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Chapter 4 Sponsorship Objectives and Components McGraw-Hill/Irwin 4-1 ©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 4-2 Sponsorship Objectives • Drive sales • Improve image • Create greater awareness • Provide hospitality opportunities • Enhance employee morale 4-3 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) 4-4 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) 4-5 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 4-6 Improve Image (Cont’d) • Shape consumer attitudes – Reach new target market – Selected property portrays different image • Philanthropy – Donations viewed favorably by public 4-7 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 4-8 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 4-9 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” 4-10 Importance of Objectives 4-11 Sponsorship Components • • • • • • • Category exclusivity Signage Right to use event trademarks and logos Distribution rights Hospitality areas Complimentary advertising Free tickets 4-12 Sponsorship Components (Cont’d) • • • • • • 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 4-13 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 4-14 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 4-15 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 4-16 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 4-17 Hospitality Areas • Facilities to Entertain Selected Individuals • On-Site Hospitality – Luxury Suites – Temporary Facilities • Off-Site Hospitality – Temporary or Leased Facilities 4-18 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 4-19 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 4-20 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 4-21 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 4-22 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 4-23 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 4-24 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 4-25 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 4-26 Which Component Is Most Important 4-27 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 4-28