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“An investigation into motorsport sponsorship: a comparative analysis of two and four wheeled sponsorship.” Bruce Grant-Braham 2008 COPYRIGHT STATEMENT This copy of the thesis has been supplied on condition that anyone who consults it is understood to recognize that its copyright rests with its author and due acknowledgement must always be made of the use of any material contained in, or derived from, this thesis. i “An investigation into motorsport sponsorship: a comparative analysis of two and four wheeled sponsorship.” Bruce Grant-Braham 2008 AN INVESTIGATION INTO MOTORSPORT SPONSORSHIP: A COMPARATIVE ANALYSIS OF TWO AND FOUR WHEELED SPONSORSHIP BRUCE GRANT-BRAHAM A thesis submitted in partial fulfillment of the requirements of Bournemouth University for the degree of Doctor of Philosophy AUGUST 2008 ii “An investigation into motorsport sponsorship: a comparative analysis of two and four wheeled sponsorship.” Bruce Grant-Braham 2008 ABSTRACT The prime objective of the research is to establish why commercial sponsors use motor sport as an element of their marketing communications. A comparison has been undertaken between car and bike racing, as represented by Formula One and MotoGp, to establish any differences in approach. The initial historical element of the research revealed that motor sport had been sponsored by vehicle manufacturers since the origins of the petrol combustion engine in the late 19th century. Any suggestion that sponsorship of motor sport is a recent, late 20th century science has been dispelled. The investigation found that the sponsors of top level car racing place major importance on achieving awareness for their brands through media exposure, particularly television. This aim is shared by motorcycle racing sponsors too and a common model is identified. Where motor cycle racing is specifically concerned the research established that there is an almost identical approach to the usage and application of sponsorship to that in car racing. The only difference being that the wider commercialisation of F1, in which brands outside those intimately involved with automotive industries have made use of motor sport sponsorship, has been around for longer than that in motorcycle racing. The motorcycle sponsors have therefore taken slightly longer to reach the same level of marketing sophistication in a sport which is recognized as having less money overall. The research reveals that the most important element of the business plan for both types of motor sport relies largely on a business model linked to global television audiences. Such audiences are seen as vital in generating awareness of sponsors and their products. Such plans provide an entirely relevant platform for the initial steps of the AIDA theory (Awareness; Interest; Desire; Action) of product adoption. The research also identifies that this commonality of approach is not entirely accidental as similar promoters have been involved at the top level of both sports. The research advises that the future of motor sport should continue to involve the application of the latest technologies appropriate to passenger vehicles if it is to continue unhindered. It is suggested that motor sport should become the definitive technological test bed for vehicle propulsion systems that are sustainable and kind to the environment. iii “An investigation into motorsport sponsorship: a comparative analysis of two and four wheeled sponsorship.” Bruce Grant-Braham 2008 LIST OF CONTENTS Page No Abstract iii List of Contents iv List of Tables ix List of Figures xi Author’s declaration xii Acknowledgements xiv 1 …... ……... ………... Introduction 1 1.1 ……... ………... Rationale 1 1.2 ……... ………... Aims and Objectives 3 1.2.1 ………... Overall Aim 3 1.2.2 ………... Objectives 3 1.3 ……... ………... Overview of thesis 4 2 …... ……... ………... The History of Sponsorship in Motorsport 5 2.1 ……... ………... Introduction 5 2.2 ……... ………... The invention of the internal combustion engine 8 2.3 ……... ………... Marketing of vehicles by manufacturers 8 2.4 ……... ………... Competition as part of the marketing mix 10 2.4.1 ………... The first hallmark event sponsors come from the media 10 2.4.2 ………... The birth of international competition 10 2.4.3 ………... Reliability and performance 11 2.4.4 ………... Win on Sunday, Sell on Monday 12 2.4.5 ………... International regulation of motorsport helps market vehicles 14 2.4.6 ………... Post War economic recovery produces fierce marketing competition 14 2.4.7 ………... The implications of climate change 15 2.5 ……... ………... Related motoring products marketed by association 17 2.5.1 ………... Technology advances force change 18 2.5.2 ………... Professionalism and personalities reinvigorate motorcycle racing 19 2.6 ……... ………... Power of association attracts brands from outside motoring related industries 21 2.6.1. ………... Tourism-related sponsorship 21 2.6.2 ………... Tobacco sponsorship 23 2.6.2.1 The misnomer of the Gold Leaf Team Lotus brandstanding 25 2.6.3 ………... Commercial sponsors become commonplace 26 2.7 ……... ………... Television coverage attracts wider motorsport audience 28 2.7.1 ………... GPWMC and GPMA 30 2.7.2 ………... MotoGP, IRTA and Dorna 31 2.7.3 ………... The implications of television for F1 34 2.7.4 ………... Justification 36 2.7.5 ………... The importance of winning 37 2.7.6 ………... Television’s influence on F1 venues 40 2.7.7 ………... Television’s influence on F1 race dates 41 2.7.8 ………... The digital or interactive TV “experiment” 41 2.7.9 ………... Virtual Billboards 43 2.7.10 ………... Broadcast sponsorship 43 iv “An investigation into motorsport sponsorship: a comparative analysis of two and four wheeled sponsorship.” Bruce Grant-Braham 2008 2.7.11 ………... A conflict of interest avoided 44 2.7.12 ………... Mobile phones and digital rights 44 2.8 ……... ………... Global sponsors identify the power of association with motorsports 45 2.8.1 ………... Team budgets 46 2.9 ……... ………... Summary 48 3 …... ……... ………... Literature Review 54 3.1 ……... ………... Introduction 54 3.2 ……... ………... Sponsorship 54 3.2.1 ………... Definition of Sponsorship 55 3.2.2 ………... Sponsorship as an element of marketing communications 57 3.2.2.1 Leveraging or activating sponsorship 61 3.2.2.2 Sponsorship’s coded messages, noise and clutter 64 3.2.3 ………... The relationship between sponsorship and advertising 65 3.2.3.1 Ambush marketing 68 3.2.3.2 Broadcast sponsorship, Channel Sponsorship and Product Placement 69 3.2.4 ………... The relationship between sponsorship and public relations 71 3.2.5 ………... Reasons for the growth of sponsorship 73 3.2.6 ………... Benefits of sponsorship 75 3.2.7 ………... Reasons for using sponsorship as a means of marketing communication 77 3.2.8 ………... Corporate hospitality and relationship marketing 80 3.2.8.1 Exclusivity 81 3.2.9 Sponsorship and product purchase decisions 82 3.2.9.1 Does sponsorship directly affect product purchase decisions? 87 3.2.10 ………... Brands 91 3.2.11 ………... Awareness 101 3.2.12 ………... Recall 103 3.2.13 ………... Selection of a suitable sponsorship 106 3.2.13.1 Sponsorship and Synergy 108 3.2.14 ………... Sponsorship strategy and objectives 109 3.2.15 ………... Measurement and evaluation of the effectiveness of sponsorship 112 3.2.16 ………... Media analysis 116 3.2.17 ………... The lack of research into sponsorship outcomes 122 3.2.18 ………... Sponsorship Summary 124 3.3 ……... ………... Sponsorship in Sport 125 3.3.1 ………... Introduction 125 3.3.2 ………... The attractiveness of sport to commercial sponsors 125 3.3.3 ………... Sport marketing 126 3.3.4 ………... The Sports League product 128 3.3.5 ………... Sport and emotion 129 3.3.5.1 The national hero 133 3.3.5.2 Association with success 136 3.3.5.3 Employee morale 138 3.3.5.4 Employee education 139 3.3.6 ………... Results of sports sponsorship 139 3.3.6.1 The Olympics 139 3.3.6.2 Cricket 139 v “An investigation into motorsport sponsorship: a comparative analysis of two and four wheeled sponsorship.” Bruce Grant-Braham 2008 3.3.6.3 Tennis 140 3.3.6.4 Football 140 3.3.6.5 Cycling 141 3.3.6.6 Yachting 141 3.3.7 ………... Celebrity endorsements 141 3.3.8 ………... Sport and tobacco 144 3.3.8.1 WHO Framework Convention on Tobacco Control 146 3.3.9 ………... Other controversial products in sport 146 3.3.10 ………... Women and sports marketing 149 3.3.11 ………... Sport’s problems for sponsors 150 3.3.12 ………... Sport and television 150 3.3.13 ………... The television audience 153 3.3.14 ………... Sponsorship in Sport Summary 154 3.4 ……... ………... Sponsorship in Motorsport 155 3.4.1 ………... Introduction 155 3.4.2 ………... The sponsorship alternatives 157 3.4.2.1 Event sponsorship 158 3.4.2.2 Team sponsorship 161 3.4.2.3 Driver sponsorship 165 3.4.3 ………... Synergy 166 3.4.4 ………... Clutter 168 3.4.5 ………... Formula One’s advantages over other sports 169 3.4.6 ………... Formula One’s main disadvantage 171 3.4.7 ………... Disaster planning 173 3.4.8 ………... Reasons for motorsport sponsorship 175 3.4.9 ………... Networking or matchmaking 179 3.4.10 ………... Motorsport and tobacco 179 3.4.11 ………... Motorsport after tobacco 184 3.4.12 ………... Motorsport and television 186 3.4.12.1 Sponsor placements 191 3.4.12.2 Broadcast timing 193 3.4.12.3 Qualifying 193 3.4.12.4 A global TV audience 194 3.4.13 ………... Documented results of motorsport sponsorship 196 3.4.14 ………... The motorsport audience 177 3.4.15 ………... Sponsorship hunting 179 3.4.16 ………... Attracting the sponsors 180 3.4.17 ………... The correct profile 180 3.4.18 ………... Sponsorship in Motorsport Summary 182 4 …... ……... ………... Methodology 209 4.1 ……... ………... Introduction 209 4.2 ……... ………... Research design and scope 209 4.3 ……... ………... Population and sample 210 4.4 ……... ………... Survey methodology 211 4.4.1 ………... Mail survey 212 4.4.2 ………... Personal survey 212 4.4.3 ………... Telephone survey 213 4.4.4 ………... Case study 214 4.4.5 ………..