sem chap 09 the economics of supply and demand

8/8/2019 SEM Chap 09 the Economics of Supply and Demand

1/55

Sports and Entertainment Marketing Thomson/South-Western

ChapterChapterChapterChapter

The Economics of Supply

and Demand

9.1 Supply and Demand9.1 Supply and Demand

9.2 Pricing Strategies9.2 Pricing Strategies

9.3 Market Conditions9.3 Market Conditions

9


2/55

Sports and Entertainment Marketing Thomson/South-WesternChapter 9Slide 2

Winning Strategies

Wheaties cereal discovered by accident

first featured star was fictitious Lou Gehrig was first actual star featured

many athletes make it a career goal to be

featured on the box

in 1999, women in sports were featured

Cereal Stars


3/55

Sports and Entertainment Marketing Thomson/South-WesternChapter 9Slide 3

Lesson 9.1

Supply and Demand

Goals

Explain the relationships betweensupply, demand, and price.

Discuss the governments influence on

pricing.


4/55

Sports and Entertainment Marketing Thomson/South-WesternChapter 9

Slide 4

Terms law of demand

law of supply

scarcity equilibrium

price fixing

bait and switch price discrimination


5/55


Slide 5

THE LAWS OF SUPPLY AND

DEMAND

demand

the relationship between the quantity of a

product that consumers are willing and

able to purchase and the price


6/55


Slide 6

businesses that use resources to develop

products and services

supply the relationship between the quantity of a

product that producers are willing and able

to provide and the price

producers


7/55


Slide 7

Price-Demand Relationships law of demand

an inverse relationship

when the price goes up, demand goes down

when the price goes down, demand goes up


8/55


Slide 8

Price-Supply Relationships law of supply

when the price goes up the supply

produced goes up

when the price goes down the supply

produced goes down


9/55


Slide 9

Scarcity scarcity

consumers have limited money to spend

producers have limited resources to use

for production

Consumers and producers must decide

how to use their limited resources tomeet unlimited wants and needs.


10/55


Slide 10

Equilibrium equilibrium

the point where the supply and demand

curves intersect

indicates the best quantity and price for

goods and services


11/55


Slide 11


12/55


Slide 12

Concerts in the Spotlight Concert prices can be set high.

limited supply

high demand

If demand is high enough, supply can

be increased by adding a second show.


13/55


Slide 13

How does price affect demand?


14/55


Slide 14

GOVERNMENT INFLUENCE ON

PRICING

private-enterprise system

based upon independent decisions made

by consumers and businesses


15/55


Slide 15

The U.S. government has an influenceon prices charged for merchandise

directly and indirectly through antitrust

laws, taxation, and various consumerprotection laws.


16/55


Chapter 9

Slide 16

Benefits of Competitionmonopoly

where one business controls the entire

market

Antitrust laws encourage competition

and help avoid monopolies.


17/55


Chapter 9

Slide 17

Taxation Taxation can be used by the

government to encourage or discourage

sales.


18/55


Chapter 9

Slide 18

Illegal Pricing price fixing

when related businesses conspire to

charge high prices

illegal in U.S.


19/55


Chapter 9

Slide 19

when a product that is advertised at a greatprice is out of stock

salesperson tries to sell customer a higher-

priced alternative advertised prices cannot be misleading

price discrimination

occurs when one individual, group, orbusiness is charged a higher price thanothers purchasing the same product orservice

bait and switch


20/55


Chapter 9

Slide 20

List three ways the government

influences pricing.


21/55


Chapter 9

Slide 21

Lesson 9.2

Pricing Strategies

Goals

Discuss pricing strategies used bybusinesses to increase sales.

List five steps for determining price.


22/55


Chapter 9

Slide 22

Terms operating expenses

markup

price lines

loss-leader pricing


23/55


Chapter 9

Slide 23

PRICING CONSIDERATIONS price

the amount that customers pay for

products and services


24/55


Chapter 9

Slide 24

the process of establishing andcommunicating the value of goods andservices to customers

operating expenses all the costs associated with running your

business

markup

the amount that is added to the cost of anitem to cover operating expenses and allowfor a profit

pricing


25/55


Chapter 9

Slide 25

many companies offering the same product

customers do not recognize major differences in the

brands

the market will drive the prices low as businesses

compete for consumers business

market price

determined by laws of supply and demand

if not sufficient to cover costs and allow for a profit,

the business will cease production of the product

pure competition


26/55


Chapter 9

Slide 26

Pricing Policies one-price policy

all customers pay the same price for a

product

flexible pricing policy

allows customers to negotiate a price

within a range


27/55


Chapter 9

Slide 27

distinct categories of merchandise based

upon price, quality, and features

geographic pricing

allows pricing variations based upongeographic location

price lines


28/55


Chapter 9

Slide 28

A Variety of Pricing Strategies sychological Pricing

creating an illusion for customers

Prestige Pricing

higher-than-average pricing

targets customers seeking status and

quality


29/55


Chapter 9

Slide 29

when a supplier provides a lower price to a

customer who buys a high volume of

product

Promotional Pricing offering customers an incentive to get them

in the store

two-hour/ 50% off sale

Volume Pricing


30/55


Chapter 9

Slide 30

the willingness to take a loss on the reduced

prices of selected items in order to create

more customer traffic

special event promotion

associates a special sale with a major event

Loss-Leader Pricing


31/55


Chapter 9

Slide 31

coupons on products that customers can mail in for

a refund

depends upon further action by the customer

multiple-unit pricing a volume based discount

trade-in allowance

giving a store your old product when purchasing a

new product usually results in a discount on the new product

purchase

rebates


32/55


Chapter 9

Slide 32

List and describe five pricing strategies

to increase sales.


33/55


Chapter 9

Slide 33

DETERMINING THE PRICE There are five steps to determining the

price to charge for a product or service.


34/55


Chapter 9

Slide 34

2. Determine the cost of the product or

service.

3. Estimate consumer demand for your

product or service.

4. Study the competition.

5. Decide on a pricing strategy.

1. Establish the price objectives.


35/55


Chapter 9

Slide 35

List the five steps for determining price.


36/55


Chapter 9

Slide 36

Lesson 9.3

Market Conditions

Goals

Define the business cycle and describe

its impact on sports and entertainment.

Discuss the importance of monitoring

consumer trends.


37/55


Chapter 9

Slide 37

Terms business cycle

inflation

shoulder periods


38/55


Chapter 9

Slide 38

IMPACT OF THE BUSINESS

CYCLE business cycle (economic cycle)

the ups and downs of the economy

--


39/55


Chapter 9

Slide 39


40/55


Chapter 9

Slide 40

Expansion expansion

the upside of a business cycle

peak

highest point of growth in the economy


41/55


Chapter 9

Slide 41

Contraction contraction

the downside of a business cycle

recession or depression

inflation

when prices for goods and services rise

faster than consumer income


42/55


Chapter 9

Slide 42

Business Reaction trough

lowest point of contraction

recovery

economy shows signs of improving

prosperity

the period of business expansion following

recovery


43/55


Chapter 9

Slide 43

Seasonal Cycles For some businesses, demand

fluctuates with the seasons.

high season

the season with the highest demand

low season

the season with the lowest demand


44/55


Chapter 9

Slide 44

periods of moderate demand

Sports and entertainment marketing

strategies must be developed to help

even out the fluctuations created bychanging seasonal demands.

shoulder periods


45/55


Chapter 9

Slide 45

What is inflation and how does itcontribute to recession?


46/55


Chapter 9

Slide 46

IMPACT OF CONSUMER

TRENDS Trends are dictated by

television revenue

sponsors

consumer demand

--


47/55


Chapter 9

Slide 47

Retro Television Retro show fans like to relive the good

old days and recall positive memories

of growing up watching the stars in thesitcoms.

Popular show reruns are inexpensive to

show on television.


48/55


Chapter 9

Slide 48

Game Shows

There are game show channels that

rerun old favorites.

New game shows are being produced

to meet demand.


49/55


Chapter 9

Slide 49

Audience Ratings Speak

Television networks cannot afford the

risk of having viewers switch channels

to watch a more exciting show on acompeting network.

Some series do not last more than six

airings due to flat ratings.


50/55


Chapter 9

Slide 50

Socio-Culture Issues

Socio-culture issues include trends in

customer attitudes

lifestyles opinions

demographics

Assessing consumers ever-changing needs

and wants is the bottom line for the successor failure of a product or service.


51/55


Chapter 9

Slide 51

Why must sports and entertainment

marketers pay careful attention to

consumer trends?


52/55


Chapter 9

Slide 52

PERFORMANCE INDICATORS

EVALUATED

Demonstrate an understanding of theeconomic challenges facing television

network programming.

Demonstrate critical thinking and problem-

solving skills.


53/55


Chapter 9

Slide 53

Describe advertisements that will attract the

attention of your target market.

Develop a strategy to encourage viewers of

the Price Is Rightto watch the bowl game.

Describe promotions appropriate for the

target market that will result in increased

ratings for the bowl game.


54/55


Chapter 9

Slide 54

THINK CRITICALLY1. How have the number of bowl games

affected the television ratings for the

games?2. Why are the scheduled date and time of

the game important factors for ratings

and promotions?


55/55

Sports and Entertainment Marketing Thomson/South Western

Chapter 9

Slide 55

4. How can an association be made

between the game show and the bowl

game?

3. Why should television networks pay

attention to the programming scheduled

around the game and on competing

networks when making decisions?

sem chap 09 the economics of supply and demand

Documents