What Is Marketing Economics of Marketing 2

What Is Marketing? Economics of Marketing 2

Chapter Objectives Define marketing. Explain the marketing concept. Define demographics. Explain the marketing mix. Explain economics and free enterprise. Identify intellectual property rights. Explain the different types of business ownership. Explain the economic impact of sports and entertainment. 3

The Importance of Sports and Entertainment Marketing The sports and entertainment industries have become two of the most profitable industries in the United States. 4

Marketing Defined Because of competition, an organized marketing plan is essential. Goods are tangible items, such as sports equipment. Services are intangible products, such as theater tickets. marketing the process of developing, promoting, and distributing products, or goods and services, to satisfy customers’ needs and wants 5

Marketing Defined Successful organizations follow a marketing concept idea that organizations need to satisfy their customers while also trying to reach their organizations’ goals The first step in creating a marketing concept involves identifying the market potential customers with shared needs who have the desire and ability to buy a product 6

Marketing Defined Organizations spend lots of money to learn about their customers needs and needs wants Having a clear picture about the target market makes developing a marketing plan easier to accomplish. needs a lack of basic necessities such as food, clothing, or shelter wants things that people desire based on personality, experiences, or information about a product target market specific group of consumers that an organization selects as the focus of its marketing plan 7

Marketing Defined The United States census provides useful information about the demographics of our nation. demographics statistics that describe population in terms of personal characteristics Businesses use demographic information to develop their marketing plans. 8

The Marketing Mix Marketers use a tool to develop strategies called the marketing mix a combination of four basic strategies known as the 4 Ps—product, price, place, and promotion To be effective, all 4 Ps in a marketing plan must focus on the target market. 9

The Marketing Mix Marketing mix strategies involve product, price, place, and promotion decisions. channel of distribution path a product takes from the producer to the consumer Place decisions include determining a channel of distribution. 10

The Marketing Mix—The Four Ps Product P Decisions involve the goods, services, or ideas used to satisfy consumer needs. Price P Decisions involve the exchange process between the customer and the seller. Place P Decisions involve making the product available to the customer. Promotion P Decisions involve how the goods or services are communicated to the consumer. 11

Buzz Power “Word-of-mouth ramped up to warp Operating an e-tail business on an electronic channel—the speed” is one definition of Internet buzz, Web—can be costly, due to design, delivery, returns, and says Business. Week. It’s the marketing operating expenses. by-product of e-mail, instant messaging, bulletin boards, and chat rooms. Though Many larger dot-com companies crashed in the The influence of buzz is so powerful that researchers monitor 1990’s, small stores like Harris Cyclery of West Newton, consumer opinions online. Positive buzz can increase profits Massachusetts, actually increase sales using a basic Web for products, books, films, TV, music, and fashion, and site. Today, a third of Harris’s bicycle business rides in on the Web to get hard-to-find parts and personal service. determine popularity of athletes and celebrities. With public resistance to banner ads and pop-ups, a little buzz “zooms” Describe an e-business’s home page to your class after a long way. viewing one through marketingseries. glencoe. com. For more information on sports and entertainment marketing, go to marketingseries. glencoe. com. 12

1. Define marketing and the marketing concept. Explain the concept of a market. 2. 3. What is the marketing mix and what is its relationship to a target market? 13

Economic Basics The economics of marketing sports and entertainment have a great impact globally as well as locally. economics the study of the choices and decisions that affect making, distributing, and using goods and services A measure of economic growth is the gross domestic product (GDP). GDP (gross domestic product) the value of all goods and services produced within a country 14

Economic Basics Profit allows companies to Profit stay in business. As with most businesses, there is a financial risk involved with sports and entertainment events. profit the money left after all costs and expenses of a business are paid competition as a characteristic of free enterprise, the struggle among companies for customers Competition is the basis of the free enterprise system. 15

Property Ownership and Intellectual Property Rights Inherent in the free enterprise system is the right to own property and start a business. copyright legal protection of a creator’s intellectual property or products Intellectual property rights are protected by the following: Copyrights Patents Trademarks 16

Types of Business Ownership Types of business ownership include: Sole proprietorship Partnership Corporation Subchapter S Corporation 17

Economic Impact Locations benefit economically from sports and/or entertainment events and marketing. On a local level, sporting events and entertainment venues economically impact areas in which they operate because they draw audiences. Hosting the Olympics has a huge economic impact on a region before, during, and after the event. 18

1. Explain the concept of economics. 2. What are three characteristics of a free enterprise system? 3. What is the economic impact of sports and entertainment events on a community? 19

Checking Concepts 1. Define and give an example of the term marketing. 2. Explain the marketing concept. 3. Describe the concept of demographics. 4. Explain the marketing mix. continued 4. Demographics are 2. The marketing 1. Marketing is the 3 The marketing mix process of statistical concept states that is a combination of developing, characteristics that organizations need product, price, promoting, and help describe to satisfy their place, and distributing people and target customers while promotion products, or goods markets. also trying to reach decisions. and services, to their organization’s satisfy customer goals. needs and wants. 20

Checking Concepts 5. Explain the concept of economics. 6. Name four types of business ownership. 7. Intellectual property 6. The four types of 5. Economics is the rights are intangible business ownership study of the choices and are protected are sole and decisions that by patents, proprietorship, affect making, copyrights, and partnership, limited distributing, and trademarks. partnership, and using goods and corporation. services. 7. Define intellectual property rights. continued 21

Checking Concepts Critical Thinking 8. Describe how sports and entertainment impact national and local economies. 8. Sports and entertainment local events draw audiences. That means workers are needed for crowd control, ticket collection, concession sales, and security. These customers may also hire local people to work for them. Nationally, events that increase tourism contribute to the GDP. 22

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