COMMERCIAL SALES IN THE SPORTS INDUSTRY
(ATTACH COVER WITH PERSONAL DATA)
In my topic of commercial sales in the sports industry, I will touch on certain points such as
standard costing, analysis of variance, and market analysis. The latter must be deepened by
asking the questions of how? why? When do you strategize using managerial finance to increase
profits? And apart from trying to understand the client’s needs, which we will see in the pages
below. As well as we will address the issues presented each week.
As we know today, the sports industry is one of the largest industries at the international
level and it always gives us something to talk about. Indeed, its business model is mainly focused
on sporting events of different sports, but it would be very incorrect if when mentioning this
industry, one did not talk about all sports products thanks to the brands that nowadays produce.
Sports products evolve more and more and it is very important to know how they try to benefit
the customer and how they grow more and more, here we will analyze all these aspects and
Analysis of variance is a great statistical tool that is commonly used by collecting data to
later analyze and compare it in a table of variance. Thus, an analysis of variance allows
determining, for example, why certain basketball players have better salaries than other players
based on their performance, showing significant differences in their results or if, on the contrary,
it can be assumed that salaries should be established in another way.
On the other hand, the analysis of the markets is what to a great extent makes the
industries and companies successful if they apply it correctly. All the parts are very important
and their functions are part of a giant puzzle, but the market analysis is what allows you to assess
the size of the particular market in your industry and identify factors such as market value,
customer segmentation, identify your buying habits, knowing the competition, the economic
environment, current trends, legal and cultural regulations and many more factors that a
company depends on for its subsequent success.
Delving into the market analysis, we have the following factors:
Market size: the larger it is, the more likely it is to be successful.
Market growth rate: analysis of its duration, growth, and time.
Market trends: Know what your customers need.
Market profitability: Analyze good profitability in your market.
Key success factors: Elements for success and adding values to the competition.
Distribution channels: Evaluate how good your channels are and if they are sufficient.
Costs: How much do you need to launch your products and services for sale.
And to implement all these factors, a series of steps such as segmentation, demographics,
target market, market need, competition, industry barriers, and regulation must first be worked
on and analyzed.
This analysis is of utmost importance for companies since through its proportion of
quantitative and qualitative data, it provides clarity to the company to be able to implement the
best strategies according to its objectives.
Market analysis in the sports industry:
Starting, it is essential to make a segmentation of our market to have organized the sports
products that we will sell, since the segmentation divides the market into different groups
depending on the products that our buyers demand, here we have the following products, once
we have already done Segmentation of our market in the sport of basketball: Special tennis shoes
for basketball players, basketballs, boards with high-quality rings, sports bands, special clothing
that includes shirts, shorts, socks, pants, jackets and sweatshirts (from different teams of the
NBA), ending with gym equipment to strengthen the muscles used in basketball with different
products within the equipment, such as small dumbbells, medium and large weights, discs, bars,
garters, ropes, and mats.
But now, to validate our product range, it is necessary to ask ourselves this question of
market analysis, will the product match the wishes and needs of the chosen segmentation? And
for this, the demographics where different needs and desires are identified by the client are
necessary. You will not sell New York Knicks products in Chicago, so the tastes of the main
customers in your area must be considered broadly.
Competition: Setting prices in the face of competition
Through an opinion survey, the consumer is asked, in our sports case:
• What is the price from which it is considered expensive?
• What is the cheapest price you could get?
These two questions are very important to arrive at the right price, considering the following:
When the company establishes its prices based mainly on those that its competitors are
setting, they can raise or lower them more or less about those of their rivals.
The distinctive feature is that it is not about maintaining a rigid relationship between our
prices, costs, or demand. That is, our costs or demand may change, but it will maintain its prices
because the competition does not alter them either. And vice versa, the company will change its
prices when its competitors do, even if its costs or demand are not altered.
How do you create managerial strategies to increase profits?
These types of strategies are normally created based on methods and stages that make up a
whole process, but a very important part is the personnel assigned to these strategies, who can
optimally do their work and have continuous contact with higher levels to the development of
objectives and goals in the short, medium and long term for the company through the feedback
of the information to allow generating strategies that in turn generate effective work systems and
practices. In this way, the approved management strategies are created to gradually increase
These strategies are implemented because the markets demand great demand from
businesses and companies, which makes it necessary to implement good intelligence-based
strategies when the company begins to be affected or simply to continue growing considerably.
Starting with financial management, we have the administration of all our resources and how
these will finance all our operations to implement desirable goals and objectives based on our
initial measure of resources, such as establishing several initial products, another amount
destined for our advertising, service expenses and miscellaneous payments.
With financial management, we can effectively manage all these initial movements based on our
resources and be able to order everything optimally.
Here it will be necessary to use the income statement, balance sheet, and cash flow statement
With the income statement, we can easily determine our initial net profit by subtracting
income from expenses. With the balance sheet, we can determine our assets and liabilities to
recognize our current net worth based on the economic information provided by this tool. With
the cash flow statement, we can determine the origin of the cash flows and their equivalents.
With good planning and financial analysis, we will be able to study and interpret our
accounting information to keep in mind and know our current situation, and set future goals for
• Profitability: We will observe the accounts related to income, costs, and results. It is about
determining not only the value of the company but also its composition, quality, evolution, and
• Liquidity: That is, the ability to meet the needs of our resources and meet our short-term debts.
We will observe variables such as debt, current assets, maturity period, turnover, etc.
• Solvency: Meet our long-term debts and also be able to invest to grow in the future. In this
case, we observe variables such as long-term debt, equity, sources of financing, etc.
For the management of our capital, we will carefully allocate our resources divided into the
products with which we will start, the basic monthly services, all the implementation of
advertising, and other expenses.
We will apply our cost of all capital with our first acquisition of products and we will test
each one of them to obtain a minimum acceptable return from each one according to what we are
investing in them. We will also analyze our capital budget to determine if an investment can be
Identification of our financial objectives: Our capital development goal in a 3-5 year
framework is to grow by 300% at the start. Taking into account the great diversity of products
that we plan to include in the medium term and the space planned for the store. And being our
investment of fixed assets and start-up expenses, we have an initial investment of $ 25,000.00
with which we will directly link with our cash flow to organize and reduce investment expenses
and in this number of years, with our short, medium plans, and long term to be able to grow in
this mentioned percentage.
We will take into account the risk to be able to minimize it as much as possible and not
obtain results so different from those expected. One way to deal with risk is to use a risk-adjusted
discount rate to discount the project’s cash flows. To properly adjust the discount rate, a function
is needed that relates to risk and returns to the discount rate. Such a risk-return function or
market indifference curve, in this case, the risk is calculated utilizing the coefficient of variation.
The market indifference curve indicates that the cash flows associated with a risk-free event are
discounted at an interest rate. Consequently, this represents the risk-free rate of return.
The comparative advantage we have in the face of local, national, and even international
competition is the great demand that exists today for basketball products in the United States. I
do not know the demand for this type of product in other countries, but I can assure you that it is
not as great as here, this is largely due to the NBA and its great global impact that attracts many
foreign tourists to enjoy their games and end up buying. some products before returning home,
studying this thoroughly we can conclude our great comparative advantage in this niche and thus
take advantage of that advantage.
To conclude, in the aspect of the balance of payments and international finances, the sports
industry has great references and is specialized in these areas due to its great international
demand that has caused trade between different countries and the sending and receiving of
different products. In our case, we will not yet enter into these issues due to our national
beginnings, but one of our long-term objectives will undoubtedly be the implementation of
international finance and therefore enter the world of the balance of payments.
Chihiro Hirotsu (2017): Advanced Analysis of Variance. Editorial: John Wiley & Sons,
Virgil Storr (2012): Understanding the Culture of Markets. Editorial: Taylor & Francis
Ramesh Soundararajan , and Kuldeep Singh, (2016): Winning on HR Analytics : Leveraging Data
for Competitive Advantage. Editorial: SAGE publications.
Sandeep Goel (2015): Capital Budgeting. Editorial: Business Expert Press.
Massimo Parravicini (2015): A Guide to Sales Management : A Practitioner’s View of Trade
Sales and Organizations. Editorial: Business Expert Press.
Robert M Stern (2011): Comparative Advantage, Growth, And The Gains From Trade And
Globalization: A Festschrift In Honor Of Alan V Deardorff : A Festschrift in Honor of Alan V
Deardorff. Editorial: World Scientific Publishing Company.
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