. nu mu m . v»\- sun ~00 .' 2-. ycvawu-nl 1- 4 '(‘r'J "M‘ .. 1. no”) LIBRARY siMW‘i Michigan State University This is to certify that the thesis entitled A Community of Benefits: A Case Study of Formula SAE Sponsorships presented by Samantha F. Spitz has been accepted towards fulfillment of the requirements for M . A . degree in Advertis ing Date May 8, 2003 0-7639 MS U is an Affirmative Action/Equal Opportunity Institution PLACE IN RETURN BOX to remove this checkout from your record. TO AVOID FINES return on or before date due. MAY BE RECALLED with earlier due date if requested. DATE DUE DATE DUE DATE DUE 6/01 c1CIRC/DateDue.p65-p.15 A COMMUNITY OF BENEFITS: A CASE STUDY OF FORMULA SAE SPONSORSHIPS By Samantha F. Spitz A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of MASTERS OF ARTS Department of Advertising 2003 ABSTRACT A COMMUNITY OF BENEFITS: A CASE STUDY OF FORMULA SAE SPONSORSHIPS By Samantha F. Spitz Businesses use spomorships as a non-traditional approach to breaking through the clutter of advertising. Sporting events and specific competitors are most popular with sponsors, and automotive racing receives the greatest portion of sports sponsorship dollars. Previous research lms focused on sponsorships of professional racing circuits and natiomlly known companieg little is known about the effects of sponsorships of grassroots tearm and circuits. Utilizing the Michigan State University Formula SAE race team, this case study focused onthe benefits receivedbytheteamand its sponsors, aswellastheperceptions ofconsumerswithvaryingrelationshipswiththeteam. Qualitativedatawascollected through personal interviews, focus groups, and questionnaires of team members, parents, sponsors, alunmi, and University representatives. Results found several benefits received and expected by both the team and the sponsors. More importantly, the perceptions of the consumers revealed the importance of spomor concern for community, the team and its members. Local sponsors were well receivedandseenasabestfitwiththeteamanditsneeds. This thesis is dedicated to my grandfather, Samuel F. Spitz, Jr., who passed away before he could see the Michigan State University Formula car and my graduation. It is his pride and passion for racing that will live with me forever. ACKNOWLEDGEMENTS A special thank you goes to my committee members: Dr. Nora Rifon, my committee chair, who saw my passion and encouraged me to pursue my interests, all of which helped to make this thesis possrble. To, Dr. Bonnie Reese, an excellent teacher who provided the support and guidance needed to accomplish this work. To, Dr. Brenda Wrigley, who opened my eyes fiirther to expand my thinking and understanding of my studies and life. To the Michigan State University Formula SAE team, my good fiiends, whom without them this study would never have existed. To Dr. Gary Cloud, advisor to the FSAE team, who participated in the study and always saw my potential on the team. To Dr. Janie Fouke, Dean of the College of Engineering, and Dr. Tom Wolfl‘, Associate Dean of the College of Engineering, who both participated in the study and continue to providethe supportandexposurethe Forrmilateamneeds. To theparents, alumni, and sponsors of the Formula SAE team, who provided insight and the understanding needed to conmletethestudyandthecar. And most importantly, thanks to my family. To my mother, Diana Spitz, and father, Samuel F. Spitz III, who are the reasons I am here today and have continuously provided the encouragement needed to get through the past two years. To my sister, HeatherJones,who leantmeanearorashoulderwhenneeded. To mynephews, Connor and Nicholas Jones, who have helped me to laugh, smile, and enjoy life. iv TABLE OF CONTENTS LIST OF TABLES ........................................................................ LIST OF FIGURES ........................................................................ CHAPTER ONE: INTRODUCTION ............................................... Automotive Racing History ..................................................... Formula SAE: Collegiate Formula-Style Racing ........................... Michigan State University Formula SAE ........................... CHAPTER 2: LITERATURE REVIEW ............................................ Sponsorships ....................................................................... Sponsorships in Racing ......................................................... How Sponsorships Work ........................................................ Sponsor Motives ................................................................... Study Questions .................................................................. CHAPTER 3: METHODS ................................................................ CHAPTER 4: FINDINGS ................................................................ Team Member Perceptions ..................................................... Sponsor Recall .............................................................. Sponsorship Fit: Automotive or Non-Automotive ................. Local vs National Sponsors ............................................ Sponsor Motives .......................................................... Sponsor Expectations .................................................... Team Expectations .................................................... Sponsor Patronage .................................................... Sponsor Credibility ..................................................... Team Member Perceptions Summary ................................ University Administration and Faculty Perceptions ........................ Sponsor Recall ......................................................... Sponsor Motives ......................................................... University Expectations .............................................. Sponsor Credibility .................................................... Sponsor Patronage .................................................... University Administration and Faculty Perceptions Summary Alumni and Parent Perceptions ............................................... Sponsor Recall ......................................................... Sponsor Patronage ...................................................... 62 Sponsor Motives and Credibility .................................... 62 AlumniandParent Perceptions Summary 65 Sponsor Perceptions ............................................................. 65 Sponsor Motives ......................................................... 66 Sponsor Perceptions Summary ........................................ 69 CHAPTER 5: DISCUSSION ......................................................... 71 Formula SAE ...................................................................... 71 Implications for Other Grassroots Race Teams ............................... 77 Implications for Other Local Events .......................................... 80 CHAPTER 6: LIMITATIONS ......................................................... 82 APPENDICES .............................................................................. 84 Appendix A ....................................................................... 85 Table One ................................................................. 86 Table Two ................................................................ 87 Table Three .............................................................. 89 Table Four ................................................................ 90 Appendix B ....................................................................... 91 Sample Questionnaires ............................................... 92 Appendix C ....................................................................... 99 Measurement of Sponsor Motives ................................... 100 Appendix D ....................................................................... 103 Measurement of Sponsor Credibility ............................... 104 Appendix E ....................................................................... 107 Measurement of Sponsor Patronage .................................. 108 Appendix F ....................................................................... 109 Measurement of Sponsor Recall ...................................... 110 Appendix G ....................................................................... l 1 1 Figure 1 ..................................................................... 112 BIBLIOGRAPHY .......................................................................... 113 Table 1. Table 2. Table 3. Table 4. LIST OF TABLES Sponsorship Event Width and Depth ........................................ 85 Sponsor Recall of Team Members ........................................... 86 Sponsor Recall of Alumni and Parents ..................................... 88 Alumni and Sponsor Patronage .............................................. 89 vii LIST OF FIGURES Figure 1. Reciprocal Benefits for Formula SAE Stakeholders viii CHAPTER 1: INTRODUCTION Technology advancements have made it possible for businesses to advertise in places far beyond the television and magazines. Now advertisements can be found on the sides of buildings, on animated signs, in the sky, on our computers, and anywhere else consumer eyes can go. Over the years, one form of advertising has caught the attention of several thousand businesses all over the world. Sponsorship is an important part ofthe mketing mix that only recently has received academic attention. A corporation creates a link with an outside issue or event hoping to influence the audience by the connection. The benefits received fi'om sponsorship include consumer recall of sponsor name, name awareness, and enhanced attitude toward the sponsor, and purchase intentions. Businesses also determine which type of event to sponsor. Sporting events, which are popular with companies and the most widely studied, inciude the Olympics, basketball, auto racing, hockey, or bowling (Burridge 1989; Crimmins and Horn 1996; Cornwell, Pruitt and Van Ness 2001; Lardinoit and Quester 2001; McDaniel 1999; Miyazaki and Morgan 2001; Nebenzahl and Jafi'e 1991; Sandler and Shani 1989, 1992; Stipp and Schiavone 1996; Stotlar 1993). Automotive racing tops the list of dollars spent on sports sponsorships. With the increase in popularity of National Association of Stock Car Auto Racing (NASCAR), Formula One, Championship Auto Racing Teams (CART), and Indy Racing League (IRL), it is no wonder that companies such as Miller Brewing Co., DuPont, Heineken, Valvoline, and STP are on the top of consumer minds. Large, multi-billion dollar corporations are well known for their sponsorships in professional racing. For small companies, there is a larger risk in participating in sponsorshipsduetotheexpenses, snufleraudiencesandreachandunpredictabilityof events such as auto racing. With automotive racing being a high-risk sport, small businessesneedto takeextracautioningoing forthwithsponsoring aracetearnwiththis perceived image. For srmller businesses, local events in their community, including sports, offer more affordable sponsorship opportunities with locally targeted outcomes. Professional sports that are likely to have wide media coverage and audience reach have been the focus of sponsorship studies. However, local venues, such as minor league baseball, backyard race tracks, and high school and college sports events, provide sponsorship opportunities that to date have been ignored by academic researchers. Notably, auto racing occurs throughout the United States on local tracks and at the college level through the Formula SAE racing competition. The Formula SAE team competition ofi‘ers sponsorship opportunities with more local, commimity-based audiences. Theseaudienceshavemoreintimaterelationshipsandagieaterstakeand interest in the team and its competition than national audiences have with professional racers. Rifonetal. (2003) suggestthataudiencesthatpossessgreaterinvolvementwitha sponsored event or cause are likely to judge the motives of sponsorship, hindering the simple attitude transference mechanism used to explain sponsorship efl‘ects for major national sporting events (Crimmim and Horn 1996). Empirical findings support a mediating role of consumer judgment of sponsor motives for the development of sponsor credibility and attitude toward the sponsor. When the audience views a more mercenary than altruistic motive to the sponsorship, it is likely to view the sponsor with less credibility than a sponsor with more altruistic motives. In Formula SAE, sponsors, team members, and other audiences are more intimate stakeholders than those previously studied by sponsorship researchers. Hence, sponsor motives may be important to the Formula SAE commimity. The following thesis is an exploratory, case study of one, university-based, Formula SAE team. The study explores sponsorship in a local sports venue, with local and national sponsors. The study examines perceptions of the different sponsorship stakeholders, sponsors, team members, parents, and alumni, for their views of the benefits received by all stakeholders. Perceptions of benefits sought and received were considered indications of real and perceived sponsor motivations. AUTOMOTIVE RACING Hrsronv Americansportingtraditionsexistinawidevarietyofaicas. OnSundaysthereis professional football, college basketball in March, and all summer long baseball is seen andplayedalloverthecountry. Onesporthasjustasmuchtradition, intheUnited States and all over the world, over the past one hundred years with a much broader following. The sport ofautomotiveracinghasbeenaroundsincethebeginning ofthe automobile industry itself. Today, the sport has expanded to include several professional, semi- professional, and amateur circuits spanning a wide variety of automobile types. Karl Benz ofGermany produced the first modern automobile in 1885; it was not until 1893 that automobiles were seen in the United States (about.com). It didn‘t take long before the idea ofracing these rmchines came to life. There is no reported date as to the introduction of automotive racing; however a successful progression throughout history can be seen with the introduction of racing styles and circuits. The earliest known race of an automobile from today's Big Three (Ford Motor Company, DaimlerChrysler, and General Motors) took place in 1901 in Grosse Point, Michigan, when Henry Ford's handmade machine outlasted then popular car maker and driver Alexander Wmton (fordheritagecom). GrandPrix,or long road races, were some ofthefirstknown forms ofracing. Franceheldthefirst FrenchGrandPrixin 1906, whichledtheway fortheintroductionof the Twenty-Four Hours of LeMans. LeMans, a twenty-four hour endurance race of "street" cars, ran its first race in 1923. Over twenty years later, the United States saw professional racing come alive with the birth of NASCAR (National Association of Stock Car Auto Racing) in 1948. NASCAR races slightly modified street stock sedans around an oval track for four to six hundred miles. Stock car circuits are a true test of driver abilityduetotherulesrestrictionsplacedonthedesignandmanufircturabilityofeach racecar. Road races were soon developed for speed and handling ability. The most popular circuit, Formula One, began in 1950 and pioneered the way for future road races. Hundreds of circuits have begun since mid-century including rally or baja, truck racing,dirttrackcarssuchassprintandmodifieds,andshiflercarts, tonarneafew. Circuits can be found all over the world at professional levels or even in one‘s own backyard. Today, race circuits are not always created for the sole purpose to race a vehicle. Rather engineers and other technical professionals are establishing vehicles and circuits to test the abilities of specific engineering components. Racing is shifting fiom a hobby towards a more professional industry. FORMULA SAE: COLLEGIATE FORMULA-STYLE RACING For those entering the world of engineering as a profession, the Society of Automotive Engineers (SAE) Offers unique Opportunities to challenge college students’ ability to take what is learned in the classroom and apply it to a real world application. Two different competitions were developed: Formula and Mini-Baja. The research conducted for the purpose of this thesis will utilize the collegiate Formula SAE "circuit". The University of Houston hosted the first ever Formula SAE, originally called SAE Mini-Indy, competition in the spring of 1979. Mini-Indy was created in response to the aheady successfirl SAE Mini-Baja competition. Organizers wanted a similar competition for engineering students that focused on the design of an on-road vehicle. During FSAE's sophomore year, restrictions on the engine rules led to no interest from participants. With some rule changes and a new location, Formula SAE was evolved in 1980. Four schools competed and Ford Motor Company and General Motors showed great interest. This first competition paved the way for the modem Formula SAE competition. Since its beginning, Formula SAE continued to grow beyond the small competition in Texas. Organizers vowed to beat the Texas heat by moving the competition north to Michigan where the Big Three automakers (Ford Motor Company, DaimlerChrysler, and General Motors) increased their visibility at the competitions. Each company sponsored the event during consecutive years until finally in 1994 they joined their ventures and all three served as the competition’s top sponsors. Other changes included the introduction of prize money and new dynamic events. In addition to the Formula SAE event held in the United States, SAE expanded the competition to include events in the United Kingdom, Formula Student, and Australia, Formula Australasia. With rule changes, including requiring four-wheel suspension, schools manufactin'inganewcareachyear,andtheincreaseincorporate spomorsand participantsovertheyears, FormulaSAEhasbeenestablishedasthemostrespected collegiate engineering organimtions in the world. Today, the event is held annually every spring in Pontiac, Michigan, at the Pontiac Silverdome. Teams fiom all around the world come together and compete in the three-day event tint inchides both static and dynamic events. In 2002, 136 teams from the United States, Canada, United Kingdom, Mexico, Australia, Japan, and Puerto Rico competed for over $35,000 in prize money. Formula SAElnsseveralpurposes. Firstand foremost,the sport originatedasa clnllengetothemindsofengineering students. Anyengineeringcollegemaytakepartin the annual competition as long as it is properly registered with the Society ofAutomotive Engnieersandanystudemmendingthatmstitufionnnybeamemberoftheteam regardlessofhisorheracademicbackgromid. Therulesallowforcreativityinthe overalldesignoftheracecar;howeversafetyissuesnarrowthefieldincertainareasof the car. The competition allows for any and all schools to compete, assuming they meet theminimurnrequirements. Eventhentheschoolmaybeableto competeonlyincertain eventseliminatingdiscouragementandgainingexperience fortheyormgengineerswho merespomrhlefortheemnedesignandmanuficnnmgpmcessesofthevelficle. Like other collegiate sports and professional organizations, the competition also serves as a vehicle for students to be noticed by future employers, and for schools to enhance their reputations as a top engineering school. Formula SAE teams gain real-world experience in all, aspects of engineering through the creation of their vehicle. One of the most critical elements before a car can evenbedesignedistheelement offunding. Teamsarerequiredto establishamethodto fimnce their projects; most teams do accomplish this through their university and sponsorships. How teams acquire sponsors varies fi'om team to team; however most teams tend to seek contributors in similar categories. Often, universities are able to provide some, if not all funding to Formula SAE teams. Otherteamsapproachbusinessesforfimncial, materiaLparts, nachining, and service contributions. These businesses could include those in the automotive industry such as automobile manufacturers, automotive parts suppliers, nachining services, and automotive material suppliers. Non-automotive related sponsors could inchrde grocery stores, home improvement stores, restaurants, designers, software companies, or even personaldonationsmadebylocalfirms, families,anda1umnimembers. [neither category, team can view their sponsors as either national or local businesses. National businessesaresimplythosewho servethegreaterpartoftheUnited States, while local businessesmayfocustheirbusinesswithinaspecific state orregionwithinastate. TherehavebeennoacademicstudiesonFSAE sponsorshipsandthetmevalueof these sponsorships rennins unknown. Imrmdiate benefits of the contributions made are easily seen in the development of a Formula SAE car; however the long-term and psychological benefits are the questions that still need to be answered. In order to understand the depth of Formula SAE sponsorships, what is already known about sponsorships must first be examined. MICHIGAN STAIE UNIVERSITY FORMULA SAE Each team participating in the Formula SAE competition has a different size budget, competes in various SAE and non-SAE sanctioned events, and displays their vehicle differently within the community. Michigan State University FSAE has a fluctuating annual budget of approximately $30,000. This includes monetary donations, as well as donated parts, materials, equipment, and services. Each year the team competes in the Formula SAE competition in Michigan and also tries to attend one or two Sports Club Car of America (SCCA) events. Attendance at non-SAE sanctioned events depends on available fimding, weather, and time commitments of team members. In addition to races, the MSU team displays the vehicle at several events in the community. OncampusthecarcanregularlybeseenintheEngineeringBuildingdming the first weeks of school for team recruitment and in the homecoming parade each fall. Michigan State often hosts events for local schoolchildren in which the Formula SAE team is asked to display the vehicle. These events inchide Science, Engineering, and Technology (SET) Day for high school students interested in these fields and “When I Grow Up,” an event exposing young children to the numerous educational Opportimities in college. Periodically, the team is often invited to display a car at various businesses and professional conferences in Michigan. Events are also hosted by the team where sponsors, parents, faculty, and alumni are invited to drive Old cars, meet the team, unveil a new vehicle, or to see the shop. The car displays sponsor names and at all of these events, the car is the star. Hence, sponsors enjoy more public exposure and advertising of their sponsorship with the team’s attendance at local events. CHAPTER 2: LITERATURE REVIEW SPONSORSHIPS Society has become full of chitter fi'om advertisers and marketers attempting to get their company or brand name in the consumer's eye. Promotional and commimication techniques have been attempted, and often failed to replace or complement advertising efforts. Sponsorships have been used over the past years as an inexpensive and efi‘ective method to cut through the advertising clutter. Little is actually known about how sponsorships work. Most consumers and businesses believe that sponsorships are simply a means offinancial support (McDonald 1991). Research has shown that a tremendous amount ofresearch and preparation needs to beput inplacepriorto anyformofsponsorshipbeingestablished. Oneofthe biggest and most debated issues still out there is the definition of the act of sponsorship. Meemghancreatedthemost connnonlyuseddefinitionofsponsorshipsintlmt it is "theprovisionofassistance eitherfinancialor in-kindto anactivitybyacommercial organization for the purpose of achieving commercial objectives" (1983). Others have arguedthattheassistanceisactuallyaninveshnentintheevMorcauseto support corporate objectives (Gardner 1987), or even the exchange of cash for ”exploitable commercial potential” (Ukman1995). In the end, the basic idea ofa sponsorship is aid, eitherwithmoney,products, orservices, givento anevent, organization, orcauses in order to meet specific marketing objectives by having the company and/or product name 10 associated with the sponsored activity or group (Abratt et all 1987, McDonald 1991). This association could expand to a variety of creative methods depending on the nature of events and capacity of sponsorship. In addition, businesses pursue sponsorships for the short and long-term benefits of contributing to a cause, event, team, or individual. These benefits could include consumer patromge (Mch 1999; Nicholls, Roslow and Laskey 1994), consumer recall (Bennett 1999; Bloxham 1998; Cuneen and Harman 1993; Hansen and Scotwin 1995; Nicholls and Roslow 1999; Pham 1992; Pope and Voges 1995; Rajaretnam 1994; Sandler and Shani 1992; Stotlar 1993; Turco 1995), positive (or negative) image of and attitude toward sponsor (D’Astous and Blitz 1995; McDaniel 1999; Nebenzahl and Jafl‘e 1991; Otkar and Hayes 1987; Rejaretnam 1994; Stipp 1998; Turco 1995), and sponsor recognition (Bennett 1999; Bloxham 19998; Johar and Pham 2001). Sponsorships are not black and white. There are several types and levels of sponsorships, as well as participants involved. Corporations can either sponsor an event, organization, or a cause. 'Event sponsorships' are just that, support for a variety of events inchiding, but not limited to sports, arts, music, and social events. The sponsorship could further entail the inclusion of the sponsorship of the broadcast, television or radio, of the event (Meenaglmn 1983). Organization or cause-related sponsorships support specific groupsorcauses, suchasamarchingband, SnidentsAgainstDmnkDriving,cancer research, or Society Of Automotive Engineers. 'Commercial sponsorship' is often used in reference to any marketing comrmmications activity that directly or indirectly benefits society (Meenaghan 1983) and 'corporate sponsorship' is cash or services donated by a ll company for the ”rights of association with that organization's mme and exposure to that organization's audience or customers" (Clarke 2000). Gardner and Shunnn identify four different participants in the sponsorship process (1987). The first are the corporations who are actual or even potential sponsors of the event. These could include large, international corporations, smll, mom-and—pop businesses, or anything in between. Distributors of the product brands, or channel members, make up the second set ofparticipants. The actual organization being sponsored and the public nuke up the final groups. The public, or more commonly referredtoastheaudience, isthelargestparticipant groupbecauseoftheimknowntrue size of this population. This is the group whom the sponsoring company is trying to reach through the spomorship. Advertisers utilize sponsorships for similar reasons to using advertising. Both hope to create, increase, or alter awareness of the company, increase sales, increase exposure, or establish certain characteristics related to the products or services (Cornwell 2001). However, the biggest difference is that sponsorships are better able to make their way to the surface, cutting through the clutter of advertising. With this, consumers tend to be more responsive to sponsorship activities than those of advertising (Meenaghan 1983). However, sponsorships should not be established instead of advertisingl; rather they should be conducted in conjunction with each other (Clarke 2000). Keeping this in mind, it is critical for companies to evaluate their marketing efforts and conduct the proper research in order to determine if sponsorships are right for them. Theactofsponsoringhascomealongwayovertheyears;itismuchmorethan simply attaching a name or logo to an event (Hoek 1999). Today sponsorship is moving 12 away fiom top executives pet projects to attempts at giving back to society (Shani et a1 1996). Several reasons have been given for this "change of heart" and more often than not ithaslittleto dowithacompanytryingto increase salesbydoing good. Abratt etal believes that our environment includes businesses of all sizes, with that there is a desire by all in the environment for there to be some sort of interaction between the two (1987). One of the best methods to do so is through sponsorships because of the ability to be associated with all aspects Ofcommunity life. Abratt et al go on to identify four reasons for this great fit: philanthropic desire to help, social awareness, blatant advertising, or a combination of these. Besides moving to more phihnthropic reasons, the business Of sponsorship is becoming more professional (Burridge 1989). Companies are realizing the greater benefit to sponsoring an event or organization than merely getting their logo out there, entertaining their cheats, or providing an outing for employees. These are still occurring; however it is being seen as a part of overall marketing and advertising campaigns. Many realize that sponsorships are a great technique for gaining exposure for small amounts of money. Money for sponsorships, as previously stated, goes to a wide range of events, organizations, and causes. However, most money is put toward sporting events. In 1996, $5.4 billion was spent on sponsorships with more than $3.54 billion (65%) spent on sports (Shani 1996). In 1999, these numbers increased to $5.85 billion spent on all corporate sponsorships and two-thirds ($4.55 billion) spent on sports alone (Comwell et a1 2001 ). The biggest reason for the high numbers of sports sponsorships is because sports have the ability to appeal to all audiences including both participants and spectators (Abratt et a1 1987). Producers and sellers of consumer goods benefit the most 13 fiomtheseaudiencesbecausesportsfansarethemost loyalto sponsoringcompaniesof their favorite sport(s). Besides the endless number and levels of sporting events, sponsors have five different methods inwhichtheycanparticipate (Abratt et a1 1987). A sport canbe sponsoredeitheringeneralorinparticular. Generalparticipantsarethosewho sponsora category, such as NASCAR. A particular sponsorship is a little more defined, for example, the NASCAR Winston Cup Series. Or, on more local terms, a general sponsorship of Little League versus a particular spomorship of the Little League Junior Series (age nine to twelve). Sponsorships can be more specifically defined by a competition in the sport (Coca-Cola 500), a team within a competition (the Roush Racing Viagra6car),oranindividualathlete(MarkMartin,driverofthe6carorSannnySosa of the Chicago Cubs). SPONSORSHIPS IN RACING Automotive racing is becoming the fastest growing spectator and participant sport in the United States (Comwell et a1 2001), with NASCAR outpacing every unjor sport (Motorsports Management 2002). All forms of automotive racing are very attractive to conmaniesinterestedinsponsoring sporting events. Thetwomainreasonsforthisare 1) racing's ability to "advertise" companies on the sides of the cars, on drivers' and teann' suhs,aroundflieuack,mdmthestands,and2)thewidemngeofsocio-ecomrmc demographics and family-oriented target market established by the racing industry (Motorsports Management 2002). 14 Racing has become an ideal sponsorship for businesses because it allows for some room to personalize the sponsorship package. Burridge identifies this as buying the "whole package" because there is more thanjust the car (1989). A company buys into the driverasaperson,thecountrytheteamordriverisfiomthesuccessofthecarandthe teamtheoverallattitudeofthesport,andtheimageportrayedbythesportandteam. In NASCAR, busuiesseswammennanieassociatedwthaleJairenandMarkManmtwo winningdriverswhocurrentlysitinthetopten. Italiancompaniestendto sponsorthe Ferrari team while English companies prefer Jaguar; and some Japanese companies may showmore interest inFormulaOnedriver Yakuma SatothantheywouldGerman Michael Schumacher. This is definitely not every case, bin success and team/driver origin often play a role in the end decision (Burridge 1989). lnnge also plays a crucial role in the decision to enter the automotive racing industry. Ithasnotbeenuntilrecentyearsthatracinghasearnedarespected image fi'om society. In the overall spectrum of racing, Formula One has a more prestigious image than other forms of racing. However, NASCAR has begun to establish a more upscale image with its spectators, participants, and business partners (Anonymous 1998). In addition to the sport itself; the drivers create an ideal image oftheir own. First, athletes mgemrdamseenashemesbecausetheypomayaheahhyfifestykmathnldscharam$ anddevelopstheindividualasasuccessfiilperson(Abratt 1987). Racecardriversare viewed as strong role models who possess "strong family values on and Ofi‘the track” in comparison to other professional athletes (Motorsports Management 2002). Sometimes a driverwillemergewhoisnot welllikedbythefiinsbecausetheiractionsatthetrackdo 15 notagreewithfanexpectations, yetthisisseenfarlessinracingthanintheNBA, MLB, NFL, or NHL. A possible determinant for the positive image carried by automotive racing is the ideathatraceteamsfullyunderstandthe impact sponsorshave ontheir sports. The industryknowsthattherewouldbenoracing withoutthesupport ofsponsors (Littman 2000). Sponsors gainsalesfi'omthe fansand ifthere isno racing, there areno fins. Therefore, the industry encourages fins to support the sponsors (Anonymous 1998). Interestingly enough, NASCAR fins are the most brand loyal fins in all of professional sports. Research has shown that approximately seventy-two percent of race fins are brandloyalandfifiypercentoffinsswitchbrandsto onethat issponsoringaraceteam (Lefione 1999). Marketers are more eager than ever to get their hands dirty in the racing industry. By merely looking at the numbers, a very successfiil pattern emerges. During the nineties, attendance at NASCAR events rose by ninety—one percent, or 15,430,000 fins (Motorsports Management 2002). This increase placed automotive racing officially as the largest spectator sport in the United States with growth rates twice that of the NHL, fourtimesofNBA, andthirteentimesthatoftheNFL. FormulaOneracingdidnot experience asdramatic ofanincreaseoffanbase asdidNASCAR; however Fl racing seesanannualgrowthrateofonepercentwithninetymillionviewersinfifiycountries (Burridge 1989). The internationally popular Indianapolis 500, championship race of the Indy Racing League, is considered the largest one-day event in the world with 400,000 fins in attendance and media coverage all over the globe (Comwell 2001). 16 Names such as STP and Penzoil are synonymous with racing. These brands serve as sponsors of teams and races, as well as commonly used products in the cars themselves. Other brand names have made their way into the racing world as well such as Budweiser, Winston, and Coors Light; it is these brands that race fins favored. With the increase in popularity Of racing, spectators are not the only ones becoming fins. NASCAR reported that nearly halfof their fins are female and companies took advantage of this opportimity (Oneal 1987). In 1987, Procter and Gamble spent nearly five million dollars to sponsor five stock cars bearing brand names like Tide, Folgers, and Crisco. Hanes Hosiery spent one million dollars to sponsor then unknown, Sterling Marlin. A decade later, Visa spent approximately ten million dollars toward a NASCAR sponsorship (Lefton 1999). With increasing price tags, 2002 finds a wide array of Official sponsors including America Online, Rubbermaid, Sharpie markers, Singular Wireless, Sprint, Lowe's, and even Viagra. How SPONSORSHIPS WORK For professional race circuits, sponsorship money comes easily. Smaller companies, and even lesser-known race circuits participate in sponsorship activities as well. More research and carefiil consideration needs to take place when selecting the best fit. Meenaghan recommends companies interested in becoming a sponsor first set objectives as to what they wish to accomplish through sponsorship activities (1998). Specific objectives will better allow for the selection of the most appropriate event/organization to sponsor as well as the type of sponsorship implemented. Objectives should be specific to what the company hopes to achieve through the 17 sponsorship including: increase repeat purchases, increase brand and/or company image, promote product trial, encourage contributions, or generate company interest. In addition, itisimportantto understandwhythecompanywould want tobeinvolvedwith sponsorships. Sponsorships are an excellent tool for those companies wishing to advertise or promote their business; however companies getting involved with sponsorships merely for the opportunity to go sailing, attend a game, or drive a racecar should not expect much success (Burridge 1989). Extensive research should be conducted when becoming a sponsor of an event or team. Thethreeareasto focusonare:whatto lookforinanevent/team, howto planthe campaign, and how the two will meet the company’s objectives. Several researchers indicatetlmtthemostcrucialsteptowardbecomingaspomorisselectingtherightevent orteamto sponsor, orfindingtherightfit. David SlmniandDennisSandler suggest usingatlnee-stepprecessforselecfingthatperfectsponsoredactivity: l)cfissifyevents usingtheSportsEventhramid,2) selecttheevent levelthatbestmeetsthecompany’s objectives with accessible resources, and 3) utilize traditioml selection criteria to choose a specific event (1996). These steps were originally geared toward sports sporeorships; however with some minor adaptations, all sponsored activities can follow a similar process. ThefirststepinselectingtheperfecteventistousetheSportsEventhramidin ordertoclassifyevents. Whenplacingeventsinthepyramid,twodimensionsshou1dbe takeninto comiderationzwidthanddepth. Thewidthofaneventisthephysical geographicreachfortheeveminthemediaanddepthdealswiththeinterest levelof thosetheeventreaches. Withwidthanddepthinmind,thepyramidisbrokendowninto five levels: Global Events, International Events, National Events, Regional Events, and Local Events (see Appendix A: Table I). Once a company’s sponsorship possibilities are identified and classified, the level, then the event that best fits the established Objectives needs to be selected. In selecting the event, three key factors reed to be considered (Burridge, 1989). First, is the appropriate image being createdwiththeevent? Thelifestylesofthe consumersneedto be properly matched with an event of similar nature. For example, automotive racing, particularly Formula One, is considered a technologically advanced sport because of the use of computer equipment to design, build, and even race the cars. Therefore, a good product fit would be anything high tech. Health products such as foods and workout equipmeMmebestnntchedwithweighfifimg,aerobic,andnmmgevem8becauseof the similar lifestyles possessed by the audience. Otkar and Hayes identify a continuiun in which the relationship between a sponsor’s product and the sponsored event fill (Meehaghan 2001). On one end are the strongly linked products where the products are physically demonstrated in the event. For example, NBA basketball players wear basketball shoes and Nike makes basketball shoes;thereforeNikeisasponsoroftheNBA. Onthefirendofthespectrumarenon— linked items. This is where the product is merely related to an image or attrilxrte of the event or event’s audience. Otkar and Hayes provide the non-linked example that “a sport is played by virile people, virile people smoke Marlboro, and Marlboro is sponsoring [the event].” In between the two extremes are linked, but not strongly linked products. Here thereissome sort ofarelationship betweentheeventandtheproduct, butnot oneas clear-cut as strongly linked products. Televised events often are taped using a certain 19 brandofcameraorvideo equipment, andoftenthatbrandofcameraorvideo equipment is an official sponsor of the event showing an indirect relationship between the product and event. Along with the irmge of the product, businesses need to be cautious in making sure the image ofthe event reflects the image the company wishes to achieve. In most instances, you will not see alcohol or tobacco companies sponsor marathons or Olympic events. Even some race teams do not have any desire to be associated with these companies. Some sponsors see successes and fiilures of teams as a direct reflection of their business success and failures. For example, international fishion company Benetton sponsors a Formula One team in which they actually take on the team owner role. This is done in order to make sure the team’s management does not reflect poorly on the management and credibility of Benetton. Other companies establish similar relationships by selecting the “whole package.” This includes carefully selecting teams or athletes of certain nationalities and even personality styles. The event’s audience make-up is the final factor to consider in selecting the perfect event to sponsor. Most researchers will argue tint this is the most inrportant aspecttomeetasasponsor. Itisimportanttounderstandwhoiswatchingorattending these events. What are their demographics, lifestyles, personality types, beliefs and values? Therelationshipbetweentheconsumerandtheevent mustbewellunderstoodas well (Gwinner and Eaton 1999). What image does the consumer possess about the event or team? Also, how many are watching, how are they watching, where are they watching from, and for how long should be carefully evaluated. Every event will have spectators, but it is those that have media coverage that will have the edge over other events. The 20 capabilities of the media can extend fiom local to national, international, or even global coverage. Obviously, the better the coverage, the more individuals the event will reach The length Of the coverage is also very important to consider. In recent years, cable and network channels are covering more automotive racing events. In addition, the average length of each broadcast increased, by fourteen percent in the late eighties alone. Sponsors should also be aware of what audiences purchase as well. Where they shop, what brands they purchase, repeat purchasing habits, price range per product category, and even how often they purchase these products are all questions one should ask about event consumers. Once the respective event or team is selected for sponsorship, a carefully executed campaignneedstobeestablished. Companieshavetobecautiousinplanningthe campaign to fit well with the sponsored event and/or team (Burridge 1989). The end goal for a sponsorship is to “maximize the return on [the] investment” which only starts with the writing of the check. Binridge states that those receiving the money are benefiting from sponsoring companies; however the involvement could turn out som' if the two do not work in cooperation with each other (1989). The wants and needs of both parties need to be clearly defined and a plan of action should be established. Organization and professionalism is key when dealing with sporting events, especially in those instances when the sponsorship evolves fi'om a special interest. Often sponsors will be required to include an entertainment or hospitality and advertising budget in the donated monies to provide services to fins, business associates, team members, or any other individuals who may be a potential customer or client. Businesses may be required to boost their own advertising and public relations efforts to keep their 21 name as well as their sponsorship activities in the public’s eye. Burridge points out that involvement needs to be effective and it does not happen without strategic planning and preparation (1989). Statistics have shown that a company can easily achieve its goals of increased sales, brand recognition, and effectively complimnt its advertising through sponsorships (Gardner and Shunran 1987). In addition, consumers recognize the company’s efi‘orts to increase comrmrnity relations and responsibilities, as well as create awareness and a positive image with both cause related and event sponsorship. Special Events Reports in 1994 stated“asponsorshipiswonhnfilfionsofdoflarsprhmrflybecausehcanhavean impact on millions of consumers” (Crimmins and Horn 1996). Little research has examined how sponsorships influence the development of community relations and subsequent audience perceptions and behaviors toward the sponsor. For sponsorship to create positive commity relations, consumers must accept the good will intentions of the sponsor. Recent research suggests that consumers infer motives for corporate sponsorships(Rifonetal. 2003)andthatthose inferencesafi‘ectconsmnerresponseto sponsorship. SPONSOR MO'I'IVES Individuals naturally try to explain why events or certain outcomes occur (Weiner 2000). Heider explains this behavior as the attribution theory where causal inferences are identified as reasons for events. Consumers follow this pattern in their purchasing behavior. Presurnptions are created based on a variety ofproduct cues such as color, brand name, quality, store reputation, and reactions fiom others (Burnkrant 1982). 22 Sponsorships follow this theory in two ways. First, consumers often inquire within themselves as to reasoning for their purchase behavior or intent (Folkes 1988). This could include why they have purchased or selected a product, switched brands or followed the recommendation of the endorser Of the product. Research has shown that fins of automotive racing are more likely to purchase or switch to those products of companies that sponsor a race team (Leftone 1999). Even though consumers may not consciously identify this cause, they are still aware of these Sponsorships and the relation to the team and driver. Consumersalso tryto recognizethe intentions ofthe companiestlnt sponsor teams and events. Rifon et a1. (2003) suggest that that infornfition about sponsor motives is not provided to the consrmier; therefore they nuke assumptions as to the company's intentions and expectations. This behavior, in turn, creates a perception of company cmmbifitybymeconsmner,whichisusedasacuemwardsfinnebmmesswimmat company. When consumers believe sponsor motives lean towards the philanthropic, comumers are more likely to develop positive perceptions of the sponsor. However, Rifon et al.’s study was performed with national sponsors and the results may not be generalimbleforlocalconmaniesandlocalevents. Infictthevahreoflocal sponsorships has been relatively ignored. InmecaseofFormrhSAEteamflreaudiencelmsagreaterinterestand involvement and therefore may be more sensitive to motives of sponsorship. The further one is removed fiom the team, the less likely a consumer would consider the sponsor’s motive. This, in turn, reflects a certain level of credibility depending on whether the motive is perceived as altruistic or of selfish nature. Similar attitudes follow in the 23 perceptionsoflocalandnationalsponsorsinthattheclosertheteam,oraudience,isto the sponsoring organization, the more the motive and level of credibility changes. STUDY QUEsnONS As indicated in the literature review, sponsorships can take on a wide range of forms, and appear in contexts including causes, programming and events. A considerable majority of money spent on sponsorships goes towards automotive racing. These sponsorship dollars contribute to the success of racing, attest to the desire for companies to find new methods of getting their name in the consumer’s eye, and build sponsor perceptions that auto racing is an effective use of those dollars. Indeed, the many forms of auto racing provide ample opportunity for sponsorships. To date, studies have examined mainstream professional racing, notably NASCAR and Formula One events. This case study will examine Formula SAE team sponsorships. Formula SAE is notably difl’erent fi'om other racing circuits. Professional circuits, such as NASCAR, Formula One, and lRL, have a large viewing audience. Millions all over the world are able to watch each race thanks to the advances in cable and satellite television. Therefore, race fins are not only watching their fivorite driver, they are also consumers being exposedto thousandsofbrandnamesinashort time fiame. Because ofthewide coverage, these brands tend to be those of national and international companies that can be available to almost every consumer. In addition, even though these fins are loyal to certain drivers and may know all of the statistics, there is little or no personal direct relationship with the team. 24 The audience for Formula SAE racing is different from the audience for other race circuits. In many ways it is similar to the backyard racetrack audience: it is hard to reach, localized, and its members have a close relationship to the race team. At first glance, this audience may seem undesirable to sponsors due to the uncertainty of obtaining and measuring positive sponsorship outcomes. However, it is this relationship with its audience that benefits F SAE and other localized circuits. Here, spectators are fi'iends and fimilies of the drivers and/or teams. Specifically for Formula SAE, this includes fimilies and fiiends of team members, university faculty and staff, alunmi, and industry professionals. The smaller, but more intimate, “fin base” creates spectators who have more involvement with the racing teams. Therefore, there is the potential for interaction between F SAE spectators and sponsors that is not available in other racing venues. Indeed, if professional racing can create customer loyalty for national brands, FSAE racing may create stronger customer relationships and loyalty for those local as well as national sponsors. Research has been conducted regarding automotive racing sponsorships; however there have been no academic studies on the effects of sponsorships of local teams, and the relative benefits for local versus national sponsors. Formula SAE offers a context for the study of these issues. In the broadest sense, this case study will try to assess the potential value for local and national businesses in sponsoring a local sports team. Specifically, it will examine the benefits perceived by sponsors, audiences, and local team members for one, F SAE team. The case study will try to answer the following questions highlighting similarities and differences for local and national sponsors: 25 Qla. le. Q2. Q3. Q5. What benefits do businesses receive from sponsoring a local Formula SAE race team? What benefits would they like to receive? What motivates businesses to sponsor Formula SAE teams? What benefits do team members receive fiom sponsorships? How do audience members respond to Formula SAE team sponsors? Q4a. Wlmt sponsor motives do audience members infer for sponsorship? Q4b. How does sponsorship influence audience perceptions, attitudes and patromge of sponsors? How does the relationship between spectator and team influence the response to sponsorship? 26 CHAPTER 3: METHODS To answer the study questions concerning the involvement of local and national businesses in automotive racing through sponsorships, a case study was developed to gain better insight. The Michigan State University Formula SAE (Society of Automotive Engineers)raceteamwasutilizedto gettheperspectiveofasingleteam, its sponsorsand those involved. MSU Formula Racing is an established collegiate team that has competed in the International SAE competition for over ten years. The team has been successful in gaining a variety of sponsorships throughout the years. The list of sponsors includes both natioml and local businesses, companies in the automotive and non-automotive industries, and financial, parts, services, material, and supply contributors. MSU F SAE serves as a good representation of any local race team from any circuit in the country. Thecasestudyexamined specific groups: teammembers, MSUfacultyassociated withFSAE, team sponsors, fimilies ofteamrnembers, and MSU FSAE alumni. Theuse ofthese individualshelpedensmethatallviewpointsconcemingtheteam, its sponsors, and the messages within were taken into consideration. It is believed that all parties have someroleofinvolvement intheinteractionwithsponsors, whetherit isdirect, indirect, through the university, or as a consumer. Qualitative data was collected through focus groups for team members, personal interviews for ficulty members, and mail questionmires for remaining groups. 27 Twenty active members of the Michigan State University Formula SAE team, eighty percent Of the entire team, were conveniently assigned to one of two groups (n=13; n=7). These individuals are the ones who have the closest relationship with the team’s sponsors. Team members use representatives from outside organizations as resources to help solve problems or deal with issues flnt may arise for a specific component or piece of equipment. Also, they are responsrhle for recruiting sponsors and generating financial support for the program. Most interactions with any sponsors are done through various members of the FSAE team with little or no university involvement. During each session, a moderator led the discussion and asked several questions regarding the team's sponsors, its motives and expectations, wants and needs of the team fiom sponsors, and the purchasing behavior of the team members. All focus groups were videotaped for further review. Personal interviews took place with selected members Of the MSU College of Engineering administration: Dean, Associate Dean, and Faculty Advisor. These individuals helped to provide insight as to how sponsor contributions are perceived by the university and college. There is a separate relationship that is created between a business and the university when donations are provided to the school or an organization within the school. It is imperative to understand the inner workings of this relationship and why it exists. There is little to no interaction between university administration and MSU Formula SAE sponsors; as previously stated, most is done with the team directly. In addition, administration and faculty members are also considered consumers and their attitudes and actions should be taken into consideration given their relationship with these businesses. 28 The third phase of data collection was done through questionnaires (see Appendix B for questionnaire examples) sent through the mail. These went to sponsors, parents of team members, and MSU F SAE alumni. Sponsors, with a twenty percent response rate, were separated into two categories: national (n=3) and local (n=2). National sponsors are businesses that serve the greater part of the United States. This may include fianchises and chains, internatioml companies, and businesses with several locations throughout the United States. Local sponsors are those businesses who primarily serve the state of Michigan or a region within the state. These companies may include those with several locations throughout the state and with customers primarily located in Michigan. Questions asked of sponsors pertained to their involvement with the team and university, expectations of team, motives (see Appendix C for measurements used) and credibility (see Appendix D for measurements used) of sponsors, and the history of their sponsorship to the MSU F SAE team. The sponsor respondents included an automotive manufacturer, equipment supplier, materials supplier, parts supplier, and software supplier. In addition, two of the five indicated they provided the team with expertise and advice and two were financial contributors. Of the sponsors who responded, three have been sponsors of MSU FSAE for over five years, one for less than three, and one became a sponsor this year. Parents, with a response rate Of 38.5 percent, were asked for their Opinions on national and local sponsors, their purchasing behavior (see Appendix E for measurements used), and to recall current team sponsors (see Appendix F for measurements used). In addition, some parents have donated money to the team and therefore were also considered sponsors (n=3). They received an additional questionnaire pertaining to their 29 sponsorship involvement and their expectations. Questionnaires were utilized with alumni (62.5 response rate) to gain an understanding of their past involvement with sponsors and the team, how those relationships have played out in their professional careers, their personal sponsorship and consumer buying activities. These individuals are anexcellent somceofallaspectsoftheracesponsorshipprogram. Again, someahnnni are considered sponsors as well because they have rmde a financial donation to the team (n=3). All mailings were provided with a letter detailing the involvement with the team and thesis work, instructions and a self-addressed stamped envelope for easy reply. 30 CHAPTER 4: FINDINGS TEAM MEMBER PERCEPTIONS Team members were asked their opinions on the relationships established between the team and sponsors. They talked about benefits of and reasons for sponsoring andthetypesofbusinessesthat shouldbeorareacceptabletypesofsponsors. This included looking at where the company conducts its business as well as the industry it is in. Finally, theywere asked howtheybelieved sponsors viewedthe teamand what they expected. SPONSOR RECALL Eachteammemberwasasked to listasmanysponsorsastheycouldrecall(see Appendix A: Table 2). Actual sponsors were recognized as those who had donated money, equipment, parts, mterials, and/or services during the past two years. This inchrded all businesses, new sponsors to this year’s team, university organizations, and any parent, alumni, or fi'iend of the team who has made financial contributions. Team members were able to identify an average of eleven sponsors per person, with only approximately nine of those being correct. Together, the team had correctly identified forty of the team’s sponsors with twenty-five recalled multiple times. The five biggest sponsors of the team were identified by over halfof the participants, with Ford Motor Company being identified by all twenty participants and General Motors identified by all 31 but two pmicipants. Ofthe sixteen incorrect responses, only three had been listed more than once. SPONSORSHIP FIT: AUTOMOTIVE OR NON-AUTOMOTIVE In determining the need to have businesses in the automotive industry as sponsors, the team preferred a mix of industries inchrding both automotive and non- automotive businesses. Automotive industries are acknowledged as any business dealing with automobiles whether it is manufacturers, parts suppliers, dealerships, towing companies and garages, body shops, driving schools, and race tracks. Twelve of the thirty-six sponsors identified were not fi'om the automotive industry. These businesses included a website designer, sign company, parents, alumni, fiiends of the team, and various organizations on campus. When asked the reasoning behind having a variety of industries represented as sponsors most agreed tint money was the biggest determinant. However, it was indicated that it makes sense for automotive-related businesses to sponsor race teams because they are‘tafloringtotheirmarket.” Consumerswho seethenamesofthesecompaniesonthe carswillassociatethemwithracing, anditisthese sarneconsumerswhowillpurchase their products. In addition, it is the automotive industry that supports the team as a means of investing in future engineers. “[Team members] are theoretically going to work for them. Theycangive [teams] fiftydollarsworthofsparkplugsandearnonethousand dollars worth Of training before [they] actually go to work.” Participants related the situation to professional circuits such as NASCAR, F1, and CART teams in that only a fiaction Of their sponsors are automotive related. The 32 main benefit for these teams was simply getting the company’s name in fi'ont of consumers. Even though participants agreed that it is beneficial to both the team and non-automotive businesses, the end benefits differ and are not comparable to those of professional circuits. Those teams are exposed to a wider audience and are perceived more as a moving billboard than a truly invested sponsorship. Here, “[consumers] associate their logos or sponsors by [who wins].” One participant stated that, “[a company] does not necessarily gain by giving NASCAR spark plugs. NASCAR is not testing or integrating their designs on a [Winston Cup car],” whereas these products could be tested and integrated with a Formula SAE car. “NASCAR is different because it is a brand name” and sponsors try to take advantage of that. Another benefit of having non-automotive businesses sponsor Formula SAE teams was simply because not all team members are geared toward working in the automotive industry. This is one approach to recruiting future engineers in other industries. A participant felt that “they are getting their hands on people that [have more] experience in the real world. It doesn’t matter that it happens [to be] that they worked on a race team while in college, because the real world experience [people] can get on [these] team[s] is above and beyond.” In the end, most participants agreed that companies sponsor professional circuits for billboard and exposure reasons and sponsor Formula SAE to gain engineers and experience. Therefore, in either case, there is no reason for non-automotive industries to not sponsor race teams. It just may be more beneficial to teams like Formula SAE for experience and knowledge purposes. 33 LOCAL vs. NATIONAL SPONSORS Raceteamsneedtodetermineiftheywanttogoaftercompaniesthatdobusiness atthenationalorinternationalleveloriftheywouldbenefitmorefromthosetlntare local. In identifying sponsors, the teammembers were able to identify twelve local businesses of the thirty-six total identified sponsors. Local sponsors were defined as thosewhosebusmessisprimarilyconductedinthestateofMichigamthismayinchide miiversityorganizations,parents,alumni,andfi’iendsoftheteam. Theteammembers hidicatedtbatmgeflmgpansormateriaLitdidmtmanerwherethecompanywas located. Insomecases,theteamwasforcedtolookoutsideofthecormtryforspecific components. Each situation is determined on a part-by-part basis and what kind of sponsorshiptheteamcanreceive. Sometimes conpaniesaresimply selectedbytheir qualityandperformanceandnotwhattheteamgetsinretum. Mostparticipantspreferredtodealwithspomorswhowerelocal. Ofientime constraintsareplacedontheteam;thereforeitnnkesiteasiertojustgotothecompany inpersonratherthanconmunicateoverthephone. Whenacompanydonatesaservice,it requires a lot ofdowntime for them, which is not often seen in larger companies. It seemstobealoteasiertogotolocalcompaniesforbelprathertlnnwaitforthelarger companies to go through their proper procedures. These larger, national businesses lmve to go throughcertain resources and “red-tape” to get approval or some other action This takes a lot of time, something not all race teams have. For the Michigan State team, they havetheaddedbenefitofbeingirnthestateofMichigamastatethatisofienrecognized forbemgthe‘hutomotivecapitaf’andcanfindjustabouteverythingtheyneedinsidethe statelines. 34 With time being the biggest factor to race teams, they often have to plan well in advance to receive sponsorships from larger companies. Team members indicated that thedonationsareverybeneficial, sincetheytend to bedomtionsoflarger sum, andtlnt most show a willingness to participate as a sponsor. However, unlike smaller businesses, toms must not expect a quick turn-around time. If they approach the businesses early onthereusuallyisnotaproblemreceivingthemoneywhenit isneeded. Sometimes theyarelacedwithsituationswherethemoneydoesnotarriveuntiltheyhaveexceeded thebudget,theseasonisover,oranotherdesignhadtobeusedforcostreasons. Itwas stated that “[team members] have to phn around national companies, whereas the local companies plan with [team]? Oneofthegreatestadeagesofhavhgbcalbushnssesassponsomisforthe relationship established with the team. In most cases, local businesses will only sponsor asingleteam. Thismaybedueto costsorproximityseeingthatFormulaSAEteamsar-e spread throughout the world. Local businesses are very interested in being associated with colleges and universities and this is an excellent medium for their involvement. In additionthesecompaniesbenefitbecauseastheygrow,theteamcangrowaswell. This couldallowfor largerdonations,butalso morebusinessfromtheteamandthose whom they refer. National businesses are definitely not to be ignored. Again, they are the largest supporters ofFormula SAE tearm. Also, these arethecompanieswiththe capital to hire theteammembersaftergraduation. Most oftheparticipantsten thatintheend, it isthe national and internatioml companies that will offer students more opportunities once in the work field. There is more potential for growth for the companies and employees. 35 Not all industries or businesses are even considered appropriate sponsors for the Formula SAE team. Most participants strongly felt that those businesses in the alcohol and tobacco industries should never be sponsors of Formula teams. One of the biggest concerns was that FSAE is a collegiate competition and these industries do not possess a message that is complimentary ofthat behind the competition. Some ofthe concern was driven by the university’s influence or regulations in not accepting certain businesses as donors. However, many team members, personally, would not have a problem with accepting money from these companies; some had problems with accepting money from tobacco companies solely for the damge to one’s health. Money seemed to be the biggest factor in accepting companies such as breweries, cigarette manufacturers, and those who are seen as “degrading to women.” Setting university policy aside, some team members were willing to take money from these businessesforthepurposeoflearning aboutandmanufactm'ingaracecar. Otherssaw the money as having a negative impact on the team, competition, and other sponsors. Oneteammemberputitbestbysaying: “The reason the competition is made was to further engineers in the automotive industryandto support students. [Whenteams become sponsoredbythese businesses], it is being done specifically for the money. There are teams that build a car for less than $5,000 and MSU builds it for less than $100,000. Those teamsarelearningthesamethings [MSU]is[learning],itisjustthatMSUlms more money. The money can help teams learn more advanced things; however it goes against the competition. Teams can just buy a win at the competition.” 36 Only one team member indicated that this same type ofthing could occur ifthe team was sponsored by a large, non-automotive related business such as Coke or Pepsi. It is their belief that if the team goes “too commercial”, then the car becomes a rolling billboard and the image of the competition is lost. Others disagreed and said that some teams have companies like UPS and La-Z-Boy as their biggest sponsor and little is perceived by it. In addition, if the check were big enough to cover the team’s expenses it would be welcomed unless it was fiom a questionable industry. In relation to other circuits, participants believed that beer and tobacco companies could sponsor race teams because there are no ties to a college or university. With Formula SAE, the team represents the school and the school is the biggest sponsor. They stated that there would be too much negative publicity having one of these businesses sponsor the Formula car. One team member indicated that Michigan State in particular already has had a bad reputation because of recent and past events of rioting and drinking. They would not want to worsen this reputation by accepting money from an alcohol or tobacco company. At the professional level, participants do not believe that people even recognize the possrble negative associations with racing and the beer and tobacco sponsorships. Those who are race fans said that they would not stop supporting a team just because it picked up one ofthese businesses as a sponsor. Also, they do not associate the names of series, like Winston Cup or Busch Series, with cigarettes or beer; they simply think of racing and the trophy. Other participants who are not race fins believe some consumers do have this association; however they personally do not and think most give little thought about the products that sponsor professional race teams. 37 Building a Formula SAE ear requires available resources, however it is these resources that help determine the success of the vehicle. Therefore, with money being a determining factor, the team believes that a mix of sponsorship types is preferred. Even thoughbusinessesintheautomotive industryisviewedasthe best fit asasponsorofa race team, money and other donations are well accepted from all industries. In some instances, the team has found that a non-automotive sponsor could bejust as beneficial, if not more, in areas such as software development or packaging. Preference is given towardbcalbusmessesbecauseofflreirmrecomminnemandmterestinflreteam The nationalbusinessesmayhavermreto ofl‘er,howeveritisthelocalbusinessesthathave thetime. SPONSORMOTIVES Exposurewasthemainreasonwhylmsinessesget involvedwithFormulaSAE. However, the types of erqiosure varied on the level of involvement and sponsorship with theteam. Teammembersacknowledgedthatallofthesponsorsaretryingtogettheir mmeoutthereandthathavingtheirlogoorstickeronaFormulacarwasagoodmethod ofdoing so. TheaudienceataFormulaSAE event, orevenanyonewhoseesthevehicle, isnndeupofconsumersandtheseconsumersmybeinthennrketforaproduct manufacturedorsoldbyoneofthesponsoringcompanies. Intheend,everyonewantsto makeaprofitandsponsoring businessesareno different. For those intheautomotive industry,theyknowthatthemajorityoftheaudienceconsistsofengineersfiomother areasoftheautomotiveindustryandcarenthusiastsofallkinds. Theycanutilize Formula SAE tearm by giving them products or equipment to use or for testing purposes. 38 Many who could benefit fiom their use, including other Formula SAE teams, and want to get involved with these companies themselves will see these parts. Thedifl‘erenceinbenefitscanbeseenbythe sizeofthecompany. Goingbackto localbusinesses, thesearetheonesthat are more likelyto benefit fromhaving theirname onthecar. Theyareawarethatthecarisseenateventsonthecampusandthroughout thecommunity. Forlocalengineeringbusinesses,theyareconsciousthat“thecaris scrutinized. Every singlepartonthecaris seenbyjudgesatthecompetition.” The judges are representatives of various aspects of the engineering community. Therefore, there is “free exposure.” One team member stated that, “[sponsors] hand [team a part] andenoughpeople fi'omFord, GM, and DaimlerChryslerwillsee it and itmight catch their eye.” Businesses not in the automotive industry, local or national, participate for similar reasons as automotive-related businesses. They may have a product that is not used for automotive purposes, but it any benefit a company in the automotive industry. For example, Michigan State Formula SAE has a web design company that sponsored the team. It definitely was not an automotive-related company. However, they wanted to get theirth inthedoor ofthis growing industryso they sponsored aFormula SAE team. Thiswasseemandevenusedasasellingtool,bysomecompaniesandtheyhavepicked upbusiness fiomacarmanufiicturer. The same could holdtrue for other businesses sponsoring race team. One aspect about Formula SAE that is different from most race teams or circuits is that F SAE is a collegiate competition and teams come fi'om colleges and universities with engineering program. This often creates an appeal for businesses to get involved 39 that may not be there with other teams. However, other grassroots race circuits could have a community relations appeal to businesses. Team members easily identified several reasons why businesses want to be involved with Michigan State University’s Formula SAE program, some of which can be related to other circuits as well. Michigan State University, as well as other universities, carries a certain reputation that businesses want to be involved with. For one, it is a large university that holdsacertainweightto itsname. Businessesprefertobeassociatedwithahighly recognized institution of learning rather than one less known. Also, Michigan State is knownforitsengmeeringprograminparticularmechanicalengineering. Thisis something of interest to businesses in the automotive field. There is a greater appeal, as an automotive company, to be associated with a school regarded for its engineering than one that is known for its medical program. These sponsorships often serve as “a bridge between school and actually working.” There is a good transition of information and preparation for after graduation that many see in Formula SAE and the sponsorships and not in the classroom. Local companies have a desire to get involved with Michigan State and the engineering program and see sponsoring the Formula team as an avenue of doing so. One of the team’s local sponsors specifically sponsored the team for this reason. They haveaninterest inthetestingthat isdone oncampusand wanted to gain some ofthat work. Since the creation of the sponsorship, they have been able to establish a relationship with one of the professors who conducts testing at the facility. To some of theteammmbersflreydidnotagreewithbusinessesusingtheteamto gettothe 40 university’s professors and facilities. Others said that the team benefits, the businesses benefit, and the university benefits. “Everyone is happy.” Community also plays a large role in the selection of Michigan State for sponsorship. These sponsoring businesses feel that they are giving back to the community; however many team members see it simply as a tax write-off. The relationship they have with the university can be used as a marketing tool to gain business for them. “They can say they support students in their own sales pitches.” This may hold true for some, but other participants saw most businesses, in particular the smaller, local ones, sponsoring Michigan States out of goodness or a donation toward education. This is especially true for the parents, alumni, and fi’iends of the team who donate to the team. As a recruitment tool, companies sponsor Michigan State for proximity reasons. Being within an hour and a halfof the “automotive capital” allows new employees to stay close to home. It is also difiicult for Detroit businesses to retain employees from southern parts of the country in Michigan just for environmental purposes, in particular, the winters. Participants said that sponsors often inform the team that these are the exact reasons why they sponsor Michigan State. Other businesses have close ties with the university. A large MSU alunmi population works at these automotive businesses and phys a strong role in the recruitment of Michigan State students. This is also reflected in their push to give money to the university as well. The end benefits that a company receives through the sponsorship of a Formula SAE car vary. Recruitment is the biggest benefit sponsors receive. They are getting first pick at engineering students who lmve several years of experience outside of the 41 classroom Professors teach the fundamentals of design and mnufacturing, but few have presented more real examples of real world engineering than seen onthe Formula SAE team. Participants saw sponsorships as an investment in education. Students have ceflahexperiemesworkmgwithcenainequipMorMefialsandMexperiemeis worth two yearsinthework field forafraction of the cost. Inaddition, some team have beenexposedto some of the cutting edge technologytlmt isvery desirable to future employers. Ortheymaybe introduced tonewandsimplifiedmethodsofcompletinga taskthatcanalsobeutilizedinanyautomotiveengineeringcompany. Some benefits of sponsoring a race team may not have immediate results. Relationshipsarebufltearlyinastudem’scareerthatcouldbeusefidyearslaterwhen theybecometheengineer. Teammembershaveseenalumnientertheworkingworldand usethecontactstheyestablishedontheFormula team to gain suppliers or information for theircurrentemployer. Thesesponsoringbusinessesarelookingtomkeasaleandthis isonemethodofdoingso. Otherteamorracingandcarenthusiastsmayseeateam usmgaspecificwmpommmthewmpetifionandpmchasethatsamprodmorother products, forthenext year or their personal vehicle. Thisisespeciallytruefor top teams; otherteamwfllseememwceeedandwammduphcatemensuccessandusmgthesam componentsisone way of doing so. Team members have also seen businesses get involved simply for the enjoyment ofracingorhelpingout. Thisisameansforracefanstobeapartofaraceteam. Several spomorsmhlybcalhrsnnssesenjoyhavmgapicuneofflreteamandcarhangmgm their shop as a conversation piece. A customer, who inquires about the car, my spark an hnerestandthemismassociationdwebpedbetweenflwmmumer,mehrsmess,and 42 the race team, whether it is community or racing related. Business could possibly be generated through this interaction. Exposure, recruitment, and community involvement are the strongest perceived motives for sponsorship seen by team members. Sponsors will not deny the opportunity to gettheirnameinthepublic eye. Thenationalbusinesseswantto keeptheirnamefi'esh inminds’ ofthe consumer, howeverit isthe localbusinesses thatwillseethisexposure as an attempt to increase sales, create business relationships, and simply advertise their company. Both types of businesses lmve a vested interest in helping the community, whetheritisthecommunitywithinthecity,theUniversity,orSAE. Eitherway,thereis a desire to be affiliated and express actions of goodwill toward the community for all sponsors. And finally, thethird motive ofrecruitrnent isone ofthe biggest, yet least altruistic motive businesses have in sponsoring a Formula SAE team. SPONSOR EXPECTATIONS Success of a sponsorship could be measured by how well expectations are met fiom sponsors and team members. Interest and insight are the biggest expectations of team members fi'om sponsors. In addition to money, participants want sponsors to be willing to share information when a question arises. Or, they would like a representative to provide assistance when there is a question or problem with their product or equipment. One of the team’s sponsors was identified as an excellent example of a good sponsorship relationship. This company had domted several thousands of dollars of equipment and supplies. However, the relationship did not end there. Representatives of the company came to the university and worked with team members in setting everything 43 up. They also are regularly available when there are questions or problem that cannot easily be answered. Inreturn, sponsorswantto seetheteamperformwell. Thereislittle interest in sponsoring a race team that does not perform well in competition Team members believe that businesses may not want to be associated with teams who are not successfirl; this is regularly seen at the professional level. Success is not always regarded as winning the competition. Rather, being successfirl is turning out a competitive vehicle, having good work ethic, understanding the car and knowing what to do when there is a problem, and simply acting in a professional and organized manner. One company had dropped its sponsorship with one school to come to Michigan State for the team’s professionalism and respectable attitudes. This sponsor believed that MSU represented an image supported by the company. A team member stated that, “at competition [or wherever the car goes] the team represents Michigan State and every company whose name is on the car.” Team members identified one company that had dropped its sponsorship because they believed they were not getting enough in return from the team. Because the company was a sponsor for the team, they wanted and expected internships or co-ops fi'om team members. Some participants understood the company’s reasoning and said that both parties would benefit. However, most did not agree that sponsorships are a “trade-off” of this type. Teams hope to do well in the competition and businesses want to sponsor successful team. Therefore, both do what they can to meet the other’s expectations. Raceteamcannotbesuccessfirlonmoneyalone. Theyneedexpert adviceandtechnical support; something sponsors are able to provide. When companies provide donations to FSAE teams, it is expected, but not always received, that these same companies will follow through with more than monetary support. In return, the team will become more knowledgeable and successful with the hopes that sponsorships will increase with new and existing sponsors. TEAM EXPECTATIONS Loyalty plays a large role, to the team, in selecting and maintaining a sponsor. Trust definitely needs to be established for both parties. Team members find that there are some sponsors whom they respect and trust wholeheartedly; however they find it difficult to trust those businesses that simply hand over a check without forming any type of relationship. The team has found that sonre sponsors will create a relationship with the team just to find out that the representative fi'om the sponsoring organization has shared the team’s designs with another team. Or, in a worse situation, has taken the design and called it their own, selling the product a year later. Once, this had happened to the team and the company wouldn’t even give a discount on the part. These situations are ones that break trust and hurt everyone involved. Reliability is also important in building a loyal relationship with a business. All too often team members had found businesses, in particular larger companies, who have foundmore important thingsthanaFormula SAE car. Thisissomethingthatis understood by the team, seeing that sponsors are also trying to run a successful business. However, when time is a factor and the team’s projects are constantly being set aside, it becomes difficult to rely on the company for its services. It becomes even more diflicult 45 whenitisoneoftheteam’sbiggestsponsorsandtheteamhaslittlechoicebuttolook elsewhereforhelp. Businessesexpectthesametrustandloyaltyfiomtheteam. Sponsorsdonot want the team to go out and purchase or receive parts that they domte or manufacture fiemothercompanies. Therearesomeinstanceswherethiscannotbeavoidedand sponsorsoftenunderstandwhenthereisagoodreason. Asindicatedbyatearnmember, “having sponsors is also competitive.” Michigan State was able to prove to one company thatitisbetterthananotherschoolandgainedtheirsponsorship. Thereislittletosaythat another school will not provethey are betterthan Michigan State. This situation is seen inevery professional circuit; driverswilllosetheirsponsorbecausetheyarenot successfirlorhavebeendisloyaltothesponsor. “[Tomlarecompetingwithother [team] for the [same] sponsorships.” Concemfortheteamandtheteammembersisnnponantindeterminmgthelevel of dependability with a sponsor. Most participants believed that the team’s sponsors expressed some sort of concern for the team’s welfare, or they would not be Sponsoring inthefirstplace. Teammembershavefoundthatseveralofthesponsorsarewillingto lendassistancewhenfliemisaproblennsomeevengoaboveandbeyondwlntis expected. Participants sawthiskindof relationship fiomthe smallerand localbusinesses more ofienthanfi'om larger ones. It isbelievedthattbelarger conrpanies have more ofa concemfortheproductratherthantheindividuals. Thefeelingfiomtheteamcangoas farassayhgthatfihelearnhgcmveismuchgefierwithflwsmlleflspomom]? Theproblemidemifiedudththeconcemfiomthesponsorsstemmedmgainfiom thelargercompanies. Itisthesecompaniestlntgivetheteamthemostnnney;however, inmost situations, themoneyisgivento theteamandthentheyare looking twentyyears down the road when students become the employees. Participants stressed that they do not feel that these companies look at the team’s immediate concerns and well-being. There was discussion that one of the sponsors has been very beneficial to the team and givenalot, yettheirinterestsdo not seemtobeintherightplace. Theyareseenastrying to get more fi'om the university than the team. Through Formula, this company has become a donor to the university and in return, was given good tickets to the football games. Theteamdidnot see a strong relationshipwiththis sponsorbecause it forcedthe teamtoworkaroundtheir schedule, puttingtheteambehind ondeadlines. Inreturn,the sponsor is “rmwilling to justify their reasons for it, yet they are the biggest Sponsor. Most ofthetirnetheydo not evenreturncalls. [Theteam] isumbletodropthem; [theteam] needsthemmorethantheyneed [the team].” Oneareawherethe largercompaniestend to Show concern fortheteamcomes from their recruitment efforts. Often these companies, in particular the car manufacturers, will hire exchrsively fiom Formula SAE team. A team member stated that, “they know where they invested the money and where to get it back fiom.” Another added that, “[Formula SAE] is education that they do not have to pay for.” A lot of this comes fi'omthe factthatthesebusinesseshiredalumnifi'omMichigan Stateandtheyare the ones who play a role in creating these positive relationships with the team and recruits; therefore they are the ones who show true concern. Establishing a relationship is critical in all sponsorship efforts. The team desires sponsors who are loyal, reliable, and express concern for the team as a whole, all of which cannot be done without a good working relationship. Even though the team relies 47 on the national sponsors for large monetary donations and possible job opportunities, it is the smaller businesses that more often are able to provide the added benefits in the sponsorship relation. SPONSOR PATRONAGE Participantswere askedto shifltheir focusto consumersratherthanasteam members to determine if they preferred to give their business to those companies that sponsor Michigan State Fonmrla SAE. Most indicated that they would definitely give their business to sponsors, especially to those who lmve been good to the team and showed that their products were of quality. One went as far as to say that they would “prefer to give [their] business to a company that is willing to give back to MSU or anyoneelse.” Theyaddedthatitisirnportant, tothem,to supportthosebusinesseswith good customer service and that help people whom the consumer would want to help. Several team members admitted to never really considering whether they were purchasing a product or using the services of a team sponsor. Some even indicated that they prefer not to put any effort into their purchases; therefore they will select what they know works and is least expensive. This sometimes results in the purchase of a sponsor product. One participant often finds themself purchasing a product solely because they are a sponsor and have referred fi-iends and family to these products or businesses. SPONSOR CREDIBILITY As consumers, team members recognize businesses’ motives of using sponsorships as means for persuading individuals to purchase their products. Most see 48 this approach as money generating; however they do not believe this is the number one reason for sponsorship. Smaller businesses may profit more than larger businesses by having their mm on a local race team, yet it my be more of name recognition for them. Participants do not see a sponsorship being dropped if the businesses’ sales do not increase. Rather ifteam members are making a purchase, they may be more inclined to purchase or recommend a sponsor’s product. Businesses sponsor race teams for a variety of reasons. Yet whether or not they are considered a qualified sponsor is a little more diflicult to determine. For the Formula SAE team, team members saw all of the current sponsors as being qualified. The basic understanding was that they would not be Sponsors if they did not qualify. The team did admit to having some businesses as sponsors in the past that probably should not have been sponsors. These businesses are ones that were only around for one year and the team had problem with their product, service, or even advice. There had been sponsors that gave wrong informtion and cost the team more money than was provided. Negative feelings were expressed concerning a Sponsor who had used the team Simply for exposure. They provided the team with a service with hopes to enter the automotive industry themelves. However, in the end, they did not provide the team with the services needed and the team was forced to severe ties with the company. Team members discussed several businesses, in particular local businesses, which are very willing to assist the team. These businesses were unable to provide financial contributions, yet wanted to donate parts, materials, and services to the team. Despite their enthusiasm and willingness, the representatives from the businesses did not have the knowledge or understanding of the team’s application. A participant who had personally 49 expedemedworkhgwfihoneofflwsebusfinssesstfledmagflwyweresnnplymissmg thetechnicalaspectneeded”andthereforecausingmoreharmthangoodtotheteam. Loyaltyandwillingnessto supporttbeteamwerethebiggestfactorsthatteam members looked for ina good sponsor. The overall consensus of the group found local busmessesmettheseneedsmomoflenthanflremmcredrhknafionalwnmanies. Despitetheappreciationandnecessityofthese donationsthevalueandsincerityofthe local businesses were seen as more genuine overall. In addition, all current sponsors, local and national, were considered credible sponsors because they are not seen as harmingtheteamorusingitforexposure. TEAMMMERPERCEPUONsSUMMARY MembersoftheMSUFornnrlaSAEteamseemedtohaveagoodunderstanding ofwhotheirsponsorsare,whytbeyaresponsors,andwhattheywantinrennn Even thoughmoney'mverydesirable,theteamexpectsmorethanjustacheckwrittenbythe sponsors. Theywantto establish professional relationshipsthat willallowthe team to gain valuable knowledge and expertise when needed. Sponsors with genuine and altruisticmotivesareperceivedasmorevahrableandcrediblethanthosewithaltemative intentions. Mostofien,itisthesmaller,localbusinessestlmbestmeettheseneeds. However, it is the larger, national businesses that are able to provide more in term of financial resources and fixture opportunities. 50 UNIVERSITY ADMINISTRATION AND FACULTY PERCEPTIONS As University representatives closest to the Formula team, participants were asked about their opinions as both University personnel and consumers. All three participants saw the sponsors rather differently, yet shared Similar expectations as administration. Interestingly, their views as consumers were much more parallel to each other. SPONSOR RECALL University representatives were asked to recall as mny Michigan State Formuh SAE sponsors as they could. The average response was seven businesses each, listing eleven different companies. Of the eleven, five were repeated by each of the three participants and three were listed incorrectly. Four ofthe five repeated responses are large organizations that donate a large sum of money to the College of Engineering each year, in addition to what is provided to the Formula team. Therefore, it is these businesses with which the University has a direct relationship. Despite the low recall mrmbers fiomtheparticipants, the facultyadvisor stated thattheytrynot to gettoo involved with the team’s sponsors in order to mintain the educational focus of the design andmnufacturingproject. Anotherpanicipannwhorecalledthefewestmvenstatedthat they did not think anyone even knows who the team’s sponsors are without looking at the car or a brochure. 51 SPONSOR MOTIVES When asked why these businesses sponsor Formula SAE teams, none of the university representatives felt that businesses sponsor Formula SAE to generate immediate business or sales from the competition’s audience. Rather, recognition was indicated most often. However, the type of recognition identified varied. First, there is name and product placement on the vehicle. The audience consists of mainly engineering professionalsandthereisthehopethattheywillbeattractedtoaspecificteambearing their company’s name or using their parts. Another aspect of recognition is from the students. It was indicated that, “engineering students my want to work for these companies and these companies my want name recognition for the students. The same students will work for somebody in the vast supply chain network.” The second halfof the student recognition is that once they do work for one of these companies, there is hopetlmttheywillrememberothercompanieswhentheyareinpurchasing ordecision making positions. This would apply to all mnufacturing industries: automotive, aircraft, robotic, mrine, civil, etc. There were mixed reactions as to why businesses sponsor Michigan State. Some believed that it is the philanthropic efforts of alumni now working for one of these companies that push for sponsorships. However, one stated that, “[they] think alumni reasons are philanthropic. [They] are not sure that most ofthe companies are looking for the same type of philanthropy.” Here the reasons are more future-oriented in that they desire to hire the best engineering students fiom top engineering colleges. It is the belief that sponsorships create a learning circle. Businesses provide money to the university and team to advance their education with the latest tools and technology, while initiating 52 a certain value or quality that the company desires in its employees. Then, these same students will be rewarded with job opportunities with these companies who have gained “an inside track on contacts of students on the Formula team who they see as [having] superior training.” It was believed that companies, in general, do not specifically sponsor Michigan State Formula SAE. Most of the sponsors, that they were able to recall, were large, national companies whom they saw as sponsoring the mjority of teams involved in the competition. One participant did indicate that they thought tint geographically, Michigan State University was fortunate in that it was located within close proximity of several large automotive-related businesses, including the Big Three automotive mnufacturers. However, it was also pointed out that these same businesses most likely sponsor a combination of other schools in the Michigan, Ohio, and Indiana area. It was assumed that the small, local businesses do, in fact, solely Sponsor Michigan State. One business, which all three participants incorrectly identified as being a local business, was recognized as establishing a Sponsorship with MSU because it is headquartered in Lansing and has a strong alumni base. Recognition was the strongest factor for sponsoring a Formula SAE team rather than generation of sales by the University. This recognition, whether being name recognition by consrnners or future employees, is coupled with the positive image set by the affiliation with the University. Often, these Sponsorships are perceived to stem from alunmi working at these companies. However, it is questionable as to whether the companies are being philanthropic, or if it is the alumni support that possess the real philanthropy. 53 UNIVERSITY EXPECTATIONS Money, parts, and equipment were the biggest expectation of sponsors fi'om the University and College ofEngineering. There was also a desire for other forum of support in the form of advice and technical cooperation. The overall feeling was best stated by one ofthe administrative oflicials: “From what [has been] seen on the Formula team, the technical cooperation is as valuableasormorethanthemoney. Even ifit isverylimiting andperipheral... Theyareverylikelngngthesameadvicetoaflofthecompetfiorsbut nonethelessitisaprofessionalthing... Thereisageneralinterest inthe profession. [They] think one of the biggest things these sponsors bring is professional interaction about [the automotive industry and building cars].” From an administrative view, the University and College of Engineering do not do enoughinretmnforthespomors. BothseeMichigan Stateasnothavingastrong reputation for supporting sponsors and donors of the tmiversity; however improvements lnvebeennnde overthepastfewyears. Othersrnallerschoolswereseenasdoingbetter with connecting firculty, development, donors, alumni, and students. These schools also tend to be ones that have a more traditional engineering history, where Michigan State is more diverse in its educational areas of study. This lack of support fi'om the University wasseenasadisappointmentandafaihneto “capitalizeonallof[the] competition team” by connecting them to other University and alumni events. Technical schools have done an excellent job in establishing and mintaining these relationships; whereas Michigan State is improving quickly, but it has several years to make up. Interestingly, the team’s faculty advisor did not share the same opinion. He simply stated that the team provides advertising for the company and little more. The team delivers a competitive vehicle to competition and places the company’s name on the body of the car, which aids in recognition of all sponsors. Invitations to sponsor events and access to firture graduates are there, but advertising is the “concrete reward” for sponsors. The involvement is “minimal and that is how [they believed it] should be. This is not a contract.” One ofthe reasons for not wanting the University to do more for Sponsors is due to the fear that the industry will get too involved in the educational process. As a professor of engineering, the advisor saw this occurring too much already. As representatives of the College of Engineering, the participants shared mixed views concerning what the University does for sponsors. Even though all agreed that the University expects both financial and expertise support, the amount given in return was questionable. Whether the University does enough or not enough, the team and the University must work together to reach a comparable balance to ensure the continued support of the team’s sponsors. By not doing enough the University and team my be jeopardizing future endeavors with the sponsors. SPONSOR CREDIBILITY There was a general desire fi'om the three University participants to have a variety of industries represented as spomors of the Formula SAE team. The connection the team has to the obvious automotive market was seen as being strong. However, even though 55 the Big Three automobile mnufacturers provide a substantial amount to the team, none wants to see the team be confined to this industry or their financial contrrhutions. The team should continue to pursue and accept sponsorships fi'om those businesses that are located in the Lansing community and my not be sought out by other team. It was also recommended that the team extend its sponsorships to include supplemental mrkets that could provide technologies not typically thought of Tapping into technological companies, including computer hardware and software, other mterial mnufacturers, fiber optics, and other industries not traditionally related to the automotive industry could definitely mke gains. As University employees, each stated that the team would have to carefully considerallowing certainbusinessesorindustriesto sponsortheFormularacecar. Some businesses that University participants would encourage the team to stay away fiom include breweries, adult entertainment, adult stores, and those that my be seen as degrading to women, such as Hooters restaurants and adult entertainment establishments. However, all ofthe participants did not hold the same opinion as to why and which businesses would be acceptable. One stated that, given there are no University regulations, a local brewery would be an acceptable Sponsor, yet any business that is perceived as adult-oriented would not. Another saw that in today’s times, Michigan State should beveryleeryofbreweries sponsoringthe Formulateam. Ontheotherhand, being a rather large and legal industry saw the possibility of a sponsorship on the MSU campus occurring. There would be, however, “less concern to have [a brewery’s name] on a building or [related to] a professorship than [they] would to put their name on a student 56 competition” The third participant simply stated that it would be best for the team to steer clear of all controversial businesses as sponsors. One concern that was brought up was the idea of having a general consulting firm sponsor the Formula team. This was because of the hiring of top engineering students for high salaries several years ago for their problem solving Skill. These businesses would come to the University offering to donate large sums of money to whatever organization needed it and in return, gained access to these top students. When the economy dropped, the University no longer saw these firms or their money. There was great concern that as these businesses suffered, the engineering graduates lost their jobs. In addition, businesses are not looked upon favorably when they come and go; the University and team need long-term relationships. “. . . [The team] wants companies that will be around in good times and bad. Those companies are the ones that are ftmdamentally interested in what is done as opposed to just giving a few dollars to help sonre students.” Relative to the current team sponsors, all three participants did not see any sponsor as being unreliable or unqualified. All of the businesses have either money or other donations or services that they want to provide for this purpose. Therefore, they donate it to the team and “do not seem to put undue pressure on [the team] in terms of a quid pro quo or implied contract.” Some my request a certain size decal in a Specific location, but this is seen as tolerable. If a business were to demnd more tlmn this, such as removing other sponsor’s names from the car, then there would be great concern as to the quality of tint business’s sponsorship. The relationship established with the team and the sponsor plays a great role in determining reliability and trustworthiness fiom these businesses. 57 Viewing the team fi'om the outside, the University representatives saw more personal concern fiomthe sponsors fortheteamthanexpected. Thisismostly seen on individuallevelsrathertlnnthewhole;howevertheydowanttoseetheteamputina good effort and produce a competitive vehicle. Vehicle performance can almost be seen mmasmermectmbnmberthanwmembecauseofmeassociationwimflmsponsormg businessesbyhavingtheirnamesonthecar. Thefewthatdotakegreatpersonalpridein theteamarethosethatcanbeseenperiodicallyattheshop,atevents,orwhenthecaris beingdriven Oneadministratorsaid,“thisiswlnttheyloveandwhatthestudents love...cars.” Fromtheperspective ofthe faculty advisor,therewasgreatconcerntostressthe hnpoflanceofmintainingtheteam’sbcustodesign,mmrfactrne,andracea competitive vehicle. When the program was smll and unsuccessful, few, in their opinion, wantedanyinvolvement. Astheprogram continues to growandbecome more successfierorebusinessesandorganizatiommywantahandintheteam Theadvisor goesontostate,“...thisissomething[theteam]needstobecarefulonbecauseone,it undermines [the team’s] integrity, andanotherthat it isadistraction. [Theteam’s] focus hastobeonbuildingacompetitivecarandracingitwell.” Therefore,itiscriticalforthe teamtoreviewthewantsandneedsofeachofitssponsorstodetermineifone,itis withintheobjecfiveofflreteamandtrw,whetherornotthesponsorshowsthedesired concemandloyaltytheteamneedstobesuccessfirl. Individually, representatives fi'om sponsoring organizations my take a personal interestforseveraldifi‘erentreasons. Recruitmentisconsideredtheminreason for buildingastrongrelationshipwithteammembers. Thestudentsontheteamare 58 prospective employees and they will remember the efforts put forth by these businesses to establish a relationship. In addition to recruitment, alumni of Michigan State and the Formula team who currently work at these companies put great efforts forth. They are proud of their MSU ties and wish to continue to support the school and team by establishing close relationships and helping out in any way. The additions of sponsors fi'om other industries my benefit the team in ways not initially thought of. The team currently has a good automotive following, however there my be some untapped industries where the team could benefit fi'om different technologies, mterials, or equipment, just to name a few. While there are certain industries the team should shy away fi'om, such as consulting firms, breweries, and adult entertainment establishmentsanybusinesswho showsaninterestintheteamand concern for its success can be considered a qualified and credible sponsor. SPONSOR PATRONAQP; Speaking as consumers, the team’s sponsors have never been taken into consideration in purchasing decisiom. With all factors being equal, there was aspiration to support students and their efforts; however it has never been an overriding factor. On a professional leveL one participant acknowledged that some sponsors have been taken into consideration when bids were placed for academic research or other services for professional purposes. Each University employee viewed the persuasive efforts of businesses that sponsor race team rather difierently. One simply does not see automotive racing sponsorships, at least at the Formula SAE level, as a means of advertising. Rather it is a 59 philanthropic effort and the companies tend to have “the students’ interests at heart.” A second participant saw it as a means for establishing relationships among FSAE’s audience of students, professionals, sponsors, and families. “It is really more about bringing the next generation of auto engineers and related business students on board in the extended professional [firmily].” Regarding professional racing circuits, there was little belief that businesses’ endeavors of persuading consmners through sponsorships actually work. In instances when there is difliculty in determining the benefits of one product from those of its competitors, consumers have to rely solely on brand recognition This is seen as the min purpose of having a company sponsor a professional race team. Brand recognition of this mgnitude did not seem to affect the purchasing decisions of the university participants. One even went as far as questioning the mnagement decisions of the company and whether or not they are wasting their money as well as the money ofthe stockholders. Even though there is always a desire to show support and give back to those businesses that help the University, the University participants rarely considered MSU FSAE sponsors in their purchases. These actions were not done intentional, rather they Simply never thought about it in making a purchase decision However, the participants never thought of the sponsorship efforts as a means of advertising rather done so for brand recognition UNIVERSITY ADMINISTRATION AND FACULTY PERCEPTIONS SUMMARY From the University perspective, participants spoke highly of the skills and quality of the graduates fi'om the Engineering program, in particular those who participatedonthe Formula SAE team. Thiswasthemainmotive eachsawfor businesses getting involved in sponsoring the F SAE team They also found name recognition and alumni support to be strong in their sponsorship efforts. Despite the passion towards the team and its sponsors, the participating University representatives seemedtobethemostremoved fiomtheMSU FSAE environment. Thesefindingswere somewhat disappointing seeing the Md for University support, however this problem had been recognized and efi‘orts to change this relationship have been established. ALUMNI AND PARENT PERCEPTIONS AlumniandParentsprovidethegreatestinsightasto consumers’ trueperceptions of sponsoring organizations. These individuals are close enough to the team to identify sponsors, yetfarenoughtopossessnueconsrmrerideas. Itiswiththeseparticipantsthat a realistic understanding of recall, patronage, motives, and credibility of the Formula SAE team will be understood. SPONSOR RECALL Parents of team members and alumni of the MSU Formula SAE team were able to identify thirty-eight difi‘erent sponsors (see Appendix A: Table 3). Only twenty-three of those identifiedarecurrerrt Sponsorsorhavebeenasponsorwithinthepasttwo years; ten were sponsors two or more years ago. Five businesses indicated were not sponsors at all. Of those correctly identified, Ford Motor Company and General Motors were recalled by everyshglepmtkipMandDaimerhryslerwasfistedbyaflhntMeepanicm. 61 These companies, the Big Three of automobile mnufacturers, are the team’s biggest sponsors and consortium sponsors of the Formula SAE competition. SPONSOR PATRONAGE Audiences of race teams support Sponsors by giving their business to sponsoring companies. When asked about purchasing behavior over the past six months, most respondents indicated they had given their business most often to national sponsors in the automotive industry. Local businesses, both automotive and non-automotive, were the least often patronized by both parents and alumni. This could be due to locations of the businesses in comparison to where each participant resides. Table 4 (see Appendix A) shows a complete breakdown of the types of businesses supported by each of the respondent types. Interestingly, when inquiring about preference of business type, all but two participants indicated that, everything else being equal, they would prefer to support local companies. SPONSOR MOTIVES AND CREDIBILI'IY Consumer perceptions of businesses sponsoring a team or event include the motives for doing so and the credibility of their intentions. Parents and alumni, as consumers, identified the motives possessed by both local and national businesses for sponsoring the Michigan State Formula SAE team. University involvement and bettering the community on the campus were viewed as the strongest motives for both local and national businesses. Consumers also saw the national businesses driving their involvement to be recognized by the SAE cormnunity. 62 Thismygo backtotheideathatthesebusinesseswishtobeassociatedwiththe international organization for the automotive engineering community. For those businesses not in the automotive mnufacturing industry, this would be seen as a means to gain recognition However, more favorable attitudes towards the bettering of the SAE community could inchrde the education and advancement of engineering students. Advertising and generating sales were also considered important motives for establishing a sponsorship with Formula SAE. However, participating consumers indicated that national businesses were more likely to sponsor an F SAE team to advertise their company, while local businesses were more likely to be involved to generate sales. One might have assumd that national businesses often have more advertising opportrmities and would not need a sponsorship at this level to advance their advertising efforts. Local businesses, as expected, utilize sponsorships of a local F SAE team to generate sales; again, this could be considered an approach to increase name recognition as well. Consumers my or my not agree with a business’ motives behind its Sponsorship efforts, however it is the credibility as a sponsor that my have a stronger impact. In automotive racing, there are four types of possible sponsoring businesses: local automotive, local non-automotive, national automotive, and national non-automotive. Participants were asked to indicate their attitudes toward these businesses and their credrhility as an FSAE sponsor. Participants had a clear distinction between their feelings toward each of the Sponsor types. National businesses were seen as more credible, possibly because they my be considered as established businesses. It was indicated earlier that it is important 63 totheteamandUniversitythat sponsorsare loyalandcontinuing their support ofthe team year after year is one way of doing so. Businesses tint are more solid, more often national businesses have a better chance of continuing their team support. However, this loyalty also inchrdes showing concern for the team’s welfare and participating consumers felt that national businesses not in the automotive industry do not demonstrate this. Consmners my question as to why a national business that is not involved in the automotive industry would want to sponsor a local, collegiate race team Care for the community played an important role in determining the credibility of sponsors by the consumers. Again, national (automotive) businesses were believed to express more care for the SAE community while all local businesses have a strong concern for the Michigan State community. It is actually the local, automotive businessesthat consumers believedto possessastronger interestinthe school. In additionitisthelocalbusinessestlmtconsumers sawasbeingmorepleasant sponsors. This, too, reflected team member’s preference for working with local sponsors when questionsorproblem surfacebecauseoftheirwillingnessto takethetimeandefl‘ort needed to assist the team. Looking at the total spectrum of possible sponsoring organizations, consumers are more favorable toward those national businesses in the automotive mdustry. Having available resources, inchrding monetary resources, and being a part ofan internatioml competition are the strongest factors in support of these perceptions. However, despite qualification and fit, consumers appreciate the effort of the local businesses more often Again, this is consistent with the findings from the team members. It is the national businessesthatarenotinvolvedintheautomtive industrythatconsumersfindless credible and possess fewer positive perceptions as sponsors of a Formula SAE team ALUMNI AND PARENT PERCEPTIONS SUMMARY National, automotive businesses are perceived to be the “best fit” for Formula SAEspomorsbybothalumniandparents. However,theydonotnecessarilyseethese hrsinessesasbeingthebestsponsors. Sponsorrecallandpatronageare strong among these national sponsors, yet participants found it more desirable to give their business to localsponsors. Thismybeduetothesebusinessesexpressingmreloyaltyandconcern fortheteam,aswellastheLansingcomnnmityandMichiganStateUniversity;whereas thenationalummssesmeseenasshnplyadvenismgthewmpanyandgammgmspem amongtheSAEcommunity. W'rththesefindingsitbecomsdifliculttodetermineifitis beneficialtoseeksponsorswhocaneasflymetfimncialdemndsorsponsorswhoare more likely to support the team in other ways. SPONSOR PERCEPTIONS Sponsors consist ofbusinesses, organizations, fanrilies, fi'iends, andalrmmiwho want to provide the team with some form of donation Each has a motive for doing so and each has some form ofeiqrectations fi'om the team. By examining the motives of eachtypeofsponsor,teammemberscandeterminewhattheyareable to provide in returnandwhichspomorshipstheyvaluemost. 6S SPONSOR MOTIVES An association with a college or university and company image topped the list of why businesses sponsor Formula SAE teams. By sponsoring a collegiate FSAE team, respondents stated that their businesses take great pride in the school(s) that they work with. There is a desire to aid in the learning process of future employees in the industry and donations are a successful avenue for doing so. Sponsors have highlighted Michigan State, in particular, as a school and team that have “almost always acted as true professionals.” There is a level of education and respect that is highly regarded by sponsoring organizations. In addition, businesses have become sponsors, or mintained their Sponsorship because they believe that MSU Formula SAE “represents [their] company in a class act mnner” and shares the same ideologies as their company. The level of education and professional quality received by Michigan State students through Formula SAE is something future employers strive to recruit for their companies. Businesses use sponsorship as a tool for recruiting these eager students. By sponsoring a team, they believe they are creating a positive image and goodwill for their organization In return, graduating seniors will be more likely to select these companies for employment. Or, they my remember the positive relationship with the sponsor when they are in the industry making decisions for other companies that my benefit from the sponsoring company’s products. Here, businesses are using sponsorships for long-term rather than short-term benefits. In addition to recruitment efforts, sponsors listed other reasons their company is involved with Formula SAE. For those companies that provide support in any way other than monetary, there is training and education occurring for their employees as well. In the past, some sponsors have used Formula SAE projects as tools to train new employees or test new equipment. Also, this type of Sponsorship helps to establish a foundation for future and bigger Sponsorships within SAE and other organizations. One participant indicated that their company sponsors Formula SAE because, “sponsorship[s] of other racing circuits are too expensive” and that they hope to increase their sponsorship efl‘orts as the newly developed company grows. With 140 teams involved in the Formula SAE competition, few businesses have the resources to contribute to every team Therefore, businesses have to carefully select which schools they are willing to sponsor. Traditionally, Michigan State University has been fortunate to have a large number of sponsors while other team can only gain a few. Participating sponsors were asked why their company selected the Michigan State FSAE team, understanding that Michigan State my not be the only school that they sponsor. The number one reason was location Again, Michigan State University is located within an hour and a halfof the “automotive capital” and most of the team’s Sponsors, local or natioml, are headquartered in the state of Michigan This mkes it convenient, not only for the team, but also for the representatives fiom sponsoring businesses who enjoy being involved with the team by attending events and visiting the race shop. Ahmmi tend to have a strong influence in the sponsorship of Michigan State. Several companies have indicated that their company has strong ties with the University, whether being a large alumni population within the company, past relationships with the University, or just being MSU fans, and this is a mjor reason for opting to support the MSU team In addition, these companies regard Michigan State as a high profile school 67 withapositive reputation Again, not onlyisthisgoodwill, but also ameans for furthering sales and getting the company’s name in the public. Overall, each sponsor had invested interest in the students as potential employees following graduation All participants indicated recruitment as one the biggest factors in their organization’s sponsorship with Formula SAE. Some looked even firrther and were interested in the professional relationships that could be established once students are prominent employees. By creating product awareness and a positive experience now for thestudents,theparticipants sawsponsorshipasameansforadvancingsalesasthe relatiomhip continues to grow. Even though each participant identified some form of personal gain, most also stressed the importance for helping the students. They wanted to suppofltheleamhgerqreriemeandfiammgteammmbersreceivemughtheFSAE program by ensuring all resources of the latest advancements in the industry are received. ALUMNI AND PARENT SPONSORSfl Some parents and alumni also serve as sponsors to the Michigan State Formula SAE team. They provide support through financial contributions or other donated item. Helping the team and supporting the learning experience from the program were the min reasons why these individuals became Sponsors. For parents, having a child on the team and sharing a love of racing were big factors in their donation Alunmi, on the other hand, simply enjoyed their experience on the team and felt obligated to give back. Many believed they owed their career to the Formula team Whilemostparentsandalumniwantedto contributetothepositivelearning experiencewithlittletonothinginreturn,fewdidindicatesmllexpectationsfromthe 68 team In addition to appreciation, participants wanted to be involved with the team in some fashion This could include simply being invited to team events, such as Sponsor Drives; others at the most wanted their name on the car. However, one individual clearly Sponsors the team for somewhat selfish reasons. They indicated that while they hope odrersreceivethesamtypeofexpefiemeandnammgastheyomedidtheyalso sponsor to gain recognition from the University and their employer. Expectations of this alumnus inchrded overallsuccessofthe team theirmmeonthecar, andaccessto students for recruitment efforts with their current employer. In addition, they stated that they became a sponsor when they, Were informed of [their employing company’s] two- for-one corporate mtch and entered into the [University’s] President’s Club.” Annual tax write—ofl‘s were also listed as benefits of being a Formula SAE sponsor. Overall, most parentsandalumnishowedageneral interest intheteamandthe individualmembers. Thegroupasawholewantedtoseetheteamsucceedandbecome thebestprofessiomlsintheirindusnyandsawFormulaSAEasamanstopreparefor thefuture. Itwasrecognizedthatwithout pmpeffilndathiscouldnotbedone. One parentwasinformedofthefundingneedsandfeltaresponsibilityto helptheteaminany way. SPONSOR PERCEPIIONS SUMMARY Genuine mtives behind a sponsorship tend to come fiom those closest to the team This would include parents, fi'iends, and alunmi. However, businesses participating at the national level gain more fiom the sponsorship. This gain is not necessarily immediate or sales related; rather it is a gain in the company investment for 69 their future. Recruitment of qualified and experienced graduates through the relationships established with the Formula SAE team is long-term planning for these businesses. Caution must be taken, however, in that the expectations of team members and the University should mtch the contributions mde as well as the efforts put forth by representatives to support the team This is a lesson that can be learned from parents and alumni as well as the smll, local sponsors. 70 CHAPTER 5: DISCUSSION FORMULA SAE Formula SAE provides a unique experience for everyone involved. Team members have an opportunity to take what is learned in the classroom and apply it to a fast-paced, exciting project; during which, sponsorships are gained and relationships are established with industry professionals. Businesses contribute to the education of future professionals and get their name and/or products to a wide audience with a common interest. At the same time, the businesses are earning respect fi'om the University who receives a positive reputation toward their engineering program And in the end, families and fiiends are a part of the racing lifestyle while seeing their money toward education being used effectively. A continuous circle of support and benefits becomes very desirable to those looking from the outside (see Appendix G: Figure I). All parties involved with the Formula SAE team tend to possess similar ideas as to what the overall benefits were for businesses that Sponsor the team In regards to national versus local businesses, both share my benefits, however local businesses seemed to benefit the most. The most obvious benefit for all Sponsors is the access to students for internship and employment opportunities. Students have more training and “real world” experience after one yearonthe Fonnulateamthanmost do during alltheiryears in school. This is very appealing to businesses, therefore creating a motive to donate to the team Here, 71 bothteammembersandUniverSityrepresentatives sawthisasameansofinvestirrg inthe company’s future. For a small amount of money, they are able to have first access to these students with “superior training” and knowledge of certain technologies and equipment. A collection of team member resumes distributed to sponsoring businesses increasesaccesstotheseindividuals. Alumnimembersevencontributetheircareersina leading company to their experience on Formula SAE. Notallofthe teammemberswillgo onto work forasponsoringbusincss, however most will be working in an industry that participates with supplying businesses. Relationshipbuildingnowwillbekeyoncethestudentsareworking inthefieldforthey will remember the positive relationships established while on the team and continue them at a professional level. Smller, more localized businesses will benefit the most fiom thesesituations. Theywillgainexposurethroughtherelationshipwiththeteamandtheir parts on the car at competition, and will continue to gain exposure on new levels once students are in the work force. This indirect advertising method is heavily relied upon by someofthecurrentteamsponsors,bigandsmall. In either case, both sponsors and team members receive long-term benefits fiom sponsorship program with Formula SAE team. While the businesses are gaining access tothenahredstudemsforemploymennthesmdemsaregmmeexpefienceand knowledge necessary to become successfirl engineers. It is through these relationships with representatives fiom sponsoring organizations that they learn and work with the latesttechnologiesandadvancementsirrequipmentandmaterials. Tradesecretsandtips are shared with the students to further their education outside of the classroom Their experiencesandrehtionshipsfiomtheFSAEteamamseenasphchgthemaheadof 72 fella“ adx‘ax invof avar 1m Fon Mic con will tot GOT. to; vel CXI difi fellow students not involved with the team for job opportunities and career advancements. Goodwill towards education serves as a strong mtive for businesses to get involved in their community. Sponsorships ofthis type can be seen on any campus with a variety of businesses contributing to research projects, scholarships and fellowships, havingtheirnameonabuilding, ortheir logo onabillboardatthefootballstadium FornmlaSAEisommansofsupponmgtheengmermgwrmmmnyandflreUmvemhy. Michigan State University, often sought after by companies headquartered in the Lansing commrmity, isnot newtothisconcept. Whenspectatorswalkirrto Spartan Stadiumthey will we at least two of the Formula SAE team’s sponsors above the scoreboard: General Motors and Dennner Corporation Ford Motor Company provides a large sum of money to theUniversityeachyearandLearCorporationhasabusinessbuilding narnedafterthe conrpany. One is a current spomor the other sponsored two years ago before leaving the Representatives fi'omtheCollege ofEngineering, whichishighlyregardedasa topengineerhgpmgramhopethathighschoolstudemswfllseekomtheMichigm State vehicle at competition or commrmity events and notice the sponsors covering the car’s body. This, coupled with the overall sponsoring companies ofthe competition, is an excellent recruitment tool for the University. Potential students exposed to the car and competitionwillbeableto seewhomsupportsandhiresfiomtheUniversity. Localbusinesseshavefirrmorebenefitsthannationalcompaniesto participateas sponsorsofFormulaSAEteam. Inlookingatlocalbusinesses,therearereallytwo difi‘erent categories of local representation with the greatest interest in Formula SAE. 73 Firs rel prc First,therearethelocalengineeringbusinessesthathavethemostto gainfromthe relationship with a FSAE team. Here businesses have the opportunity to “Show ofl°’ their products, equipment, or material to leading automotive and mnufacturing companies. The Formula SAE competition provides a unique audience to these smaller engineering firm who would not typically be exposed to their products. Not only will industry professionals see their work, but so will other F SAE teams and race enthusiasts who my purchase their products. Sponsorship is an excellent and inexpensive form of advertising outside of their community, in particular, to these types of businesses. Several smaller businesses simply share a passion for racing and wish to be involved. Other businesses my aspire to enter into the racing industry, but because of their Size and location are unable to. Formula SAE is seen by sponsors as a way to break into the racing mrket. The audience, consisting of race fans of all types and ages, some racing themselves, my take notice of up and coming companies. Businesses that are successful in their Sponsorship endeavors through Formula SAE have the opportunity to grow and possibly gain entry into other racing circuits. Company growth not only benefits those hoping to enter the racing market, but other industries as well. Even though local businesses my not be able to provide the large sums of money that national companies are able to donate, there is more of a personal relationship establishedwiththesebusinesses. Thisissomethingthatteammembersandthe University find valuable in a sponsorship. Teams would like to see all Sponsoring businesses take a great interest in the team, however the local companies are found to be better at accomplishing this. Often there is a need for professional and technical assistance and students must approach experts in the field. This, as indicated by team 74 members, is not always easily done with larger businesses; however it is the smaller companies that take the time to assist the team most often It is these relationships that are the greatest advantage and benefit for smaller businesses to sponsor Formula SAE teams. Motives for sponsoring Formula SAE are not always those of self-interest. In addition to recruitment opportunities, advancements in sales, growth of business, and gaining recognition fiom the University, several sponsors focus on the goodwill efl‘orts rather than personal gains. Alumni tend to hold the greatest weight in sponsorship support. Businesses, especially those in the state of Michigan, have Michigan State alunmi working for them and it is these individuals who have pursued Sponsorships fiom their respective employers. Patronage and perception had parallel findings amongst the participating groups. Even though parents and alumni most often gave their business to national companies, they indicated their preference for patronizing the local sponsoring businesses. This was reflectedintheirperoeptionsoftheselocalbusinessesassponsorswho trulycareabout the team and University. All participMs saw a general concern and willingness fiom the mraller, less known businesses than fiom the large, national companies. Even though there seemed to be a better fit amongst the national, automotive businesses, it is the generosityandeagerness ofthe localcompaniesthat consumerspreferred. Intheend, it was their motives that were perceived as genuine and their previous interactions with the team that give the local businesses a more favorable acceptance amongst all involved with the Formula SAE team 75 Further research ofthe needs and nrotives ofsponsoring businesses, along with the careful examination of team objectives will allow for a more successful sponsorship program of the Michigan State Formula SAE race team It is critical for the team to evaluate what it wants to receive fi'om sponsors, what it needs fiom sponsors, and who is capableofprovidingthis. Atthe sametime,afairlyin—depthresearchprocessshould take place to determine what businesses are willing to help, what they are able to provide, their motives, and whom they are trying to reach. Together, these two very important stepswillassisttheteaminnotonlyfindingthe“bestfit”forsponsors,butalsocapitalize on minirml efl'ort. The process does not, and should not stop with finding sponsors. Businesses want to knowtheyaremkingagood investment. Itistheresponsibilityoftheteamandthe University to express their appreciation and gratitude for their efl‘orts and goodwill. The temnanditshrdividualmemberscanaccompfishthisbymhrmhungestabfished rehtionships, involving sponsors in any fashion, and incorporating sponsors names and logos where possrhle. The University already identified a need for improvement on recognizing the contributions mde to the team and the College of Engineering. However, more cohesive involvement is necessary to institute a stronger program Currently, University representativesclosesttotheprograrnarenot ableto correctlyidentifyseveralteam sponsors, nor can alumni. A communication network among the team, University, alumni, sponsoring organizatiom, and others associated with the program will better allow for name recognition and publicity, support, relationship building, and overall goodwill for everyone comrected with MSU Formula Racing. 76 IMPLICATIONS FOR OTHER GRASSROOTS RACE TEAMS Formula SAE is a collegiate competition with an educational foundation Even thoughthereisacollege oruniversity’snameattachedwitheachteam, it stillfunctionsin the same mnner as other grassroots race teams. Therefore, the ideologies and thinking behind team sponsorship can be applied to any non-professional race circuit. Beforeanyteamcanbeginto solicit sponsors, it isirnportant to go backtothe basicsandsetobjectivesastowhat isto beachieved throughsponsorships. Thiswould include budgets and types ofbusirresses to solicit. As found through the case study, businessesarenotwillingto sponsorateamandthenexpectnothinginretrnn Even those sponsoring to “help out” are still looking for some form of appreciation Objectives should include a plan for meeting sponsors’ needs. Indeterminingwhomto solicit,raceteamsmustfirstlookattheiraudience. In the case of Formula SAE, a large portion of the audience consists of professional and student engineers in the automotive industry. Here it was beneficial to approach those businesseseitherinortryingto entertheindustry. Thesesametypesofbusinessesmy serve as excellent sponsors for other grassroots teams; however the benefits of recruitmentarenotnearlyasstrong. FormulaSAEhasamuchlargeraudiencethanthe engineerhgmmmmityandhasfomflohrbusfinssesthfiommppefltomisaudieme, two, provideresourcesneededbytheteam, andthree, haveageneral interestinbeirrga part of the team for various reasons. These three things apply to grassroots racing circuits as well. 77 For most non-professional circuits and teams, money is accepted despite its origin. However, the Sponsors my have more of a vested interest if they were aware of who saw the car. As stated in previous research, Procter and Gamble recognized the growing interest in racing by women and invested several millions of dollars to sponsor several Winston Cup cars with household brands such as Tide, Folgers, and Crisco (Oneal 1987). This approach can easily be implemented in other circuits on a smller level. For example, there are circuits that race vintage cars. This audience my appeal to businesses that sell or repair vintage items, such as cars, antique shops, and the restoration industry. Other circuits my have a younger audience and businesses such as radio stations and popular clothing and record outlets my appeal to this crowd. Money can aid in almost all facets of racing. However, one area that Formula SAE teams excel at is their ability to gain other resources fiom businesses. This would include parts, mterial, equipment, and software, all extremely beneficial to a race team. Theseteamsneedto evaluatetheirneedsto competeinaraceandresourcesto which they have access. Not all businesses are able to donate money, but my be able to donate extra material or parts that they no longer use or provide a large discount. These types of sponsorships were identified as being as valuable to the F SAE team as money. In the past, the team had difliculties in mnufacturing an accurate and solid chassis. One of the team’s Sponsors became aware of this Situation and donated a used surface plate to the team A surface plate my not be as feasible to every, but other items such as tools, machinery, mterials, and parts would as beneficial. One of the advantages that Formula SAE teams have in gaining sponsors is the connection with a university or college. As found, businesses have a desire to be 78 associated with institutions of higher learning and are more willing to provide necessary means to do so. On the other hand, this can be viewed as goodwill towards the commrmity. Busirressesmyseesponsoringalocalraceteamasameansofsupporting the community, especially in areas where events at the race track are very popular. Today, more and more race tracks conduct commrmity-related events such as having the local elementary school as special guests or Just Say No Nights. This is a positive image thatbusinessesenjoybeing linkedto andmywishto support eithertheevent orteam participating in the event through a sponsorship. In addition, there is a lot of exposure of racecarsincommrmities. Dmingthesummer,mnycitiesallowthecarstoparticipatein parades and festivals. Larger circuits my have a popular annual event that a large number of spectators attend increasing the audience exposure. Circuits such as NASCAR and Formula One have very well known corporations as sponsors ofeventsandteams. Because ofthe greatreachandexposure, these businesses can afl'ord the sponsorship. They my have little or no interest in sponsoring tearmthatraceatthelocaltrackinvarioustownsacrossthecounny. Becausethereach ismuchsrnallerandthepopularityofthe driverandtearnisunknown, national businesses would not receive the same benefits received on the professional level, even if it costs the company less. Also, unfike Formula SAE, there is little interest in recruiting individuals involved with these teams for employment, which stood as the number one reason for sponsorship of F SAE teams. In retrospect, non-professional grassroots race team should devote as much effort in seeking sponsorship as any other team It is the focus of their eflons that should be adapted to meet the team and circuit’s needs. Therefore, fiom the case study, it is 79 recomnrendedthatraceteamatthislevelpursue sponsorships fiombusinesseswithin their community. The type of business, again, depends on the team’s audience and needs. The benefits are much stronger for both parties with spomorships at the local level. Team my not be able to get the size of sponsorships they desire, but the resources and technicaladvicereceivedwillbejustasvaluableifnotmore. Ifaloyalandhonest relationship is established and mintained between the team and sponsor, the businesses will receive similar benefits seen with Formula SAE team. However, grassroots race team should not be discouraged fiom approaching large, national businesses for sponsorship. Sponsorships are about risks and some national companies do take an irrterestinthese smallerteamandarewillingto mkeacontribution Therefore, it is also recommended that businesses whose headquarters are located within the community he sought after. IMPLICATIONS FOR OTHER LOCAL EVENTS Sponsorships are rather fluid in that variables can change at anytime. The type of event, the spectators or audience, the available fimds, and even the underlying motives my change with each event or cause. Automotive racing sponsorships are no difl‘erent. There is not a set structure as to how to approach sponsorship efforts. In addition, there are no set guidelines for event sponsorship. However, whether it is for racing or any othereventthesamethinkingprocessescanbefollowedinorderto achievethemost successful sponsorship program for the appropriate event. In establishing a sponsorship, contributors must evaluate their objectives and find the “best fit” event and audience that would meet these objectives. Event participants 80 mustdothesamewhenseekingsponsoringorganizations. Bothmustalsodetermine whattypesofbusinesseswillbestmeettheirneedszlocalornational. Fromtheresearch conductedwiththeFormulaSAEteamwhichcanapplytoallevents,theretendstobea “better fit” for local or community events and local businesses serving as sponsors. Sinfihrbemfitsofgrassrootsmcmgcucunscanbemtudthanysponsomdmmmunny event, these being exposure to new and existing mrkets, advertising products or company, generating sales, generating goodwill, and creating a positive innge. Whether hisanmmhonfesfivalormebcalracenachsponsomhipscanbenefitwnsummmd businessesalike. ltisthecarefirlexecutionofresearchingtoestablishafitandmeeting setobjectivesthatwilldetermineifthe sponsorshipissuccessful. 81 CHAPTER 6: LIMITATIONS Several factors were limitations in grasping a strong understanding in certain areas of the case study. The most important was the poor response rate. To begin with, there was a small sample available to analyze. The team consists of fewer than thirty members and has fewer than thirty sponsors. In addition, due to poor record keeping, it was difficult to contact alumni of the MSU Formula SAE race team Therefore, the response rate was what would have been expected; however the actual number of respondents was far fewer than desired. More thorough follow-up was needed in order to assure a more accurate account of responses. Also, more University and community members would have interesting results in determining consumer perceptions of sponsorship efl‘orts. To further the study, it is suggested that data be collected from several Formula SAE teams. This will aid in comparing different processes of gaining sponsorships fi'om schools with different levels of success of their F SAE car, budgets, school involvement, and locations. Each of these would play an important factor in assessing the benefits received by a team’s sponsors. Even though several aspects of the case study could be used to generalize sponsorship benefits and consumer perceptions of other grassroots racing, Formula SAE serves as a unique avenue for businesses. With its educational foundation, sponsors of Formula SAE have been found to possess motives for sponsorship that is not seen in 82 other race circuits. This could include the recruitment of future graduates. It is possible that businesses will hire individuals in other circuits because of the relationship established; however recruitment is more likely to occur and is one of the mjor benefits of F SAE sponsors. In addition, there are no university ties to other race circuits. It has been seen that some colleges or universities will serve as sponsors of a student’s or employee’sracecar, butthisisnot doneinthe samemnnerasseeninSAE. Qualitative data was utilized for analysis of focus groups, personal interview, and questionnaire purposes. Questionnaires were coded for quantitative purposes, however due to the poor response rate qualitative analysis was used. Interpretation by the researcher my have caused error or biases in findings fi'om participants. Despite the difficulty in analysis and mrgin of error, the use of qualitative research was determined nrore beneficial for the purpose of the case study. 83 APPENDICES APPENDIX A 85 Table l- Sponsorshi Event Width and Depth Width Depth Examples Global Event Worldwide High interest level Olympic Games coverage World Cup soccer Limited geographic High interest level European Cup region Soccer . or or Pan-Am Games “tem'h‘m” Em" High global reach Low interest level or Wimbledon Tour de France Single (or dual) High interest level World Series (US) National Event country reach Sumo wrestling (Japan) Narrow geographic High interest level Boston Marathon Regional Event reach (region Big Ten Football within country) IRA Racing Narrow geographic High interest level High school reach (single city or to those in segment; football Local Event community) low interest level to Minor League others Baseball 86 Table 2 - Sponsor Recall of Team Members Sppnsor Identified Number of Times Identified Ace Graphics and Signs Alro Steel" ASMSU ATI Aurora Bearings" Belle Tire Bosch Ciba" City Body Cold Forming" College Bike Shop Cyclotron (N SCL) DaimlerChrysler Demmer Corporation Denton Family Department of Cormnunication & Arts“ DuraBar Duralite" Essex Racing“ F allicon Ford Motor Company Fox Racing Shox“ General Motors GKN H&H Mobil Hanson Bulk” I-lexcell" Jefl" Schmitz Lear Corporation” Mechanical Dynamics Micfigan Machining MSU College of Engineering Mid-State Bolt and Screw" MoTec* MSC Software” National Instruments NGK Paul’s Auto Performance Friction Corporation Platinum Digital Media Priority Auto Body Ravenna Pattern and Manufacturing 87 Table 2 cont. Real 2 Real“ Rhino Robert Peckham Sensor ' Barber ' School ° F Stealth Tash F Vantico Visteon VT Weisco Pistons West ' Wilwood" " not a sponsor ” not a sponsor within past two years mm 1 l 1 l l l l l 3 1 2 l 4 1 88 Table 3 - Sponsor Recall of Alumni and Parents Alumni Alumni Sponsors Parents Parent Altair“ Aurora Bearings“ Belle Tire Bosch cant # College Bike DaimlerChrysler Delphi“ Demmer Corporation Detroit Diesel“ Ford Motor Corgrany General Motors GKN Hexcell” Honda‘ Hoosier‘ InsulTab" Jeff Schmitz Lear" Lincoln Electric LocTite*"‘ Mechanical Dynamics Meritor” Michigan Machining Mid-State Bolt and Screw‘ MSU College of Engineering National Instruments NGK Performance Friction Corporation Research Tool" Rhino Composites Slick’s Great Lakes Salvage Vantico Visteon VT Competition Engine Development West Michigan Spline Wheel to Wheel Williarnston True Value" -CON¢O~O--OOOO~¢~HOCOOOMNONONO—‘OOOO Ol—Ol—t—OI—IH—IOP—Il—tI—I—bN—Il—hfl—l—II‘NI-Ih‘co—i—INwl—Iwcuh-iONl—I—II—I OOQO—‘I—QOOO~°¢OO¢OOOOOOO—OG\I\IOWCMOONOOO s“ OOOONOOCOOOI-‘OOOOOOOOOO-‘OOwac—‘NwOOHOOOE "l "' not a sponsor ” not a sponsor with in past two years 89 Table 4 - Alumni and Parent Sflnsor Patronage Alumni Alumnr- Parents Parent- Sponsors Sponsors Yes No Yes No Yes No Yes No Local-Automotrve 1 1 l 2 0 7 0 3 Sponsors National-Automotive 2 O 2 1 5 2 2 1 Sponsors Local-Non-Automotrve 2 0 0 3 0 7 0 3 Sponsors N ational-N on- Automotive Sponsors 1 l O 3 2 5 0 3 APPENDIX B 91 Questionnaire - Parents and Alumni Formula SAE Sponsorships Thank you for taking the time to complete this questionnaire. Below are definitions for tenns used for the purpose of this questionnaire. Sponsor — a business or individual donating money, materials, parts, and/or services to the MSU F SAE team; Sponsors are identified on the body of the vehicle National Sponsor — a MSU FSAE Sponsor whose business serves the greater part of the United States; this could includes fianchises/chains, international companies, businesses with multiple locations throughout the United States Local Sponsor -— at MSU FSAE sponsor whose business serves primarily the state of Michigan or a region within the state; this includes possessing several locations within the state and customers primrily located in Michigan Circuit —- league in which a car and/or driver races in; MSU FSAE competes in a collegiate competition ran by the Society of Automotive Engineers (SAE); FSAE will be considered the circuit Automotive Industry — any businesses who sells or mnufictures automobiles and/or automotive parts or services; this includes vehicle mnuficturers, car dealerships, auto body shops, automotive part suppliers, garages/towing companies, racing schools/tracks, etc. Non-A utornotive Industry - any business which does not fill in the automotive category Part A 1. Have you either seen the MSU Formula SAE car or pictures of the MSU Formula SAE car? (please circle one) Yes No 2. Can you recall any of the sponsors of the MSU Formula SAE car? Yes No Ifyes,pleaselistallofthesponsorsthatyouareabletorecallinthespacebelow: 92 3. During the past Six months, how mny times have you patronized an MSU FSAE sponsor? (please circle one) 3a. Localautomotive sponsors Otimes 1-2 times 3—4times Sormoretimes 3b. National automotive sponsors 0 times 1-2 times 3-4 times 5 or more times 3c. Local non—automotive sponsor 0 times 1-2 timw 3-4 times 5 or more times 3d. National non-automotive sponsors 0 times 1-2 times 3-4 times 5 or more times The following quations concern your opinion as a consumer on businessa sponsoring automou've race teams. Please red each statement and circle the best response. (I=strongly disagree, 5=stmngly agree) StronglySo-ewhatNotSo-ewhtStI-cagly Disagree Disagree Sure Agree Agree 4. Local businesses sponsor FSAE to advertisetheirbusiness 1 2 3 4 5 5. National businesses sponsor FSAE to l 2 3 4 5 advertise their business 6. Local businesses sponsor FSAE to 1 2 3 4 5 generate business/sales 7. National businesses sponsor FSAE to 1 2 3 4 5 generate business/sales 8. Local businesses sponsor F SAE to 1 2 3 4 5 better the university community 9. National businesses sponsor FSAE to 1 2 3 4 5 better the university community 10. Local businesses sponsor FSAE to 1 2 3 4 5 better the SAE community 11. National businessessponsorFSAE l 2 3 4 5 to better the SAE community 12. I would give my business to local 1 2 3 4 5 companies that sponsor F SAE 13. Iwould givemybusinesstonational 1 2 3 4 5 companies that sponsor F SAE 14. I would not be affiliated with 1 2 3 4 5 businesses that sponsor F SAE 15. lftwo companies, one local and one national, provided the same service/product ofthe same quality and same price, which would you give your business to? (please circle one) Local Company National Company 93 Part Two Below are set s of word pairs. Please mark closest to the word which best reflects your feelings about sponsorships. For example, if you think that sponsors matter to racing, you might respond like this: matters IO me good qualified pleasant dependable favorable Sincere good qualified pleasant dependable fivorable sincere good qualified pleasant dependable fivorable Sincere good qualified pleasant dependable favorable Sincere Local Automotive Sponsors National Automotive Sponsors Local Non-Automotive Sponsors National Non-Automotive Sponsors 94 does not matter to me bad unqualified unpleasant undependable unfivorable insincere bad unqualified unpleasant undependable unfivorable insincere bad unqualified unpleasant undependable unfavorable insincere bad unqualified unpleasant undependable unfavorable insincere Below are another set of word pairs. Please mark closest to the word which best reflects your feelings towards sponsorships based on the following question: 1. How do you feel about the following sponsor types? Cares about FSAE Cares about MSU community Concern for team member welfare Creates positive corporate image Cares about F SAE Cares about MSU community Concern for team member welfare Creates positive corporate image Cares about FSAE Cares about MSU community Concern for team member welfare Creates positive corporate image Cares about FSAE Cares about MSU community Concern for team member welfare Creates positive corporate image Local Automotive Sponsors Does not care about FSAE Does not care about MSU community No concern for team member welfare Creates negative _ _ __ _ _ _ __ corporate image Doesnotcareabout FSAE Doesnotcareabout MSUcommunity Noconcernforteam memberwelfare Createsnegative _ __ _ _ __ _ _ corporateimage Does not care about F SAE Does not care about MSU community No concern for team member welfare Creates negative corporate inmge National Non-Automotive Sponsors _ __ __ __ _ _ _ DoesnotcareaboutFSAE DoesnotcareaboutMSU __ __ __ __ _ __ _ community Noconcernforteam mernberwelfare Creates negative corporate image Thank you again for taking the time to conrplete this questionnaire. 95 QUESTIONNAIRE — PARENT AND ALUMNI SPONSORS The following questions are only for those who have donated money, services, and/or material to the MSU M team. Please answer the following questions as a sponsor. 1. Why did you sponsor Formula SAE? 2. What do you look for in return from the F SAE team? 3. How did you become a sponsor of FSAE? 4. What kind of relationship/interaction do you have with members of MSU FSAE? 5. What kind of benefits, (for example publicity, new customers, image enhancement) do you expect to receive from sponsoring MSU FSAE? Thank you again for taking the time to complete this questionnaire. QUESTIONNAIRE - SPONSORS Formula SAE Sponsorships Thank you for taking the drne to complete this questionnaire. The following questions pertain to your organization ’s sponsorship of the Michigan State University Formula SAE team. How long has your organization been a sponsor of the MSU Formula SAE team? (please check one) 1. Lessthanoneyear Onetothreeyears Three to five years Over five years What form of support have you provided to the MSU FSAE team? (please check all that apply) Financial Materials Parts __ Machining __ Equipment __ Services Expertise/Advice Keeping in mind that there are many different types ofevents to sponsor, what would you say are the top three reasons that your organization sponsors Formula SAE? Keeping in mind that there are many difi‘erent organizations to sponsor, what would you say are the tOp three reasons that yom' organization sponsors Michigan State University FSAE? 5. How did you become a sponsor of MSU FSAE? 97 What do you see as the main benefits that your organization ACTUALLY receives, fiom your sponsorship of MSU F SAE? What benefits do you hope for in the firture? What kinds of interaction does your organization maintain with MSU F SAE? How do you think MSU FSAE team members to gain fi'om your organization’s sponsorship? Thank you again for taking the time to complete this questionnaire. 98 APPENDIX C MEASUREMENT OF SPONSOR Monvss Asked of Alumni and Parents The following questions concern your opinion as a consumer on businesses sponsoring automotive race teams. Please read each statement and circle the best response. (1==strongly disagree, 5=strongly agree) Strongly Somewhat Somewhat Strongly Disagree Mme Not 8'" Agree Agree 1. Local businessessponsorFSAE to l 2 3 4 5 advertise their business 2. National businesses sponsor F SAE to l 2 3 4 5 advertise their business 3. Local businesses sponsor FSAEto 1 2 3 4 5 generate business/sales 4. National businesses sponsor FSAE to 1 2 3 4 5 generate business/sales 5. Local businesses Sponsor F SAE to l 2 3 4 5 better the university community 6. National businesses sponsor FSAE to 1 2 3 4 5 better the university community 7. Local businesses sponsor FSAE to l 2 3 4 5 better the SAE community 8. National businesses sponsor FSAE to 1 2 3 4 5 better the SAE community 100 AskedofAlumniandParentswho sponsortheteam The following questions are only for those who have donated money, services, and/or material to the MSU FSAE team. Please answer the following questions as a sponsor. 1. Why did you sponsor Formula SAE? 2. What do you look for in return fiom the FSAE team? 3. What kind of benefits, (for example publicity, new customers, image enhancement) do you expect to receive fiom sponsoring MSU F SAE? lr lOl Asked of Sponsors The following questions pertain to your organization ’s sponsorship of the Michigan State University Formula SAE team. 10. Keeping in mind that there are many different types of events to sponsor, what would you say are the top three reasons that your organization sponsors Formula SAE? 11. Keeping in mind that there are many different organizations to sponsor, what would you say are the top three reasons that your organization sponsors Michigan State University FSAE? 12. What do you see as the 1min benefits that your organization ACTUALLY receives, fi'om your sponsorship of MSU FSAE? 13. What benefits do you hope for in the future? 102 APPENDIX D 103 MEASUREMENT OF SPONSOR CREDIBILITY Asked ofAlumni and Parents Part Two Below are sets ofwordpairs. Please mark closest to the word which best reflectsyour feelings about sponsorships. For example, if you think that sponsors matter to racing, you might respond like this: matters to me good qualified pleasant dependable favorable sincere good qualified pleasant dependable favorable sincere good qualified pleasant dependable favorable sincere good qualified pleasant dependable favorable sincere Local Automotive Sponsors National Automotive Sponsors Local Non-Automotive Sponsors National Non-Automotive Sponsors l04 does not nutter to me had unqualified unpleasant undependable unfavorable insincere bad unqualified unpleasant undependable unfavorable insincere bad unqualified unpleasant undependable unfavorable . . bad unqualified unpleasant undependable unfavorable insincere Belowisanothersetofwordpairs. Pleasemarkclosesttothe wordwhich bestreflects your feelings towards sponsorships based on the following question: 2. How do you feel about the following sponsor types? Cares about FSAE Cares about MSU community Concern for team member welfare Creates positive corporate image Cares about FSAE Cares about MSU community Concern for team member welfare Creates positive corporate image Cares about FSAE Cares about MSU community Concern for team member welfire Creates positive corporate image Local Automotive Sponsors National Automotive Sponsors Local Non-Automotive Sponsors 105 Does not care about FSAE Does not care about MSU community No concern for team member welfare Creates negative corporate image Does not care about FSAE Does not care about MSU community No concern for team member welfare Creates negative corporate image Does not care about FSAE Does not care about MSU community No concern for team member welfare Creates negative corporate image Cares about FSAE Cares about MSU community Concern for team member welfare Creates positive corporate image National Non-Automotive Sponsors 106 Does not care about FSAE Does not care about MSU community No concern for team member welfare Creates negative corporate image APPENDIX E l07 MEASUREMENT or SPONSOR PATRONAGE Asked of Alumni and Parents 1. During the past Six months, how many times have you patronized an MSU FSAE sponsor? (please circle one) 1a. Localautomotive sponsors Otimes l-2times 3-4 times Sormoretimes lb. Natioml automotive sponsors 0 times 1-2 times 34 times 5 or more times 1c. Local non-automotive sponsor 0 times 1-2 times 34 times 5 or more times 1d. National non-automotive sponsors 0 times 1-2 times 3-4 times 5 or more times The following questions concern your opinion as a consumer on businesses sponsoring automotiveraceteams. Pleasereadeachstatementandcirclethebestraponse. (I=strongly disagree, 5==strongly agree) Strongly Somewhat Not Sure Somewhat Strongly Disagree Disagree Agree Agree 2. I would give my business to local 1 2 3 4 5 companies that sponsor F SAE 3. I would give my business to national l 2 3 4 5 companies that sponsor FSAE 4. I would not be affiliated with 1 2 3 4 5 businesses that sponsor FSAE 5. If two companies, one local and one national, provided the same service/product of the same quality and same price, which would you give your business to? (please circle one) Local Company National Company l08 APPENDIX F 109 MEASUREMENT OF SPONSOR RECALL Asked of Alunmi and Parents Part A 1. Have you either seen the MSU Formula SAE car or pictures of the MSU Formula SAE car? (please circle one) Yes No 2. Can you recall any of the sponsors of the MSU Formula SAE car? Yes No If yes, please list all of the Sponsors that you are able to recall in the space below: 110 APPENDIX G 111 Figure l - Reciprocal Benefits for Formula SAE Stakeholders PARENTS & TEAM ALUMNI MEMBERS Support education goals Perceived goodwill Hands on . Recruitment Sponsor recall tramrng 0 Business Word-of-mouth relationships advertising . Word-of-mouth . Sales potential 3‘1““th SPONSORS A o Affiliation w/ University . Financial support 0 Access to professors . 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