Sponsorship, Patronage or Charity?

Coca Cola reportedly spent US$31 million to sponsor FIFA

The importance of understanding the difference between the three was expressed in our last Sport Marketing class. Sponsorship is never patronage or charity. It must be a mutually beneficial agreement in which both parties achieve objectives through developing the relationship. It seems common for many organisations and/or individuals who are looking to be ‘sponsored’ to fail to recognise the difference between the three different forms of aid, and in doing so overlook the provision of benefits to the sponsoring organisation. Just to be precisely clear, the definitions for each are below;

Sponsorship; the provision of resources (e.g. money, people, equipment) by an organisation directly to an event, cause or activity in exchange for a direct association (link) to the event, cause or activity. The providing organisation can then engage in sponsorship-linked marketing to achieve either their corporate, marketing or media objectives.

Patronage; the support, encouragement, privilege, or financial aid that an organization or individual bestows to another.

Charity; the voluntary giving of help, typically in the form of money, to those in need.

The types of demand – making people want your product

In sport, it is important to recognise that there are three different types of demands which can be generated through advertising or marketing of a particular product. Identifying the type of demand you wish to evoke from consumers is important to ensuring the marketing campaign for that product is timely and accurate.

The types of demands (including examples) are outlined below:

1. Generic Demand

This is the demand for a generic product, for example, demand for a particular sport in general. The example below exhibits targeting of generic demand as it highlights the sport/league as a whole, not any particular franchise or licensee or product that may be aligned or associated with that generic brand.

Hyundai A-League

2. Brand Demand

The most popular and widely used consumer promotion is directed towards creating demand for a particular brand. The ad below is an example of brand focused promotion as it is promoting the support of the Melbourne Renegades, a Big Bash Cricket League side. The ad uses the other Melbourne based team, the Melbourne Stars, to help highlight having to choose between the two sides, and ultimately wanting to “Get on Red” and support the Renegades over the Stars. This has been done by using match footage and highlighting the team’s exciting skills.

“It’s Time to Choose” Melbourne Renegades      

3. Direct/indirect demand

What is a somewhat less widely used form of consumer promotion in sport is the use of indirect marketing, which is the promotion of one product or idea to drive the promotion of another product or idea which is built from the original idea. The video below is an example of this as it is a campaign for an ‘original idea’ of being active and is promoted using soccer who then may benefit from the advertisement due to being indirectly associated with ‘getting off your chair’ and leading an active lifestyle. More widely, it can be considered that this campaign would promote all types of sport as a whole, despite not directly referring to or mentioning any other sport in the promotion.

“Get Active” European Union

Maslow’s Hierarchy of Needs

The concept of needing to fulfil one set of needs before you can be worried about fulfilling the next set of needs has been drilled into me since year 11 Business Management, when my teacher explained the importance of determining the needs of an individual or particular demographic in marketing a product or service. And now, as I attempt to explain this for the fifth time in my life just three years after being taught it for the first time, you could say that I am just about sick of hearing about it. I guess, if I have gotten one thing from learning this over and over, it would have to be a very strong perception about the importance of knowing this for the future of my career.

The concept is relatively basic. Starting from the bottom, you must fulfill the needs of that level before you can successfully fulfill the needs of the next level.

1. PHYSIOLOGICAL NEEDS

This refers to the needs you have in order to stay alive, so basically, you need food, water, shelter and warmth.

2. SAFETY

Once you have the needs to sustain life, you can worry about being safe. You need security in where you are and what you’re doing before you can require the next level.

3. BELONGING

Once you are safe, your needs extend to that of feeling a part of something, that is belonging to a family, a group of friends and having people who love you.

4. SELF-ESTEEM

This level explains the need to feel good about yourself, the need to have achievement and recognition for what you do or are doing.

5. SELF-ACTUALISATION

This is the ultimate level of needs, and describes your desire to, once having reached self-esteem, fulfill your own ultimate desires and pursue your inner talent.

SPORT IS FANTASTIC CONFERENCE 2013

Darrin Gross of the Oakland Athletics Major League Baseball talks attracting and retaining sponsorship and ticket sales in a market dominated by others.

Background of Darrin Gross and the Oakland Athletics

Darrin Gross who was, at the time of presentation, the Director of Corporate Partnerships for the Oakland Athletics (OA), a Major League Baseball side, worked his way through the sport in a similar fashion to most players; that is, through the development pathway. He has been an integral part of the development of the Oakland Athletics corporate relationships and, for lack of a better phrase, off-field successes in terms of ticket sales and sponsorship attainment and retention; something which is particularly impressive when the scope of the local sports market is taken into consideration. The Oakland Athletics are a somewhat surprisingly competitive side in the MLB conference, particularly with a majority of their players (15/20, to be exact) earning the MLB minimum wage, and the club’s financial circumstances meaning they are unable to attract any high profile free agents, contributing to a lack of well-known baseball stars occupying their payroll, and as a result further increasing the level of difficulty involved in obtaining other revenue stream such as sponsorship and ticket sales.

The environment in which they operate

Gross outlines in his presentation that being surrounded by such a populated area allows for both significant advantages and disadvantages. Such advantages include:

–          San Francisco being the #6 media market in the United States, meaning there is sizeable level of potential exposure for the OA’s around the country and the world
–          Their DMA (Designated Market Area – admittedly a phrase/concept which I was completely unaware of before this presentation) consists of roughly 6 million people, not including surrounding areas such as Sacramento (not in their DMA) who contribute some further 1 million people
–          San Francisco area has been rated as one of the top #10 tourist draws in the world, therefore increasing the average potential to draw in crowds from over the world who are looking to experience a different sporting environment

The disadvantages, whilst also being greater in number, are arguably more influential on the corporate operations for the OA’s. Gross explains that such disadvantages are recognised by the club but are unable to be used as excuses, therefore increasing and fostering the creativity with which they market to the people and corporate populations. Such disadvantages include:

–          Their venue is aged, outdated and somewhat run down
–          Their stadium is shared with the NFL club the Oakland Raiders (a team with a bit of a Collingwood reputation – that is, most hated in the league, with hooligan fans) meaning the turf suffers higher than average wear and tear
–          As mentioned earlier, they have one of the 5^th lowest budgets for player salaries in the league (MLB does not operate salary cap policies), making attracting high profile players difficult
–          There are 17 other teams, clubs and events (from a variety of sports) within 90 miles of the OA’s, who are therefore competing for the same sponsorship dollars and population for ticket sales

The existence of such disadvantages means there is an increased reliance on the advantages which the OA’s do have over other teams in the area and league. Such advantages are either already in existence or have been developed by the baseball club in an attempt to make their home games a more marketable product. These include;

–          Huge parking capacities
–          Close by public transport (established through a sponsorship deal) which drops patrons off right outside the gates of the stadium
–          The stadium, despite being aged, is a great and historic arena which has a brilliant atmosphere once seated and watching baseball
–          The OA’s have a long and remarkable history of baseball excellence and successes
–          The weather is good for a majority of the playing season

All points stated above have been used by Darrin and the OA’s to celebrate what they are, and their points of difference towards competitors, rather than being forgotten in an attempt to try and be what they are not.

Key strategies, campaigns and policies

During the presentation, Gross outlines a total of ten separate strategies which have been employed at the OA’s to make them stand out from their competition. I have expanded on a couple which I would consider to be more significant and noticeable strategies below:

1. The establishment of events which are designed to ‘marry’ the clubs partners to each other

–          This involves creating events whereby partners are able to mingle with each other, therefore increasing their own business opportunities. In particular, Gross explained a situation whereby Krispy Kreme doughnuts became aligned with a wholesale sponsor to sell their product in their stores.
–          Examples of events include suite nights for representatives from different partners to come together at a match, bocce competitions, and golf days.

2. Well trained and thoughtful staff

–          Ensuring staff (particularly game day staff) who interact with the consumers on a one-on-one level are aware of the impact they can have on the experience of the patron in attending their matches, means they are more likely to provide a positive experience for them. It is important for all staff to understand their importance in providing the sport service to the customers. They have the ability to “make or break somebody’s day”.

The other strategies outlined by Gross were:

o   Strategic partner rates for unsold inventory (advertising space)
o   Kiosks (established in conjunction with the MLB) placed around the stadium
o   Flexible ticketing exchange policies
o   Value propositions e.g. free parking Tuesday’s
o   Special entrances for ‘VIFs’ (Very Important Fans – season ticket holders)
o   High level seating (Diamond seating and Field Box seating)
o   Establishment of a corporate service team
o   Partner inclusion in Social Media campaigns

The implications on the Australian sport marketing industry/landscape

Gross’s talk outlines that despite being in an area which is highly competitive, there are many ways to stand out in front of your competitors to win sponsorship. Australia’s sporting industry, whilst quite vast and spread out, is arguably a hotly contested industry, particularly with the rise of sports such as A League soccer, the introduction of the Big Bash League, and the rejuvenation of the Trans-Tasman Netball League; the ANZ Championship – not to mention the competition between the NRL and the AFL. Gross demonstrates the innovation used in the OA’s marketing techniques which is most definitely the reason they are still alive and successful today, and there is no reason why these practices cannot be replicated within the Australian sports industry.

Three key takeaways from the talk

Following listening to the talk, I determined the following three practices which could be implemented right away to help improve a sporting club or league within Australia. They are;

–          The development of kiosk technology to help ease the purchasing and collecting of tickets,
–          The establishment of corporate service teams to help prioritise the service of corporate guests, and;
–          Strong and bargained value propositions to help encourage attendance at quieter games.

The future of the sportplace – build it and they will come…?

Rungrado May Day Stadium, North Korea, has a capacity of 150,000 people, and occupies over 200,000 square metres.

A Case Study.

1. How do the variables ‘facility planning’ and ‘physical evidence’ apply to the different sections of this case study?

Facility planning refers to the need to create long-term, prospective and perspective plans about the requirements and usage for a particular facility, in this particular case study, the sport stadium. In terms of sport stadia, many modern day stadium constructors are unable to foresee the use of a stadium for just a single sport as a financially viable enterprise or endeavour. As a result, many new stadiums are being built with a multipurpose-full future usage plan in mind. Examples of functions which are increasingly being included in stadiums to expand their roles include restaurants, office spaces, night clubs, television studios and health and fitness centres.

Due to the majority of the sport product being intangible, the importance of the place of sport is enhanced as it is the majority of physical evidence which can be used to compare the quality of the product to other similar sport products. The physical evidence of product should support the quality characteristics, which can be boosted through the design of the sport facility itself, or through the promotion of the sport facility.

An example of the way a sport facilities design can add to the quality of the sport product is through the use of up-to-date interactive technology, such as instant replay scoreboards, banners, and statues of sporting heroes.
An example of how the promotion of the sport facility can add to the quality of the sport product is through the associated experience of being at the venue for any particular event. This can include promoting photographs of past events, the services provided by the organisation, and the explanations of different product offerings.

2. How do the variables ‘people’ and ‘process’ apply to the different sections of this case study?

Four of the five ways which people use to distinguish the quality of a service product are fully dependent on the level of training, abilities and skills of the human resources performing tasks outside the match. In terms of stadium management, this refers to the level of efficiency and effectiveness at which the service of watching a sports match is provided. That is, how quickly the food and beverage attendants are able to deliver food to a corporate box, for example.

The process refers to the ways in which the product is actually distributed to the customer for purchase and consumption. These processes occur between two functions; the marketing function, and the sport servuction model. Traditionally, the marketing function comprised purely the marketing department, whose role was to develop, communicate and executing marketing plans. However, in an increasingly service based industry such as sport, the marketing function has been described as ‘including all resources and activities which have a direct or even indirect impact on the establishment, maintenance, and strengthening of customer relationships, irrespective of where in the organisation they are’. This therefore concludes that all members of the organisation, including stadium staff – for example food and beverage attendants, security members etc. – are identified as ‘part-time marketers’. This would be particularly appropriate in corporate seats, where a high quality service product is expected. The sport servuction model identifies the difference in those functions which are physically evident in the process of delivering the product, compared to those functions which are not physically evident in this process. The facility design, contact people and players are the physical evidence of the product, whilst the preparation of those delivery systems and the actual services provided for the customer are invisible to the consumer.

3. Can you think of other standards that may replace ‘cost per seat’ as a better way to calculate facility construction costs? Justify your answer.

Using the calculation of ‘cost per seat’ to measure the costs of a stadium’s construction is very efficient and effective as it allows the cost to be expressed in terms of what it will mean is available to each patron of the stadium, should it be completely sold out. However, this value could be expressed more precisely to match the realistic attendance expectations of the venue, particularly for venues where the functions don’t vary too considerably. For example, the costs could be calculated based on average attendances of previous seasons (provided the prior venue was of similar capacity). This value would then represent more accurately the money which is being spent on helping to improve and/or ensure a positive experience for each expected attendant to a match. This calculation method would, however, be ineffective if previous attendance numbers weren’t indicative of future expected attendances, or if the venue serves multiple functions such as office space, night club and restaurant.

Lucozade Advertising of the Past 40 Years

The Beginning – 1972

1. Who is the drink targeted to?

This original advertisement was targeted to mothers, in particular, as well as people who needed a ‘pick-me-up’. At the time they were the ones who made the purchase decisions for the household, making them the most ideal target for providing the drink for everyone.

2. What was the purpose of the drink?

At this time, the drink was marketed as a supplement to aid recovery and tiredness and give people energy.

3. Why is it sold in such a big bottle?

Selling it in such a large bottle means there is plenty to go around the entire family; everyone can enjoy it.

4. What was the end slogan?

‘Lucozade aids recovery’ and ‘Lucozade is for you too’ – indicating it is a drink which can be beneficial to the whole family. It can help to replenish and make you feel better.

Ten Years Later – 1980’s

1. Has the target market changed?

The target market in this advertisement was that of males, who were on-the-go and generally busy people with disposable income, as opposed to mothers and families of the previous ad.

2. What image does Lucozade now want?

This add, unlike the earlier one, depicts an image of being energetic and cool, rather than a recovery drink for the family.

3. Why has the bottle shrunk?

Being marketed at a younger ‘on-the-go’ generation also meant that Lucozade had to change to packing to fit their profile of being convenient.

4. Why and how has the end slogan changed?

“The original solution” – this slogan can be said to be used to maintain the market as the people who grew up with the drink as children.

The Next Generation of Advertising

1. Who is the drink targeted at?

This time around, Lucozade have aimed their advertising at athletes and people who are sporty or aspire to be elite athletes.

2. What adjective is used to describe the drink?

The adjective used is ‘Resfreshing’

3. Why is glucose mentioned?

Glucose was the super food of it’s time, it was a scientific term at the time which sounded legitimate but not everyone was sure what it meant, meaning that Lucozade would be able to entice further customers who are wanting to get the benefits of ‘glucose’.

Some 20 Years Ago – 1990’s

1. Why are they introducing words like ‘Isotonic’?

This helped add to the effect of using the word ‘glucose’, which by this time wasn’t fooling anybody into purchasing as its meaning was now somewhat common knowledge. Isotonic built on this effect by providing another mysterious benefit to drinking Lucozade.

2. What do you notice about the packaging?

The packaging has changed from being a glass bottle to being a can, this could be due to many factors, including being cheaper to produce, convenient, more relatable to sport (cannot take glass onto a sports field), and they were also having to compete with other brands such as Coca Cola which was using aluminium cans as well.

3. Why do they use cans?

Glass isn’t appropriate to take into sporting venues or onto a sporting field.

The Most Recent Advertising – 2012

1. How different was it to the first?

There was a stark contrast in the family friendly, recovery drink to the athlete’s drink for better performance.

2. Was their campaign a success?

It can be considered that, yes, their campaigns throughout the ages were successful, due to the fact that it is still around and was only re-branded and marketed as recently at 2 years ago.

BIRGing and CORFing – Dealing with Your Team’s Performance

Basking in Reflected Glory

This refers to how someone’s individual self-esteem can be enhanced by the success of another individual or team. The feeling of basking in glory as such is not from one’s own personal successes, and therefore they are basking in ‘reflected’ glory – that of their favourite football team winning the Grand Final, for example.

Cutting off Reflected Failure

CORFing refers to acting in the opposite way to another person or team’s losses. In this case, individuals will distance themselves from the club and their loss as far as possible to avoid facing any kind of backlash or confronting interaction regarding the loss.

Three Rather Strange Product Extensions…

A product extension, as defined by the Business Dictionary, is the act of introducing a product with which the company is familiar, but that has features that consumers are not yet aware of. A product extension in the computer software business could be an upgrade or revision, and other possible product extensions are product repositionings and additions to existing products.
In reference to sport, product extensions are those branded products which we, as consumers, purchase in support of our club, team, league or event. It’s fun to dress up and show support for our club, it makes us feel a part of something. These money-making schemes produced by the sporting bodies have possibly, however, gone too far when designing these product extensions… would people really pay money to have these?

Brisbane Lions AFL House Key

If you’re going to pay $7 to help support your team financially I imagine you’d be more inclined to purchase something relatively worthwhile that can actually be used to visually display your support more clearly. Most AFL cubs have these available.

NFL Themed Beauty Products for Women

Apparently the only thing making these products individual is the logo on the outside… So would you wear a body lotion just because it has your team’s logo on it, even if it means you smell like every other female fan?

NRL Team Umbrella

If your half-the-price, plain black umbrella just isn’t doing the job in terms of both keeping the rain off and actively displaying your support for your team – then go ahead and purchase one of these NRL themed umbrellas!

The Characteristics of Sport as a Service

That which defines it as a service as opposed to a good;

1. Heterogeneity

This refers to the individuality of each performance which provides inconsistency and variability. This applies to sport because there is no way to ensure performances are the same each week, they in fact depend largely on who is performing the activity. It can be considered both good and bad; the unpredictable nature provides excitement, but also may mean some people are disappointed with the product if it does not go their way, particularly when it is expected to.

2. Intangibility

This refers to the fact that nothing about the product can be sensed prior to its consumption. It also refers to the fact that be engaging in the sport product, either by watching or playing, there is frequently no tangible product to be taken away from the event.

3. Perishability

This refers to the inability to reclaim the product. You cannot attend a sport match and capture it and keep that exact same experience following the match. It represents lost revenue which is unable to be retained.

4. Simultaneous production and consumption

The production of the product (that is the playing of the match) and the consumption of the product (spectators watching the match) both happen at the same time. This characterizes sport as a service rather than a good.

Active Ageing in Queensland

In a bid to improve the physical activity levels of older Queenslanders, particularly before the Baby Boomers generation swell the percentage of the population that is over 50, the Queensland Government decided to implement the program known as ‘Active Ageing Queensland’.

After reading the case, and thinking back to the ‘Marketing Myopia’ article by Levitt last week, do you think this case study suggests another possible industry that sport could position itself within?

The case study suggests that typically, older Queenslanders were not engaging in competitive sport for various different reasons, but were preferring to engage in other lighter activities such as reading. Despite this, there was still a large percentage of older Queenslanders who were engaging in exercise for the purpose of keeping fit. This could suggest that there is a market in which competitive sports have the opportunity to market towards older generations to help them keep fit but also provide regular, structured competition for them.

The case gives us a general situation analysis, what are your first impressions of who the target markets might be? Why?

Upon first impression, the case study suggests the target markets are people aged 50+ or people who will be aged 50+ in the near future. More specifically, it suggests the target markets are those over 50 who aren’t physically active or as physically active as they would like to be. This appears to be the suggested target market as the aims of the program are to introduce a greater amount of programs for older people to become physically active.

We have already been given some objectives, what are your first impressions of the strategies that can be used to meet these objectives?

My first impression of some strategies which may meet the objectives include encouraging individual competitive sports to design modified versions of their game to meet the needs of older people. Having age specific modifications for the elderly would, similarly for younger people, give them the confidence to join in and perhaps overcome the perceived fear of not being able to keep up or being embarrassed by younger ages.