Sponsorships and product categories: the guarantee of exclusivity
The initial step in any sports sponsorship programme is for the business to test which product categories are available. The Science of Commodities, the discipline that studies the nature, possibilities of use and commercial value of commodities, defines a product category as the class of products identified according to the product classification, i.e. a set of products having the same nature, possibilities of use and commercial value.
If we dive into the details, we will find out that other three definitions exist below product category, which provide a further insight: product macro classes, product classes, and product sub-classes. Let’s examine the example of a large consumer product.
Product category: cosmetics Product macro class: skin Care Product class: day cream Product sub-class: redensifying agent for dry skins
A brief overview of the history of sponsorships and product categories
The idea of product category in sponsorships was firstly introduced in relatively recent times during the preparatory works of the 1984 Olympic Games in Los Angeles. At the time, the International Olympic Committee decided to limit the spreading confusion in the world of sponsorships and to set to 30 the number of the official sponsors of the event, introducing the principle of category exclusivity. This marked a true revolution for the world of sports marketing, which all of a sudden found itself moving in an incredibly obstacle-free territory, and a great victory for both partners and sponsors who no longer had to fight against competitors in the same communication arena. As is easy to understand, the principle of category exclusivity offers companies partnering with a championship, a team or an event the certainty that they will not be annoyed by competitors, thus maximizing the effectiveness of the sponsorship. Hence, another unexpected cascade effect: as sponsors are very hardly willing to give up their space to competitors and to lose the opportunity at stake, they are more prone to renew their sponsorship agreements for multiple years, thus offering greater guarantees to the organisers. This is what happened with Coca Cola, McDonald’s, VISA and other companies whose brands proudly appear on the banners of the most popular sporting events.
From category exclusivity to category partner
As the years went by, the incorporation of product categories in one single sport property became a very significant strategic asset to the point of becoming increasingly crystallised into sponsorship categories. A look at the official sponsors of the MotoGP championship listed below (or any other championship of relevance) suffices to understand how the definition of sponsor incorporates the idea of product category: Tissot is the Official Timekeeper, Michelin is the official MotoGP Class Tyre, BMW M is the official car, Singha is the official beer, and DHL is the official courier.
As this case clearly exemplifies, category exclusivity is not merely a guarantee for the sponsor company, but it is also an efficient communication tool to reiterate and strengthen the company prestige and its leadership over competitors. This effect does not merely impact the Official Sponsors of a championship, but it also applies to suppliers, partners and all sponsor categories of a property in an organic and vertical manner. Ironically, and paradoxically at the same time, a team, an event or a championship cannot be supported by a limitless number of sponsors: each property can only have one sponsor per product category.
How to use product categories
The teams give sponsorship agencies a very valuable document where they specify the product categories that are vacant at a specific time. Each team and organisation draws up a file in which they write down vacant product categories and macro classes, including the term of any existing agreements: this is a useful tool to understand and to help both internal and external interlocutors to timely understand the current situation and the opportunities for the future. For instance. Recommending Juventus a partner in the insurance field as long as they have Allianz or a coffee producer as long as they have Segafredo would not be useful. Similarly, it would be no use in offering a car manufacturer as long as the Jeep logo sits on the jerseys of the Black&Whites.
The arguments above help realize the true value of a sports marketing agency or a sponsorship agency, which consists in the agency’s cross-sectoral ability to identify the opportunities opening up from time to time for specific brands and businesses. Of course, the threat around the corner in this case is the appealing voice of “do it yourself”, which however poses the risk of wasting time and credibility, bumping your head against closed doors and coming across obstacles on the way to success. This is the case with specific product sectors in specific sports, for instance. Almost all Formula 1 and MotoGP teams have energy drinks just like all golf tournaments already have partners from the world of luxury watches or sailing competitions have Internet Technology.
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