South African Motorsport - a Business Perspective of The

SOUTH AFRICAN MOTORSPORT - A BUSINESS PERSPECTIVE OF THE INVESTMENT OPPORTUNITY BY: GARETH JOYCE (STUDENT NUMBER: 9704663) RESEARCH THESIS PRESENTED IN ACCORDANCE WITH THE. REQUIREMENT FOR THE DEGREE MASTER OF COMMERCE IN BUSINESS MANAGEMENT IN THE FACULTY OF ECONOMIC AND MANAGEMENT SCIENCE OF THE RAND AFRIKAANS UNIVERSITY STUDY LEADER: PROF. S. KRUGER OCTOBER 1999 Key Value Drivers of Track Motorsport in South Africa OPSOMMING TITEL: "SOUTH AFRICAN MOTORSPORT - A BUSINESS PERSPECTIVE OF THE INVESTMENT OPPORTUNITY" rormule Een motorsport is vir bale entoesiaste die hoogtepunt van motorsport. Aan die anderkant kan die sport op verskillende vlakke verder ontgin word. Sover terug as 1968 het die ommekeer met betrekking tot borgskap in motorsport plaasgevind. Groot maatskappye het you tot die besef gekom dat motorsport hoe aansien geniet deur volledig dekking op televisie en deur die pers alhoewel geen borg aan die verloorkant beskikbaar is nie. Die gevolg was dat 'n groot hoeveelheid geld as borgskap aangebied is. Navorsing dwarsoor die wereld, asook in Suid Afrika, het aan die lig gebring dat motorsport 'n winsgewende bedryf geword het. In Suid Afrika geniet die sporfsoort een van die hoogs betaalde borgskappe alhoewel dit maar net tiende op die rangleer van populere sportsoorte in Suid Afrika is. Die doel van hierdie verhandeling is om die sleutelfigure in motorsport uit te lig en die ontwikkeling en die Ieemtes aan te vul deur op die behoeftes wat nodig is vir verdere ontwikkeling te konsentreer. Daardeur kan vooruitgang in die sport nie net in openbare belang wees nie, maar ook vir beleggers. Hierdie verhandeling dien slegs as 'n raamwerk vir verdere navorsing om die sleutelfigure van Motorsport in Suid Afrika te identifiseer met die doel om meer beleggers te lok. Key Value Drivers of Track Motorsport in South Africa jj DECLARATION This serves to confirm that this document is the sole work of the author and has not previously been submitted for examination purposes or otherwise. SIGNED: DATE: 9y// /z COMMISSIONER OF OATHS: DATE: Key Value Drivers of Track Motorsport in South Africa jjj To my beautiful wife - thank you for your love ! You are my sunflower. Key Value Drivers of Track Motorsport in South Africa iv ACKNOWLEDGEMENTS I wish to express my gratitude to the following people who made valuable contributions to this thesis: Gillian Joyce, for your inspiration, patience, tolerance, hours of listening, hours of proof reading and endless love. Jim Bolton, for your inspiration and shining example. Mike Birkhead, for SMB and your hours of proof reading. Tony Griffin, for your sound advice and hours of proof reading. Ma Nieuwenhuys, for your hours of assistance. Professor Stefan Kruger, for believing me and helping me reach the end. Respondents, for your support. Anna-Marie Crozier, for your assistance with the translations. Key Value Drivers of Track Motorsport in South Africa V TABLE OF CONTENTS EXECUTIVE SUMMARY DECLARATION II ACKNOWLEDGEMENTS IV TABLE OF CONTENTS V LIST OF TABLES X LIST OF FIGURES X CHAPTER 1: INTRODUCTION 1 1:1 INTRODUCTION 1 1:1:1 Motorsport - The Past and the Present 2 1:1:2 The World Scene 3 1 : 1 :3 Sponsorship and Return on Investment 4 1:1:4 Motorsport in South Africa 7 1:2 PROBLEM STATEMENT 10 1:3 OBJECTIVES 11 1:4 METHODOLOGY ......... ...... .......... ............. 12 1 :5 DEMARCATION OF THE STUDY 15 1:6 CHAPTER OUTLINE 1 7 CHAPTER 2: LITERATURE REVIEW 19 2:1 INTRODUCTION 19 2:2 FACT OR FICTION: IS MOTORSPORT THE ADVERTISING VEHICLE IT'S MADE OUT TO BE 2 20 2:3 THE SOUTH AFRICAN GRANDS PRIX OF 1992 24 2:4 THE SOUTH AFRICAN GRANDS PRIX OF 1993 32 2:5 FINDINGS FROM A TRACK SURVEY 34 Key Value Drivers of Track Motorsport in South Africa vi 2:6 CRITICAL REVIEW OF THE LITERATURE 39 CHAPTER 3: RESEARCH METHODOLOGY 41 3:1 RESEARCH OBJECTIVES 41 3:2 RESEARCH PROPOSITIONS 41 3:2:1 Proposition 1 41 3:2:2 Proposition 2 41 3:2:3 Proposition 3 42 3:3 RESEARCH METHODOLOGY 42 3:3:1 Introduction 42 3:3:2 Questionnaire Design 43 3:3:3 Personal Interviews 43 3:3:4 Pre-Testing of the Questionnaire 45 3:3:5 Questionnaire Construction 45 3:3:6 Section 1: Biographical Information 45 3:3:7 Section 2: Important and Current Value Drivers 46 3:3:8 Section 3: Qualitative Data 47 3:3:9 The Population and Sample 47 3:3:10 Data Collection 48 3:3:1 1 Data Analysis 48 3:3:12 Biographical data 49 3:3:13 Proposition 1 49 3:3:14 Proposition 2 50 3:3:15 Proposition 3 50 3:3:16 Qualitative Data 51 3:4 LIMITATIONS 51 CHAPTER 4: RESEARCH FINDINGS 53 4:1 INTRODUCTION 53 4:2 RATING EVALUATION 54 4:3 GENERIC KEY VALUE DRIVERS 59 4:3:1 Category One: Sporting Competitiveness 61 Key Value Drivers of Track Motorsport in South Africa vii 4:3:2 Category Two: Event Management 61 4:3:3 Category Three: Consumer Value 62 4:3:4 Category Four: Driver Publicity 63 4:3:5 Integration of the Generic Value Categories 64 4:4 QUALITATIVE DATA 65 4:5 DEVELOPMENT NEEDS 67 4:6 VARIABILITY TESTS 70 4:6:1 Significant Differences by Age 71 4:6:2 Significant Differences by Income Grouping 72 4:6:3 Significant Differences by Qualification 73 4:6:4 Significant Differences by Frequency of Viewing 74 4:7 SUMMARY OF RESEARCH FINDINGS 74 4:7:1 Research Proposition 1 75 4:7:2 Research Proposition 2 76 4:7:3 Research Proposition 3 77 CHAPTER 5: SUMMARY, CONCLUSION & RECOMMENDATION 79 5:1 SUMMARY 79 5:2 CONCLUSION 81 5:3 RECOMMENDATION 84 REFERENCES 87 APPENDIX I: INTERVIEW SCHEDULE 91 APPENDIX II: ELECTRONIC MAIL QUESTIONNAIRE 98 APPENDIX III: STATISTICAL ANALYSIS 99 1: TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE 8, KEY VALUE DRIVER 99 1:1 Listed in Order of Electronic Questionnaire 99 1:2 Sorted into Rank Order of Importance 99 1:3 Sorted into Rank Order of Evidence 99 1:4 Sorted into Rank Order of Difference of Means 99 Key Value Drivers of Track Motorsport in South Africa viii FACTOR LOADINGS AFTER VARIMAX ROTATION : 4 FACTORS 99 2:1 Listed in Order of Electronic Questionnaire 99 2:2 Sorted into Rank Order of Factor #1 99 2:3 Sorted into Rank Order of Factor #2 99 2:4 Sorted into Rank Order of Factor #3 99 2:5 Sorted into Rank Order of Factor #4 99 TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE BY AGE 100 3:1 Listed in Order of Electronic Questionnaire 100 3:2 Sorted into Rank Order of Probability 100 TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE BY GENDER 100 4:1 Listed in Order of Electronic Questionnaire 100 4:2 Sorted into Rank Order of Probability 100 TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE BY INCOME GROUP 100 5:1 Listed in Order of Electronic Questionnaire 100 5:2 Sorted into Rank Order of Probability 100 TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE BY QUALIFIFCATION 100 6:1 Listed in Order of Electronic Questionnaire 100 6:2 Sorted into Rank Order of Probability 100 TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE BY INFORMATION SOURCE 101 7:1 Listed in Order of Electronic Questionnaire 101 7:2 Sorted into Rank Order of Probability 101 TESTS FOR DIFFERENCES BETWEEN KEY VALUE DRIVER IMPORTANCE BY FREQUENCY OF VIEWING 101 8:1 Listed in Order of Electronic Questionnaire 101 8:2 Sorted into Rank Order of Probability 101 QUALITATIVE DATA CONTENT ANALYSIS 101 Key Value Drivers of Track Motorsport in South Africa iX DATA CORRESPONDENCE PLOT 101 RE-SCALED RAW DATA 101 Key Value Drivers of Track Motorsport in South Africa X LIST OF TABLES TABLE 1.1 - PROPOSED DATA COLLECTION TECHNIQUES 14 TABLE 2.1 - GLOBAL TELEVISION VIEWING OF THE 1996 FORMULA ON GRAND PRIX SEASON .... ......... TABLE 4.1 - RE-SCALED DATA OF THE 5 POINT LIKERT SCALES (IMPORTANCE AND EVIDENCE OF KEY VALUE DRIVERS) 55 TABLE 4.2 - MEANS OF KEY VALUE DRIVERS RANKED BY IMPORTANCE 56 TABLE 4.3 - GENERIC VALUE CATEGORIES FOR TRACK MOTORSPORT 60 TABLE 4.4 - SUMMARY OF OPEN-ENDED QUESTION CONTENT ANALYSIS .66 TABLE 4.5 - TOP TEN DEVELOPMENT NEEDS FOR TRACK MOTORSPORT IN SOUTH AFRICA 68 TABLE 4.6 - SUMMARY OF SIGNIFICANT DIFFERENCE OCCURRENCE BY DEMOGRAPHIC VARIABLE ..71 LIST OF FIGURES FIGURE 4.1 - A TWO DIMENSIONAL MODEL OF KEY VALUE CATEGORIES FOR TRACK MOTORSPORT IN SOUTH AFRICA .65 Key Value Drivers of Track Motorsport in South Africa 1 CHAPTER 1: INTRODUCTION 1:1 INTRODUCTION Millions of people around the world watch motor racing on television, and millions of people journey to race circuits to experience personally the excitement and glamour [Howard, 1992: 81. The ear-splitting noise, the smell of the fuel, the gleaming cars and the drivers - modem-day knights in armour, who do battle at unbelievable speeds. And behind every driver are sponsors, managers, engineers, mechanics and a whole team of professionals. Since cars were invented more than a century ago, men have felt an impulse to race them, while manufacturers have used the sport to prove the superiority of their vehicles. France was the birthplace of motor racing, thanks largely to Napoleon's road network, built to move his armies around swiftly in pursuit of his Imperial ambitions. French influence is felt to this day, certainly in the politics of motorsport, as is demonstrated by the impressive headquarters of the Federation Internationale du Sport Automobile (FISA) at number 8, Place de la Concorde in Paris.

Load more