frtour1-8, Exercise 1: The economics of the caravan

Model answer (check the details):

Organiser:
- Gains: income from firms that pay to join, and an entertainment that keeps crowds at the roadside for hours.
- Risks: complaints about litter and waste, the cost of managing a large convoy, accidents involving vehicles, and the danger that the caravan overshadows the sport.

Sponsor:
- Gains: direct contact with a large crowd, a chance to hand out samples, television coverage of its vehicles, and a link between its brand and a popular event.
- Risks: a high cost for uncertain returns, reputational damage from waste or accidents, and difficulty in measuring whether the giveaways turn into sales.

Spectator:
- Gains: free gifts and entertainment before the race, and a livelier day.
- Risks: crowding and the risk of being hit by thrown items or vehicles; very little cost, so little downside.

Evidence to use: sponsors' reports and marketing studies, the organisers' figures, surveys of spectators, and independent reviews of the environmental effects.

Care: the numbers are mostly supplied by interested parties.