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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

ASSIGNMENT 2ND SEMESTER : SPONSORSHIP MANANGEMENT

(SPM001)

STUDY UNITS COVERED : STUDY UNITS 1 - 4

DUE DATE : 3:00 p.m. 19 AUGUST 2014

TOTAL MARKS : 100

CASE STUDY : MUGG & BEAN SPONSORING SA MEN’S HOCKEY

INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS The complete ‘Instructions to Students for Completing and Submitting Assignments’ must be collected from any IMM GSM office, or the relevant additional tuition centre or can be downloaded from the IMM GSM website. It is essential that the complete instructions be studied prior to commencing your assignment. The following points highlight only a few important notes.

1. You are required to submit ONE assignment per module.

2. The assignment will contribute 20% towards the final examination mark, and the other 80% will be contributed by the examination, however, the examination papers will count out of 100%.

3. Although your assignment will contribute towards your final examination mark, you do not have to earn credits for admission to the examinations; you are automatically accepted on registering for the exam.

4. Number all the pages of your assignment (e.g. page 1 of 4) and write your name and surname, student number and module at the top of each page.

5. The IMM GSM requires assignments to be presented in a typed format, on plain A4 paper. Unless otherwise specified, this assignment must be completed within a limit of 2500 words, excluding the bibliography. Students who exceed the word limit may find that only part of the submitted assignment will be marked.

6. A separate assignment cover, which is provided by the IMM GSM, must be attached to the front of each assignment.

7. Retain a copy of each assignment before submitting, in case the original does not reach the IMM GSM.

8. The assignment due date refers to the day up to which assignments will be accepted for marking purposes. The deadline is 3:00 p.m. on 19 August 2014. Late assignments will be accepted, but 25 marks will be deducted from the maximum mark if received after 3:00 p.m. on 19 August 2014 and up to 5:00 p.m. the following day, after which no assignments will be accepted.

9. If you fail to follow these instructions carefully, the IMM Graduate School of Marketing cannot accept responsibility for the return of the assignment. It may even result in your assignment not being marked.

Results will be available on the IMM GSM website, www.immgsm.ac.za, on Friday, 3 October 2014.

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Answer ALL the questions References are to the prescribed textbook: Shilbury, D., Westerbeek, H., Quick, S. and Funk, D., 2009. Strategic Sport Marketing. 3rd ed. Australia: Allen and Unwin.

QUESTION 1 [25]

1.1 List at least five (5) goals for organisations and corporations like Mugg & Bean to get involved with sponsorships. (5)

1.2 You are the sponsorship manager for Mugg & Bean and you decided to sponsor hockey as a restaurant/coffee shop brand. Draw up and discuss at least five (5) criteria for the selection of this sponsorship and discuss the reasons for your criteria. (20)

QUESTION 2 [20] Discuss and explain the unique characteristics of sport marketing as outlined by Shilbury et al. (2009), using men’s hockey to illustrate examples. QUESTION 3 [20] 3.1 Two distinct streams exist within the broad concept of sport marketing. Briefly

discuss them both. Use practical examples to support your explanation. (4)

3.2 How would you define the difference between a sponsorship and a donation? In your answer define each concept and use examples to clarify your answer. (6)

3.3 Briefly discuss the sponsorship framework to create win-win situations using practical examples. (10)

QUESTION 4 [25] Sponsorship managers rely on research information to assist them with the development of a marketing strategy and plan. Explain how you would apply segmentation, target markets and positioning in the development of your SA men’s hockey sponsorship marketing plan and strategy. Provide a framework for your strategy and plan, clearly showing how you will access all the data sources. PRESENTATION [10]

ASSIGNMENT TOTAL: 100

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

CASE STUDY: Mugg & Bean sponsoring SA Men’s Hockey

Men’s hockey team gets sponsor

Lelo Mzaca | about a year ago (2013-04-24T15:22:14+0200)

JOHANNESBURG – The South African Men's Hockey team on Wednesday said the Mugg & Bean sponsorship will go a long way toward helping the team improve.

The company earlier announced that a two year sponsorship deal was signed to help the national team compete in top-class international events.

These events will help the team qualify for the 2014 World Cup in Netherlands.

Team captain Rhett Halkett said the sponsorship could not have come at a better time.

"This sponsorship is as good as gold for us. It’s good to know that we have that security and we’re going to do everything we can to make sure that we can extend that into the future.”

Goalkeeper Rassie Pieterse said the sponsorship will ease the team's financial burden.

“We’re over the moon; we’re really pleased to have such a big brand supporting SA hockey. It’s been a long road. It will make a massive difference to South African men’s hockey team."

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Pieterse said the cash injection could help take the team to the next level.

"I think over the last few years we’ve been competitive against big countries, but we’ve never really turned the corner. It just came down to the fact that we’re not playing enough international hockey and we’re not having enough training camps. Having a sponsor on board will help us to prepare better.”

Source: Mzaca, L., (nd) Men’s hockey team gets sponsor. [Online] Available at: http://ewn.co.za/2013/04/24/SA-Mens-Hockey-receives-boost# [Accessed: 18 July 2014]

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Pereira to head SA men's hockey side

Charlie Pereira has been appointed head coach of the national men's hockey team, the South African Hockey Association confirmed.

Owen Mvimbi of South Africa celebrates a goal against Austria. (Gallo)

14 May 2013 09:08 Sapa

Pereira succeeds Gregg Clark, whose contract ended at the end of last season.

Saha chief executive Marissa Langeni said Pereira's appointment was in line with the federation's strategy as they target the 2016 Rio Olympic Games.

"We appoint coaches on an Olympic cycle and Gregg was appointed prior to the Beijing Games in 2008, so his contract came to an end," Langeni said.

"We did open it up for Gregg to apply for the post again, but this is the start of a new era."

Alongside Pereira, Saha appointed four trainers, three team managers, three video analysts and a conditioning coach for the team, but Langeni said they would rotate the responsibilities.

While the South African men had secured a sponsor, Mugg & Bean, for the first time in years, Langeni said those funds had not been used to boost their management structures.

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

"These people are all employed full-time in other jobs, and we'll appoint team management for each tournament based on who is available," she said.

"We would also like to give local coaches some exposure, so we've broadened our base." South Africa will compete at the World League semi-finals in Malaysia from June 29 to July 7.

They will then take part in the Africa Cup in Kenya, from September 27 to October 5.

"It's an honour to be appointed head coach of the national men's team and I look forward to working with the rest of the management team as there is a lot of work for us to do to get ready for Malaysia,” Pereira said.

Source: Mail & Guardian, 2013. [Online] Available at: http://mg.co.za/print/2013-05-14-pereira-to-head-sa-mens-hockey-side. [Accessed: 18 July 2014]

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Mugg & Bean steps in to perk up South African hockey 24 April 2013 | Posted in Sponsorship, Hockey, Africa | By Michael Long The South African Hockey Association (SAHA), the governing body of field hockey in South Africa, has announced a two-year sponsorship agreement with Famous Brands Limited. As part of the deal, the company’s coffee themed restaurant franchise Mugg & Bean becomes a co-sponsor of the South African men’s hockey team, which is currently ranked 12th in the world. A statement released by the SAHA on Wednesday said the deal marks ‘the first sponsorship for the team in a number of years’, with the South African men’s team having struggled to finance the cost of training and travelling to tournaments in recent times. “We are delighted that we have a popular brand like Mugg & Bean on board,” said SAHA chief executive Marissa Langeni.

“We are pleased that this is a two-year commitment which will include the World Cup in 2014. This sponsorship will assist the SA Men’s team in competing in top-class international events and hockey is proud to be associated with the Mugg & Bean brand.” Famous Brands’ chief marketing officer Derrian Nadauld added: “This sponsorship deal will bring a new energy to the game and the Mugg & Bean brand is excited to be involved with the national men’s team. “Hockey in South Africa has largely been a Cinderella sport, in desperate need of a sponsor who could give the team the support they so richly deserve. The Mugg & Bean sponsorship of the SA men’s team is a natural extension of the brands involvement with the sport of hockey. Source: Long, M., 2013. Mugg & Bean steps in to perk up South African hockey. [Online] Available at: http://www.sportspromedia.com/news/mugg_bean_steps_in_to_perk_up_south_african_hockey/. [Accessed: 18 July 2014]

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Mugg & Bean Website

Source: http://www.themugg.com/index.php. [Accessed 18 July 2014]

Famous Brands announce sponsorship of the SA Men’s Hockey Team

Famous Brands Limited today announced a two-year sponsorship of the SA Men’s Hockey Team.

One of its premium brands Mugg & Bean is partnering with SA Hockey as the new co-sponsor of the SA Men’s Hockey team.

“We are delighted that we have a popular brand like Mugg & Bean on board,” said SA Hockey Association CEO Marissa Langeni.

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

“We are pleased that this is a two-year commitment which will include the World Cup in 2014. This sponsorship will assist the SA Men’s team in competing in top-class international events and hockey is proud to be associated with the Mugg & Bean brand,” the SA Hockey CEO added.

Famous Brands Chief Marketing Officer Derrian Nadauld stated: “This sponsorship deal will bring a new energy to the game and the Mugg & Bean brand is excited to be involved with the National Men’s team.

“Hockey in South Africa has largely been a Cinderella sport, in desperate need of a sponsor who could give the team the support they so richly deserve.

The Mugg & Bean sponsorship of the SA Men’s team is a natural extension of the brands involvement with the sport of Hockey.

“Earlier this year, the brand concluded a five-year sponsorship deal of the Varsity Sports Hockey series, currently running across universities across the country,” the Famous Brands CMO added.

The SA Men’s team are currently ranked 12th in the world and this is the first sponsorship for the team in a number of years.

Source:

http://www.sahockey.co.za/sa-hockey-teams/806-famous-brands-announce-sponsorship-of-the-sa-mens-hockey-team. [Accessed 18 July 2014]

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Background to the organisation

More than a coffee shop - The big, bold and bottomless ballad of Mugg and Bean

Mugg & Bean is associated with good food, bottomless cups of coffee, a relaxed and warm atmosphere, as well as generous portions of food, and large slices of cake. The Famous Brands group acquired them in 2009 for R104 million, and they currently have over 130 restaurants in South Africa and Africa. But where does the Mugg & Bean story start, and how did they grow from one initial offering to the multi-million rand success story they are today, in the ever-competitive food industry?

Ben Filmalter started Mugg & Bean in 1996. He was already a seasoned hand in the restaurant world, having started in the industry as an 18 year old cook’s apprentice, and working his way up from there until he made it out of the kitchen and into management. He was involved with various restaurants, including Linger Longer, an upmarket Johannesburg restaurant he purchased in 1979 with his older brother John. Ben Filmalter subsequently sold his share of the Linger Longer restaurant to chef and restaurateur Walter Ulz and his business partner Carlos de Freitas in 2005.

Filmalter and his wife were inspired by the idea of creating Mugg & Bean after a visit to a small boutique coffee shop in Chicago, which offered a unique combination of great food, good coffee and outstanding service. The Chicago coffee shop experience made a lasting impression on them, and they felt that this type of restaurant concept was an offering that would do well in the South African market. And based on these initial inspiring ideas, the Mugg & Bean story was born.

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Filmalter’s preceding career in the food industry meant that he was able to add his knowledgeable marketing and commercial skills to this new business too. The result was a coffee and restaurant concept new to South Africans, which filled a niche in the popular fast casual dining sector by offering a mix of high quality fast food within a restaurant setting.

The first Mugg & Bean restaurant opened in 1996 at the V&A Waterfront in Cape Town, and as Filmalter had predicted, their unique model proved popular. Generous portions, fast food made from good quality ingredients, the value for money appeal of bottomless cups of coffee as well as being served by friendly staff made their first restaurant a hit with customers.

Two years after the establishment of the first outlet, and based on the success and popularity of the original Mugg & Bean restaurant, development of the concept as a franchise opportunity started to take shape. Franchising would permit rapid expansion of the business, while allowing Filmalter to retain control over the development and marketing of the brand, and the subsequent years saw many more franchised Mugg & Bean restaurants opening up all over South Africa.

Over the years, Filmalter maintained that the company’s continued success was as a result of their objective to remain innovative, and this was a concept he was committed to achieving. “We had a very clear vision about how we wanted to operate our business from the very start, and that developed the culture in terms of how the brand was going forward. We knew we wanted to be the best,” he said.

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Another factor in Mugg & Bean’s success was that by locating their restaurants in shopping malls, they had easy access to a wide variety of customers. Through clever store positioning they could attract an extensive range of people, as they catered to shoppers and business people during the week, as well as to families over the weekends. While Mugg & Bean is often regarded as a coffee shop, food orders make up the majority of sales and dining is the cornerstone of the business, accounting for the majority of turnover. And in keeping up with a market that needs to stay innovative as well as maintain a feeling of being an up to date and trendy brand, they often revamp their menu content and look at introducing new food items to their menus to broaden their appeal and attract new customers. Favouring a different marketing approach to telling the history of the brand, and embracing the enjoyable notion of storytelling, Mugg & Bean created an invented history of how they came to be, based on a fictitious San Francisco legend of Clement Mugg and Joshua Fenomah Bean, who, it was said … “lifted their bourbon glasses in San Francisco in 1868 and toasted to bringing Mugg & Bean General Merchants to life. In five short years, their business flourished and became a place where everyone was welcome.” Filmalter’s vision was to stay true to the core elements that set Mugg & Bean apart in the marketplace, saying “The reason for the brand’s world-class success is because of the cut-above quality and extraordinary value for money. We are always more generous with our portions, offer high quality food and have outstanding signature dishes and baked items.”

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Not surprisingly, their success attracted great acclaim within the restaurant sector and in 2009, Famous Brands, who own a portfolio of premium brands including Steers, Wimpy, Debonairs Pizza, FishAways, House of Coffees, announced the acquisition of Mugg & Bean for R104 million.

Commenting on the deal at the time, Kevin Hedderwick, Famous Brands’ then chief operating officer said: “The Group’s stated strategic intent has always been to acquire and grow best-in-class franchised brands and the Mugg & Bean brand fits perfectly into this strategy. This is a brand which, since its inception, has been sought after by potential franchise partners, landlords and consumers alike.”

Filmalter went on to say: "Since its inception we have nurtured the Mugg & Bean concept and steered the business to the leading position it enjoys today. We are delighted to pass the torch to Famous Brands, whom we are confident will ensure that the concept is further developed and its success continued into the future."

In keeping with their aim to stay innovative and receptive to consumer demand, Mugg & Bean recently introduced a new concept to the brand, with their ‘On The Move’ outlets. These offer a takeaway selection to customers who are in a hurry and in need of the convenience of getting something quick to eat, or a coffee ‘to go’. They chose to name this ‘On The Move’ to differentiate it from other already well-established takeaway outlets in the marketplace.

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© IMM Graduate School of Marketing Assignment: 2

nd Semester 2014 SPM001

Seeing an opportunity to introduce something unique and appealing to the casual dining sector at a time when there were few other competitors is part of the founding success of Mugg & Bean. But it takes more than opportunity to build a successful brand, and that’s where Filmalter’s enthusiasm, passion for providing generous portions of good food, as well as creative marketing put his brand above the rest. In an interview with www.succeed.co.za, when asked if he had any advice for budding entrepreneurs, Filmalter said, “The most important factor is that they have to have a vision. If you do not have a vision, what are you shooting for? Are you just going to be dragged along? Or are you going to make your dreams come true?” ----------------------------------- Fast facts:

The first Mugg & Bean was opened at V&A Waterfront in Cape Town in 1996. In July 2009, Famous Brands acquired Mugg & Bean for R104 million. Famous Brands is positioning itself as one of largest coffee-roasting

businesses in South Africa after acquiring a 60% stake Java Lava Beverage Manufacturers for R7.3 million in July 2012.

Mugg & Bean has over 130 restaurants in South Africa and Africa, including their ‘On the Move’ outlets.

Mugg & Bean has won the Caxton Leisure Options “Best Coffee Bar” category for 11 years in a row.

Quotes from Mugg & Bean founder Ben Filmalter: “I knew very little about franchising at the outset, but because of the success of the first Mugg & Bean I decided to take the franchising route. I started with no franchising experience at all. No brand experience. No support infrastructure. And no money. This meant only one thing – I could not fail.” “.. we had a very clear vision about how we wanted to operate our business from the very start, and that developed the culture in terms of how the brand was going forward. We knew we wanted to be the best. Source: http://www.mweb.co.za/Entrepreneur/ViewArticle/tabid/3162/Article/7574/More-than-a-coffee-shop-The-big-bold-and-bottomless-ballad-of-Mugg-and-Bean.aspx7. [Accessed 18 July 2014]