Consumer perceptions of effectiveness of ambush marketing

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1st Jan 1970 Marketing Reference this

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The objective of the company has been changed as the market condition has been changing after industrialization process. Companies not only see a bright prospect of sport industry itself, but also regard the value of sport as a marketing tool, and they have been tried to achieve close relationship with it. Because of increased spare time for improving the quality of life, people in the present age are interested in sports. In this context, sports take a large proportion of our life which means it has the infinite potential of developing sports industry. Company believed that they can achieve the ultimate purpose of the company which is making profit, through sports sponsorship (Pope and Voges, 1994). Thus, they seek various communication methods in order to achieve this objective effectively and the way of differentiating corporate image. Sponsorship takes the most important share of sports marketing. A number of countries increasingly invest huge amount of capital in sports sponsorship (Copeland & Frisy, 1996; Stotler, 1993). The reason why is that public interest in sports event is higher than other event. Companies developed communication activities using sports after they found that the sports are the effective way to maximise the sales increase and to draw out purchase intention (Meenaghan, 2001).

In terms of companies, sponsorship affects promotion, sales, creation of brand awareness, positive attitudes toward brand, and purchase intention, and provides opportunity of standing at advantage over the competitors. (Pitt& Stotler, 1996). Generally, the reason why companies want to participate in sponsorship is that it is more effective than traditional public advertisement against the costs (Meenaghan, 1991), and remind the customers of the corporate and product image (Turco, 1994), and can be used as means of delivering a message to the public (Sleight 1989). When it became a promotional tool within the competitive environment, it brings the fame of the sports event to the company (Mcdaniel and Kinney 1994 ; Gwinner 1994; and Keller 1993). By participating in sports sponsorship, the company expects the improvement of corporate image, brand awareness, brand image along with the final purchase (Macdaniel, 1995). This sponsorship is one of marketing communication mix and has been developed over the recent decades. Companies were always thinking hard about finding an epoch-making communication method and medium toward consumer.

Gwinner and Eaton (1999) demonstrate that the one of the objectives of sponsorship is building a brand image and positioning a brand. This idea can also be transferable to the concept of ambushers and can be adopted and rephrased within the ambush marketing context. However, some people say that ambush marketing affects and reduces the effect of official sponsor relatively. Ambush marketing strategy is used as an effective and competitive strategy for non-official sponsors and it affects not only official sponsorship holders but also sports organisations. According to a research of Chartered Institute of Marketing (2000) about Olympic and brand for 100 adults, 33% of respondents tended to think that the brand of adidas and reebok associated with Sydney Olympic, although they were not Olympic official sponsor. McDaniel and Kinney (1998) stated that ambush marketing strategy can be seen as the typical strategy used by the competitors within the range of the official sponsor’s product. Sometimes ambush marketers are recalled and recognised as official sponsors, and in some cases, they outperformed over officials.

In addition, companies get positive sponsorship effect through sponsorship activities. Furthermore, the objectives of ambush marketing activities, which is recently spread out to many companies, can be considered as same as the objective and the effect of sponsorship activities that companies want to achieve. As sponsorship shows its effectiveness, companies try to find appropriate sports event which enables to communicate with their target customers. FIFA world cup can be considered as one of the attractive sports events in the world. In order to use FIFA world cup as a medium of marketing communication, companies need to be the official sponsor. However, it requires huge amount of sponsorship fee and the official sponsorship programme is exclusive which means decent companies cannot actually participate. Global sports events programme like the World Cups requires huge investment fee but provides more promotion effects than it is expected. Thus, many global companies expect infinite benefits through sponsorship activities; they make sacrifices and enter into the competition for official sponsorship. In the sense of sponsor companies, ambush marketing activities infringes on their rights and sponsorship benefits. Yet, companies cannot just sit and miss the good season so they attempt ambush marketing. Therefore, ambush marketing is a growing alternative for non-official sponsors that emerged on competing with the rising costs for the sponsorship rights (Tripod and Sutherland, 2000). Since 1980s, ambush marketing has been increasing but its regulations are not sufficient its methods and formations are getting more diversified and bolder. The fact of which ambush marketing get benefit from the global sports event is because of indifference of the public and a lack of education toward its harm and benefit.

The organization of the events presents the counterplan against ambush marketing for monopolistic rights of sponsor, but the true condition is that ambushers are avoiding the regulations cleverly (Townley, Harrington, and Couchman, 1997). By looking at studies related to ambush marketing, Sadle and Shani (1989, 1993) argue that ambushers acquired the effectiveness of remain, recognition, brand attitude, and purchase intention as much as official sponsors. Moreover, ambush marketing can be used as a competitive strategic marketing tool through ambush activities of global event by identifying further relationship between consumer perception and the ambushing activity. As it is explained, sponsoring companies want to require several objectives that they pursue through various sponsorship activities. As a matter of fact, it should be examined that whether ambush marketing activities can be an effective marketing strategy for company than sponsorship activities with massive sponsorship fee.

This paper explores the effectiveness of ambush marketing of global sports events on customer perceptions. This paper will show the effect of ambush marketing by investigating and exploring causal relationship between brand attitudes, brand awareness, corporate image and purchase intention. This research would be done by comparing examples and survey. This paper is consisted of five parts; introduction and literature review give an overview of ambush marketing including definition, background, characteristics and methods, its form, and previous studies of ambush marketing. In chapter 3, methodology will be discussed. Chapter 4 discusses the data analysis and result. Lastly, chapter 5 concludes the paper with summary and gives suggestions.

Literature Review

A wide range of subject areas was explored through the literature review as it shows the academic validity of the research by looking at articles with recognised academic standard. The literature review in this paper will provide an overview, definition, characteristics, methods on ambush marketing and common ambush strategies from various sources such as academic journals, published book, and conference papers, and will investigate how ambush marketing perform.

Sections 2.2 through 2.4 address

definitions of sponsorship, the history and growth of sponsorship and sponsorship’s

role in the marketing communications mix, while Section 2.5 explores SME

sponsorship usage.

Sponsorship

The corporate marketing strategy using global sports events focus on improve brand PR and promotion by acquiring the rights to use an exclusive usage of logo and mascot of the sports events as well as publish and broadcast. The global sports event is used as an efficient strategy in a way of establishing its sports cosmopolitanism. Most of multinational firms and large corporations use this strategy for their brand to be advertised throughout the world.

The word sponsorship has firstly defined in the Oxford dictionary in 1931. It defines the sponsorship as paying cost by companies or entrepreneur to the TV programme to elicit the advertising introduction of commercial products. It was the first definition, which has affected from the American commercialism.

English Tourist Board has highlighted that the sponsorship is a business agreement which accessing the goals that have been set to gain benefits between the sponsor and sponsorship recipients.

A number of definitions were defined by various researchers including Sleight (1989),

(Sandler & Shani,1989, p. 10),Meenaghan (1991), which stated:

“Sponsorship is a business relationship between a provider of funds, resources or

services and an individual, event or organisation which offers in return some rights

and association that may be used for commercial advantage” (Sleight, 1989, p. 4).

“The provision of resources (e.g. money, people, equipment) by an

organisation directly to an event or activity in exchange for a direct association to

the event or activity. The providing organisation can then use this direct association

to achieve either their corporate, marketing or media objectives” (Sandler & Shani,1989, p. 10)

“Commercial sponsorship is 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. 10).

Meenaghan has defined that the sponsorship is supporting money and goods by profit organisation for the reasons of commercial goals.

According to Sleight (1989), sponsorship is the business relationship between the individual, event or organisation such as parties, which provides money and services for granting the rights for the purpose of commercial benefits or partnership. In addition, Sandler and Shani have tried to define the word sponsorship; it is the compensation due to a partnership on the events and activities so that the organisation directly provides financial, human and materials for the events or activities. Then, the organisation, which supports capital, can use the direct partnership on their business, marketing and media purposes.

Meenaghan, Snadler and Shani has tried to define the sponsorship in a meaning of broad sense, however, it did not reach the certain expectation because they have been limit the function and location of sponsorship within the marketing mix. Sponsorship has been gradually accepted as best fit for the variable within communication and promotion. The marketing communications mix so-called marketing mix consists of ‘four P’s’ which are product, price, promotion, and place. This is considered to be an important factor to meet its marketing objectives (Kotler, Brown, Adam, & Armstrong, 2001). Sponsorship is flexible form of superseding or working as a different element of the communication and often regarded as promotion within the marketing mix along with advertising, sales promotion, personal selling, and publicity (Meenaghan, 1991; Sleight, 1989) because of its basic function “lies in achieving marketing communications objectives” (Meenaghan, 1991 p. 39). Depending on the perspectives, sports sponsorship has been used as a various means. Brook (1994) argued that the sponsorship is a marketing tool and process. Mullin (2000) added that it is a part of the promotion licensing. Pitts and Stotlar (1996) demonstrated that it is a corporate’s marketing tool. Using sports is much effective method compare to the other promotion media, moreover, the effect is maximized when being used with other promotional media. Thus, involvement of the company on sports sponsorship is increasing. Many companies are highly regarding the usefulness of sports sponsorship as they acknowledge the sports sponsorship as an important form of marketing communication mix. It is because; corporates’ involvement on the sports sponsorship has occurred the tremendous effects more than their investments Gardner and Shuman has defined that the sponsorship is an investment on the event or competition to reach to the goal of corporate like increasing sales, improving corporate reputation and product image along with product awareness. The most rapidly growing market is the sponsorship market among all that components of a market economy, and like today, where many different types of consumers are existing in the community, the sponsorship is most appropriate communication method.

the IEG Sponsorship Report predicted that worldwide sponsorship

expenditure would total US$28 billion in 2004, which represented an 8.1% increase

from US$25.9 billion in 2003 (IEG, 2003), which demonstrated sponsorship’s

increasing popularity in the corporate world.

The ambush marketing is the most controversial issues over large sports sponsorship. Ambush marketing is the promotion strategy of non-sponsor companies that act as a sponsor of the event and gives false impression to commercialised the event, reputation and popularity of the ownership. In sponsorship, if the exclusive right is the most powerful rights that the official sponsor could have, then, ambush marketing is the target that has to be strictly watched. It is because the official sponsor protects their area to achieve corporate’s goals through using the exclusive right and the ambush marketing executer infringe on the official sponsor’s area to interfere the goals of official sponsor. However, it is competitive and expensive in order to be the official sponsor of global events, thus, corporates trying to find an alternative methods to overcome, and today, the most popular method is the ambush marketing, that is to make known their brand name through taking advantage in the period of sports events.

Definition of Ambush Marketing

Definition of Ambush Marketing

According to a broad definition, ambush marketing describes any kind of behavior of a party that strives to associate with an event in order to profit from it without making any own contribution (Solder, 2006). Sandler and Shani (1989) define ambush marketing as:

“The planned effort (campaign) by an organisation to associate themselves indirectly with an even in order to gain at least some of the recognition and benefits that are associated with being an official sponsor” (Sandler and Shani, 1989, p.11).

Beech and Chadwick (2007, p.282) also defined ambush marketing as “the strategy involves trying to achieve outcomes similar to those available to an official sponsor but without having to pay an official right fee.” Ambush marketing is often called with common synonyms which are guerrilla marketing or parasite marketing. Ambushers, who are often considered as competitors of official sponsors, tend to increase their profit or their own level of awareness by linking their corporate image with the sporting event (Solder, 2006). One of the factors to be cautious of getting sponsorship effect is ambush activities. As the scale of sponsorship is getting larger, the scale and the number of ambush marketers are growing as well. Companies with ambush marketing strategy get benefits from making consumers confused of recognizing official sponsor. On the other hands, this is the aim of ambush marketing. 이런 앰부쉬 ëˆì¼€íŒ…을 통해 기ì-…들은 공식적인 스폰서 기ì-…들이 누릴 수 있는 이익과 영í-¥ë ¥ì„ 약화시키고, 소비자들이 올바른 공식스폰서를 인식하는데 혼란을 일으킴으로서 스폰서 기ì-…의 영í-¥ë ¥ì„ 약화시킬 수 있다.

Characteristics and Methods

Well-planned and intent activities

It is not an event occurred by an accident or not a decision made by resorting to a temporary expedient. Sandler and Shani (1989) stated that “ambush marketing is not an ad hoc decision or a one shot ad or commercial but the well-planned effort.” Namely, it is a strategic plan to appeal to customer to be recognised as an official by giving fake impression.

Paying considerable costs

Ambusher does not pay the sponsorship right fee but expends considerable indirect costs, as much as official sponsor. If the organisation have a well-planned and executed ambush marketing strategy, then the required beget is demanding. Sandler and Shani (1989) argue that ambush marketing is not always free as it is assumed.

Reducing the effects of a sponsoring by creating image confusion

Meenagan (1996, 1998) states the aim of sponsoring is to create brand awareness and image which will lead to the increase of the brand equity, company’s sales, and profit. These aims are useful and well-matched with both sponsor and ambusher. Meenahan(1996) and Brewer(1993) state that the perception of a non-sponsor as a sponsor can affect the effects of a sponsoring by making the impression of involvement which lead to the receipt of goodwill by consumer who can no longer distinguish between an official and an unofficial sponsor of the event. It can contribute ambush marketer to outperform over the official sponsor. Both the ambusher and the sponsor want to associate with an event. However, the difference is that the corporate sponsor seeks to associate the organisation with the value of the event, while the ambusher focuses on drawing attention from the sponsor to associate itself with the event.

Brooks (1994) has described the role of sponsorship as a media, which are efficient communication, targeting and differentiating. Brooks added that the traditional advertisement has a media clutter, which leads difficulties for message communication, however, sponsorship can apply their messages separately which allows to maximise the attention of certain target groups. Through minimising the inefficiency in the communication process it allows to maximise the visibility of messages and also it can aim at the exact targets.

Protect themselves intellectually by securing legal basis

Ambush marketers protect themselves. The ambusher is well aware of a range of restriction and any related right to allow themselves to make an association with the event as direct as possible (Held, 2007). Tripodi and Sutherland (2000) argue that successful ambushers see their activities as legitimate business practice. Ambush marketing can be considered to be competitive marketing when it is used in the applicable scope of the law (Held, 2007). Ambushers should secure the plan of the campaign around the rights of the sponsor for conscience sake.

However, to guarantee the exclusive right to the official sponsor, FIFA has made the strict rules to minimise the damage for their partner corporates from the ambush marketing such as the official trademark theft without permission. However, the ambush marketing executer activate cleverly on the boundaries of the law, thus, even though the sports organisation and sponsor puts a lot of efforts to prevent, they are still suffering from it.

Common Ambush Strategies

A variety of legal common ambushing strategies by Meenaghan (1994, 1996) is identified in the following which can be used to associate with the sporting event in the consumers’ mind.

Sponsor media coverage of the event

Ambusher sponsors the broadcast on television or radio and they get an opportunity to associate itself with the larger number of media audience than on-site audience. Meenaghan (1994) mentions that “this exploits a perfectly legitimate sponsorship opportunities”. For example, the case of 1984 Los Angeles Olympics shows a legal ambush activity. Kodak played an ambusher role against official sponsor Fuji. Kodak took up the sponsor of ABC Television’s broadcasts of the Los Angeles Olympics and became an official film suppler to the U.S. Track Team (Fannin, 1988 cited in Meenaghan, 1998). Many consumers believed that Kodak was an official sponsor of the Los Angeles Olympics at that time.

Sponsor a subcategories within the event and exploit this investment aggressively

Ambusher obtains legitimate sponsorship of a lesser category within the event by paying investment cost with intensive promotion which can be seen as cost-effective way. Ambusher uses this strategy to take benefits from making confusion. In 1988 Calgary Winter Olympic, Kodak was the official in the meantime; Fuji did aggressive ambush marketing by deciding to become a sponsor of the U.S. Swimming team. This strategy was a smart counter-campaign of Fuji to associate with the game at lower cost (Bayless, 1988 cited in Meenaghan, 1998). However, this strategy can cause the “clutter” of differ tiers of sponsorship in the same event (Wei and Kretschmer, 2004).

Venue-related ambush marketing

Obviously, the venue of the event attracts audience’s attention. Ambushers try to expose their brand in or near the venue. The traditional approach is busying advertising space for the event in the host place or ‘sneaking’ in some items with the ambusher’s brand (Wei and Kretschmer, 2004). Here is the successful example. FIFA exercise their right toward the stadium about one month before the event. Without any permission, officials as well as non-officials cannot practice any commercial action. On the other hand, ambushing activities can be activated, except restricted area nominated by FIFA, without using the World Cup logo and emblem.

In 2000, Major League Baseball Pepsi wrote ambushing message in the air space by floating hot balloon over the stadium while Coke was played the sponsor role of the tournament (Terry 2000). This kind of ambush activities became hard to succeed since the event organizer’r prevention policy such as the International Olympic Committee’s clean venue policy are getting stronger than before. In fact, “advertising space within the camera view around the host city is normally under the control of event organisers (Wei and Kretschmer, 2004).” However, unique and distinctive ambushing strategy is still coming up every event.

For example, in 2002, during an Australian-New Rugby match in Sydney, two men were just painted-on Vodafone logos on the body and streaked onto the playing field (BBC, 2002).

Celebrities through endorsement contracts

This approach uses the global sports event as commercial as possible through endorsement

contract. This strategy uses major figures from the sport and benefits from the celebrity. For example, during 1992 Winter Olympic Games, Mcdonald’s was official sponsor of the American team’s involvement in the Olympic Games, while Wendy’s restaurant chain in the U.S. contracted Olympic gold medalist figure skater Kristi Yamaguchi as an advertising model (Jensen, 1995; Schlossberg, 1996). Ansett was the official sponsor in 2000 Sydney Olympics. The rival Qantas used sponsorship and endorsement of the high-profit Olympic athlete, Cathy Freeman on print and television advertising of the official broadcaster, Channel 7 (ESA, 2010).

Purchasing advertising time between broadcast programmes

Ambusher seeks to purchase advertising time in the slots around television or radio relays of the event. Sandler and Shani (1998) found in their research that almost a third of respondents believe that advertising around relays of the event was an official sponsor. This approach was successful ambushing strategy in the past but is less relevant now. The real situation is that broadcasters in many countries make an offer to the sponsor first or refuse to permit any direct competition in slots around televised events (Advertising Age, 1994 cited in Meenaghan 1998).

Miscellaneous ambush strategies

Many ambushers have created imaginative strategies toward the protected symbols or slogan’s of the event to associate with them. One way of achieving this strategy is how to evade the legal protection. Although Visa was the official sponsor of the Winter Olympics 1994, American Express cards promoted a campaign stating “if you are travelling to Norway this winter you will need a passport but you do not need a visa” (Los Angeles Times, 1994).

Several studies have investigated the ambush marketing, examples of such work included, authors.

A study of Sandler and Shani (1998) based on Atlanta Olympic discussed that people had lack of knowledge about the right of official sponsorship. Consumers are indifferent towards Ambush marketing and consumers were confused about different sponsorship levels. McDaniel and Kinny (1998) found that ” themes and references connected to the event are important.” Although official sponsor acquired the right of sponsorship, it does not always provide competitive advantage to officials over the ambushers. Meenaghan (1998) found consumers have lack information about broadcasting advertising and are indifferent towards ambush marketing. However, he also argue that consumers agree that ambushers should not mislead. Consumers are aware of rights use the Olympic logo. Tripodi (2000) sees successful ambushers associate themselves with the event and achieve brand awaredness and image at low cost. Grohs(2004) found that brand prominence does not necessarily positively associate with sponsor awareness. “Sponsorship leverage determines image transfer. Image transfer applies to all sponsors, not just to officials. However, awereness and image are not measured enough.” Ruth (2003) suggested ” controversial products have a negative influence on the sponsor perception” means by reducing the impact of the sponsorship event, ambushers can benefit from it. “Complementarities of sponsor and weaken sponsor event is important”-> All sponsor can benefit from the event by associating with the event.

Global sports event provides an opportunity to participate in experiencing sponsorship effect in terms of image and competitiveness of the company. Sports marketing become one of innovative marketing communication tools in terms of achieving positive attitude and corporate image.

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