Effects of Sponsorship on Consumer Behaviour of Stakeholders

1. Title

How does Sport sponsoring in soccer affect the consumer behavior of stakeholders in Germany

2. Background

Sponsoring is a bipartisan relationship in business between a sponsor and its stakeholders and the other way around for mutual benefits. (Olkkonen, 2001). In this line sponsoring can be defined as “an investment in cash or in kind, in an activity, in return for access to the exploitable commercial potential associated with that activity” (Meenaghan, 1991, p.36). Sponsoring is the most rapid growing form of marketing across various industries. On a global scale the spending on sponsoring planed achieved € 51.2 billion in 2013 and projected to raise to € 55.6 billion plus 8,6 % in 2014 (IEG 2013).

Especially sport sponsoring has become a significant section of marketing strategies in every major company over the last 20 years while the traditional media has become cluttered and less effective (Javalgi, Traylor, Gross & Lampman, 1994; Meenaghan, 1991). New media competes with old media, dividing up the audience across multitude of media channels and making it more difficult for marketers to reach the targeted audience. Even in times of media fragmentation sport sponsoring is an important tool to build brand equity and corporate image and is used to reach large and different audiences (Cornwell, Roy & Steinard, 2001; Tripodi, 2001). Sponsoring supports the instruments to surmount this dare and deals constitute big investments for the sponsoring enterprises. Various reasons are responsible for the growth of sponsoring. One reason is that sponsoring is a keen instrument of communication. The excessive growth of private television channels lead to an enhancement in transmission hours and massive accelerating development of the communication industry. This trend produced a plenty availability of TV slots to reasonable prices. Later the high production costs of material which was used in television had lead to an absolute branch in prices of the slots themselves. Therefore companies had to integrate alternative communication solutions as their planed budgets were used out of these communication methods. Sponsoring enables companies associate with independent messages linked with a clear structured communication flow.

A specific source is a football team in this case. The football team present his own message and uses channels represented by the media in general that transferred great importance to the sports events, because they realize the populace find them very appealing. Much more attention and clearance to a event managers or producers who organize importance events for the public such as sport, cultural or musical will be given by media. The media need producer information more than the other way around. An economic advantage for the sponsors is the result of an asymmetry of power in the information market.

Investigations to measure or evaluate sponsoring endorsement deals contain soft measures like rising purchase intention, bran recognition or media broadcasting time of the brand name during a sport event. However, it is difficult to translate these measures into financial values. To get a reliable estimate what section of turnover can be allocate to the sponsoring or what part of further activities like in-store activities or other media commercials is very difficult in practice. Sponsoring improves qualitative main factors such as image, brand awareness and purchase intention (Keller, 1993). Moreover the aim of sport sponsoring is to present the bottom line impact by rising potential sales and profits. Direct and indirect costs are anticipated to be offset by future benefits in terms of growing brand awareness, image depiction and higher profits (Farrell & Frame, 1997).

Corporate sport sponsoring is a tool marketers apply in reaching consumers and influence them concerning their buying decision. Problems facing marketers include how to assess the effects of sport sponsoring on consumer behaviors and how to determine its business value (Harvey, 2001). Know how consumer attitudes are formed and changed is the key of effective sponsoring and to examine the relationship between sponsoring and attitudes. Attitudes can be defined as compromised enduring cognitive, affective and behavior tendencies towards an object and have a strong influence and impact on consumer behavior. Sponsoring purpose to affect the component of an attitude by creating a positive link between the consumer´s sport team ant the company´s product.

Especially in football companies exert investments to sponsor a famous and popular football club. The game attracted spectators since 1850s and and is nowadays the most popular sport globally. Consequently the football industry became an international business. The European Championship and the FIFA European and World cups are top media events around the world. According to consultants of Deloitte (2011) many football clubs originated parts of their income from sponsoring. The football club Real Madrid is a good example. In the season 2009/2010 from Real Madrid´s revenue of approximately € 438,6 million 34% was generated from commercial activities (Deloitte, 2011). Furthermore Real Madrid´s front deal with B-Win generates € 15 million till € 20 million in the season 2012/2013. Further partnerships including Audi and Coca Cola.

Other Football clubs in Europe especially Bayern München in Germany earn also significant part of their income from sponsoring. Many international cooperation who operates in Germany have a tendency to invest in sport sponsoring as a potential promotion tool. But it is difficult to measure the effectiveness of sport sponsoring in Germany or worldwide. The effects of sport sponsoring concerning brand awareness and purchase decision are not exactly and sufficient reached in Germany. In spite of the huge impact and importance of sponsoring as a communication tool in the marketing mix in the last decades, only litle is known about how stakeholders process this information in their own brand and image assessment. The current situation is that researchers have tried to provide theoretical frameworks about the stakeholders´ identification of sponsoring and the effects related to brand awareness, corporate image and further stakeholders´criteria, only little research has been focused on the sponsorship effectiveness in Germany

3. Research question and objectives

Based on the the literature and background research following main questions and sub question have been formulated:

• How does sport sponsoring in soccer affect the consumer behavior of stakeholders in Germany?

The sub questions are defined:

• What is the status quo of sponsoring and especially sport sponsoring in Germany
• How can the effectiveness of sport sponsoring be evaluated?
• How do perceive Fans, Non Fans and adversaries think about the image of the sponsor?
• How influence the sponsoring the brand awareness and customer loyalty of the stakeholders?

Based on the research questions, the research objectives are defined as follows:

• Anaylse the elaboration of key characteristics, aims and achievements of sport sponsoring in Germany.
• Analyse the comparison of sport sponsoring in the past and nowadays.
• Identify tools and measures companies evaluate their sponsoring arrangement.
• Analyse the influence of sport sponsoring related to the customer behavior.
• Analyse how far the company´s image and value is influenced by sponsoring.

4. Hypothesis

First, to measure sponsoring effectiveness there has been no consistency with respect to the predictor variables and results being meted (Cornwell & Maignan, 1998). Due to the complex process of developing cognitions based on variables the evaluation of sponsoring is a controversial and most difficult component of sponsoring. Moreover the high use of promotional tools for leveraging purposes and the rising numbers of objectives make the evaluation of sponsoring to a complicated task (Berrett, 1993; Crompton, 2004; Meenaghan, 1983). However four variables have been identified as the most important ones: Brand awareness, purchase intention, corporate image and customer loyalty.

The subsequent hypotheses are derived by the above mentioned research questions and aims:

H₁: German companies have a competitive advantage and better image by investing in sponsoring.

H₂: Sponsoring in soccer has a high impact on the customer behavior of stakeholders.

H₃: Sponsoring is positive related to brand awareness, purchase intention, corporate image and customer loyalty.

5. Methodology

This chapter describes the methodology applied to explore the research questions and objectives which have been mentioned in the previous chapter. Uses research philosophy and methodology is the best way to investigate the research topic (Saunders et al 2009).

The study is twofold and will examine on the one hand the opinion and attitude of consumers related to the sponsoring as a measure used by companies for their commercial objectives. On the other hand the study tries to investigate the relationship among sport sponsoring effectiveness and variables from stakeholders perspective. Concerning the lack of existing data and unfortunately missing market and company insight this research combine inductive and deductive approaches. In order to obtain the highest reliability and significance results of the research, quantitative and qualitative methods are applied for gathering the required information. Therefore this study works with an mixed-method approach.

In reference to the hypotheses telephone interviews and questionnaires are conducted to receive the view of fans, non-fans and big companies, who have sponsoring contracts with clubs in the German “Bundesliga”. First, telephone interviews with sponsored companies in the German “Bundesliga” will be agreed to gather information how they sponsoring works. Only companies are qualified which have been undertaken sponsoring the last five years.

Some of the biggest sponsoring companies in the German “Bundesliga” in the last five are Adidas, Nike, VW, Mercedes, Deutsche Telekom, Evonik industries and Tui. The interview will be mostly made with the Head of marketing of the company. However, to achieve a reliable result more than 10 companies which have been sponsored clubs in the German league in the last five years will be interviewed professional to obtain a high qualitative outcome. In case of the companies face to face interviews are unfeasible due to the lack of time of the participants. Therefore telephone interviews seem to be the best practical solution and will be limited to four weeks.

In order to get information about the other stakeholder’s surveys will be developed for fans and non-fans. As I mentioned the research will be split in quantitative and qualitative date collection method. Therefore an extra and representative sample size is required. Last year the total number of citizens amounts to approximately 80,8 million (Destatis 2013). From this amount nearly 50 million round about 76% are football enthusiasm (Destatis 2013). First, to get a information about their personnel background the survey includes questions related the their gender, age, education level, relationship status and favorite football club in Germany. The second step that the respondents were asked the relative importance of five variables which were used in a five point Likert type importance scale. The rating will be from “total agree” to “total disagree”. This survey includes 25 questions and measured, brand awareness, purchase intention, corporate image and customer loyalty. The time frame will be planned with six weeks for this execution and will be expected that the results are available. The questionnaires will be anylsed by the computer software SPSS.

The interaction of quantitative questionnaires and qualitative interviews can be a benefit when you have to deal with reliability and credibility issues.

6. Timescale

This timescale defines the duration of the project to ensure a planed and structured research approach. According to Pearlson and Saunders (2010) a project plan is necessary to organise project activities, classify them into several steps along a time line. Crucial targets and planed deadlines help to be on time. The steps are structured in 23 weeks.

Research stages:

Figure 1

Source: Own illustration

Time Scale

Figure 2

Source: Own illustration

7. Resources

In order to deliver a successful research it is essential important to have sufficient access to resources. For this study the researcher requires different resources ans the access has to be guaranteed.

First, a telephone is necessary to exercise the telephone interviews with the head of marketings of the companies. Moreover it is important to have access to libraries and scientific databases for secondary data. The Fontys International Business School can be used in this matter. Concerning the creation of a questionnaire a web-enabled computers is required to have access to an creating tool via the internet. In order to analyse the survey outcomes the software IBM SPSS statistics is necessary.

8. Limitations

The researcher has also to deal with limitations during the study. First, to the researcher is dependent from the big companies concerning the telephone interview. The companies could cancel the interviews in argumentation of time restrictions, reluctance and no interest. Secondly, due to the usage of standardised online questionnaires, the participants could underlie their own evaluation of questions. Also the number of questions within the questionnaire as well as the number of respondents is limited Moreover the questionnaire have to be tested before publication to avoid obscurities and ambiguities, because the participants could misunderstand questions and the researcher is not on site when completing the surveys. Finally it is very important to stick to the project plan and calculate precautionally buffer for contingencies occurrences.

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9. List pf References

Berrett, T. (1993). The sponsorship of amateur sport–government, national sport organization and the corporate perspectives. Leisure and Society, 16, pp. 323-46.

Cornwell, B., Roy, D., & Steinard, E. (2001). Exploring manager’s perceptions of the impact of sponsorship on brand equity. Journal of Advertising, 30(2), pp. 41–51.

Crompton, J. L. (2004). Conceptualization and alternate operationalization of the measurement of sponsorship effectiveness in sport. Leisure Studies, 23(3), pp. 267-281. http://dx.doi.org/10.1080/0261436042000183695

Deloitte, (2011). The untouchables football money league. Football Money League 2011 Sports Business Group. Manchester, UK.

Farrell, K., & Frame, S. (1997). The value of Olympic sponsorship: Who is capturing the gold? Journal of Market-Focused Management, 2(2), pp. 171–182.

Harvey, B. (2001). Measuring effects of sponsoring. Journal of Advertising Researvh. Vol. 41, pp. 59-65.

Javalgi, R. G., Traylor, M. B., Gross, A. C., & Lampman, E. (1994). Awareness of sponsorship and corporate image: An empirical investigation. Journal of Advertising, 23(4), pp. 47–58.

Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, 57(1), pp. 1–22.

Meenaghan, T. (1983). Commercial sponsorship. European Journal of Marketing, 17(7), pp. 5-73. http://dx.doi.org/10.1108/EUM0000000004825

Olkkonen, R. (2001). Case study: The networ approach to international spot sponsoring arrangement. Journal of Business & Industrial Marketing, Vol. 16 No. 4, pp. 309-329

Saunders, M. Lewis, P. Thornhill, A. (2009).Research methods for business students. (5th edn) Harlow: Pearson Education Limited.

Tripodi, J. A. (2001). Sponsorship – A confirmed weapon in the promotional armoury. International Journal of Sports Marketing & Sponsorship, (Mar/ Apr), pp. 1–20.