3.06 Employ product-mix strategies to meet customer expectationsSEM II

Examples of Merchandising Opportunities for Sports/Events

Merchandising opportunities for sports/events include:

Licensed sale of merchandise such as apparel and other souvenirs

Signage at the sport/event promoting the sponsor

Stationary signage – does not move Rotating signage – toggles between

advertisers Virtual signage – appears only on television

Risks Associatedw/ Merchandising Opportunities Risks include: Logo abuse and counterfeit merchandise Damage to the event’s reputation, especially if

an advertised sponsor goes encountered legal difficulties or declares bankruptcy (e.g., Enron Field—Enron was an oil distribution company whose illegal practices led to its bankruptcy and imprisonment of some top company executives)

Damage to the advertised sponsor’s reputation, especially if the sport/event goes poorly (e.g., XFL professional indoor football league, which ended after only one season)

Advantages and Disadvantages of Using Branded Merchandise

Advantages: Development of profitable new product lines Greater exposure to the market Enhanced sales Positive attributes associated with the sport/event Development of universally identifiable brands (e.g., Nike Swoosh) Positive attributes of the sports entity transferred to the sponsor Licensee and/or sponsor attains better brand recognition Less time and money required to build high levels of brand equity Higher prices for “official” branded merchandise   Disadvantages: Possible loss of control over the brand (e.g., licensee may produce

inferior goods and offer them at a lower price, leading to a lessening of the perceived image of the sport/event)

Expense required to seek out counterfeit merchandise

Sources of Merchandising Ideas

Marketers generate merchandising ideas by: Identifying the target audience and selecting products based

upon its demographics Knowing what products have sold well in the past Identifying target audience’s lifestyle models to determine

appropriate products: Needs-driven consumers: Farthest removed from mainstream

culture, unaware of events, seeking only the bare necessities Outer-directed consumers: Affected by others around them

Belongers: Traditional, conservative, conforming, sentimental, and nostalgic

Emulators: Upwardly mobile, status conscious and competitive Achievers: Materialistic, self-reliant, geared toward success,

driven to preserve their status quo and comfortable lifestyle, likely to purchase high-end merchandise as status symbols

Factors Affecting the Choice of Merchandising Options

Factors affecting the choice of merchandising options include:

Planning: Merchandise to be sold in the future must be bought now

Analysis: Customers’ needs must be correctly identified to determine their needs, wants and desires

Acquisition: Who will produce the products

Control: Quality control is necessary as the product will reflect upon the company whose name and logo appear on it

SEM II 3.07 Establish barter agreements(vendors, media, etc.)

Bartering Trading or exchanging a good or service

for another good or service. Ex: Posting Fresh Water Company’s sign

at the event participant registration desk in exchange for bottles of water to give the runners who participate in the event.

Barter Agreement Agreement between two entities for the

exchange of goods or services where both entities gain. Ex. I will wash your car, if you take me to

school for a week.

Reasons for Barter Agreements Helps to decrease cost

If you are getting an item at no cost, your overall out of pocket expenses are lower.

Win for both parties involved Both parties get the desired outcome they

want per the agreement.

Terms/Considerations in Making a Barter Agreement Determine what each party has to trade.

Could be one item/service or multiple items/services. Determine exactly what each party wants to trade the other for.

Only trade for items/services you will actually need/use. Determine the value of the items/services bartering for.

Make sure they are equal or that Clearly spell out the terms of the agreement.

Leave nothing for interpretation. Limited the terms of the agreement.

Don’t make an open ended agreement, keep it to a certain event or timeframe.

Put the agreement in writing and obtain signatures. Do not settle for a verbal agreement.

Be flexible, but let the other side take advantage of you.

SEMII 3.08Explain the need for sport/event insurance.

Conduct a risk assessment of an event.

Comprehensive General Liability Coverage

One of the most widely used types of insurance. This type of insurance covers basic liabilities to other parties for bodily injury or property damage caused by the insured.

Cross-Liability Coverage

Cross liability insurance happens when someone who is insured files a claim against another insured person who has the same policy. This plan covers the insured who has been hit with the claim in the same way as if they had belonged to separate policies. Even so, cross liability insurance does not increase the insurance company’s limit of liability.

Source: http://www.theinsurancepedia.com/2011/04/what-is-cross-liability-insurance/

Rider A provision of an insurance policy that is purchased

separately from the basic policy and that provides additional benefits at additional cost. Standard policies usually leave little room for modification or customization, beyond choosing deductibles and coverage amounts. Riders help policyholders create insurance products that meet their specific needs.

Source: investopedia.com

Rider example For example, an accelerated death benefit rider on

a life insurance policy would provide the insured with a payout while he or she was still alive, in the event of a terminal illness. The insured could use these funds to pay for medical expenses and to increase the quality of their remaining life. When the insured passes away, their beneficiaries will receive a reduced life insurance benefit, since the rider allowed a portion of the policy to be used early.

Source: www.investopedia.com

Prize Indemnity“This type of coverage allows you to promote your business, sporting event or charity by offering a sporting event contest such as a hole in one, putting contest, golf shootout, football toss, football field goal contest, hockey red line shot, hockey blue line shot, basketball half court shot, basketball 3/4 court shot, or basketball parlay. You setup the event, purchase prize indemnity insurance and offer a huge payout to the participants and Direct Event Insurance takes on the risk.”http://directeventinsurance.com/s/frequently-asked-questions/

Umbrella Policy This type of liability insurance provides coverage

over a single underlying policy, or several different underlying policies. The limits provided by this policy will not respond to the loss until after some specified underlying policies limits are spent, exhausted, or otherwise not available. If underlying limits are not available, and the coverage is not excluded from the Excess/Umbrella coverage, this policy will respond as primary.

http://www.sportsinsurance.com/glossary/?culture=en-us#glossary_s

Sport-Accident Insurance

Liability insurance covers losses resulting from accidents and personal injuries.

Basic liability insurance protects the sport/event organization against financial losses and lawsuits that result from injuries to spectators, volunteers, and employees during the sport/event. This type of insurance typically covers a fan who is hit by a baseball during a game, or a volunteer who is hurt on site during a concert.

Event InsuranceThere are numerous types of events you may want to consider insuring. If you are planning a single-occurrence event of a short duration (e.g. a wedding, family/class/alumni reunions, bar/bat mitzvahs, non-commercial sporting events, neighborhood/homeowner association block parties, fundraisers, fairs, etc.), you will need to consider the types of liability to which you may be exposed. Event insurance typically provides coverage for event cancellation, liability, personal injury, property damage, etc.

Explain reasons for obtaining sport/event insurance.

Insurance is a contractual agreement in which one company (insurer) will pay for specified losses incurred by the other company (sport/event organization or facility) in return for payment (premiums).

Sport/Event organizations reduce their risk of financial losses by purchasing various forms of insurance.

Describe the use of cancellation insurance. Event organizers purchase cancellation insurance

to cover losses resulting from possible catastrophic conditions. For example, if a large event is canceled due to acts of terrorism and is not rescheduled, the insurance often covers spectator ticket refunds and vendor payments (e.g., concessions, food) that the event organizers owe. Various forms of cancellation insurance cover financial losses due to weather (e.g., tornadoes) and threats of terrorism. Cancellation insurance often includes options that cover the costs associated with refunding money to ticket purchasers, which affects event sales.

Risk Assessment. Risk is the possibility of financial gain or loss or

personal injury.

Click here for an article about the five steps of risk assessment.

Demonstrate procedures for conducting an event’s risk assessment.

Ticket takers, security guards, guest relations representatives, and merchandise sales personnel are examples of employees who might provide insight when conducting risk assessment. For example, sales personnel can provide information regarding shoplifting and its risks.

By gathering as much information as possible from staff members, sport/event organizations can conduct comprehensive risk assessments in many areas and develop appropriate procedures to handle each situation or issue.

SEMII 3.09 Implement quality

assurance processes to

minimize potential loss

Explain purposes of conducting site inspections.

Planners must ensure that the facilities they select for an event meet their needs. For example, an event organizer who is planning a fundraising dinner for 500 attendees should make sure that the facility has the space and the amenities (food service, tables, chairs, restrooms) to accommodate a large party.

To encourage attendance, the location of the facility should be accessible and centrally located for the majority of attendees.

Identify factors to evaluate during site inspections.

Because sport/event venues have different needs, organizers and promoters consider several factors when inspecting a facility for use. For example, a high-tech rock concert might require a lot of storage space for lighting, costumes, and musical instruments.

The availability of hospitality options (e.g., rooms, restaurants) to accommodate VIPs and hold press parties might also be factors for promoters to consider when they are inspecting facilities.

Other considerations might include concessions, equipment availability (e.g., lighting), and load-in time.

The geographic location of available properties is an important consideration when inspecting sites that might be used for an event.

Event planners consider a variety of factors such as proximity to other attractions, type of neighborhood, need for transportation service, etc.

The goal is to select one or several properties that have the capacity to accommodate the event as well as the participants.

However, it is also important that these properties are conveniently located in desirable areas so participants have easy access to the event.

Identify factors to evaluate during site inspections.

Demonstrate procedures for conducting site inspections

What to look for when conducting site inspections

Site Inspection Checklist

How to perform a site inspection like a pro

Identify types of disruptions that can affect an event.

Marketers should be prepared to refund money in case an event must be canceled due to weather or other type of natural disaster.

They should be prepared to evacuate a facility in case of a terrorist threat or bomb scare.

Although having contingency plans will not prevent emergency or crisis situations from occurring, they will make it easier for marketers to effectively and safely handle these situations.

Explain the importance of event contingency planning.

Sport/Event marketers should be prepared for all types of possible emergency or crisis situations. When such situations occur, marketers should have contingency, or backup, plans in place.

Part of a contingency plan might involve developing procedures for working with the media and handling publicity. Also, a contingency plan might include a system for safely transporting people away from the facility.