Racing, Finance and Sponsorship - Essay Example

?Racing, Finance and Sponsorship Table of Contents Table of Contents 2 Overview of the project 3 Sponsorship strategy 3 Action Plan 6 Results attained 8 Reflection of the sponsorship strategy 8 Reference 10 Overview of the project The project relates to the design of new sidepods for Brunel University Racing 2011 Formula Student Vehicle. The idea is to develop a sidepod that can provide adequate cooling space for the electronics and radiators in the car. This calls for financing and sponsorship for materials and manufacturing the bodywork for the vehicle. Other than this there are other costs associated with material and manufacturing of the bodywork. The design of a sidepod would require special engineering skills. Generally this requires the joint efforts of the team management and the designers. The main aim of the new design is to create a more user-friendly, light and agile vehicle. By way of innovative solutions and technological up gradation the formula students aim to rank among the Top 5 at the event and emerge as the top team in UK at the car racing program. The team management works towards maintaining high standards for the vehicle and develop technical prowess of the members and create environmental awareness. However the success of the efforts is based on the support that it is able to garner from the corporate, as University assistance is not sufficient to take care of the funding associated with the design and development of the car. Sponsorship strategy Brunel Racing team comprises mechanical engineering and motorsport students. The designing work is entrusted to the third year students. Ever since the team was established in the year 1999 it has participated in a range of Formula Student competitions across worldwide locations, which includes the famous Hockenheim and Silverstone Grand Prix circuits (Brunel University West London-a, n.d.). For more than a decade the University team has participated in this event. Going by the rise in the number of Universities participating in the program the event is now eagerly awaited. The amount of media exposure at such events is also high. In the last year’s event there was extensive media coverage of the event. Many small and large businesses lend their support to the event and their number is continually growing. These businesses get the opportunity to reach out to the masses by sponsoring the events. Their logos or corporate names are advertised on the race route and along the street leading to the event venue. Besides helping them in raising the bottom-line of the business they are able to forge an alliance with the University members. By reaching out to the University students these companies also get the chance to fulfil their corporate social responsibility. So the sponsorship event enhances the market image of the companies and also helps them in establishing a philanthropic image in the society. Sponsorship is generally viewed as a ‘business relationship’ forged between a beneficiary and a sponsor i.e. there is always a commercial angle to it. However by granting funds for the university car racing the company will be able to draw dual benefits. Firstly, it will create more awareness about the products and services offered by the company. This will get reflected in the form of rising sales figures. Secondly, the company will be able to fulfil its responsibility of a socially responsible entity. Past research has brought forth the “consumer effects of sponsorship”. It has been seen that the investment offered by the sponsor in any sports activity creates a good-will among the event attendees. This is said to influence their behaviour and attitude towards the brand. There are three levels at which the sponsor is able to generate good-will. First is the ‘generic level’ that relates to the feelings of the consumers at the engagement of the sponsors in an activity; second is the ‘category level’ that relates with a particular audience say sports or art and third is at individual activity level’ that relates to fans of a specific team. It has been seen that sports enthusiasts vouch on the sponsors lending support to their favourite team (Bowdin, et al., 2006, p.234). In the case of Formula Students also the sponsors will get the opportunity to build up a strategic alliance with the car racing team of the University. This will make their products popular both on and off the campus. The marketing strategy of most of the companies is designed towards attracting the youth. Therefore a University alliance is the best possible way of reaching out to this segment of the society. Moreover the car racing team of the University has already established its image in the sporting activity and given the top ten positioning of the team it has been able to garner a fan base. If the team members are found to use the logistics of the company or wear sports gears with the company logo this will surely boost the image of the company. This is the ultimate of all advertising campaigns run by the companies. The financial collaboration will help the company in building up a relationship with Brunel which functions as a reputed Uxbridge based University. Behind the car racing events the mission of the University is to give an imaginary, practical and entrepreneurial approach to the academic process of learning. The mechanical engineering students of the University are involved in the design and development of the car. Therefore by imparting the necessary financial aid to these students the company will be able to create a good image in the society. Since the very inception of this event the University has made a mark in the car racing. In 2009 the University won a prize for the ‘best fuel system’. In 2002 the University won the formula students won ‘the Cosworth Engine Prize’. In the next year it was bestowed the “Honda R&D Most Desirable Engineering Product”. In 2005 the car designed by the formula students of the University received the award for “most fuel efficient car”. In 2009 the students of the University ranked sixth among the participating 87 teams. With this University acquired a place among the top two UK teams at Formula Student UK and Germany (Brunel University West London-b, n.d.). Brunel Racing is primarily funded by the Brunel University besides a host of partners from wide ranging fields. This includes EControls Inc, NewPro Foundries, Ansys, Solidworks, Metro Plating, D & B Crash Repairs, Goodfabs, Exact Engineering, DC Electronics, Zirotec, Willans, Middlesex Laser Cutting, MoTec, Pro Alloy, Hamlyn Engineering, Imprint Promotions and IPG Automotive (Brunel University West London-c, n.d.). The University offers its partners to introduce case studies of their products or services. This can prove to be to the advantage of the companies as it will facilitate their entry into the classrooms. For 2009-10 season, the total budget relating to the building of the race car amounts to ? 37050. This comprises various design & development, apparel and event related expenses. Although the University contributes generously towards this purpose the team management will need the financial support of the business partners. Other than financial aid they will also require transportation and logistics support (Brunel University West London-b, n.d.). Formula Student being an international event the associated partners will be able to establish a footprint in the global arena. This implies that the small businesses that have to rely on domestic market will get the opportunity to reach out to the global audiences. The logos advertised by them on the racing car will gather the attention of the spectators. The car racing event is attended by the University students as well as the families of the students. Besides all this there is extensive media coverage of the event. The team management of the formula students will offer the sponsors extensive exposure through publicized races and campus recognition. Like at all media interactions the team management will display the product or support service of the business partners. The team members will use the products of the sponsoring company at all the events sponsored by them. This would range from health drinks to apparel. In the case of any requisition for any additional promotion the team management will do the needful. The Formula Students team is confident that positive mentions at the media events will enable the companies in raising their revenues. International exposure to the event will help them to cater to the international consumers. By way of this the company will be able to raise its export volumes. From an impression of the past events it has been observed that most of its business partners have been successful in raising their sales figures thereby pushing up their ROI figures. In exchange of this the Formula Students is looking for an annual investment of ?10000 to ?50000. The companies can enter into a three or five year contract with the Formula students. At the maturity of the contract the companies can themselves assess the positive effects of the sponsorship. If they are satisfied they can renew their agreement. Action Plan The amount that a company is willing to spend for this initiative can be suitably adjusted as per their kitty set aside for such activities. As already said the sponsors can contribute anywhere between ? 10000 to ? 50000 for the designing and development of the new and advanced car model. Based on the contribution amount they will be classified into groups like Platinum, Gold, Silver, Bronze and Others. All the groups carry varying amount of promotional schemes and sponsorship benefits. The Platinum is the top group for the sponsors contributing ? 41000-? 50000. For the sponsors falling in this category the logo of the company will be displayed on team apparel, race car and the Formula Student website. Besides this they will get a promotional facility at all public appearances and media events. The next group i.e. sponsors falling in the Gold group, with contribution ranging around ? 31000- ?40000, can have their logos displayed on the front half of the race vehicle. Other than this they will also be entitled to promotions at public appearances. The next class of sponsors i.e. the companies making contributions ?21000-?30000, will fall in the Silver group. The company logo of this group will appear on the rear half of the racing car. Other than this their logos will also be displayed on the support vehicles of the formula student team. The next in line would be the Bronze group. This will comprise companies making contributions ranging from ?11000 to ?20000. The corporate falling in this group will get the facility to display the company logo and link on the University’s formula student website. The logos will also be visible on the wearing apparel of the team members. For the sponsors making contributions of up to ?10000 the link and the company logo will be displayed on the website (Rensselaer Polytechnic Institute, 2011). Besides all this the companies can also avail for additional promotional offers. Like the Formula student can include the name of a sponsor in the team name. This could be contracted and renewed every year. As already said the race paths will display the company advertisement and the Formula Student team of the University will use the products of the company sponsoring the logistics. Like a health Drink Company can avail the additional promotional facility by making their products as the official drink of the team members in the car racing event. Besides the promotional benefits the University will send newsletters containing the progress of the team on a bi-monthly basis. The other benefits to the sponsors include- use of the event’s photos for their own promotions; displays with requests to the members to extend their business support to the sponsor; at University office notice boards; advertisements on stationeries used by the team members etc (Funding Information Service, n.d.). Implementation of plan- The funds are required for the project on an immediate basis. The initial expenses of the project plan can be met through the funds provided by the University, however, the design of bodywork and the manufacturing of sidepods require additional funds. This is the reason the University is looking for some sponsors with whom it can form a strategic alliance to fund the car racing event. The estimated amount of sponsorship that the University seeks has been set as ? 37050. The goal of the action plan is to attract maximum investment from the sponsors. In the first stage the University students have to arrange for a meeting with the HR personnel of corporate. This is the point where the University students can explain the benefits of granting sponsorship to the sponsors. Here it can be highlighted as to how they are going to gain commercially by the sponsor. Before approaching the potential sponsors the University students must prepare a strategy that will help them in drawing the interest of the sponsors. Prior to this the classification of the various groups of investors must be made by the University. Based on this the marketing benefits that can be availed by the sponsors must be drafted. The entire process of developing a sponsorship strategy, approaching the sponsors and fund raising is expected to take nearly three months. Results attained The sponsorship strategy has been successful as a number of small as well as big corporate houses have come up to build alliance with the Formula students. The international exposure that the car racing event offers seems to be one of the main attraction for the sponsors. The funds contributed have mostly been in the range of ?31000 to ?40000 i.e. in the Gold Group. This shows that most of the sponsors want to display their logos on the racing car. Reflection of the sponsorship strategy For the purpose of raising funds, for material and manufacturing of the body parts of the racing car the assistance provided by the University is not sufficient. This is the reason a sponsorship strategy has been designed to get the financial assistance of the companies. Keeping in mind the fact that all companies may not be in a position to provide equal amount of financial assistance various groups have been formed. By way of this University will be able to attract funds even from the small scale businesses. This will help in pooling more money. Overall the strategy looks quite reasonable. For the companies falling under various groups the promotional package also varies. The companies contributing higher sums of money are allowed additional privileges. The Group making the highest contribution i.e. Platinum is entitled to logo display on team car, wearing apparel as well as media exposure at all interactions of the Formula Student team. On the whole the strategy seems to have shaped up well. However, there are some areas where the team members could have availed additional benefits from the sponsors. Like the University could have asked the companies to distribute pamphlets among its consumers for promoting the car racing event. This would help the University in raising more revenues for the event as it has some event passes that it can sell directly to the consumers. Other than this the University can request the important company officials to attend the other cultural programs of the University. Reference Bowdin, J.A.G. Allen, J. O'Toole, W. 2006. Events management. Elsevier. Brunel University West London-a. No Date. An Introduction to Brunel Racing. News. Available at: http://www.brunelracing.co.uk/team/index.php [Accessed on February 2, 2011]. Brunel University West London-b. No Date. Sponsorship Information 2009-10. School of Engineering and Design. Available at: http://www.brunelracing.co.uk/partners/Brunel_Racing_Sponsorship_Information_2009-10.pdf [Accessed on February 2, 2011]. Brunel University West London-c. No Date. Partners. Available at: http://www.brunelracing.co.uk/partners/index.php [Accessed on February 2, 2011]. Funding Information Service. No Date. Sponsor benefits. What is Sponsorship. Available at: http://www.fis.org.nz/index.php?page=Sponsorship#process [Accessed on February 2, 2011]. Rensselaer Polytechnic Institute. 2011. Sponsorship. RPI Solar racing team. Available at: http://solarracing.union.rpi.edu/Corporate%20Sponsorship%20Packet.pdf [Accessed on February 2, 2011]. Read More