3.06 - Employ product-mix strategies to meet customer expectations

3.06 - Employ product-mix strategies to meet customer

expectations

Merchandising opportunities for sports/events include:

Licensed sale of merchandise such as apparel and other souvenirs

Signage at the sport/event promoting the sponsor

Stationary signage – does not move Rotating signage – toggles between advertisers Virtual signage – appears only on television

Merchandising Opportunities for Sports/Events

Logo abuse and counterfeit merchandise Damage to the event’s reputation, especially

if an advertised sponsor goes encountered legal difficulties or declares bankruptcy (e.g., Enron Field—Enron was an oil distribution company whose illegal practices led to its bankruptcy and imprisonment of some top company executives)

Damage to the advertised sponsor’s reputation, especially if the sport/event goes poorly (e.g., XFL professional indoor football league, which ended after only one season)

Risks Associated

Using Branded Merchandise

Advantages Development of profitable new product

lines Greater exposure to the market Enhanced sales Positive attributes associated with the

sport/event Development of universally identifiable

brands (e.g., Nike Swoosh) Positive attributes of the sports entity

transferred to the sponsor Licensee and/or sponsor attains better

brand recognition Less time and money required to build

high levels of brand equity Higher prices for “official” branded

merchandise

Disadvantages Possible loss of control over the

brand (e.g., licensee may produce inferior goods and offer them at a lower price, leading to a lessening of the perceived image of the sport/event)

Expense required to seek out counterfeit merchandise

Marketers generate merchandising ideas by: Identifying the target audience and selecting products based upon

its demographics Knowing what products have sold well in the past Identifying target audience’s lifestyle models to determine

appropriate products: Needs-driven consumers: Farthest removed from mainstream

culture, unaware of events, seeking only the bare necessities Outer-directed consumers: Affected by others around them

Belongers: Traditional, conservative, conforming, sentimental, and nostalgic

Emulators: Upwardly mobile, status conscious and competitive Achievers: Materialistic, self-reliant, geared toward success,

driven to preserve their status quo and comfortable lifestyle, likely to purchase high-end merchandise as status symbols

Sources of Merchandising Ideas

Factors affecting the choice of merchandising options include:

Planning: Merchandise to be sold in the future must be bought now Analysis: Customers’ needs must be correctly

identified to determine their needs, wants and desires

Acquisition: Who will produce the products Control: Quality control is necessary as the product

will reflect upon the company whose name and logo appear on it

Factors Affecting Choices