Chapter 4.2

1. Chapter 4.2 Sponsorship

2. Sponsor • Sponsor-A person, organization or business that gives money or donates products and services to another person, org, or event in exchange for public recognition. • Reasons for Sponsorship • To increase sales • To compete in a saturated area • To be identified w/ an event

3. Sponsors Continued • To introduce a new product to a large audience • To earn goodwill of the audience • To show commitment to the community • Enter new markets • Enhance company’s image

4. Need for Profit • Sponsors monitor the value of their investments, and want a good return. • Return is the profit the sponsor earns from its support of an athlete or team. • Example…A vet clinic would like to see increase in patients due to sponsoring a team. • Businesses watch returns since costs can be HIGH!

5. Sponsorship in Niche Markets • Niche Marketing-involves researching a target market to determine the specific items a small group will buy. • Businesses must understand both the large target market AND the smaller niche market for each event they sponsor. • Common Niche Markets • Women and men in different age groups • 12-24, 25-34, 34-44 etc… • Different ethnic groups

6. Examples of Niche Markets • Auto Racing • #1 sport for fan loyalty, also most loyal fans to their sponsors • Value is added to the sponsors return when they are mentioned in a race. • Young men age 12-34 is one of the most sought after markets today. • Sponsors are trying very hard to attract this group through extreme sports

7. Continued • ESPN started the X Games in 1995 • Very pleased with their popularity • 250,000 teens attended in • Who are they going after? • Young market that doesn't enjoy sports like baseball and football. • Soft-drink makers, tech businesses, and clothing businesses are main sponsors

8. Can Anyone Sponsor Anything? • Sponsors come in all sizes and budgets. • Few businesses can afford to sponsor major league sports, but newer sports offer attractive opportunities for small businesses • Affinity Sports-Niche markets whose participants are as passionate about their sport as those of more traditional sports. • Bass fishing • Rope jumping

9. Loss of Sponsors • 20th Century saw a backlash against sponsors by tobacco and alcohol businesses. • Multistate Tobacco Settlement 1998 • Tobacco sponsorship is prohibited for concerts, events which participants are under 18, or for football, baseball, soccer, and hockey. • Tobacco sponsorship is limited to one event and one brand per year per business

10. Chapter 4.3-Promotion • Promotion-Publicizing or advertising a product, service, or event with the goal of selling it. • Purpose is to make the consumer want it • People MUST know about a product in order to buy it • Promotion leads to selling • Promotion serves both the buyer and seller of the promo

11. Promotion Targets • Attracting new markets and keeping old ones are equally important • Goal is to find new customers or persuade regulars to buy more • Promotion is a critical stage in winning new customers • Maintaining customer satisfaction, loyalty, and repeat business is also a goal of promotion

12. Promotion Objectives • Before spending a cent, a company must know what it wants to accomplish. • 1st…Target must be decided. Then research the five elements of market segmentation (demographics, psychographic, geographic, product usage, and benefits derived) • This is to make sure the product and market suit each other.

13. Next… • Company must decide on the message it wants to send. • Does it want to persuade to try a new product? • Inform customers about new features existing product? • Create new attitude about existing product? • Or just broaden awareness?

14. Finally… • Company must decide what it wants consumers to do. • Trying a new product, coming to certain store or event, or buying more of something they already buy.

15. Promotional Tools • Promotional Plan or Promotional Mix has 4 elements: • Personal Selling • Advertising • Publicity • Sales Promotion

16. Personal Selling • Personal Selling is an in-person, face-to-face communication between a seller and a customer. • Example…Vendor and business buyer. A rep for a sportswear manufacturer and manager of a college bookstore. • Retail store clerk and customer • Telemarketers

17. Personal Selling Cont.… • Advantages • Opportunity for seller to overcome any hesitation from the buyer • Seller can offer more info • Can compare with similar product • Or personal experiences w/ the product • Often human interaction will make the sale. • Even if the sale is not made, customers will return in the future if they are treated courteously.

18. Advertising • Advertising is paid communication between the product maker or seller and the audience. • Effective advertising • Clearly explain the benefits of a good product. • Even the best advertising wont bring customers back to a bad product. • Toy commercials during morning cartoons • Advertising can occur almost anywhere!

19. Publicity • Publicity is any free notice about a product, service, or event. • Articles in newspapers or magazines • “sound bites” on television or radio • Newspapers front page stories about Lance Armstrong’s victory over cancer • Promoted interest in the race • Free promotion not only to Armstrong but the race, other racers, and to bicycle related businesses who were quoted in the article.

20. Publicity Continued • Publicity also means just keeping your name, event, or organization in public view. • Press releases, • Speeches • Volunteer work • Donations other than sponsorships • Letters to the editor

21. Sales Promotion • Sales promotion is any action or communication that will encourage a consumer to buy a product. • Usually short term specials • Limited time memberships • Giveaways • Coupons • Items with company’s name on it • Free samples