Ch 18: Sporting Goods and Licensed Products Industries Flashcards
what is the triple commodity nature?
- the activity/game
- the service
- the goods
what did early entrepreneurs in sport create ideas about?
better uses of existing technology
George Tryon
- 1811
- fishing tackle business east of Mississippi River
Michael Phelan and John Brunswick
- 1840s/50s
- established production of billiards equipment
A.J. Spalding created a sports manufacturing giant based on selling to what demographic?
the expanding middle class
what did Spalding adopt?
technological advances for manufacturing
what did scalding promote?
grassroots
what kind of guides did scalding produce?
guides on how to play/exercise
how did Scalding gain credibility?
by claiming official supplier status w/ baseball’s Nat League
how did scalding create a profitable distribution system?
company sold directly to retailers at a set price w/ guarantee what retailers would sell at a price that Scalding set
what concept did Scalding eliminate at the retail level?
price cutting
SFIA
- founded in 1906
- founded as intercollegiate ball leaders and athletic equipment manufacturers sought to make the sport safer
who are 3 baseball players who participated in early endorsement deals?
(1920s)
-Knute Rockne, Honus Wagner, Nap Lajoie
when did spending on sporting goods increase?
after Korean War, so 1950s
when did imported products arrive in greater numbers in the American market?
1960s
Founder of Adidas and Puma
Dasslers
- Adolph=Adidas
- Rudolph=Puma
how did Adidas and Puma. find success?
production of soccer cleats and track spikes
how did Adi Dassler establish brand equity?
convinced Jesse Owens to wear his spikes in 1936 Berlin Summer Games
why does Adidas hold an advantage?
relationship w/ FIFA
when did Nike become U.S.’s top sneaker and how much were they making a year?
1980
-$269 million a year
what happened in 2005 that could signify competitive balance in sneaker industry?
Adidas bought Reebok for 3.8 billion
licensed apparel
fans purchase goods in order to draw them closer to their favorite organizations and athletes
what university is credited w/ being 1st school to enter into a licensing agreement?
UCLA, 1973
when did NCAA form properties division to license championship merchandise?
1975
what is the properties division?
FOR-PROFIT branch of the league
what does the properties division do?
- approves licenses
- watch for trademark infringement
- distribute licensing revenues equally among franchises
sporting goods industry
- manufacturers of:
- sport equipment
- footwear
- apparel
what is the trade association for manufacturers, producers, and distributors of sport apparel
SFIA
licensee
manufacturer of licensed products
licensor
teams and league payed by licensee
what do licensees pay teams/leagues for?
for the right to manufacture products bearing teams and school names, colors, logos
what does licensing enable schools/teams to generate?
- brand recognition/interest
- increase revenues w/ very little financial risk
What do licensees HAVE to assume?
the risk created by manufacturing the product and paying fee to the licensor for the use of trademark on products
who has the leverage in the licensee/licensor agreement?
licensor
what is a trademark?
“any word, name, symbol, or device adopted and therefore used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others”
what is a trademark defined under?
the Federal Trademark Act of 1946, or Lanham Act
what do royalty fees generally range from?
4%(toys/games) to 20%(trading cards/video games)
what are royalty fees based on?
gross sales at wholesale cost
what do the majority of teams and leagues have as a royalty rate (%)?
12%
why would an NCAA D1 school administer their own licensing program?
the school can retain a greater portion of sales revenues
What does CLC stand for and what is it?
- Collegiate Licensing Company
- formed in 1981
- recently bought by sport marketing company IMG
what does the new IMG college do?
articulates licensing agreements on behalf of approximately 200 colleges and universities, bowls, conferences, Heisman
who pays a portion of the royalties to the CLC and how much?
client colleges
-usually 50% of the royalties
what fields are included in the licensing industry?
- league licensing deps
- collegiate licensing offices
- retail sales outlets
- product manufacturers
what is a brand’s image?
the cumulative impact of all the associations with a particular brand
what does it mean to create a brand? what is it doing for your company?
creating a distinct identity
global sourcing
a business turns to a foreign company to manufacture one or more of its products
what does global sourcing take advantage of?
it takes advantage of manufacturing expertise or lower wage rates in foreign countries
what have sport apparel and shoe manufacturers been under fire for?
-paying unfair, low wages and supplying unsafe working conditions in their overseas operations (Adidas, Nike, Puma)
why did American Needle sue the NFL in 2000?
the NFL signed exclusive deal with Reebok and immediately raised prices
