sports and entertainment marketing © thomson/south-western chapter 2 slide 1 do now what is risk?...

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 1

Do Now

What is risk?

What does Harbor Yard or Bluefish Stadium do to reduces the risk of injury to an attendee during a concert or game?

Sports and Entertainment Marketing© Thomson/South-Western

Chapter Chapter Chapter Chapter

Sports and Entertainment Means Business

2.1 Sports and Entertainment 2.1 Sports and Entertainment EconomicsEconomics

2.2 Risk Management2.2 Risk Management

2

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 3

Lesson 2.2

Risk Management

Goals Define risk and describe the categories

and classifications of risk. Name and describe four strategies for

risk management.

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 4

RISKING IT ALL

risk the possibility of financial gain or loss or

personal injury

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 5

Three Categories of Risk

1. Natural risk occurs from unavoidable weather

conditions

2. Human risk dishonest customers and employees inadequately trained employees

3. Economic risk occurs due to changes in the economy

Sports and Entertainment Marketing© Thomson/South-Western

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Three Additional Classification of Risk

1. gain or loss risk speculative risk

either a gain or loss could result

pure risk a chance of an event occurring that could only

result in a loss

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2. controllable or uncontrollable risk controllable risk

if a loss can be prevented or the likelihood of its occurrence reduced

uncontrollable risk nothing can be done to prevent the risk

Three Additional Classification of Risk

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Chapter 2Slide 8

3. Insurable or Uninsurable risk insurable risk

a pure risk for which the chances of loss are predictable and the amount of the loss can be estimated

uninsurable risk the chance that a dollar loss could occur the amount of the loss cannot be estimated

Three Additional Classification of Risk

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 9

What are four steps a sports venue could take to avoid risk of injury to fans attending games?

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 10

MANAGING RISK risk management

preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk avoidance, risk insurance, risk transfer, and/or risk retention

Sports and Entertainment Marketing© Thomson/South-Western

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Strategies to Manage Risk

1. Risk Avoidance – precautions to avoid risky situations

2. Risk Insurance – buy insurance for predictable risk

3. Risk Transfer – put the liability on another company or even the customer

4. Risk Retention – retain money to cover the cost of a given risk

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 12

Lesson 2.1

Sports and Entertainment EconomicsGoals Define profit and explain the profit

motive. Describe types of economic utility.

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 13

THE PROFIT MAKERS profit

the amount of money remaining from revenues after all expenses are paid revenue

the money a business receives from the sales of goods and services

profit motive making decisions to use resources

in ways that result in the greatestprofit

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 14

Cultural Opportunities for Profits Worldwide distribution revenue is

critical for movie profits. China has a tremendous movie market.

The government censors movies for content

Pirated movies diminish theatersales

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 15

ECONOMICS

economics the study of how goods and services are

produced, distributed, and consumed

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Chapter 2Slide 16

the study of the economics of the entire society

microeconomics the study of the relationships between

individual consumers and producers Sports and entertainment marketers are

focused on microeconomics. relationships with consumers

macroeconomics

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Chapter 2Slide 17

Sports and Entertainment Economics economic utility

the amount of satisfaction a person receives from the consumption of a particular product or service

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Types of Utility form utility

when the physical characteristics of a product or service are improved

time utility making the product or service available when the

customer wants it place utility

the product is available where it is wanted possession utility

the product or service is available at an affordable price

Sports and Entertainment Marketing© Thomson/South-Western

Chapter 2Slide 19

List four types of economic utility.