This dissertation has been submitted by a student. This is not an example of the work written by our professional dissertation writers.
Raising the bar of an undervalued marketing weapon
The double-edged appeal of adventure sports has started to capture the public’s imagination as a result of the combination of sports with the excitement and allure of adventure. In order to better understand the realm of adventure sponsorship and the other ramifications which accompany the subject matter “Strategic Sponsorship: Raising the bar of an undervalued marketing weapon: An inquiry into adventure sponsorship”, the logical starting place to begin to understand the realm is by understanding the words. Adventure denotes “…an exciting or very unusual experience…” as well as “…a bold, usually risky undertaking…” which is a “… hazardous action of uncertain outcome…” . Sports are “…a physical activity or skill carried out with a recreational purpose…” with this activity directed at the attainment of some specific goal, competition, excellence, skill or combinations of the aforementioned. The lack of assurance of the outcome, along with a familiarity of the rules creates the circumstances for an unsure ending that provides the drama and rationale to watch, to see the eventual winner.
The preceding adds up to a genre that has caught on with a segment of the public and is catching on. Adventure is a sport that is multi disciplined and has seen a tremendous growth in popularity during the past ten years. The foregoing has seen a commensurate rise in sponsorships as a result. Sponsorship is defined as “…a business deal between two or more parties in which one party meets all or part of the costs of the project or activity in exchange for commercial benefit”.
It is a significant aspect of ‘Adventure Sports’ in that it enables teams to compete in various venues for public exposure, meaning magazines, newspapers, Internet sports updates as well as television coverage of significant races. The costs associated with fielding an individual athlete or team includes not only equipment, but also the costs of travel, lodgings, training, physicians, special diet and other allied expenses.
As the popularity of ‘Adventure Sports” has grown so have the rewards for winning. Sports celebrities adorn the packages of various foods, as well as their appearing in advertisements, magazine ads and billboards. These are some of the payoffs that accrue to the athletes and teams. As for the sponsors, their good fortune comes form their logos, banners and other merchandising labels that are picked up in photos and seen in newspapers, sports journals, the Internet and when the events are large enough, television.
The advertising as well as publicity payoffs can be either a breakeven proposition for athletes and teams that do not perform well, or a modest return for those athletes and teams that achieve moderate success, to hitting the jackpot with championships and the exposure that accompanies same. The determination of how the investment stacks up against the return on their sponsorship investment is made by the amount of money the company puts up, along with the exposure of the sport and the potential demographic profiles that are reached as well as the cost per impression. The formula to arrive at the proper sponsorship amount is based upon the company’s understanding for the pragmatic nuances involved and a cost/return calculation equated against the potential for the athlete or team to achieve anticipated levels of success.
The newness of these ‘Adventure Sports’ venues means that they are not nearly popular enough to challenge the major sports, however it does provide an alternative that is new, and this appeals to a major demographic group that advertisers covet, 24 through 56, males and females, a broad spectrum of income variables and they are active. The atmosphere associated with any sporting venue is upbeat, social, lively and a perfect selection to appeal to a captive audience.
Captive in the sense that they are engaged in watching or, being at an event as well as enjoying the festivities and the drama associated with whom the eventual winner(s) might be. The sports are defined by the way they cause the athletes and teams to ‘push’ the limits to win in head to head as well as against the clock formats in the differing venues that comprise the ‘adventure’ genre. The aforementioned ‘risk taking’ aspect it takes to compete and win does often result in crashes, falls and other sports disaster associated with top competition and is a source of high appeal to fans as they know that each athlete as well as team are giving all they have to win.
As is the case with any emerging trend, in this case adventure sports, the theory associated with sponsorship and actual practice will be examined to determine if it is developing in accordance with historical trends or is indicating a differing approach. The business end of sponsorship entails exacting as much mileage out of the funds provided to underwrite the athlete and / or team through media coverage. The better the athlete / team performs the more they appear in the winners circle with on camera exposure, when there is television coverage. The sponsor’s whose investment result in the aforementioned is thus associated with winners and this association provides a marketing edge which the companies exploit through advertisements in the media via magazines, posters, radio, the Internet, television, and newspapers.
The rewards associated with successful athletes and teams are considerable and the downside, meaning poor performances, still garners enough exposure so that the investment is not a loss. Adventure sports associations covering the differing type of venues understand that the sponsors help to fill out their rosters, thus they are sure to see that even the losing teams receive exposure and thus advertising impressions.
The preceding results from shots of crashes, spills, second place finishes, spectacular moves and so forth. These glimpses of action occur on a regular basis through the season, along with interviews, media events and other activities to ensure that even the sponsors of losing athletes and teams get their monies worth. This strategy keeps the door open for the athletes and teams to secure sponsors who are aware that their investment, regardless of the outcome, is well worth it.
Chapter 1 – Introduction
In order to understand the growing appeal of adventure sponsorship it is important to understand the source from which this new field has arisen, ‘Sport’. The allure and attraction of sports can be found in the fact that in the animal kingdom as well as human beings, the inborn trait of play is a characteristic of almost all species. In the animal world we see newborns, lions, kittens, pups, and baby elephants engage in play where they test their strength, speed, will and endurance.
This prepares them for survival. As rationale beings, humans strive for knowledge, happiness and truth, the distinguishing characteristics that define the difference between the human and animal worlds. Throughout human history games and sports have been a part of the human evolutionary process whereby new physical, social and psychic skills are further developed.
Evidence of the importance of sport can be found in humankind’s earliest beginnings. As we changed from being hunter gathers to hunters, the change required mutual cooperation to increase the chances of success of the hunt. This fostered team-building skills to corner and bring down large sized prey, which in most cases was to big for an individual to confront on their own. The skills of stalking, trapping, hunting, killing and carrying prey caused cooperation and the physical attributes needed for these areas were honed in practice and contests which developed into various sporting activities. As the size of tribes and villages increased, sport was utilized to train for combat to either conquer or protect.
Historical findings indicate that these were the uses of sports for many millennia, except for the continued introduction of new weapons and fighting techniques. 776 B.C. marked an important turning point in the history of sports as this is the date of the first Olympic games. And while the events were comprised of military prowess (archery, Javelin, Discus, boxing, wrestling, the shot put and marathon) it marked the first organized event where athletes from throughout a particular country assembled in one location to engage in sporting events. The modern era Olympic Games have continually added new sporting events to keep pace with the development of cultural trends and it now includes baseball, equestrian, boating, basketball, hockey, cricket, squash, tennis, volleyball, handball, and other modern sporting venues.
Every sport has its sponsors; they are an integral aspect of how semi as well as professional athletes and teams are able to compete. Sleight (1998) defined sponsorship as “…the financial or material support of an event, activity, person, organization or product by an unrelated organization or donor”. He continued that funds are “…made available to the recipient of the sponsorship deal in return for the prominent exposure of the sponsor’s name or brands.” Sponsor funds form the backbone of all sports and are important to new and emerging venues such as the ‘adventure’ category.
To attract sponsors the individual events, athletes, teams and in some cases their governing bodies do their utmost to ensure that all sponsors receive value for their money as this is the means for them to compete as well as exist. Kitchen (1998) stated that it is necessary to “…target customers in an integrated fashion…” to accomplish certain objectives under a company’s marketing plan. He goes on to add that through marketing communications the target audience to be reached via promotional means is informed, persuaded and reminded, both prospective customers as well as those which are already in the company’s brand franchise. Kitchen explains that a company’s products and or services need to be differentiated in order to appeal to as well as satisfy the needs, desires and wants of target audience profiles.
Brassington et al (2002) concurs on the target audience methodology that he terms “Integrated Marketing Communication”. Under “Product Management” Brassington discusses the importance of reaching diverse market segments to reinforce a company’s brand image in targeted market segments. The marketing problems faced by small firms is compounded by the lack of sufficient monetary resources to match the spending patterns of their larger competitive rivals.
Companies with limited marketing budgets, as well as large firms seeking to tap into diverse customer profiles must understand the dynamics of how the marketing mix can serve audience differentiation. Blois (2000) delves into the importance of not only understanding the importance of marketing, he cautions that it is essential to have adequate market research information to reach segmented aspects of the consumer profile. He adds that underwriting new promotional venues provides unique opportunities to stretch marketing dollars and that sports sponsorships are an effective channel for such objectives.
The dependency on sponsorship funds continues even after the sport (in this case ‘adventure’) has garnered television and other media contracts. Formula 1 motor sport is a prime example. With 16 races scheduled on virtually every continent and a multi-million dollar broadcast deal, the sports still relies on gate receipts as well as sponsorships. It is estimated that the average cost of running a top Formula 1 team can range from the high of $250,000,000 spent by Ferrari, through $200,000,000 spent by McLaren Mercedes, Williams BMW, etc. The logos that adorn the sides of the racing vehicles, the paddocks and signage throughout the tracks are a result of sponsorship deals. Even with the tremendous hordes of cash provided by the team sponsors (BMW, Ferrari, Mercedes, Toyota, etc.), the television revenues and gate receipts, the teams would not be able to compete at present levels without the backing of sponsors.
The extremely competitive nature of the business world means that companies must utilize every means at their disposal to extend the reach, exposure and impact of their marketing messages. The number of new companies, products and offerings available for consumers to select from has created a plethora of choices even among the same types of products, thus heightening the task of companies to created and sustain some type of brand loyalty.
A recent study uncovered that consumers are doing more brand switching and that they are also shifting from one brand to another and this includes the ancillary products as well. Consumer brand loyalty represents an individual’s “…conscious or unconscious decision…to repurchase a brand continually.” To achieve this end, companies must create an image of the brand that provides them with a competitive advantage. This becomes an extremely valuable asset in marketing products as well as convincing consumers to either try, switch or remain loyal.
The foregoing requires a clear, concise, understandable and memorable marketing plan that establishes consistency in the minds of consumers. People tend to be drawn to what they perceive as established, trustworthy, quality oriented, stable, and successful brands, this is the technique that has resulted in such companies as BMW, Mercedes, Rover, General Electric, Sansburys and others who have carefully cultivated their brands to reflect the attributes which consumers respect.
The importance of achieving the objective of a respected brand image cannot be overstated. It entails delivering a consistent message across all product lines through logos, advertising, marketing, packaging, public relations and sponsored events. A careful assessment of some of the brands you purchase on a consistent basis, and even look for when in a strange location is an example of the foregoing. There are specific attributes that attracted you to that brand and the company in question has delivered an image, message, level of quality and consistency that causes you to repeat your purchases.
The marketing campaign that achieves this end must present a unified message as well as image. Success in this endeavor requires consistency across the marketing mix, and one of those components is sponsorship. Consumers are marketing savvy, they understand as well as realize that commercials, billboards, magazine ads are directed at them to attempt to influence their decisions. As a result of all these consistent impressions consumers have, depending upon their degree of education and other factors, a slight resistant to such advertising forms ranging from commercials, billboards, magazine ads and radio built in as they understand that these are attempts to sell or influence them. The more successful firms understand the preceding and thus they seek to appeal to our common sense, emotions, humor or intelligence as the alternative. The creative approach in these types of ads gives the consumer credit for intelligence.
The success of stations such as HBO, Cinemax, Stars and other commercial free venues is the proof of the foregoing. Dr. David Schrader (2005) indicates that “Consumers may soon have the technological power to ‘cocoon’ themselves and their families…” from ad messages they chose not to see. Schrader points out “…that a typical consumer…sees some 5,000 advertising impressions…” each day. This figure is up from the 3,000 recorded in 1990. The ‘cocooning’ trend Dr, Schrader noted is based upon futurist Faith Popcorn coining of this phrase to describe what was beginning to take place among consumers as early as 1981. In a recent interview she stated that the “…home has become an armored cocoon…” where the gated communities, working from home and other aspects that permit people to almost completely avoid the outside world, and then do so mostly on their own terms. This idea has filtered over to the world of advertising as well. The concept of developing technology that permits consumers to shield out unwanted advertising and commercial messages and permit only what they have identified as interesting for them is already partly in place with such mechanisms as TiVo.
Sponsorship is not patronage as the later is defined as:
“1. The support or encouragement of a patron, as for an institution or cause.”
It, patronage, is a means whereby a wealthy individual or person supports a talented person in the furtherance of their pursues, be it art, writing, athletics, music, or such. In the 16th, 17th, 18th and 19th centuries it was utilized as a means to these ends, and even today it exists. The patron might be seeking some type of acknowledgement from peers for their intelligence in finding or seeing the potential or talent of the selected individual, and in other instances they might be supporting them until that person reaches celebrity status and then seek reimbursement for their patronage.
The types of this kind of support take on many forms. It differs from sponsorship as the boundaries are defined. Sponsorship represents “…a business deal between two or more parties in which one party meets all or part of the costs of the project or activity in exchange for commercial benefit”. And while the individual nuances of sponsorship deals can take on many forms, the understanding of what it is, is universal.
Chapter 2 – Literature Review
Adventure sports are a relatively new field of sponsorship that is just beginning to come into its own as viable corporate tool for utilization in the marketing mix. The relative newness of the field makes it a relative bargain for those firms seeking to enter. Sponsorship represents a strategic investment that can and does reap multiple benefits that are in excess of the fiscal outlay. This is because of the relative inexpensive nature of entry into adventure sports as the field is still developing in terms of fan base and public interest.
Given the foregoing, the research entailed delving into and understanding the varied nuances that comprise the realm of sponsorship as the important variable in examining the subject matter at hand. It was also important to understand the dynamics of the overall marketing mix and the role sponsorship opportunities can contribute to reinforcing brand image and reach. Adcock et al (1995) provide insight on this process under “The Competitive Environment” segment of his book “Marketing Principles and Practice”.
Entering the sponsorship arena entails first having a plan whereby the actions and marketing plans of competitors are understood in identifying their strategies, current positioning, areas where they might be vulnerable as well as those areas that constitute strength. Adcock stresses the importance of knowing and understanding what your competitor is doing and why as there might be some valuable information on their approach to reaching your own company’s target audience through unique marketing channels. The chapter “Buyer Behaviour” in Adcock’s book provides a real world understanding as well as education into the nuances that cause as well as make consumers do what they do. Most consumer’s are subject to the influence of the complex patterns and associations that comprise ‘buyer behavior’.
Adcock (1995) indicates that the “…Complex buying behaviour” of consumers is an outgrowth of their own decision making processes along with marketing impressions and outside influences which seek to grab their attention almost every minute of each day. Demand is a characteristic of current as well as potential customers that the company has identified as objectives in its marketing plan along with the varied factors that contribute to their buying decisions.
To effectively formulate strategies that maximize factors influencing buying decisions and behaviour a company needs to understand how consumers go about making their purchasing decisions. Some of the questions that Adcock identifies in this regard are:
1. Identification of the degree that consumer’s are aware of the company’s competitive brands and their loyalty to the brand(s) they utilize or purchase most often.
2. Understanding where a consumer makes his/her buying decision. Is it at their home, business or is it impulsive.
3. What external factors influence, impact or cause a consumer to reach a buying decision concerning which brand to select?
4. To what extent are they really knowledgeable on brand differences, if any, and how can their information on the company’s brand be improved?
5. What and who actually influences the decision maker?
6. How, when and where are the best avenues to reach and influence the decision maker to induce trial or brand switching?
7. What competitive advantages does the company’s brand have in impacting upon discernable differences that will influence buying behaviour?
Adcock (1995) analyzes factors such as:
- The factors comprising the buying decision process
- Aspects behind consumers habitual buying behaviour
- The varied psychological factors that enter into consumer buying decisions
- The influence of social variables
And how to utilize complex buying behaviour patterns to the company’s advantage
The preceding form the basis for making determinations as to:
- Who are the company’s customers?
- How are they segmented in terms of demographics and psychographics?
- What are the variables of market segmentation as it relates to the company and its competitors?
- What are the customer’s psychographics and lifestyle profiles and how are they segmented
- Can target marketing achieve meaningful gains?
The last question concerning target marketing, when combined with the preceding ones, brings up the potential of sponsorship as a defined avenue. Adcock’s (1995) book, while it does not specifically address sponsorships as its main topic, does include it as part of the overall marketing mix. More importantly, his comprehensive analysis regarding marketing principles brings into the picture the other considerations which are included as part of marketing effectiveness. He defines customers as a business asset in that their purchases are the revenue stream that keeps the company in business. As such, one can never lose sight of the customer as the ‘only’ reason they make or provide a service.
In Chapter Fourteen, “Marketing Communications and Media” Adcock brings in sponsorship as a marketing variable. He sees the marketing process as establishing a dialogue with the customer through marketing communications. The next Chapter “Promotional Planning” explains the importance of investing in promotions as a means to reach one’s target audience. When making use of this medium, promotions, the mix assigned to this area must be mindful of the message the company is sending to its current as well as potential customers via the message being delivered.
Adcock’s (1995) book is extensive in its subject matter as well as the categories contained in each chapter. Blois’ (2000) book is as comprehensive as Adcock’s in its coverage of theory and actual marketing practice. A copulation of twenty-six academics from around the globe, Blois’ book provides a compendium of information from differing, yet similar views of the subject of marketing. As with Adcock, the book prepares the reader for the ensuing chapters which become increasing complex as they build upon the information supplied in prior sections.
In the ‘introduction’ he delves into the subject of “What is Marketing About” , explaining it as the gasoline that enables cars to move. Under the works of Klaus Grunert under Part Two “Understanding and Assessing Buyer Behaviour” the book provides insight concerning why consumer’s make the decisions they make. The importance of understanding consumer behaviour is stressed as a key aspect in the formulation of any marketing plan so that it addresses the underlying reasons and actions that motivate their purchasing decisions. This is particularly useful in designing collateral materials for promotional events such as sponsorships.
Grunert states that understanding consumer behaviour is not only important for the company, the dynamics of this area affects every company associated with the delivery and distribution of the end product. The selection of color, distinctive packaging, product placement, point of sale materials and other factors all come into play in subtle but extremely important ways as part of the buying process. Even when consumers are looking for their regular brand, the effects of a competing brand come into the scenario.
If they tend to notice a variety offerings, continued restocking so supplies are optimum, certain information contained on point of sale displays or signs, these can at some point of time, in conjunction with the direction, messages and sophistication of the marketing plan become a rationale to induce either trial or brand switching. In Blois’s book a model of the consumer decision-making process is presented in a four-step sequence as part of the overall consumer behaviour chapter. It indicates that in most instances that a purchase is usually made to satisfy a problem. A problem recognition analysis conducted through a means end” chain concept can help a company determine what factors or influences are motivating a consumer to purchase a product or products.
Blois states that consumers usually have a varied number of alternative solutions to select from in choosing a product or service. He continues that depending upon how complex the purchase decision is the methodology utilized by the consumer is either ‘multi-attribute’ or based upon ‘decision heuristics’. The outcome in many purchase decisions by consumers tend to be influenced by any number of aspects that are within the company’s control and thus can be addressed to help say the decision to select his product. Blois’ utilization of selected academics for differing segments of his “Oxford Textbook of Marketing” utilized Walter van Waterschoot under Part 3 to explain the dynamics of “the Marketing Mix as a Creator of Differentiation”. It is explained that the ‘marketing mix’ refers to the varied components a company may utilize in combination to create demand.
Waterschoot states that in order for an exchange of money for a product to take place, there are some preliminary marketing conditions that need to be fulfilled. He adds that when the fundamental aspects of a company’s marketing mix have taken these factors into account, which are termed generic or promotional, then exchange will take place. It is explained that when the decision is based upon generic factors the exchange will take place sooner or later, and when the decision is based upon promotional, then the exchange will take place sooner as opposed to later. This distinction is extremely important in pointing out the value of sponsorships and the role they play in the generation of sales.
The immediacy of the consumer purchase decision is influenced by the context of a sponsored event/ This impact can build a company’s image and more importantly sale volume in a fashion that can be measured by equating the beginning of the sponsorship event to any increase in sales. All things being considered equal, if there are no other promotional items in the marketing mix, the resultant rise in sale, or lack thereof, signals a determination of effectiveness.
Kitchen (1998) covers the subject of sponsorship under chapter 21 of his book ad shares the same view as Blois and Waterschoot in terms of its measurability. The resultant incremental increase in sales volume can be determined when promotional venues are utilized within the marketing mix. This ability to see the effectiveness of the selected promotional tool provides feedback as to the effectiveness of the research into consumer buying behaviour patterns and other allied areas. Kitchen cites Tesco as an example of a company that understands the value of knowing its customers.
While a direct example of sponsorships was not cited a corresponding marketing component illustrated the importance of understanding the factors that influence consumer-buying behaviour. Kitchen states that it is necessary to utilize promotions within a defined target audience as well as market and utilize an integrated means of information, persuasion and recall to remind both existing and prospective customers of the company.
He cites that the differentiation of the marketing mix to appeal to these distinct and important segments cannot be overstated in terms of their importance in achieving increased brand image and product trial or sale. He continues that marketing communications entails utilizing a continuous set of proven and tried techniques not only to deliver advertising messages, but to correspond to and keep pace with the consistently changing aspects of consumer buying behavioral dynamics.
Kitchen adds that in the final analysis all products, not matter how well they are positioned, distributed, priced and thought of in terms of public perception, need to be promoted. And he cites sponsorships as one of those variables that makes a measurable difference. Attention to the components of public relations, direct marketing, sales promotion and sponsorships rely upon a deft understanding of the market being served. Along with effective and efficient planning, follow through and consistent evaluation of measurable results.
Brassington et al (2002) also emphasizes the importance of consumer buying behaviour along with sales promotion and strategic marketing in three distinct chapters. The concept of strategy is explained along with its importance. It is explained that strategy is the matching of activities in a company to the marketing context it operates in as well as the company’s capabilities with regard to resources.
Marketing’s input at the differing levels in the company hierarchy influences campaign strategies as well as components. Brassington indicates that marketing strategy is a living on-going process that requires consistent review as well as adjustment which he terms is the “feedback loop”. The case for utilizing sponsorship is cited in the evaluation of marketing strategy, which consists of:
1. Analyzing the company’s market externally provides information concerning the changes being implemented by competitors and thus within the company the marketing staff as well as executives need to be mindful of the consistently changing nature of that environment and take advantage of any opportunities that present themselves.
2. The preceding indicates why any analysis of external factors must also include an analysis of one’s customers as well and this is where the marketing department utilizes its studies of consumer buying behaviour as well as other components.
3. Brassington states that it is important to look at areas whereby the strengths inherent in the product, in terms of consumer perceptions, are put into play as well as maintaining strengths in markets the company is competing in.
4. Lastly, Brassington cautions that in spite of ‘best laid plans’ a company must acknowledge that there are and will be those instances where an effective exit strategy will need to be employed. He states that having this exit strategy planned gives the company a proactive rather than reactive stance which is important.
The range of case examples provided within Brassington’s book provide illumination and a clearer understanding of the points being made.
The adventure sports arena is a still developing entity and since it is basically like any other sport, with the exception of its newness, an examination of its role provides the answer to how this undervalued strategic weapon works. Sleight (1998) provided the foundation for understanding sponsorship with the definition of it being “…the financial or material support of an event, activity, person, organization or product by an unrelated organization or donor”.
Sleight added that the sponsor makes funds available to “… the recipient of the sponsorship deal in return for the prominent exposure of the sponsor’s name or brands.” Said sponsor monies are the backbone upon which all sports survive and exist. Formula 1 motor sports, American football, basketball, baseball, Premier League Football, the varied European soccer leagues, golf, bike racing, tennis and any sport you can think of exists as a result of sponsorship funds. These monies underwrite athlete, team, events and/or governing body and augment any broadcast, admission or other income thus generated.
Dr. Schrader (2005) delved further into the varied aspects of sponsorship by illustrating the impact and effect that sponsorship has on brand image, sale generation, publicity, public relations and other areas. Dr. Schrader pointed out that the relative captive audience of sponsorship provides the perfect environment by which to establish, deliver and impact consumer purchasing and trial decisions. He also indicated that because consumers are exposed to over “…5,000 advertising impressions…” each day the closed world of sponsorship, in terms of capturing fan and viewers in an entertainment venue. Friedmann (2005) laid out the key elements of how sponsorship helps to accomplish important goals and objectives for sponsors as it:
1. Enhancement of the Company’s Image and the Shaping of Consumer Attitudes
2. Driving Sales
3. Creating Positive Publicity and a heightening of Visibility
4. Provides a Platform for Differentiation from Competitors
5. Aids in the Establishment of the Good Corporate Citizen Image
6. Enhances Business and Consumer Relations
The case studies utilized were taken from examples provided by Performance Research (2005) and afforded a basis to look into actual sponsorship deals. These covered one adventure type sport, snowboarding, as well as major sports such as baseball. The lessons gleaned from these examples are relevant to adventure sports in that it is the concept and practice of sponsorship is the foundation upon which the continued growth and exposure will be build as a result of fan and consumer interest.
Aaker (2000) explained the differences and importance of brand identity, brand equity and brand leadership as marketing and corporate objectives that define success in the marketplace. As the professor emeritus of marketing with the Haas School of Business at the University of California at Berkeley, he has been championing the brand concept as the core of the objective of marketing since the 1990’s.
The aims of the research were to identify the underlying key components inherent in sponsorship, which includes the importance considerations in a company’s marketing mix as well as brand image and public perceptions.
Chapter 3 – Sponsorship Case Studies
3.1 Brand Image
Corporate utilization of sponsorship as part of the overall marketing mix can take on differing reasons for inclusion in a company’s plan. Whatever the reasons for the selection of a particular marketing mix strategy, one aspect heads all lists – preserving and enriching the company’s brand image. And just what is a brand image? It is the ‘brand’s public personality’ reflecting what individuals think both on a conscious as well as subconscious level of a company’s identity or product(s). Bavarian Motor Works (BMW), carefully cultivated the image as the ‘the ultimate driving machine’ to place in the consumer’s mind that their vehicle is the standard by which all other cars are judged.
Whether this is true or not, depending upon your personal preference, the image these words brought to mind in repeated commercials is unmistakable. It created a ‘personality’ for the brand that positioned it in a unique niche, neither sports car or family sedan. The image conveyed BMW as simply the best handling and performing vehicle on the market and the company completed that promise with innovative products that fulfilled that idea.
Aaker (2000) analyzed the way in which multiple brands work together to form “…a synergistic system…” which is the brand identity concept. He makes a compelling case for the brand leadership model in that he explains is replacing the older system regarding brands which was pioneered by Proctor and Gamble during the 1930’s.
Aaker further explains that when brand equity was introduced in the 1980’s it first seemed to be a fad, however its principles are in use and have been expanded upon since that time. In creating a brand image, the delivery of the product or service must closely approximate what consumers are being told and fulfill their expectations. Done correctly and the company garners a reputation and marketing positioning, done incorrectly and the door is opened for consumers to either try or switch to one’s competitors, and nothing is harder to regain than a consumer who has been disappointed in the delivery of a promise. The marketing mix includes a combination of many variables:
The first and most obvious aspect of the marketing plan, after the campaign strategy and rationales have been agreed upon, is the selection of media the company will utilize to reach the public, the percentages utilized and the exposure patterns. Depending upon the size of the company and its allocation for advertising a typical large sized company will use television supported by radio spots, magazine and newspaper ads along with mailings, Internet web site and web site ads, billboards, transit (bus, train, taxi placements etc.) in a schedule whereby each reinforces the other in a carefully designed plan that creates maximum repeat exposure patterns.
Smaller companies without the media dollars to compete with established companies must think of and use innovative means to accomplish the same task, which is compounded by the lack of funds to take prime positioning away from large companies who press their advantage. Thus, the marketing manager must take calculated risks to achieve a measure of exposure that provides enough reach and frequency to compete. The inability to match advertising media spending on a large scale means that additional emphasis is placed on other aspects of the marketing mix such as P.R., events of opportunity, promotional venues and sponsorship.
The larger companies also utilize these components, however the nature of these elements provides a somewhat leveled playing field as creativity and innovativeness can approach equaling the clout of better-heeled rivals. For the purpose of example, the following aspects will utilize a smaller firm as the basis for examination as adventure sports holds particular appeal to these types of firms, whereby larger companies tend to stick to the more established sports, dabbling in new fields as a result of having the budget to do such.
2. Public Relations
This area is where a creative marketing manager can gain ground on larger competitors, as well as distance the company from similarly sized firms. Via a carefully constructed series of press releases on varied areas that create an interesting story for pick up, the P.R. side of the marketing mix can represent a genuine opportunity to gain exposure that can vault a company into consumer consciousness.
The P.R. aspect can pull stories from all corners of company activities and when planned in a carefully crafted scheduled series of releases spread across the advertising campaign on a consistent basis, it can make up considerable ground on larger advertising budgets.
Public Relations activities encompasses a spectrum of marketing tactics which strengthen a company’s creditability, image and develops goodwill as well as influencing public opinion. Publicity is a function of Public Relations in that it is media coverage.
The following lists the components that comprise Public Relations tactics:
1. Publicity and Media Relations
The media coverage, which is publicity, enables a company to put various stories and message in front of the public through and organized program of releases as well as events that occur throughout the year. The media relations aspect of this category consists of a number of differing method via which the media is contacted and information disseminated, and these are, News releases, media advisories, press kits, press tours, news conferences and calls to editors as well as reporters.
2. Special Events
Some examples of this segment of the Public Relations aspect include the utilization of awards ceremonies, stunts, contests, and speeches by company executives, trade shows, fundraisers and open houses. These types of activities provide the stage to draw public attention to the company as well as create traffic where applicable.
These are either created in-house or through an advertising agency and generally range between four to twelve pages on average and consist of short articles designed to provide customers, members, clients, and investors with information on what the company is and will be doing as well as other areas of interest.
4. Annual Reports
Publicly traded companies are required to generate an Annual Report of the company’s operations. It includes important financial and corporate developments that transpired in the prior year and serves as a record for shareholders.
5. Speakers Bureau
Through this aspect company executives and spokespersons address various trade and professional associations, civic organizations as well as community groups.
6. Tip Sheets
These are sheets consisting of one or two sides that contain either instructions, advice or other data of use to a company’s customers and/or clients. Tip sheets are utilized to illustrate a company’s expertise and are usually designed as numbered or bulleted lists.
7. Fact Sheets
In general, these usually consist of one page and they provide either certain statistics or data concerning a project or issue.
8. News Sheets and Action Alerts
The dissemination of urgent or recent information is communicated utilizing a one or two page format that is usually intended for the recipient to undertake a specific action. Such usually consists of them making a donation, writing a public official or to consider a change in their purchasing habit.
9. Letters to the Editor and Op Ed Pieces
These communications promote the company’s expertise through a letter to the editor in response to items or articles that appeared in the news, or as a correction or further information that was already been published.
10. Charitable Contributions
The news worthiness of this activity is generally confined to those companies that make large donations, however, this type of corporate activity does generate goodwill and local awareness. Such donations are usually written up in corporate newsletters, web sites and other means of distribution outside of the mainstream.
This is the activity whereby a small company can effectively compete with larger ones, depending upon the sporting or other activity selected. The budgets to sponsor a major racing team, such as Formula 1, Cart Racing, football, or soccer are generally the province of larger companies who dominate this field. Adventure sports and other similarly sized new venues offer a company the opportunity to showcase their logo, message and garner press coverage through events, broadcast and results whereby their affiliation with a particular team, athlete or sport yields return on investment results that generally exceed the expenditure. The value of these types of associations shows the public the company’s commitment as well as support.
All of the preceding areas help to contribute to a company’s brand image in differing fashions, but the objective is still the same. Each opportunity affording exposure either builds, negates or maintains a company’s public brand image. And sponsorships are one of the most visual and consistent of these methods.
3.2 The Nuances of Sponsorship
As a segment of a company’s overall marketing strategy and as a component of the marketing mix, sponsorship activities provide media opportunities that translate into additional press coverage, television exposure, magazine and newspaper articles, newsletter updates as well as branding reinforcement. Sponsorships provide the opportunity to enhance as well as build upon brand associations by associating the company with “…other aspects of life.” It entails a company providing its financial support as well as creative input and media support to either an important event or activity that has been organized by a third party.
One time support provides certain benefits, however a longer term arrangement not only provides the company with more Public relations possibilities, it also creates an air of consistency whereby the fans and participants of that activity see the company as part of that activity rather than seeking to profit from specific events. This consistency is noticed by not only the fans, but also the media and thus provides the consistent supporter with additional benefits. As a critical aspect of the Public Relation umbrella sponsorship provides the opportunity for a company to reach a specified target audience and deliver specified messages. It is the unique event-to-event message aspect that makes sponsorship a valuable tool for the marketing message. Through this medium, sponsorship, a company can accomplish the following important marketing objectives:
2. Brand Reinforcement
The exposure offered through the sponsorship of adventure sports permits a company to reinforce its brand message through the consistent utilization of its name, logo, slogan and main advertising campaign message. These preceding aspects are basic inclusions that are a part of any special marketing message delivery that a company elects to select.
As a newly emerging sports category, adventure sports provides a company with the opportunity to market to a different psychographics profile within a defined demographic group. For example, a clothing goods manufacturer might either design a special line to appeal to this group, or elect to reach them through sponsorship support in this new avenue. The extreme diversity of sports within this profile means that the adventure sports fan is demographically from almost every conceivable group.
The benefit to a company for utilizing this type of sports sponsorship is that it permits it to reach and or strengthen its brand image with current users as well as enlist trial by new users. The opportunity to further strengthen ties with existing, occasional or new consumers through the sponsorship of adventure sports is not only a plus, it helps to create an image whereby the company is seen as up-to-date, contemporary, adventurous, in tune with new developments, involved and progressive.
This translates into a company that must also be applying these attributes to current products, new product rollouts and product development. If a company is in step with the time and new developments then it would appear that this same philosophy would extent to its internal operations and products as well. To cause this as well as any other brand reinforcement attempts to work, the company must deliver on its promise
3. Advertising Reinforcement
The informal and festive atmosphere of a sporting event provides a perfect opportunity to reach consumers with the company-advertising message. With the company logo, colors and brand name adorning athlete or team uniforms and equipment the company is provided with brand name exposure and visualization before, during and after the event. It is important to understand that the multitude of advertising message consumers are exposed to (Schrader  pointed out “…that a typical consumer…sees some 5,000 advertising impressions…” each day) means that companies must enlist every opportunity to reach consumers in a semi-closed environment whereby the number of advertising messages they are exposed to is limited. Sporting events provide just such an opportunity in that only sponsor messages adorn athletes, teams or events.
The process via which consumers elect to select a brand is a very complicated. As a result of this, a company’s advertising messages need to be specifically designed to be timely, relevant and impact at each stage of the consumer buying process. This means that a consumer may be thinking of a purchase, has heard the benefit of a particular product, is undecided about which brand to choose and so forth. Aiding in this process through repeated brand and advertising message reinforcement is therefore a plus in potentially swaying a decision. The first step in the consumer buying or decision pattern entails at least the understanding or awareness that a certain brand exists.
The extent to which a consumer is aware of a particular brand is the task of the advertising and marketing campaign as well as strategies. In order to impact this decision process a brand must be a part of the consumer’s mental environment, and this is achieved through the various marketing venues. The more a consumer is familiar with, understands and is comfortable with a brand the more the potential of them purchasing that brand increases. The importance of word-of-mouth introduction or familiarization induce a consumer to consider the trial, test or seek more information on a particular brand thus opening the door for a potential purchase or new customer. The significance of these variables as part of the advertising reinforcement process cannot be overstated.
As sporting events represent a location that creates a semi captive audience, the opportunity to utilize this format to inform the attendees of special or important brand announcements can yield results if conducted in a manner that does not intrude upon their enjoyment of the festivities.
5. Contests & Prize Giveaways
The nature of these events offer the perfect opportunity to announce as well as conduct contests and giveaways, either as part of the overall general marketing plan or as specialized events specific to the adventure sports genre.
As previously defined, sponsorship is “…the financial … support of an activity used primarily to reach specified business goals.” In terms of marketing segment tools, sponsorship “…is the fastest growing form of marketing…” Sponsorship provides the opportunity to accomplish several different marketing objectives at the same time, the following provides an illustration of this statement:
1. Enhancement of the Company’s Image and the Shaping of Consumer Attitudes
Companies often look for ways to improve the manner in which they are perceived by their target audience and the sponsoring of events that appeal to differing market segments allows the customization of the marketing plan to reach the special interests of their overall demographic profile.
2. Driving Sales
When sponsorship opportunities are developed to drive sales, it can be an effective as well as valued promotional tool. The captive audience permits a company the opportunity to showcase products as well as, when applicable, conduct taste samplings as in the case of food product companies.
3. Creating Positive Publicity and a Heightening of Visibility
One of the key objectives of any marketing plan is to maximize the utilization of the budget allocation. Sponsorship offers companies a means to increase their exposure in electronic, broadcast as well as print media through public relations and publicity and via this create an increased visibility of its products, goods or services. The company’s logo, brand name and varying promotions are picked up via coverage in both subtle as well as direct ways and transmitted to the public through the media along with images and photographs.
The coverage attained is in excess of the cost it took to obtain the sponsorship and thus results in a positive addition to the overall marketing budget. Maximization of the preceding is accomplished through a comprehensive media campaign that augments the regular media coverage of the event(s) provided by the organizers. It should be noted that sponsorship participation in some instances can help to create media coverage which might not have happened otherwise as the media becomes interested in the sponsors participating and thus deem such events as important.
4. Provides a Platform for Differentiation from Competitors
Simply sponsoring an event or series of events is a means to create a significant differentiation between one’s competitors. Target audiences generally perceive a company’s participation in sponsorship in a positive manner and understand that the company’s funds are furthering that particular sport.
5. Aids in the Establishment of the Good Corporate Citizen Image
A benefit of sponsorship is that the company is looked upon a being a good corporate citizen in supporting special interest sports and in doing so helping it not only to grow but receive recognition as well.
6. Enhances Business and Consumer Relations
The hospitality opportunities afforded by event participation provides a means for companies to mingle directly with consumers and interact with them. Each event provides the opportunity to create and build relationships through varied measures that enhance consumer perspectives about the company.
No other segment of the marketing mix offers as many different ways in which to customize advertising and brand message delivery than sponsorships. It provides a return in investment which yields additional media coverage and publicity multiples unavailable by any other means.
3.3 Case Studies
Chapter 4 – Making a Sponsorship Work Successfully
Sponsorships are an investment whereby a company exchanges cash in consideration for the participation in some organized event or for a highly publicized entity. In order for companies to be successful, they must generate sales and this is a function of their marketing department creating the opportunities for this to occur.
The same holds true for the organizers of events. They must also understand the nuances of their business and the benefits of their product to companies in order to build sponsorship opportunities that cause companies to participate. Allen (1998) set forth the 12 steps to successful sponsorships as follows:
1. Take Inventory
The first step in the process is to understand what it is that is being sold. By taking inventory of the event(s) organizers can determine the various attributes of their product that can consist of the following elements:
a. TV and print associations
b. Retail outlet connections
c. Collateral material such as posters, brochures and flyers
e. Tickets available as sponsor comps, in quantity
f. Ticket backs
g. VIP Parking
h. VIP seating
i. Hospitality opportunities for customers, employees and the trade
j. On-site exposure for banners
k. Booth opportunities and positioning
l. Announcement via audio
m. Stuffers for payroll
n. Billboard opportunities
o. Product sales and product displays
p. Appearances by celebrities and interviews
q. Exposure on the internet
r. Public Relations
s. Incentives for employees
t. Other aspects
The preceding list can be expanded upon to include other attributes in the organizer’s quest to attract and secure sponsors for their event, athletes and teams.
2. Development of Media and Retail Partners
After organizers have identified the attributes and pragmatic considerations that are valuable to potential sponsors, the next step is to contact the developed media and retail partners. In terms of business opportunities these two partners should be treated in the same manner as other sponsors and provided with the same rights as well as benefits. The attribute that makes this attractive is the audience, opportunities for sampling, sales potentials and multiple exposures in varying media that can be offered, this in turn can be utilized by others to bring to their own advertisers.
Television opportunities provide valuable airtime, and from print media organizers seek special positioning as well as coverage in special sections (termed advertorial). The importance of media and retail outlets is that they are valuable components of the sponsorship offering(s) and thus deserve the same treatment as the sponsors.
Retail partners represent supermarket outlets, drugstore chains, fast-food outlets, along with others. These partners provide organizers with added benefits and attributes that can be utilized by sponsors. Some examples of the foregoing are as follows:
a. Aisle or end aisle displays
b. Register tape promotions
c. Displays inside the store(s)
d. In-store audio announcements
e. Weekly flyers
f. Opportunities for cross promotional activities
g. Bag stuffers
h. Fast food placemats
i. Shopping bag advertisements
And even if the media and retail outlet deals consist of a barter arrangement their importance to the organizers is not diminished in terms of value. These partners provide organizers with benefits that are needed by sponsors and thus are of enormous value in attracting companies with retail products.
3. Development of the Sponsorship Offering
The third component is the development of the offering package and support materials that will be utilized for sponsors. The key to an effective presentation is the avoidance too many levels and too many headings. In addition Allen (1998) recommended not to utilize such aspects as gold, silver and bronze in package identification. The key is to use words and phrases that are universally understood and simply lay out what is being offered.
Every sales presentation includes the closing or further information by actual individuals, thus details or special presentation nuances can be work out in these exchanges. The utilization of a one-page fact sheet the clearly layouts out the salient points and aspects of the sponsorship opportunities being offered and the benefits associated with participation.
4. Sponsor Research
Allen (1998) stresses the importance of conducting research on sponsors to aid in tailoring presentations and contacts to their specific needs. Research on potential sponsors can be gathered from a number of viable sources, the Internet, annual reports as background information of these types of activities and or needs as well as the type(s) of branding strategies and marketing plan the company is engaged in. The more that is known about potential prospects the more meaningful will be any discussions.
5. Initial Sponsor Contact
It is pointed out that fact finding through the proper contact at the companies being looked at for sponsorship roles is a better technique that attempting to sell them. The preceding saves time for all concerned as it will become evident through these discussions if a particular company is a viable or potential sponsor.
6. Getting the Appointment
After the initial contact and a brief discussion, if the organizer has prepared and conducted his research, the call should discuss an appointment to go into further depth on varied areas and aspects which would of benefit.
Once the appointment has been secured it is important to not only be prepared, but to present the reasons for their participation on pragmatic ways. The demonstration must address their basic needs and engender conversation that encourages their participation on the solution process.
8. Getting the Sale
Simply stated, if one does not ask for an order or sale, one cannot get one.
9. Keep the Sponsor Informed
The more the sponsor feels that they are kept abreast of developments, additions and potential beneficial recommendations, the more comfortable they will be with the process.
10. Involving Sponsors in the Event
It is important to seek the sponsors’ attendance at the event through any number of their company’s appropriate representatives. This provides the opportunity for them to see their sponsorship dollars at work, as well as the organizers to forge closer ties.
11. Post Event Information
Whether the sponsor has attended or not they should be provided with an update on the event as well as some visual representations. The preceding should include copies of all materials, collateral, performance affidavit from either radio or television partners. A prepared post event kit should be in place that permits updating after each event.
This should then be sent to all sponsors and other partners to keep them appraised of all developments. Each individual sponsor and partner’s kit should contain a personalized letter highlighting the accomplishments and objectives under their participation to illustrate that professional one-on-one touch.
12. Renew for The Nest Year
If the preceding 11 steps have been adhered to, then the 12 step becomes almost elementary.
Chapter 6 - Conclusions & Recommendations
The utilization of adventure sports sponsorship as a marketing tool represents a unique move for companies seeking to gain a ground floor advantage. The diverse mix of sports found within this arena, such as:
1. Mountain – Road Biking
2. Hiking – Endurance
3. Rock Climbing
4. Whitewater Rafting and Canoeing / Kayaking
6. Off Road and Special Event Motor Sports
8. Target Shooting
9. Surfing / Windsurfing
10. Jet Skiing
13. Backpacking / Trekking
14. Dog Sledding
define the contemporary nature of this category. The answers to the question posed “Strategic Sponsorship: Raising the bar of an undervalued marketing weapon. An inquiry into adventure sponsorship” asks more of what sponsorship as this underpins all sporting activity. The bold, and exciting nature of adventure sports has captured the imagination as well as participation of a broad demographic profile that pretty much mirror the anti-establishment stance of snowboarders.
The people comprising this group are adventurous and seek new forms of entertainment via which they express their individuality. For companies to reach them they need to retool their thinking an approach this realm with unfettered thinking. As it was and is with the Internet, sponsors of adventure sports are entering a new arena where the returns will exceed their financial exposure if they treat it for what it is, rather than what they would like it to be.
The key idea is to examine and understand that new age consumers are diverse and have a broad range of interests. These consumers did not appear from some different world, they are members of existing demographic profiles whose interests and views require companies to find new ways in which to reach these consumers, sponsorship in the new field of adventure sports is a means via which to get them to respond.
Aaker D, Joachimsthaler E (2000), “Brand Leadership” Free Press
Adcock D, Bradfield R, Halborg A, Ross C .1995.Marketing Principles and Practice. Second edition. Pitman Publishing, London.
American Heritage Dictionary.2005. Patronage. http://education.yahoo.com/reference/dictionary/entry?id=p0117500
Brassington, Francis, Pettitt, Stephen.2002.Principle of Marketing. Prentice Hall. ISBN: 0273657917
Blois, Keith..2000.The Oxford Textbook of Marketing. Oxford University Press.ISBN: 0198775768
Business 2000.2005. The ‘Coca-Cola Brand and Sponsorship. http://www.business2000.ie/cases/cases/case6.htm
Friedmann, Susan.2005. Sponsorship: A Key to Powerful Marketing. http://www.expressseek.com/addpr/show_details.php?id=217
Infroplease.com. 2005. Definition of adventure. http://www.infoplease.com/ipd/A0308036.html intersports.com.2005.Brief History of Sports. http://www.innersports.org/history.htm
Kitchen, Phillip.1998.Marketing Communications: Principles and Practices. Thomson Learning.ISBN: 1861521960
Management Centre Europe.2005. Definition of Sponsorship. www.mce.be
Performance Research.2005. Sample Projects. http://www.performanceresearch.com/sponsorship-research-projects2.htm
Schrader, David.2005.The end of the line for advertising?. http://www.thewisemarketer.com/features/read.asp?id=38
Sleight S.1989.Sponsorship. What it is and how to use it. McGraw-Hill. Maidenhead.
Sports Marketing Surveys.2005. European Participation and Fanbase Study. http://www.motherwellfc.co.uk/vsite/vcontent/page/custom/0,8510,5045-149862-167078-30820-126383-custom-item,00.html
teamy3x.com.2005. Team Y3X: Sponsorship Proposal. www.teamy3x.com
thedailypage.com.2005. Consumer brand loyalty declining. http://www.thedailypage.com/advertise/article.php?id=16
Wikimirror.com. Definition of Sports. http://www.wikimirror.com/Sports