Global Sport (& Event) Sponsorship

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Global Sport ( Event) Sponsorship
Robert Sparks and Shannon Jetté November 28, 2005
The University of British Columbia Vancouver,
Canada
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A question for you

• How have you learned what you know about drinking
  alcohol, such as when to drink, where, why, how
  much, and so forth?
• To answer, probably need to think stage of life
  (stage of drinking experience)
• When you first started (15-16 yrs)
• Now

In your youth

• Meaning of drinking shaped by
• Family
• Peers (friends)
• Direct experience
• In media-intensive societies, we see that
  meanings and values connected with drinking are
  increasingly shaped by the mass media
  television, movies, music/ videos, consumer brand
  advertising.

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Background1

• Major international alcohol corporations are
  using sport and event sponsorship in increasingly
  multi-functional ways to gain competitive
  advantage in the emerging global market.
• This shift invites us to assess the impacts of
  alcohol sponsorship and of alcohol control
  policies themselves in more global and
  fundamental terms.
• 1(Sparks, Dewhirst, Jette Schweinbenz, 2005)

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Multi-functional Uses of Sponsorship

• Open doors politically (corporate good citizen)
• Bridge cultural differences in the global-local
  market (invest in/capitalize on favorite local
  events and brands)
• Develop strategic alliances (with suppliers,
  distributors, and other key groups)
• Exploit under-developed markets (that will
  respond to the sponsorship techniques developed
  in mature markets)
• Lock out competitors (to achieve a heterogeneous
  distribution of resources competitive
  advantage)

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Top 4 Global Breweries (2004)

• (sales)1 (volume)2
• Anheuser-Busch 14,934 3.81
• Heineken 12,666 2.95
• SABMiller 12,645 4.01
• InBev 11,598 4.85
• 1 US millions
• 2 billions of gallons

Remarks by Patrick Stokes, CEO A-B

• Stokes identified four priorities to stimulate
  growth
• improve the image and desirability of beer
• keep beer fun and social
• grow increase beer occasions and
• improve retail.
• (Pas, 2005)

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In beer sponsorship in particular

• We are seeing a growing sophistication and
  integration of sponsorship-linked marketing
  methods that follow these guidelines.
• Some of this is originating from abroad
• Some domestically, in response to the changing
  communications and marketing environment.

Organization of the Talk

• Illustrate some of these developments in Latin
  America (particularly Brazil)
• Policy issues
• Some ideas for solutions

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Recent LA examples.

• Brazil
• Schincariol
• Nova Schin
• AmBev (InBev)
• Antarctica
• Skol

• Argentina
• CCU (A-B licensing)
• Budweiser
• Columbia
• Bavaria (SABMiller)
• Cristal
• Aguila

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Schincariols use of events

• In 2003, Schincariol launched Nova Schin with
  aggressive price positioning and strong ad
  support (R180 million each year 2003, 2004,
  2005)
• Events Culture (Folio at Carnaval de Salvador),
  surfing (Nova Schin Festival -WCT), F1 (Globo TV)

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http//www.xtxe.com/xsx/surf/surfing/hobgood-claim
s-victory-in-brazil.shtml
Nova Schin Festival Brazil WCT
http//surfingthemag.com/surfing-photo-video/surfi
ng-photo-dept/110205a/index.html
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Industry Self-Regulatory Code

• Brazilian Council for Self Regulation in
  Advertising
• 2000
• Recommended that ads for alcoholic drinks not be
  associated with athletes at major sporting
  fixtures
• 2003
• Celebrities appearing in ads must not be drinking
• Scenes, photos, illustrations that represent
  consumption of alcohol are banned from ads

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AmBevs use of sport sponsorship and events

• AmBev began sponsoring the Brazilian National
  Soccer team with Guaraná Antarctica in 2001 (US
  10million/yr)
• AmBev introduced Skol Beats in 2003 aimed at
  youth (5.2). This has been supported by
  Skol-themed events marketing.

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Guaraná Antarctica sponsorship of Brazil National
Team - Confederação Brasiliera de Futebol
http//www.guarana.dk/en
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Brand BOA Antarctica Brewery Brahma (owned by
AmBev, part of InBev)
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Issue of brand extensions

• Using brand elements from an unregulated or
  socially acceptable product to help sell a
  regulated product or one that would raise
  concerns.
• No apparent guidelines

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Anheuser-Busch

• A-B competed with Interbrew for AmBev in 2004
• Interbrew won
• A-B lost distribution channel in Brazil, but is
  now using CCU partnership in Argentina to produce
  Budweiser, and Coca Cola to help distribute in
  Brazil.
• A-B Sponsors River Plate, Argentinas leading
  football team, and related properties.

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River Plate (Argentina)
F1 - BMW Williams
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Bavaria (Columbia)

• SABMiller (England) bought Grupo Empresarial
  Bavaria in 2005 for US7.8 billion.
• Two of Bavarias main brands are using sport
  imagery sex in their marketing
• Cristal
• Aguila

From Bavaria website, linked to cristal brand
http//www.cristal.com.pe/05_conectate/publicidad_
impresos.asp
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Industry Self-Regulatory Code

• Brazilian Council for Self Regulation in
  Advertising
• 2003
• Women in bikinis, etc., must only appear in ads
  that portray beaches and/or swimming pools

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Issue of Sport Sponsorship

• Functions as an implicit form of social marketing
  
• Attributes socially desirable qualities to
  alcohol tobacco products, ultimately to the
  actions of drinking and smoking themselves, not
  simply to brands
• Youth have been found to be particularly
  vulnerable to these messages (Sparks,1999)

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Does alcohol sponsorship affect consumption?
Yes, but we need more research.

• Some longitudinal survey evidence that
  sponsorship increases consumption among youth
• Ellickson et al. (2005) exposure to beer
  concession stands at sports or music events
  predicated f of 15 year old drinking.

• Evidence that consumption goes up in the context
  of major events such as Carnival and World Cup.
• Examples of time outs where people engage in
  legitimate deviance of excessive drinking.

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But the consumption question somewhat misses the
point. What is the long term effect of these
brand strategies?

• The increased marketing of youth-oriented alcohol
  sponsored events, in particular
• Insinuates beer and drinking into youth culture,
  but outside the context of family controls.
• Provides parallels to Carnival and World Cup, but
  on a continuing, mass produced basis.
• Sells drinking as a functional component of
  socializing, dating and having fun. (Stokes, CEO
  of A-B)
• Normalizes association between masculinity, sport
  and beer men as doers drinkers, women as
  watchers drinkers.

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What to do?

• Will need cross-national strategy
• Framework Convention on Tobacco Control is good
  model.
• In our experience with tobacco, other categories
  will step up telecoms, transportation, .coms,
  more.
• They have been locked out

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FCTC sponsorship-related clauses

• Sponsorship any form of contribution to any
  event, activity or individual with the aim,
  effect or likely effect of promoting a tobacco
  product or tobacco use either directly or
  indirectly
• Each ratifying country
• in accordance with its constitution or
  constitutional principles, shall undertake a
  comprehensive ban of all tobacco advertising,
  promotion and sponsorship
• shall adopt and implement legislation
  providing for protection from exposure to
  tobacco smoke in indoor workplaces, public
  transport, indoor public places, and, as
  appropriate, other public places

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Issues in global markets (Kotler, 1986)

• Legislation, regulations
• Cultural differences
• Performance expectations standards
• Local customs knowledge
• Networks key contacts
• Competitors (domestic international)