In marketing, the distinction between sponsorship, patronage and charity is somewhat blurred. This confusion appears to be amplified when applied to a sport marketing context as each concept is often used interchangeably. This inability to distinguish the three concepts can also create problems for sport organisations. The organisations may not be gaining the intended benefit from sponsorship, patronage or charity as the wrong type of agreement was entered into. This post will define each term and provide you with some examples to further explain the difference between sponsorship, patronage and charity. 

SPONSORSHIP
Sponsorship involves a 'reciprocal relationship' between the sponsor and the entity being sponsored. This means that both parties to the transaction obtain a benefit, usually of commercial significance. Resources, services or money are commonly exchanged to achieve this goal. The San Francisco 49ers, a NFL team, recently signed two sponsorship agreements in relation to their new stadium. One agreement was made with Citrix Systems (who will become the 'mobile workspace technology partner') and another with United Airlines (who will become the 'official airline partner'). Citrix will obtain the benefit of having a boardroom and business centre bearing their name at Levi's Stadium. Additionally, United Airlines will get the naming rights to the largest corporate suite space at the new stadium. In contrast, the 49ers will receive a healthy sum of money from the sale of this sponsorship inventory.  

PATRONAGE

On the other hand, patronage involves the act of supporting a particular group of people or organisation that has been specifically selected by the patron. The intention is to promote the work of such groups and ensure they have the resources to continue with their work. Historically, the wealthy were considered to be 'patrons of the arts' if they offered their support to painters, musicians, sculptors and other artists. In sport, the concept can also be applied. The Kirra Surfriders Club consider patrons to be "individuals who have provided long term support over an extended period of time but who may not have ever been a member of the club. The role of Club Patron is part promoter of the club and its members and part supporter of the club's activities and ongoing success."

CHARITY
Lastly, charity is the act of helping those in need by providing aid through money and/or volunteering. In 2013, the AFL had an arrangement with the Australian Red Cross where this organisation would be the official charity partner of the preseason competition. This partnership was described as the following: "As well as match day fundraising, the partnership will also provide a national platform to increase awareness of the work of the Red Cross through the AFL and AFL stakeholder promotional vehicles including online, radio, print, PR and match day promotions."

Maslow's Hierarchy of Needs is a theory that aims to illustrate the motivation behind human behaviour. The needs are divided into five main categories: physiological, safety, love/belonging, esteem and self-actualisation. The categories are depicted in a pyramid shape in order to reflect which needs are basic for survival (positioned closer towards the base of the pyramid) through to complex needs (positioned closer towards the apex of the pyramid).   

Physiological needs are the most essential for humans to survive. It involves necessities such as food, water and sleep. A step up from this category is safety. Safety comprises of needs that are also vital for survival. However, fulfilment of these needs comes from feeling secure through employment, shelter and health. Once these survival needs are met, according to Maslow, humans desire a sense of love and belonging. This is found in sexual intimacy, family relationships and social ties.

As we move further up the pyramid, we begin to see what needs are important once survival and social needs are met. It is clear that self-esteem, a sense of achievement and respect (both of others and by others) becomes integral in motivating human behaviour. Following on from these more complex needs, is self-actualisation. Self-actualisation suggests that people need to feel self-aware and conscious of their personal growth to further motivate behaviour.

In a sporting context, fulfilling social needs is one of the most important categories. Sport has the ability to make people feel as though they belong to a team and are accepted by others. As a result, marketing can use this notion in an attempt to connect with consumers. For an example, see my previous post which shows how the Collingwood Football Club successfully use a sense of belonging in order to sell their brand. 

MASLOW'S HIERARCHY OF NEEDS DIAGRAM:

This blog post includes three video clips. They will help demonstrate generic, brand and indirect/direct demand in marketing.

GENERIC

The following is a video of the advertising campaign released by the Australian Football League (AFL) for the 2009 Premiership Season. Importantly, the campaign is a clear example of generic demand in marketing. This is so, as it intends to sell the sport as a product in itself. The video cleverly depicts the way in which the sport of Australian rules football encompasses many of the skills needed to play a wide variety of sports. For example, the vertical leap needed in the ruck contest is similar to that in basketball. The speed of AFL players can be compared to horse-racing, and the one-handed fend-offs prevalent in the NFL can be mirrored in the Australian sport. Further, the physicality, creativity and evasive moments needed to play AFL are all showcased by using comparisons to boxing, ice hockey and bull running. Overall, the video aims to depict the uniqueness of the game to illustrate how the sport is "in a league of its own", as the tagline suggests. 

BRAND

The following is a video of an advertising campaign released by the Collingwood Football Club for the 2012 Premiership Season. Collingwood's brand message is made very clear throughout the advertisement. It uses drama and the notion of unwavering loyalty to polarise consumers. On one hand, the advertisement persuades Magpies fans to purchase memberships in order to show their commitment to the club. This is so, as the "us against them" theme unites fans. It fosters a strong connection where supporters are inspired to solidify their bond with the club. On the other hand, the campaign also illustrates an acute awareness of how they are perceived by the rest of the competition. By adding this antagonistic angle, it further divides people into two categories: Collingwood supporters and Collingwood haters. Ultimately, the club's brand is clearly reiterated to consumers. 

INDIRECT/DIRECT

The following video was released by Turkish Airways in 2013. It depicts two internationally   identifiable athletes: basketball icon Kobe Bryant and soccer star Lionel Messi. The video titled 'Selfie Shootout' uses the popularity of the two athletes to indirectly market Turkish Airways as a premier airline to consumers. This is done through a friendly rivalry where both Bryant and Messi try to outdo one another by taking 'selfies' in exotic destinations all over the world. For example, the athletes take pictures in Moscow, Beijing, Cape Town and Istanbul, then send the images to one another. Each location is a destination that Turkish Airways fly to, ultimately persuading consumers to also "widen their world": just like Bryant and Messi. 

In my previous post, entitled 'Dan Migala: Getting Creative To Sell Sponsorships & Ticket Inventory', I summarised his five-point framework for innovate sponsorship and ticketing revenue generation. In this post, I will outline the three key messages I took away from Dan's presentation at the 2013 Sport Is Fantastic Conference. 

1. LEARN FROM YOUR FAILURES

Dan discussed how worthwhile it is to look at your biggest failures and learn from the experience. He encountered a problem when he tried to propose that the foul pole in baseball could be converted into a giant Stanley tape measure. However, before he could begin his presentation, he learned that tape measures were amongst Stanley's smallest revenue earners. This example illustrates that Dan had the right idea to look at the foul pole as a piece of sponsorship inventory, but it was the wrong audience to market the concept to. Yet, by understanding that his idea failed due to the lack of an innovative new product to showcase, Dan could approach a different brand such as Taylor Made; a leading golf equipment manufacturer. Therefore, Dan's lesson on learning from your failures is a valuable one. It forces you to revaluate and think differently about your initial concept. 

2. FOCUS ON YOUR OBJECTIVE

In a world where sport is financially lucrative and showing no signs of slowing down, having a revenue-driven mindset can pervade the thinking of many sport marketers. One of the main takeaways from Dan's presentation is that your core objective should be your focus. Revenue will be bound to follow once you stay true to your idea. I believe that there is a valuable lesson here than spans beyond the Avis example Dan discussed in his speech and the revenue psyche. It also can relate to fan engagement vs followers in a social media context. Sporting teams should focus on engaging fans and interacting with them on social media platforms, rather than aim to have a certain number of followers. A simple favourite, retweet or reply truly engages fans. Followers will then be a by-product of such interaction. 

3. BE GENUINE

Personally, there is nothing worse than feeling as though you are being sold something. The more obvious the hard sell is, the less likely potential consumers will respond to what is being communicated to them. Dan made it clear that having an authentic ideas resonates more strongly with consumers. This is something that sport marketers can take away from his presentation in order to communicate their product or service more effectively. 

This post is a summary and review of Dan Migala's talk 'Getting Creative To Sell Sponsorships & Ticket Inventory' which he presented at the 2013 Sport Is Fantastic Conference (Melbourne, Australia). 

BACKGROUND

Dan Migala is the Co-Founder of Property Consulting Group and the monthly marketing newsletter, The Migala Report. He began his career as a journalist, writing stories that covered various business aspects of sport. His work centred on ticket sales, promotions, sponsorship and innovative marketing ideas. Soon after, Dan evolved into a sponsorship consultant who has worked with clients such as Cricket Australia, the San Diego Padres and Major League Soccer teams.

Dan's presentation at the 2013 Sport Is Fantastic Conference focussed on a framework for generating non-traditional revenue strategies for both sponsorship and ticket inventory. Through the use of anecdotes, he was able to illustrate the importance of developing creative strategies. 

Dan began with a story that led him to evaluate his idea generation process. The convenience store 7/11 approached clubs in the Chicago area willing to sponsor a team that most accurately reflected their values. Dan, who was working alongside the Major League Baseball team, Chicago White Sox, posed the following question: If you owned 7/11, how do you get the message across that you sponsor the White Sox? From this initial line of questioning, Dan woke up one morning at precisely 7:11am and came up with the idea to change game times to 7:11. They successfully sold this idea to the convenience store chain for three times the original price. Further, the six minute delay allowed the broadcasters to fit in more commercials and the food and beverage partners to sell more product. When an intern asked how did this sponsorship work beyond the kitschy nature of 7/11, Dan developed the five virtues needed to thing creatively in revenue generation. They included emotional connection; moments of truth; enhance, don't interrupt; authenticity; and revenue is a result, not an objective. This post will provide an explanation of the five terms and the possible affect that such a framework can have on sport marketing in Australia.

EMOTIONAL CONNECTION

Dan reinforced the notion that marketers must try to emotionally connect with their fan base. The Cedar Rapids Kernels, a grass roots Minor League Baseball team, had an advertiser in the University of Iowa Children's Hospital. In the community, a young child had severed part of his leg in a farming accident. This tragedy and the child's subsequent recovery was front page news in the local newspapers. To create an emotional connection between the fans and the University of Iowa Children's Hospital as an advertiser, Dan and his team proffered the idea of inviting the child to do an honourary run around the bases. This aimed to celebrate the child walking again and the inclusion of the hospital leadership as team members celebrated how the staff nursed the child back to recovery. The idea was a success as it made the front page of the newspaper and it was the lead story on the news broadcast. The University of Iowa Children's Hospital now has the largest sign at the ball park and make up the largest ticket purchasers. Thus, this emotional connection illustrated instead of told the target market (parents) how the hospital gives children world class care. 

MOMENTS OF TRUTH
Secondly, Dan proposed that marketers need to create a truthful connection between what you are selling and what the audience is receiving. Once again, Dan used an example to illustrate this virtue. The Major League Baseball team, Kansas City Royals, sold family packs for Sunday games. This pack included two adult tickets, two children tickets and four free drinks for a price of $39. This product was a loss leader. One evening, the Royals' management staff went to a Denny's Restaurant and saw a sign which read 'Kids Eat Free on Sunday'. This concept, by a 1-2% margin, was Denny's highest revenue earner. The Royals had a moment of truth that they were lying to themselves by marking to a traditional family of four. Instead, their goal was to get more children to the games. As a result, they switched the family pack to 'Kids Eat Free on Sunday'. This allowed them to charge the full price for children's tickets and parents subsequently paying more for additional treats such as cotton candy. This revelation resulted in 6000 children attend the games, as opposed to the 500 family packs previously sold.  

ENHANCE, DON'T INTERRUPT
From Dan's presentation, it was made clear that people should never feel as though they are being sold something by sponsors. Instead, the sponsor must be a part of the passion inherent in sport. Kelly Services, a recruitment firm, was a non-traditional brand that sponsored the Omaha Royals. As the Royals wanted to be inside the school system, an intern suggested that a child could become the CEO of the team for a day. This presented the perfect opportunity for Kelly Services to partner up with this initiative by running resume workshops with the children and choosing the winner. By creating a concept that the company would invest in, the sponsorship idea enhanced Kelly Services' business objectives. The success of the child CEO initiative lead to front page news stories and the lifecycle of the promotion continues to this day. 

AUTHENTICITY
Building on the 'enhance, don't interrupt' virtue, it is imperative that marketers communicate a story that is authentic not contrived. By using the New York Yankees as an example, Dan was able to show the importance of such a concept. The Yankees had an airline partner who paid exorbitant amounts of money to be aligned with one of the world's biggest sporting teams. Originally, signs and PA announcements were used to market the airline partner at baseball games. However, research illustrated that the recall on the Yankee's airline partner amongst their premium baseball attendees ranked fifth out of only five options. It was clear that they were off-message and needed to appeal to their high net-worth travellers in a more effective way. As a result, a fan engagement concept was developed where frequent flyer miles could be used as a form of currency at Yankee games. For example, 100,000 miles could be redeemed to meet your favourite player or throw out the first pitch. An immediate spike in their target audience was reached once this initiative was established. Ultimately, by looking at the travel behaviours of the premium Yankee fans, it is evident that the authenticity of the idea played an important role in resonating with the consumer. 

REVENUE IS A RESULT, NOT AN OBJECTIVE
Lastly, Dan emphasised that marketers must stay true to the brand. If this is done, revenue will follow. For example, Gatorade do not have signs around stadiums. Instead, their orange coolers are placed near athletes as the sports drink is intended to serve athletes. Gatorade's success can be attributed to staying true to their brand. Another example can be found with Avis and their sponsorship of the New York City Marathon. The Avis Chairman's message was 'We Try Harder'. At the marathon, Avis had 50 teams representing the 50 states. These volunteers helped individuals, such as the blind and disabled, to run the race. Therefore, it is clear that Avis' objective was to show people the lengths they will go to help others and try harder. Revenue generation was not the primary focus. 

IMPLICATIONS FOR SPORT MARKETING IN AUSTRALIA
Marketing departments for sporting teams in Australia, big or small, can use these five virtues as a framework for generating innovative sponsorship and ticketing ideas. Currently, many professional Australian sporting teams have family packages that cater for a traditional family of two adults and two children. Although such packages can serve a purpose, it does not accurately reflect the composition of families in today's society or those wanting to go to a game. As a result, the marketing departments could reevaluate their product offerings so as they too can have a 'moment of truth'. They must look more broadly at the objectives of the family packs in order to develop an effective and creative way to facilitate such goals.

Additionally, in Australia, sporting teams have a strong focus on revenue generation as opposed to larger objectives. It is recommended that sport marketers make emotional connections to truly appeal to their consumers. Some teams, such as the Collingwood Football Club, do attempt to these make emotional connections. For example, Peter Gourlay, a 4-year-old cancer patient, was made President for a day this season. However, there is an opportunity to partner this initiative with a sponsor to raise further awareness of the hospital or the illness in itself. 

Overall, Dan's five-pronged framework should be at the forefront of every sport marketer's mind. Not only does it provide you with clear steps, it also forces you to revaluate both successful and unsuccessful marketing strategies. As a result, you can learn from these experiences to give yourself the best chance of succeeding in the future.  

In one of my previous blog posts, I analysed how Lucozade rebranded their product over the last 40 years. In the late 1980s, Lucozade utilised UK athlete Daley Thompson as a spokesperson in one of their television advertisements. This is arguably one of Lucozade’s most well-known advertisements as it helped launch the product as a sport energy drink.

For this post, I thought I’d give you all a little insight into the athlete that is Daley Thompson.

Name: Francis Morgan Ayodélé ‘Daley’ Thompson

Date of Birth: 20^th July 1958

Place of Birth: Notting Hill – London, England

Nationality: British

Sport: Decathlon

Club: Essex Beagles

Olympic Games Medals: 2x Gold (1980 – Moscow, 1984 – Los Angeles)

Commonwealth Games Medals: 3x Gold (1978 – Edmonton, 1982 – Brisbane, 1986 – Edinburgh)

World Championship Medals: 1x Gold (1980 – Helsinki)
Honours: MBE (1982), OBE (1986), CBE (2000)

How would you describe the current pricing strategies used by the GWS Giants?

The current pricing strategies used by the GWS Giants reflect the relationship between supply and demand for their product. The GWS Giants are the newest team to enter into the AFL. In addition, the club has been established in the traditionally rugby-dominated state of New South Wales. As a result, the high substitutability of their sport product for other products from Rugby League and Rugby Union teams means that the GWS Giants are experiencing more supply than there is demand for their memberships. Therefore, the pricing reflects this need to stimulate demand for their product. In order to create more demand, the marketing department at GWS Giants have three tiers of memberships on offer: Ultimate, Giant and Reserve. Within each category, subgroups of memberships are on offer such as Adult, Concession, Junior (under 13 years), Family (2 Adults + 2 Juniors), and Pet Membership. Overall, it is evident that the GWS Giants have taken into account demand/supply issues, pricing strategies of competitors and marketing mix constraints arising from product mix and place dependence. 

Consider the GWS Giants’ new stadium. What pricing objectives could you develop for the team to reflect its ‘new place’?

It is necessary that GWS Giants look to maximise shareholder value to capitalise on the unique viewer experiences that Skoda Stadium offers. The stadium has undergone an upgrade and refurbishment in recent years. As a result, stadium attendees have access to members’ bars, fan zones, facilities and features such as the largest video screen in the Southern Hemisphere. Thus, GWS should look to maximise sales growth as a long term pricing objective by having lower membership pricing options. In doing so, they can sell their sport product to as many customers as possible who will then experience the features and experiences that Skoda Stadium has to offer. Ultimately, this experience will encourage consumers to repurchase tickets in the future.

How would you make sure the price set is not too high or too low?

To ensure the price of GWS Giants tickets are not too high or too low, the marketing team will need to implement a strategic pricing process. After setting some organisational goals, they will first need to determine market sensitivity to price by looking at supply and demand, as well as factors that determine price elasticity (such as substitutability of the product and the proportion of income spent on the product). Moreover, the GWS Giants marketing team must conduct research into the pricing strategies of major competitors in both rugby codes and soccer. After doing so, it is necessary to determine possible constraints by researching the product mix and place dependence.

How can the new objectives support other elements of the GWS Giants’ marketing mix?

In particular, the new objectives can support the promotion component of the GWS Giants’ marketing mix. By combining strategies such as sales promotions, advertising and personal selling, the club can communicate to consumers how their sport product can satisfy consumer needs. If the promotional strategies are implemented correctly, it can influence whether the consumer choses to purchase a GWS Giants membership over another substitutable product on offer from rugby codes or soccer.

Develop a pricing strategy for a range of membership (individual and corporate) packages for the GWS Giants, including a timeline for launching memberships for the new season.

Determine pricing goals: Firstly, the GWS Giants must set clear goals for their organisation. It is recommended that the club take a long-term view of maximising the profits from their sport product, rather than focussing on current financial performance. By concentrating on increasing the potential for sales growth, the GWS Giants can aim to sell as much of their product possible. This would mean that the price must reflect affordability and a lower price than the competition in the market.

Determine market sensitivity to price: The GWS Giants must ascertain the size of the market and each segment to gain a clearer understanding on price elasticity as well as the supply/demand relationship. The club already has options available for adults, children, pets and families. However, GWS Giants can diversify their product range by developing products for more segments such as interstate supporters, occasional attendees (less than five games) and perhaps online packages for potential overseas supporters. Further, the marketing department must conduct research into how their target market segments spend their income.

Estimate the break-even price: In order to determine a break-even price point, the GWS Giants marketing team need to look at the following factors: selling prices, volume of sales, unit variable cost, total fixed cost and sales mix. Once this is ascertained, the club can charge as little or as much above the break-even price.

Determine pricing strategies of major competitors: The GWS Giants are located in the rugby-dominated state of New Sales Wales. Therefore, the marketing team must look at the price points both rugby codes use to make their AFL product an attractive alternative. 

Determine constraints on pricing behaviour: For public policy or strategic reasons, the AFL can implement a threshold that ticket prices must adhere to. As a result, the GWS Giants will need to ensure they follow such guidelines set out by the AFL when setting their prices.

Determine constraints of other marketing mix variables: As previously discussed, the GWS Giants have entered into a new market for the AFL. New South Wales is not traditionally an AFL state. Instead it has a long history with rugby league and rugby union. Therefore, this product mix means that the club should set lower prices in comparison to bring consumers to the game. Visually, this will fill up seats. In turn, the games will look more attractive on television, having the potential of maximising sponsorship opportunities for the club. Moreover, if a low pricing strategy is adopted, the promotions must be both proactive and intensive to sell as many as possible to yield the greatest return.

Determine time dependence: The GWS Giants should implement their pricing strategies throughout the season, with extensive promotional work in the off-season. For example, the club could pre-sell memberships in the pre-season at a reduced price to reward early adopters. In addition, the peak period of demand would be in the first half of the season. As a result, the membership prices should be at the highest point during this time. Lastly, reduced ticket packages should be on offer during the second half of the season. The purchaser cannot consume games that have already been played. Yet, if the team is performing well or if consumers want to attend games on a casual basis, the pricing strategy should accommodate these factors.

Determine final price: Once the aforementioned steps are completed, the GWS Giants can formulate appropriate and effective prices.