This article states that Maple Leaf Sports & Entertainment Ltd has chose and signed a 10-year deal with Canadian Tire as its sponsorship partner. The fact that Canadian Tire is a Canadian company has helped the company to win the favor of MLSE company. Oftentimes, the culture can affect many transactions and collaborations in the market. For example, the customer may decide to purchase local domestic products than imported products and company may decides to partner up with local company.
The contract with MLSE will only benefit Canadian Tire in the long-term. Why? Sponsoring MLSE’s sports team provides the opportunity for the company to free advertise itself and to participate in more retail chains such as operating MLSE apparel shop. Through apparel shop, Canadian Tire is offering unique attributes that are valued by fans (customers) from different sports team and thus the company may achieve great differentiation in the industry. This will greatly enlarge the sector of target market, increasing customers who have strong loyalty to their favorable teams. While the company is experiencing benefit of charging a premium price due to the uniqueness of sports properties, it can also prevent other competitors from copying.
Other than Canadian Tire, many retailers such as Wal-Mart Corp., National Sports, Mark’s and etc had also competed for a spot to be involved in the sponsorship. A quote said by Steven Lewis “Companies are always looking for new ways to connect with consumers.” can help to explain why there is a large competition in the sports market and also in any market. This can also related to Channel segment in business model canvas which we discussed in the class. Example like sponsorship marketing can help the company to reach to their customer segment and achieve cost-efficient.
Professional sports company or sports league are also taking advantage of having sponsors to be the backup when it is facing potential risks. The company often turns capital raised through the deal into re-investment of the company (operation, hold events).
http://www.theglobeandmail.com/report-on-business/industry-news/marketing/canadian-tire-takes-over-as-mlse-sports-team-sponsor/article14207122/