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4. Strategic sponsorship
Strategic utilization of sponsorship is the key to success. Without clear strategic objectives and goals a firm should not enter a sponsorship. However, the reality is different. Still a majority of (especially small) businesses all over the world have no clear plan while engaging to a sponsorship relation (Farrelly et al., 1997; Zyman, 2002). Further in this paper when mentioned the word "firm" or "business" or something similarly, it is assumed this firm does have a strategy of entering a sponsorship.
Firms can have several different strategies to engage in a sponsorship. First of all it depends on the objective and goal a firm wants to reach, what kind of stragegy is utilized with entering a sponsorship relation. Does a firms wants to increase brand awareness? Or wants a firm enter the market in a new geographic region? Or does a brand wants an event where it can invite its partners for relationship building? Or does a firm wants to recruit new people? Similary, from the sponsored entity its side, a strategy should be worked out before entering a sponsorship relation. Is engaging to a sponsorship a way to get money? Or is it a way to get excess to knowledge? Or to promote your event? A sponsorship communicates and therefor needs to be in line with the brand values and image, both for the sponsor as the sponsee.
3.1 Traditional model: Sponsorship-linked marketing
In the traditional model sponsorship is utilized in the marketing mix. Cornwell (1995) presents a few strategies where sponsorship-linked marketing is a way to implement traditional marketing tools such as advertising, personal selling and PR and sales promotion. These sponsorship-linked marketing strategies can be understood by analogy (Cornwell, 1995). The next presented strategies can be also combined, depending on the goal the sponsoring firms wants to reach with engaging in a sponsorship relation.
Sponsorship-linked marketing: Advertising
Sponsorship-linked marketing accepts the popular analogy to advertising, where target markets are reached by media (Cornwell, 1995). A medium in this case is the general carrier of the message, and can be either social causes, sorts, media (TV-broadcasts, megazines, etc.), arts or community related, but can also be combined. Most businesses primarily engage in sponsorship analogous to advertising to link with a particular audience with the general objective to increase improve corporate image and increase product awareness. Certain specific vehicles (like rock concerts or tennis) within a certain medium are used to reach a specific target group. Various advertising-related marketing strategies can be used, or combined. A few strategies presented by Cornwell (1995) are described below.
Media concentration strategy
This strategy is when a sponsor focusses on one particular medium such as music, or even one vehicle within this medium. Best outcome can be generated when the target market is well defined and the matched well with the sponsored entity.
Reach strategy
Several media and vehicles are utilized to reach a wide variety of consumers. Obviously, this is most beneficial for companies whose consumers appear in multiple market segments. For example Coca-Cola its consumers can be found among all media and most vehicles within this media.
Flighting strategy
Another strategy can be a flighting strategy where the sponsor choses an events based on its timing. For example a sun cream manufacturer will preferaly promote its products in spring/summer as this is the season people consume their product. Therefore a suncream manufacturer would prefer to sponsor spring/summer events.
Sponsorship-linked marketing: Personal selling
Another approach to sponsorship strategies are analogous to personal selling (Cornell, 1995). With these strategies firms primarily engage in a sponsorship to have person-to-person contact with its audience by participating the sponsored activities. In this case the audience of the sponsor is not limited to the target group of the sponsored entity, but can be different audiences of the sponsor as well, such as its shareholders, suppliers, distributors or employees. A few personal selling related sponsorship strategies presented by Cornwell (1995) are described below:
Product demonstration
With this strategy a sponsoring firm demonstrates its product directly to its potential consumers at a sponsored activity (Cornwell, 1995). For example the beer brewery Duvel Moortgat NV demonstrates its beer brand Vedett to its target audience by sponsoring Incubate Festival where it delivers free Vedett at among other the opening of the festival to the audience.
Prospect generation
A sponsor plans business meetings at a sponsored event with partners whose field is related to the sponsored event. As the atmosphere has a positive impact on chances the business will work out (Cornwell, 1995).
Customer relationship building
A good buyer-seller relation is of major importance for sustainable success, and here sponsorship can help (Cornwell, 1995). Relationship development concists of five stage: awareness, exploration, expansion, commitment and dissolution. In the first four stages sponsorship can play a role, especially for awareness. However, firms should be aware sponsorship could also play a role in the dissolution part in case the target group does not feel connected with a sponsorship.
Sponsorship-linked marketing: PR and sales promotion
A third approach of strategic sponsorship can be seen as and extention of PR and sales promotion. Sponsorship can be an extention of the public relations function to raise your profile in for example a certain geographic region or certain target group. Vedett uses its sponsorship relation to raise its profile in Netherlands. Similarly sales promotion can be extended by engaging to a sponsorship relation. In this case a sponsoring firm particularly engages to a certain event to increase sales immediately. Some firms create own long-term proprietary events solely to help build a life-style around it, and thereby sponsoring for example rock music artists.
Indirect marketing
Expenditures on out-of-home activities has been increased in wealthy countries for the last decades, on both arts and sports events (Cornwell, 2008). This also explains why sponsorship became more interesting the last decades. Besides of that, people are more away from home, away from television with its traditional advertising. People increasingly emotionally connect to events of their choice, as they do with modern commincation technology (Cornwell, 2008). And this is only increasing. As Cornwell (2008) states: "wirelessness supports the trend to be away and yet connected".
Earlier is mentioned advertising is dying according to some authors. Rust and Oliver (2004) blame the, in that time new, internet and network technology. However, advertising would not die completely, the rules change. Not only because the technology and economy changes, but also because of life style changes of individuals and communities (Cornwell, 2008). Curremtly people decide much more theirselves to what media they are connected, due to technologic advance people have more their own choice. Therefor mass media advertising is reaching a smaller audience, but sub groups are devided in many small networks. Which of cource requests different advertising strategies. Rules are changing, but not dying. Expenditures on sponsorship increased much faster since the early 1990s as expenditures on advertising, as can be seen in the figure below.
Sponsorship-linked marketing is a valuable tool to reach the increasingly emotionally connected sub groups. Sponsorship is an indirect marketing tool (Cornwell, 2008) which became more cost effective as advertisement. With engaging to a sponsorship, a firm associates it selves with a certain project and the culture assiciated with the project. The association says what the sponsoring firm wants to be, or how the firm wants the consumers to see them like (Lokerman, 2004). The sponsoring firm will communicate the association with the sponsored property. Firms attempt to make customers fans of their brand to appeal them by sponsoring events and activities they emotionally feel connected with (Lokerman, 2004).
World wide:
25.9 billion 2003
28 billion 2004
30 billion 2005
33.7 billion 2006
37.7 billion 2007
43.1 billion 2008
44 billion 2009
46 billion 2010 expected by IEG
3.2 Further development of strategic sponsorship
Basketbal player Michael Jordan and Nike were one of the first examples of sponsorships which involved all facets of the marketing strategy of Nike (Amis et al., 1999). Nike started to sponsor Jordan in 1984 at a very early stage of his career when it was not sure how big his success would become. Together they developed and marketed the Air Jordan shoes. Nike did not utilized the Jordan sponsorship for its sneakers, he was part of the whole Nike's marketing package in which Jordan would tie together the brand, the product, the advertising and the athlete into one image. Jordan was also used by Nike for giving motivational talks, hosting sales meetings, glamorizing new product launches, playing golf with clients and employees and helping with product development. And, another important thing: the Jordan sponsorship build pride for Nike employees and developed a corporate culture. Most employees looked at Jordan rather as an colleage than as a athlete, like all athletes Nike is sponsoring. Nike and Jordan still are partners and in Februari 2010 the 25th Air Jordan shoe is released. The Nike-Jordan case is a good example of a sustainable sponsoring relationship which is used to its maximum. The more a resource can be used and developed, the more valueable it becomes for the organisation (Amis et al., 1999).
Resource-based view on sponsorship
In the final sentence of the Nike-Jordan case description above, the word "resource" is used; the sponsorship is seen as a resource. Amis et al. (1999) descriped the sponsorship from a resourced-based view of the firm.
The resource-based view (RBV) of the firm is to looking at firms in terms of their resources rather than their products (Wernerfeld, 1984). With resources is meant anything that can be sees as a strength or a weakness of a firm. Traditionally economists confined these resources as labour, capital and land, but the RBV is looking broader and includes for example brand names, in-house knowledge of technology, employment of skilled staff, networks, capital, etc. (Wernerfeld, 1984). But also a sponsorship relation can be a powerful resource (Amis et al., 1999, Argus et al., 2004, Farrelly et al., 2000). This view was first introduced in by Wernerfelt (1984), but go almost no attention from the academic field till the 1990s. However, ten years after the RBV can not be ignored in the academic field of marketing management (Wernerfelt, 1995)
Applying the RBV does not limit sponsorship utilization as a marketing tool, but rather see it as a corporate component of the whole firm structure. A firm entering a sponsorship should treat sponsorship as a resource which can singly, or in combination with other resources, result in sustainable distincive competitive advantage (Amis et al., 1999). The appliance of the RBV can help understanding the critical aspects of sponsorship for a firm (Argus et al., 2004). The key resources which can result into sustainable competitive advance are mostly invisible. Argus et al. (2004) concludes key personnel knowledge and effective organisation capabilities and processes to be the two most important key resources.
The RBV contends that the possession of effectively deployed key resources lead to sustainable competative advance (Argus et al., 2004). Best is to focus on gain extra competitive advantage on intangible resources, as those are hard to copy and therefore more sustaible as tangible resources (Amis et al., 1999). Value, barriers to duplication and appropriability are the essential advantage-creating resources (Farrelly et al., 2000; Argus et al., 2004). The organisation capability resources which are critical to successful implementation of sponsorship are market oriented capabilities, branding building capabilities and collaborative capabilities and routines (Farrelly et al., 2000). If these resources and capabilities will be developed and deployed, a sponsorship can generate maximum result.
Sustainability
As mentioned earlier after the Jordan case, sustainability of a relationship will generate in the long-term more return on investment. Therefore a sponsoring firm should carefully select the proportery it is investing in.
To achieve sustainable advantage over competitors with using sponsorship as a method, a firm requires three components (Amis et al., 1999): 1) Perceived customer value, the sponsorship should be able to provide a significant increase in customer value of the perceived customer value of the product or service offered by the firm, 2) competitor differentation, the distinctive competence that the firm develops must be unique in order to differentiate the firm from its competitors and 3) extendability, the competence must be usable in a variety of areas: it must be extendable. These three points are an equilateral triangle (see figure below). In this theory also the extendability is included, which also was one of the key elements which made the Jordan-Nike relationship a success.
Once a firm has advance upon its competitors, it constently needs to endure the gab to stay ahead. As Zyman (2002) constantly repeats, once a strategy is made and applied, you need to start all over again from te very start. The market is dynamic. Regular extensive evaluation of a sponsorship relationship results in improvement, or in case a relationship does not work out, how earlier the relation can be end, the better.
A relationship is permanently fading. The process of sponsorship relationship fading gets little attention by researchers. Although, Olkonen & Tuominen (2006) attempt to descibe, analyse and understand relationship fading between a business sponsor and a sponsored museum in the context of cultural sponsorship. Triggers of fading, according to Olkonen & Tuominen (2006), are: 1) relationship changes between the organisations, 2) changes in the organisations characteristics, 3) changes in potential competitors, and 4) changes in the entire contextual business environment. These triggers affect the development of a relationship by reducing the motivations to invest in the relationship (Olkonen & Tuominen, 2006). Although these triggers can have positive affect on the relationship as well. Regular evaluation and two-way communication can recognise relationship fading triggers in an early stage and avoid motivation reduction and build, enhance and mentain the relationship (Farrelly & Quester, 2003; Olkonen & Tuominen, 2006).
3.3 Sponsorship as a strategic alliance
In times of big competition firms always are searching for a way to get competative advance. Companies, how small or big they are, get dosens of requests to sponsor a sport entity, festival or whatever. Firms do want to support causes, but as well they want return on their investment. Traditional advertisement is not the way to get competative advance anymore, no or little return on their investment will be gained by traditional advertising. Companies need to get more creative to find the right partners to get this competative advance, something which can grow into a sustainable partnership which is hard to copy by its competitors. From the other side, organizations looking for sponsors better concentrate on finding a sponsor, a potential partner, which is competible. Better stop thinking about sponsorship, but about a strategic alliance. Both parties should become partners and work together on a sustainable relationship which is fully integrated in the corporate strategy of both partners.
More can be get out of a sponsorship relation if it will be integral part of the corporate strategy. Former chief marketing officer of Coca-Cola Sergio Zyman (2002) states the term sponsorship should not be used anymore by firms who use it within their marketing mix. The term sponsorship still contains a part of an philanthropic idea, and if seen as marketing it should be fully corporate and therefore should get return on investment (Zyman, 2002). Whatever the phenomenon is called, sponsorship should be seen as a strategic alliance where both parties can do something for each other and get a return on their investment in the alliance.
Traditioal philanthropic sponsorship is exchanged for corporate strategic alliances in which also the sponsee works professionally towards a succesful relation. It can be compared to a ordinary B2B alliance, where the sponsee, a non-profit organisation, does deliver something back to its sponsor in change of the financial or in-kind support of its sponsor. Varadarajan & Cunningham (1995) give an extensive review about strategic alliances and about their conceptual foundation from a B2B point of view. The relationship part of a sponsorship is the key of a successful sponsorship if integrated into the strategic plan (Farrelly et al., 2003).
Traditionally sponsorship is seen as a one-way commitment from the sponsor to the sponsee. A firm engaged to a sponsorship to associate itselves with the sponsored entity. The image transfer is assumed to be one-way. However, Henseler et al. (2009) argued image transfer equally accounts for the direction from sponsor to sponsee. A sponsee can be equally considered as a unique brand as the sponsoring firm (Henseler et al., 2009) and so the sponsee should also should considering engaging to a sponsorship with a B2B attitude.
Firms can have several different strategies to engage in a sponsorship. First of all it depends on the objective and goal a firm wants to reach, what kind of stragegy is utilized with entering a sponsorship relation. Does a firms wants to increase brand awareness? Or wants a firm enter the market in a new geographic region? Or does a brand wants an event where it can invite its partners for relationship building? Or does a firm wants to recruit new people? Similary, from the sponsored entity its side, a strategy should be worked out before entering a sponsorship relation. Is engaging to a sponsorship a way to get money? Or is it a way to get excess to knowledge? Or to promote your event? A sponsorship communicates and therefor needs to be in line with the brand values and image, both for the sponsor as the sponsee.
3.1 Traditional model: Sponsorship-linked marketing
In the traditional model sponsorship is utilized in the marketing mix. Cornwell (1995) presents a few strategies where sponsorship-linked marketing is a way to implement traditional marketing tools such as advertising, personal selling and PR and sales promotion. These sponsorship-linked marketing strategies can be understood by analogy (Cornwell, 1995). The next presented strategies can be also combined, depending on the goal the sponsoring firms wants to reach with engaging in a sponsorship relation.
Sponsorship-linked marketing: Advertising
Sponsorship-linked marketing accepts the popular analogy to advertising, where target markets are reached by media (Cornwell, 1995). A medium in this case is the general carrier of the message, and can be either social causes, sorts, media (TV-broadcasts, megazines, etc.), arts or community related, but can also be combined. Most businesses primarily engage in sponsorship analogous to advertising to link with a particular audience with the general objective to increase improve corporate image and increase product awareness. Certain specific vehicles (like rock concerts or tennis) within a certain medium are used to reach a specific target group. Various advertising-related marketing strategies can be used, or combined. A few strategies presented by Cornwell (1995) are described below.
Media concentration strategy
This strategy is when a sponsor focusses on one particular medium such as music, or even one vehicle within this medium. Best outcome can be generated when the target market is well defined and the matched well with the sponsored entity.
Reach strategy
Several media and vehicles are utilized to reach a wide variety of consumers. Obviously, this is most beneficial for companies whose consumers appear in multiple market segments. For example Coca-Cola its consumers can be found among all media and most vehicles within this media.
Flighting strategy
Another strategy can be a flighting strategy where the sponsor choses an events based on its timing. For example a sun cream manufacturer will preferaly promote its products in spring/summer as this is the season people consume their product. Therefore a suncream manufacturer would prefer to sponsor spring/summer events.
Sponsorship-linked marketing: Personal selling
Another approach to sponsorship strategies are analogous to personal selling (Cornell, 1995). With these strategies firms primarily engage in a sponsorship to have person-to-person contact with its audience by participating the sponsored activities. In this case the audience of the sponsor is not limited to the target group of the sponsored entity, but can be different audiences of the sponsor as well, such as its shareholders, suppliers, distributors or employees. A few personal selling related sponsorship strategies presented by Cornwell (1995) are described below:
Product demonstration
With this strategy a sponsoring firm demonstrates its product directly to its potential consumers at a sponsored activity (Cornwell, 1995). For example the beer brewery Duvel Moortgat NV demonstrates its beer brand Vedett to its target audience by sponsoring Incubate Festival where it delivers free Vedett at among other the opening of the festival to the audience.
Prospect generation
A sponsor plans business meetings at a sponsored event with partners whose field is related to the sponsored event. As the atmosphere has a positive impact on chances the business will work out (Cornwell, 1995).
Customer relationship building
A good buyer-seller relation is of major importance for sustainable success, and here sponsorship can help (Cornwell, 1995). Relationship development concists of five stage: awareness, exploration, expansion, commitment and dissolution. In the first four stages sponsorship can play a role, especially for awareness. However, firms should be aware sponsorship could also play a role in the dissolution part in case the target group does not feel connected with a sponsorship.
Sponsorship-linked marketing: PR and sales promotion
A third approach of strategic sponsorship can be seen as and extention of PR and sales promotion. Sponsorship can be an extention of the public relations function to raise your profile in for example a certain geographic region or certain target group. Vedett uses its sponsorship relation to raise its profile in Netherlands. Similarly sales promotion can be extended by engaging to a sponsorship relation. In this case a sponsoring firm particularly engages to a certain event to increase sales immediately. Some firms create own long-term proprietary events solely to help build a life-style around it, and thereby sponsoring for example rock music artists.
Indirect marketing
Expenditures on out-of-home activities has been increased in wealthy countries for the last decades, on both arts and sports events (Cornwell, 2008). This also explains why sponsorship became more interesting the last decades. Besides of that, people are more away from home, away from television with its traditional advertising. People increasingly emotionally connect to events of their choice, as they do with modern commincation technology (Cornwell, 2008). And this is only increasing. As Cornwell (2008) states: "wirelessness supports the trend to be away and yet connected".
Earlier is mentioned advertising is dying according to some authors. Rust and Oliver (2004) blame the, in that time new, internet and network technology. However, advertising would not die completely, the rules change. Not only because the technology and economy changes, but also because of life style changes of individuals and communities (Cornwell, 2008). Curremtly people decide much more theirselves to what media they are connected, due to technologic advance people have more their own choice. Therefor mass media advertising is reaching a smaller audience, but sub groups are devided in many small networks. Which of cource requests different advertising strategies. Rules are changing, but not dying. Expenditures on sponsorship increased much faster since the early 1990s as expenditures on advertising, as can be seen in the figure below.
Sponsorship-linked marketing is a valuable tool to reach the increasingly emotionally connected sub groups. Sponsorship is an indirect marketing tool (Cornwell, 2008) which became more cost effective as advertisement. With engaging to a sponsorship, a firm associates it selves with a certain project and the culture assiciated with the project. The association says what the sponsoring firm wants to be, or how the firm wants the consumers to see them like (Lokerman, 2004). The sponsoring firm will communicate the association with the sponsored property. Firms attempt to make customers fans of their brand to appeal them by sponsoring events and activities they emotionally feel connected with (Lokerman, 2004).
World wide:
25.9 billion 2003
28 billion 2004
30 billion 2005
33.7 billion 2006
37.7 billion 2007
43.1 billion 2008
44 billion 2009
46 billion 2010 expected by IEG
3.2 Further development of strategic sponsorship
Basketbal player Michael Jordan and Nike were one of the first examples of sponsorships which involved all facets of the marketing strategy of Nike (Amis et al., 1999). Nike started to sponsor Jordan in 1984 at a very early stage of his career when it was not sure how big his success would become. Together they developed and marketed the Air Jordan shoes. Nike did not utilized the Jordan sponsorship for its sneakers, he was part of the whole Nike's marketing package in which Jordan would tie together the brand, the product, the advertising and the athlete into one image. Jordan was also used by Nike for giving motivational talks, hosting sales meetings, glamorizing new product launches, playing golf with clients and employees and helping with product development. And, another important thing: the Jordan sponsorship build pride for Nike employees and developed a corporate culture. Most employees looked at Jordan rather as an colleage than as a athlete, like all athletes Nike is sponsoring. Nike and Jordan still are partners and in Februari 2010 the 25th Air Jordan shoe is released. The Nike-Jordan case is a good example of a sustainable sponsoring relationship which is used to its maximum. The more a resource can be used and developed, the more valueable it becomes for the organisation (Amis et al., 1999).
Resource-based view on sponsorship
In the final sentence of the Nike-Jordan case description above, the word "resource" is used; the sponsorship is seen as a resource. Amis et al. (1999) descriped the sponsorship from a resourced-based view of the firm.
The resource-based view (RBV) of the firm is to looking at firms in terms of their resources rather than their products (Wernerfeld, 1984). With resources is meant anything that can be sees as a strength or a weakness of a firm. Traditionally economists confined these resources as labour, capital and land, but the RBV is looking broader and includes for example brand names, in-house knowledge of technology, employment of skilled staff, networks, capital, etc. (Wernerfeld, 1984). But also a sponsorship relation can be a powerful resource (Amis et al., 1999, Argus et al., 2004, Farrelly et al., 2000). This view was first introduced in by Wernerfelt (1984), but go almost no attention from the academic field till the 1990s. However, ten years after the RBV can not be ignored in the academic field of marketing management (Wernerfelt, 1995)
Applying the RBV does not limit sponsorship utilization as a marketing tool, but rather see it as a corporate component of the whole firm structure. A firm entering a sponsorship should treat sponsorship as a resource which can singly, or in combination with other resources, result in sustainable distincive competitive advantage (Amis et al., 1999). The appliance of the RBV can help understanding the critical aspects of sponsorship for a firm (Argus et al., 2004). The key resources which can result into sustainable competitive advance are mostly invisible. Argus et al. (2004) concludes key personnel knowledge and effective organisation capabilities and processes to be the two most important key resources.
The RBV contends that the possession of effectively deployed key resources lead to sustainable competative advance (Argus et al., 2004). Best is to focus on gain extra competitive advantage on intangible resources, as those are hard to copy and therefore more sustaible as tangible resources (Amis et al., 1999). Value, barriers to duplication and appropriability are the essential advantage-creating resources (Farrelly et al., 2000; Argus et al., 2004). The organisation capability resources which are critical to successful implementation of sponsorship are market oriented capabilities, branding building capabilities and collaborative capabilities and routines (Farrelly et al., 2000). If these resources and capabilities will be developed and deployed, a sponsorship can generate maximum result.
Sustainability
As mentioned earlier after the Jordan case, sustainability of a relationship will generate in the long-term more return on investment. Therefore a sponsoring firm should carefully select the proportery it is investing in.
To achieve sustainable advantage over competitors with using sponsorship as a method, a firm requires three components (Amis et al., 1999): 1) Perceived customer value, the sponsorship should be able to provide a significant increase in customer value of the perceived customer value of the product or service offered by the firm, 2) competitor differentation, the distinctive competence that the firm develops must be unique in order to differentiate the firm from its competitors and 3) extendability, the competence must be usable in a variety of areas: it must be extendable. These three points are an equilateral triangle (see figure below). In this theory also the extendability is included, which also was one of the key elements which made the Jordan-Nike relationship a success.
Once a firm has advance upon its competitors, it constently needs to endure the gab to stay ahead. As Zyman (2002) constantly repeats, once a strategy is made and applied, you need to start all over again from te very start. The market is dynamic. Regular extensive evaluation of a sponsorship relationship results in improvement, or in case a relationship does not work out, how earlier the relation can be end, the better.
A relationship is permanently fading. The process of sponsorship relationship fading gets little attention by researchers. Although, Olkonen & Tuominen (2006) attempt to descibe, analyse and understand relationship fading between a business sponsor and a sponsored museum in the context of cultural sponsorship. Triggers of fading, according to Olkonen & Tuominen (2006), are: 1) relationship changes between the organisations, 2) changes in the organisations characteristics, 3) changes in potential competitors, and 4) changes in the entire contextual business environment. These triggers affect the development of a relationship by reducing the motivations to invest in the relationship (Olkonen & Tuominen, 2006). Although these triggers can have positive affect on the relationship as well. Regular evaluation and two-way communication can recognise relationship fading triggers in an early stage and avoid motivation reduction and build, enhance and mentain the relationship (Farrelly & Quester, 2003; Olkonen & Tuominen, 2006).
3.3 Sponsorship as a strategic alliance
In times of big competition firms always are searching for a way to get competative advance. Companies, how small or big they are, get dosens of requests to sponsor a sport entity, festival or whatever. Firms do want to support causes, but as well they want return on their investment. Traditional advertisement is not the way to get competative advance anymore, no or little return on their investment will be gained by traditional advertising. Companies need to get more creative to find the right partners to get this competative advance, something which can grow into a sustainable partnership which is hard to copy by its competitors. From the other side, organizations looking for sponsors better concentrate on finding a sponsor, a potential partner, which is competible. Better stop thinking about sponsorship, but about a strategic alliance. Both parties should become partners and work together on a sustainable relationship which is fully integrated in the corporate strategy of both partners.
More can be get out of a sponsorship relation if it will be integral part of the corporate strategy. Former chief marketing officer of Coca-Cola Sergio Zyman (2002) states the term sponsorship should not be used anymore by firms who use it within their marketing mix. The term sponsorship still contains a part of an philanthropic idea, and if seen as marketing it should be fully corporate and therefore should get return on investment (Zyman, 2002). Whatever the phenomenon is called, sponsorship should be seen as a strategic alliance where both parties can do something for each other and get a return on their investment in the alliance.
Traditioal philanthropic sponsorship is exchanged for corporate strategic alliances in which also the sponsee works professionally towards a succesful relation. It can be compared to a ordinary B2B alliance, where the sponsee, a non-profit organisation, does deliver something back to its sponsor in change of the financial or in-kind support of its sponsor. Varadarajan & Cunningham (1995) give an extensive review about strategic alliances and about their conceptual foundation from a B2B point of view. The relationship part of a sponsorship is the key of a successful sponsorship if integrated into the strategic plan (Farrelly et al., 2003).
Traditionally sponsorship is seen as a one-way commitment from the sponsor to the sponsee. A firm engaged to a sponsorship to associate itselves with the sponsored entity. The image transfer is assumed to be one-way. However, Henseler et al. (2009) argued image transfer equally accounts for the direction from sponsor to sponsee. A sponsee can be equally considered as a unique brand as the sponsoring firm (Henseler et al., 2009) and so the sponsee should also should considering engaging to a sponsorship with a B2B attitude.
The perception of value of a sponsorship changed. Sponsorship became from a tactical tool a strategic tool (Fahy et al. 2004; Farrelly et al., 2006). But also from a transactual to a realtionship orriented perception, and from short term to long term (Farrelly et al., 2006).
3.4 Co-marketing alliance
A sponsorship can also be seen as a co-marketing alliance. A co-marketing alliance is a lateral relationship or working partnership between firms of whose products, skills are other resources are complements in the marketspace (Bucklin & Sengupta, 1993). Both parties intend to amplify user awareness of benefit by contributing to the marketing of a product. A co-marketing alliance can besides of marketing a product also lead to research, product develpment and production (Bucklin & Sengupta, 1993). A good example of a co-marketing alliance is the alliance between Dutch firms Philips and Douwe Egberts who developned, produced and marketed the Senseo brand and product. A more world wide known example is the Nike+ Sport Kit sensor by Nike and Apple.
Its important both partners are equally endowing resources, otherwise power imbalance occurs (Bucklin & Sengupta, 1993). Equally powerful partners is preferable because of that, also to minimize costs of the exchange proces, as reaching an agreement will be more easy if both partners are equally powerful (Buclin & Sengupta, 1993). However a recent study by Schöbel & Herhausen (2010) founded power imbalance does not influence the co-marketing capability.
Pay-off: Alliances with well-defined market opportunities and well-defined costs are more likely to perform well (Bucklin & Sengupta, 1993).
Partner match: Similar management style, company culture, domain and goals enhance effectiveness of an alliance (Bucklin & Sengupta, 1993).
Especially commitment and trust results in economic and non-economic satisfaction (Farrelly & Quester, 2005b), which is, of course, the benefit a sponsor wants in return for its investments in sponsorship. Farrelly & Quester (2005b) examined the influence of commitment and trust on economic and non-economic satisfaction due to extensive interviews with sponsors of the Australian Football League (AFL). His hypotheses of a positive influence of sponsors’ relationship commitment to economic satisfaction, trust to both commitment, economic and non-economic satisfaction, and non-economic satisfaction to economic satisfaction were all verified. However, his hypothesis of positive influence of sponsors’ relation commitment to non-economic satisfaction turned out not to be supported. Farrelly & Quester (2005b) suggested that the reason might be the independent operation of the sponsor taking key decisions.
Commitment to a relationship entails a desire to develop a stable relationship, a willingness to make short-term sacrifices to maintain the relationshipm and a confidence in the stability of the relationship (Bucklin & Sengupta, 1993).
NOTES
Most important to enter into a sponsorship are increasing public awareness of a brand or company or changing or enhancing company or brand image and reputation (Amis et al., 1999).
Mentioned is the “experience” consumptions, or “erlebnis”, or “beleving”. It is important for corporations to constantly to explore and redefine social boundaries in order to maintain economic, political and social legitimacy.
(p39-40) More modern sponsorships have a social contract with the community. They have their own administrative entities for cultural programming. This is part of the “new partnership” as described in Schreiber (1994). “Social contract” is from Gordon (1995). (p41)
In the EU and the US a consensus on the objectives to sponsor is reached by scientists after the body of management literature on sponsoring in the beginning of the 90ties: 1) Image transfer, 2) social responsibility, 3) contact with customers and markets (and product promotion), 4) employee motivation (in the workplace and at special events) and 5) the personal interests of corporate executives.
To gain competitive advance you need to differentiate yourself. If you are in a market where are many businesses involved in, carve out a niche for yourself (Amis et al., 1999).
From research by Farrelly et al. (1997) among North American and Australian firms involved in sponsorship. the strategic fit with the sponsored entity was the main reason, following by the get access to a spicific target media or event audience (both over 80% of the respondents of their surverys).
Sports and cultural sponsorship had a different structure, mainly due to difference in audience. Sports not a “high-culture” as arts, but sports much more wide-spread, also among elites. (Rectanus, 2002)
A study to 28 Canadian companies by Amis et al. (1999) resulted that companies who developed their sponsorship strategic management into distinctive competence were successful, and those who didn't failed.
Both parties need to work on the desired image of a sponsorship entity (Amis et el., 1999). Amis et al. (1999) pointed out that the difference between successful and unsuccessful sponsorships were that the former recognized sponsorship as potential valuable resource. Sponsorship should be integrated into the whole marketing mix to deliver one clear and consistent message to consumers.
A sponsored team can become "your team", that should be in the corporate culture. Trust and humour in a relationship make it more extendable (Amis et al., 1999). Non-economic satisfaction.
Any sponsorship should be approached by the firm as a potentially valuabel resource worth spending time and effort on developing (Amis et al., 1999). Commitment.
The involvement of every single employee of the company with the sponsored sport to make them feel part of it. Thats a way Amis et al. (1999) describes how a Canadian building company sponsored an Olympic sport. Amis et al. (1999) also described two unsuccessful sponsorships which stated to have reasons like "because the chairman wanted it" and "because we had the dollars to do it". These sponsorships were damned to fail, as an decent attempt to build a coherent marketing image was lacking, no strategy was behind it. So ad hoc decisions versus integration into broader corporate strategy. The connection with a event, athlete, celebrity or whatever will increase customer value temporarily, but long-term advantage requiers integration into the marketing mix (Amis et al., 1999).
A proposition of a conceptual model of B2B factors in sponsorship is presented by Dann (2008) using the resource based view is used. A sponsorship asset shared by both parties is created. This asset is a commercial entity formed from consensual arrangements of contractual, legal, financial, marketing and social obligations arising from ongoing business relationships between a sponsor and the sponsored property (Dann, 2008). The sponsee (sponsored property) and sponsor are B2B interconnected which results into a sponsorship asset creation and activation:
IEG Sponsorship Report 2007 gives a good example of a successful strategic sponsorship of Dallas Museum of Art.
Everybody knows the classic low-profile sponsorship model where a company sponsors for example a sports club and gets advertisement space as an exchange. In many cases this is still the model behind a sponsorship. Firms just want to sponsor because they like what the sponsee is doing, without a strategy behind it. The sponsor does not expect much, or any, return in investment; only the association with the sponsee gives the company satisfaction with which it can show it is socially involved. Doing well by doing good. The difference with pure philanthropy is the advertisment the sponsor gets in return. In this thesis we forget about this model, assumed is a sponsor has more clear objectives of the sponsorship.
3.4 Co-marketing alliance
A sponsorship can also be seen as a co-marketing alliance. A co-marketing alliance is a lateral relationship or working partnership between firms of whose products, skills are other resources are complements in the marketspace (Bucklin & Sengupta, 1993). Both parties intend to amplify user awareness of benefit by contributing to the marketing of a product. A co-marketing alliance can besides of marketing a product also lead to research, product develpment and production (Bucklin & Sengupta, 1993). A good example of a co-marketing alliance is the alliance between Dutch firms Philips and Douwe Egberts who developned, produced and marketed the Senseo brand and product. A more world wide known example is the Nike+ Sport Kit sensor by Nike and Apple.
Farrelly & Quester (2005a) state that the co-marketing alliance model can be applied as a sponsorship model. In this model five requirements of sponsorship are described which make a co-marketing alliance:1) strategic compatibility,2) goal convergence, 3)commitment,4) trust, and 5) economic and non-economic satisfaction.Strategic compatibility and goal convergance are both key issues of alliance philosophy and trust, commitment and satisfaction are performance stimulating attributes of an alliance (Farrelly & Quester, 2005a).
Schöbel & Herhausen (2010) introduced another important over ruling performance stimulating attribute: co-marketing capability, the capability of a firm to effectively engage in marketing alliances. It can be concluded that the five co-marketing alliance requirements by Farrelly & Quester (2005a) together form co-marketing capability (CMC). The CMC is of major importance, as
Its important both partners are equally endowing resources, otherwise power imbalance occurs (Bucklin & Sengupta, 1993). Equally powerful partners is preferable because of that, also to minimize costs of the exchange proces, as reaching an agreement will be more easy if both partners are equally powerful (Buclin & Sengupta, 1993). However a recent study by Schöbel & Herhausen (2010) founded power imbalance does not influence the co-marketing capability.
Pay-off: Alliances with well-defined market opportunities and well-defined costs are more likely to perform well (Bucklin & Sengupta, 1993).
Partner match: Similar management style, company culture, domain and goals enhance effectiveness of an alliance (Bucklin & Sengupta, 1993).
Especially commitment and trust results in economic and non-economic satisfaction (Farrelly & Quester, 2005b), which is, of course, the benefit a sponsor wants in return for its investments in sponsorship. Farrelly & Quester (2005b) examined the influence of commitment and trust on economic and non-economic satisfaction due to extensive interviews with sponsors of the Australian Football League (AFL). His hypotheses of a positive influence of sponsors’ relationship commitment to economic satisfaction, trust to both commitment, economic and non-economic satisfaction, and non-economic satisfaction to economic satisfaction were all verified. However, his hypothesis of positive influence of sponsors’ relation commitment to non-economic satisfaction turned out not to be supported. Farrelly & Quester (2005b) suggested that the reason might be the independent operation of the sponsor taking key decisions.
Commitment to a relationship entails a desire to develop a stable relationship, a willingness to make short-term sacrifices to maintain the relationshipm and a confidence in the stability of the relationship (Bucklin & Sengupta, 1993).
NOTES
Most important to enter into a sponsorship are increasing public awareness of a brand or company or changing or enhancing company or brand image and reputation (Amis et al., 1999).
Mentioned is the “experience” consumptions, or “erlebnis”, or “beleving”. It is important for corporations to constantly to explore and redefine social boundaries in order to maintain economic, political and social legitimacy.
(p39-40) More modern sponsorships have a social contract with the community. They have their own administrative entities for cultural programming. This is part of the “new partnership” as described in Schreiber (1994). “Social contract” is from Gordon (1995). (p41)
In the EU and the US a consensus on the objectives to sponsor is reached by scientists after the body of management literature on sponsoring in the beginning of the 90ties: 1) Image transfer, 2) social responsibility, 3) contact with customers and markets (and product promotion), 4) employee motivation (in the workplace and at special events) and 5) the personal interests of corporate executives.
To gain competitive advance you need to differentiate yourself. If you are in a market where are many businesses involved in, carve out a niche for yourself (Amis et al., 1999).
From research by Farrelly et al. (1997) among North American and Australian firms involved in sponsorship. the strategic fit with the sponsored entity was the main reason, following by the get access to a spicific target media or event audience (both over 80% of the respondents of their surverys).
Sports and cultural sponsorship had a different structure, mainly due to difference in audience. Sports not a “high-culture” as arts, but sports much more wide-spread, also among elites. (Rectanus, 2002)
A study to 28 Canadian companies by Amis et al. (1999) resulted that companies who developed their sponsorship strategic management into distinctive competence were successful, and those who didn't failed.
Both parties need to work on the desired image of a sponsorship entity (Amis et el., 1999). Amis et al. (1999) pointed out that the difference between successful and unsuccessful sponsorships were that the former recognized sponsorship as potential valuable resource. Sponsorship should be integrated into the whole marketing mix to deliver one clear and consistent message to consumers.
A sponsored team can become "your team", that should be in the corporate culture. Trust and humour in a relationship make it more extendable (Amis et al., 1999). Non-economic satisfaction.
Any sponsorship should be approached by the firm as a potentially valuabel resource worth spending time and effort on developing (Amis et al., 1999). Commitment.
The involvement of every single employee of the company with the sponsored sport to make them feel part of it. Thats a way Amis et al. (1999) describes how a Canadian building company sponsored an Olympic sport. Amis et al. (1999) also described two unsuccessful sponsorships which stated to have reasons like "because the chairman wanted it" and "because we had the dollars to do it". These sponsorships were damned to fail, as an decent attempt to build a coherent marketing image was lacking, no strategy was behind it. So ad hoc decisions versus integration into broader corporate strategy. The connection with a event, athlete, celebrity or whatever will increase customer value temporarily, but long-term advantage requiers integration into the marketing mix (Amis et al., 1999).
A proposition of a conceptual model of B2B factors in sponsorship is presented by Dann (2008) using the resource based view is used. A sponsorship asset shared by both parties is created. This asset is a commercial entity formed from consensual arrangements of contractual, legal, financial, marketing and social obligations arising from ongoing business relationships between a sponsor and the sponsored property (Dann, 2008). The sponsee (sponsored property) and sponsor are B2B interconnected which results into a sponsorship asset creation and activation:
IEG Sponsorship Report 2007 gives a good example of a successful strategic sponsorship of Dallas Museum of Art.
Everybody knows the classic low-profile sponsorship model where a company sponsors for example a sports club and gets advertisement space as an exchange. In many cases this is still the model behind a sponsorship. Firms just want to sponsor because they like what the sponsee is doing, without a strategy behind it. The sponsor does not expect much, or any, return in investment; only the association with the sponsee gives the company satisfaction with which it can show it is socially involved. Doing well by doing good. The difference with pure philanthropy is the advertisment the sponsor gets in return. In this thesis we forget about this model, assumed is a sponsor has more clear objectives of the sponsorship.
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