lower prices, new products, and better quality.
F. Discuss the concept of bootlegging.
1. Bootlegging is the unauthorized use of a name, logo, or trademark of a
league, athlete, sports team, entertainer, film, television show, or character.
2. Bootlegging reduces the profits of licensors and legitimate licensees.
3. Bootlegging can result in poor quality products for consumers, which will
decrease brand loyalty.
4. Bootlegging can result in higher manufacturing costs to the licensee, which
will result in higher prices for the consumer.
OBJECTIVE:
7.01
Discuss food & beverage services.
A. Define the segments of the food & beverage service industry.
1. Concessions.
a. Mobile carts or units that sell food and beverages.
b. Vendors that sell food and beverages to attendees in the seating areas.
These are also called hawkers because they “watch fans like a hawk” for
potential opportunities to make a sale.
2. Counter-service is similar to quick-serve restaurants or food courts.
3. Full-service restaurants are sit-down, public eating places with services
provided by a wait-staff.
4. Suites are rooms with a view of the event that have seating and food &
beverage services with a full-service wait staff.
5. Specialty services includes services such as the combination of an event and a
segment of the food & beverage industry. For example, Cinema Grill in
Atlanta, Georgia combines dinner and a movie.
B. Explain the history of food & beverage services.
1. Harry M. Stevens – H.M. Stevens Concessions Company
a. Considered the “father of ballpark concessions.”
b. Sold first program at a baseball game in Columbus, Ohio in 1887.
c. Began by selling scorecards to crowds at racetracks, ballparks and arenas.
d. Initialized the selling of hotdogs and soft drinks at sporting events.
e. Became one of the seven largest concessionaires in the United States.
2. Cretors & Company
a. Founded in 1885.
b. Patented the process of popping corn in oil in 1893.
c. Introduced the world’s first popcorn popping machine at the World’s
Columbian Exposition in Chicago, Illinois.
d. Influenced the creation of machines for use in theaters.
3. National Association of Concessionaires – NAC
a. Founded in 1944 as an association for the recreation and leisure-time food
& beverage services industry.
b. Provides members and services who seek to increase the standards of
excellence in the food & beverage services industry with information.
c. Included are owners and operators from the following facilities:
i. Movie theaters
ii. Stadiums and arenas
iii. Zoos and aquariums
iv. Colleges and universities
v. Foodservice contractors
vi. Park and recreation departments
vii. Amusement parks and family entertainment centers
viii.Ice skating rinks
ix. Roller skating rinks
x. Racetracks
xi. Bowling centers
xii. Outdoor facilities
xiii.Convention centers
C. Discuss contracting and self-operating food & beverage services.
1. Contracting is an agreement between a venue and an external company that
provides food & beverage services.
a. Advantages include:
i. Less time consuming.
ii. Responsibility of training and staffing food & beverage employees is
assumed by the contractor.
iii. Financial liability for waste, spoilage, or other losses is transferred to
the contractor.
iv. Responsibility of day-to-day operations is assumed by the contractor.
b. Disadvantages include:
i. Venue gives up managerial control. For example, staffing, inventory,
and merchandising.
ii. Less profits due contractor fees.
2. Self-operating is owning and operating ones own food & beverage services.
This is also referred to as in-house operations.
a. Advantages include:
i. Owners control the decision-making process.
ii. Profits are increased by cutting out the middle-man.
b. Disadvantages include:
i. Owner assumes all financial liability for waste, spoilage, or other
losses.
ii. Owner is responsible for all training and staffing of the food &
beverage services employees.
iii. Owner must have in-depth knowledge of the complete operation.
D. Identify costs of operating food & beverage services.
1. Start-up costs are associated with the initial venture of owning a business.
For example, equipment, signage, utilities.
2. Cost of goods sold include all costs associated with manufacturing products or
purchasing goods for resale. For example, food, wrappers, condiments, paper
products, and containers.
3. Operating expenses include costs associated with the day-to-day operations
of the business.
a. Fixed operating expenses do not vary over a specified period of time. For
example, insurance, rent or leases, depreciation on equipment, and
employee salaries.
b. Variable costs vary on a monthly basis. For example, supplies, utilities,
advertising, and security.
E. Identify factors affecting revenues from food & beverage services sales.
1. Attendance.
2. Type of event.
3. Weather.
4. Team standing (winning or losing season) affects attendance, which will affect
sales.
5. Expenses. For example, start-up costs, cost of goods sold, and operating
expenses.
6. Per capita spending is the average money spent by each spectator. In
general, as the cost of attending an event increases, the per capita spending
increases. For example, for a family of four to attend a movie, the per capita
spending is $12. If the same family of four attends a college football game,
the per capita spending is $45.
OBJECTIVE: 7.02
Explain on-site merchandising.
A. Identify the purpose and components of an on-site merchandising plan.
1. The primary purpose of having an on-site merchandising plan is to maximize
income for a sports or entertainment event.
2. Companies maximize income through the sales of food & beverage and
merchandise.
3. Four components of an on-site merchandising plan are:
a. Location of a vending station.
b. Design or physical layout.
c. Operations.
d. Merchandise.
B. Identify appropriate vending locations.
1. On-site merchandising can occur in a permanent merchandise stand or a
mobile cart. For example, a kiosk (a small freestanding booth).
2. Displays should be located near entrances, restrooms, concessions, exits, or
any high traffic area. For example, a vending location near an entrance will
be visible and attract customers.
C. Discuss the physical layout of a vending location.
1. The vending location should be within close proximity to a restocking area.
For example, an ice machine near concession stand or a stock room near a tshirt stand.
2. Display signs should be above eye level, three dimensional, lighted and
colorful.
a. Red and white should be used to attract attention of customers in close
range or near the point of sale.
b. Yellow and black attract attention from a farther range.
3. Larger, more bulky items are usually purchased at the end of a sports or
entertainment event.
D. Recognize critical issues of selling on-site merchandise.
1. The heaviest traffic for merchandising is upon arrival and departure.
2. In club levels, luxury boxes and suites, a menu of food & beverages and
merchandise is placed on seats. Orders are placed with a vendor or hawker
who fills the order and handles payment.
3. Test marketing is important to ensure the effectiveness of a good or service.
4. Training of sales personnel varies with the event.
5. Using a “multiple sales” selling technique and suggestion selling can increase
sales.
6. With smaller events, selling and merchandising may occur in-house.
Responsibilities include:
a. Designing the logo.
b. Deciding the type, quality, and quantity of merchandise.
c. Ordering merchandise.
d. Creating displays and point-of-purchase areas near the check-in, front
entrance and playing area.
OBJECTIVE:
8.01 Summarize the concept of risk management.
A. Explain the types of risk.
1. Risk is the possibility of a financial loss or failure. Individuals or companies
are willing to take a risk because of the opportunity for success or financial
gain.
2. Identify the three most common risks for a business.
a. Economic risk is the risk associated with the possibility of a loss due to a
change in the economy.
i. A business might experience monetary loss due to changes in overall
business conditions.
ii. Competition, changing consumer lifestyles, inflation, population
changes, limited usefulness or popularity of some products, product
obsolescence, government regulation, and recession are economic
risks.
iii. For example, there was competition for consumer dollars when the
Carolina Hurricanes, Carolina Cobras, and NC State Basketball team all
played at the RBC Center in Raleigh. The Carolina Cobras eventually
moved to Charlotte where they had a better chance of making a profit.
b. Natural risk is the risk associated with the possibility of a loss due to
natural causes.
i. Droughts, fires, floods, hurricanes, tornadoes, lightning, earthquakes,
and other unexpected changes in normal weather conditions are
natural risks.
ii. For example, in Lubbock, Texas in 2002, a power outage due to a
storm forced the cancellation of a Britney Spears concert after only two
songs.
c. Human risk is the risk associated with the possibility of a loss due to
human factors.
i. Customer unpredictability, employee or endorser unpredictability, and
human mistakes are human risks.
ii. Risks affiliated with employees or endorsers might include dishonesty,
incompetence, accidents, illness, or negligence.
iii. Risks affiliated with customers might include dishonesty, fraud,
accidents, or theft.
iv. For example, Lowes Motor Speedway widened pedestrian walkways to
reduce the possibility of a potential hazard from tightly packed crowds
after an event. Lowes Motor Speedway also removed the first two
rows of seats on the frontstretch of the track to protect fans from
debris that might harm fans after a wreck during a racing event.
B. Discuss the concept of risk management.
1. Risk management is the management, control, and prevention of exposure to
internal or external risks.
a. A risk management plan outlines procedures for handling all forms of
business risk.
b. Four important considerations to be included in a risk management plan
are:
i. Identify the potential business risks.
ii. Measure and prioritize potential business risks.
iii. Determine how to effectively handle each risk.
iv. Implement risk management plan.
2. Risk prevention and control involves dealing with risks before they occur.
a. Screen potential employees. Interviews and aptitude tests are the two
most common ways businesses screen employees.
b. Train and orient new employees to company policies and procedures.
c. Provide safe conditions and safety instructions for employees. Proper
safety instruction can reduce the possibility of on-the-job accidents.
d. Prevent external theft. Shoplifting is stealing merchandise from a
business. Robbery is stealing merchandise or money through the use of
force or threat.
e. Prevent internal theft. Dishonest employees could steal merchandise
(larceny) or money (embezzlement) from a company.
3. Risk transfer is passing risk.
a. Purchasing insurance against a potential loss transfers the risk to another.
For example, property, liability, business interruption, and income.
b. Warranties transfer risk to a manufacturer. A warranty is a written
guarantee that a product or service will meet certain quality standards. If
the product or service should not meet the expectations of the consumer,
or if the product should fail, then the manufacturer is held responsible.
Most warranties have specific time or use limits.
c. The type of business determines how much risk is incurred by each owner.
In a sole proprietorship or partnership, all risks are assumed by the
individual owner(s). In contrast, a corporation transfers risk to its
shareholders.
4. Risk retention is assuming or acknowledging a business risk and the outcome.
a. Businesses recognize that some risks are inevitable or uncontrollable.
b. Businesses recognize that some risks cannot be transferred, avoided,
insured, or prevented. For example, an act of terrorism, such as
September 11, 2001.
c. Certain risks may never occur.
5. Risk avoidance may be achieved by anticipating a business risk and preparing
for that risk in advance.
a. Avoid opportunities or investments that have a potentially high risk.
b. Pursue an option or strategy that involves less risk.
OBJECTIVE:
8.02 Discuss considerations for safety and security.
A. Define safety and security.
1. Safety is providing the proper precautions to protect against harm, failure,
breakage, or accident.
2. Security is any measure taken to guard against crime or attack.
B. Discuss the types of indoor/outdoor security.
1. Security guards are hired to protect a venue and maintain order at an event.
2. Metal detectors are devices that detect the presence of metal such as guns
and knives. The device is usually hand-held or gatelike in structure.
3. Searches are used to examine a person or his/her personal effects in order to
find an inappropriate concealed item.
4. Security badges include plastic cards, metal tags, devices, or tokens.
a. They may be issued to employees, contractors, vendors, members of the
press, athletes or entertainers and their entourage, or any other person
with a valid reason for entering a secure area or event.
b. Examples of security badges.
i. Wristbands are plastic identification bands that encircle the wrist.
ii. Photo-identification cards are plastic cards or badges bearing a
photograph, name, and other identifying information about a person.
iii. Magnetic strip cards are plastic swipe cards with a magnetic strip
containing encoded data that is read by passing the card through a
slotted electronic device. The cards are used especially to make
electronic transactions and to provide access to restricted or secure
iv. Smart cards are plastic cards containing a computer chip which allows
the holder to enter secured areas, buy goods and services, or execute
other operations requiring secured information stored on the chip.
v. Bar code cards are plastic cards with a number of vertical lines set in a
pattern, containing identifying security information.
vi. Proximity cards are plastic cards with a magnetic strip containing
encoded data that is read by passing the cards within a certain
distance of a computerized electronic card reader. The cards are used
to provide access to restricted or secured areas.
5. Facial recognition technology is a computer program that takes images filmed
from a camera and compares them to a known database of criminal pictures.
Crowds of people can be scanned instantly using a single camera alleviating
the need of long security lines. This technology was first used on a widescale basis at the 2002 Winter Olympics in Salt Lake City.
6. Surveillance cameras are used to observe attendees of an event.
OBJECTIVE:
8.03 Discuss the types of insurance necessary for the
sports and entertainment industry.
A. Explain liability insurances.
1. General liability insurance provides broad coverage against claims of
negligence or inappropriate action resulting in bodily harm or damage to
personal property.
2. Automobile liability insurance provides compensation to individuals injured by
automobiles used in an event. For example, if an event organizer is driving a
golf cart and hits a spectator, the organization is covered.
3. Board of Directors liability insurance protects volunteer board members from
personal liability. For example, if an event goes bankrupt, the event
managers or the board cannot be held personally liable or be directly sued.
4. Comprehensive general liability insurance is a package policy that includes
fire, theft and injury. There are exclusions to this type of coverage.
Examples of common exclusions are pyrotechnics (fireworks), aerial activities,
participant activities, and other activities which might be deemed as high-risk.
B. Outline miscellaneous insurances.
1. Event Cancellation Insurance provides coverage for the cancellation of an
event due to circumstances beyond the event coordinator’s control.
2. Inclement weather insurance provides coverage for the cancellation of an
event due to inclement weather or natural risks, rain, lightening, hurricane, or
tornado.
3. Broadcast Transmission Interruption Insurance provides coverage due to an
interruption of the radio or television broadcast of an event.
4. Non-Appearance or “No-Show” Insurance provides coverage if an athlete or
entertainer fails to appear at an event due to accident or illness.
5. Prize Indemnity Insurance provides coverage when a participant wins a
promotional contest. Contest examples are Hole-in-One Golf Tournaments
and Field Goal Kicks for cash or prizes. Prize indemnity can also protect the
company against loss of income due to prize fraud.
6. Accidental Death and Dismemberment Insurance provides coverage if an
event participant suffers loss of life or limb.
7. Temporary Disability Insurance provides coverage for an athlete or
entertainer in the event that he/she suffers an injury or illness that
temporarily keeps him/her from working.
8. Permanent Disability Insurance provides coverage for an athlete or
entertainer in the event that they suffer an injury or illness that permanently
keeps them from working.
9. Image Protection Insurance provides coverage for a sponsor in the event that
an athlete’s or entertainer’s actions result in negative publicity for the
company.
10. Property Insurance Provides coverage for damage to buildings and production
sets. Property insurance will also provide coverage for theft or damage to
personal property and props.
11. Producer’s Errors and Omissions Liability Insurance provides coverage for
copyright infringement, libel, and plagiarism.
12. Animal Mortality Insurance provides coverage in the event that an animal dies
while being used on a production set.
13. Workman’s Compensation Insurance provides reimbursement of medical
expenses for workers injured on the job.
OBJECTIVE:
relationships.
9.01Summarize factors of interpersonal
A. Explain the concept of human relations and its importance to sports and
entertainment marketing.
1. Human relations is getting along with others.
2. Teamwork is people working together to achieve a common goal.
B. Discuss personal traits necessary to enhance interpersonal relations.
1. Friendliness is getting along well with others.
2. Courtesy is having good manners and a polite demeanor.
3. Ethical behavior is demonstrating honesty, integrity and fairness.
4. Creativity is using ones imagination to be original and inventive.
5. Initiative is being self-motivated to start a task without being asked.
6. Responsibility is being accountable for ones own actions and the resulting
consequences.
7. Attitude is the disposition towards people and situations.
8. Self-control is the ability to slow anger and behave in a disciplined way, not
impulsive.
9. Self-awareness is knowing ones strengths and weaknesses.
10. Willingness to change is adjusting to criticism or changes in the environment.
11. Self-esteem is self-respect or valuing ones personal worth.
12. Empathy is understanding another person’s situation or feelings.
13. Assertiveness is having the confidence to stand up for beliefs, ideas, or rights.
14. Time management is budgeting time and respecting important deadlines.
15. Goal-setting is planning for the future.
C. Describe factors that facilitate successful teamwork.
1. Train employees.
a. Each new employee must know how to do the tasks he or she will be
asked to perform.
b. Existing employees need continuous education and training to improve
knowledge, skills and efficiency.
2. Establish goals.
a. The company should plan how it will accomplish goals and objectives.
b. All team members should be committed to reaching the company’s goals
and objectives.
3. Delegate responsibility.
a. Assign roles and duties.
b. Make agreements for commitment to quality of work.
4. Evaluate performance.
a. Evaluate individual employee performance.
b. Evaluate whether or not the company’s goals and objectives are obtained.
5. Communicate.
a. Management should promote open and effective channels of
communication.
b. Listening to customers may result in new products or better customer
service and satisfaction.
OBJECTIVE:
9.02
Demonstrate the skills needed for obtaining
employment.
A. Identify sources of job leads.
1. Company personnel offices
2. Cooperative education experiences
3. Employment agencies
4. Family and friends
5. Former employers
6. Internet
7. Internships
8. Job fairs
9. Newspaper ads
10. Placement centers
11. School personnel, such as career development coordinators, counselors, and
teachers
12. Temporary employment agencies
B. Prepare a resume for a sports or entertainment marketing career.
1. Resumes are brief summaries of an individual’s personal information,
education, skills, work experience, activities, and interests. A growing trend
for employers is the use of online resumes.
2. Parts of a resume:
a. Contact information
i. Name
ii. Address
iii. Telephone number
iv. E-mail address
b. Objective
i. Identifies the position or type of job in which an applicant is interested
ii. Describes the skills or qualifications an applicant has acquired
c. Experience and employment history
i. List of related job experience, including volunteer work
ii. Dates, names, and location of former employers
iii. Description of duties and responsibilities
iv. Traditionally listed in reverse chronological order
d. Education
i. List of schools attended and degrees earned, including dates attended
and related coursework
ii. List of certificates, training, and/or licenses obtained
e. Activities and awards
i. List of affiliations with personal or professional organizations, including
volunteer or charitable organizations
ii. Personal and professional awards or recognition
f. References
i. List of people prospective employers may contact for more information
regarding an applicant
ii. Include the name, title, position held, name of business, location of
business, telephone number, fax number, and e-mail address
iii. Avoid using family members as references
iv. Portfolio of relevant work in addition to references, if necessary
C. Utilize proper interviewing techniques.
1. Prior to the interview:
a. Know information about the company and its products and/or services.
b. Dress appropriately.
c. Bring a copy of resume and references for the interviewer.
d. Arrive five to fifteen minutes prior to the interview.
e. Be prepared to answer job-related interview questions.
f. Be prepared to ask the interviewer appropriate job-related and companyspecific questions.
2. During the interview:
a. Use a firm and proper handshake.
b. Be enthusiastic.
c. Wait until offered a seat before sitting.
d. Sit up straight.
e. Listen to the interviewer and act interested at all times.
f. Speak clearly using proper grammar, making eye contact with the
interviewer when speaking.
g. Thank the interviewer for his/her time.
h. Shake hands before leaving.
3. After the interview:
a. Reflect on the interview experience. Make notes about things that went
well and things needing improvement.
b. Send the interviewer a brief thank you letter as soon as possible.
c. Follow-up phone call to employer one week after the interview.
OBJECTIVE:
9.03
Explain ethical responsibility in the sports and
entertainment industry.
A. Define ethics.
1. Ethics are the moral decisions of what is right or wrong.
2. Ethical behavior is knowing the difference between right and wrong and
consciously choosing to do what is right.
3. Ethical conduct of an organization is determined by the actions, attitudes, or
behavior of employees.
4. Ethics of companies, athletes, or entertainers has come under increased
public scrutiny in recent years.
5. A code of ethics is a written statement of responsibility for proper actions,
attitudes, or behaviors for employees.
B. Identify ethical responsibilities to customers.
1. Full disclosure.
a. Customers must be informed of a product’s features, conditions, and
price.
b. Companies have a responsibility to inform consumers of negative results
from the use of a product.
2. Truth in advertising.
a. False advertising is unethical and illegal.
b. “Bait and switch” practices lure customers with a low-price product, but
the company has no intent to sell that product to the customer. The
company then attempts to persuade the customer to purchase a higher
priced product.
3. Price fixing is an illegal agreement between a manufacturer and a company to
set prices for a product.
4. Unsafe products are manufactured with low-quality or potentially harmful
materials that could present a hazard to the consumer. Unsafe products can
result in lawsuits and a negative company or brand image. The Consumers
Union is an independent, nonprofit testing and information organization that
evaluates products for the benefit of consumers.
5. The Federal Trade Commission (FTC) enforces federal antitrust and consumer
protection laws, such as advertised prices.
6. The Consumer Product Safety Commission is an independent federal
regulatory agency. The CPSC attempts to reduce the risk of injuries and
deaths associated with consumer products by developing product standards,
conducting research, and educating consumers about potential product
hazards.
C. Identify ethical responsibility of employees.
1. Work habits
a. Be on time for work.
b. Work hard.
c. Be truthful and honest.
d. Be reliable and dependable.
e. Use initiative.
f. Give proper notice if leaving a job.
2. Loyalty
a. Keep confidential information classified.
b. Avoid gossip.
c. Practice good work habits.
3. Business image
a. Make a good first impression with customers.
b. Ones conduct should reflects positively upon the business.
D. Discuss character traits.
1. Courage
a. Having the determination to do the right thing even when others don’t.
b. Having the strength to follow ones conscience rather than the crowd.
c. Attempting difficult things that are worthwhile.
2. Good judgment
a. Choosing worthy goals and setting proper priorities.
b. Thinking through the consequences of ones actions.
c. Basing decisions on practical wisdom and good sense.
3. Integrity
a. Having the inner strength to be truthful, trustworthy, and honest in all
things.
b. Acting justly and honorably.
4. Kindness
a. Being considerate, courteous, helpful, and understanding of others.
b. Showing care, compassion, friendship, and generosity.
c. Treating others as one would like to be treated.
5. Perseverance
a. Being persistent in the pursuit of worthy objectives in spite of difficulty,
opposition, or discouragement.
b. Exhibiting patience and having the fortitude to try again when confronted
with delays, mistakes, or failures.
6. Respect
a. Showing high regard for authority, for other people, for self, for property,
and for country.
b. Understanding that all people have value as human beings.
7. Responsibility
a. Being dependable in carrying out obligations and duties.
b. Showing reliability and consistency in words and conduct.
c. Being accountable for ones own actions.
d. Being committed to active involvement in ones community.
8. Self-discipline
a. Demonstrating hard work and commitment to purpose.
b. Regulating oneself for improvement and restraining from inappropriate
behaviors.
c. Being in proper control of your words, actions, impulses, and desires.
d. Doing ones best in all situations.
E. Explain importance of ethics.
1. Employees have a social responsibility to the companies for which they work.
These responsibilities include being truthful, fair and honest in the production,
management, or selling of a product.
2. Athletes and entertainers hire agents to represent them. Agents may also be
accountants or attorneys. Responsibilities include negotiating personal
service agreements, contracts, and endorsements. Agents are usually paid a
percentage of the PSA, contract, or endorsement.
3. Handlers are individuals paid by athletes, entertainers, companies, or teams.
Handlers are hired to assist with the public image of an athlete or entertainers
by regulating their behavior. Companies, including teams, require
employees, including athletes or entertainers, to act ethically. Athletes or
entertainers who are incapable or reluctant to act ethically require handlers
because of the opportunities to make money. Many times, the investment of
hiring a handler is worth the cost.