Sponsorship Management Lec 1: An Introduction

1. Sponsorship ManagementLec 1: An Introduction Leo Kwan

2. Lecture Objectives: • To describe the strategic nature and purposes of sponsorship. • To understand the role and scope of sponsorship. • To discuss the current developments of sponsorship. • To examine why sponsorship is increasingly important and the enormous growth of sponsorship. • To comprehend the benefits and risks of sponsorship. Reference: Bruce E. Skinner and Vladimir and Rukavina. Event Sponsorships. New York: John Wiley & Sons, 2003.

4. Definitions of sponsorship (1) Sponsorship is a contribution to an activity by a commercial organization in cash, or in kind, with the expectation of achieving corporate and marketing objectives. T. Beirett

5. Definitions of sponsorship (3) Sponsorship is ... 'a mutually beneficial relationship most often between a corporation and event or rights holder, for the purpose of enhancing a product or corporate brand.' The Exordium Group, an industry strategy company

6. Definitions of sponsorship (4) Sponsorship is ... ‘an investment in sport, the arts, a community event, individual, venue, broadcast, institution, program or cause which yields a commercial return for the sponsor.' A. Grey & K. Skildum-Reid

7. What is Sponsorship? • Sponsorship is : • a business relationship between a provider of funds, resources or services and an individual, event or organization which offers in return some rights and association that may be used for commercial advantage. Sponsorship may be purely altruistic, but normally undertaken with the expectation of achieving benefits for the sponsorship. • E.g.: in achieving corporate or marketing-related objectives.

8. What is Sponsorship? • Meenaghan (1991) suggests that sponsorship can be used to - Provide community involvement - Counter adverse publicity - Build goodwill among staff - Opinion formers and decision makers - Increase company, product or brand or awareness - Reinforce or alter perceptions of product or brand - Identify an product or brand with a particular market segment - indirectly increase product sales Polonsky, M.J. and Speed, R. (2001), “Linking sponsorship and cause-related marketing complementarities and conflicts”, European Journal of Marketing, 35(11/12)

9. Reasons of Sponsorship • to promote public awareness, • to entertain customers and • to build goodwill. There are three main reasons why people sponsor:

10. The Reasons for the Growth of Sponsorship • Concern over traditional promotional methods. • an alternative and cheaper form of gaining exposure • Creation of favorable associations. • It creates an association between the sponsored entity and the sponsoring company • Overcome linguistics / cultural barriers. • The sport, the arts and music are the areas of global appeal • E.g. SCB sponsors of HK Chi. Orchestra • E.g. Carlsberg sponsors of Carlsberg Wanchai Festival and Carlsberg Drama Festival

11. The Reasons for the Growth of Sponsorship • Wide / multiple target audience appeal. • It can be used to influence strategic partners, company staff, civic officials, govt. regulators and customers. • Overcome legal barriers. • It provides a platform for harmful products to promote • E.g. Salem sponsors of tennis competition • E.g. Marlboro sponsors of car racing • Selective targeting • It provides a means of targeting selected market • E.g. American Express sponsors of HK Arts Festival ‘s Opera activity targets on high-end customers

12. Sports Sponsors Beneficiaries

13. Arts Sponsors Beneficiaries

14. Events and Entertainment Sponsors Beneficiaries

15. Charity Sponsor Beneficiaries

16. Education Sponsors Beneficiaries

17. Commercial Events Sponsors Beneficiaries

18. Say a few things about these few slides • Sponsorship is everywhere • Sponsorship is an important part of marketing process • Types of sponsorship can be sports, arts, entertainment, charity, education, or even commercial events… • Sponsorship demands creativity • Sponsorship purpose is different between the sponsor and the beneficiary. • There is always money available. It depends on how you can convince the wealthy corporations or tycoons to sponsor your activities. All based on sufficient reasons. • Your job is to create reasons.

19. There are something common • Who • Initiate sponsorship • Need sponsorship • Determine the sponsorship • Why • Reasons behind the sponsorship • Value of sponsoring the event or having a sponsor. • Does it cope with the corporate objective e.g. CSR • Where • In which country, community • Which channel • What • What are the responsibilities to each party • When • When to execute the sponsorship to the best advantage to the sponsor and the beneficiary. • How • How to make use of it to generate publicity • How to integrate it with other marketing communications

20. The reasons of sponsoring From the perspective of the sponsor

21. The Benefits of Sponsorship (1) • Community image building • Present the sponsoring company as a good corporate citizen. • Marketing leverage • Appeal to corporations as a marketing communications medium. • E.g.: testing of products under ‘real-life’ conditions (‘Ultra Fuel’ high-carbohydrate drink sponsored a series of multi-sport and cycling events with product sampling in order to achieve its objective at minimum expense.) http://www.shell.com/home/content/envirosoc-en/environment/dir_environment_16042007.html

22. The Benefits of Sponsorship (2) • Hospitality opportunities • Crate a good relationship with existing and potential partners, suppliers or distributors to strengthen these B-to-B relationships. • www.sunkist.com • Media leverage • Able to capitalize on the medial attention and allowed some companies to circumvent regulations on their products. • E.g.: Tobacco products being not allowed to advertise on TV.

23. The Risk of Sponsorship • Negative associations • The image of sponsored company may be negative. • Sponsorship clutter • Too many sponsors will result in mess of logos and co. names. • Over-communication • Excessive commercialization can also turn off sponsors. • Evaluation problems • It is hard to evaluate its effectiveness

24. The Strategic Nature of Sponsorship • Strategic fit • A good “fit” between the sponsored co. and sponsoring co. is significant. • E.g. Watson’s sponsors of Standard Chartered Marathon, DTC sponsoring Miss HK • Difficult to imitate • It is difficult for competitor to imitate • Tradability of resource • The sponsorship is non-tradable • Limits of competition • Little competition favors success • E.g. Watsons would be the first selected partner for Standard Chartered Marathon as they have long relationship

25. Corporate Social Responsibility • Corporate social responsibility involves the firm making a contribution of cash or kind without an expectation of a tied benefit” The firm donates funds to a worthy cause because it wishes to be a good corporate citizen and without seeking to generate or exploit any association with the cause It is not viewed as part of a firm’s marketing activity, but rather, is seen as within the domain of broader corporate social performance Polonsky, M.J. and Speed, R. (2001), “Linking sponsorship and cause-related marketing complementarities and conflicts”, European Journal of Marketing, 35(11/12)

26. End of Lec 1