Global Sport (& Event) Sponsorship

1. Global Sport (& Event) Sponsorship Robert Sparks and Shannon Jetté November 28, 2005 The University of British Columbia Vancouver, Canada

2. A question for you… • How have you learned what you know about drinking alcohol, such as when to drink, where, why, how much, and so forth? • To answer, probably need to think stage of life (stage of drinking experience): • When you first started (15-16 yrs) • Now In your youth… • Meaning of drinking shaped by: • Family • Peers (friends) • Direct experience • In media-intensive societies, we see that meanings and values connected with drinking are increasingly shaped by the mass media: television, movies, music/ videos, consumer brand advertising.

3. Background1 • Major international alcohol corporations are using sport and event sponsorship in increasingly multi-functional ways to gain competitive advantage in the emerging global market. • This shift invites us to assess the impacts of alcohol sponsorship and of alcohol control policies themselves in more global and fundamental terms. 1(Sparks, Dewhirst, Jette & Schweinbenz, 2005)

4. Multi-functional Uses of Sponsorship • Open doors politically (corporate “good citizen”) • Bridge cultural differences in the global-local market (invest in/capitalize on favorite local events and brands) • Develop strategic alliances (with suppliers, distributors, and other key groups) • Exploit under-developed markets (that will respond to the sponsorship techniques developed in mature markets) • Lock out competitors (to achieve a heterogeneous distribution of resources – “competitive advantage”)

5. Top 4 Global Breweries (2004) (sales)1 (volume)2 • Anheuser-Busch $14,934 3.81 • Heineken $12,666 2.95 • SABMiller $12,645 4.01 • InBev $11,598 4.85 1 US$ millions 2 billions of gallons Remarks by Patrick Stokes, CEO A-B “Stokes identified four priorities to stimulate growth: • improve the image and desirability of beer; • keep beer fun and social; • grow [increase] beer occasions; and • improve retail.” (Pas, 2005)

6. In beer sponsorship in particular… • We are seeing a growing sophistication and integration of sponsorship-linked marketing methods that follow these guidelines. • Some of this is originating from abroad; • Some domestically, in response to the changing communications and marketing environment. Organization of the Talk • Illustrate some of these developments in Latin America (particularly Brazil) • Policy issues • Some ideas for solutions

7. Brazil Schincariol Nova Schin AmBev (InBev) Antarctica Skol Argentina CCU (A-B licensing) Budweiser Columbia Bavaria (SABMiller) Cristal Aguila Recent LA examples….

8. Schincariol’s use of events… • In 2003, Schincariol launched Nova Schin with aggressive price positioning and strong ad support (R$180 million each year 2003, 2004, 2005) • Events: Culture (Folio at Carnaval de Salvador), surfing (Nova Schin Festival -WCT), F1 (Globo TV)

9. http://www.xtxe.com/xsx/surf/surfing/hobgood-claims-victory-in-brazil.shtmlhttp://www.xtxe.com/xsx/surf/surfing/hobgood-claims-victory-in-brazil.shtml Nova Schin Festival Brazil WCT http://surfingthemag.com/surfing-photo-video/surfing-photo-dept/110205a/index.html

10. Industry Self-Regulatory Code • Brazilian Council for Self Regulation in Advertising • 2000 • Recommended that ads for alcoholic drinks not be associated with athletes at major sporting fixtures • 2003 • Celebrities appearing in ads must not be drinking • Scenes, photos, illustrations… that represent consumption of alcohol are banned from ads

11. AmBev’s use of sport sponsorship and events • AmBev began sponsoring the Brazilian National Soccer team with Guaraná Antarctica in 2001 (US $10million/yr) • AmBev introduced Skol Beats in 2003 aimed at youth (5.2%). This has been supported by Skol-themed events marketing.

12. Guaraná Antarctica sponsorship of Brazil National Team - Confederação Brasiliera de Futebol http://www.guarana.dk/en

13. Brand: BOA Antarctica Brewery: Brahma (owned by AmBev, part of InBev)

14. Issue of brand extensions… • Using brand elements from an unregulated or socially acceptable product to help sell a regulated product or one that would raise concerns. • No apparent guidelines

15. Anheuser-Busch • A-B competed with Interbrew for AmBev in 2004 • Interbrew won • A-B lost distribution channel in Brazil, but is now using CCU partnership in Argentina to produce Budweiser, and Coca Cola to help distribute in Brazil. • A-B Sponsors River Plate, Argentina’s leading football team, and related properties.

16. River Plate (Argentina) F1 - BMW Williams

17. Bavaria (Columbia) • SABMiller (England) bought Grupo Empresarial Bavaria in 2005 for US$7.8 billion. • Two of Bavaria’s main brands are using sport imagery & sex in their marketing: • Cristal • Aguila From Bavaria website, linked to cristal brand http://www.cristal.com.pe/05_conectate/publicidad_impresos.asp

18. Industry Self-Regulatory Code • Brazilian Council for Self Regulation in Advertising • 2003 • Women in bikinis, etc., must only appear in ads that portray beaches and/or swimming pools

19. Issue of Sport Sponsorship • Functions as an implicit form of social marketing • Attributes socially desirable qualities to alcohol & tobacco products, ultimately to the actions of drinking and smoking themselves, not simply to brands • Youth have been found to be particularly vulnerable to these messages (Sparks,1999)

20. Does alcohol sponsorship affect consumption? Yes, but we need more research…. • Some longitudinal survey evidence that sponsorship increases consumption among youth: • Ellickson et al. (2005) exposure to beer concession stands at sports or music events predicated f of 15 year old drinking. • Evidence that consumption goes up in the context of major events such as Carnival and World Cup. • Examples of “time outs” where people engage in “legitimate deviance” of excessive drinking.

21. But the consumption question somewhat misses the point. What is the long term effect of these brand strategies? The increased marketing of youth-oriented alcohol sponsored events, in particular: • Insinuates beer and drinking into youth culture, but outside the context of family controls. • Provides parallels to Carnival and World Cup, but on a continuing, mass produced basis. • Sells drinking as a functional component of socializing, dating and having fun. (Stokes, CEO of A-B) • Normalizes association between masculinity, sport and beer: men as doers & drinkers, women as watchers & drinkers.

22. What to do? • Will need cross-national strategy • Framework Convention on Tobacco Control is good model. • In our experience with tobacco, other categories will step up: telecoms, transportation, .com’s, more. • They have been “locked out”

23. FCTC sponsorship-related clauses • Sponsorship: ‘any form of contribution to any event, activity or individual with the aim, effect or likely effect of promoting a tobacco product or tobacco use either directly or indirectly’ • Each ratifying country: • ‘in accordance with its constitution or constitutional principles, [shall] undertake a comprehensive ban of all tobacco advertising, promotion and sponsorship’ • [shall adopt and implement legislation] ‘providing for protection from exposure to tobacco smoke in indoor workplaces, public transport, indoor public places, and, as appropriate, other public places’

24. Issues in global markets (Kotler, 1986) • Legislation, regulations • Cultural differences • Performance expectations & standards • Local customs & knowledge • Networks & key contacts • Competitors (domestic & international)