Chapter 1.1: Marketing Basics

Chapter 1.1: Marketing Basics

CHAPTER 1.1: MARKETING BASICS Overview: This chapter introduces basic marketing concepts and defines and explores the vales of entrainment and sports marketing. Describes the basic concepts of marketing Explains the marketing mix Defines the six core standards of marketing TERMS

Marketing Marketing Mix Product Distribution Price Promotion Discretionary Income WHAT IS MARKETING?

According to the American Marketing Association, Marketing is Planning and Executing the conception, pricing, promotion and distribution of ideas, goods, and services to create exchanges that satisfy individual and organization objectives. Most people when thinking about Marketing only think about advertising. However, producing, distribution, pricing, and promotion are also essential marketing elements. More than marketing also involves determining consumer needs, designing products to meet those needs, determining prices the consumers will pay, and designing a promotional strategy to get consumers to attention. Most important WHAT IS MARKETING

Simple definition the creation and maintenance satisfying exchange relationship. This definition describes pieces of the entire marketing concepts. Creation suggests that marketing involves product development. Maintenance indicated that marketing must continue as long as a business operates. Satisfaction implies that marketing must meet the needs of both businesses and customers when exchanging products or services. Exchange Relationship occurs when the parties involved

(business and customer) both give and receive something of value. SATISFYING CUSTOMER NEEDS Customers are the primary focus of the marketing. Not easy Three activities need to be performed to satisfy customer needs. Must identify your customer and the needs of that customer. You need to develop products that customers

consider better than other choices. You must operate your business profitably (revenues must exceeds the cost of doing business). SPORTS AND ENTERTAINMENT MARKETING Sports and Entertainment Marketing is a huge industry offering numerous products and services. Busy individuals and families must carefully choose whose sports and entertainment activities they will enjoy with their limited time and

financial resources. Marketers of sports and entertainment products and services must assess consumer demand, the competition, and the financial valuation of the goods and services they offer. THE MARKETING MIX Marketing Mix describes how a business blends the four marketing elements of product, distribution, price and promotion.

Product is what a business offers customers to satisfy needs. Products include goods, such as athletic shoes, and services, such as video rentals. Providing entertainment can also be considered providing a service. Distribution involves the locations and methods used to make products available to customers. Price is the amount that customers pay to products Promotion describes ways to make customers aware of products and encourage them to buy. MARKETING MIX CONSIDERATION

Individuals have many entertainment must be constantly evaluated and updated. Individuals have many entertainment options for their limited discretionary income. Discretionary Income is the amount of money individuals have available to spend after paying for the necessities of life and other fixed expenses, such as housing and car payments. Choosing the right products to meet the needs and wants of the market is essential to the marketing mix. Marketers must consider the quantities of the product to produce. Too much of a product could result in price markdowns. Too few of a product could result in lost DISCRETIONARY INCOME

Price influences the purchasing decision made by consumers, a business must offer its customers products and services they need and want at prices they are able to pay, while at the same time covering the cost of the business and making a profit. Prices charged for sports and entertainment events must be sensitive to consumer demands and the state of the economy. Championship teams will increase consumer demands and ticket prices. However, when the economy becomes questionable, consumers are likely to spend less money on sports and entertainment. Distribution involves transporting or delivering goods to final customers. Athletic uniforms arriving by UPS and turf for football fields arriving by semitruck are both examples of the distribution function of marketing.

DISCRETIONARY INCOME Distribution of an event involves planning the location where the events will take place. A popular three-day outdoor concert event for country or rock music must be held at a location near the customer base and where nearby businesses, such as hotels and restaurants, can accommodate the needs of the fans. Promotion is essential to inform prospective customers about sports and entertainment events and products. Forms of promotion can range from television commercials and newspaper advertisements to in-stadium advertising through special offers on

the back of tickets stubs and on giant video screens. Promotion requires creativity to keep the attention of prospective customers. Promotion costs large sums of money, making important to select effective promotion plans that reach the largest audience at the most reasonable price. THE MARKETING MIX ** The marketing mix has four key elements: product, distribution, price and promotion. If you do not have a product that consumers want, the other elements of the marketing mix are irrelevant. CORE STANDARDS OF MARKETING

1. Distribution Determining the best way to get a companys products or services to customers is part of the distribution function. Television makers like Sony sell their products through electronic retailers like Circuit City. Sony knows that shoppers go to Circuit City to buy electronic goods and appliances. In Sports and entertainment, distribution involves selecting the right location for an event and making tickets available through tickets sales outlets. For sporting goods, distribution involves getting equipment to store where customers can buy it. CORE STANDARDS OF MARKETING 2. Marketing-Information Management Gathering and using information about customers to improve business decision making involves marketinginformation management. When Dominos first considered expanding operations into Japan, it used its

marketing research findings to adapt its traditional pizza to Japanese tastes. Dominos offered nontraditional toppings such as corn and tuna because of local preferences. For sporting goods, successful marketing involves using marketing information to predict consumer demand and to estimate the right quantities of merchandise to produce. CORE STANDARDS OF MARKETING 3.Pricing The process of establishing and communicating to customers the value or cost of goods and services is called pricing. Prices assigned to sports and entertainment events and goods are directly related to consumer demand. Prices may be set high if the seller knows people will buy at the high price. Super Bowl ticket prices go through the ceiling since there are a limited number of tickets and there is an enormous demand for them, Prices may be set lower if the seller knows a large volume of a product can be sold. Pricing policies are also based upon the cost of producing

goods and sports and entertainment events. If costs of promotion are not covered, the business will not succeed. CORE STANDARDS OF MARKETING 4. Product/Service Management - designing, developing, maintaining, improving, and acquiring products or services for the purpose of meeting customer needs and wants are all part of product/service management. Fisher Price test new toys ideas with children and parents to make sure kids will enjoy playing with the toys. Success in sports and entertainment marketing depends upon evaluating events and goods to determine how well they meet customer needs and how events and goods can be improved to maintain and increase sales. CORE STANDARDS OF MARKETING

5. Promotion using advertising and other forms of communication to distribute information about products, services, images and ideas to achieve a desired outcome is promotion.For example, sports fans often find coupons on the back of ticket stubs after they attend a ball game. The coupons are used to promote products or services and to entice fans into trying them at a CORE STANDARDS OF MARKETING 6. Selling Any direct and personal communication with customers to assess and satisfy their needs and wants is considered Selling. Selling involves not only satisfying customer but also anticipating their future needs. Selling in

todays world includes purchases made through the Internet with no face-to-face communication whatsoever. CORE STANDARDS OF MARKETING 7. Financing- although financing is not one of the six core standards of marketing, it is clearly related. Financing requires a company to budget for its own marketing activities and to provide customers assistance in paying for the companys products or services. A company or organization can obtain financing from sponsors and investors. Sponsors spend large sums of money to be visible during sports and entertainment events. Sponsorships can range from millions of dollars for sponsoring college bowl games to only hundreds of dollars for sponsoring the local little league team. Customers may receive financing in the form of different payment options, such as cash, credit, and installment payments. Customers

are more likely to make purchases when they have more than one payment option.

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