Ch 18: Sporting Goods and Licensed Products Industries

Question 1

what is the triple commodity nature?

Answer 1

• the activity/game
• the service
• the goods

Question 2

what did early entrepreneurs in sport create ideas about?

Answer 2

better uses of existing technology

Question 3

George Tryon

Answer 3

• 1811

- fishing tackle business east of Mississippi River

Question 4

Michael Phelan and John Brunswick

Answer 4

• 1840s/50s

- established production of billiards equipment

Question 5

A.J. Spalding created a sports manufacturing giant based on selling to what demographic?

Answer 5

the expanding middle class

Question 6

what did Spalding adopt?

Answer 6

technological advances for manufacturing

Question 7

what did scalding promote?

Answer 7

grassroots

Question 8

what kind of guides did scalding produce?

Answer 8

guides on how to play/exercise

Question 9

how did Scalding gain credibility?

Answer 9

by claiming official supplier status w/ baseball’s Nat League

Question 10

how did scalding create a profitable distribution system?

Answer 10

company sold directly to retailers at a set price w/ guarantee what retailers would sell at a price that Scalding set

Question 11

what concept did Scalding eliminate at the retail level?

Answer 11

price cutting

Question 12

SFIA

Answer 12

• founded in 1906

- founded as intercollegiate ball leaders and athletic equipment manufacturers sought to make the sport safer

Question 13

who are 3 baseball players who participated in early endorsement deals?

Answer 13

(1920s)

-Knute Rockne, Honus Wagner, Nap Lajoie

Question 14

when did spending on sporting goods increase?

Answer 14

after Korean War, so 1950s

Question 15

when did imported products arrive in greater numbers in the American market?

Answer 15

1960s

Question 16

Founder of Adidas and Puma

Answer 16

Dasslers

• Adolph=Adidas
• Rudolph=Puma

Question 17

how did Adidas and Puma. find success?

Answer 17

production of soccer cleats and track spikes

Question 18

how did Adi Dassler establish brand equity?

Answer 18

convinced Jesse Owens to wear his spikes in 1936 Berlin Summer Games

Question 19

why does Adidas hold an advantage?

Answer 19

relationship w/ FIFA

Question 20

when did Nike become U.S.’s top sneaker and how much were they making a year?

Answer 20

1980

-$269 million a year

Question 21

what happened in 2005 that could signify competitive balance in sneaker industry?

Answer 21

Adidas bought Reebok for 3.8 billion

Question 22

licensed apparel

Answer 22

fans purchase goods in order to draw them closer to their favorite organizations and athletes

Question 23

what university is credited w/ being 1st school to enter into a licensing agreement?

Answer 23

UCLA, 1973

Question 24

when did NCAA form properties division to license championship merchandise?

Answer 24

1975

Question 25

what is the properties division?

Answer 25

FOR-PROFIT branch of the league

Question 26

what does the properties division do?

Answer 26

- approves licenses - watch for trademark infringement - distribute licensing revenues equally among franchises

Question 27

sporting goods industry

Answer 27

- manufacturers of: - sport equipment - footwear - apparel

Question 28

what is the trade association for manufacturers, producers, and distributors of sport apparel

Answer 28

SFIA

Question 29

licensee

Answer 29

manufacturer of licensed products

Question 30

licensor

Answer 30

teams and league payed by licensee

Question 31

what do licensees pay teams/leagues for?

Answer 31

for the right to manufacture products bearing teams and school names, colors, logos

Question 32

what does licensing enable schools/teams to generate?

Answer 32

- brand recognition/interest | - increase revenues w/ very little financial risk

Question 33

What do licensees HAVE to assume?

Answer 33

the risk created by manufacturing the product and paying fee to the licensor for the use of trademark on products

Question 34

who has the leverage in the licensee/licensor agreement?

Answer 34

licensor

Question 35

what is a trademark?

Answer 35

"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"

Question 36

what is a trademark defined under?

Answer 36

the Federal Trademark Act of 1946, or Lanham Act

Question 37

what do royalty fees generally range from?

Answer 37

4%(toys/games) to 20%(trading cards/video games)

Question 38

what are royalty fees based on?

Answer 38

gross sales at wholesale cost

Question 39

what do the majority of teams and leagues have as a royalty rate (%)?

Answer 39

12%

Question 40

why would an NCAA D1 school administer their own licensing program?

Answer 40

the school can retain a greater portion of sales revenues

Question 41

What does CLC stand for and what is it?

Answer 41

- Collegiate Licensing Company - formed in 1981 - recently bought by sport marketing company IMG

Question 42

what does the new IMG college do?

Answer 42

articulates licensing agreements on behalf of approximately 200 colleges and universities, bowls, conferences, Heisman

Question 43

who pays a portion of the royalties to the CLC and how much?

Answer 43

client colleges | -usually 50% of the royalties

Question 44

what fields are included in the licensing industry?

Answer 44

- league licensing deps - collegiate licensing offices - retail sales outlets - product manufacturers

Question 45

what is a brand's image?

Answer 45

the cumulative impact of all the associations with a particular brand

Question 46

what does it mean to create a brand? what is it doing for your company?

Answer 46

creating a distinct identity

Question 47

global sourcing

Answer 47

a business turns to a foreign company to manufacture one or more of its products

Question 48

what does global sourcing take advantage of?

Answer 48

it takes advantage of manufacturing expertise or lower wage rates in foreign countries

Question 49

what have sport apparel and shoe manufacturers been under fire for?

Answer 49

-paying unfair, low wages and supplying unsafe working conditions in their overseas operations (Adidas, Nike, Puma)

Question 50

why did American Needle sue the NFL in 2000?

Answer 50

the NFL signed exclusive deal with Reebok and immediately raised prices