Transcript Chapter 04 - NMSU College of Business

Chapter 4
Sponsorship Objectives
and Components
McGraw-Hill/Irwin
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©2007 The McGraw-Hill Companies, All Rights Reserved
Sponsorship Evolution
• Early sponsorships were ego-driven
– CEO likes golf; company sponsors golf event
• Focus shifted to philanthropic motives
– Sponsorship was way to donate to a cause
• Most sponsorships today focus on ROI
– Sponsorship as investment, not an expense
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Sponsorship Objectives
• Drive sales
• Improve image
• Create greater awareness
• Provide hospitality opportunities
• Enhance employee morale
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Drive Sales
• Sustainable competitive advantage via
association with the sponsee
– Fuji over Kodak (No presence at World Cup)
• Merchandising opportunities
– Selling Coca-Cola products at the Olympics
• Shape consumer attitudes
– Firestone after negative PR (Indy 500)
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Drive Sales (cont’d)
• Overcome advertising restrictions
– Bans against tobacco advertising
• Cut through advertising clutter
– Not competing with broadcast advertising
• Reach small segments and niches
-Small specialized properties (local festival)
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Improve Image
• Attain positive PR
– Support seen as helping the sponsee
• Viewed as a good corporate citizen
– Contribution to a popular sponsee
– Especially for causes or local events
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Improve Image (Cont’d)
• Shape consumer attitudes
– Reach new target market
– Selected property portrays different image
• Philanthropy
– Donations viewed favorably by public
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Create Greater Awareness
• Increased visibility
– Ability to reach new target market
– Mass reach to introduce new product
– Mass reach to inform of new brand name
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Provide Hospitality Opportunities
• Entertain customers, prospects and
suppliers – Reinforce relationships
• Opportunity to attend event
– Tickets; parking
• Provision of various amenities
– TV monitors, restrooms; premium seating
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Enhance Employee Morale
• Entertain employees
– Use of free tickets & hospitality areas
– Reward high performers
• Sense of pride
– Feeling of “My company cares”
• Employee involvement
– Feeling of “I’m part of the corporate team”
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Importance of Objectives
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Sponsorship Components
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Category exclusivity
Signage
Right to use event trademarks and logos
Distribution rights
Hospitality areas
Complimentary advertising
Free tickets
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Sponsorship Components (Cont’d)
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Right to purchase additional tickets
Link on event web site
(Sponsorship) Designation
Inclusion in event promotions
Access to property mailing list / Database
Right of first refusal
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Category Exclusivity
• Guarantee that a sponsor’s competitor will
not be allowed to become involved with
the sponsee
– Example: If Coca-Cola sponsors the World
Cup of Cricket, then category exclusivity
provides assurance that Pepsi-Cola will not
be involved in any official capacity
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Signage
• Actual signs identifying and promoting the
sponsor at the event venue
• Helps reinforce the relationship in consumers’
minds
• Signage may be actual or virtual
• Signage clutter a concern
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Right to Use Event Trademarks
and Logos
• Events Generally Have Terms and
Symbols That Are Legally Protected
• It Is Illegal to Use These Intellectual
Properties Without Permission of Owner
• Sponsors Use These in Advertising, on
Packaging, and on Promotional Items
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Distribution Rights
• Right to Use Event as a Distribution Outlet
• Distribution of Free Samples of Product at
Event Venue
• Ability to Sell Products at Event Venue
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Hospitality Areas
• Facilities to Entertain Selected Individuals
• On-Site Hospitality
– Luxury Suites
– Temporary Facilities
• Off-Site Hospitality
– Temporary or Leased Facilities
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Complimentary Advertising
• Free Advertising for the Sponsor
• Often Paid as Part of Rights Fees
• Examples
– TV Advertisements
– Radio Advertisements
– Print ad in the Event Program
– Mentions by Announcers – PA or Media
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Free Tickets
• Admission to the Sponsored Event
• Important for Events that Typically Sell Out
• May Vary According to Sponsorship Level
– High level sponsors receive more free tickets
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Right to Purchase
Additional Tickets
• Valuable for Sold Out Events
• May be Used Even When Free Tickets Are
Not Provided to the Sponsor
• May be Bought at Discount if Event Is Not
Expected to be sold out
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Link on the Event Web Site
• The ability for Visitors to the Event Web
Site to Click on an Icon That Will Take
Them to the Sponsor’s Web Site
• Check out the Web Sites for the World
Cups of Soccer and Cricket
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Designation
• How the Sponsor Can Refer to Itself in Its
Own Marketing Efforts. Examples Include:
– Presenting Sponsor
– Title Sponsor
– Official Sponsor
– Marketing Partner
– Official Supplier
– Regional Supporter
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Inclusion in Event Promotions
• The Event Is Likely to Promote Itself
Through Traditional Media. It Is to the
Sponsors’ Benefit to Be Identified in the
Event’s Advertising and Marketing Efforts
• Helps to Reinforce the Relationship
between the Sponsor and the Sponsee in
the Minds of the Consumers
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Access to Property
Mailing List / Database
• Sponsor and Sponsee Likely Have Very
Similar Target Markets
• Access to Sponsee’s List Will Provide
Sponsor with Access to Potential Buyers
• Many Properties Have Lists of Ticket
Buyer and Members of Fan Clubs
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Right of First Refusal
• Current Sponsor Is Provided Opportunity
to Renew It’s Sponsorship for the Next
Period Prior to the Solicitation of New
Sponsors by the Sponsee
• Evaluate New Terms; Effectiveness of
Existing Sponsorship; Potential Actions by
Competitor if Sponsorship Is Terminated
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Which Component
Is Most Important
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Closing Capsule
• Sponsorships should benefit both the sponsor
and the sponsee – A win-win partnership
• Sponsorship components should be considered
tools that will help the sponsor achieve its
objectives
• Category exclusivity and venue signage are the
most important components
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