Developing a Marketing Plan

1. Developing a Marketing Plan Chapter 11.3 and 11.4

2. Know Where You are Headed • A marketing plan is awritten component of the strategic plan that addresses how the company will carry out the key marketing functions. • A marketing plan can be simple or detailed. • Of primary importance in a marketing plan is the development of a mission statement. • A mission statement is the identification of the nature of the business or the reasons the business exists.

3. A Sense of Direction • There is no specific format for a marketing plan. • The major components of a marketing plan are determined by the specific needs of the firm and the products or services to be marketed. • When a company moves its focus away from its customers, it loses the customers’ business.

4. Focusing on the Customer • In 1997, video-rental company Blockbuster saw its earnings drop 20 percent. • Some of the strategies Blockbuster used to help improve their company included: • A guarantee that new movies will be available or next movie is free • Improved the way of purchasing videos from major movie studios • Backed their plan with a 160-million advertising blitz

5. What’s the Plan? • Sporting events and the athletes who participate in them are consumer products. • Fans buy the products by purchasing tickets and viewing the game. • Game tickets must be sold or they quickly become worthless. • Because they are perishable, sports and entertainment must be pre-sold. • A marketing plan helps the company make the pre-sale.

6. Components of a Strategic Marketing Plan • A strategic marketing plan includes several components that guide a company’s direction. • Mission of the business • Goals of the business • What does the company intend to accomplish by marketing this product? • Product planning • What event, product, or service will be marketed? • Marketing-Information Management • Who are the company’s competitors? Who makes up the target market?

7. Distribution System • How will the product get to the customer? • Pricing • What is the best price for the product? • Promotional Strategies • How will the company use advertising, publicity, personal selling, and sales promotion to position the product in the minds of customers? • Financing • How much will it cost to produce or deliver the product?

8. Purchasing • What materials or services must be purchased? • Risk Management • What legal liability might the company incur? • Selling • How will the direct sale of tickets and related merchandise be handled? • People • Who is responsible for each segment of the plan?

9. Internal Communication Systems • How will one department communicate with the other department within the organization? • Timelines for Implementing the Plan • What is the scheduled date for the action to commerce? • Intervals of Review and Evaluation • What can be done better, faster, and cheaper? • The Future • Where is the business going?

10. Let’s Make Money • The purpose of all business activity surrounding sports and entertainment marketing is to make a profit. • Profit is the amount of money remaining after all costs. • Since a number of entities generally come together to stage an entertainment or sports event, each entity has the possibility to make or lose money. • Money is generated through ticket sales, broadcast rights, licensing, and facility revenues. • Either the people who are the owners of the event idea must risk their own money to stage and market the event, or they must find others who are willing to invest in or sponsor the event.

11. Promotion is intended to persuade fans to attend and make a monetary commitment to sports and entertainment. • Television networks make a profit by selling commercial time to advertisers and by selling programs to affiliated stations.

12. Challenges of Physical Limits • There are physical limits to the number of good seats that can be created for any sporting event. • As a result, the ideal stadium size and seating configuration for each sport does not change. • The sources of revenue with potential for growth are special seating arrangements, concessions, and other commercial licenses. • Personal Seat License (PSL) is when a fan pays a fixed fee to obtain the right to buy season tickets. • In football and baseball, PSL fees are sometimes used to pay for part of the cost of the sports stadium.

13. New Homes for Sports Teams • Professional sports stadiums are often difficult to build if a public subsidy is necessary. • Neighbors frequently oppose the projects, and anti-tax protestors are relentless. • Ticket prices at new venues are so high that many people are unable to attend professional sporting events. • This alarming trend will have a definite impact on future fan base and attendance.

14. Did We Make Money? • As a part of the marketing plan, a forecast must be made. • The forecast predicts the cost of expenses and expected revenues from the event. • A budget is developed that details the financial impact of each part of the marketing plan. • The budget is a plan for controlling the flow of funds.

15. Records must be kept of all financial transactions. • The records include a balance sheet and an income statement. • A balance sheet shows the company’s current assets, including cash, property, and equipment, and its current liabilities, including debts owed and loans. • The income statement is a record of all revenue received and all expenses incurred.