Available Sponsorship for Small Companies - Essay Example

Available Sponsorship for Small Companies al Affiliation) Introduction To sponsor is to support an activity, event, persons, or organizations financially or provide them with services and products. A sponsor is the person or group that offers the support. Sponsorship is a kind fee paid to a property (mainly in arts, sports, entertainment, or causes in return for the access to the available commercial likeliness related to the property in question. Commercial sponsorship is given with an expectation of commercial benefit (West 2010). According to Swinbanks (2013), commercial sponsorship is a form of advertising in which businesses pay to be linked with certain events. When the sponsorship is offered to a nonprofit organization, the sponsorship activity is called cause marketing or event marketing. In the past decade, corporate sponsorship has increasingly grown; in fact, more than the overall corporate sponsorship recorded in the 1990s (Swinbanks, 2013). Most funders of big events and activities are, of course, established companies. However, the current trends indicate that part of the increase in commercial sponsorship is attributable to developing firms that are becoming involved. In the past, only established firms could sponsor event as a means of boosting revenue and building goodwill. However, in today’s commercial environment, medium and small-sized firms have embraced the sponsorship of several events and activities from volleyball and softball teams to festivals, park clean-ups and fairs as an effective way of increasing their visibility in their local communities. Several of these kinds of sponsorships help small companies to increase their public profiles in a cost-effective manner (Steiner, 2008). Corporate sponsorship is common in festivals and museums, but it can be seen in commercial environments. For instance, a football club may bear the name of a company and the sporting contest may be proceeded by the sponsoring corporation’s name. Because corporate sponsorships can be costly, stakeholders have been cautious of the profits ascribed to the publicity in depressed economies. Selling sponsorship opportunity. The sales cycle for marketing sponsors is often a tedious procedure that involves examining prospects, generating custom-made proposals based on a firms business goals, finding the right contact persons in a company, receiving buy-ins from several electorates and finally discussing benefits. Some deals can take up to one year and traders report spending somewhere between 3-6 hours a day investigating each firm that is seen as a likely prospect for sponsorship (Steiner, 2008). Leveraging sponsorship and activation. These are words used by numerous sponsorship experts to refer to how a sponsor uses the gains they obtain under the terms of a sponsorship contract. (Michael, 2012) defines leveraging as the “act of employing collateral marketing communications to exploit the profitmaking capability of the relation between the sponsor and sponsored” while activation, according to (Miles & Rines, 2012), is the “communications that boost the involvement, participation or engagement, of the sponsorship audience with the sponsor. Money spent on activation is above and over the rights fee paid to the sponsored and is often much greater than the cost of the rights fee. Types of sponsorships. 1) Title sponsorship-is the highest rank of sponsorship. It symbolizes the most important contribution of a firm in planning and hosting an event. Often, the brand of such a sponsor is placed next to the name of competition, individual athletes and teams. For instance, the logo of a title sponsor is positioned next to the label of a football team. The rank of a title sponsor espouses presence over other sponsors in the same business- first, the right of presence to all official activities centered on a sport event. Secondly, the right to exploit coaches and players to conduct joint promotions. Thirdly, highlighting the sponsor’s name in film credits. Fourthly, Mandatory mentioning in all events conducted on behalf of the team. Finally, the placement of banners and logos (Meenaghan & Sullivan, 2009). 2) General sponsor is a sponsor that provides most of the contribution (in the absence of a title sponsor-usually more than 50% of all sponsorship monies raised) and in return receives the right to use the image of completion and the extensive media coverage used by the team to promote its activities. If need arises, the status of a title sponsor can be transferred to the general sponsor (Meenaghan & Sullivan, 2009). 3) Official sponsor is a sponsor that provides a given amount of the raised funds, usually within 20-35%. Typically, the given status can be approved by category. For instance, "official automotive partner", "official insurance partner", among others. 4) Technical sponsorship. In this category, the sponsor promotes the organization of activities like sporting events through the full or partial payment of goods and services. For instance, medical equipment, organizing transport, fitness and lodging. 5) Participating sponsorship involves a company and a sponsorship fee not exceeding 10% of total funds raised. 6) Information sponsor-involves an organization that offers informational support by conducting PR-actions, media coverage and joint actions. Theories of sponsorship According to (Faganel, & Bratina, 2013), A variety of communications and psychological theories have been employed to explain how corporate sponsorship works to influence customer audience. Most employ the notion that a brand (corporate sponsor) and activity/event (sponsored) becomes associated in consumer memory through the sponsorship and as an effect, reflecting on the brand can trigger even-linked relations, while thinking of the activity can trigger bran-linked relations. One of the most significant findings in corporate funding is that the best results are archived where there is a good fit between the sponsored and the sponsor, such as a sports brand sponsoring a sports event (Faganel, & Bratina, 2013). Benefits A firm can profit in several ways from sponsorship. Faganel, & Bratina, (2013) describe a variety of potential gains: "Sponsorships can improve a firms visibility and image and distinguish the business from its opponents; help build closer associations with present and potential clients; promote services and products; drop outdated inventory; and permit the firm to participate more efficiently against superior organizations that have considerably larger marketing budgets. In addition, permits to sponsored activities can be exploited as motivations for vendors, employees, and clients and to encourage staff loyalty (Faganel, & Bratina, 2013). Experts affirm that if sponsorships deals are well-perceived and planned, they can increase sales; both short term and long-term, as they serve the public through the activities and events they support." Good public relations agendas give staffs a purpose to be gratify the firm, which intensifies devotion and can help to decrease production and labor costs. Besides, a firm with contented workers and a decent reputation in the public is likely to entice new highly competent workers. A small business can also come up with new trade dealings through the leads and contacts it gains in its public relations activities. Such interactions can also make it simpler for the firm to obtain funding for enlargement, gain favors in terms of taxation and ordinances, and find new promising locations or utilities. Good public relationships can also be advantageous in times of emergency, such as a plant closing, or a fire, by gathering the public around the affected business. In a study that debates current trends in company sponsorship, Cavalli (2013) lists the four principles that not-profit fundraisers anticipate to be employed by most firms in evaluating the invitation to become part of the sponsorship. The four principles include: Relevance—the basis must be applicable to the businesss service or products. Branding Fit—there must be a good fitting with the general firm brand. Mission Alignment—the relationship must in harmony with a firms mission. Business Result—the business must trust it can realize some quantifiable commercial result from the partnership. In addition to the promotional and advertising features of corporate sponsorship, it also offers gains in the realm of public relations. An inclusive, current public relations program ascribed to activity sponsorship can help virtually any firm achieve a reputation as a good public citizen. Organizations are renowned as good public citizens when they fund community programs that advance the quality of life in their community, including employment, clean-ups and beautification, crime prevention, environmental programs, restoration and recycling. Some other examples of programs include urban renewal projects, scholarship programs, educational and social programs, performing arts programs, childrens activities, construction projects and community organizations (Cavalli, 2013). These types of sponsorships also called “cause related sponsorships”, can be linked to regional or international social causes. Event sponsorship, in specific, is an enticing option since it offers a firm access to different audiences, including business decision makers, employees, , and government legislators as well as end-users. It can be a good advertising tool for companies involved in global trade, because sponsorship surpasses culture and language. Several promoters feel that corporate sponsorship is essential since it allows for an immediate customer response to new product offerings. Events provide business administrators with a chance to come in physical contact with their clients. They also offer clients an opportunity to try out a corporations products directly. By contrast, research tools used in marketing studies, like focus groups, can be expensive and may not be focused on the right population, while market surveys do not provide future clients with an opportunity to try the product (Bero, 2009). Corporate sponsorships offer marketers a chance to strategically position their goods and services in market places. With corporate sponsorships, unlike normal marketing methods, the product, the firm, and the cause/event being sponsored tend to be linked with the consumers’ minds. By directly or indirectly funding and even sponsoring an event or funding the broadcast of an event, the sponsor benefits by gaining visibility while simultaneously developing a link to itself with the event’s values. The event, by default, draws an audience while promoting standards related with the event’s activities. Each sponsorship tool has certain relation images in the end user’s mind that are relayed to the sponsor (Bacham, 2013). Ambush marketing Ambush marketing is prevalent in the current corporate sponsorship activities. The paybacks delivered by corporate sponsorship can be reduced considerably by competitive strategies known as "ambush marketing”. Ambush marketing occurs when rivals take measures to diverge an activity’s audiences attention away from the event sponsor to themselves. Ambush marketing strategies include sponsoring the event indirectly like funding the media coverage of an event as opposed to directly funding the event, funding a subsection of an event, funding individual teams or athletes participating in an event, or strategizing advertising to overlap with the event. Although paid sponsors and event owners consider the act to be unethical, others consider it an ordinary part of competitive publicity (Bacham, 2013). Conclusion and recommendations. There are several measures that corporate sponsors can employ to avoid being hit with ambush marketing. Sponsor firms should anticipate competitive promotions and establish those particular rights with the event owners. They ought to identify potential avenues for promotions and block them, and seek legal remedies upon the infringement of their rights by event owners. The most effective approach that sponsor companies can employ to avoid ambush marketing is to have a legally binding contract that addresses the aforementioned issues and promotes their interests effectively. Given the tendency for end-users to relate events with sponsors, it is advisable for sponsoring corporations to select activities that match with the image of their services and products. Indeed, developing firms should not relate themselves with any event or cause without first tasking themselves with examining the possible setbacks of a funding opportunity. For instance, effective funding often needs active involvement on the part of firms and sections of their staffs. In addition, some firms shy away from funding because of worries that they might be exposed to legal action by other event organizers. Affiliation with a public event that is poorly planned or interrupts local morals of good taste can be expensive to a developing business. With this in mind, medium and small business proprietors should continuously agree to a background check on organizations or events that they consider funding. Consulting with past and current sponsors is an effective way gather more about the organization or event from people other than its agents. It is worth noting that the increasing acceptance of corporate funding has encouraged several market research organizations to help businesses in the implementation, selection, and evaluation of corporate sponsorship opportunities. However, these services can be extortionately costly for smaller companies. Even if there is a perfect fit between events and sponsors, it is still advisable for a corporation to fund the event and its engagement in order to obtain benefits. After all, funding is a type of publicity, even when it is a charitable venture or a nonprofit event. Likely ways to advertise events sponsorship include print and broadcast adverts, billboards, and direct mail. Sponsoring firms can also find it important to issue press announcements on the event to public media, as well as to donate editorials and articles and to journals that reach the intended audience. Promoters of customer goods can also engage in joint campaigns with retailers, such as tie-ins and coupons The costs attached to event promotion can vary from hundreds of thousands of dollars to a millions of dollars, subject to the response to the event and the degree of the funder’s participation. In addition to the fee of hosting the event itself, there are also related publicity, administrative and advertising costs to contemplate. Several small firms opt to start as a co-sponsor of a current event, which permits them to take advantage of the other established corporate sponsors experience. It can also be likely for an emerging business to endorse a new event and share promotion costs with an established or counterpart co-sponsor. Some companies find it difficult to validate the cost of corporate funding because it can be difficult to measure the outcomes in financial terms. However, it is often probable to have before-and-after interviews with the audiences of the event, or to provide away tickets and then track improvement rates. Some companies also try to measure the achievement of an event by offering a toll-free phone number for participants to call for more information about their services or products. References Bacham, T. (2013). Commercial Sponsorship in Mountaineering: A Case Study of the 1975 British Everest Expedition. Sport in History, 33(3), 333-352. Bero, L. A. (2009). Accepting commercial sponsorship. BMJ, 319(7211), 653-654. Cavalli, F. (2013). World Oncology Forum and commercial sponsorship – Authors reply. The Lancet, 381(9878), 1624. Faganel, A., & Bratina, D. (2013). Commercial sponsorship, brand image and WTA tournament. International Journal of Academic Research, 5(2), 156-162. Meenaghan, T., & Sullivan, P. (2009). Commercial sponsorship. New York, NY: John Wiley & Sons. Micheal, M. (2012). Should Commercial Sponsorship be Used to Subsidize Athletics Programs?. Journal of Physical Education, Recreation & Dance, 73(4), 9-11. Miles, L., & Rines, S. (2012). Football sponsorship & commerce an analysis of sponsorship and commercial opportunities in football. London: International Marketing Reports Ltd.. Steiner, T. J. (2008). Ethical Issues Arising from Commercial Sponsorship and from Relationships with the Pharmaceutical IndustryReport and Recommendations of the Ethics Subcommittee of the International Headache Society. Cephalalgia, 28, 1-25. Swinbanks, D. (2013). Commercial sponsorship reaches new heights. Nature, 348(6302), 575- 575. West, D. (2010). Project sponsorship an essential guide for those sponsoring projects within their organizations. Farnham, Surrey, England: Gower. Read More