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CONTENT/TEACHING OUTLINE

COMPETENCY: 3.00 Explain economic foundations relevant to the sports andentertainment marketing industry.

OBJECTIVE: 3.02 Explain the concept of competition.

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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-pricecompetition, 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 Putt-Putt versus an 18 hole golf course.

3. Price competition focuses on the selling price of a product. Consumers prefer tobuy the products that are lowest in price. For example, buying athletic shoes atFoot Locker versus purchasing from Eastbay catalog.

4. Non-price competition is based on factors that are not related to price. Non-pricecompetition includes the quality of products, customer services, businesslocation, business reputation, and the qualifications of the salespeople. Forexample, 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 enterprisesystem, the United States Government allows an exception if it is wasteful tohave more than one company. For example, there is only one NFL team perarea.

C. Discuss profit and loss as they relate to the sports and entertainment marketingindustry.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.

8/6/2019 Objective 3.02

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CONTENT/TEACHING OUTLINE

COMPETENCY: 3.00 Explain economic foundations relevant to the sports andentertainment marketing industry.

OBJECTIVE: 3.02 Explain the concept of competition.

Sports and Entertainment Marketing ISummer 2003

45

D. Identify sources of revenue and expenditures of sports and entertainment marketing.1. Sources of revenue

a. Admissionsb. Food & beverage salesc. Parkingd. Merchandise salese. Sponsorshipsf. Naming rights

2. Sources of expendituresa. Performer fees

b. Rental or leasing of facilitiesc. Advertisingd. Incentives or in-game promotionse. Food & beverage servicesf. Security staff

8/6/2019 Objective 3.02

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CONTENT/TEACHING OUTLINE

COMPETENCY: 3.00 Explain economic foundations relevant to the sports andentertainment marketing industry.

OBJECTIVE: 3.02 Explain the concept of competition.

Sports and Entertainment Marketing ISummer 2003

46

Resources Teacher NotesPrinted References:Marketing Essentials, 3rded., 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 clipart from the Internet) pairing examples ofproducts illustrating the four types ofcompetition.

Profit and loss research Have studentsresearch the profitability/worth of variousprofessional sports teams, sports figures,celebrities, etc. (www.businessweek.com is agood site to begin).

Competition debate Divide students intogroups and assign half the students to supportthe view that competition harms society and theother half the view that competition benefitssociety. Encourage students to look at all typesof competition, from the business world tosports and even academics.

There is a 3.00 project at the end of thiscompetency.

Websites:www.businessweek.comwww.the-numbers.com

Other Resources:3.02 PowerPoint Presentation