chapter

13

Promotional Licensing and Sponsorship

Objectives

• To illustrate the relationship between the sport organization and the corporate sponsor

• To provide an understanding of the scope of sponsorship and promotional licensing

• To develop a comprehension of the motivations and rationale for the use of sponsorship by corporations and sport entities

Sponsorship or Partnership

• A cash or in-kind fee paid by a client to a property in return for access to the exploitable commercial potential associated with the property.

• A win–win situation where the client and the property both benefit. It is a partnership where both should see economic benefits.

Sponsorship

• It is the acquisition of rights to affiliate or directly associate with a product or event for the purpose of deriving benefits related to that affiliation or association.

• The sponsor then uses this relationship to achieve its promotional objectives or to facilitate and support its broader marketing objectives.

• The rights derived from this relationship may include retail opportunities, purchase of media time, entitlement (the inclusion of the sponsor name in the event or facility name, such as the McDonald's LPGA Championship or the RCA Dome), or hospitality.

Sponsorship Provisions• The right to use a logo, a name, a trademark, and

graphic representations signifying the purchaser's connection with the product or event

• The right to an exclusive association in a product or service category

• The right of entitlement to an event or facility• The right to use various designations or phrases in

connection with the product, event, or facility (“official sponsor,” “official supplier,” “official product,” or “presented by”)

• The right of service or the right to use purchaser's product or service in conjunction with event or facility

• The right to conduct promotional activities, such as contests, advertising campaigns, or sales-driven activities, in conjunction with sponsorship agreement

Reasons for Growthin Sport Partnership

• Decreased effectiveness of advertising in print and on TV

• Increased interest in sport and leisure time• Opportunity for two-way communication• Changing social priorities: Statement of

priorities by sponsor and consumer• High consumer acceptance “life-styled

marketing”

Why Sponsorship?

• Lifestyle marketing• Exclusivity• Heightened communication• Publicity

Ambush Marketing

“A planned effort (campaign) by an organization to associate themselves indirectly with an event in order to gain at least some of the recognition and benefits that are associated with being an official sponsor” (see endnote 54 in book)

Selling the Sponsorship

• Evaluate inventory.• Establish list price for items in inventory.• Establish packaging discount policies.• Determine or recognize real costs of items.• Determine exclusive items and exclusive product

areas.• Initiate sales process.• Work from larger sponsorship proposals (major

corps) to smaller proposals and corps.• Pit competitors to create bidding environment.

The Partnership Sale

• Know when budget decisions are made.• Identify and cultivate the decision maker.

– Face to face – Complementary items

• Make presentation: Offer solutions to their problems.

• Negotiate: Sell from the top down.• Secure the sale: Document terms of the deal.• Service the sale: Underpromise, overdeliver.

Six-Step Process of Selling Sponsorship

• Identify and arrange meeting with decision maker.

• Hold preliminary meeting: Listen more than talk.

• Arrange follow-up meeting.• Create proposal.• Hold follow-up meeting for purpose of

making presentation.• Negotiate final deal.

Sponsors’ Objectives• To increase public awareness of the company, the

product, or both• To alter or reinforce public perception of the company• To identify the company with the particular market

segments• To involve the company in the community• To build goodwill among decision makers• To generate media benefits• To achieve sales objectives• To showcase unique product features, technologies, or

advantages• To create an advantage over competitors through

association or exclusivity• To gain unique opportunities in terms of hospitality and

entertainment• To secure entitlement or naming rights

Ethical Issues

• Undue influence• Social responsibility

– Unfair labor practices– Alcohol sponsorship