Sponsorship Proposal for Japan Racing Association


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This written document is a more detailed description of the presentation entitled JRA. The document outlines the plan and viability of a proposed two day horse racing event in Japan and was prepared as part of a university assignment which focuses on a sponsorship proposal.

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Sponsorship Proposal for Japan Racing Association

  1. 1. EQ301 Continuous Assessment 2 1.) A Thoroughbred Racing Festival Mark Power 10372595
  2. 2. JRA International Championship Date: 22/11/2013
  3. 3. Overview A world championship horse racing event in Japan fills a gap in the racing calendar for globetrotting group one campaigners and it is the next logical step in Japan becoming a bigger force on the international horse racing stage. Japan has been taking steps in an effort to become more internationally recognised and by running this two day festival in Nakayama racecourse in December, Japan could soon find themselves becoming leaders in international racing. The two day festival will incorporate the Arima Kinen, a major group one race run in Nakayama. This flagship race, will instantly allow Japanese racegoers to make a connection with this well-established group one which is “The world’s biggest race in terms of betting turnover” (Japanracing, 2013). These two high class days racing will offer punters a world class betting product. The festival will cater for the top rated horses on both dirt and turf surfaces and these two fantastic days racing will be broadcast around the world by the major horse racing channels, as well as various terrestrial television channels. As a major sponsor of this event, the JRA will be given the naming rights of this event and will enjoy a major profile with customers of the international event. The event will create a platform for the JRA to network with various internationals, as well as allowing customers to do business also. How International Racing in Japan has Developed • In 1981, Japan developed its’ first international invitational race, the Japan Cup, which paved the way for international racing to develop across the world. • Racing in Japan was still quite restrictive: - 2004: 22 races were open to foreign based participants. - 2007: 111 races were open to foreign based participants. • Only a restricted amount of owners may exist in Japan and Sheikh Mohammed has recently joined this elite group. The introduction of Sheikh Mohammed to the Japanese horse racing industry illustrates the potential for further international
  4. 4. investment. A world championship event will encourage and allow for networking between international investors and members of the Japanese horse racing industry. • Japan Cup has attracted Derby, Arc and Breeders’ Cup winners. • World Super Jockeys’ Series is held in Hanshin in December. • 2010: Japan Association of International Racing and Stud Book was established in replacement of Japan Association of International Racing and the Japan Racing Horse Registry. (Japanracing, 2013) Nakayama racecourse • Home of the Arima Kinen • Established in 1920 • Dirt and Turf courses • Right handed • Capacity 165,676 • Located quite close to Narida and Haneda airports. • Surrounded by a good transportation system. (Japanracing, 2013) Aims
  5. 5. • To create a world championship of racing, with horses from various parts of the world competing. Listed under target audience, is the different groups of horses which are predicted to compete at this international event. • Showcase & promote Japanese racing as a world class industry, with world class facilities. • Showcase the talent of Japanese horses to the rest of the world and allow for international networking and investment to occur. • Increase annual betting turnover and, as a result, increase the revenue of the JRA. This will occur due to the increased wagering in Japan, as well as the development of new international betting markets. For the majority of the time, the major bookmakers in Ireland and the U.K offer their own prices on international racing, whilst allowing for their own margins, but for major races these bookmakers will bet into the local pools whilst offering payouts that are adjusted for their operating costs. • Promote the growth of Japanese exports: - Having recently had a number of Japanese runners in European races, most notably Ofervre in the Prix de l’Arc de Triomphe, Japanese trained and bred horses are becoming more attractive in the European market. Event Details Dates & Times: Friday 20th December, 7.30 pm – 10.30 pm – Opening reception Saturday 21st December, 3.30 pm – 7.30 pm – Day 1 of racing Sunday 22nd December, 1.30 pm – 5.30 pm – Day 2 of racing Location: Opening reception and racing to be held at Nakayama racecourse. Attendees: Nakayama racecourse holds approximately 165,000 and it is expected to be at full capacity on both the Saturday and Sunday. Cost: Transport: Tickets will range in price from $100 to $10. Located quite close to Narida and Haneda airports. Good public transportation to and from the racecourse.
  6. 6. (Japanracing, 2013) Opening Reception, Friday 20th December This opening reception will create a hype around this extraordinary international event. A press conference will be held at the beginning of the reception whereby a panel of five or six major competitors will be asked questions on their intended runners or mounts. After the press conference, the opening reception will be a formal affair with a champagne reception, finger food and some various Japanese arts performances will be provided for entertainment. An international atmosphere will be held throughout this reception, whereby Nakayama racecourse will have the flags of the various competitors flying. The reception will allow for these international competitors to network and will also allow members of the JRA to build relationships with its’ customers. The following are a list of the major group 1 races to be run during the JRA International Championship. Day 1 Racing, Saturday 21st December • 3yo plus Dirt sprint 1200m $2.5million • 2yo Dirt 1400m $2milion - This shorter distance will entice fast US 2YOs who may not stay the KY Derby distance, but it is illogical to expect any Triple Crown contenders to compete here. • Fillies and mares turf 2000m $2.5million - Won’t take away from Arima Kinen because of its’ value. • 2yo fillies turf 1600m $1.5 million - Sharper fillies have the option of taking on the colts • 3yo turf 2000m $2.3million
  7. 7. Day 2 Racing, Sunday 22nd December • 2yo turf 1400m $2million • 3yo plus dirt 2000m $2.5million - Attract Japan Cup Dirt horses • 3yo plus sprint turf 1200m $3million • 3yo mile turf 1600m $3.5million • Arima Kinen turf 2500m $8million - Prize money boosted by $2.8million in an effort to attract an international field and increase the prestige associated with the race worldwide. (Japanracing, 2013) Gap in the International Racing Festivals • Dubai World Cup March 29th - Dubai Carnival January 9th (dubairacingclub, 2013) • NEW: Australia Championships April 12th/ 19th (Kerr, 2013) • Royal Ascot June 17th – 21st (Royal Ascot, 2013) • Prix de l’Arc de Triomphe 6th October
  8. 8. • Breeders’ Cup 1st – 2nd November What horses will be attracted? • Top international horses - US, Hong Kong, Australia, UAE & Europe • Breeders’ Cup horses (Nov. 1st & 2nd) • Melbourne cup horses (Nov. 3rd) • Dubai Carnival horses ( Jan. 9th) Target Audience (HRI, 2011) The above target audience represents an international audience. International owners would be attracted to attend, given that this is an international invitational event whereby the JRA pay for the travelling expenses of international runners.
  9. 9. Marketing The goods and services on show at an event make up the experience which the customer is buying, but these goods and services must be marketed appropriately and to the correct audience. According to Robison et. al, (2010) marketing allows event organisers to understand customer’s needs and desires and gives an event a better chance of achieving customer satisfaction, “Marketing enables event organizers to capture customer data and understand what motivates event attendance”. If the JRA International Championship can gain an understanding of these desires and motivators it will give itself a better chance of retaining these customers for the following year. Given that this event is seeking to attract an international audience, it is necessary to apply a differentiated targeting strategy based on geographic location, as well as the expected benefit that a specific segment will get from their experience (Robinson et. al, 2010). It is necessary to advertise in a suitable language and, in this advertisement, a message that is appropriate to that target segment should be clear to the customer, e.g large betting pools for the bettors and prize money levels to horse owners. Having the right marketing mix in place is vital: -People: Staff must be capable of delivering the service to a world championship standard. -Process: The right systems and procedures must be in place to deliver the event. -Physical Evidence: Uniforms, signage and website development must incorporate the same brand image of a high quality betting and racing product. -Product: An event product is produced and consumed at the same time. Its’ features include high quality racing, betting product, venue and service. Its’ benefits include customer satisfaction of having witnessed this quality racing, betting on the product and engaging in social interaction. -Price: This event will be marketed as a premium event so a premium price should be allocated to the majority of tickets. Ticket prices will range from $100 to $10. -Place: Tickets will be available through online intermediaries or directly to consumers. -Promotion: The event will be promoted in the most suitable marketing channels according to the target segment to which they belong. In any promotional message however, it is important to grab the attention of the customer, hold their interest, arouse desire and obtain action through purchasing a ticket or involving them in the event.
  10. 10. (Robinson et. al, 2010) Media Coverage There are currently 5 television stations who have committed to purchasing the television rights of the JRA International Championship which include TVG, Attheraces, Sky in Australia and two terrestrial television channels in Japan. The television fee has been set at $50,000 for each television station and includes reduced cost of television advertising. Why Should JRA Sponsor? The JRA is the ideal sponsor for this event, as the event’s goals are so closely linked to the marketing plans of the JRA. JAIRS (Japan Association for International Racing and Stud Book) was established in 2010 and one of its missions was “The conduct and support of International Events Relating to Horse Racing and Participation in International Conferences”. The growing trend of increased international participants and international invitational races in Japan emphasises the need to take racing to the next level. It is important to understand the return on investment that a sponsor expects to receive, having financed an event. These expectations include the four categories of sponsorship objectives: • Direct sales: Ticket sales, merchandise, television rights, food and beverage (depending on whether or not it is outsourced) and in the case of the JRA, betting turnover. • Brand awareness: This is often best achieved from television advertising. • External corporate awareness: Networking with home grown and international customers and competitors. • Internal corporate awareness: Allowing JRA employees to truly understand what the company represent. (Robinson et. al, 2010) Finance
  11. 11. The following are a list of the major costs associated with running such an event: Total prize money on offer: $24.6milion (Not including the $5.2million previously set aside for the Arima Kinen) Transporting foreign runners: $225,000 (15 horses @ $15,000) Marketing (includes t.v advertising) Increased workforce $400,000 $10,000 (100 extra staff for 1 day @ $100 per day. Arima Kinen would be in JRA budget) Catering for international customers $50,000 Other $25,000 Although there may be various other minor costs, in comparison to the above, involved in running such an event, the finance that is needed for such an event should not vary too much around the total of $25,310,000. This is the amount of sponsorship that is being sought to run the JRA International Championship. The figures below give an indication of where this sponsorship money will come from and have lead the International Championship to believe that the JRA is the most suitable sponsor, having come from a thriving industry that is seeking to progress forward at a global level. Japan operate a pari-mutuel wagering system whereby, of the betting turnover: 75% is returned in the betting pool to customers 10% is taxed by the government 15% is offered for prize money and operating profits. (Japanracing.jp, 2013) In 2011: Total betting turnover = $22,703,073,577 15% (prize money and operating profits) = $3,405,461,037 Total prize money = $934,750,239 Operating profits = $2,470,710,798
  12. 12. (Japanracing.jp, 2013) $25,310,000 is a realistic sponsorship figure when viewed alongside the above figures. The Arima Kinen is “The world’s biggest race in terms of betting turnover” (Japanracing, 2013). This statistic has the potential to reach the whole weekend, which would allow for huge betting turnover for the JPA. In sponsoring this event, the JPA would be fronting one of the most prolific racing events in the calendar. It is a great investment opportunity not only to increase their turnover, but to develop Japan into an industry leading nation in International racing.
  13. 13. References dubairacingclub. (2013). 2014 Dubai World Cup Carnival Programme. Available: http://dubairacingclub.com/race/dubai-world-cup-carnival/dwcc-programme. Last accessed 21st Nov 2013. HRI. (2011). Strategic Marketing Group Report. Available: http://www.goracing.ie/HRI/Resource-Centre/Strategic-Marketing-Group/. Last accessed 21st Nov 2013. japanracing. (2013). Japan Association for International Racing and Stud Book (JAIRS). Available: http://japanracing.jp/en/jpn-racing/jairs.html. Last accessed 14th November 2013. japanracing. (2013). JRA Race Programme (2013). Available: http://japanracing.jp/en/information/jra-race-programme/index.html. Last accessed 22nd Nov 2013. japanracing. (2013). Statistics (JRA) (2013). Available: http://japanracing.jp/en/information/jra-race-programme/index.html. Last accessed 22nd Nov 2013. Kerr, T. (2013). Australia to host end-of-season championships. Available: http://bloodstock.racingpost.com/news/bloodstock/randwick-australians-reveal-newchampionship-meeting/1561686/. Last accessed 21st Nov 2013. Robinson P., Wale D. & Dickinson G. (2010) Events Management, Oxfordshire, CABI Tourism Texts Royal Ascot. (2013). Race Meeting. Available: http://www.ascot.co.uk/royal-ascot2014/royal-ascot-begins. Last accessed 21st Nov 2013.