Events are the motivator of tourism. Events deliver a special atmosphere of festivity, hospitality and tradition. (Getz. 2008). In the last few years, the event has become an industry in its own right because of its strong growth rates. Its maturity makes governments to develop keen interest in the industry, and governments now promote and support the industry to enhance economy development. However, the event has become a leeway that corporate organizations employ to achieve marketing objectives. (Allen, O'Toole, Harris, & McDonnell, 2011).
Our organization is intending to be a major sponsor for the 2013 Santos Tour Down Under. The Santos Tour Down Under is one the biggest cycling event in the world and organized in Adelaide, Australia, which attracts riders from every corner of the globe. In 2005, the UCI (Union Cycliste Internationale) promoted the event and in 2007, the Tour Down Under became the first event in the UCI global ranking calendar. Over the years, the event has attracted the global champions that include Armstrong, and the participation of Armstrong in 2009 has increased number of visitors to the event. Between 2008 and 2009, the economic impact of the event increased from $17.3 million to $39 million. Moreover, the media coverage of the event increased by five fold. In 2010, the press identifies the Tour Down Under as the Australian Best Major Event. In 2011, the event attracted 782,000 visitors with economic impact of above $43 million.
Objective of this report is to provide recommendations that will assist the Board of Directors to decide whether to become the major sponsor for the 2013 Tour Down Under. The report uses the "CEDAEEE" approach to determine whether our company should sponsor the event.
Allen et al. (2011) argues that an organization is required to evaluate the benefits and associated costs of an event before deciding to become a major sponsor of an event. Using the CEDAREE approach, our organization will be able to identify benefits, and costs to sponsor the event, minimize risks associated with an event.
The Santos Tour Down was first organized in 1999 in Adelaide, and since that year, the event has become one of the major cycling events in Australia and attracting the global audience. Yearly, the visitors and cyclists increase making the Tour Down Under to become the largest cycling event in the Southern hemisphere and attract prestigious riders and team globally. The Santos Tour runs for eight days over six stages with one stage per day. Participation of global cyclists has dramatically increased the number of spectators to the event. Moreover, the Tour Down Under has generated nearly 26,100 media items with the value of $167.3 million. The event has also generated 324 hours of television promotion internationally and across South Australia, which assists in reaching the global audience. Since 2007, the Tour Down Under has attracted audience globally. In 2007, the event attracted 357,000 visitors, and in 2010, the visitors increased to 770,000. In essence, the presence of this audience boosts the economy of Adelaide, which consequently enhances the market advantages for the sponsors. (Grey, and Skildum-Reid, 2003, Clancy, Krieg, 2006)
Yearly, the event delivers more than 5% increase of economic impact. The Minister Conlon highlights about the Tour Down of 2009 revealing that the Tour Down Under has become the biggest event in the history of Australia, which has attracted the biggest crowd of over 750,000 people and the best riders to Adelaide yearly. Moreover, the Tour has been able to attract sustainable tourism. For example, Armstrong's participation in the event assists in injecting more than $41 million in the state economy. Apart from attracting nearly a million visitor, the television coverage at home and abroad make the Tour Down Under to be one of the most publicized events in Australia and globally.
The Santos Down Under continues to attract media attention yearly. For example, the website Santos Down Under received more than 320,000 visitors a week before and during the event. Typically, the event receives over $154 million worth of media coverage as well as 284 hours television broadcast coverage. In essence, yearly media exposure increases. The major factor leading to the increase in the event exposure is that the Santos Down Under has started welcoming the world fastest sprinters that include Robbie McEwen, Tyler Ferrar, Andre Greipel and Mark Cavendish. In essence, thousands of visitors also come to welcome Lance Armstrong, the most talented cyclist and seven times winner of Tour de France.
Additionally, the event will attract international media coverage from the United States, Italy, China, and Middle East and all over Europe. The increase in the media exposure to the Tour Down Under has made many organizations willing to sponsor the largest cycling sporting event outside Europe. Allen et al. (2011) point out that
"Sponsorship is the provision of cash or contra (in-kind) support for access to or an association with an event. Sponsorship is one element within an integrated marketing communications program." (p 8).
The Minister of Tourism asserts that more than 330 hours of TV coverage cover the event globally. Moreover, the Tour Down Under tournament is viewed in more than 190 countries. In essence, 37 media have the broadcasting rights to televise the event to millions of international cycling fans around the globe.
Distribution Channel Audience
The distribution channel will consist of national and international TV stations. The media and TV coverage will be viewed by hundreds of millions of people globally. More importantly, there will be 11 media organizations televising the event live using the digital platform. Within Australia, the Santos Tour Under will be broadcasted live in the Channel 9. Moreover, the event will broadcasted live in the following international channels.
Supersport (Pan-Africa), and ITV and Sky Sports (UK).
Apart from TV live coverage both national and internationally, radio stations will also cover the Tour Down Under tournament and these radio stations include
891 ABC Adelaide
and ABC SA
"TDU Digital Radio Station" and ABC TDU 2012.
Advantage over Competitors
Sponsorship is one of the best strategies to connect organizations to potential and current customers. Major advantages that our organization will enjoy over our competitors are as follows:
Increase brand awareness
Enhancement of brand image.
Service exposure and product trial
Sale opportunities, and Market interactivity.
First, our brand awareness will increase nationally and internationally, and this will assist our company to gain more market advantages over our competitors. One of the potential advantages of sponsoring the event is that our organization will enjoy more national and international exposure than our competitors. As being discussed in the previous sections, the event has attracted global attention, and the opportunity will make our company to be exposed to potential customer globally and across Australia. The increase in our company media exposure will make more people to know our company and many customers will be interested in demand for our product and services. Moreover, the event will increase our annual revenue and net income, which will consequently increase our ROI (Return on Investment), and ROA (Return on Asset).
As being pointed out by Allen et al. (2011), our participation in the major event such as the Santos Down Under will boost our
"Return on investment (generation of goodwill, generation of awareness, entertainment value for clients, generate media coverage, access to and/or influence opinion leaders, and/or an increase in sales)." (Allen et al., 2011 p 8).
Resource require for Investment Involvement
We will use our financial resources to sponsor the event, and we are anticipating offering $5,000 to sponsor the event. Moreover, we will use our personnel and IT resources for the investment. The personnel will be involved in the planning and implementation of our program. Apart from the costs that will be incurred in the sponsoring the event, the time spent in participating in event will represent the costs to the company. Typically, the time should be spent in the company to produce goods and services rather than using this time in the event is a shortcoming in sponsoring the event.
STDU (Santos Tour Down Under) is the first global cycling race in South Australia, and organized by the government of South Australia. Although, the event will attract million of spectators, however, people of all ages will be the spectators, who will be allowed to line up on the street of Adelaide as well as the street of South Australia region to watch the Tour Down Under, cheering up the participants as well as viewing the best global cyclists in action. The event will divided into six stages and one stage will be carried out per day. The characteristics of the event include:
The STDU stage fee starts from $15,000.
There will be packing restriction and road closed during the tournament.
There will also be some barricading and safety fencing.