KRLS 105 FINAL QUESTIONS & ANSWERS
1. Sponsorship
What are the 5 elements of promotion mix - answer -- personal selling
- advertising
- publicity
- incentives (sales promotions)
- sponsorship
All interrelated
Sponsorship platform - answer -the central theme around which the sponsor can
develop a consistent promotional message
Why is the sponsorship platform important - answer -sponsorship doesn't offer a direct
message as to why a brand should be purchased
- have to amplify message to the audience
- ideal to have fewer sponsorships, but invest more in leveraging each
Two basic costs of sponsorship - answer -direct sponsorship investment + indirect
activation of the sponsorship
- $3 in activation for every $1 on direct sponsorship
What is media involvement - answer -- anticipated media involvement is prominent in
negotiations
- media coverage is key to brands seeing awareness or image enhancement
Three ways to pursue media coverage - answer -1. Negotiate trade-outs with tv, radio,
newspaper
2. Media pays to sponsor events in exchange for rights to sell other sponsorships
3. Secure editorial coverage (companies buy a block of time from the network (30 min
block) and sell ad time
Platform elements - answer -- signage
- awards
- internet
- retail promotions
- personalized service
- licensing
What is sponsorship commitment - answer -- need time to establish linkages
- long-term relationships may leave legacies
- 3 year minimum contract is recommended
- 2 reasons why sponsors do not renew:
- sponsor management or market conditions may change
,- reduction in impact of a sponsorship
Alcohol sponsorship and sport/recreation - answer -- sports fans drink beer + beer
drinkers like sport
- both men and women max beer consumption and sports participation peak between
age 18-29
- seen as lesser evil than tobacco
4 levels of benefit packages/ sponsorships - answer -1. Title sponsor
2. Presenting sponsor
3. Official sponsor
4. Official supplier
What is a title sponsor? - answer -- their name is integrated into the event
- have input into organization of the event
- can result in increased costs
What is a presenting sponsor? - answer -- usually only have to pay 1/2 to 1/4 of what
title sponsor pays
- given rights to associate within a specific product category
- try to narrow categories to increase number of possible sponsors
What is an official sponsor? - answer -- pay 10% of title fee
- part of product categories not reserved by the presenting sponsors
- allows smaller companies with less money to have sponsorship opportunity
What is an official supplier? - answer -- they do not have an obvious link to the event
- offer goods or services to organization staging the event
How do we price sponsorships - answer -- using the hierarchy of benefit packages
allows sponsors to choose level of investment
- potential sponsors usually present top-level packages first
- acceptability of the price will depend on other sponsorship opportunities available
- do not price individual elements as it allows sponsor to cut out parts
- 65% of fee should be paid up front
Issues addressed in a sponsorship agreement - answer -- official status (sponsorship
category, rights etc.)
- sponsorship fee (how much, when to pay, refundability, security)
- title rights (how does sponsors name appear, awards, trophy presentations)
- tv exposure (who owns rights, right of first refusal for advertising)
- hospitality rights (hospitality tend, tickets for clients)
Issues addressed in a sponsorship agreement cont. - answer -- point of sale promotion
(products sold on site, can sponsor run on and off side promotions)
- direct mail lists (will mailing list of sponsor be made available)
, - product sampling (space made available for display/sampling)
- legal liability ( who's responsible for injuries to spectators, athletes, officials etc.)
- future options (how long is sponsorship, who has right to renew, fee increase)
Media equivalencies - answer -quantifying:
- duration of television coverage, including verbal and visual mentions
- duration of radio mentions
- press coverage (measured in column inches)
Calculate and assign a dollar value based on the rate paid
What is media coverage weighted to reflect - answer -1. Relative attractiveness of
different types of media coverage
2. Quality of media coverage
3. Amount of clutter
What is often inflated in media coverage - answer -1. Article length equated with
advertising space
2. Full rate card value is assumed when few companies actually pay the full price
3. Assumes that time of exposure adds up to equivalent commercial sport
Issues of sponsorship awareness - answer -- recall is often faulty
- market leaders are given credit for sponsoring
Economic and intangible benefits of sport - answer -
Establishing geographic areas - answer -- province, region, city
- usually reflects funding source
- displaced spending - spending that would occur in the area anyway
Economic impact analyses - expenditure approach - answer -- estimate attendance at
an event
- survey attendees to find spending associated with the event
- apply a multiplier to account for recirculation if money is in the local economy
What is a multiplier? - answer -the degree to which spending induces additional rounds
of spending
Economic impact analyses - income approach - answer -- total payments to workers
and suppliers in a related industry
- apply a multiplier
- any errors at any point in the calculation can significantly bias the results
Substitution effect - answer -- when attendees spend money on an event instead of
something else in the local economy
(ie. The reallocation of expenditures, not net increase in economic activity)
1. Sponsorship
What are the 5 elements of promotion mix - answer -- personal selling
- advertising
- publicity
- incentives (sales promotions)
- sponsorship
All interrelated
Sponsorship platform - answer -the central theme around which the sponsor can
develop a consistent promotional message
Why is the sponsorship platform important - answer -sponsorship doesn't offer a direct
message as to why a brand should be purchased
- have to amplify message to the audience
- ideal to have fewer sponsorships, but invest more in leveraging each
Two basic costs of sponsorship - answer -direct sponsorship investment + indirect
activation of the sponsorship
- $3 in activation for every $1 on direct sponsorship
What is media involvement - answer -- anticipated media involvement is prominent in
negotiations
- media coverage is key to brands seeing awareness or image enhancement
Three ways to pursue media coverage - answer -1. Negotiate trade-outs with tv, radio,
newspaper
2. Media pays to sponsor events in exchange for rights to sell other sponsorships
3. Secure editorial coverage (companies buy a block of time from the network (30 min
block) and sell ad time
Platform elements - answer -- signage
- awards
- internet
- retail promotions
- personalized service
- licensing
What is sponsorship commitment - answer -- need time to establish linkages
- long-term relationships may leave legacies
- 3 year minimum contract is recommended
- 2 reasons why sponsors do not renew:
- sponsor management or market conditions may change
,- reduction in impact of a sponsorship
Alcohol sponsorship and sport/recreation - answer -- sports fans drink beer + beer
drinkers like sport
- both men and women max beer consumption and sports participation peak between
age 18-29
- seen as lesser evil than tobacco
4 levels of benefit packages/ sponsorships - answer -1. Title sponsor
2. Presenting sponsor
3. Official sponsor
4. Official supplier
What is a title sponsor? - answer -- their name is integrated into the event
- have input into organization of the event
- can result in increased costs
What is a presenting sponsor? - answer -- usually only have to pay 1/2 to 1/4 of what
title sponsor pays
- given rights to associate within a specific product category
- try to narrow categories to increase number of possible sponsors
What is an official sponsor? - answer -- pay 10% of title fee
- part of product categories not reserved by the presenting sponsors
- allows smaller companies with less money to have sponsorship opportunity
What is an official supplier? - answer -- they do not have an obvious link to the event
- offer goods or services to organization staging the event
How do we price sponsorships - answer -- using the hierarchy of benefit packages
allows sponsors to choose level of investment
- potential sponsors usually present top-level packages first
- acceptability of the price will depend on other sponsorship opportunities available
- do not price individual elements as it allows sponsor to cut out parts
- 65% of fee should be paid up front
Issues addressed in a sponsorship agreement - answer -- official status (sponsorship
category, rights etc.)
- sponsorship fee (how much, when to pay, refundability, security)
- title rights (how does sponsors name appear, awards, trophy presentations)
- tv exposure (who owns rights, right of first refusal for advertising)
- hospitality rights (hospitality tend, tickets for clients)
Issues addressed in a sponsorship agreement cont. - answer -- point of sale promotion
(products sold on site, can sponsor run on and off side promotions)
- direct mail lists (will mailing list of sponsor be made available)
, - product sampling (space made available for display/sampling)
- legal liability ( who's responsible for injuries to spectators, athletes, officials etc.)
- future options (how long is sponsorship, who has right to renew, fee increase)
Media equivalencies - answer -quantifying:
- duration of television coverage, including verbal and visual mentions
- duration of radio mentions
- press coverage (measured in column inches)
Calculate and assign a dollar value based on the rate paid
What is media coverage weighted to reflect - answer -1. Relative attractiveness of
different types of media coverage
2. Quality of media coverage
3. Amount of clutter
What is often inflated in media coverage - answer -1. Article length equated with
advertising space
2. Full rate card value is assumed when few companies actually pay the full price
3. Assumes that time of exposure adds up to equivalent commercial sport
Issues of sponsorship awareness - answer -- recall is often faulty
- market leaders are given credit for sponsoring
Economic and intangible benefits of sport - answer -
Establishing geographic areas - answer -- province, region, city
- usually reflects funding source
- displaced spending - spending that would occur in the area anyway
Economic impact analyses - expenditure approach - answer -- estimate attendance at
an event
- survey attendees to find spending associated with the event
- apply a multiplier to account for recirculation if money is in the local economy
What is a multiplier? - answer -the degree to which spending induces additional rounds
of spending
Economic impact analyses - income approach - answer -- total payments to workers
and suppliers in a related industry
- apply a multiplier
- any errors at any point in the calculation can significantly bias the results
Substitution effect - answer -- when attendees spend money on an event instead of
something else in the local economy
(ie. The reallocation of expenditures, not net increase in economic activity)
