Sport sponsorship

1
Sport sponsorship

• Sport Marketing
• University of San Francisco
• Sport Management
• Cohort 07S

2
Intro

• 11.4 billion market in north America 28
  billion worldwide (IEG, 2004)
• 10 of sponsoring companies receive 1,300
  proposals/year (Seaver, 2004)
• Top spending corporations (IEG, 2004)
• 250-255 million PepsiCo
• 240-245 million Anheuser-Busch
• 185-190 million GM
• 180-185 million Coca-Cola
• 160-165 million Nike
• Investment breakdown by industry
• Sports (69) 7.69 billion
• Entertainment (10) 10.06 billion
• Festivals/Fairs (7) 792 million
• Cause marketing (9) 991 million
• Arts (5) 608 million

3
Sponsorship

• a cash and/or in-kind fee paid to a property in
  return for access to the exploitable commercial
  potential associated with that property (Ukman,
  2004)
• Sport sponsorship, in its essence, is based on
  a mutual exchange between a sport entity and a
  corporation (Copeland et al. 1996).

4
Theoretical framework

• Social Exchange Theory (Emerson Cook, 1978)
• Based on central premise that the exchange of
  social and material goods is a fundamental form
  of human interactions. Focused on how interaction
  patterns are shaped by power relationships
  between individuals and the resulting efforts to
  achieve balance in exchange relations a
  symbiotic relationship
• Theory of inequity (Adams, 1963)
• Whenever two individuals exchange anything,
  there is the possibility that one or both of them
  will that the exchange was inequitable.
  Therefore, inequity for a person in the
  relationship occurs whenever he or she perceives
  that the ratio of his or her outcomes to inputs
  are unequal.
• 3. Reciprocal Theory
• Customers will seek a reciprocal relationship
  with a select group of sellers from whom they
  will purchase products and services. Customers
  expect to pay for value, but customer loyalty can
  only occur when the two parties perceive that the
  value exchange between them is equal.

5
Growth impetus

• the ability to reach consumers in a less
  cluttered environment than traditional
  advertising (Cordiner, 2002).
• Advertising exposed to over 5,000 messages per
  day.
• Sport may also be over-saturated!
• Cluttered with title sponsors, presenting
  sponsors, supporting sponsors, cam sponsors,
  official product sponsors, pouring rights,
  licensing rights, naming rightsClutter and
  dilution are in direct opposition to what
  sponsors want.
• Many sponsors are now seeking alternatives
  action or extreme sports, fantasy sports, or
  Fewer, better, bigger or Less is more
  approach to reduce clutter.

6
Background

• Used to serve interests of corporate CEOs
  (Lets sponsor golf, because I like it.)
• Strategic philanthropy A companys long-term
  investment in an appropriate cause that does
  measurable good in society while enhancing the
  companys reputation with key audiences. ?
  Evolved to Causal (Cause-related) Marketing.
• Heavy dependence on sponsorship from high
  school to pros
• Creating win-win partnership

7
Stotlar Evaluation model
Please see handout
8
Sponsorship process
BRAINSTORMING PLANNING FOR SPECIFIC
ACTIVATION (PROPOSAL)

• PROSPECTING FOR SPONSORS UNDERSTANDING SPONSOR
  NEEDS

EXECUTION OF ACTIVATED COMPONENTS
POST SPONSORSHIP EVALUATION
9
Prospecting for sponsors

• (1) RESEARCH! (WSJ, trade publications, Yellow
  Pages, local Chamber of Com.)
• Business trends
• Industry health (ex. Airline vs. gasoline)
• Past sponsors new kids on the block
• (2) GENERATE A LIST OF COMPANIES RANK THE
  POTENTIAL
• (3) INVESTIGATE POTENTIAL SPONSORS (Websites,
  Annual Report)
• Company profiles
• Ownership status
• Brand literature positioning, features
  benefits, messages or storiesetc.
• New product roll-outs
• (4) ESTABLISH THE CORRECT POINT OF ACCESS
• Start with local, then corporate HQ.
• Both local and HQ must endorse and support the
  prospect of sponsorship

10
Identifying sponsor needs

• (1) KEY CONCEPT
• Is there a fit between what I can offer and
  what the sponsor needs? Finding that perfect FIT
  is essential!
• (2) NEED FOR SPONSOR CRITERIA FOR EVALUATION OF
  SPONSORSHIP PROPOSAL?
• Increasingly stringent ROI accountability!!
• (ex. Coke 1 how many cases?, A-B Does it
  sell beer?)
• (3) IDENTIFY UNDERSTAND WHAT YOU HAVE!
• Crystallize your demographic profile (age,
  gender, income, locationetc)
• Understand psychographics of your fan base
  (attitudes, perceptions, beliefs, values,
  purchase behaviorsetc.) utilize past data
• The clearer these info, the clearer your PLAN OF
  ATTACK

11
Identifying sponsor needs

• (4) LEARN ABOUT SPONSOR NEEDS ( objectives)
• a.We NEED to let consumers know about our new
  product / brand. ? AWARENESS OBJECTIVES (ex.
  Nike vs. LG)
• b. We NEED to upgrade the impressions held by
  consumers about our company. ? IMAGE OBJECTIVES
  (ex. Wal-Mart apparel ad in Vogue K-Mart PGA)
• c. We NEED to boost our revenues (sales
  volume). SALES OBJECTIVES
• Drive traffic at retail (ex. QSRs car
  dealers)
• Product sampling (ex. Food beverage brands)
• New consumer data base (ex. service industry)
• Incremental volume (ex. vending programs at
  schools or event merchandise sales)
• BOTTOMLINE! Sales-driven objectives are No.1
  NEEDS for sponsors!

12
Identifying sponsor needs

• d. We NEED to entertain potential and current
  clients in order to open new businesses and
  retain current accounts. NEED to something to
  enhance business relationships with them.
  HOSPITALITY OBJECTIVES (ex. Corporate suites and
  tents or pro-ams) ? mostly sales-driven as well.
• e. We NEED to minimize the impact of recent
  lay-offs and/or reward the model employees.
  EMPLOYEE MORALE OBJECTIVES (ex. POSCO 2002
  World Cup, PGA Shell Houston Open)
• (5) IDENTIFY THE FIT AND ATTACK POTENTIAL
  SPONSORS!
• Convince how and why the fit is there.
• If your sponsorship can satisfy multiple
  objectives (the more the merrier), your pitch has
  a better chance. However, focus on 1-2 KEY
  sponsor needs and address them fully.

13
Execution

• Activation Stotlars model
• Cross promotion
• Among the most powerful and popular activation
  methods, as they can grant marketers access to
  new distribution channels and spread out
  proportional costs across multiple partners.
• (Ex. NBA Sprite 7-Eleven prior to the All
  Star Game)
• Cause-related marketing
• 83 of consumers developed a more positive
  impression of companies engaged in CRM (Ex.
  Coaches vs. Cancer for Jimmy V. Foundation)
• Grassroots programs
• Brings marketing to a local or regional community

14
Post-sponsorship evaluation

• INCREASED EMPHASIS ON R-O-I (ACCOUNTABILITY)
• Easier to retain current sponsors than to start
  from scratch again.
• Honest and accurate assessment of the exchange
  theory can lead to long-term partnerships.
• Can also be used as a recruiting tool for future
  sponsors.

15
Post-sponsorship evaluation

• Stotlars Evaluation Protocol (2004)
• QUANTITATIE APPROACH
• Event demographics
• Recall (unaided) / Recognition (aided) Surveys
• Top of Mind (TOP) Research (pre, during, post
  event)
• Market Share Measures (pre, during, post event)
• Incremental customers (pre post)
• Promotional measures (ex. Coupons, liquidation,
  downloads, sales incentives, new DBetc.)
• Employee Morale Survey
• Qualitative Evaluation Protocol (Choi Stotlar
  2006)
• A NEW PERSPECTIVE
• LG Action Sports Championship
• On-site COMPARISON of activated components vs.
  consumer findings
• Photo Journaling method

16
Developing a proposal

• See sample USA Taekwondo Sponsorship Proposal in
  your Reader for more info and strucutre.