TOP QUESTIONS MISSED IN SPORTS AND ENTERTAINMENT …
SPORTS AND ENTERTAINMENT MARKETING INFO AND HINTS
Objective 3.00 Economics
Communist economy = Cuba (C & C)
Socialist economy - Germany
Market economy = USA (people decide what is going to be produced by what they are willing to buy.
Traditional economy = always doing the same thing - such as Amish & Cherokees
Command economy = Govt. planning dominates the direction of economic activity, and market forces are not allowed to do so to any considerable degree. Socialist and communist economies are planned whereas capitalist economies are much less so. Command economy = Nazi's & former Soviet Union
Economics = trying to meet the demand of customers with a ltd. # of products.
Economic PRINCIPAL stating that supply increases when demand is great = Law of Supply & Demand
Not having enough goods to meet demands = scarcity (scarce - means insufficient or hard to find)
Government System that encourages people to own/operate businesses w/o little Govt. say-so = FREE ENTERPRISE SYSTEM (set own hours - choose type of business, etc.)
CD = Good Play/baseball game = service (cannot touch it)
Degree to which demand for a product is affected by its price = ELASTICITY
Two guys go to Golden Corral to eat at the buffet. One wears tight jeans and the other warm-up pants with elastic in the waist. Guy in warm-ups can keep going back for seconds because of the elastic in his waistband will give. The guy in jeans cannot - his jeans will not give (inelastic)
Things you have to have such as baby's formula, gas for the car, kerosene for a heater in cold weather are necessities - - no matter how high the price gets you may need them to survive - the price or need will not give = INELASTIC
Things you do not have to have so you can avoid if the price gets too high - such as going out to eat,
going to the movies, getting a second pair of new shoes, etc. The need/price = elastic - it will give - you don't need for survival. ELASTIC
Exchanging a product for monetary value ($$$$'s) = possession - you buy it
All US citizens have basic economic freedom of ownership - if you have enough $$$'s you can buy it
BUSINESS CYCLES
Business Cycles are like a wave
When times are bad = no jobs, no $$$'s etc. it is like where the
Wave bottoms out (DEPRESSION).
After a period of time, things start to get better, there will be more jobs available, a little more money being spent, more goods being produced = RECOVERY - just like getting over the flu.
Things continue to improve until they reach a peak (PROSPERITY) - - at that time more goods are bought - people are employed - money is being spent - people willing to pay high prices and then things reach a peak and the economy starts to decline again. Less jobs are available, less goods are being bought, less goods are being produced (RECESSION). Then the wave will bottom out again (depression).
You will spend the most $$'s at Prosperity - - go on trips, to the movies, eat out a lot.
During recession you will spend less. You will take advantage of buying goods when prices start to drop - buy when prices are lower.
COMPETITION Competition forces businesses to operate efficiently. Helps to maintain reasonable prices.
Direct competition = basically offering same foods at same prices just using a different brand name (Disney World/Universal Studios in Orlando)
MCDONALDS DIRECT COMPETITION BURGER KING
Indirect competiton - McDonalds and Olive Garden - offering different grade of food at different prices
MCDONALDS INDIRECT COMPETITION OLIVE GARDEN
PRICE COMPETITION = Trying to find a bargain and save $$$$$'s Buying locally rather than pay shipping costs on the internet is ex. Of price competition.
NON-PRICE COMETITION = Based on such things as convenience (BoJangles is just around the corner) or on customer service or quality of goods available. (will to pay a higher price for better quality and service).
NO COMPETITION = Monopoly
RESOURCES = All materials used to produce goods/services
ECONOMIC GOODS = something that can be bought and sold and provides a person a way to make a living. An athlete would have to buy protective pads, mouthpiece, etc.
Natural resources can be shaped into a good that can be sold - for example a piece of wood can be shaped into a bat (FORM) and then be sold - to provide a person a way to make a living
FORM
WOOD SHAPED INTO A BAT (Can be sold)
BUSINESS OWNERSHIP:
Entrepreneur - work for yourself - student can paint faces at baseball park. Advantage = ease of start-up - rent brother-n-law's building to start a garage/ Disadvantage = long hours - you have to mop, take out trash, etc. in the beginning
Partnership - similar to a marriage - two people will pool theirs resources and knowledge to start a business.
Limited Partnership. The partner is responsible for debt up to the amt. he/she invested.
Corporation - business owned by stockholders - Board of Directors typically manage the daily operations
Private = do not offer to sell to the general public
Public = offers shares of stock for sale to the general public
Subchapter S - are taxed like a sole proprietorship (S&S) and limited to less than 35 shareholdders
Franchise = business with the right to use an established name and sell trademarked products - granted to a retailer or wholesales for a fee. Advantage = name recognition Disadvantage - freedom to make business decisions is usually limited. Must purchase all products/supplies from the franchisor.
PROFIT = money earned after all costs (such as cost of merchandise sold) and expenses have been paid.
RISK = potential for loss or failure (loss = decrease in potential profit)
RISK MANAGEMENT - tries to effectively manage losses due to risk
SOURCES OF REVENUE IN SEM: Admissions, food & beverage sales, parking, merchandise sales, sponsorships, and naming rights
SOURCES OF EXENDITURES IN SEM: Performer fees, rental/leasing of facilities, advertising, incentives or in-game promotions, food & beverage services, and security staff
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