Sports Marketing Exam Review PDF

Sports Marketing Exam Review ### **Key Marketing Concepts Simplified** #### **Marketing and Functions / Marketing Process / Marketing Concept / Marketing Mix** - **Marketing** is all about promoting and selling products or services, including research and advertising. - **Marketing funct...

Sports Marketing Exam Review ### **Key Marketing Concepts Simplified** #### **Marketing and Functions / Marketing Process / Marketing Concept / Marketing Mix** - **Marketing** is all about promoting and selling products or services, including research and advertising. - **Marketing functions**: The key areas include creating a product, setting a price, promoting it, and getting it into the hands of consumers (the 4Ps: **Product, Price, Place, Promotion**). - **Marketing Process**: It involves planning, executing, and evaluating marketing strategies to meet customer needs. - **Marketing Concept**: This is the idea that businesses should focus on satisfying customer needs and wants while making a profit. - **Marketing Mix**: The 4Ps mentioned above (Product, Price, Place, Promotion). Companies use these to meet customer needs and compete in the market. #### **Target Market** This is the specific group of people a business wants to sell to---people with similar characteristics, needs, or interests. ### **Economic Basics** - **GDP (Gross Domestic Product)**: The total value of goods and services produced in a country. - **Profit**: The money a business makes after subtracting expenses from revenue. - **Revenue**: The total money a company earns from sales. - **Competition**: Other businesses that offer similar products or services. - **Supply and Demand**: Supply is how much of something is available, and demand is how much people want it. If demand is high and supply is low, prices usually go up. - **Demographics**: The breakdown of a population by things like age, gender, income, and education. ### **Other Important Concepts** - **Risk Management**: Identifying risks (like competitors or market changes) and finding ways to reduce them. - **Sports Marketing**: Can be split into two: **Marketing of Sports** (promoting the sport, team, or athlete) and **Marketing through Sports** (using sports events or athletes to promote other products, like Nike with athletes). - **Consumer Decision Making Process**: The steps consumers take before buying something: recognizing a need, looking for information, comparing options, making the purchase, and reflecting on the decision. - **Market Segmentation**: Dividing customers into smaller groups based on shared traits (like age, location, or income) to target them more effectively. - **SWOT Analysis**: A tool to evaluate a company's **Strengths**, **Weaknesses**, **Opportunities**, and **Threats**. ### **Break-Even Analysis (Explained Simply)** The **break-even point** is where a company's revenue equals its costs. At this point, the company isn't making a profit, but it isn't losing money either. **Formula:** *Break even point (Units) = Fixed Costs / (Price per unit-Variable cost per unit)* *Fixed Costs: Costs that don't change with the level of output (rent, sales)* *Price per unit: How much you sell each product for* *Variable cost per unit: Cost that changes with the production level (material, labour)* Let's break down the questions now: ### **Break-Even Question 1:** - **Given**: - Selling price per unit = \$20 - Variable cost per unit = \$12 - Fixed costs = \$40,000 - **Break-even formula**: *Break-even point=40,000 / (20−12)=40,000 / 8=5,000 units* **Answer**: The company needs to sell **5,000 units** to cover its costs and break even. ### **Break-Even Question 2:** - **Given**: - Direct labor per unit = \$22 - Direct materials per unit = \$12 - Variable overheads per unit = \$6 - Fixed costs = \$400,000 - Selling price per unit = \$60 - **First**, calculate the **total variable cost per unit**: *Variable cost per unit=22+12+6=40* - **Break-even formula**: *Break-even point=400,000 / (60−40)=400,000 / 20=20,000 units* **Answer**: The company needs to sell **20,000 units** to break even. ### **Break-Even Question 3:** - **Given**: - Selling price per block = \$1.60 - Variable cost per block = \$0.60 - Fixed costs = \$60,000 - Full production capacity = 100,000 blocks - **Break-even point**: *Break-even point=60,000 / (1.60−0.60)=60,000 / 1.00=60,000 blocks* **Answer**: The company needs to sell **60,000 blocks** to break even. - **Profit at full capacity** (100,000 blocks): *Profit=(100,000×1.60)−(60,000+0.60×100,000)* *Profit=160,000−(60,000+60,000)=160,000−120,000=40,000* **Answer**: The profit at full capacity is **\$40,000**. - **Profit at 90% capacity** (90,000 blocks): *Profit=(90,000×1.60)−(60,000+0.60×90,000)* *Profit=144,000−(60,000+54,000)=144,000−114,000=30,000* **Answer**: The profit at 90% capacity is **\$30,000**. ### **Other Concepts in Brief** - **Branding**: Creating a unique image for a product or company in the consumer's mind. Think of Nike's "swoosh" logo or Coca-Cola's red color. - **Sponsorship**: A company paying to be associated with a team, event, or athlete (e.g., Gatorade sponsoring a sports team). - **Market Research**: Collecting and analyzing data about what consumers want to help make marketing decisions. It can be **primary** (new surveys) or **secondary** (existing reports). - **Celebrity Endorsements**: When a famous person promotes a product. This can be risky if the celebrity gets into controversy (e.g., a scandal could hurt the brand). - **Licensing**: A company (the **licensor**) gives permission to another company (the **licensee**) to use its brand or product for a fee or royalty.