SMGT 362 Exam 2

high prices?

-not necessarily detrimental -Price often associated with perceived quality -Price is the point where seller & buyer agree on value

factors stimulating sponsorship growth

1) Establish a more intimate and emotionally involved relationship with its target audience than is feasible with traditional advertising 2) Efficiently communicate with specific target audiences 3) Employee morale (ex: John Hancock and the Olympics games)

Sponsorships: Two main precepts

1) Two or more parties exchange resources 2) The resources offered by each party must be equally valued by the reciprocating parties.

Sport marketing has developed two major components:

1. the marketing f sport products (goods and services) directly to consumers 2. marketing of other companies (or products) through the use of sport promotions

commercial advantage

A business relationship between a provider of funds, resources, or services and a sports event or organization which offers in return some rights and an association that may be used ________________

philanthropy

A charitable act or gift. "An act of trust on the part of the donor towards an organization that will receive the donation."

cause-related marketing

A commercial activity by which business and charities or causes form a partnership with each other to market an image, product, or service for mutual benefit.

in-kind sponsorship vs. financial sponsorship

A financial sponsor pays a set amount of money in exchange for benefits outlined in a sponsorship agreement. Benefits may include an opportunity to promote the company to the sponsored organization's membership or audience; an advertisement or mention in official programs, newsletters or press releases; or signage or logos on promotional materials.; In-kind sponsors donate goods or services rather than cash as their sponsorship offering. For example, a local bakery may sponsor a monthly town council meeting by providing participants with coffee and Danish pastries. In this sense, the bakery is not giving a cash contribution, but making a donation of goods instead.

Affinity Marketing

A method of selling goods and services by creating partnerships with similar or compatible companies and brands. This increases brand loyalty for both companies and products and heightens market awareness of both. Opposite of competitive marketing.

advertising vs. publicity

Advertising relates messages to the consumer regarding the product and attempting to motivate the consumer to make the exchange. (You control the message, Cost, Less Believable) Publicity refers to information regarding the product or sport organization conveyed through the mass media for free. (You don't control the message, Free, More believable)

price determination (climate)

Ball State football, NBA All-Star game and bar entry fees, supply & demand

Sponsorship Inventory

In short, almost everything is for sale. The seller will offer some, or all, of the following inventory items, in a variety of packages:

market demand elasticity

Measures how sensitive a market is to price change

value =

Perceived benefits - perceived cost

PSA

Public service announcement is a non-commercial advertisement typically on radio or television, broadcast for the public good. The main concept is to modify public attitudes by raising awareness about specific issues.

make goods

Rerun credit' given to an advertiser by an advertising-medium (newspaper, magazine, or radio or TV station) to compensate for an error in the composition (if composed by the medium) or the placement of an ad, or the timing of a commercial. The medium promises to 'make the error good' by re-running the corrected-ad or correctly timed commercial.

Sponsorship

The acquisition of rights to affiliate or directly associate with a product or event for the purpose of deriving benefits related to that affiliation or association. The sponsor then uses this relationship to achieve its promotional objectives or to facilitate and support its marketing objectives. Sponsorship is a form of promotion, a way to communicate with consumers

price determination (company)

What are the goals of your company? What costs do you have invested (rent, equipment, salary, etc.)

publicly demonstrating a commitment to social responsibility

While public speaking engagements, clinics, and open houses allow sport organizations to foster desirable relationships with members of the community via direct contact, charitable programs allow them to do so by publicly demonstrating a commitment to social responsibility

Public Relations

a form of communication that is primarily directed toward gaining public understanding and acceptance.

inelastic

a given percentage change in price results in a smaller percentage change on quantity

Sport public relations

a managerial communication-based function designed to identify a sport organization's key publics, evaluate its relationships with those publics, and foster desirable relationships between the sports organization and those publics.

generate revenue

again, people would prefer to spend money with an organization that they feel good about.

Media relations

aims to foster desirable relations with members of the mass media. Media relations programs are designed to generate favorable publicity and minimize unfavorable publicity.

use of facilities

allowing your facility to be used by a charitable organization. It ties your organization in without a lot of the legwork.

• Game outreach programs

being involved in a project that directly benefits charities through a promotion. "Each home run hit by the Astros will be a $100 donation to the Boys & Girls Club of Houston." "Each corner kick will result in $50 being donated to Houston Dynamo Foundation"

grow the game

build interest in the sport itself (NFL)

connect with diverse publics

charitable programs allow organizations to connect with a wider variety of people in terms of age, race, and socioeconomic background.

what will the market bear?

cost+desired profit = price (based on experiences, statistical analysis and comparisons)

basics of pricing

easily changed, highly visible, important to consumers, price threshold

sport organization as provider

game outreach programs, use of facilities

Publics

groups of people who relate to the sport organization in similar ways. They may include members of the mass media, members of the sport organization's community as well as its employees, customers, donors, and investors

community relations

has traditionally been conceptualized as a long-term investment in community goodwill

pricing issues

how to determine customer value

6 benefits sought from sponsorship

increase awareness, image enhancement, hospitality opportunities, demonstration platform, product trial, sales opportunities

marketing channel:

intensive distribution

public relations =

media relations + community relations

SID

media relations director/sports information director...• Generate publicity • Managing statistical services • Managing the media at games • Creating publications • Manage web sites • Oversee social media • Deliver a message - communicate!

place

or product distribution): making products (goods and services) available in the right quantities and locations - when and where consumers want them.

Enhance Image

people think more highly of an organization that gives back than one that doesn't

dynamic pricing

pricing to adjust ticket prices in real time. Adjustments are made according to various factors, such as day-of-game ticket sales, division standings, pitching match-ups, weather, opponent, competition, demand, etc.

marketing channels and supply chain management

producer to wholesaler to retailers to customers

value (ethics definition)

something we judge to be worthwhile, desirable, excellent, and important

Gain Tax Advantages

tax shelters for high paid athletes

enhance the community

the belief that the organization itself will be successful if it is in a good community

customer value is the difference between

the benefits a consumer perceives in a product and the cost of obtaining those benefits (satisfaction = benefit - cost)

Price

the exchange value of a product (good or service) in the marketplace

Demonstrate Social Responsibility

the obligation professionals have to not only advance the cause of their own business but also serve their community in general and society at large. Some would say that sport organizations have even more

exclusivity

the only one in the product category, high level of exposure without competition

Fan Cost Index FCI

two adult average price tickets, two child average price tickets, four small soft drinks, two small beers, four hot dogs, two programs, parking, and two adult-size caps (NFL was highest... Bears at $685.10)

why is this better than advertising?

uses publicity that does not necessitate payment in a wide variety of media and is often placed as news or items of public interest. Because public relations communications are placed in this manner, they offer a legitimacy that advertising does not have, since advertising is publicity that is paid for

Value (marketing definition)

what every product promises, implicitly or explicitly. It is fundamental to survival. A product's price must fairly reflect this to the customer, or the product eventually will fail

elastic

when a given percentage change in price results in a larger percentage change in quantity

unitary demand

when a given percentage change in price results in an equal percentage change in quantity

price determination (consumer)

will look at quality, ease of purchase, refund policy, reputation, etc. Some consumers will complain (15-20%). This is normal. If everyone complains, it is too high. If no one complains, it is too low.

price determination (competitor)

you must investigate the competitor's prices when setting your own (Foot Locker vs. Athletic Attic). Are people willing to spend more if there is the perceived quality

Types of Charitable Programs

• Cash donations • In-kind donations: tickets, golf clubs, gym memberships, etc. These are often then auctioned off for a "higher than retail" price. • Volunteerism (i.e. Houston Dash)

sponsorship activation

• Perhaps the most overlooked element in analyzing a sponsorship opportunity is how much it will cost to activate. When Coca-Cola buys its Olympic sponsorship, it buys privileges and merchandise opportunities. It does not buy marketing campaigns. Coke and other sponsors need to create the marketing programs, and those campaigns cost big money.

rights of sponsorship include

• Right to use a logo, trademark, name • Right to an exclusive association • Right to entitlement to an event • Right to special designations • Right to conduct special promotions

approaches to pricing

• Supply & demand • Production costs • Competitor's price • Organization objectives • Product and event frequency • Loss leader • Variable pricing • Dynamic pricing

place decisions

• The live event itself (ex: rice vs. UT Austin being played at NRG) • Tickets to the event (ex: ticket windows, call-ins, internet, secondary ticket market, etc. • Concessions (ex: make it as easy as possible for people to buy concessions... people walking around selling like cotton candy and beer, shorter lines so more booths, etc.) • The image of the live event via media. Where are you going to televise your event • Merchandise and memorabilia `