sports and entertainment marketing © thomson/south-western chapter 2 slide 1 do now what is risk?...
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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.
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Chapter 2Slide 4
RISKING IT ALL
risk the possibility of financial gain or loss or
personal injury
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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
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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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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
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Chapter 2Slide 9
What are four steps a sports venue could take to avoid risk of injury to fans attending games?
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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
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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
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Chapter 2Slide 12
Lesson 2.1
Sports and Entertainment EconomicsGoals Define profit and explain the profit
motive. Describe types of economic utility.
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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
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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
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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
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Chapter 2Slide 19
List four types of economic utility.