OVERVIEW

In order to increase brand awareness, successful marketing programs use spectator-sporting events. A carefully considered sponsorship program provides a platform, which the consumer product or service message can be delivered effectively. These very spectator-sporting events, such as motor racing, lend themselves very nicely to the relatively new "business to business" marketing concept as well. At Krauss Racing Enterprises, we refer to sponsorships as commercial partnerships, because these truly are partnerships, with the objectives firmly in mind for all, that the agreed upon goals are met. With the need to be perceived as creditable and of value to the event organizers, participants, and to spectators alike, marketing partnerships with Krauss Racing Enterprises usually take one of the forms below.

PRINCIPAL OR PRIMARY PARTNERSHIP

Principal partners have the most visible presence and typically provide the majority of the investment for capital and operating costs for the team. We work with these partners to develop major marketing campaigns around theses sponsorships. We make it a point to get the most out of this considerable investment. An example of this would be when, as often is the case, the media treat the sponsor and its race team as a single entity such as "Michael Andretti's Ford-powered K-mart Indy car".

CORPORATE PARTNERSHIP

Corporate partners are companies which accept a secondary exposure on the car. Often times, this is a good way for a company to assess whether it intends to become a principal partner. The investment at this level is reduced proportionately. An example of this would be Pepsi Cola on the NASCAR Winston Cup car campaigned by Jeff Gordon.

ASSOCIATE PARTNERSHIP

Associate partners are typically companies where success in their industry requires a motor sport presence, or they wish to enhance a portion of their marketing program. Examples of this include: the STP Corporation on 1996 Indy Car champion Jimmy Vasser's car or the Pennzoil logo that appeared on the rear flanks of Scott Pruett's car.

TECHNOLOGY PARTNERSHIP

Technology partners typically provide much of the "hardware" associated with the car and the running of the team as well as the technical assistance at the track or at the team headquarters. Examples of the type of items used and provided by the technology partners include: communications equipment, computers and software, fuel, adhesives, brakes, tires, etc.

PERSONAL PARTNERSHIP

Personal partners are companies or individuals who support many of the expenses of the driver. Assistance from a personal partner can range from covering some of the driver's operating costs, to buying the car, or, in many cases, forming a team.

Certainly, there are differing levels of financial involvement depending on the interest and goals of the individuals or companies considering a motorsports marketing partnership with Krauss Racing Enterprises. However, there are both tangible and intangible benefits available to those partners of Krauss Racing Enterprises such as:

Increase Corporate Visibility- When a company buys commercial time during a nationally televised sporting event, they may get only seconds of exposure, but when that advertiser chooses to sponsor the action itself, the potential is there to receive hours of exposure as well as some "free advertising", thereby making the cost per thousand significantly lower than more traditional media. v

Target Specific Regions of the United States- Valvoline began sponsoring small-town rodeos in rural Texas when it realized that its products were not selling well in those areas. Sales increased by 28% in these areas.

Target Preferred Customers- Several financial service, e-business, upscale automobile and personal accessory companies often sponsor grand prix and sports car events because they know that those race fans are more likely to own IRA's, stocks/bonds, businesses, high-end autos and accessories than the average affluent individual. Examples of this would be the "Rolex 24 hours of Daytona" and the "SAP United States Grand

Prix".

Entertain Key Clients and Employees- What better way to improve corporate morale and image than with the spectacle of motor racing? Internal incentive plans built on a business' sponsorship can be used to foster team spirit, provide a catalyst for increased sales and productivity, and promote regular work attendance. This is also a phenomenal way to entertain, impress, and influence important suppliers, franchisees, distributors, etc., by having them as guests at an event that the company is involved in.

Opportunities in Merchandising & Sales Promotions- By licensing and selling related memorabilia, the sponsor can not only recoup a portion of their investment, but perhaps more importantly, generate an unlimited number of ongoing impressions of the company's name or logo and encourage fan loyalty to its products and services.

Team 'Car'Driver Appearances- Not only can the car be displayed at trade functions or shopping malls to help a company draw crowds before an actual event, but the team, car, and/or driver can be made available to be at corporate functions or to give a motivational talk to a group of customers or employees.

In short, a marketing partnership with Krauss Racing Enterprises will be cost-effective, and will produce the kind of excitement, enthusiasm, and goodwill rarely found elsewhere. Truly a winning combination!