CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 3.00 3.

02 Explain economic foundations relevant to the sports and entertainment marketing industry. 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 non-price 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 PuttPutt 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. Non-price 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.

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CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 3.00 3.02 Explain economic foundations relevant to the sports and entertainment marketing industry. Explain the concept of competition.

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

Sports and Entertainment Marketing I Summer 2003 45

CONTENT/TEACHING OUTLINE COMPETENCY: OBJECTIVE: 3.00 3.02 Explain economic foundations relevant to the sports and entertainment marketing industry. Explain the concept of competition.

Resources Printed References: Marketing Essentials, 3rd ed., pp. 41-47. Sports and Entertainment Marketing, pp. 58-62, 129, 146, 168, 226, 261-264. Marketing, pp. 68-74, 102, 115, 177-179, 286-287, 390-392. Suggested Activities: Competition collage - Have students create a collage (can be done on PowerPoint using clip art from the Internet) pairing examples of products illustrating the four types of competition. Profit and loss research Have students research the profitability/worth of various professional sports teams, sports figures, celebrities, etc. (www.businessweek.com is a good site to begin). Competition debate Divide students into groups and assign half the students to support the view that competition harms society and the other half the view that competition benefits society. Encourage students to look at all types of competition, from the business world to sports and even academics. There is a 3.00 project at the end of this competency. Websites: www.businessweek.com www.the-numbers.com Other Resources: 3.02 PowerPoint Presentation

Teacher Notes

Sports and Entertainment Marketing I Summer 2003 46