Introduction to Sports Marketing

Introduction to Sports Marketing
Chapter 1 Introduction to Sports Marketing McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Broad Marketing Domains
Primary Focus of Marketing Efforts Marketing through Sports Marketing of Sports

Marketing Through Sports
Traditional Strategies Sports as a Marketing Platform Reaching Similar Target Market Sports Incorporated within the Marketing Mix Product Distribution (Place) Price Promotion

Marketing Through Sports
Sponsorship Strategies Traditional Coca-Cola and the Olympics Venue Naming Rights AT&T and AT&T Park (San Francisco Giants MLB Stadium) Licensing Anvil (t-shirts) and NFL (Super Bowl logo shirts) Endorsements Tag Heuer (Watches) and Tiger Woods

Marketing of Sports Products
Examples of “Sports Products” Access to Spectator Sports Events Tickets or Media-based access to the British Open Access to Participation Sports Venues Membership to Gold’s Gym Sporting Goods and Apparel Nike Golf Clubs and Golf Shirts

Spectator Sports Drop Figure 1.2 from top of page 5 here

Local Events Draw Fans from Small Geographic Area
Promote Using Local Media Examples Minor League Team High School Sports Local Amateur Competitions

Regional Events Little National or International Interest
Marketers Attempt to Move Event Up Examples Most Collegiate Sports Teams (Most) Marathon Races

National Events Large Portion of One or Two Countries
Often Large Media Presence Examples Stanley Cup Playoffs (Ice Hockey) BCS (College Football) Championship Game NCAA Final Four (College Basketball) The Ashes (England & Australia Cricket)

International Events Appeal Transcends National Borders
Large Media Presence Venue often Shifts Among Countries Examples Ryder Cup Golf Tournament World Cup of Rugby Wimbledon Tennis Championships

Global Events Broadcast to Global Audience
Significant Rights Fees Paid by Broadcasters National Pride often a Consideration Few Events in this Top Category Examples Olympic Games World Cup of Soccer

Participation Sports Market the Idea of Participating Market Venues
Play more Golf Engage in More 10-Pin Bowling Market Venues Build and Market a New Golf Course Building Bowling Facilities in Casinos

Most Popular Participation Sports
Drop in First Part of Table 1.1 (Page 8) – However many lines fit while providing ease of reading – maybe top 5 to 8

Sporting Goods and Apparel
Sporting Goods – Equipment Golf Clubs, Footballs, Exercise Equipment Apparel – Clothing Participation-Based: Softball Uniform Fashion-Based: Logo Shirt Category Will be Broadened in Chapter 2

Why Teach Sports Marketing?
Huge Economic Impact Little Focus on Sports Industry in Curricula More Emphasis on the Bottom Line by Sports Entities (e.g. University Football)

Evolution: Sports Marketing
Marketing of Sports Taught First Marketing Through Sports Added Leisure Emphasis Early Leisure and Business Focus Today

Economic Impact Drop In Table 1.2 Here (Bottom of Page 11)

Components of Economic Impact
Direct Spending by Consumers Tickets, Hotels, Restaurants, Gas, Rental Cars, Wages Paid to Workers, Participation Fees (e.g. Ski Lift Tickets; Golf Greens Fees) The Multiplier Effect Recognizes That Money Turns Over in the Economy: (Typically between 1.3 and 3 Times)

The Multiplier Effect Drop Box 1.2 In Here

One-Day Events Event may occur over one day, but impact may cover extended period of time NFL Super Bowl Indianapolis 500 Championship Boxing Match

Multiday Events Events encompass 2 or more days
May be at single or multiple venues Examples Olympics Masters Golf Tournament America’s Cup Yachting Regatta World Cup of Soccer

Participation Sports/Recreation
Local Resident Contributions Restaurant, activity-based shopping Vacation Expenditures Participation Fees Tournament entry, rental equipment

Professional Team or Arena
Local Wages for Employees Tax Revenues Expenditures by Visitors

Aggregate Economic Impact
Gross Domestic Sports Product (GDSP) Total Spent on Sports-Related Goods and Services in a National Economy in 1 Year Difficult to Measure Estimate for USA in 2007 was approximately $277 Billion

Typical Organizational Chart – MLB Team
Drop in Figure 1.3 (Page 17) Here

Career Opportunities Internships Sales Variety of Positions
Often Unpaid Establish Network of Associates - References Sales Season Tickets, Group Tickets, Sponsorship Suites, General Retail

Other Career Opportunities
Advertising & Promotion Marketing Research Hospitality Facilities Management/Venue Operations Brand Activation

Web Site Manager Public Relations Retail Store Operations Participation Center Management Agent

Sponsorship Purchasing Making Good Decisions Investment Decisions Sponsorship Evaluation Postevent Measurement Estimation of Return on Sponsorship Investment

Looking for a Sports Job?
Check out the most recent job postings at: Register for weekly updates

Career Trends More Jobs More Job Applicants
More International Opportunities More Focus on Selling Through Sports More Emphasis on Business Aspects

Closing Capsule Aspiring sports marketers should not confuse it with playing a game. It is a job, one that demands time, energy, commitment and knowledge.

The Four Domains of Sports Marketing
Chapter 2 The Four Domains of Sports Marketing McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

One of Our Dilemmas No Uniform Definition of “Sport(s) Marketing”
Thus, There Is No Agreement as to Exactly What Constitutes a Sports Product There Is Agreement that the Discipline Encompasses More than Putting Fans in Seats at Spectator Sports Events

Two Broad Domains As Noted in Chapter 1, there are two broad domains (categories of initiatives) germane to the discipline of sports marketing: Marketing of Sports Products Marketing through Sports by Creating a Sports Overlay (Platform)

Important Statement “attention to marketing tools is long overdue” in the marketing of sports products.

Products Germane to Sports Marketing
Sports Products Nonsports Products

Sports Product - Category 1
Spectator Sports (i.e. a football game) Live Audience Media-based Audience

Sports Product - Category 2
Participation Sports (i.e. golf) Attracting more Participants Getting Current Participants to Play More

Sports Product – Category 3
SASS Sporting Goods (Callaway Golf Clubs) Apparel (New Era Baseball Cap) Athletic Shoes (Air Jordan Shoes) Sports-related Products (Souvenir Program)

Nonsports Products Goods & Services not directly related to a sport
Anything not Included as a Sports Product such as cars, clothes, soft drinks, & razors Nonsports Products Are Often Sold by Creating a Sports Overlay (or Platform)

Level of Integration Traditional Strategies
Sponsorship-based Strategies

Traditional Strategies
Employ the Basic Components of Marketing Strategy Target Market Selection Corresponding Marketing Mix Price Place Product Promotion

Sponsorship-Based Strategies
Employ an Official Sponsorship-based Relationship with a Sports Entity Traditional Sponsorship Three Special Forms of Sponsorship Venue Naming Rights (Building Sponsorship) Endorsements (Personal or Personality Sponsorship Licensing (Right to Use Intellectual Properties)

Basic Principles of Sports Marketing (Details in Box 2.2)
Broad Focus Marketing of Sports vs. Marketing of Sports Products Sports vs. Nonsports Level of Integration Traditional vs. Sponsorship Based Strategies

The Sport Marketing Matrix
Drop in Figure 2.1 from Page 35

Mainstream Strategies
Using a Traditional Strategy to Create a Sports Overlay to Sell Nonsports Products Target Market – ad for Honda cars in Golf Digest Product – Clothing feature golf graphics Promotion – ad featuring golfers drinking Pepsi Distribution – Hard Rock Café at MLB Stadium Price – Discounts to Bar Patrons Wearing Participation Sport Uniform

Product-Focused Strategies
Using Traditional Marketing Strategy to Sell Sports Products Target Market – NBA Targeting Chinese Fans Product – New Titanium Golf Clubs Promotion – Newspaper ad regarding tickets Distribution – Broadcast Available on WWW Price – Bundling Tickets & Refreshments at a Bargain Price

Domain-Focused Strategies
Using Sponsorship of a Sports Entity to Sell Nonsports Products Traditional – Coca Cola and the Olympics Venue Naming Rights – Citi Bank & MLB Stadium Endorsement – Tiger Woods & Gatorade Licensing – Mattel & NASCAR

Sports-Dominant Strategies
Using Sports-Based Sponsorship to Sell Sports Products (Least Common Domain) Traditional – adidas and FIFA (World Cup) Venue Naming Rights – Reebok Stadium Endorsement – Burton Boards & Shaun White Licensing – Nike & the New York Yankees

“Sports Marketing” …is the implementation of proactive strategic initiatives designed to influence potential buyers’ preferences for an array of sports products or to otherwise create a sports overlay in such a way so as to have a positive impact on the sale of nonsports products.

Closing Capsule We have a comprehensive overview of the sports marketing environment Using the type of product sold and the level of sports integration, we have identified the four domains of the discipline Best visualized with the 2 by 2 matrix

Closing Capsule The Four Strategic Domains Are: Mainstream
Product-Focused Domain-Focused Sports-Dominant

Closing Capsule To Determine a Marketing Initiative’s Location in the Sports Marketing Environment Matrix, You Need to Answer Two Questions: Is the product a sports product or not? Is there any indication that an official sponsorship of a sports entity exists?

Closing Capsule Chapter 3 Begins Our Examination of Marketing through Sports Marketing of Sports Products Will Begin with Chapter 13

Marketing through Sports Using Mainstream Strategies
Chapter 3 Marketing through Sports Using Mainstream Strategies McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Sports Overlay or Platform
Using Strategic Initiatives to Integrate Sports in Order to Create a Sports Theme or to Reach One’s Designated Target Markets More Effectively

Traditional Strategies
Employing Target Market and Marketing Mix Initiatives to Achieve that Sports Overlay

Using Traditional Strategies in an Effort to Sell Nonsports Products Mainstream Strategies Are Not Based upon Any Official Sponsorship-Based Relationship with a Sports Entity

Nonsports Products Examples of Nonsports Products Often Marketed Using a Sports Platform Cars (Volvo) Beer (Fosters) Colas (Coca-Cola) Watches (Swatch) Fast Food (McDonald’s)

Nonsports Products Using Traditional Elements of Marketing Strategy Target Market – Car ad in Golf for Women Product – Clothing with sports design Distribution – Restaurant at sports arena Price – Discounts for bar patrons in uniforms Promotion – Ad featuring a sports setting

Target Market Access Segment the Market
Select Appropriate Target Markets Identify Relevant Target Markets that Can Be Reached Via a Sports Platform

Target Marketing Applications Using Mainstream Strategies
Advertising beer during a TV broadcast of a football or rugby game Luxury automobile marketer featuring golf in its brochures that promote its cars Marketer of an energy drink using outdoor advertising along a marathon race route

Incorporating Pricing Decisions in a Mainstream Strategy
Marketer Offers Discounts to Venue Operators in Order to Have its Food or Beverage Products Sold There Hospitality Industry (restaurants & hotels) Providing Discount Prices for Certain Categories of Athletes or Fans

Incorporating Product Decisions in a Mainstream Strategy
Packaging Featuring Sports Images Sports Bar Showing Sports Events on TVs Hospitality Package Featuring Tickets to a Sports Event (selling hotel rooms) Credit Card Company Providing Special Access to Tickets for Sports Events University Offering a Course/Degree in Sports Marketing

Incorporating Place Decisions in a Mainstream Strategy
Marketer Selling Its Goods and Services at a Sports Venue (Stadium, Arena, etc.) Marketer Selling Its Nonsports Products at A Retail Store Specializing in Sporting Goods Intensifying Regional Efforts Where a Sport is Popular

Incorporating Promotion Decisions in a Mainstream Strategy
Traditional Promotional Mix Components Advertising Personal Selling Sales Promotion Public Relations / Publicity Excludes Sponsorship; Sponsorship would Represent a Domain-Focused Strategy

Incorporating Promotion Decisions in a Mainstream Strategy
Emerging Promotional Tools that Can Be Used to Create a Sports Platform for the Marketing of Nonsports Products Product Placement Virtual Advertising Hospitality Internet

Using Advertising in a Mainstream Strategy
Advertise during the Super Bowl Advertise in a Sports Magazine Creative Aspect of Ad Features Actors in Sports Setting Advertise on “Sports Talk Radio” Advertise on Dorna Boards at Sports Venue

Using Personal Selling in a Mainstream Strategy
Salesperson Providing Tickets for a Sports Event to Customers and Prospects Conducting Business on the Golf Course

Using Sales Promotion in a Mainstream Strategy
Specialty Advertising – Calendar Featuring Marketer’s Logo and a Team’s Schedule Coupons – Discount Sent Via Direct Mail (i.e. the Coupon Features a Sports Graphic) Free Sample – Distribute at Sports Venue Consumer Expo – Display at Golf Show

Using Sales Promotion in a Mainstream Strategy (cont’d)
Customer Loyalty Program – Credit Cards that Accumulate Points for Benefits Contests – Chance to Win Event Tickets Point-of-Sale (POS) Display – Signage that Features a Sports Theme at a Super Market Premiums – Sports-Oriented Giveaways

Using Public Relations/Publicity in a Mainstream Strategy
Objective of PR is the Dissemination of Positive Publicity through the Media Aligning with Sport for a Charitable Cause Press Release Regarding Marketer’s Support of a Local Athlete

Emerging Promotional Strategies
Product Placement – Product Featured in a Movie or TV Program Where Brand is Identifiable Virtual Advertising – Computer-Generated Signage Displayed on the Field of Play during a Televised Broadcast – Internet – Advertise on a Sports Web Site – see Hospitality – Staff a Tent at a Golf Tournament

Closing Capsule Many Marketing Efforts for Nonsports Product Attempt to Influence Consumer Purchase Behavior by Incorporating a Sports Platform (or Overlay) Mainstream Strategies Involve the Use of the Traditional Elements of Marketing Strategy – Target Markets & the Marketing Mix – to sell Nonsports Products

Introduction to Sponsorship: Concepts, Objectives, and Components
Chapter 4 Introduction to Sponsorship: Concepts, Objectives, and Components McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Sponsorship’s Role Another Promotional Tool for Marketers
Sponsorship Should Have a Synergistic Effect on a Marketer’s Promotional Efforts Sponsorship Fits within the Promotional Mix Integrated Marketing Communications (IMC)

Integrated Marketing Communications (IMC) Plan
Advertising Personal Selling Sales Promotion Public Relations / Publicity Sponsorship Key Is How They All Work in Harmony Sponsorship Is NOT Advertising

Evolution of Sponsorship Motives
Early Sponsorships Were Ego-Driven CEO likes golf; company sponsors golf event Focus Shifted to Philanthropic Motives Sponsorship was a way to contribute to a cause Most Sponsorships Today Focus on ROI Sponsorship as an investment, not an expense

Advertising’s Advantages
Persuasive Message Words and Images Used to Convey Ideas Standardization Everyone Receives an Identical Message Guaranteed Size of Audience Reached Circulation; TV Ratings; Radio Ratings

Advertising’s Advantages (Cont’d)
Evaluation of Effectiveness Measures such as CPM Can Be Applied Measure the Impact on Sales Concept Testing Prior to Using Advertisement Turnkey May Be a Stand-Alone Tactic That Is Not Supported by Other Elements of the IMC

Sponsorship A Relationship between a Marketer and a Property in Which the Marketer Pays a Cash or In-Kind Fee in Return for Access to the Exploitable Commercial Potential Associated with the Property Many Types of Properties that Represent Sponsorship Opportunities for a Marketer

Sponsorship’s Advantages
Credibility Image Prestige Internal Morale Sales Opportunities Access to Live Audience

Sponsorship Categories
Sports Entertainment, Tours & Attractions Cause-Related Marketing Festival, Fairs & Annual Events The Arts Associations and Membership Organizations

Sponsorship Spending by Category (2008)
Sports (69%) Entertainment, Tours & Attractions (10%) Cause-Related Marketing (9%) The Arts (5%) Festival, Fairs & Annual Events (4.5%) Associations and Membership Orgs (3%) * Rounding creates small statistical error (IEG)

Worldwide Sponsorship Spending
Drop in Table 4.2 Here

Key Sponsorship Concepts
Participants Sponsor – Party Seeking Association (Visa) Sponsee – Property Owner (e.g. FIFA) Linkages Self-Evident – adidas products used in event Strategic – Visa Credit Cards and FIFA have similar target markets

Key Sponsorship Concepts
Leveraging – Must Support Sponsorship with Additional Strategic Elements (i.e. Event-Oriented Advertising) Ambush Marketing – Non-Sponsors often try to Create the Misperception among Consumers That They Are a Sponsor (Diminishes Value for the Actual Sponsor)

Re-Visit Types of Sponsorships
Traditional Straight-forward Association Special Cases of Sponsorship Endorsements – Personality Sponsor Venue Naming Rights – Building Sponsor Licensing – Sponsorship Involving Trademark

Sponsorship Objectives
Drive Sales Improve Image Create Greater Awareness Provide Hospitality Opportunities Enhance Employee Morale

Drive Sales Sustainable Competitive Advantage Via the Association with the Sponsee Visa over MasterCard (No presence at World Cup) Merchandising Opportunities Selling Coca-Cola Products at the Olympics Shape Consumer Attitudes Firestone after negative PR (Indy 500)

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)

Improve Image Attain Positive PR Viewed as a Good Corporate Citizen
Support Seen as Helping the Sponsee Viewed as a Good Corporate Citizen Contribution to a Popular Sponsee Especially for Causes or Local Events

Improve Image (Cont’d)
Shape Consumer Attitudes Reach New Target Market Selected Property Portrays Different Image Philanthropy Donations Viewed Favorably by Public

Create Greater Awareness
Increased Visibility Ability to Reach More Potential Customers Mass Reach to Introduce New Product Mass Reach to Inform of New Brand Name

Provide Hospitality Opportunities
Entertain Customers, Prospects & Suppliers – Reinforce Relationships Opportunity to Attend Event Tickets; parking Provision of Various Amenities TV monitors, restrooms; premium seating

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”

Importance of Objectives

Sponsorship Components
Category Exclusivity Signage Right to Use Event Trademarks and Logos Distribution Rights Hospitality Areas Complimentary Advertising Free Tickets

Sponsorship Components (Cont’d)
Right to Purchase Additional Tickets Link on the Event Web Site (Sponsorship) Designation Inclusion in Event Promotions Access to Property Mailing List / Database Right of First Refusal

Category Exclusivity A Guarantee that the Sponsor’s Competitor Will Not Be Allowed to Become Involved with the Sponsee Pepsi-Cola is a Sponsor of the World Cup of Cricket. Category Exclusivity Provides Assurance that Coca-Cola Will Not Be Involved in Any Official Capacity

Signage Actual Signs Identifying and Promoting the Sponsor at the Event Venue Helps to Reinforce the Relationship in the Consumers’ Minds May Be Actual or Virtual Signage There is a Concern About Signage Clutter

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

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

Hospitality Areas Facilities to Entertain Selected Individuals
On-Site Hospitality Luxury Suites Temporary Facilities Off-Site Hospitality Temporary or Leased Facilities

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

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

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

Link on the Event Web Site
The Ability for Visitors to the Event’s Web Site to Click on an Icon That Will Take Them to the Sponsor’s Web Site Check out the Web Site for FIFA and the World Cup of Soccer

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

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

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 Buyers and Members of Fan Clubs

Right of First Refusal Current Sponsor Is Provided Opportunity to Renew Its 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

Which Components Are Most Valuable?

Controversial Issues Do Higher Prices Result from Sponsorship?
Do Large Multinational Companies Have an Unfair Advantage? Sponsorships May Seem Illogical (No Fit) May Feature Unwholesome Products

Closing Capsule Sponsorship Has Emerged as a Key Element of Many Firms’ IMC Plans Sponsorship Spending Is Growing, But Only Accounted for Approximately $43.5 Billion (US) in 2008 Most Sponsorship Money Goes to Sports

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 Viewed as the Most Important Components

Sponsorship Foundation: Developing and Selling the Proposal
Chapter 5 Sponsorship Foundation: Developing and Selling the Proposal McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Sponsorship Success Much Like Constructing a Building, a Sponsorship with a Solid Foundation Is More Likely to Endure – and Succeed – for an Extended Period of Time A Sound Foundation Does Not Guarantee a Successful Sponsorship; However a Weak Foundation Is a Precursor to Failure

Sponsorship Success There Are 10 Fundamental Requirements (or Building Blocks) for the Construction of a Sound Foundation for Any Successful Sponsorship Program

Building Blocks for a Sponsorship Foundation
Sponsorship Should Be: Defined Need to understand what a sponsorship Is An Appropriately Selected Communications Medium Fit the target market and communications goals Objective-Led Decision based on Organizational Goals

Sponsorships Should Be: Integrated Fits within and supports the sponsor’s IMC plan Effectively Screened Selected based on merit Contracted Written contracts help to avoid surprises and to provide recourse in the case of non-compliance

Sponsorships Should Be: A Long-Term Commitment Ongoing serial sponsorship over time tends to be more effective than a “once-off” sponsorship Protected from Ambush Marketing Both the sponsor and the sponsee should engage in activities that identify and provide protection from ambush marketing

Sponsorships Should Be: Leveraged Sponsor should recall that sponsorship is not a stand-alone promotional tool and invest an adequate level of resources for collateral support Evaluated Marketer will not know if the sponsorship succeeded or failed if there is no attempt to measure the results

Sponsorship Commitment: The Two Key Questions
How Much Will the Sponsorship Cost? What Are the Key Timelines Involved? Payment Schedules Event Timing When Can Sponsor Publicize Relationship? When Does the Sponsorship Begin and End?

Cost: Cash versus Value-in-Kind
Cash Outlay Required Value-in-Kind (VIK) Represents the Value of Goods and Services Provided by the Sponsor in Lieu of a Cash Payment Many Contracts Use a Combination of Cash and Value-in-Kind as Payment

Trends Rights Fees Escalating for Many Major Properties
Not All Properties Exhibit This Inflation Many Sponsors Are Choosing to Forgo Long-Term Commitments in Favor of Property Hopping Many Contracts Cover a Defined Multiyear Cycle Typically 4 Years with IOC and FIFA

Factors That Provide Value
By Providing Value, These Factors Increase the Rights Fees Expected by the Sponsee Increased Rights Fees Should Be Balanced by Increased Benefits for the Sponsor

Factors that Provide Value: Tangible Factors
Easier to Estimate Their Economic Value Examples Value of free tickets Value of free advertising Value of signage at venue Value of distribution rights

Factors that Provide Value: Intangible Factors
Difficult to Assign a Monetary Value to, but Must Still Be Taken into Consideration Examples Number of sponsors Attendance at event Fit between sponsor/sponsee target markets Right to use property’s trademarks and logos

Factors that Provide Value: Geographic Reach
Greater Reach Translates into Greater Value Drop in first six lines of Table 5.2 here

Factors that Provide Value: Market Factors
Cost of Similar Property in Other Markets Cost of Alternatives in the Same Market Demand for the Property Cost of Purchasing Advertising Time and Space in Traditional Media in that Market

Factors that Provide Value: Price Adjusters
Drop in Box 5.5 Here

Price Determination Make the Sponsor’s Investment and Benefits Measurable Prospect will likely perform some type of cost-benefit analysis prior to making investment Perceived value should exceed the price charged by the sponsee for rights fees

Establishing the Price for the Sponsorship Rights Fees
Cost-Plus Approach Competitive Market Approach Equivalent Opportunity Approach Relative Value Approach

Cost-Plus Approach The Cost Incurred by the Sponsee in the Delivery of the Sponsorship Components PLUS a Pre-Determined Fee. The Pre-Determined Fee May Be: Fixed monetary amount A fixed percentage based on the cost

Competitive Market Approach
Determined by Assessing Supply and Demand for Sponsorship Opportunities within the Market(s) Reached by the Sponsorship in Question Focus Is on Value Rather than Costs Considers Disparate Properties For example, sports event vs. an art exhibit

Equivalent Opportunity Approach
Establish Cost of Sponsorship Based on the Cost of Attaining Similar Promotional Value through Traditional Media Advertising versus Sponsorship

Relative Value Approach
Comparable Value of Anticipated Exposure for the Sponsor Based on Forecasts of Exposure If Average Sponsor Has Its Logo on TV for 6 Minutes, What is that Exposure Worth?

Recall the Methods of Payment
Cash Value-in-Kind (VIK) Combination of Cash and VIK

Sponsorship Level Many Sponsees Have Different Levels of Sponsorship that Have Varying Rights Fees Different Plan Components at Each Level Can Use to Overcome Price Resistance

Sponsorship Level Illustrated

Timing Issues Duration of the Sponsorship Agreement
Once-off versus ongoing serial sponsorships Variety of terms from one day to lifetime Timelines for Sponsorship Designation Prior to Event After Completion of the Event

Timing Issues (Cont’d)
Projected Schedule of Sponsee Activities that Identify Sponsors When will ads be run When will the sponsee’s Web site reflect the relationship with the sponsors When will signage be erected & dismantled When will press releases be disseminated

Timing of Payments to Sponsee
Date of Initial Payment Date of Interim Payments Date of Final Payment Date of Any Required Lump Sum Payment Delivery of VIK

The Sponsorship Proposal
Can Now Move on to the Development of the Actual Sponsorship Proposal It Is a Sales Tool for the Sponsee It Is Essential Information for the Prospect It Typically Includes Six Key Components

Preliminary Actions (Before Developing the Proposal)
Prospecting – Finding Potential Sponsors Gather Information On Prospects On Prospects’ Target Markets

Sponsorship Proposal Must Match the Proposal to the Needs of the Prospective Sponsor Effort to Link Prospect and the Property Remember that It Is a Sales Tool It Is a Basis for Initiating Negotiations

Six Elements of a Sponsorship Proposal

Introduction A Written Handshake Create Positive Impression
Help Get the Proposal Read by Prospect Include Basic Information; Specifics Follow

History of the Event When Was Event First Staged?
Has the Title Changed Over Its Life? Who Are the Participants? Is There Any CRM Overlay? Media Coverage Rudimentary Financial Information (Optional)

Plan Components What Will the Sponsor Get from the Sponsee in Return for Its Commitment? Customize – Boilerplate Proposals Do Not Work Offer Components Such as: Category Exclusivity, Signage, Hospitality, etc.

Value Enhancements Ways in Which the Sponsee Will Help the Sponsor Achieve Its Objectives Examples: Leveraging Opportunities Cross-Promotion Opportunities Protection Against Ambush Marketing Postevent Research Regarding Effectiveness Fulfillment Report

Terms Rights Fees Timelines Cash VIK Single Payment Due
Payment Schedule for Lengthy Contracts When Does Sponsorship Begin & End?

Executive Summary May Be at Beginning or End of Proposal
Capture the Key Elements of the Proposal Important because Not All Executives Will Take the Time to Read the Entire Proposal May Be the Basis for Rejection

Compliance with Prospect’s Guidelines for Your Proposal
Some Large Companies Receive a Large Number of Sponsorship Proposals They May Have Staff Whose Primary Task Is to Identify the Good and Bad Proposals These Companies Often Have a Standardized Format That Must Be Used

A Harsh Reality It Has Been Reported that Less than 10% of the Proposals Submitted to Prospects Are Given Serious Consideration Less than 1% of All of the Proposals Receive Funding from the Targeted Prospective Sponsors

Selling the Sponsorship
Convert the Prospect into a Customer Typical Business-to-Business (B2B) Marketing Strategies and Tactics

Selling the Sponsorship
Negotiating the Deal Proposal Represents an Offer by Sponsee Prospect Likely to Issue a Counteroffer Need Mutual Understanding What Do I (the Sponsee) Have to Offer? What Does the Prospect Need? What Adjustments to Proposal Are Needed? Close the Deal

Closing the Deal Typical Closing Techniques Examples:
Added Inducement Close (e.g. more signage) Standing Room Only (SRO) (other prospects) Balance Sheet Approach (list pros and cons) Alternative Decision Approach (Want A or B?)

Customer Relationship Management (CRM)
Focus on Customer (Sponsor) Retention Focus on Sponsor Satisfaction and the Resolution of Problems that Emerge Focus on Communication

Closing Capsule Successful Sponsorships Are Characterized by a Solid Foundation This Foundation Is Comprised of 10 Basic Building Blocks Task Is to Convert Prospect into a Sponsor

Closing Capsule Key Element is the Sponsorship Proposal
Will Likely Involve Meaningful Negotiations Sponsorship Requires a Commitment of Resources by Both the Sponsor and the Sponsee

Closing Capsule Both Parties Seek A Fair Return on the Resources that They Commit (Win-Win) Sponsors Will Re-evaluate the Value They Received at the End of the Sponsorship Focus on Sponsor Retention

Pre-event Evaluation: The Assessment of Sponsorship Opportunities
Chapter 6 Pre-event Evaluation: The Assessment of Sponsorship Opportunities McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Pre-event Evaluation An Effort to Evaluate Sponsorship Opportunities with the Goal of Identifying the Best Opportunities for Investment While Rejecting Those that Are Unlikely to Produce an Adequate Return on the Sponsorship Investment Recall Earlier Premise that Sponsorship Motives Have Evolved to Focus on ROI

Reasons for Increased Emphasis on Pre-event Evaluation
Mass (Untargeted) Solicitations for Sponsors Increased Emphasis on ROI Increased Cost of Sponsorship Increased Number of Sponsorship Opportunities Increased Opportunities Beyond Sports Better Descriptions of Sponsor/Sponsee Target Markets

Mass (Untargeted) Solicitations for Sponsors
More Sponsees Using Less Selective Methods to Contact Prospective Sponsors No Real Effort to Match the Two Entities Risk Rejecting a good opportunity out-of-hand Investing in a poorly conceived opportunity

Increased Emphasis on ROI
Prospective Sponsors Will Weigh the Cost of Sponsorship Against the Benefits Specific Marketing Objectives Associated with the Sponsorship Investment Pre-event Evaluation Represents an Effort to Estimate the Value of the Anticipated Results before Investing in a Sponsorship

Increased Cost of Sponsorship
Rights Fees for Major Events Have Experience an Upward Trend World Cup of Soccer Sponsorship: $17.5 Million in 1994; $100 - $125 Million in 2010 Also Need to Consider Cost of Leveraging

Increased Number of Sponsorship Opportunities
Properties Increasing Their Number of Sponsors Properties Adding New Sponsorship Levels Properties Seeking Sponsors for First Time New Events Seeking Sponsors Sponsors Seeking International Opportunities

Increased Number of Opportunities Beyond Sports
Causes McDonald’s & Muscular Dystrophy Association Entertainment, Tours & Attractions American Express & the Eagles Concert Festivals, Fairs & Annual Events J2O & the London Comedy Festival

Increased Number of Opportunities Beyond Sports
Arts Boeing & the Seattle Art Museum Associations & Membership Organizations J.D. Power and Associates & Detroit Chapter of the American Marketing Association

Better Descriptions of Sponsee’s and Sponsor’s Target Markets
More Information Available Better Defined Small Target Markets Better Targeting Available When Prospect Engages in Pre-event Evaluation

When Are Pre-event Evaluations Needed?
When Existing Contracts Expire When New Opportunities Emerge Property Initiates Sponsorship Program Existing Sponsors of Property Drop Out Property Increases Number of Sponsors New Property Emerges and Seeks Sponsors When a Marketer Decides to Seek Sponsorship Opportunity for First Time

Evaluation by the Potential Sponsor
Identify Corporate Marketing Objectives Delineate & Prioritize Specific Sponsorship-based Objectives Identify Set of Evaluation Criteria Assign Weight to Each Criterion in Model Rate Each Criterion (for Each Alternative) Select/Reject Opportunities Based on the Systematic Evaluation of Each Alternative

Identify Corporate Marketing Objectives
What Do We Want to Achieve with Our Marketing Strategy? Examples: Increase Awareness Enhanced Consumer Perception Strengthen Brand Loyalty Increase Sales Attain Positive Public Relations & Publicity

Delineate & Prioritize Specific Sponsorship Objectives
What Do We Want to Achieve with Our Sponsorship Strategy? What Priorities? Possible Sponsorship Priorities (3) Increase Awareness (4) Enhanced Consumer Perception (2) Strengthen Brand Loyalty (1) Increase Sales (5) Attain Positive Public Relations & Publicity

Identify Set of Evaluation Criteria
Identify A Broad Set of Evaluation Criteria Drop Box 6.2 in Here

Identify Set of Evaluation Criteria
Break Each Criterion Down into More Specific Evaluation Criteria; For Example: Budget Considerations Affordability Cost Effectiveness Tax Benefits

Assign Weight to Each Broad Criterion in Model
Weights Should Reflect the Relative Level of Importance of All Criteria to Be Used in the Evaluation Process Common to Use 100 Point Basis for Allocation Purposes Other Basis Can Be Used if Desired

Assign Weight to Each Broad Criterion in Model
Consider the Following 3-Criteria Model Using a 100 Point Basis Target Market Considerations (60) Budget Considerations (30) Event Management (10)

Reallocate Weights to Each Specific Criterion in the Model
For Each Broad Criterion, One or More Specific Criteria Will Be Used in the Evaluation Process Each Specific Criterion Will Be Assigned a Weight that Reflects Its Importance in the Assessment of the Broad Criterion in Which It Is Listed

Reallocate Weights to Each Specific Criterion in Model
Instead of a 100 Point Basis, the Basis Is the Number of Points Assigned to Each Broad Category In the Previous Hypothetical Model, the Points Were Allocated As Follows: Target Market Considerations (60) Budget Considerations (30) Event Management (10)

Reallocate Weights to Each Specific Criterion in Model
In This Hypothetical Model, Assume that the 60 Points Allocated to Target Market Considerations Are Reallocated As Below: Target Market Considerations (60) Geographic Media Coverage 10 International Coverage 2 National Coverage 8 Demographic Fit 30 Size (Reach) 10

Rate Each Criterion Using An Appropriate Measurement Scale, Each Criterion Is Rated on Its Merits Most Scales Use Between 5 and 9 Points in Order to Allow Adequate Discrimination Generally, a Negative Evaluation Is Assigned a Lower Number; a Positive Evaluation Is Assigned a Number at the High End of Scale

Rate Each Criterion Consider a 9-Point Scale Where -4 Is a Poor Rating and +4 Is an Excellent Rating; the Scale Has a Midpoint of Zero. Each Criterion Can Now Be Rated on the 9-Point Scale

Rate Each Criterion Consider an Example Where Coca-Cola Is Considering Renewal of Its Sponsorship with FIFA and the World Cup of Soccer Criterion Weight Rating Target Market Considerations (60) Geographic Media Coverage International Coverage National Coverage Demographic Fit Size (Reach)

Complete the Ratings Process
Multiply Each Rating by the Weight for the Corresponding Criterion Criterion Weight Rating W*R Target Market Considerations (60) Geographic Media Coverage International Coverage National Coverage Demographic Fit Size (Reach)

Sum Results for All Criteria
Result Will Be a Single Grand Total Maximum Possible Points for Any Model Equals the Aggregate Weight Total Times the Best Rating for Each Criterion In this Example: 100 * 4 = 400

Applying the Results Use the Same Model to Compare Each Alternative Sponsorship Being Considered Can Compare the Results of One Alternative to Another Can Compare the Results to an Established Benchmark

Applying the Results Drop in Table 6.4 Here

Overview of the Process
Drop in Figure 6.1 Here

Sponsee Applications Allows the Sponsee to Evaluate Its Own Proposal from the Prospective Sponsor’s Perspective Understand Prospect’s Priorities Can Help Sponsee Decide Which Components to Offer in Its Proposal

Closing Capsule Prospects Have Many Opportunities from Which They Can Choose The Increase in Opportunities and a Major Focus on ROI by Prospective Sponsors Have Led to Greater Emphasis on Pre-event Evaluation

Closing Capsule Systematic Pre-event Evaluation Should Increase the Likelihood that the Sponsorship Will Achieve the Objectives Sought by the Sponsor More Independent Consultants that Can Help the Prospect with Pre-event Evaluation Sponsorium -

Closing Capsule Fewer Sponsorships Should Fail
Fewer Failures = Higher Renewal Rates

Leveraging: Activation Of the Sponsorship
Chapter 7 Leveraging: Activation Of the Sponsorship McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Leveraging Sponsorship Has Been Characterized as a License to Spend More Money Sponsorship Is Not a Stand-Alone Activity Need to Support Any Sponsorship with Additional Efforts Designed to Reinforce the Awareness that the Marketer Is an Official Sponsor of the Property

Leveraging Also Referred to as: Defined as: Activation
Collateral Support Defined as: the set of strategic initiatives that are designed to support and enhance the sponsorship

Why Leverage? Reinforce Relationship in Consumers’ Minds
Reduce Vulnerability to Ambush Marketing Increase Likelihood that the Sponsorship Will Achieve Its Anticipated Objectives

License to Spend Drop in Figure 7.1 Here

How Much Should Be Spent on Leveraging Activities?
No Universal Agreement Actual Amounts Vary Significantly Generally Accepted Standard Is That a Minimum of $1 Should Be Spent on Leveraging for Each $1 Committed to Rights Fees

Leveraging in Practice
IEG Reported Expenditure Ratio in 2004: $1.30 Spent on Leveraging for Each $1.00 Paid in Rights Fees New Report Indicates that Ratio Increased in 2007 to an All-time High of $1.90

Leveraging Techniques

Theme-Based Advertising
Use Advertising that Focuses on the Same Theme Germane to the Sponsored Event For example: adidas Sponsors FIFA and the World Cup of Soccer; They Use TV and Magazine Ads that Feature a Soccer Theme to Leverage that Sponsorship

Example of Theme-Based Ad

Advertise During the Broadcast of the Event
Often, Sponsors Are Given Opportunities to Purchase Advertising Time Prior to that Time Being Offered to Nonsponsors For Example: McDonald’s Airs TV Advertisements during the Olympic Broadcast in an Effort to Leverage Its Sponsorship of the IOC

Advertise in the Event Program
Reach the Fans at the Event; Those in Attendance Will Read the Program and Be Exposed to the Sponsors’ Advertisements For example: FedEx Used Ads in the Ryder Cup Program to Reach Fans and Increase On-Site Business

Use Sponsee’s Logo on Packaging & Promotion
Incorporate Trademarks and Logos of the Sponsored Event on Product Packaging Must Have Been Granted This Right in the Contract by the Sponsee Incorporate Logo on Other Promotional Efforts For Example: McDonald’s Incorporates Logos of World Cup, UEFA, & Olympics on Its Drink Cups

Use of Logo on Packaging

Distribution of Free Products or Premiums
Use Free Samples of Sponsor’s Product or Promotional Giveaways that Feature the Sponsee’s Trademarks and Logos For Example: Absopure Gives Free Samples of Its Water at Michigan Stadium GM Gave Out Poster Featuring NFL Team

Use of Premium Drop in Figure 7.4 Here

Provision of Prizes Sponsor Provides Goods and Services that Sponsee Uses as Prizes for Selected Activities For Example: Southwest Airlines Provides Tickets that MLB’s St. Louis Cardinals Give Away to Contest Winners Selected from Fans in Attendance

Point-of-Sale Display (POS)
Use of Themed Signage at Retailers; the Signage Features the Sponsorship For Example: adidas Uses Displays that Feature Soccer in General and the Brazilian Soccer Team in Retail Stores in South America

Push Strategy for Retailers
Engaging in Activities Designed to Persuade Retailers to Increase Exposure of the Sponsor’s Products and Promotions within the Retail Stores This May Involve Some Type of Financial Compensation for the Retailer For Example: NASCAR’s Sponsor, Country Time, Achieved a Substantial Increase in Display Space because Retailers Saw a Chance to Increase Their Sales

Consumer Sales Overlay
Consumers Associated with the Sponsor Can Buy Tickets at Discounted Prices For Example: AAA Is a Sponsor of the Detroit Tigers; Members of AAA Have Several Opportunities Each Season to Purchase Tickets at Half Price (2 for 1)

Cross-Promotions with Co-Sponsors
Collaborate with Another of the Property’s Sponsors in a Joint Marketing Endeavor For Example: U.S. Olympic Team Sponsors (Hilton Hotels and United Airlines) Put Together Travel Packages While Referencing Their Association with the USOC

Affinity Programs Capitalize of the Brand Equity and the Consumers’ Affection for the Sponsee Effective For CRM-Based Sponsorships, but Applicable in Sports Marketing For Example: MNBA NFL “Extra Points” Visa Credit Card Features NFL Logos and Consumer Benefits Are Accumulated by Using the Card

Web Tie-Ins Acknowledgement of the Relationship on the Sponsor’s Own Web site – May Link For Example: McDonald’s Web Site Has a Link for “Sports” Clicking Through Will Direct the Browser to a Listing of All of the Marketer’s Sponsorships Where One Can Click Through to Any of Its Sponsorships Including the IOC, All American High School Basketball, FIFA, and NASCAR

Provide Hospitality Reward Top Employees & Customers
Reinforce Relationship with Sponsee in the Eyes of Those Entertained by Sponsor For Example: Nokia Invited 2,000 Customers to Attend the Nokia Sugar Bowl – Included Parties and Other Events Affiliated with the Game

Overview of Leveraging
Essential for Maximizing Impact Expensive – Consider Cost of Leveraging as Well as the Cost of the Rights Fees Sponsee Can Advise Sponsors on the Use of Effective Leveraging Strategies

Example of a Leveraging Effort
Visa and the NFL Components Affinity Credit Card Contest for Consumers Who Use the Card Print Advertising Featuring NFL Logos POS Featuring NFL Logos in Stores Cross-Promotion with DirecTV Chance to Win Tickets to Super Bowl

Example of a Leveraging Effort
Best Western International and NASCAR Components NASCAR Room Rate (Discounts) Affinity Credit Card Cross-Promotions with Co-Sponsors On-Site Hospitality at Race Location Access to Tickets through Hotel

Ten Steps to Effectively Leveraging a Sponsorship

Make-Buy Decision Make – Sponsor Develops and Implements Its Own Leveraging Program Buy – Sponsor Hires an Outside Agency to Assist in the Development and Implementation of Its Leveraging Program

Who Is Used When “Buying”?
Insert Figure 7.7 Here

Closing Capsule If a Sponsorship Fails to Achieve Its Objectives, the Sponsor Must First Ask Itself: “Did We Do an Adequate Job in Leveraging Our Sponsorship?” Leveraging Helps Reduce Impact of Ambush Marketing Efforts

Closing Capsule Sponsorship Is Only Effective When the Consumer Recognizes the Relationship between the Sponsor and the Sponsee Effective Leveraging Makes that Recognition Far More Likely

Chapter 8 Ambush Marketing
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Concept of Ambush Marketing
Defined as: a Promotional Strategy Whereby a Nonsponsor Attempts to Capitalize on the Popularity/Prestige of a Property by Giving the False Impression that It Is a Sponsor Often Used by Competitors of the Property’s Official (Actual) Sponsors

Parasite Marketing A Parasite Attaches Itself to an Unwilling Host and Takes Nourishment From It An Ambush Marketer Attempts to Attach Itself to a Valuable Property and Extract Benefits from that Perceived Attachment

Why Ambush? High Cost of Rights Fees It Has Been Shown to Work
Consumers Not Offended by Ambushers Attitude Within Industry May Be Changing

Piracy Versus Ambushing
Piracy Is Illegal Ambush Marketing Is Legal in Most Countries Ambushing Represents an Ethical Dilemma for the Marketer

Piracy Infringements on the Intellectual Property Rights of the Event or Property (e.g. Using an Event’s Trademarks and Logos without Permission to Do So) Making an Overt Claim to Be Officially Associated with the Event or Property When Such an Association Does Not Exist

Ambush Marketing Strategies
Sponsor Media Coverage of the Event Sponsor Subcategories Make Sponsorship-Related Contribution to the Players’ Pool

Ambush Marketing Strategies
Purchase Advertising Time During the Broadcast Replay Engage in Advertising to Coincide with the Timing of the Event Use Other Dilution Strategies

Sponsor Media Coverage of the Event
Advertise During the Original Broadcast For Example: Fuji Film Was an Official Sponsor of the Olympic Games, but One of the Major Advertisers during the Broadcast Was Kodak

Sponsor Subcategories
“Ambushing Up” – Sponsor at a Lower Level with Objective of Being Associated with the Property at a Higher Level For Example: adidas Was the Official Sponsor of the 2006 World Cup of Soccer, but Nike Sponsored the Brazilian National Team that Competed in the Tournament

Make Sponsorship-Related Contribution to the Players’ Pool
Payments Are Made to Competitors Who in Turn Acknowledge This Involvement; May Serve as Performance Incentive For Example: Speedo Promoted a Plan to Reward Olympic Swimmer Michael Phelps with a $1,000,000 Award if He Won Seven Gold Medals in the 2008 Olympics

Purchase Advertising Time during the Rebroadcast of the Event
Events Are Often Shown on TV Many Times After the Live Broadcast. There Are Fewer Restrictions Regarding Who Can Purchase Advertising Time. For Example: The World Cup of Soccer Prohibits Advertising by Ambushers during the Original Broadcast, but the Championship Game Will Be Rebroadcast on Various Sports Channels Where that Prohibition Will No Longer Be in Effect. This Represents an Opportunity for Nike to Ambush the True Sponsor, adidas.

Engage in Advertising to Coincide with the Timing of the Event
Even if the Ambusher Cannot Advertise on the Event Broadcast, It Can Advertise on Other Programs within that Timeframe For Example: Themed Advertising: Wendy’s Ambushed McDonald’s and the Winter Olympics by Showing Ads Featuring Winter Sports and Former Olympic Athletes

Engage in Advertising to Coincide with Timing of the Event (Cont’d)
Traditional Advertising: Using Advertising that Represents a Normal Creative Execution for the Nonsponsor. For Example: Coors Light Was the Official Beer Sponsor of Super Bowl XLIII in Budweiser Ran Advertising Throughout the Football Season on Many Networks and During Regular Season NFL Games.

Other Dilution Strategies
Purchase Tickets to the Event Distribute Tickets; Use as Contest Prizes Confusion Technique Duplicate Effort of an Actual Sponsor Create Own Event Similar Event that Appeals to Same People

Other Dilution Strategies
Sponsor Other Events at the Event Venue Association with the Venue or Secondary Event May be Mistaken for Association with the Original Event Wear Nonsponsor’s Logo Clothing at the Event Give away Shirts for Fans to Wear

When Should Ambush Marketing Be Considered?
Drop Box 8.1 in Here

Example of Ambush Marketing
Beijing Olympics: Official Sponsor Was Panasonic; the Ambush Marketer Was Vizio Vizio ran series of ads called “Splash” in an effort ambush Panasonic. The ads ran during the Olympic broadcast, and the creative execution featured a diver in slow motion with an American flag in the background.

Example of Ambush Marketing
EURO 2008: Official Sponsor Was McDonald’s; Ambusher Was Burger King Burger King ran ads in host countries where games were played. They featured a “Red Card” theme that has obvious soccer connotation. Ads featuring images of celebrating fans were run during same timeframe as the actual competition.

Protection from Ambushers
Sponsors Should Learn How to Ambush Leverage with Collateral Support (Remember: Sponsorship Is Not a Stand-alone Promotional Activity) Clean Stadium (Devoid of Nonsponsor Signage)

Protection from Ambushers (Cont’d)
Establish More Control Over Advertising Restrict Use of Virtual Advertising Limit Ability of Players to Endorse Brands of Nonsponsors

Educate Consumers Engage in Surveillance Programs Limit Number of Sponsorships

Prohibit Pass-Along Strategy Incorporate Sponsor’s Name Lobby Governments to Enact Legal Restrictions

Are Preventative Measures Effective?
No Event Is Immune to Ambushing Sponsor Who Understands How to Ambush Is Better Prepared to Assess Its Own Vulnerability Many Ambushing Techniques Are Effective Many Events Now Require New Laws and Clean Stadia as Conditions for Staging an Event

Closing Capsule Ambushing Is Cheaper Than Sponsorship
Ambushing Can Be Effective Ambushing Reduces Sponsor’s Benefits Sponsors Must Effectively Leverage

Postevent Evaluation: Identifying Success and Failure
Chapter 9 Postevent Evaluation: Identifying Success and Failure McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction Pre-event Evaluation Provided a Projection of How Effective a Potential Sponsorship Might Be if Implemented Postevent Evaluation Provides an Assessment of How Well a Sponsorship Actually Performed – Was It a Productive Investment?

Sponsorship Accountability
Cost versus Benefits ROI Best Use of Scarce Resources Maximize ROI Lack of a Standard Measure No consensus on how to measure ROI

Postevent Evaluation Methods
Qualitative Assessments Market Response Change in Sales Impact on Trade Participation Change in Consumer Attitudes Media Equivalencies Comparable Value Share

Qualitative Assessments
Judgment & Perception For Example: AT&T Indicates that Its Sponsorship of the USOC Is a Good Investment because of the High-Impact, Emotional Appeal of the Olympic Games to American Consumers

Market Response: Change in Sales
How Much Did Sales Increase as a Result of the Sponsorship? Commonly Applied Measures: Before-and-After Measurements Comparison to “Same Period” Sales Compare Sponsorship Region to Rest of Market Tie Sales Directly to the Sponsored Event

Example: Calculation of Change in Sales (and ROI)

Market Response: Impact on Trade Participation
“Trade” Represents the Intermediaries, Especially the Retailers,” that Operate within the Sponsor’s Distribution Channel Measure The Trade’s Increased Involvement with the Sponsor and the Sponsor’s Products

Market Response: Impact on Trade Participation
Increase in POS Display at Retail Stores Increase in Shelf Space Increase in Number of Stores Selling the Sponsor’s Products Investments in Cooperative Advertising

Example of Market Response: Impact on Trade Participation
Listerine Sponsored “Taste of Chicago” Number of Displays in Retail Stores in the Chicago Area Increased by 112% Retailer Participation in Cooperative Advertising Reached the Highest Level in the History of the Listerine Brand

Market Response: Change in Consumer Attitudes
What Attitude Is to Be Measured? Requires a Measurement of that Attitude Prior to the Implementation of the Sponsorship Program (Prior to the Initiation of the Leveraging Effort)

Market Response: Change in Consumer Attitudes
What Percentage of Consumers Anticipate Purchasing the Sponsor’s Products? What Percentage of the Consumers Have a Favorable Opinion of the Sponsor? How Has the Sponsor’s Image Changed in the Eyes of the Consumers?

Example of Market Response: Change in Consumer Attitudes
Lloyd’s Bank Sponsored the Lloyd’s Bank Theatre Challenge in the United Kingdom Attitudes Regarding the Following Issues Improved by 30% on the Scale: Lloyd’s is a place to bank Lloyd’s is friendly Lloyd’s is keeping up with the times

Media Equivalencies Sponsorships Result in Exposure
Of Particular Interest is the Viewers’ Exposure to the Sponsors’ Trademarks and Logos as Well as the Number of Times that the Sponsors are Mentioned during the TV Broadcast that Features the Sponsored Property

Media Equivalencies The Key Question Is: How Do We Assign a Monetary Value to that Exposure? One Answer Is to Determine How Much It Would Have Cost the Sponsor to Have Purchased an Equivalent Amount of Exposure Using Traditional Advertising during the Broadcast

Media Equivalencies: Comparable Value
One of the More Popular Measurement Methodologies is Used by Joyce Julius & Associates Value of Exposure Value of Mentions

Joyce Julius & Associates
Consider the following Example of a Sponsorship for a College Football Game Cost for a traditional 30-second TV ad during the Broadcast is $210,000 That Equates to $7,000 per Second

The Sponsor’s Logo Appeared on Camera and In-Focus for the Viewers’ to See for a Total of 3 Minutes and 23 Seconds during the Broadcast of the Game 203 Seconds in Total Value of That Component of the Sponsor’s Exposure = ($7,000 x 203) = $1,421,000

The Sponsor’s Name Was Also Mentioned a Total of Eight Times during the Broadcast Each Mention is Valued as Equal to 10 Seconds of Exposure Value of that Component of the Sponsor’s Exposure = ((8 x10) x 7,000) = $560,000

Comparable (Equivalent) Value Exposure = $1,421,000 Mentions = $560,000 Total Comparable Value = $1,981,000

Was this a Good Sponsorship Investment? Compare the Results to the Cost in Terms of the Rights Fee Paid by the Sponsor

The Rights Fees Paid in this Example Were $1,000,000 The Comparable Value for the Sponsor Was Calculated to be $1,981,000 Was It a Good Investment?

The Answer Is No! Sponsorship Should Produce $3 in Comparable Value for Every $1 Spent on Rights Fees The Ratio in this Example Is: (1,981,000 / 1,000,000) = $1.981 The Sponsor Achieved Less than $2 in Comparable Value for Each Dollar Spent

Why Is the Answer No? Why is a $3 Return Needed?
Why is a $1 for $1 Ratio Insufficient? Sponsorship Does Not Convey Persuasive Message; Not as Effective as Advertising In Addition to Rights Fees, the Sponsor Should also be Using Additional Resources for Its Leveraging Program

Media Equivalencies: Share (of Time)
Another Measure Is to Use the Exposure Time to See How the Sponsor Fared Against The Rest of the Sponsors Out of the Total Exposure Time Achieved by All Sponsors, What Percentage Was Attained by the Sponsor in Question?

Media Equivalencies: Share (of Time)
Recall that The Sponsor of the Football Game Received 203 Seconds of Exposure The Total Exposure Gained by All of the Sponsors Was 3,904 Seconds The Sponsor’s Share of Time Can Be Calculated as (203 / 3,904) = .052 or 5.2%

Media Equivalencies: Share (of Comparable Value)
Takes the Comparable Value Concept One Step Further Starts By Calculating Comparable Value for the Sponsor Continues by Calculating Aggregate Comparable Value Achieved by All Sponsors for the Event

Finishes by Calculating a Sponsor’s Comparable Value as a Share of the Total Comparable Value Attained by All of the Sponsors of that Event Number May Differ Slightly from Share of Time Figure because Comparable Value Also Takes Mentions into Account

Sponsor’s Comparable Value: $1,981,000 Aggregate Comparable Value: $34,750,000 Sponsor’s Share of Comparable Value = (1,981,000 / 34,750,000) = .057 or 5.7%

Using Share Results Compare Your Sponsorship to Others for the Same Event Compare Different Levels of Sponsorship Compare Sponsorship of One Property to Sponsorship of Other Properties

Concerns About Postevent Evaluation
Other, Perhaps Better, Techniques Are Available Different Methodologies Produce Different Results Exposure May Not Translate into Sales New Sponsors Often Overlook ROI Question of What Constitutes a Viewable Image

New and Improved Measures
Recognition Grade (Joyce Julius) Reduces Value for Small Images and for Cluttered Screen When Exposure Exists NTIV Analysis (Joyce Julius) Incorporates Other Media Exposure such as Radio, Print Media, and Venue Signage

SponsorMap (Starfish) Focus Is on Outcomes Recall, Passion, Persuasion, Image & Commitment Spindex (S-Comm) Provides More Detailed Information Media Equivalent Cost Signage, Scoreboards, Clothing, Location of Logo on TV

Sponsorship Scorecard (A.C. Nielsen) Internet-Based; Considers Alternative Media SPORTSi (TNSSport) Electronic Measurement of Exposure

Failure of a Sponsorship
Failure - Different Meanings to People Failure: Failed to Meet Expectations Sponsors Chose Not to Renew Dilemma Is that Sponsors Often Choose Not to Renew Some Sponsorships that Have Met All of Their Expectations

Sponsee Accountability
Fulfillment (Compliance) Report Documents that each component to which the sponsor was entitled was actually provided by the sponsee Signage Complimentary ads Free tickets Other contracted components

Competitor Response Natural Response by Competition is to Attempt to Neutralize Any Differential Advantage Based Upon a Sponsorship Responses by Competitors: Piracy or Ambush Marketing Increases in Promotional Activities Aggressive Changes in Marketing Mix

Sponsorships Fail When They Have a Poor Foundation
Recall the 10 Building Blocks of a Solid Sponsorship Foundation If Any of Those Building Blocks Are Missing or Inadequate, Then There is a Greater Likelihood that the Sponsorship Will Fail to Achieve Its Stated Objectives

Other Reasons for Failure
Decrease in Market Value The Anticipated Benefits Are Not Delivered, So the Sponsor Considers the Sponsorship to be Over-priced, but Sponsee Does Not Reduce the Price Accordingly New Events at Lower Prices Drag Down the Market Value of Existing Events

Cost Becomes Prohibitive Rights Fees Escalate because of Increased Demand as Events Prove to Be Effective Prime Properties such as the Olympics and the World Cup of Soccer Have Dramatically Increased their Rights Fees over the Past Few Sponsorship Cycles

Change in Corporate Direction Even When a Sponsorship Has Been Effective, the Sponsor May Decide to Pursue a Different Marketing Strategy – One That Does Not Involve the Sponsorship in Question Isuzu Terminated Its Sponsorship with the Celebrity Golf Challenge Solely because of Its Effort to Create a New Image for Isuzu

Property Hopping The Sponsor Focuses on Short-Term Strategies that Result in the Movement across a Series of Sponsored Properties

Timing Considerations Events Are Not Always Staged During the Same Time Period from Year to Year A Sponsorship that Made Sense for an Event Held in July Might Not Make as Much Sense When that Event Is Staged in April

Failure to Understand What Is Not Received “Due Diligence Overlooked” – The Sponsor Expected Certain Plan Components that Were Not Specified in the Contract The Sponsor Misunderstood Some Issue Sponsor Expected Broader Category Exclusivity Sponsor Expected Signage to be More Prominent

Greenwashing Public and Media Scrutiny Arises in Regard to a Marketer’s Sponsorship of a Cause-Related or Environmentally-Focused Property IEG Caveat: “Don’t sponsor green unless you are green”

Overreliance on Small Sponsorships Small, Grass Roots Sponsorships Typically Do Not Provide the Benefits Associated with Major Properties; This Reality Is Often Perceived to Be a Failure which Results in a Greater Propensity for Property Hopping

Failure to Sell Internally Many People Who Have a Vested Interest in Using Company Resources Wisely Are Not Sold on the Benefits that the Sponsorship Has Provided The Unconvinced May Want to Use Resources in Other Ways, So the Sponsorship Is Not Renewed

Failure to Deliver Sought Results There Is a Deficit When Comparing the Actual Results to the Anticipated Results The Return on the Sponsorship Investment Is Deemed to Be Inadequate

Overview of Failure Some Failures Are Inevitable
Learn from the Successes & the Failures

Examples of “Failure” Xerox & IOC Siemens & McLaren Mercedes F1 Team
New Focus on “Other Customer-Facing Initiatives” Siemens & McLaren Mercedes F1 Team F1 Racing Deemed Inconsistent with Siemens’ Image Ford & International Jazz Festival Inadequate ROI

Closing Capsule Postevent Evaluation is Essential
Sponsors Likely to Request It as Part of a Fulfillment Report from the Sponsee Will Help Sponsor Decide Whether to Renew or Terminate a Sponsorship

Closing Capsule Three Broad Categories of Postevent Evaluation
Qualitative Measures of Market Response Media Equivalencies There Are Ongoing Efforts to Refine and Improve the Measurement Process

Closing Capsule Some View Any Non-Renewal as Failure
Some Successful Sponsorship Relationships Are Terminated by Satisfied Sponsors There Are Many Reasons for Failure Learn from Successes and from Failures

Chapter 10 Venue Naming Rights
McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Venue Naming Rights Building Sponsorship
Sponsor Pays to Have Its Name Attached to a Facility for A Specified Period of Time Many Types of Facilities beyond Sports Also Driven by ROI

Brief Historical Perspective
Early Ego-Driven Motives 1973 – Rich Stadium for NFL’s Buffalo Bills ($1.5 million over 25 Years) Percent of US Professional Teams Playing in Venues with Corporate Sponsor 30% in 1997 69% in 2007

Benefits for Four Constituencies
Benefits for the Fans Benefits for the Community at Large Benefits for the Resident Organization Benefits for the Sponsor

Benefits for the Fans – Often Involves New Facility
Better Seating Configurations More Amenities Potential for Lower Ticket Prices Better Product Team Retention

Benefits for the Community at Large
Provides Jobs Higher Levels of Tourism Lower Taxpayers’ Burden

Benefits for the Resident Organization
New Revenue Stream Enhanced Level of Prestige Greater Corporate Interest for Involvement Via Traditional Sponsorship

Benefits for the Sponsor
Increased Awareness Improved Image Sustainable Competitive Advantage from the Association with the Venue and Its Resident Organization Hospitality Opportunities Increased Sales

Plan Components Comparable to Traditional Sponsorships
Insert Box 10.1 Here

Plan Components Signage Logos
Places like main entrance, gathering areas, scoreboards, concession areas May Include Virtual Signage Opportunities Logos On uniforms of participants, service workers, and items such as napkins and cups

A Key Component: Signage

Plan Components Advertising – Broadcast and Programs
Many venue naming rights deals include advertising for the building sponsor; these may include radio, TV, and the event program Designation for Leveraging Purposes A building sponsor often seeks ability to position itself as an “official sponsor” of the venue’s primary resident organization

Plan Components Category Exclusivity
Competitors of the building sponsor may not be allowed any official role with the venue Recognition on Public Address Announcements and Scoreboards Contract often specifies a minimum number of such acknowledgements during each event that is staged at the venue

Plan Components Hospitality Complimentary Tickets
Provision of an area for entertaining; may include a luxury suite for some (or all) events Complimentary Tickets Free tickets to events staged at the venue

Plan Components Web Presence Distribution Rights
Acknowledgment or even a direct link to the sponsor’s Web site from the venue and the resident organizations’ Web sites Distribution Rights Ability of sponsor to sell its products at the venue

Plan Components Other Marketing Initiatives Take orders for products
Accept applications (i.e. credit card company) Showcase products Engage in promotional giveaways

Example of Venue Naming Rights Contract

Key Success Drivers Target Market Fit Ability to Leverage
Integration within Sponsor’s IMC Plan Multipurpose Facilities

Target Market Fit Capitalize on Strategic Linkage to Reach the Sponsor’s Target Market Marketer May Need to Consider Venues beyond the Sports Environment

Ability to Leverage Resident Organization May Receive a Significant Amount of Media Exposure Building Sponsor Should Use Leveraging Program as a Means of Capitalizing on that Exposure Leveraging Should Tie the Sponsor to the Resident Organization

Integration within Sponsor’s IMC Plan
Sponsorship Fits Other Elements of the Building Sponsor’s Marketing Strategy Sponsorship Is Not a Stand-Alone Promotional Strategy; It Must Work in Harmony with the Other Components of the Sponsor’s Integrated Marketing Communications (IMC) Plan

Multipurpose Facilities
Reach a Varied Array of Market Segments Reduce the Seasonal Variation Regarding the Use of the Venue

Value Determination Drop in Box 10.3 Here

Examples of Sports Venues
Venue Location Total Contract ($US) Years Citi Field New York, NY Reliant Stadium Houston, TX Philips Arena Atlanta, GA Emirates Stadium London, England Lucas Oil Stadium Indianapolis, IN Allianz Arena Munich, Germany Air Canada Centre Vancouver, Canada

Opportunities Beyond Sports
Examples Include Hospitals Educational Facilities Museums Performing Arts Centers Shopping Malls

Measuring the Results Qualitative Assessment
Consumer Surveys of Awareness Media Equivalencies

Problems, Concerns and Criticisms
Cost Public Reluctance to Embrace Corporate Name Media Resistance to Use Corporate Name

Difficult to Measure Sponsorship’s Impact Sponsor Transition (i.e. Merger) Arena Obsolescence Lack of Consistency – Performance of Resident Organization Varies over Time

Limited Number of Opportunities Remain in the US Professional Sports Market Teams Move Sponsorship Clutter

Growth Opportunities Some Pro Sports Opportunities in USA
Nonsports Environment Secondary Sports Facilities Opportunities Outside of United States

Building Sponsorship? Drop in Figure 10.2 Here

Brokers and Consultants
Specialized Agencies that Negotiate Deals that Work for Either the Sponsor or the Sponsee in the Negotiation Process Work to Get Maximum Revenue for Venue Work to Get Best Deal for the Sponsor For Example: Front Row Marketing

Closing Capsule Venue Naming Rights Is Our First Special Case of Sponsorship Primary Emphasis Has Been on Sports Venues, but Other Opportunities Abound It’s Not Just about Attaching a Corporate Name to a Building

Closing Capsule Sponsors Seek Reasonable ROI
Focus Is on the Potential Value of the Plan Components and the Sponsorship’s Cost Measuring the Results Is Difficult Done Correctly, Many Parties Will Benefit

Celebrity Spokesperson
Second Special Case of Sponsorship Referred to as Personality Sponsorship Used in Marketing of: Sports Products – Nike & Tiger Woods Nonsports Products – Sony & Peyton Manning

Matching Process Celebrity (Personality) Needs to Fit:
The Target Market The Product The Brand

Types of Personalities Used
Entertainer (Bon Jovi & Duracell Batteries) Politician (Bob Dole & Pepsi-Cola) Dignitary (Sarah Ferguson & Weight Watchers) Athlete (LeBron James & Bubblicious)

Endorsement Applications
“I Use It, So Should You” Drop in Figure 11.1 Here

“I Am an Expert, and I Think that You Would Be Smart to Use this Product” Drop in Figure 11.2 Here

“I Think Its Cool, So You Should Use It” Drop in Figure 11.3 Here

Athletes as Endorsers Prominent Roles in Society
Recent Concerns Regarding Legal and Moral Transgressions Longevity Concerns – Injury & Retirement

Let’s Sell Some Wheaties
The Wheaties Brand Has A Long History of Using An Endorsement Strategy to Influence the Demand for Its Cereal

Factors Favoring Use of Athletes as Endorsers
More Effective with Sport-Specific Products (i.e. Tiger Woods & Nike Golf) Recognition Can Help Cut through Clutter Meaningful Recognition Rates for Association between Athlete and Brand

Top 10 Athlete Endorsers in the United States

Factors Impacting Endorsement Effectiveness
Endorser: Is a High Achiever Has Believability/Credibility Is Known Is Likable/Popular/Admired Is Recognizable Provides Ease of Recall Is Congruent with Target Market Is Physically Attractive (Provides Prospect for) Continuity

High Achiever Winners Have Greater Impact on Consumers
Winners Are More Expensive David Beckham, Michael Jordan, Serena Williams, Tiger Woods, Lorena Ochoa, Roger Federer

Believability/Credibility
Trust What They Say - Sincerity Accept Their Endorsement as Informed PGA’s Arnold Palmer

Known Target Market Familiarity with Endorser
Know the Name Even if the Face Is Not Quickly Placed by Consumer Athletes Who Compete in Popular Sports Soccer’s Ronaldinho; Tennis’ Roger Federer

Likable/Popular/Admired
Use of Athletes Not in this Category Might Have Negative Impact on Sales & Image Regional Implications – One Country versus Another; One City versus Another NHL’s Wayne Gretzky Has Broad Popularity NBA’s Bruce Bowen Has Regional Popularity

Recognizable Not Only the Name, but also the Face
Athletes in Some Sports Have Advantage Absence of Protective Equipment Close Proximity to Fans at Event (and On TV) NBA’s LeBron James

Provides Ease of Recall
Recall of the Product by the Consumer In Retail Store, Consumer Will Remember the Relationship between an Athlete and the Endorsed Product Michael Jordan & Hanes Underwear

Is Congruent with Target Market
Similar Demographic Profile Similar Lifestyle – Regardless of Demographics Allen Iverson’s “Street Cred”

Is Physically Attractive
Consumers Rate Ads Featuring Attractive Endorser Higher They Also Rate Product Higher Maria Sharapova

Continuity Prospects Like Traditional Sponsorship, Impact is Maximized Over Long Term Risk Involved for Both Parties NBA’s Kobe Bryant

Selection Process Like Traditional Sponsorships, an Endorsement – AKA a Personality Sponsorship – Should Be Evaluated Prior to Making Any Substantial Investment Reduce the Risk of Making an Inappropriate Selection for the Spokesperson for Your Product

Selection Process Set Budget for Personality Sponsorships
Identify Potential Spokespersons that Match the Values Characteristic of the Marketer Evaluate Each Potential Spokesperson Using an Objective Measurement Tool

Selection Process – Q Scores
Some Marketers Use Independent Consulting Services such as Q Scores from Marketing Evaluations, Inc. for Information to Assist in this Process

Selection Process – Q Scores
Examples of Recent Q Scores (Typically Range between 0 and 60) Tiger Woods Michael Jordan Serena Williams Jennie Finch

Selection Process – Assessment
Select Relevant Endorser Criteria Assign Weight to Each Criterion Assign Rating to Each Criterion Using an Appropriate Rating Scale Determine Overall Assessment for Each

Selection Process – Assessment

Problems with Celebrity Endorsers
The Criminal The Prima Donna The Fading Star The Lightning Rod The Tongue-Tied

Other Potential Problems Involving Celebrity Endorsements
Ambush Marketing Costs Misrepresentation of Use Endorsement Conflicts Conflicts with Sport Regulatory Bodies (Impact on) Amateur Status Unwholesome Nonsports Products Overexposure

Closing Capsule Endorsements Represent a Special Case of Sponsorship – Personality Sponsorship May be Used for Marketing of Both Sports and Nonsports Products Primary Emphasis in this Chapter Was on Nonsports Products (Domain-Focused Strategies)

Closing Capsule Personalities Employed May be Local, Regional, National, International or Global May be Athletes, Entertainers, Politicians, Dignitaries, Recognized Personalities Help Cut through Advertising Clutter Not Devoid of Risk

Introduction to Licensing
Third Special Case of Sponsorship Licensing is a Value-Adding Process that Provides Revenue-Generating Opportunities Via the Conveyance of the Right to Use Another Organization’s Intellectual Properties for Commercial Purposes

Intellectual Properties
Intellectual Properties – Intangible Assets for Which an Organization Can Claim Ownership Trademarks – Registered Identifiers Which Can Be Protected Using Existing Laws Examples: Brand Names - Nike Slogans – “Just Do It” Logos – the Nike “swoosh”

Brief Historical Perspective
1930s - Walt Disney Characters 1950s – Television Personalities 1960s – Professional Sports in USA 1970s – Collegiate Sports in USA

Key Concepts - Participants
Licensor – Owner of the Intellectual Property Who Conveys the Right to Use Select Intellectual Properties to the Licensee Licensee – Entity that Is Given Permission to Use the Intellectual Properties for Specified Marketing Activities

Financial Perspective (2006)
Sales of Officially Licensed Merchandise Were Estimated at $187.4 Billion These Sales Resulted in Total Payments of Some $10 Billion to the Licensors Payments to the Licensors Generally Involve a Percentage of the Licensee’s Sales Revenue - Royalties

Top 5 Licensing Categories
Categories Royalties Characters from Entertainment $2,680 Trademarks/Brands 1,090 Fashion Sports Collegiate 2006 Royalties in Millions – US Dollars

Establishing and Maintaining Ownership

Agreement Terms Eligible Products Scope of Exclusivity
Geographic Scope

Eligible Products Product Item – One Specific Product Product Line
i.e. – Rival brand crock pots Product Line i.e. – Rival brand food preparation items Product Assortment i.e. – All products produced by Rival

Scope of Exclusivity Exclusive – Rights for Specific Product(s) Granted to a Single Licensee Nonexclusive – Granting Rights to Use Intellectual Properties on Same Product(s) to Two or More Competing Companies

Geographic Scope Regional Global Small local region
Larger region but not national in scope National Multinational region Global

Example of Actual Agreement

Compensation Fixed Fee Royalty Minimum Guarantee

Compliance Reviews “Underpayments May Represent as Much as 50% of the Amount Due to the Licensor” Verify that All Payments Due to the Licensor Have Been Made Should be Performed Periodically

Benefits for the Licensor (Owner)
Revenue Stream No Significant Investment Required Broader Product Assortment for Consumer

More Benefits for the Licensor
Create Consumer Awareness & Interest Control Standards of Quality Control Array of Products Available Protect Image

Benefits for the Licensee (User)
Capitalize on Licensor’s Brand Equity Capitalize on Short-Term Phenomena Capitalize on Economies of Scale Reach New (Higher) Price Points

Example of Selection Criteria

Infringement Unauthorized Use of an Organization’s Trademarks and Logos Counterfeit Issues Lost Revenues Lower Quality

Market Surveillance Policing the Marketplace in an Effort to:
Locate counterfeit merchandise; Locate other trademark infringements; Take appropriate measures to end the infringement; Remove any illegal products, and Discourage such efforts in the future

Remedies for Infringement
Legal Restraints (Cease-and-Desist) Confiscate and Destroy Counterfeits Possible Time in Jail for Offenders

Performance Review Evaluate Licensee’s Financial Performance
Evaluate Licensee’s Production and Marketing

Developing Licensing Plan
Identify Licensable Intellectual Properties Establish Fee Structure Establish Selection Criteria Establish (Type) Terms of Agreement Engage in Compliance Review Market Surveillance Performance Review

Examples of Licensing Contracts

Growth Strategies New Target Markets New Up-Market Products
More Traditional Advertising (Leveraging)

Top American Universities

Closing Capsule Licensing Is a Special Case of Sponsorship that Features a Win-Win Relationship for the Licensor and the Licensee Global Sales of Licensed Products Continue Steady Growth

Closing Capsule Major Infringement Issues in Many Countries across the World Manufacturers and Retailers Are Being Encouraged to Produce and Sell Officially Licensed Merchandise

Closing Capsule Insert Figure 12.3 Here

Segmentation of the Sports Market
Chapter 13 Segmentation of the Sports Market McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Introduction and Review
“The Mass Market Is Dead” “One-Size-Fits-All” Strategy is Obsolete Mass Marketing Has Given Way to Differentiated Marketing

Differentiated Strategies
Marketing Mix Tailored to Each Selected Target Market Not Everyone: Wants the same products Shops at the same types of retail facilities Can or will pay the same prices Is motivated by the same promotions

Market Segmentation As Relevant for Sports Products as It Is for Nonsports Products such as Cars, Fast Food Restaurants, Beverages, and University Programs

Target Market Decisions in the Consumer Market
Market Segmentation – the Process of Subdividing the Heterogeneous Mass Market into Two or More Smaller, More Homogeneous Groups of Consumers Target Market – A Market Segment that the Marketer Will Pursue via the Implementation of a Marketing Mix Tailored to that Group of Consumers

Segmentation Criteria in the Consumer Market
Demographics Geographics Psychographics Product-Related Variables

Demographics Drop in Table 13.1 Here

Demographics Drop in Figure 13.2 Here

Geographics Urban Versus Suburban One Part of Country Versus Another
Basketball versus Soccer One Part of Country Versus Another Skiing versus Golf One Country Versus Another Cricket versus Baseball

Psychographics (Lifestyle)

Product-Related Variables
Level of Usage Season ticket buyer versus infrequent buyer Loyalty Long-term versus new season ticket buyer Benefits Sought Social outing versus entertainment by athletes

Sports Fans – Overall Market
Criteria Used to Segment the Overall Market of Sports Fans Involvement Participation Social Needs Identification Appreciation of Sport Sex Appeal

Six Segments of Sports Fans
Players Patriots Appreciators Socialites Friends Voyeurs

Players Those Who Play a Sport Are the Most Likely to be a Fan of that Sport Example: Golfers Are Most Likely Group to Attend or Watch a Golf Tournament on TV

Patriots National Pride – England versus France
Municipal Pride – New York versus Boston Regional Pride – East versus West Important Segment for International Competitions such as the Olympics, the World Baseball Classic, and the World Cup of Soccer

Appreciators Admiration of the Players’ Skills
Desire to Witness Excellence Not as Concerned about Who Wins

Socialites Segment Seeks Sports Event Where Interaction with Friends Is Facilitated Tailgating (Boot Parties) Members May Not be Very Knowledgeable of the Sport or Event They Are Attending

Friends Watch Friend or Family Member Compete
May Have Limited Knowledge of Sport Important for Minor Sports and Events High School Sports Amateur Recreational Sports

Voyeurs Drawn by the Sex Appeal of the Sport or the Individual Athletes Skimpy Attire (Beach Volleyball) Attractive Participant (Maria Sharapova)

Overview of the Fan Market

Participation Market Focus on Players Rather than Spectators
Segmentation Still Important for Marketer Same Four Categories of Segmentation Criteria Can be Applied Demographics – Geographics Psychographics – Product-related Variables

Aggregate Participation Market
Excitement-Seeking Competitors Getaway Actives Fitness Driven Health-Conscious Sociables Unstressed and Unmotivated

Excitement-Seeking Competitors
Prone to Engage in Risky Activities Bungy Jumping, Extreme Sports Predominantly Male Relatively Young Generally Single

Getaway Actives Fun with Family and Friends Vacation Prone
Skiing, camping, hiking, golf Vacation Prone Social Motives Both Sexes

Fitness Driven Activities Requiring Strength and Stamina
Running, Aerobics, Martial Arts College Graduates Dominate this Group Predominantly Female

Health-Conscious Sociables
Activities that Foster Good Health Walking, Light Cardiovascular Exercise Older Participants Predominantly Female

Unstressed and Unmotivated
Prone to be Inactive Generally Older (Both Sexes) Few Activities Appeal to this Segment Little Marketers Can do to Induce Activity by Members of this Segment

Sport-Specific Segmentation
Applicable for Any Participation Activity Golf, Bowling, Poker, Skiing, Tennis, Hunting More Insight than with Segmentation of the Aggregate Participation Market Used to Identify Homogeneous Segments of Participants in a Specific Activity

Segmenting the Golfer Market
Different Levels of Playing Ability Different Motives for Playing Different Attitudes toward Practice Differing Frequency of Play

Five Segments of Golfers
Competitors Players Sociables Aspirers Casuals Recognizing Different Segments Allows Golf Marketers to Better Satisfy Their Various Groups of Customers

Closing Capsule “One-Size-Fits-All” Clothing Results in Consumers Wearing Clothes that Don’t Fit Developing One Marketing Mix For All Consumers Is Just as Ineffective Market Segmentation and the Resultant Differentiated Marketing Strategy Provide a Better Fit for Each Consumer

Closing Capsule Market Is Segmented Using Relevant Criteria
Target Markets Are Selected from the Array of Identifiable Market Segments A Corresponding Marketing Mix Is Developed for Each Selected Target Market

Closing Capsule Segmentation Is Appropriate for:
The Aggregate Fan Market The Fans of a Particular Spectator Sport The Aggregate Participation Market Participants of a Particular Activity Buyers of Sporting Goods, Apparel & Shoes Buyers of Sports-related products such as souvenirs, lessons, & sports magazines

Product Decisions in Sports Marketing
Chapter 14 Product Decisions in Sports Marketing McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Product First Variable in the Traditional Marketing Mix
Emphasis is now on the Product-Focused Domain Marketing of Sports Products Using Traditional Strategies

The Product Variable What the Marketer Is Attempting to Sell to Its Customers Products Can Be Tangible Goods or Intangible Services Good – Burton Snowboard Service – Lift Ticket for Whistler Ski Resort

Basic Product Concepts
Augmented Product – Basic Benefit Ancillary Components – Additional Benefits Total Product – The Augmented Product Combined with the Ancillary Components

Product Assortment Array of Products Offered by the Marketer
Periodic Assessment of the Assortment Maintain Status Quo Modify Existing Products in Assortment Product Extension Introduce New Products Product Deletion

Sports Products Access to Spectator Sports Participation Sports Sporting Goods, Apparel, Athletic Shoes, and Sports-Related Products (SASS)

Spectator Sports Live Audience Media-Based Audience TV Radio Internet
Mobile Technology

Spectator Sports Product
Product May Be Represented by: Access to an Event The Competition on the Field of Play

Participation Sports Organized Team Sports – Softball League
Informal Team Sports – Pickup Soccer Individual Sports – Tennis, Jogging Other Leisure Activities – Fishing, Poker

Key Reasons for Participation
Personal Improvement Appreciation of the Sport Social Interaction

SASS Sporting Goods – Spalding Basketball
Apparel – Canterbury Rugby Shirt Athletic Shoes – Nike Air Jordans Sports-Related Products – Golf Lesson

Selling Sports Products
Two Domains of the Sports Marketing Environment Matrix Traditional Strategies – Product-Focused Sponsorship Based – Sports Dominant

Strategic Initiatives – the Core Product for Spectator Sports
The Core Product Is the Game Itself – Whatever Takes Place on the Field of Play, Including the Manner in Which It Is Conducted, the Style and Strategy Employed, and the Interpretation of Understood Laws, Rules, Regulations, and Historical Precedents

Modification of the Core Product
Done to Increase Appeal to Fans Speed the Pace of Play Increase Scoring Enhance Competition Typical Core Modifications: Changes in the Rules Changes in Rules Enforcement by Officials

Examples of Changes to Core Product
NASCAR – Race for the Cup NHL – Sudden Death and Shootout NFL – Clock Stoppage MLB – Using Instant Replay for Some Calls

Guidelines for Changes to the Core Product
Should Have Positive Economic Consequences Increased Attendance Larger Media-Based Audiences

Should Not be Made on the Basis of Implications for the Media Often Are Changed for Media, but Need to be Positioned as Advantages for the Fans NFL Changed Clock Stoppage Rules, in Part, to Speed Up the Game to Complete it in the Three Hour Window Provided by the TV Networks

Tradition Is a Major Consideration in Changing a Sport’s Core Product New Leagues Often Use Rules Changes as a Way of Differentiating Their Product Any Changes to the Core Product Will Be Disdained by Many of the Sport’s Fans

Core Changes Are Often Based Upon the Emergence of Competition and Its Impact on the Status Quo When New Rules for New Competitions Are Embraced, the Original Product May Be Modified to Suit Fan Preferences NBA Adopted the ABA’s 3-Point Shot Rule NFL Adopted the USFL’s 2-Point Conversion

Core Alterations Will Not Overcome Poor Quality Poor Products Will Not Sell XFL Was Viewed as Poorly Played Football; Failed in Less Than 2 Seasons Despite Innovative Changes to the Core Product

Instead of Changing the Core Product, Consider Changes to the Peripheral Product The Peripheral Product Represents the Elements Surrounding the Game or Event Over Which the Organization Can Exercise a Reasonable Level of Control

Peripheral Product Alternative Entertainment at Venue
Carousels, Post-Event Concert or Fireworks Incorporation of Technology WiFi, Virtual Technology on Broadcast Premiums Giveaways such as bobblehead dolls, caps

Participation Sports Two Primary Marketing Tasks
Attracting New Participants Inducing Current Participants to Increase the Frequency with which They Choose to Participate

Outcomes from Increased Participation
Impacts Usage for Participation Facilities Golf Courses; Health Clubs, Tennis Courts Impacts Demand for Sporting Goods, etc. Golf Balls, Apparel, Tennis Shoes Impacts Demand for Spectator Sports Bowlers are more Likely to be Bowling Fans

Examples of Target Marketing in the Participation Market
Women Golfers Kids and 10-Pin Bowling Golf Tee Areas Based on Skill Levels NFL’s Olive Ball in China Rugby and Cricket in the USA

Target Marketing in the Participation Market

SASS Sporting Goods Apparel Athletic Shoes Sports-Related Products

Sporting Goods New Target Markets Require Different Sporting Goods
Equipment for Female Softball Players New Participation Sports and Activities Emerge or Are Introduced in New Geographic Markets American Football in China

Sporting Goods New Spectator Sports Influence Demand for Equipment for New Participants NFL in Europe Modifications and Improvements to Existing Sporting Goods Products Ski, Boot and Binding Designs that Enhance Both Performance and Safety

Apparel For Participation For Fashion
New Styles and Designs for Different Target Markets Updated Styles, Logos, and Colors

Apparel Demand is Influenced by:
New Professional Team Uniforms and Logos Endorsements by High-Profile Athletes Situational Influences such as Winning Team

Athletic Shoes No Longer Placed in a Single Overall Generic Category of “Tennis Shoes” Originally Based on Functionality Every Major Brand Endorsed by Athletes Function Important – i.e. Different Treads

Athletic Shoes (cont’d)
Part of Everyday Wardrobe Today Not Just for Athletic Endeavors More Emphasis on Styles, Fabrics, Colors and Brands

Sports-Related Products (Some Examples)
Souvenirs (Logo Merchandise) Media (Dedicated TV, Magazines, Web Site Access) Nonsports Products at Sports Venues (Food, Beverages, Programs, and Alternative Entertainment Options)

Closing Capsule Sports Marketing is not Just About Putting Fans in the Stadium Seats Spectator Sports is the Most Commonly Recognized Sports Product In Selling the Spectator Sports Product, Marketers Must Consider Both the Live and the Media-Based Audiences

Closing Capsule The Core Product Is Sometimes Altered in an Attempt to Sell the Sport Care Should be Taken When Modifying the Core Product Peripheral Products Can Play a Key Role in the Marketing of Spectator Sports

Closing Capsule Other Sports Products Are Important to Sports Marketers as They Seek to: Increase Participation Sell Apparel Sell Sporting Goods Sell Athletic Shoes Sell an Array of Sports-Related Products

Distribution Decisions and Facilities Management in Sports Marketing
Chapter 15 Distribution Decisions and Facilities Management in Sports Marketing McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Distribution (Place) Distribution Is the Second Variable of the Traditional Marketing Mix It Represents Decisions Regarding the Manner in Which Sports Products are Made Available to the Sports Consumer Spectator Sports Participation Sports SASS

Spectator Sports Live Audience – Those Spectators in Attendance at the Sports Venue Media-Based Audience – Those Who Witness the Event Via Some Electronic Medium Marketing Objective May Focus on Either or Both of the Two Types of Audiences

Spectator Sports – the Live Audience
Venue Issues Event Decisions Where Shall Special Events be Staged? In Which Cities Should Teams be Located? Stadium Decisions Is a New Facility Needed Where Should the Community’s New Stadium Be? Single-Purpose or Multipurpose Facility? How Many Fans Should the Facility Seat? Timing Decisions When Should a Special Event be Staged?

Ticket Issues (Ticket Distribution Strategy) Traditional Box Office Phone Orders Authorized Ticket Retailers and Brokers Internet Secondary Ticket Market

Unaffiliated Ticket Distribution Not Part of Marketer’s Own Strategy Unauthorized Resellers Scalpers (Touts) Who Speculate Internet Bring Buyer & Seller Together (i.e. eBay)

Spectator Sports – the Media-Based Audience
Television Free-to-Air (FTA) TV – Major Networks General Sports Networks – ESPN; Sky Sports Specific Sport Network – Golf Channel League Networks – MLB Network (Jan. 2009)

Television (Continued) Sports Tier – NFL Sunday Ticket on DirecTV Team-Dedicated Networks – YES Network College League-Dedicated Networks – Big 10 Pay-Per-View (PPV) – Boxing Match

Concerns About PPV Will Prime Events Move from Free-to-Air TV to a PPV Format Exclusively? Super Bowl; Olympics; World Cup of Soccer Australia’s Antisiphoning Law Assures FTA Availability of Key Events

Radio AM FM Satellite Sports Tiers

Internet Free-to-Air Radio Stations with Web Access Social Networks Audio Streaming Video Streaming

Mobile Communications Devices Cell Phones Emerging as a Key One-to-One Broadcast Medium PDAs iPods

Smart Watches Still a Novelty Movie Theaters (Cinemas) High definition video; Dolby 5.1 audio Gaining Favor

Market Development Strategies for a Spectator Sport
New Target Markets New Demographic Group X Games New Emphasis on Female Segment Broadened Geographic Coverage in Same Countries NHL into New Warm Weather North American Markets Super 14 Adding New Team in Western Australia New International Target Market Cricket in USA; Gridiron Football in China

Market Development Strategies
Global Competition Showcase Sport in New Locations NHL Players in Olympics World Baseball Classic NASCAR in Mexico NBA’s “Basketball Without Borders” Possible League Expansion (NBA in Europe?) NFL in London (Regular season – 2 USA teams)

Market Development Strategies
Global Media World Cup of Soccer 2010 Shown Live on TV in Many Markets Internet Streaming Makes Small or Emerging Markets Accessible Satellite Radio

Participation Sports Drop in Box 15.4 Here

SASS Sporting Goods, Apparel, Athletic Shoes, and Sports-Related Products General Retailing Principles Provide the Framework for the Distribution of SASS

SASS Key Question Concerns the Scope of Distribution in a Given Geographic Area Intensive Distribution Selective Distribution Exclusive Distribution

SASS Role of Nonstore Retailing Direct Response Marketing (DRM)

Sports-Related Products
Sold at the Venue Optimal Number of Service Outlets Service in Seating Area

Facilities Management
Complexity Exemplified by Looking at the Array of Activities Schedules for an Arena Drop in Box 15.5 Here

Tasks Associated with Facilities Management
Usage Scheduling Primary Tenant Lease Terms Rental Policy/Rate Determination for Secondary Tenant(s)

Staff Selection and Training Staff Scheduling Box Office Management

Maintenance Levels and Budgeting Risk Management Security

Traffic Control and On-Site Parking Media Facilities Negotiation of Concession and Service Contracts

Vending Considerations General Marketing Sponsorship Compliance

Closing Capsule “If you build it, he will come”
That Popular Line from the Movie Field of Dreams Does not Truly Explain Most Sports Marketing Efforts An Effective System Must be Implemented in an Effort to Reach Each Target Market

Closing Capsule Spectator Sports Live Audience Media-Based Audience
Venue Issues (i.e. Capacity) Ticket Issues (i.e. Use of Internet) Media-Based Audience A Broad Array of Options

Closing Capsule Market Development for Spectator Sports
Effort to Grow the Market by Reaching New Target Markets Live and Media-Based Efforts

Closing Capsule Technology has changed the Landscape for Distribution of the Sports Product There Must Be an Awareness of the Opportunities Presented by the Emergence of the Legal Secondary Ticket Market

Closing Capsule Participation Sports SASS
Different Types of Facilities Marketers Need to Balance Supply & Demand SASS Driven by General Retailing Principles

Closing Capsule An Important Issue Related to Distribution Involves the Management of a Sports Facility There is an array of activities and decisions that comprise the job of a facility manager Facilities management offers a meaningful career opportunity for the aspiring sports marketing professional

Developing a Promotional Strategy for the Marketing of Sports Products
Chapter 16 Developing a Promotional Strategy for the Marketing of Sports Products McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Promotion The Third Variable of the Traditional Marketing Mix
An Effort to Communicate with One or More of the Organization’s Target Markets

Promotional Mix Has Historically Incorporated Four Promotional Tools
Advertising Personal Selling Sales Promotion Public Relations (Publicity)

Additions to the Promotional Mix
Though Not Everyone Agrees: Two Tools Have Been Associated with Those of the Traditional Promotional Mix: Sponsorship Direct Response Marketing (DRM)

Integrated Marketing Communications (IMC) Plan
New Terminology Encompasses All Promotional Tools Stresses That All Promotional Tools Used in the Development of the Organization’s Promotional Efforts Must Work in Harmony

The IMC Plan Consistency Synergy
Must Support the Product, Distribution, and Pricing Strategies Must be Appropriate for the Target Market

The Communications Process

The AIDA Model for Effective Promotion
Attention Interest Desire Action

Advertising Paid, Nonpersonal Form of Communication that is Generally Disseminated via One or More of the Mass Media Mass Media Include: TV Radio Magazines Newspapers Others

Advertising Media and Vehicles
A Medium Is the Broad Mechanism for Conveyance of the Message Once a Medium Is Selected, the Marketer Must Still Select Specific Vehicles A Vehicle Is a Specific Option within Each Medium

Advertising Media and Vehicles
Medium: Magazines Vehicles: Cosmopolitan TV Guide People

Personal Selling Paid Form of Direct Interaction between a Selling Entity and a Prospective Buyer Interactive One-to-One Marketing Message Can be Adapted as Needed Persuasive Process Designed to Encourage Action on the Part of the Prospective Buyer

Sales Promotion Tools Often Used as Direct Inducements to Encourage a Particular Response on the Part of the Prospective Buyer Examples: Free Samples Discount Coupons Specialty Advertising Contests

Public Relations (PR) Nonpersonal Form of Communication Designed to Influence Attitudes and Opinions of Various Groups of Stakeholders Designed to Generate Positive Publicity Often Used to Counter Negative Publicity

Sponsorship Relationship between a Marketer and a Property that Allows the Marketer Access to the Exploitable Commercial Potential Associated with the Sponsored Property In These Cases, the Sports Property is the Sponsor, Not the Sponsee

Sponsorship by Sports Marketers
Causes – Charities, Disaster Relief, Health Grass Roots Events – Museum Exhibits, Fairs, Local Festivals Special Cases of Sponsorship Venue Naming Rights Endorsements Licensing

Direct Response Marketing (DRM)
Paid Form of Mass Communications Effort to Communicate with the Target Audience in a Manner Such That the Receivers Can Immediately Initiate Action Upon Receiving the Message Internet, Infomercials, Direct Mail

Advertising Applications
Spectator Sports – TV Ad for Next Home Game for Local Minor League Team Participation Sport – Newspaper Ad Seeking Members for a New Bowling League SASS – Magazine Ad for Nike Golf Balls

Personal Selling Applications
Spectator Sports – Sell Luxury Suites at Major Sports Venue Participation Sports – Convert Trial Member of a Health Club into a Regular Member SASS – Fitting of Custom Golf Clubs

Sales Promotion Applications
Spectator Sports – 2 for 1 Discount Coupon for the local MLB Team Participation Sports – Free Trial Membership at a Tennis Club SASS – PGA Merchandise Show

Public Relations Applications
Spectator Sports – Press Release Announcing Signing of New Star Player Participation Sports – Press Release Seeking Runners for a Charity Event SASS – Nike Press Release Explaining Often Criticized Labor Practices Abroad

Sales Promotion Drop in Figure 16.3 Here

Sponsorship Applications
Spectator Sports – NFL’s Sponsorship of “Tackling Men’s Health” CRM Program Participation Sports – NHL Licensed Ice Skating Rinks SASS – Reebok Stadium (Soccer Venue); Tiger Woods’ Endorsement of Nike

Sponsorship by a Sports Entity
Drop Figure 16.4 in Here

Direct Response Marketing (DRM) Applications
Spectator Sports – DVD Sent to Known Buyers of Tickets to a NASCAR Event Participation Sports – Direct Mail Piece for Entry into Hoinke Bowling Tournament SASS – Infomercial Reaching Prospective Purchasers of the Total Gym Exercise Equipment (Order by Phone or WWW)

DRM – New York Yankees Drop in Figure 16.5 Here

Emerging Tool: Product Placement

Brand Equity Value Associated with a Specific Brand
High Levels of Brand Recognition Consumers Associate Quality with Brand Provides Differential Advantage that Creates Brand Preference or Insistence

Brand Equity Opportunities for Brand Extension Involving Other Sports Products: NBA – WNBA NFL – NFL Europe ESPN – ESPN Golf School Fox Sports – Fox Soccer Channel NHL – NHL Ice Skating Rinks

Brand Equity Opportunities for Brand Extension Involving Nonsports Products: Fox Sports – Sky Box Fun Food & Spirits ESPN – ESPN SportsZone

Brand Extension Based on Brand Equity
Drop Figure 16.6 in Here

Cross-Promotion Joint (Collaborative) Marketing Effort of Two or More Marketing Entities May Be Common Ownership or Control Pittsburgh Steelers & Kenny Chesney Concert May Be Separate Entities ESPN Golf School Involves Golf Magazine

Effective Promotions – the NBA

Closing Capsule Drop in Box 16.1 Here

Closing Capsule Sports Marketers Must Coordinate the Components of Their IMC Plan in a Manner that the Components Are Consistent and Support Each Other An Effective IMC Plan Does Not Require Initiatives in Each of the Six Categories

Closing Capsule Effective Promotion Helps Develop a Higher Level of Brand Equity Brand Equity Creates Opportunities to Collaborate in Effective Cross-Promotions Not Only Must Components of IMC be Consistent, the IMC Must Support the Remainder of the Marketing Mix

Closing Capsule Examination of the Basic Elements of Marketing Strategy Is Almost Complete Target Market Marketing Mix Product Distribution (Place) Promotion (IMC Plan) Price

Price What the Buyer Gives Up in the Exchange Process
The Fourth and Final Variable of the Traditional Marketing Mix

Elasticity Elastic Demand – Market Exhibits Sensitivity to Changes in Price Characteristic of Most Products When Beef Prices Rise, Consumers Reduce Expenditures on Beef and Purchase More Substitute Products (Such as Chicken or Pork)

Inelasticity Inelastic Demand – Market Is Less Sensitive to Pricing; Purchase Product at Higher Prices Few (or no) Substitutes – Gasoline Buyer Not Willing to Forgo Purchase - Textbook Buyer Not Able to Forgo Purchase - Medicine

Factors That Influence Price

Situational Influences
Unusual, Often Short Term Influences, that Impact Consumer Purchase Decisions Team Is Winning Move to a New Stadium Presence of a Visiting Star Player

Costs In Spectator Sports, this Generally Relates to the Team’s Payroll or Appearance Fees Paid to Individual Athletes MLB’s New York Yankees Payroll in Was $209,081,579 Appearance Fee of Some $2 Million for Tiger Woods to Play in the New Zealand Open Resulted in Major Increase in Ticket Prices

Competition – Cost of Alternatives for Consumer
Baseball versus Football (MLB v. NFL) Baseball versus a Motion Picture Gold’s Gym versus Curves Nike versus adidas Athletic Shoes

Supply and Demand Surplus Drives Prices Down; Shortage Is a Catalyst for Higher Prices Teams that Sell Out – Lakers, Patriots, Maple Leafs and Cubs – Have Higher Ticket Prices Teams Struggling to Fill the Stands Often Resort to Promotional Pricing

Marketing Objectives Market Share Objectives Prestige and Image
Seeking Higher Market Share, Top Flight Golf Balls Are Sold at Prices Much Lower than Those of the Premium Brands Such as Titleist, Callaway, and Nike

Legal Considerations Taxes Added to Cost of Products Team “Scalping”
MLB’s Chicago Cubs Taken to Court Over Team’s Resale of Desirable Tickets at Highly Inflated Prices

Consumer Perceptions – “Perception Is Reality”
What Consumers Think about the Product Influences Their Perception of Value Influences How Much They Will Pay Thus Influencing Price that Can Be Charged Titleist Golf Balls Command Premium Does the typical golfer know why Titleist is superior?

Marketing Mix Consistency
Price Needs to Work in Harmony with the Other Elements of the Marketing Mix Price Also Needs to Be Consistent with the Target Market Many Marketers of Sports Products Offer Alternatives Featuring Different Prices

General Implementation Strategies
Cost-Plus Markup Promotional Bidding Yield Management Target Return

Pricing Applications: Spectator Sports
Most Commonly Criticized Component of the Strategies Employed by the Marketers of Spectator Sports Fan Cost Index – Average Ticket Price NFL $72.20 for Most Recent Season NBA $48.83 NHL $49.66 MLB $25.43

Fan Cost Index Cost for a family of four to attend a game in each city for each of the four major North American Sports Leagues. Includes: 4 average tickets (2 adults & 2 kids) 4 small soft drinks 2 small beers 4 hot dogs 2 programs Parking 2 adult-sized souvenir caps

Fan Cost Index (2008 Season)
Average for the NFL $396.36 Average for NFL’s New England Patriots $596.25

Season Ticket Partial Season Ticket Price Tiering Variable Pricing

Value Pricing Promotional Pricing Discount Pricing Bundling Cross-Promotion Discounting

Controversial Pricing Applications: Spectator Sports
Qualifying Payment PSL Donation to University Program Bidding Secondary Ticket Market

Pricing Applications – MLB’s Chicago Cubs
NOTE: Price Tiers Variable Pricing (Platinum, Gold, Silver, Bronze) Bidding (CBOE Seats in Red) Value Pricing (Bronze Games) Other identifiable strategies include season tickets, partial season tickets, bundling, bidding, cross-promotion and the secondary ticket market

Pricing Applications: Participation Sports
Supply and Demand Based Pricing Level of Service Variable Pricing Individual Considerations

Pricing Applications: SASS
Traditional Retailing Principles Supply and Demand Value Added through Licensing Value Added through Celebrity Endorsement

Pricing Applications: SASS
Markup Based on COGS Evident that Prices for SASS Are Influenced by the Set of Factors Discussed for Spectator Sports

Closing Capsule Many Factors Influence Price Drop in Box 17.1 Here

Closing Capsule Pricing Policies Are Commonly Criticized
Tickets for New England Patriots NFL Game Greens Fees at Pebble Beach Nike Shoes Endorsed by LeBron James A Beer at a Sports Stadium Any Bargains in that List? Emergence of Secondary Ticket Market

Closing Capsule Marketers in Each Category of Sports Products Recognize the Presence of Different Market Segments Prices Vary Significantly Depending on Which Segment Is Being Targeted

Relationship Marketing in the Business of Sports
Chapter 18 Relationship Marketing in the Business of Sports McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Two Broad Marketing Objectives
Attracting New Customers Retaining Existing Customers Customer Acquisition Can Be Costly Customer Retention Deemed Superior

Customer Retention Basic Premise of Relationship Marketing
Seeking Long-Term Association Cost of Customer Acquisition Estimated to be 6 Times that of the Cost of Taking the Steps Required to Keep an Existing Customer Satisfied

Relationship Marketing
An Integrated Effort to Identify, Maintain, and Build a Network with Individual Consumers and to Continuously Strengthen the Network for the Mutual Benefit of Both Parties through Interactive, Individualized and Value-Added Contracts Over a Long Period of Time Focus on Lifetime Customer Value (LCV)

Benefits for the Sports Marketer
Customer Loyalty Facilitates Resolution of Complaints Sense of Belonging – Not Just a Buyer

Benefits for the Marketer of a Spectator Sports Product

Six Components of Relationship Marketing
Mutually Beneficial Win-Win Partnership; Buyer & Seller Benefit Trust Feeling that the Other Party Will be Honest Empathy Understand Each Other’s Situation

Six Components of Relationship Marketing
Communications Interactive and Responsive Bonding Strong Unified Commitment Viewed by the Participants as a Partnership Continuity Seek to Maintain a Long-Term Association

Fan Bonding as Measured by Relative Relationship Strength
The Core Relationship Usage Length of Relationship Intensity of the Commitment Frequency of Contact Fan Identification Emotional Involvement Personal Commitment Loyalty

Fan Bonding as Measured by Relative Relationship Strength
The Expanded Relationship Responsiveness to Product Merchandising Purchase of logo Merchandise Propensity to Engage in Word-of-Mouth Advertising Talk About Recent Results Talk About Future Competitions Talk About Acquisition of New Players

Twelve Applications of Relationship Marketing in Sports

Clubs (1) Spectator Sports – Fan Club
New Zealand Cricket Fraternity Participation Sports – Club for Players PGA Tour Partners Club SASS – Club for Users of Particular Brand Storm Chasers (Storm Bowling Balls)

Serial Marketing (2) Spectator Sports – Giveaways
Require Regular Attendance for Complete Set Drop in Figure 18.2 Here

Frequency Incentives (3)
Spectator Sports – Frequent Attendance English Rugby Football Union Smart Card Participation Sports – Frequent Play 10-Pin Bowling: Play 6 Games; Get 1 Free

Affinity Marketing Programs (4)
Spectator Sports – Credit Card That Benefits Both the Sports Property and the Fan MBNA NASCAR RacePoints Visa Credit Card Participation Sports – Lifestyle-Based Credit Card Ducks Unlimited MasterCard Credit Card SASS – Credit Card User Accrues “Points” Bass Pro Shops Outdoor Rewards Visa Credit Card

Affinity Marketing Programs

Routine Periodic Communications (One-Way) (5)
Traditional Print Media or Spectator Sports – Contacting Fans Newsletter, Schedule, Promotions Participation Sports – Contacting Participants Asking Marathon Runners to Register Online SASS – Magazines Callaway Golf Magazine

Callaway Golf – Communications with Known Buyers

Interactive Opportunities (6)
Spectator Sports – Internet Chat Room Dialog between Fans and Player Participation Sports – Real Time Results Boston Marathon Participant Tracking SASS – Information and e-products adidas.com downloads and store locator

Gifts (7) Spectator Sports – Recognize Relationship
NFL Team’s Holiday Ornament for Season Ticket Buyers Participation Sports – Encourage Return Golf Tournament that Provides Gift Pack for Players SASS – Reward for Past Use Bowling Ball Company that Gives Special-Edition Ball to Recognize Perfect Game by Bowler Using Its Brand

Fan Appreciation Activities (8)
Spectator Sport Based Player Clinics Autograph Sessions Celebrations of Team Achievements

Contests (9) Spectator Sports – Win Tickets Participation Sports –
Future Game or Cross-Marketed Event Participation Sports – Register On-Line; Chance to Waive Fees SASS – Win Products Titleist.com: Win Year’s Supply of Golf Balls Contests involve need for provision of information that can be used to build the marketer’s database.

Logo Merchandise (10) Spectator Sports – Peripheral Product
Premiums that Incorporate Team Logo Participation Sports – Reward Performance Bowler Receives Logo Jacket for 300 Game SASS – Support Core Product Storm Bowling Balls Sell Shirts, Towels, etc.

Direct Access/ Personal Representative (11)
Spectator Sports – Ticket Representative Assigned to Handle Season Ticket Accounts Addresses Exchanges Resolves Complaints Addresses Renewal Provides Constant Point of Contact Over Time

Recognition (12) Spectator Sports – PA Announcement
Birthday of a Season Ticket Holder Participation Sports – Acknowledgement Tournament Web Site Identifies Bowlers Who Attain a Noteworthy Mark in Continuous Participation SASS – Identification on Website Recognize Achievers Who Used the Marketer’s Product in a Noteworthy Performance

Example in Spectator Sports: NASCAR
Apartment Building by Lowe’s Speedway NASCAR Thunder Store NASCAR Café NASCAR Amusement Centers NASCAR Simulators Daytona USA Theme Park Pit Stop Challenge Simulate Role of Race Announcer

Example in SASS: Reebok
Focus on Female Runner Target Market Focus on Smaller Retailers Emphasize Running Roots in Promotions Sponsor US Olympic Track & Field Team Grass Roots Sponsor of Running Events Newsletter Sent to Known Runners Seek Input from Retailers

Evaluating the Effectiveness of a Relationship Marketing Program
Track Sales Monitor Complaints Customer Satisfaction Surveys

Evaluating the Effectiveness of a Relationship Marketing Program
Monitor Internet Chat Rooms and Bulletin Boards (Buzz Manager) Calculate Click-Through Rate (CTR) for Internet-Based Relationship Marketing Initiatives Customer Relationship Management (CRM) Software (data mining)

Recovery Marketing When Things Go Bad, How Do We Get the Customers to Come Back? Formula 1 Racing in USA After 14 of the 20 Cars Entered Refused to Race because of Safety Concerns about Tires NHL After a Cancelled Season

Five Steps for Recovery Marketing

Recovery Marketing by the NHL
Lost Season Due to CBA Issues Drop in Table 18.1 Here

Closing Capsule Relationship Marketing Is All About Customer Retention
Key Issues Are Customer Satisfaction and Problem Resolution Relationship Marketing Encompasses All Elements of a Marketing Strategy

Closing Capsule Win-Win Environment
Focus Is on Lifetime Customer Value – In Other Words, a Long-Term Relationship Despite Best Efforts, Things Go Wrong Need to Understand Recovery Marketing

Technology – The Internet and Beyond
Technology Has Impacted Virtually Every Aspect of Every Organization Sport Is No Different in this Regard

Foundation for the Internet: Five Key Questions
Why? Who? What? Where? How?

Why? Will It Enhance Marketer’s Image?
Will It Augment Other Strategic Initiatives? Will It Result in Increased Demand?

Who? Who Will Utilize the Site? Is It Open to Everyone?
Will It Target Adults or Kids – or Both? What Other Web Sites Will be Linked to It?

What? What Is the Site’s Core Purpose?
How Will It Impact the Target Market?

Where? Where Will Users Gain Access to the Site?
Where Will Site be Developed and Maintained?

How? How Will Users Receive the Information?
How Will the Site be Developed? How Will the Site be Evaluated?

Types of Sites in Sports Marketing

Content Sites Large Information Base
Often Extensions of Traditional Media General Publication: New York Times Sports Oriented Publication: Sporting News General Broadcast Media: ABC TV Sports Broadcast Media: ESPN

Team or League Sites Also Includes Sports Organization Sites
Wide Range of Organizations from Local Recreational Bowling League, to an NHL Team, to the NBA, to FIFA. Information on Players, Awards, Results, Schedules, and Merchandise Sales, etc.

Commerce Sites Virtual Storefront
Often Sell Officially Licensed Merchandise

Gambling Sites Not Generally Embraced as Sports Sites High Growth Rate
Provide Information as Well as Wagering Generally Require Some Sort of “Membership” or Registration

Revenue Models – Content Sites
Online Advertising or Sponsorship Banner Ads Ad Badges Subscription Fees Subscribers Can Drill Deeper for Content E-Commerce Products Available for Purchase

Advertising Fees Bases for Rates Charged to Advertisers CPM
Cost Per 1000 Visitors to Web Site Click-through Fee Charged for Each Visitor Who “Clicks through” to Link to the Advertiser’s Web Site Flat Rate Fixed Sum for the Advertiser

Revenue Models – Team & League Sites
Online Advertising or Sponsorship Subscription Fees Fee-Based Access for Audio & Video E-Commerce May add ticket sales to list or include within E-Commerce Category

Revenue Models – Commerce Sites
Sales Revenue Commissions Online Advertising or Sponsorship

Revenue Models – Gambling Sites
Wagers Subscriptions Online Advertising

Communications Objectives for Sports Marketing Web Sites

Web-Based Objectives Drop in Box 19.3 Here

Provide Information Information 24/7 No Geographic Limitations
Can Drill Deeper than Traditional Media

Provide Information Drop in Table 19.2 Here

Information-Based Web Sites

Facilitate Distribution
Virtual Box Office Ticket Sales and Exchanges for Season Ticket Holders Audio and Video Streaming Live Action Replays of Past Action (Video-on-Demand)

Enhance Customer Relationship Management
One-Way Communication Interactive Communication One-to-One Marketing (Customization) Domain

Relationship Marketing: Australia’s National Basketball League

Facilitate Operations
Marketing Research – Data Collection Account Management – Order Extra Tickets Database Management – Contest Information Human Resources Outreach – Job Postings Interoffice Communications – Among Offices Interactive Communications – , Webcams, meetings Participant Registration – Boston Marathon

Buzz Manager An Interesting New Service that Monitors Internet Chatter about Your Organization Positive, Neutral, Negative Buzz Score

Technology Beyond the Internet
Mobile Technology Customized Content Information Service Audio and Video Highlights Tickets for Access May be Stored & Displayed Technology Integration – Virtual Imaging Home Plate Application in MLB First Down Marker in Football Cricket – Leg-before-Wicket Call by Umpire

Electronic Funds Transfer Technology Powerpay (RFID Technology) Smart Cards Similar to EFT Similar to Credit Card Value Loaded on Card Tickets on Card (Contactless Entry)

High Definition TV Improved Picture Quality Quicker Refresh Rates for Better Video Interactive TV Multiple Feeds from Which Viewer Can Select Trivia Games Information Available – Scores, Statistics Instant Replay Technology

WiFi Capabilities Wireless Access Fans, Media Who Have Laptop Computers Some Premium Seats May Include Monitors Global Positioning Systems Golf Courses – Information for Players Participants – Runners, Cross Country Skiers Boston Marathon Facilitated Tracking of Runners

Closing Capsule Technology Has Had a Dramatic Impact on Marketers in Every Industry The Internet and the WWW Have Ushered in Dramatic Changes for Sports Marketers Other Technology Beyond the WWW Has also Played a Role

Closing Capsule Virtually Every Sports Marketer Today Has Its Own Web Site There Are Content Sites, Team & League Sites, Commerce Sites, and Gambling Sites

Closing Capsule Web Sites Can Provide a Revenue Stream
Advertising and Sponsorship Subscription Fees E-Commerce Other Sources of Revenue, Depending on the Type of Web Site, Are Available

Closing Capsule The Most Common Applications for a Sports Marketer’s Web Site Are: Provide Information Facilitate Distribution Enhance Customer Relationships Facilitate Routine Operations

Closing Capsule Other Technology Beyond Internet: Mobile Technology
Virtual Imaging EFT & Smart Cards Interactive & High Definition TV Use of Instant Replay for Officials’ Calls WiFi GPS

Controversy Marketers Face Continuous Scrutiny
For Sports Marketers, Criticism Emanates from Many Different Groups Consumers Consumer Advocacy Groups Community Residents Fans Media Government

“Do The Right Thing” Ethics Is Subjective
Any Decision May Evoke Controversy Critics Are Vocal Issues for Both the Marketing of Sports Products and Marketing Through Sports

Controversial Issues in Sports Marketing
Target Market Decisions Marketing Mix Decisions Product Distribution Pricing Promotion Broad-Based Controversies

Target Market Decisions
Exclusionary Membership Policies Private Clubs Excluding Women or Minorities Protests Regarding Masters Golf Tournament Targeting Children Expensive Products Creating Unrealistic Expectations

Product Decisions Oversaturation of Spectator Sports Gimmick Sports
More Teams, Longer Seasons, More Sports More Post-Season Participants More Media-Based Access to Sports Gimmick Sports Contrived Competitions Athletes Outside of Their Sport Focus on Sexuality Rather than Sport Non-Athlete Participation

Product Decisions Appearance Money TV’s Role in Spectator Sports
May Cause Ticket Prices to Go Up May Not Be a Good Investment TV’s Role in Spectator Sports Media Time-Outs Event Scheduling For Flexible Scheduling, note NFL’s decision to use “Flexible Scheduling” in determining it’s Sunday night broadcast.

Product Decisions Changing the Spectator Sport Core Product
Traditionalists Will Resist Did the Change Make the Game Better Player Mobility Often Cited as the “Business Side” of Sports Players Deemed “Greedy” – Moving for Money Owners Deemed “Cheap” – Money over Fans

Product Decisions Unwholesome Nonsports Products Sold Though a Sports Platform When Appropriate Segment Is Targeted When Non-Targeted Segments Are Reached Examples of Unwholesome Products Alcoholic Beverages (Miller Lite Beer and the NFL) Tobacco Products (Marlboro and Indy Car) Products of a Sexual Nature (Viagra and MLB)

Distribution Decisions
Franchise Mobility Loyal Fans Even When Overall Support Is Low Team Moves because of Financial Incentives Drop in Table 20.1 Here

Taxpayer-Funded Venues Billionaire Owners with Millionaire Players New Stadium May be Required to Keep Team Taxpayers “Held Hostage” Better Ways to Spend Tax Money Control Of Streaming Video and Podcasts Not Allowing 3rd Party Distribution

Pricing Decisions Ticket Prices PSLs
Fan Cost Index Documents High Cost Focus on Corporate Ticket Buyers Exorbitant Prices for Special Events PSLs Personal Seat License Permanent Seat License University Contribution Seeing PSLs Used at High Schools

Examples of University PSLs

Pricing Decisions Pay-per-View (PPV) Team “Scalping” of Tickets
When Event Moves from Free to PPV Format Will Mainstream Events Go to PPV Format? Team “Scalping” of Tickets Often Illegal for Individuals to Sell Tickets at Prices Exceeding Face Value Some Teams have “Premium Ticket” Unit Court Cases Ruled in Favor of the Teams Secondary Ticket Market Being Used

Pricing Decisions High Prices for Participation Sports, Athletic Shoes, and Other Sports-Related Products Greens Fees Ice Time Shoes Endorsed by Popular Players Food & Beverages at Pro Sport Venue

Promotion Decisions Overcommercialization Naming Rights
Proliferation of Event Sponsors – Olympics Cluttered Sports Environment – NASCAR Perception of Emphasis on Bottom Line Naming Rights Venue Names Often Ignored Title and Presenting Sponsors Cost – Is It a Sound Investment

Promotion Decisions Signage Issues Athlete Endorsements
Too Many According to Fans Too Few Say Many Sponsors Clean Stadium Concerns Athlete Endorsements Create Unrealistic Expectations Among Kids Create Demand that Parent May Rebuff Believed to Exert Upward Pressure on Prices

Promotion Decisions Virtual Advertising
Ability to Manipulate Environment Ability to Block Out Actual Signage Opportunities for Ambush Marketers May Distract Viewer from the Action

Broad-Based Controversies
Overstated Estimates of Economic Value Estimate Used as Rationale for Investment Governments Invest Millions on this Basis Critics Doubt Investments Will be Recouped Critics Argue Much of the Money Would be Spent in the Area Even without the Team, Stadium, or Event

Broad-Based Controversies
Costs Are Underestimated Drop in Table 20.4 Here

Disregard of Human Rights
Outsourced Manufacturing For Example, Athletic Shoes in Vietnam “Emergence of “Hate Nike” Web Sites Led to New Policies at Some Universities Competition Tours Teams Reluctant to Compete in Countries Zimbabwe China University policies regarding sponsorship/licensing in conjunction with university - Issues concern living wage, work conditions, child labor, sexual harassment.

Gender Equity Title IX Led to More Female Participants
Has Resulted in Cuts to Men’s Programs Most Universities Have Compliance Officer

Handling of Performance Enhancing Drugs (PED)
Steroids and Human Growth Hormones Rules Against Use, But Penalties Have Been Relatively Mild Have Leagues Condoned Use for Economic Reasons? Recent Government Intervention

Integrity of Sports Criminal Charges Civil Infractions Cheating
Sexual Assault, Marijuana Civil Infractions Reckless Driving, DUI Cheating Spying, Corked Bats, Foreign Substances

Integrity of Sports Judging Transgressions
Olympic boxing, Olympic ice skating Selection of Location for Special Events Salt Lake City Olympics Gambling NBA referee, Pete Rose

Security A Concern versus a Criticism Fan Safety Terrorism
Tremendous Financial Burden on Organizers

Closing Capsule Sports Marketers Have Many Critics
Questions Arise Regarding Each Element of an Organization’s Marketing Strategy There Are Also Several Broad-Based Controversies Surrounding the Sports Marketing Environment

Closing Capsule We Market Through Sports We Market Sports Products
It May Sound Easy, But It’s Not As a Business, There Is A Focus on the Bottom Line – And the Industry Has Critics

Introduction to Sports Marketing

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