One of the first checks to be made when starting a sports sponsorship programme is the availability of the product categories.
The first question we should answer is: what is a product category?
The answer is quite simple: the product category is a class of products with the same nature, same use and same commercial value. To fit into the product category, an item must have the same or similar nature, use, and commercial value.
Below the merchandise category there are three other definitions, which descend into more detail: commodity macro-classes, merchandise classes, and merchandise sub-classes.
Using consumer products as an example, we would have:
Product category: cosmetics Product macro-class: skin care Product category: day cream Merchandise sub-class: re-densifying for dry skin
A brief history of sponsorships and product categories
The concept of commodity category in sports sponsorship was introduced during the preparation for the 1984 Olympic Games in Los Angeles.
On that occasion, the Olympic Committee decided to limit the confusion over potential sponsorship and limit the number of official sponsors of the event to 30, introducing the exclusivity of the product category.
It was a revolution for the world of sports marketing, which previously had been a territory cluttered by obstacles. The product category introduction was also a great victory for partners and sponsors, who no longer had to fight against competition within the same communication arena.
As it’s easy to understand the exclusivity of the product category offers to partner companies of a championship, a team or an event, especially when the certainty of not having competing companies, thus maximizing the effectiveness of the sponsorship, is noted.
Furthermore, all this also generates an unexpected cascade effect: a sponsor is unlikely to leave the space to their competition, and rather than lose the opportunity is, therefore, willing to renew a sports sponsorship contract for several years, offering greater guarantees to the organizers. This has been true in the case of Coca-Cola, McDonald’s, VISA and other companies that for decades have proudly stood by the flags of the main sporting events.
From product category exclusivity to category partner
Over the years, the closure of the product categories within the same sports property became an asset so strategic as to be increasingly crystallized into real sponsorship categories.
Just look at the official sponsors of the MotoGP Championship (the same goes for any championship of importance) to see how the definition of the sponsor is to incorporate the product category. Tissot is official timekeeper, Michelin is official MotoGP Class Tire, BMW M is the official car, Singha is official beer, and DHL is official forwarder.
In this case, the category exclusivity is not only a guarantee for the sponsoring company, but also an effective communication tool that serves to reaffirm and reinforce the prestige of the company and the supremacy of competition.
This does not apply only to the official sponsors of a championship, but also to suppliers, partners and all categories of sports sponsorship. Paradoxically, a team, event or a championship cannot have endless sponsorships: for each property there can be a single sponsor for the product category.
Using the product categories
One of the most valuable documents provided by teams to sponsoring agencies is the availability or otherwise of the product categories in a given period.
Each team and organization has a file in which it lists categories, free macro-classes, and duration of agreements. It is a useful tool to quickly understand internal and external interlocutors, what the current situation is, and what the opportunities are for the future. It is useless, for example, to propose to Juventus another partner in insurance, as long as there is Allianz, or a coffee producer whilst there is Segafredo, or a car manufacturer whilst the Jeep logo remains on the jersey of the bianconeri.
Even in these arguments, the true value of a sports marketing or sponsorship agency is substantiated: the ability to understand the opportunities that from time to time open up for certain brands and companies.
Of course, even in this case, the call of the do-it-yourself is around the corner – but the risk is to waste time and risk credibility, spending time and resource only to slam into closed doors that make it impossible to proceed. This is the case for certain product sectors in certain sports. Almost all Formula 1 and MotoGP teams have energy drink sponsors, for example; almost all golf tournaments have partners in luxury watches and almost all races in internet tech.
It’s important, therefore, to utilize the expertise of those within the sports marketing field, who will be able to advise on which brands and companies work best with particular sports or championships (read more about what is a Sponsoprship Activation). If you’re ready to talk more about sports marketing or product category sponsorship contact firstname.lastname@example.org