Page 374 - Introduction to Business

348 PART 3 Marketing

sponsoring Underwriting the cost of an Sponsoring some type of event can be an effective sales promotion alternative
event for either consumer or industrial products. In recent years, sponsoring sporting
events has become increasingly attractive. In 2002, $9.4 billion was spent on
sponsorship in North America; about two-thirds of that figure was spent on sports.
The rest was allocated to entertainment, tours and attractions, festivals, fairs,
annual events, causes, and the arts. Worldwide, about $25 billion was devoted to
sponsorships—about 40 percent in North America, 30 percent in Europe, 17 per-
cent in the Asia Pacific region, and 9 percent in South America. The industry most
likely to be involved with sponsorships was nonalcoholic beverages, followed by
banks, automotive, telecommunications, beer, packaged goods, retailers, airlines,
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insurance, and credit cards. These industries are well represented in Exhibit 10.3,
which shows the top ten U.S. sponsors.
Sponsorship can involve enormous sums. The professional golfer Tiger Woods
earns $30 million a year endorsing such products as Buick cars. And not to be out-
done, Lebron James, the high school basketball player drafted by the NBA, picked
up $110 million in endorsements before even playing one game—$90 million of it
from Reebok.
sweepstakes Chances for a consumer Sweepstakes involve a chance factor, such as a drawing or lucky number. Proof
to win a prize or money, such as through of purchase is usually not required or is optional so that lottery laws are not vio-
a drawing
lated. Two famous and heavily promoted sweepstakes are those conducted by
Readers Digest and Publishers Clearing House. Dell Computer Corporation used a
sweepstakes in an effort to increase its 8.4 percent market share in the U.S. personal
computer market. During July, any purchaser of a Dell PC would have a chance to
win $50,000. Competitors were expected to retaliate. Hewlett-Packard decided to
offer its own sweepstakes of three $2,000 shopping sprees. 3
trade shows Shows where companies Trade shows, where companies can display their products, are the major sales
have the opportunity to display their promotion strategy for firms marketing industrial products. Around $20 billion
products
annually is spent on trade shows. By 2008, it is expected that around 2 million com-
panies will be exhibiting at more than 6000 trade shows that will be attended by 125
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million people. Trade shows offer a number of important advantages, but in order
to maximize these, exhibitors at trade shows need to recognize and employ several
guidelines. Trade shows can speed up the selling process; they can get products to
the market in less time. Trade shows are attended by prospects who come with an
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open mind, actively seeking information. Trade shows allow prospects to actually

EXHIBIT 10.3
Top Ten U.S. Sponsors

Company Amount (in millions)

Anheuser-Busch Co. $215–$220
Philip Morris Co. $190–$195
Pepsico $190–$195
General Motors Corp. $165–$170
Coca-Cola Co. $130–$135
DaimlerChrysler AG $105–$110
Nike $105–$110
Eastman Kodak Co. $90–$95
Ford Motor Co. $75–$80
McDonald’s Corp. $75–$80

Source: “IEG Sponsorship Report,” Marketing News, July 8, 2002, p. 23.

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