I need help with a Management question. All explanations and answers will be used to help me learn.
Director of Sponsorships, Dunkin’ Donuts (Potential Sponsor)
As Director of Sponsorships you are responsible for heightening brand awareness and ultimately increasing sales and for Dunkin’ Donuts. Annually, you are provided with a $5 Million Dollar budget to spend on sponsorships with properties in the sports and entertainment industry. The objective of each sponsorship deal is to find creative ways to market the diverse portfolio of Dunkin’ Donuts options to your target market. You currently have sponsorship deals with the following properties: the New England Patriots, Boston Red Sox, Boston Bruins and Boston Celtics.
As Director of Sponsorships, you have done a tremendous job of enhancing the Dunkin’ brand and increasing overall sales within the Boston market. However, sales at Dunkin’ Donuts locations throughout the New York City market have been done in the past two years. Mainly, due to the strong presence of Starbucks in the NYC area. You aim to change this through strategic partnerships with New York based sports teams.
You recently met with your first potential partner in the New York area, the New York Yankees. You were impressed with both their extensive sponsorship inventory and creative thinking and have been invited back to Yankee Stadium to negotiate the terms of the sponsorship deal with the Vice President of Corporate Sponsorships for the Yankees.
Components to consider when negotiating the deal:
- Sponsorship Budget – You have already spent $4.2 Million of your $5 Million sponsorship budget allowance for the fiscal year. As a result you only have $800,000 to work with. Do you want to invest all of this money in a sponsorship deal with the Yankees?
- Sponsorship Activation – You want to ensure this sponsorship deal accomplishes your objective of enhancing your brand presence and driving sales at Dunkin’ Donuts in the NYC area. How will the Yankees be able to leverage the organization’s brand equity to help you accomplish your objective? Think creative sponsorship strategies. Remember the organization will be accepting your sponsorship dollars so it’s up to the Yankees to devise a strategy for sponsorship activation.
- Sponsorship Measurement and ROI – You want to consider how the Yankees organization intends on measuring the effectiveness of the sponsorship activation. You could potentially be spending a lot of money with the organization, how are they going to demonstrate you are getting return on your financial investment? Think technology and analytics.
Vice President of Corporate Sponsorships, New York Yankees
As Vice President of Corporate Sponsorships for the New York Yankees it is your responsibility to generate over $10 Million Dollars a year in sponsorship revenue. You have been able to accomplish this goal in recent years by negotiating sponsorship deals with corporations like Toyota, Canon, Delta, PepsiCo and Bank of America. However, this year you are in danger of not hitting your sponsorship revenue goal of $10 Million. At this point in time you have only generated $9 Million and only have a week remaining before the sponsorship deadline. As a result, you are desperately attempting to cultivate partnership with new sponsors.
Recently, you met with the Director of Sponsorships for Dunkin’ Donuts. You had a very productive first meeting and have invited him back to work on negotiating a sponsorship deal. He has expressed to you that his remaining sponsorship budget is $800,000. Your charge is to create a creative sponsorship proposal and activation plan that will impress your potential client and get him to sign the sponsorship contract before he leaves Yankee Stadium. Your client’s objective is to enhance the Dunkin’ brand and increase sales at Dunkin’ Donuts locations in the NYC area. You will use your impressive sponsorship inventory to deliver a creative plan that will help Dunkin’ Donuts accomplish this objective.
Components to consider when negotiating the deal:
- Sponsorship Revenue – As previously stated, your client’s sponsorship budget is $800,000. Your objective is to get the offer to be increased to $1 Million so you can achieve your sponsorship revenue goal of $10 Million.
- Sponsorship Activation – How will you help Dunkin’ Donuts accomplish its sponsorship objectives of increasing brand presence and increasing sales? Think about the Yankees extensive sponsorship inventory (i.e. stadium, website, social media, hospitality opportunities, access to fans) and how you will implement creative strategies for your client. Be prepared to provide your client with examples of what the Yankees will do for Dunkin’ Donuts.
- Sponsor Return on Investment – How will the Yankees measure the effectiveness of the sponsorship? How can the Yankees organization demonstrate Dunkin’ Donuts is getting return on their financial investment? Think analytics, social media and technology.
I am assigned to be in roll of Vice President of Corporate Sponsorships, New York Yankees. Please help me create a PPT to show negotiation rationale.