The document discusses key economic concepts related to supply and demand including financing, financial statements, utility, antitrust laws, and pricing strategies. It explains how these concepts impact sports and entertainment marketers who must balance the interests of producers and consumers. The document also discusses factors marketers consider when marketing movies and concerts abroad.

1. Economics:
Supply and Demand
Unit 9

2. What is financing?
 Involves budgeting, finding ways to pay the cost
of doing business, managing the cost so that
they do not exceed the revenues coming in, and
helping customers pay for the products or
services.
 Forecast
 A report that is developed to predict the expenses to
be incurred and revenues to be received from an
event.
 This report is vital to planning for the event.

3. Financial Statements
 Balance Sheet
 Show the company’s assets and it’s liabilities
at a specific point in time.
 Difference between assets and liabilities is a
business’s net worth.
 Income Statement
 Shows all revenues received an all expense
incurred over a specific period of time.
 Shows the companies net loss or profit.

4. A Little More on Economics
 Economic Utility
 The amount of satisfaction a person receives
from the consumption of a particular product
or service.
 Sports and entertainment marketers are
constantly trying to find ways to increase
economic utility.
 Four ways to increase utility
 Form, Time, Place, and Possession

5. Finding Middle Ground
 Finding the balance between producers
and consumers is a major challenge of
marketers.
 Law of Demand:
 When price goes down, demand goes up
 When prices goes up, demand goes down
 Inverse relationship

6. Finding Middle Ground con’t
 Law of Supply:
 When the price goes up, supply produced goes up.
 When the price goes down, supply produced goes
down.
 Balancing
 Providing customers information about new products
 Making products conveniently available
 Producers must pay attention to what is selling at profitable
prices and quantities and what is not and make adjustments.

7. Antitrust Laws and Monopolies
 Antitrust Laws
– Federal and state statutes designed to promote
competition among businesses. Antitrust laws in
the United States originated from the laissez-faire
excesses that took place in the early 1900s.
Effectiveness of antitrust laws is heavily dependent
upon enforcement by the powers in charge
primarily the U.S. Justice Department.
 Monopolies
 One business controls the entire market

8. Competition
 Allows laws of supply and demand to set
prices.
 Businesses receive new ideas from their
competition.
 Merchandise and services improve to
compete for business.
 Encourages businesses to develop new
products and services.

9. Profit!
 All business activities revolve around making a
profit.
 Unprofitable ventures will eventually run out of
money and cease to exist.
 Multiple groups or entities come together to
create an event, all have the option to gain or
lose a profit.
 Investors will normally cover all costs of an
event before tickets are sold.

10. Pricing Strategies
 Psychological Pricing
 Prestige Pricing
 Volume Pricing
 Promotions
 Quantity Discounts
 Trade – In Allowances

11. How Does This Relate?
 Sports and Entertainment Marketers are
focused on microeconomics and their
relationship with customers.
 Marketers goal:
 To convince consumers to use their
resources on the product and services the
marketers offer.

12. Marketing Abroad
 Movie sales are generating more money
overseas than in the United States.
 Example: Titanic
 United States Sales - $600.8 Million
 China Sales – $1,234.6 Million
 What does this mean for producers and
directors?

13. Movies Abroad
 China has more people than the United States.
 The market for movies is tremendous.
 However the Chinese government holds a tight
rein over the content of movies.
 Marketers must understand the market in which
they are trying to sell to.
 What movies would likely not be permitted to be
sold in China?

14. Concerts
 Small amount of supply (limited seating)
 High demand (number of people who want
to come)
 Result:
 Increased prices on tickets
 Possibly add additional shows