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Chapter 15 Sport Sponsorship Introduction • What is sponsorship? – Cash and/or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property • One of most prolific forms of sport marketing • Sponsorship fees often exceed $10,000,000 per year and are structured as multiyear deals • Provides a company with association, value, exposure, and opportunities to leverage their affiliation to achieve marketing objectives History • Increasing commercialization of sports has led to tremendous growth in sport sponsorship. – $11.3 billion spent on sport sponsorships in 2009 • 1984 Los Angeles Olympic Games – Watershed year in the evolution of sport sponsorship (President Peter Ueberroth) • Ueberroth became commissioner of MLB – Raised sponsorship bar for major professional sport leagues • Less-is-more philosophy – 2-2-1 Plan History: Reasons for Sponsorship Growth • Increased media interest in sports. • Companies can “break through the clutter” of traditional advertising. • Sponsorship can reach its target consumer through consumers’ lifestyles. © Gheorghe Roman/ShutterStock, Inc. History: Reasons for Sponsorship Growth (cont.) • Enable corporate marketers to reach specific segments, such as the following: – Heavy users, shareholders, and investors; or specific groups that have similar demographics, psychographics, or geographic commonalities • Today sport sponsorship has become a discipline involving serious research, large investments, and strategic planning Sales Promotion: In-Venue Promotion • Increase the amount of “value-added” benefits that teams provide their paying customers • Traditional giveaways: Sponsor underwrites the cost of a “premium” item in exchange for its logo on the item and advertising support that prepromotes the event • Continuity promotions: Require fans to attend multiple games to obtain giveaways • Success of promotion varies widely based on time of season, teams’ win–loss record, day of promotion, opponent, and perceived quality of the item • Incremental increase in fans Sales Promotion: In-Store Promotion • Companies often leverage sponsorships at retail level • Premiums – Merchandise offered free or at a reduced price as an inducement to buy a different item or items • Contests/sweepstakes • Sampling – One of the most effective sales promotion tools to induce consumers to try a product • Point-of-sale or point-of-purchase materials – Used by marketers to attract consumers’ attention to their product/service and their promotional campaign at the retail level • Coupons Cross-Promotion • Joining together of two or more companies to capitalize on a sponsorship is becoming increasingly popular and effective • Creates more “bang for their buck” under the premise that two sponsors working together can generate more interest and awareness among targeted sport consumers • Used to gain exposure in nontraditional and unexpected retail settings • It has become increasingly important to think outside the box as to how sponsors can be joined to increase the overall effectiveness of sponsorship investments Sponsorship Packages: Sponsor Benefits • Exclusivity in one’s product or service category • Official designations – Leagues and teams offer multiple designations tied to the sport and to the sponsor’s product or service category • Rights to utilize the sport organization’s intellectual property in advertising and promotion campaigns • Advertising support • In-stadium signage and promotional announcements • Access to tickets • Potential new business through access and opportunity Sponsorship Packages: League/Team Benefits • • • • Rights fee Multiyear commitment Advertising commitment Commitment to team-oriented promotions Sponsorship Platforms • Governing body sponsorship – Entails securing “official sponsor” status • Team sponsorship – Appropriate platform for local/regional companies or companies with smaller marketing budgets • Athlete sponsorship – Involves some type of endorsement of the sponsor’s product or service Sponsorship Platforms • Media channel sponsorship – Companies that purchase advertising or programming during sport-related broadcasts • Facility sponsorship – Enables companies to tie directly to the event atmosphere • Event sponsorship – Tie directly to event atmosphere • Sport-specific sponsorship – Enables company to direct its sponsorship efforts to a specific sport Evaluating Sport Sponsorship • Vital due to growing financial commitments necessary to effectively activate sport sponsorship programs • No one exact formula for measuring ROI • For ROI, companies use the following: – Internal feedback, sales/promotion bounceback measures, print media exposure, television media exposure, primary consumer research, dealer/trade response, and syndicated consumer research Evaluating Sport Sponsorship • Difficult to determine precisely how much incremental sales are directly attributable to a specific sponsorship program. • Many companies conduct periodic consumer surveys to determine ROI. • Companies often hire professional sport research firms to perform media evaluation research that examines corporate sponsorship and brand exposure through television and print media coverage of sports events. Sponsorship Agencies • Many companies engaged in sport sponsorship outsource the negotiation and/or implementation of their sponsorship programs • Rely on agencies because they do not possess the expertise, the experience, or the resources to negotiate and implement sponsorship programs Current Issues • Ethnic marketing – Sport organizations have begun to adopt strategies to target ethnic groups more effectively. • Overcommercialization – Do consumers have an emotional threshold for accepting a constant bombardment of corporate names, logos, and messages? • Gambling – Sport organizations have embraced gambling as a growing source of sponsorship revenue. © Ablestock