Analyze Case 10 from the IE Textbook, Cross-Border Sponsorship

Form: Part I - Summary of Company and Situation Problem Identification

Part II - Analysis of Situation and Problem Alterative Solutions to Problem - at least 3

Part III - Recommended Solution and Why - pick from Alterative Solutions above Implementation of Solutioin - How, Timeline, Resources, etc. Long-Term Implications of your Recommended Solution 1.5 2.5 pages

Sports sponsorship gained prominence in the 1970s in the United States (U.S.). According to Benot Seguin, at the University of Ottawa, Canada, as television and radio licenses increased in the 1970s, competition between advertisers to attract consumers attention was fierce. 2 As originally coined by Tony Meenaghan in the International Journal of Advertising in 1991, sponsorship is defined as an investment in cash or kind, in an activity, person or event, in return for access to the exploitable commercial potential associated with that activity, person or event by the investor (sponsor). According to sports sponsorship expert, IEG, what originally began as a means to attract advertisers across the four major U.S. professional sports leagues and their teams is now an industry of over $2.46 billion (Exhibit 1).

Sponsorship Overview With the growth of sponsorships over the last few decades, some argue that sponsorships now should be considered part of the promotional mix along with publicity, public relations, sales promotions, personal selling, and advertising. When the number of television and radio networks began to grow in the 1970s, some began to question the continued effectiveness of traditional advertising routes. As a result, sponsorships emerged and began to grow during this time period, as they were considered effective at a lower cost. Additionally, sponsorships were considered different from traditional advertising because audiences with an association element thought of their perception separately. 3 Companies and organizations began to set objectives for sponsorships to justify return on investment (ROI). Three types of sponsorship objectives have been identified. The first is broad corporate objectives. The second is marketing objectives, including brand promotions and sales promotions. Finally, media objectives have been identified, including reaching target markets and obtaining cost efficiency. Overall, some argue that sponsorships are utilized to generate additional sales with the goal of enhancing profitability, while others believe that corporations attempt to achieve multiple objectives with the use of sponsorships.4 The vast increase in sponsorships over the past decades points to the success of sponsorships since their introduction. Moreover, there has been an increase in the number of sponsorship opportunities that companies and organizations have taken advantage of. A marketing team must now carefully take into consideration how sponsorships can be integrated into its promotional and communications strategy. 5 There is a stark contrast between traditional advertising and sponsorships. Advertising intends to exploit emotion in individuals, whereas sponsorship intends to connect with the emotion inherent in the product or brand that is being sponsored. An association between the sponsor and sponsoree is created that enhances the relationship beyond the basic promotional value found in traditional advertising. Sponsorship attempts to persuade consumers in a more indirect manner than advertising.6 Sponsorships are extremely prominent in sports relative to other areas. Sports provide a flexible communication vehicle. In addition, sports and athletic heroes are commercially driven phenomena. Finally, consumers are extremely interested in sports and sporting events, as they provide a leisure activity that differs from their daily work routines.10 Sports sponsorships can transcend the increasingly accessible communication channels, which began with cable and have now additionally moved to the new Internet technologies. Sports sponsorships can target either a niche audience or a larger demographic, which may span a range of demographic and psychographic profiles. Furthermore, sports sponsorships can reach international audiences due to their ability to transcend cultural, lingual, and geographic boundaries. Whether in the United States or internationally, sports sponsors tend to aim for a broad audience reach in an attempt to better gain brand and product awareness.

Trends in Sports Sponsorship There have been some subtle, and recent, changes in trends relating to sports sponsorships. For instance, as new and different sports gain popularity, the opportunity has arisen for sponsorships in these sports, such as darts. In another trend, sponsorship rights holders slowly have begun moving away from selling all possible revenue opportunities, including stadium naming rights as well as the right to be official partners for financial services, alcohol, soft drinks, sportswear, TV, and utilities. People have begun to feel that the emotional connection was being abused, and as a result, clubs, teams, and events now typically have fewer sponsorship partners.19 Some organizations even have begun donating their sponsorship revenue to charity. By demonstrating that it is a responsible organization, it has attracted even more sponsorship opportunities.20 Cross-promotion also is gaining popularity as an effective sports sponsorship option. Cross-promotion sponsorships occur when one company shares a sponsorship with another company or a different strategic business unit within the same company. In addition to allowing companies to share the total cost of the sponsorship and/or promotional execution, companies can utilize existing business relationships as well as test the relationship of potential future business opportunities. In certain situations, a weaker company can piggyback on the strength and position of a stronger company. There is also the potential of a pass-through crosspromotional agreement in which a company, such as a grocery store, can pass some or all of its sponsorship costs to product vendors in its stores. An example of a successful cross-promotion sponsorship is Got Milk and Kelloggs sponsorship of NASCAR.21 Sports organizations now must look for innovative ways to attract corporate sponsors. For instance, the minor league baseball team the Dayton Dragons created what it calls the worlds largest outdoor billboard, which is 240 feet long by 6 feet high. Rather than using the traditional method of cluttering the billboard with upwards of 50 different advertisements from sponsors, the sign is backlit and shows one of the teams major sponsors wall-to-wall for a half inning. The billboard rotates every half inning and shows another sponsor to the standing-room-only crowd.

Sponsorship Marketing Strategies Basketball Turkish Airlines has established a prominent mass-media sports-marketing strategy through several sponsorship agreements across different sports categories with highly reputed teams, sport associations, and celebrity players, notably NBA superstar Kobe Bryant, who the airline enlisted as its Global Brand Ambassador.

Mr. Tanaka previously had been contacted by a U.S. sports agency representing one of basketballs premier athletes. Since Mr. Tanakas company was performing extremely well financially, signing a multiyear sponsorship commitment with the agency would be seen as another routine marketing budget expense. Strategically, however, it could be a masterstroke in terms of returning his companys products to prominence in the eyes of his customers. He envisioned a multimedia campaign involving television, radio, social networking, and in-person appearances. More importantly, Mr. Tanaka had spent the last six months completing extensive due diligence through a multifaceted approach: This included investigating his competitors in the Japanese market; the reputation of the agency that contacted him; and the athletes past positive history, both on and off of the basketball court. Of course, part of Mr. Tanakas research focused on how much the Japanese public admired this athlete as well as the countrys love for that sport. It was now no longer a matter of if Mr. Tanakas company would move forward but rather when. He looked forward to meeting the agencys staff in Tokyo and then traveling to the United States to sign the deal. The year was going extremely well so far, and this new deal might indeed be the one to keep that trajectory going strong.