Chapter 2 - RCS Technology Integration Pages

advertisement
Chapter 2
Sports and Entertainment
Means Business
2.1 Sports and Entertainment
Economics
2.2 Risk Management
2.3 Business Ethics
2.4 Financial Analysis
Sports and Entertainment Marketing
© Thomson/South-Western
Winning Strategies
EMI
 one of the largest music content providers
 cost savings achieved through outsourcing
of manufacturing
 in 2005, income grew due to legitimate
sales of digital music
 the music industry embraces ever-changing
technology and helps drive the economy
Chapter 2
Slide 2
Sports and Entertainment Marketing
© Thomson/South-Western
Lesson 2.1
Sports and Entertainment
Economics
Goals
 Define profit and explain the profit
motive.
 Describe types of economic utility.
Chapter 2
Slide 3
Sports and Entertainment Marketing
© Thomson/South-Western
Terms




profit
profit motive
economics
economic utility
Chapter 2
Slide 4
Sports and Entertainment Marketing
© Thomson/South-Western
THE PROFIT MAKERS
 profit
 the amount of money remaining from
revenues after all expenses are paid
Chapter 2
Slide 5
Sports and Entertainment Marketing
© Thomson/South-Western
 revenue
 the money a business receives from the
sales of goods and services
 profit motive
 making decisions to use resources in ways
that result in the greatest profit
Chapter 2
Slide 6
Sports and Entertainment Marketing
© Thomson/South-Western
Cultural Opportunities for
Profits
 Worldwide distribution revenue is
critical for movie profits.
Chapter 2
Slide 7
Sports and Entertainment Marketing
© Thomson/South-Western
 Marketers must understand the markets
in which sales occur.
 China has a tremendous movie market.
 the government censors movies for
content
 pirated movies diminish theater sales
Chapter 2
Slide 8
Sports and Entertainment Marketing
© Thomson/South-Western
 In addition to U.S. ticket sales, name two
other large sources of revenue for U.S.
film studios.
Chapter 2
Slide 9
Sports and Entertainment Marketing
© Thomson/South-Western
ECONOMICS
 economics
 the study of how goods and services are
produced, distributed, and consumed
-
Chapter 2
Slide 10
Sports and Entertainment Marketing
© Thomson/South-Western
 macroeconomics
 the study of the economics of the entire
society
 microeconomics
 the study of the relationships between
individual consumers and producers
 Sports and entertainment marketers are
focused on microeconomics.
 relationships with consumers
Chapter 2
Slide 11
Sports and Entertainment Marketing
© Thomson/South-Western
Sports and Entertainment
Economics
 economic utility
 the amount of satisfaction a person
receives from the consumption of a
particular product or service
Chapter 2
Slide 12
Sports and Entertainment Marketing
© Thomson/South-Western
Types of Utility
 form utility
 when the physical characteristics of a product or
service are improved
 time utility
 making the product or service available when the
customer wants it
 place utility
 the product is available where it is wanted
 possession utility
 the product or service is available at an affordable
price
Chapter 2
Slide 13
Sports and Entertainment Marketing
© Thomson/South-Western
 List four types of economic utility.
Chapter 2
Slide 14
Sports and Entertainment Marketing
© Thomson/South-Western
Lesson 2.2
Risk Management
Goals
 Define risk and describe the categories
and classifications of risk.
 Name and describe four strategies for
risk management.
Chapter 2
Slide 15
Sports and Entertainment Marketing
© Thomson/South-Western
Terms
 risk
 risk management
 liable
Chapter 2
Slide 16
Sports and Entertainment Marketing
© Thomson/South-Western
RISKING IT ALL
 risk
 the possibility of financial gain or loss or
personal injury
Chapter 2
Slide 17
Sports and Entertainment Marketing
© Thomson/South-Western
Categories of Risk
 natural risk
 occurs from unavoidable weather
conditions
 human risk
 dishonest customers and employees
 inadequately trained employees
 economic risk
 occurs due to changes in the economy
Chapter 2
Slide 18
Sports and Entertainment Marketing
© Thomson/South-Western
Additional Classification of
Risk
 gain or loss risk
 speculative risk
 either a gain or loss could result
 pure risk
 a chance of an event occurring that could only
result in a loss
Chapter 2
Slide 19
Sports and Entertainment Marketing
© Thomson/South-Western
 controllable risk
 if a loss can be prevented or the likelihood
of its occurrence reduced
 uncontrollable risk
 nothing can be done to prevent the risk
Chapter 2
Slide 20
Sports and Entertainment Marketing
© Thomson/South-Western
 insurable risk
 a pure risk for which the chances of loss
are predictable and the amount of the loss
can be estimated
 uninsurable risk
 the chance that a dollar loss could occur
 the amount of the loss cannot be
estimated
Chapter 2
Slide 21
Sports and Entertainment Marketing
© Thomson/South-Western
 What is meant by a controllable risk?
Chapter 2
Slide 22
Sports and Entertainment Marketing
© Thomson/South-Western
MANAGING RISK
 risk management
 preventing, reducing, or lessening the
negative impacts of risk by using the
strategies of risk avoidance, risk insurance,
risk transfer, and/or risk retention
Chapter 2
Slide 23
Sports and Entertainment Marketing
© Thomson/South-Western
Risk Avoidance
 Sports and entertainment marketers
need to plan to avoid risky situations.
 liable
 the business is legally responsible for
damages that occur
Chapter 2
Slide 24
Sports and Entertainment Marketing
© Thomson/South-Western
Risk Insurance
 risk insurance
 pays for predictable losses
 premium
 cost of insurance
Chapter 2
Slide 25
Sports and Entertainment Marketing
© Thomson/South-Western
Risk Transfer
 Some risks can be transferred to
another company or even to the
consumer.
 contracting with third parties for services
 including releases from liability on event
tickets
Chapter 2
Slide 26
Sports and Entertainment Marketing
© Thomson/South-Western
Risk Retention
 risk retention
 assuming the cost of an uninsurable risk
 risk retention groups
 similar businesses facing similar risks pool
resources
 resources are distributed to members that
have a loss
Chapter 2
Slide 27
Sports and Entertainment Marketing
© Thomson/South-Western
 Briefly describe four strategies for
managing risk.
Chapter 2
Slide 28
Sports and Entertainment Marketing
© Thomson/South-Western
Lesson 2.3
Business Ethics
Goals
 Define ethics.
 Discuss the impacts of unethical
behavior.
Chapter 2
Slide 29
Sports and Entertainment Marketing
© Thomson/South-Western
Terms
 ethics
 principles
Chapter 2
Slide 30
Sports and Entertainment Marketing
© Thomson/South-Western
DO ETHICS COUNT?
 ethics
 a system of deciding what is right or wrong
in a reasoned and impartial manner
 Business should be conducted with
integrity, trust, and fairness.
Chapter 2
Slide 31
Sports and Entertainment Marketing
© Thomson/South-Western
Ethics and Character Matter
 principles
 high standards of rules and guidelines
 character development
 a progression in behavior where people
advance from childish behavior to mature
behavior based on principles
 Young people need good role models.
Chapter 2
Slide 32
Sports and Entertainment Marketing
© Thomson/South-Western
 How does a person’s character develop?
Chapter 2
Slide 33
Sports and Entertainment Marketing
© Thomson/South-Western
Character Development
 Young Child – Bad Behavior =
Punishment, Good Behavior = Reward
 As we mature others expectations
begin to influence or decisions
 More difficult today for Children to
develop character – Lack of good role
models
Chapter 2
Slide 34
Sports and Entertainment Marketing
© Thomson/South-Western
BUSINESS BEHAVIOR
 People and businesses should act
ethically while pursuing a profit.
Chapter 2
Slide 35
Sports and Entertainment Marketing
© Thomson/South-Western
Seeking an Advantage
 Sometimes it is hard to continue to act
ethically when you observe people
who receive a benefit from acting
unethically.
Chapter 2
Slide 36
Sports and Entertainment Marketing
© Thomson/South-Western
When Being Bad Profits
 Only fans can really influence the
behavior of ethically challenged
athletes and celebrities.
 Leagues issue fines to players to help
curb unethical behavior
Chapter 2
Slide 37
Sports and Entertainment Marketing
© Thomson/South-Western
Effective and Ethical
 Good decisions are both ethical and
effective.
 Good decisions are the right choices for
the long term.
Chapter 2
Slide 38
Sports and Entertainment Marketing
© Thomson/South-Western
 How can the bad behavior of celebrities
be controlled?
Chapter 2
Slide 39
Sports and Entertainment Marketing
© Thomson/South-Western
Ethical Athletes
 NBA Lockout 1998
 Hakeem Olajuwon – Credited with saving
the season
 Billy Hunter – PA Negotiator
 Shaquille O’Neal & Jayson Williams
Chapter 2
Slide 40
Sports and Entertainment Marketing
© Thomson/South-Western
Ethics and Profits
 “Everybody is doing it” – Does not
improve marketability of a product
 Unethical behavior can undo the best
marketing plans
Chapter 2
Slide 41
Sports and Entertainment Marketing
© Thomson/South-Western
Lesson 2.4
Financial Analysis
Goals
 Discuss sources of funding and
revenue for sports and entertainment
businesses.
 Describe four tools for financial
analysis.
Chapter 2
Slide 42
Sports and Entertainment Marketing
© Thomson/South-Western
Terms





return on investment
forecast
budget
balance sheet
income statement
Chapter 2
Slide 43
Sports and Entertainment Marketing
© Thomson/South-Western
IT TAKES MONEY
 Profit is the primary purpose of sports
and entertainment marketing.
Chapter 2
Slide 44
Sports and Entertainment Marketing
© Thomson/South-Western
Finding Funding
 Investors generally provide the funding
for an event to cover all the costs that
must be incurred before tickets are ever
sold.
Chapter 2
Slide 45
Sports and Entertainment Marketing
© Thomson/South-Western
 return on investment
 the income from a venture that is
distributed to investors
Chapter 2
Slide 46
Sports and Entertainment Marketing
© Thomson/South-Western
Money Sources
 Funds to repay investors are raised
through




ticket sales
broadcast rights
licensing
facilities
Chapter 2
Slide 47
Sports and Entertainment Marketing
© Thomson/South-Western
 Name three sources of revenue from
sports and entertainment.
Chapter 2
Slide 48
Sports and Entertainment Marketing
© Thomson/South-Western
WHERE IS THE MONEY?
 forecast
 a plan that predicts the expenses to be
incurred and the revenues to be received
Chapter 2
Slide 49
Sports and Entertainment Marketing
© Thomson/South-Western
BUDGETS
 budget
 a plan for how available funds will be spent
 The purpose of a budget is to control
costs so they do not exceed the funds
available.
Chapter 2
Slide 50
Sports and Entertainment Marketing
© Thomson/South-Western
Financial Statements
 balance sheet
 net worth = assets – liabilities
 shows net worth at a specific point in time
 income statement
 shows revenues and expenses for a
specific period of time
 reveals company’s profit or loss
Chapter 2
Slide 51
Sports and Entertainment Marketing
© Thomson/South-Western
 What is the purpose of a forecast?
Chapter 2
Slide 52
Sports and Entertainment Marketing
© Thomson/South-Western
PERFORMANCE INDICATORS
EVALUATED
 Communicate pricing strategies for supply
and demand.
 Analyze relevant data to determine varying
ticket prices for home games.
 Explain the need for and use of additional
revenue from higher-priced tickets.
Chapter 2
Slide 53
Sports and Entertainment Marketing
© Thomson/South-Western
 Demonstrate knowledge of appropriate
pricing strategies.
 Explain the benefits of increased revenue
for consumers of foot-ball tickets.
Chapter 2
Slide 54
Sports and Entertainment Marketing
© Thomson/South-Western
Did you know…
 G and PG rated movies sell more
tickets than R movies?
 Using younger up and coming actors
can be a good money-making asset for
filmmakers?
 Salaries, Advertising, etc…
Chapter 2
Slide 55
Sports and Entertainment Marketing
© Thomson/South-Western
THINK CRITICALLY
1. Why have an increasing number of
universities varied ticket prices to games
based upon the opponent?
2. Why must universities consider the consumer
before raising ticket prices?
3. If games become to expensive to attend,
what other options do consumers have to
watch the games?
4. How much revenue would be generated from
the seven games if ticket prices were $40 all
season long?
Chapter 2
Slide 56
Sports and Entertainment Marketing
© Thomson/South-Western
Download