14 Jun Case: Sport Sponsorship Screening & Planning Posted at 03:23h in Case Studies, Sport Sponsorship by Danielle Spinks-Earl Share A Hypothetical Case Study of Green&Black’s and the Highland Fling The following is a plausible, hypothetical case study of a sport sponsorship partnership, which uses emerging best practice principles including sponsorship-linked marketing, co-marketing alliances, and image as well as values transfer. No permissions have been gained and assumptions have been made with respect to some internal company information. As such, specific information in this report should not be considered factually correct for any purpose other than understanding how sport sponsorship planning could be conducted. I hope it is helpful. Executive Summary Green & Black’s premium chocolate and the mountain bike marathon event, Highland Fling, share many things in common including a target market / fan base as well as brand personality fit and strategic objectives. This report shows how the two organisations can serve the objectives of each other in a three-year partnership based on collaboration between people, resources, skills and capabilities, in order to affect a 3% increase in Australian chocolate market share for Green & Blacks by growing the popularity of the Highland Fling and the esteem of Australian ‘serious leisure’ cyclists. Situation Analysis Environment Green & Black’s (G&B) is a brand of organic, free trade chocolate that began as a small enterprise and is now owned by Kraft. It operates in the chocolate and confectionary category, specifically, the premium chocolate segment. The Australian chocolate market is worth $2.7 billion p.a. Average Australian consumption is 4.4 kg per year. The market is saturated with predominantly milk chocolate products and rivalry is intense. The market is mature, but the premium segment is in growth at 2.3% p.a. (IBISWorld, 2013). Seventy five per cent of purchases are from retail consumers. Net profit margin per product is 6.8%, meaning that G&B will make 59 cents on every $4 100gm bar. The market is stable and is considered “recession proof” (Henschen, 2008). Organisation G&B has an advantage of being part of the Kraft group from whom it can utilise resources, marketing expertise and packaging economies-of-scale if required. The G&B management controlling the Australian market is located in Dunedin, New Zealand. Because of its Fair Trade status, G&B enjoys a high degree of autonomy from Kraft’s operations (World Chocolate Guide, 2013). Competitors Competition is from Kraft (who owns Cadbury and their extensive product lines) at 49.1% share; Nestle (21.5%) and Mars (14.3%). In the premium segment, the market leader is Lindt (5.8%); Ferrero (4.5%) and then Darrell Lea (4.1%). G&B has less than 1 per cent share (0.7%) (IBISWorld). Customers There are two groups of G&B customers. Young, affluent urbanites and everyday luxury buyers, generally mothers. Taste and quality are the key determinants for both. More consumers are increasingly attracted to dark chocolate because of the health benefits, which include high anti-oxidants, low sugar and no dairy, as well as an increase in consumer concern about ethics and sustainability of food. The segment has expanded by 65% since 2002 (Market Research.com, 2013). Global Positioning The cacao for G&B’s product is not sourced from the Ivory Coast of Africa where the majority of the world’s chocolate comes from using child slave labour. It is sourced from village workers in Mayan village, Belize. Here, the beans are “picked, dried, roasted on a hot plate over a woodfire and ground by hand in a machine resembling a large household mincer” (Purvis, 2006). The result of the G&B enterprise has meant that 70% of children in outlying villages now have secondary education compared to 10% before G&B began operating there. G&B positions its products on taste with organic and Fair Trade status as supporting elements. The brand’s name refers to ‘Green’ being the environmental and ethical dimension of the products and ‘black’ refers to the high cocoa content, a hallmark of authentic chocolate (Green & Black’s Website, 2013). G&B has historically resisted ‘push’ strategies in favour of a philosophy that is about having consumers ‘discover’ the brand and then drive word of mouth. G&B is noted for its distinct brand story. It won the Worldaware Business Award in 1994 for its and became the recipient of the UK’s first ever Fair Trade brandmark (Burkitt & Zeally, 2007). Internationally, the brand recognises that its Fair Trade status and organic attributes are not inimitable and copycat brands with the same attributes are appearing. As a result, G&B now accentuates its ‘playful’ brand personality with image-driven short copy ad campaigns (below) that ensure its position in the mind of the consumer is as a chocolate for ‘grown-ups’ rather than families (Cadbury) and teenagers (Mars). Figure 1. G&B UK Advertising Campaign Corporate Objective For KRAFT, the place of Green & Black’s in the category portfolio is to take the niche alternative, healthy, Fair Trade choice for ‘grown ups’: the affluent and ethical Australian consumer. The goal is to increase Green & Black’s Australia market share from 0.7% to 3.0 % before June 30 2016. That will increase net revenue from $38,161,200 to $163,548,000 assuming the margin remains consistent. Marketing Plan Objectives and Positioning Expansion into Australia has proven difficult. The brand is relatively unknown and the distribution is solely through supermarkets. The core problem is brand awareness and lack of product trial. A SWOT/TOWS is below and outlines the strategic situation. OPPORTUNITIES THREATS • There’s growing demand for Dark Chocolate for health benefits• World Vision promoting ethical suppliers alternative to ‘blood chocolate’• Sport sponsorship increasingly explored by manufacturers• Branding and Promotional activities stimulate product trial. • New dark chocolate lines from competitors are imminent.• KRAFT’s Cadbury products moving to fair trade and may cannibalise.• Branding and promotional tactics like Mars ‘super-size’ products• Input price rises (cocoa and sugar) STRENGTHS SO ST • Fair Trade Status / Organic Status.• Powerful history and brand story• Product trial is almost always very favourable• Owner, KRAFT, can provide resources if requested • Use sport sponsorship to increase awareness and product trial.• Infuse brand story into promotional packaging• Use a sponsorship vehicle to promote the ethics of the products. • Pre-empt new competition through increasing awareness of story and origins.• Use freebies or samples to encourage later purchase. WEAKNESSES WO WT • Relatively unknown in Australia• Distribution solely through supermarkets so trial is not easy• Consumers very brand loyal to competitors. • Awareness-building will help tap the dark chocolate interest.• Sponsorship will encourage selection at supermarket (75% impulse purchase). • Earlybird awareness of the brand and story may thwart new line penetration• Direct online store may reduce overheads in event of input price increase Marketing Objectives In order to achieve the corporate goals, G&B must significantly increase awareness and generate favourable attitudes of brand liking and preference. Given the positioning strategy, the brand seeks to become embedded in communities. Sport Property Selection In order to maintain the global brand’s positioning strategy of below-the-line communications, as well as to generate reach to build awareness and be cost-effective, G&B has reviewed its TOWS strategic options and decided to sponsor a sporting event. The sport choice selected was Cycling. This is due to the fewer instances of clutter in this sport than other mainstream sports in which sponsorship is saturated. Cycling is the fourth most popular sport in Australia. Fourteen per cent of men and nine per cent of women participate in cycling activities and this constitutes approximately 1.89 million Australians (Brown, O’Connor, Barkastos, 2009). The strategy for G&B is to generate grassroots awareness and product trial through a sport sponsorship framework, preferably one that supports and reinforces G&B core value proposition of being sustainable, alternative, ‘grown-up’ and high quality. The criteria for the sport property are: • the opportunity should be unique or novel • the partnership should be of value to both brand and sport by deepening connections with customers / fans • there should be opportunity to make a significant contribution to the sport • the sport should offer adequate exposure Two events were scrutinized: Tour Down Under, the professional road cycling event and 110km mountain bike marathon Highland Fling in NSW Southern Highlands. Both events were screened using the Sports Sponsorship Screening Instrument (Irwin, 1995). Both share a good fit in terms of target market / sport participants in that they are 20s-40s, educated, ethically-minded and reasonably affluent consumers. Tour Down Under was eliminated for three reasons: 1) With over 30 incumbent partners, the excessive clutter in terms of the number of sponsors as well as the confusing array of sponsorship / partnership ‘levels’ and in-kind supporters is unlikely to achieve cut-through (Amis, Slack & Berrett, 1999). 2) Were G&B to achieve any cut-through for its investment, it is likely to be mistaken in the mind of a consumer / spectator for another brand in the chocolate category with a larger share of voice (e.g. Lindt, Mars or Nestle) (Cornwall, Weeks & Roy, 2005). (3) Given the professionalism of the event and the skillful use of social media and broadcast opportunities, little added value can be given by applying G&B’s resources and capabilities 4) Given the frenetic schedule of the event organisers, it is unlikely that the desired level of inter-organisational cooperation and collaboration would be available to see such a sponsorship form the basis of a medium-term (minimum 3 year) partnership. SWOT – Highland Fling The Highland Fling is an off-road mountain biking (MTB) marathon event that has been running for nine years. It attracts around 5,000 participants and spectators each year and attracts minimal sponsorship clutter, and little media. Event participants come from the Southern Highlands, Sydney, Canberra, Wollongong, interstate and some from overseas (Wild Horizons, 2013). The event seeks a new major sponsor to whom it grants naming rights each year. There is little evidence that the sponsorships have been well-leveraged by sponsoring brands. Event marketing is left to the event organisers where there is limited marketing or media experience. That said, it is likely that extensive naming and management cooperation can be gained, facilitating a mutually rewarding long-term relationship. Strengths• Highly loyal participants• Full naming rights• Close to Sydney, Wollongong and Canberra • Willingness to collaborate • Strong congruence with target market & fans • Strong market orientation and connections with cycling community internationally • Carbon neutral • Minimal sponsor clutter Weaknesses • Smaller event (5,000) annually• Long registration queue• Previous sponsors have not leveraged their commitments • Most of the tracks in bushland (no spectators) • Website Opportunities• Sampling• Extend spectatorship through media• Online registration Threats / Risks• Ambushing• Major incident (accident)• Degenerative behaviour Although the Highland Fling is not currently a major event, it presents a major opportunity to become so with a vast but as yet untapped potential to generate traditional news and broadcast coverage and, more importantly, online viral reach. Enabling this lift in event profile would benefit the sport property and esteem of its highly engaged fan / participants, but also raise awareness and liking of the G&B brand. It also meets the criteria of inter-team management collaboration, presents an event of rare or uniqueness, and the opportunity for a powerful image transfer (Ferrand and Pages, 1999). Utilising the inherent depth of loyalty and passion with G&B’s complementary resources and capabilities, a distinct competitive advantage can be developed as has been seen in the case of firm Owens-Corning in Canada facilitating the increase in popularity of freestyling skiing (Amis et al, 1999). This would be mutually advantageous and result in G&B being perceived as a vital and trusted member of the group, rather than ‘wallpaper’ as it may with another event. Target Market / Audience Fit The Highland Fling event fans tend to fit the ‘New School’ psychographics (Argus, 2013): – Cycling enthusiasts – Predominantly male but strong female participation – Tertiary educated with a professional background and mid-high income – Aged from mid-20s to mid-40s with most in mid-30s Across this spectrum of participants there are multiple motives for participation including competitiveness, fitness, risk and adventure (Crum, 1998). This event is perceived as a ‘hard core’ cycling event in the “serious leisure” cycling category”. The motivations for participation are “social, embodiment, self-presentation, exploring environments and physical health outcomes” (Brown, Trent & O’Connor, 2008). The cycling fraternity is a tribe where “the importance of the activity and the level of participation is high” (Bull, 2006). Group affiliation is high. Highly identified attendees and spectators are likely to view any sponsor as being part of the ‘in-group’, meaning there is a high degree of image transfer to G&B. This is supported by “Self-esteem theory” which posits that the motivation begins with ‘belonging’ before it moves to the ‘personal’ (Burke and Stets, 2000). Considering the sport participation ‘escalator’ (Mullin, Hardy, Sutton, 2000), participants of this over 18s event can be considered highly engaged. However, there is space for different levels of engagement with the shorter races, as well as a gap for 14-17 year olds to ensure their ongoing involvement and ascendency in connections with both the sport and the brand. Perceived Match The Highland Fling begins in Bundanoon, a village that became Australia’s first town to voluntarily ban bottled water. It has also been involved in a long community standoff with Coca-Cola who wishes to conduct aquifer drilling in its pristine national parks. This legacy suits G&B’s ‘alternative’ positioning. The archetypal elements of this story (David and Goliath / the power of community) resonate with the history and brand of G&B, given its positive impact on the Mayan village of Belize and the resultant income and educational advancements this has brought to that developing region. Personality Congruence G&B brand is known for an increasingly irreverent personality in other markets around the world. It forgoes above-the-line advertising and promotions for creative, minimal print ads, sponsorships and experiential sampling encounters. Highland Fling is also known for an irreverent personality. The 110 km race is the full fling and the shorter 14 km race is the casual fling. The double entendres fits with the in-house style of G&B. Sponsorship Objectives For G&B, brand awareness is very low. The objectives of the sponsorship are: To increase brand awareness and recognition to 10% of the Australian market by 2016. To stimulate interest and desire for G&B due to the congruence with the sport values and aims for 50% of those who are brand aware by 2016. To exploit the event for product sampling, especially by those identified as opinion leaders. After the inaugural year, to use the sponsorship as a promotional vehicle for brand extensions including the 14 flavours of chocolate blocks available in other markets but not yet introduced into Australia (Cornwall, 2008). To increase G&B product market share by 1% per annum until it reaches 3% in June 2016. Sponsorship Strategy To achieve these objectives, the strategy is to: Secure Naming Rights for the event and exploit on-site opportunities for association leveraging, articulation and exposures. To use humour in the creative executions and product sampling to “seed the vanguard” (Dye, 2000) within the sport by identifying and nurturing influencers and opinion leaders. Communications Budget The total investment in the sponsorship itself will be $200,000 per annum, comprised of a $50,000 initial investment and accompanied by $150,000 to leverage the associations and build the event’s profile. The expected duration of the partnership is 3 years. Sponsorship Theme Ferrand and Pages (1996) remind us that we need to be simple in order to cut through, and to put our focus on the collective rather than the individual, in order to generate feelings of connection and tribe. The sponsorship will use the term ‘Tasty Fling’ to emphasise the exciting and decadent aspects of the chocolate and the event. Leveraging and Activation People The event manager of Highland Fling is Wild Horizons. This company has deep insights into the cycling community, opportunities to access this group, and is owned and led by Huw Kingston, a high profile key influencer of the serious leisure cycling community internationally. In preliminary discussions with Wild Horizons, a decision to undertake a co-marketing alliance and adopt a Resource Based View (Amis, Pant & Slack, 1997) whereby the complementarities of both organisations could be manipulated to form an event and brand competitive advantage. A cross-functional ‘Sponsorship Activation’ team within G&B will be developed with key members of marketing, IT and human relations. This team will work with Wild Horizons to assist manage the event program and the alignment of both parties’ objectives over the next three years. Processes An initial event blueprint (Bitner, Ostrom & Morgan, 2007) was devised that documents each event registrant’s actions and movement and the backend processes involved. It also documents physical evidence requirements and opportunities. This has formed the basis for the development of a co-marketing alliance as well as the investment items for G&B. An initial review of past years’ feedback and results with the Wild Horizons team has found overall very positive experiences and emotional bonding between participants and within the event. There were the exceptions of two perceived main drawbacks, however – the physical registration process resulting from a lack of online payment gateway and transport inconveniences. Resources and Capabilities Wild Horizons’ Role Wild Horizons’ role will be to manage and co-ordinate the event and provide a team of on-site staff to facilitate the smooth execution. They will also manage the first-aid, camping area and onsite food and beverage stalls as usual. As they have an excellent market orientation in terms of understating the fan base and sport industry, they will be advisors as to the effectiveness of communication elements through the use of a ‘test marketing’ group they formulate. This group will also be used as an advisory panel for the sponsorship partnership and serve as idea generators. Technology – Website and CRM G&B will lend IT capabilities in the design and installation of an updated Highland Fling website with CRM and online event registration and payment portal. This will capture registrant’s details, enable ongoing communications and avoid the long registration queue identified in the blueprinting. Design – Registration Kit Sent to each registrant will be the route map, detailed instructions as to how to arrive in Bundanoon and a sticker with their competition Number and co-branding. . There will also be a G&B gift sample. The route map will be designed by G&B marketing department and feature chocolate iconography. Event Staging – Race Stage Naming The early stage of the course is flat and classified ‘easy’. The white chocolate will brand the section as ‘an easy fling’; the wood-chipped line section of the course will be the ‘crunchy fling’ (hazelnut); the muddy, slippery section will be ‘butterflinger’ (butterscotch); the section with sharp turns and tight corners will be the ‘spicy fling’ (chilli) and the dimmer, rainforest section will be ‘decadent fling’ (dark chocolate 85%). Online Live Broadcast Due to the limitations on the event participation numbers, the reach can be extended though social and mainstream media. Twenty riders will be selected by Wild Horizons to be outfitted with Go-Pro video cameras which will be used to capture live footage of the event and fed to the YouTube live streaming. Social Media G&B will reinforce Highland Flings social media promotion of the event with their own and enable user-generated content from the event to be uploaded to the new website. Green & Black’s Technical Quality Award The trickiest hairpin turn in the heart of the race will be kept under HD video surveillance and an award for Technical Quality will go to the participant who makes the most adept maneuver of this junction. The footage will also be repurposed for media broadcast opportunities for commercial programs including Sports Tonight, Fox Sports and nightly news programs around the country. Other video clips will be used in the YouTube live broadcast. Photography Three stills photographers from G&B will rove around the event and capture images for news publications, magazine articles, G&B advertising campaigns (in which rivers of mud may be used to resemble chocolate) and social media. Transport The three principle corridors that event participants are likely to come travel through are from Sydney, Canberra and Wollongong. To assist in the comfort and convenience (and thereby create positive disconfirmation of the overall event experience and brand liking), some luxury coach services will be provided for the 90 minutes journey the day before the event and run from Sydney Airport, Canberra and Wollongong to Bundanoon. App and Game In order to move the younger target customers and fan base along the escalator of brand and event awareness and liking, an app based on the event will be designed for the free download of a targeted group of 14 – 17 year olds. G&B SPONSORSHIP-LINKED MARKETING Packaging In Australia, the course stages named after products will have packaging temporarily reflect the event staging names. The brand stories of both organisations will be synthesized into an event narrative and printed on the inside of the packaging also. QR codes and web links will lead to richer online stories and interaction opportunities. Advertising G&B will take out full-page ads in RevolutionMTB magazine, Cyclist magazine and some online advertising in cycling-related websites in the six months leading up to the event. Along the main transport route for event participants, five billboards will promote the event, including three along the M5 Motorway. Public Relations / Publicity The Sponsorship Activation Team alongside the Wild Horizons team will generate Media Releases about the event partnership and the higher-order congruence of conscience of both parties. The nature of World Vision’s work to end ‘blood chocolate’ will be showcased on both the websites of the event parties and the event itself. World Vision can be also be included in these communications with information about the chocolate from the Ivory Coast of West Africa (World Vision Website, 2013) and the disastrous impact that is having on the lives of many in those areas. Ideally, both will make an investment donation with World Vision whereby the ethical dimension of the partnership may be reinforced. Contingencies Ambushing In order to proactively thwart ambushing attempts, Wild Horizons will liaise with accommodation venues in the event proximity and G&B will supply them with friendship hampers for their staff. Private landholdings on which the race event takes place will also be sent gift thank you hampers by G&B via Wild Horizons to help inhibit these parties as targets of either ambush marketing or event sabotage. YouTube Videos featuring the footage of the event will be annotated by G&B’s marketing team and feature irreverent commentary. No advertising will be permitted on the clips to avoid any intentional or unintended promotion of competitor or other brands. Joint Communications The event organisers will also use their knowledge and connections with the cycling and MTB community to promote G&B event partner. Measurement In order to accurately measure the impact of the co-marketing alliance, some measurement research will be undertaken prior to the event and after the event each year. Brand awareness levels will be gauged through surveying. As this has been criticized as being an inadequate measure (Abratt & Grobler, 1999), this will be accompanies by richer qualitative data, including focus groups and perceptual mapping, also. These interviews and surveys will be conducted before and after the event with random samples of adults in the target market. This will be done to measure the amount of processing that has occurred in terms of image transfer and concomitant emotional and cognitive benefits associated with the brand (Gwinner & Eaton, 1999) Sales figures will determine the market share and any changes before, during and after the event. Each year, it is expected that the group team will evaluate the effectiveness of the sponsorship and work together in a weekly updates for the following year’s activities. Improvements and modifications to the program can be made on a flexible basis. Finally, the event sponsorship will be evaluated in terms of what other types of investment (such as advertising) may have achieved instead. Assumptions and Limitations This sponsorship plan assumes that the Highland Fling event will continue for a further three years in order to achieve the 3-year strategic objectives. By blueprinting the procedures and activites undertaken by each team independently and together, it is possible that any changes in the management teams can be mitigated and successful results carried over to future years. It is assumed that the ownership of Green & Black’s (KRAFT) will not pose a negative association. It is possible that some may construe G&B’s partnership with Highland Fling and World Vision as disingenuous and exploitative, however, little can be done to minimise this risk other than keeping true to the brand origins story and continuing discrete business operations. In the event that the sponsorship partnership is very effective, emerging sports that share a close congruence with the target market / fan base and shared values will be considered to build the G&B brand even further. References Argus, K (2013) “Sport Marketing & Sponsorship”, Monash University. Amis, J & Cornwall, B [Eds] (2006) Global Sports Sponsorship, Berg Amis, J., Pant, N., & Slack, T. (1997). Achieving A Sustainable Competitive Advantage: A Resource-Based View Of Sport Sponsorship. Journal Of Sport Management, 11(1), 80 Amis, J., Slack, T. & Berrett, T. (1999). Sport Sponsorship As Distinctive Competence. European Journal Of Marketing, 33(3), 250-272. 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