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AN INVESTIGATION INTO SPORT SPONSORSHIP AS A MARKETING TOOL A STRUCTURED LITERATURE REVIEW

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CHAPTER ONE

INTRODUCTION

 

  • Background of the Study

In modern marketing, companies and their brands are competing heavily to hold existing and to gain new market shares. In order to accomplish this, marketing communication is of high importance. One important factor regarding marketing communication is promotion which consists of diverse elements such as advertising, which in definition is any paid form of impersonal promotion transmitted through a mass medium. The fact that advertising is paid for and impersonal, distinguish it from other promotion elements such as sales promotion and personal selling. All of these already mentioned promotional elements, along with public relations traditionally combine for a company’s promotion mix, which is the total marketing communication program of a company.

 

During the 1980’s and 90’s the cost of traditional mass media advertising increased substantially and it started to become increasingly difficult to reach specific target groups through the mass media due to the increased advertising buzz in news papers, television, radio and in recent times the internet. As a result of these difficulties, companies were looking for new elements in the promotion mix to reach their target markets with their message and to strengthen their brand. The companies search for new media opportunities, have during the past decades resulted in two new, related and increasing areas in marketing mix, event marketing and sports sponsorship.

 

The concept of event marketing is relatively new in marketing theory, and seems to originate from the sponsoring industry. Event marketing can be used in both business-to-business and business-to-customer. The concept of event marketing had its major breakthrough at the 1984 Olympic Games in Los Angeles.

 

A wide variety of organizations are realizing that sport sponsorship is a valuable way to reach new markets as well as holding the existing customer base. Sponsorship can increase sales, change attitudes, heighten awareness and build new and maintain existing customer relationships. Sponsorship is an important tool of marketing communication that seeks to achieve favourable publicity for a company and or its brand within a certain target audience via the support of an activity not directly linked to the company’s normal business.

 

The difference between event marketing and sports sponsorship, which could be considered as highly related area to event marketing, is that event marketing could only occur in marketing via events, unlike sponsorship which could occur in several different situations. Merely sponsoring of hockey team, football team or an artist for instance does not qualify as event marketing. In order for something to be classified as event marketing it is required that the company uses the event both as an attempt to communicate and as a separate medium. (Behrer-Larsson, 1998).

 

The definition of sports sponsorship are: “investing in a sports entity (athlete, league, team or event) to support overall organizational objectives, marketing goals and/or promotional strategies.” (Shank, 1999). Sponsoring activities present multiple opportunities for achieving awareness objectives, and much of the research to date in the sponsor recall (Gwinner, 1997). While there are obvious aesthetic pleasures in merely watching a sport performance, the real intensity comes from identifying with an individual or team as they strive to win. It is this phenomenon that has helped make sport a vehicle for the promotion of corporate interest, when professional team sport has emerged in the century, the relationship between sport teams and fans was sustained by reliance on local ownership and involvement. The general reasons for making sports sponsorship a part of the promotional mix, is the widespread appeal of sports across all ages, areas and life-styles. This is especially true when it is linked to the television broadcast of the events. Many sports and sporting events attracts high television coverage, which means that even if the actual sponsorship cost might be high, the sponsorship is still quite cost effective in comparison to the cost of direct television advertising. (Brassington-Pettit, 2000).

 

1.2     Statement of the Problem

Sponsorship is an element of the promotion mix that has experienced a dramatic growth over the decades. The main reason for the increased popularity of sport sponsorship as a marketing communication tool versus a traditional element such as advertising is the fact that through sponsorship, the sponsoring organization communicates through the perceived attributes in the sponsored object. (Meenaghan-Shipley, 1999). Over the past decades, sport sponsorship has been shown to be an effective tool with which to alter and enhance a company’s image and reputation. Consequently, researchers believe that sport sponsorship should be considered an important resource that help companies to secure a position of competitive advantage.

 

Sport sponsorship has increased dramatically in the past two decades. For many large non-sport  corporations like: Shell, Coca-Cola, Emirates and Vodafone, sponsoring sport organizations and athletes is  an important part of their marketing strategies. Many different kinds of sport organizations and individuals may be sponsored, including individual athletes, clubs and teams, events, league, unions, federations, competitions,  venues and special causes. Sponsorships are supposed to benefit both parties: usually the sport property services cash, goods, services or expert advice and the sponsor receives benefits such as promotional rights and the marketing advantages of being associated with a particular sport property. Sponsors hope that by investing in a sport property, they will increase consumers’ awareness of their brand and consequently build their brand equity

 

One important issue with sponsorship that is often brought up by researchers is the objectives. Not like adverting objectives, sponsorship objectives could be categorized into direct and indirect objectives. (Shank, 1999). The direct objectives focus on short-term consumer behavior and to increase sales.

Sport sponsorship ties into brand image and event marketing and is a promotional area that has increased rapidly over the past decades. Therefore in is interesting to investigate whether or not sports sponsorship actually works and how to measure the results, secondly to know how companies determine what sports entity to sponsor to enable them achieve the above stated objectives.

1.3 Objectives of the Study

There main objectives for sport sponsorship are.

  • To ascertain how sport sponsorship can help the firm to generate awareness or raise awareness of the company’s products, services, product lines or corporate name.
  • To know how sport sponsorship can help the firm to meet any competitive threat on the sponsorship market.
  • To evaluate how sport sponsorship can be use to take advantage of consumer interest and the ability to reach large and yet specifically targeted audience.
  • To understand how sport sponsorship can be use to built relationship with clients
  • To know how sponsorship can provide a positive association of the brand of the sponsoring organization.

 

1.4     Research Questions

Based on the research objectives the following question will be answered:

  • What can be achieved through a sports sponsorship strategy?
  • How effective is the use of sponsorship in achieving marketing promotion objectives (in relation to achieving brand related goals, attitude change or sales increases for instance)?
  • What are the possible criteria for selecting a sporting team or event to sponsor?
  • How could the objective for sport sponsorship be described-from the sponsor and the sport entity perspective?

 

  • How do the companies evaluate the effectiveness of sport sponsorship?

 

 

1.5 Research Hypotheses

 

The following null-hypotheses shall be tested in this study;

H1. Sports sponsorship is significant in creating awareness.

H2. Sport sponsorship is significant in building relationship with clients.

H3. Sport sponsorship has a significant relationship with the brand of the sponsoring organization.

H4. Sports sponsorship is significant in reaching large and targeted audience..

 

1.6 Significance of the Study

Sport sponsorship has evolved into a vast business enterprise, encompassing sport at all levels which has influence Scholars and experts to examined sport sponsorship extensively. Sponsorship is now an indelible aspect of companies advertising strategy to reach a wider public.

 

Investigating sport sponsorship at this level will be a valuable contribution to the existing industry and will assist in understanding of company-based sport sponsorship relationships. It will also be of help to companies in their selection process of which type of sporting event to sponsor due to the numerous benefits it will bring to the company such as acting as a valuable way to reach new markets, change attitudes and heighten awareness of the consumers towards the brand.

 

There are several benefits with sport sponsorship. First and foremost, it helps in developing consistent message points among all marketing factions, including public relations, advertising and promotion. Another benefit is opportunity. Experience will show that there can be a number of missed public relations opportunities when public relations are practiced totally independent of promotions, advertising, and other marketing functions. Another example of benefits from integrating marketing is the practice of using the making of advertising for public purposes.

 

1.7     Limitation and Scope of study

The sport sponsorship area is a very large area with many different factors to investigate. However due to time limitations the thesis will focus on the companies conducting the sponsorship and teams that are sponsored, from a marketing communications perspective. This is because it is beyond the scope of this study to include all factors within the area of sport sponsorship. Two firms one a Telecommunication company and a financial services provider involve in sport sponsorship will be used for the study. The two firms are MTN and First Bank Plc.

 

Due to the lack of prior empirical research that focused on sport sponsorship of either football or athletics the researcher does not have the opportunity to compare his findings. Some of the company’s confidential policies to release information might affect the findings of this research.  And lastly participants/companies who do not respond could also affect the findings of this study.

1.8     Definition of Key Terms

There are a range of terms used in this report which are defined in their relevant sections; any other terms are defined within this section.

Sporting Property

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