Free Business Dissertations - 1.3 Analyse The Costs And Benefits Of Sponsorship For Both The Sponsor And
1.3 Analyse the costs and benefits of sponsorship for both the sponsor and the recipient.
For the recipient, any financial investment, particularly in arts projects with limited budgets, can help to boost productivity and cashflow in the short-term and financial stability and sustainability in the long-term.
In the arts industry, capital is key factor of production; in order to produce good quality work, heavy investment in resources is vital.
Covering salary costs is the biggest overhead for many organisations, but in creative industries, this expense can reach new heights.
In the case of film, actors’ salaries often hit the multi-millions, particularly in Hollywood. Clearly, this eats into filmmakers’ budgets and makes the need for financial input even more pressing.
Executives green-light pictures just so they can say: ‘we’re doing so-and-so’s next picture.’ It enhances the company’s image. They know the figures don’t add up, but signing on the dotted line keeps them in a job for another year. (New Statesman, 2005)
Added publicity and PR opportunities can also result from sponsorship deals, as the recipient can expect to be mentioned in promotional and corporate material issued by the sponsor.
However, it is important for a the recipient to think carefully about the kind of image they want to portray before entering into a sponsorship deal, as this will be influenced by that of the sponsor. This is especially a consideration for arts organisations, where correct positioning is key and traditional marketing methods are sometimes problematic.
This is because marketing is about identifying and satisfying customer needs:
The true marketing approach involves the determination of consumer needs and values and the design and supply of goods and services to satisfy them. (Needle, 2004: 361)
To attract the consumer, the benefits of a product or service need to be communicated. However, in the arts industries, and entertainment in particular, these benefits are often intangible and subjective, eg, the ‘experience’ of watching a film. It can therefore be more difficult to identify, manage and meet customers’ needs and demands.
Recipients need to ensure that their objectives do not conflict with those of the sponsor. Risks in this area include the possibility that the sponsor will receive negative publicity, which could reflect badly on the recipient. Another scenario is that that recipient’s project will become ‘swamped’ by the sponsor’s self-promotion, detracting from the project being sponsored. Good communication is vital for the recipient to retain the required amount of control over the way their work is presented.
Sponsorship can increase recipients’ credibility, showing that other companies have the confidence to associate their brand with them. The added financial stability and prestige can also positively impact on morale and confidence of those involved in the project.
Dissertations - Free Business Dissertations
