Sponsorship in Effective Marketing

Sponsorship is one of the marketing tools adopted by variety organization as their marketing strategy popularly. As section A found that the researcher has an intention to work in the marketing field as a supportive role based on the personality test and career analysis. He is also interested in significance of the topic on sponsorship, so that the research focuses on the branding management and sponsorship aspect.

The sponsorship of sport events can be considered is an effective marketing tool for companies that it can help to raise the brand awareness and improve the brand image (Bühler & Nufer, 2008). Commercial sponsorship is one of the most rapidly growing parts of marketing communications activity (Meenaghan & Shipley, 1999). About the annual growth of sponsorship, it was recorded 11.5% growth in 2007 and 11.4 % growth in 2008, it increased more than another promotion tools such as advertisement and sales promotions (IEG, 2009). Sponsorship is used widely in the sport sector and it is approximately 54-65% of spending on sponsorship (Bashiri, 2010). Therefore, sponsorship has the great potential in the company adoption for marketing strategy development.

1.2 Reason for choice of brand

Adidas has different sponsorship agreements for major sports events around the world. Adidas take an active role on the global sports events to be an official sponsor of the FIFA Football World Cup and Olympic Games. Adidas is the official sportswear Partner to 2012 Olympics game and 2014 FIFA World Cup and Adidas has also the sponsorship agreement with the Japan Football Association, the Australian Olympic Committee (Datamonitor, 2010). Thus, Adidas is an ideal company to study on the topic of sponsorship.

1.3 Aims and objectives

The aim of the present study is to evaluate the effectiveness of sponsorship to achieve a positive brand image using by the company though the case study. About the research objectives, there are two major factor needed to be involved. Firstly, it is the review the core concept of brand image and sponsorship and any other relevant concept. Secondly, this project has to find out the core concept effectiveness on the company application though the case of Adidas. Based on these objectives purpose, there are three questions to be set as guidance and academic for the objectives:

• What kinds of sponsorship were employed by Adidas to enhance its brand image?
• How did those Adidas’ sponsorships contribute to create a favorable image?
• What were the effects of those sponsorships brought to Adidas after enhancing the brand image?

1.4 Outline of section

There are the sections of outline are arranged as follows: In the upper part of chapter one, there are reason for choice of topic, reason for choice of brand, aims and objectives and outline of section. Next in chapter two, it is the brief introduction of the case company background and information. Thirdly in chapter three, there is a literature review related on the core concept of sponsorship and brand image to be discussed. In chapter four, there will be the case application of Adidas on the project topic. Finally, the conclusion for the research findings would be attached in the last and together with the limitation and suggestion on the further study.

Chapter 2: Setting the Scene

2.1 Company background

Adidas Group is one of the most famous brands in produces sportswear and sports equipment. Adolf Dassler was a founder of Adidas and established Adidas in 1949. Adidas is a German and it’s headquartered located in Herzogenaurach, Germany and employs about 42,541 people in 2010. It consist different branding through three brands, including Adidas, Tailor-Made – adidas Golf, and Reebok. Adidas also has around 170 subsidiaries operation in Europe, the Americas and Asia (Datamonitor, 2010, adidas group, 2011).

In financial year 2010, Adidas revenues was €11,900 million EUR, Adidas is the world’s second largest player in the product portfolio of athletic footwear, apparel and equipment by sales in 2010 (Datamonitor, 2010, adidas group, 2011). The Adidas brand ranked at the 62nd out of the top 100 global brands list, compiled by Interbrand-Business Week in 2009 (Datamonitor, 2010), it showed that Adidas has a strong brand image around the world.

Adidas perforce his the brand characteristic that it is looking both forward and back (Haig, 2004)

Chapter 3: Literature Review

Brand Image

Brand image has been defined as “perceptions about a brand as reflected by the brand associations held in memory” (Keller, 1993). Therefore, brand image is the linkage of consumers associations regarding the brand.

Positive brand images can assistant consumer’s memory linkage strong, favourable, and unique associations to the brand (Keller, 2008). Besides, Brand establishment is a complicated process that the organization requires a lot of time and efforts to establish a branding (RuževičiÅ«tÄ-, 2010). Thus, company require a good marketing strategy and brand management to create a favourite brand to communicate with consumers.

How does the brand association of the brand is important, Aaker (1991) stated that the role of associations that provide reasons to buy, and provide the need for associations to add value on the brand. Park (1986) also stated that brand image is “the understanding consumers derive from the total set of brand related activities engaged by the ¬rm”. Furthermore, consumers attribute an image to the brand based on subjective perceptions of a set of associations which the set are related to the brand (Nandan, 2005). Therefore, it can be understood that the association is vital to the brand.

Brand awareness

Brand awareness includes the recognition of brand and brand recall (Keller, 2008). In the wide definition, the brand associations are keeping in memory of target audience and it also deal with beliefs about the personality or image of the brand. Beliefs can be described as a person hold about something (Keller, 2008). These brand image beliefs include the whole of associations that consumers can connect with the brand and brand personality associations (Batra and Homer, 2004). Moreover, the brands beliefs can those specific attributes and benefits linked to such brand and its competitors (Keller, 2008).

Keller (1993) suggested there should include three components of brand associations and they are “attributes”, “benefits” and “attitudes”.

Brand associations of attributes

Attributes such as size, colour and design features are specific, whereas related to the brand personality’ attributes such as’ youthful’ and ‘energetic’. Attributes could be categorised as product-related and non-product related (Keller, 1993).

Product related attributes would relate to the type of product and service.

Non-product-related attributes would contain price information, packaging and user imagery (Keller, 1993).

Brand associations of benefits

Benefits are the personal value of consumer’s judgement on the product or service what can contribute for them that the consumers attach the value to the product or service attributes (Keller, 1993). Also, benefits refer to the consumer perception of the needs that it makes them satisfaction (Nandan, 2005).

Park (1986) stated three groups of benefits as functional benefits, symbolic benefits and experiential benefits. “Functional benefits” usually correspond to the product-related attributes (Keller, 1993). “Experiential benefits” relate to what it feels like to use the product or service and also usually correspond to the product-related attributes (Keller, 1993). Symbolic benefits are the more extrinsic advantages of product or service consumption (Keller, 1993).

Brand associations of attitudes

Brand associations of attitudes is the third components. Brand attitudes are consumers’ overall evaluations of a brand (Wilkie, 1986). It is important to evaluate because they often come form the consumer behaviour for the selection of brand (Keller, 1993).

Researchers have constructed several models of brand attitudes. According to the tri-component attitude model, attitudes consist of three components: cognitive, affective and conative.

The cognitive component refers to the consumer’ s knowledge or belief about the brand; the affective component relates to the emotions and feelings; whereas the conative component describes the likelihood or tendency of the consumer to take speci¬caction (egbuy) with respect to a brand. (Nandan, 2005)

Brand Personality

Another type of measurement of brand association is Brand personality. Aaker (1997) defined it as “the set of human characteristics associated with a brand.”

Sponsorship

The term of sponsorship has a wide definition so that it is not easy to be defined in a way. Meenaghan (1991) defined sponsorship as “an investment, in cash or in kind, in an activity, in return for access to the exploitable commercial potential associated with that activity”. It was the basic meaning of sponsorship as a marketing promotion tool that Sponsorship is a relationship between a provider of funds, resources or services and an individual, event or organisation, which can get public recognition for the company (Carter &Wilkinson, 2000). Different form of sponsorship such as athletes, facilities, and events become a popular promotions tool in the company marketing strategy. Targeting the specific market segments cater for the consumer habit, the companies are looking to use sport sponsorship more frequently (McGlone C. & Martin N. 2006).

Madrigal (2000) provided the further explanation of sponsorship that an important benefit came from sponsorship is the opportunity for a company to link itself to his target customer. It is because when the consumers pay attention to an event, they have a passion feeling toward a product, and they have a strong feelings about the sport events with which they are related.

Sponsorship is frequently used to deliver the successful images by associating the brand with personalities (Tuominen, 1999).According to Lee CW. & Aiken K.D. (2010) research, the sponsorship is a workable strategy to influence consumers brand association of the brand. Using Sponsorship can convert consumers’ brand image perceptions and associations so that sponsorship helps improvement of the brand image. Based on the globalisation effect on economies around the world, sports sponsorship has recently been used as a strategic tool to help sponsors in the international marketplace promotion (Sparks, 2008).

Gwinner (1997) indicated that marketers use sponsorship to realize two important objectives. Firstly, sponsorship is used to increase brand awareness, as it was mentioned before. Secondly, the company want to establish, enhance or change a brand image by linking their brands to a favourite cause, event or sports team. Keller (1993) has also noted that some of the cognitive associations or personal meanings hold toward the property may become linked in memory to the brand.

Types of sponsorship

Pelsmacker & Geuens & Bergh (2010) had suggested four main types of sponsorship which can be distinguished. They are event-related sponsorship, broadcast sponsorship, cause-related sponsorship and ambush marketing.

• Broadcast sponsorship

Broadcast sponsorship is one of sponsorship form used to be sponsored the costs of production or transmission on the broadcasting programme to insert the advertising message of the company (Copley, 2004, Pelsmacker & Geuens & Bergh, 2010).

• Cause-related sponsorship

It is one type of sponsorship that company respond to the consumer’s expectation of corporate social responsibility culminated public relations, sales promotions and corporate philanthropy that it creates the good images of the company. (Pelsmacker & Geuens & Bergh, 2010, Irwin & Lachowetz & Cornwell & Clark, 2003)

Ambush marketing

Ambush marketing is the company to seek for the association with an event but the company without the role of official sponsor to achieve the similar effect compare with the official sponsor (Copley, 2004). The ambush marketers can sponsor the media coverage to show the role of big sponsor during the event or by sponsoring for a sport team or a player or by overstating involvement in the event thought out supporting advertisement or sales promotion activity (Copley, 2004, Pelsmacker & Geuens & Bergh, 2010). Ambush marketing is one of the threats to the event official sponsor. Marketers need to understand the factors of ambush marketing effective to have a preparation against such ambushers (Pitt L., Parent M., Berthon P., Steyn P.G., 2010).

(Pickton & Broderick, 2005)

Event sponsorship

This kind of sponsorship can include variety types of sponsorship but it is usually related to sport event or arts event (Copley, 2004). It is a brilliant tool to target the specific market segment in terms of demographic and psychographic (Pelsmacker & Geuens & Bergh, 2010).

Sports event sponsorship

Companies always find the difficulty to reach their target group through print advertisements, television commercials and direct marketing (Bühler & Nufer, 2008) Therefore, sport event sponsorship are able to target their desirable groups in a famous sporting scenario setting to transfer the positive image of the sports event onto their brand (Nufer, 2009). The sponsorship of sports events is a special form of sports sponsorship (Nufer , 2009). He also indicated that companies use sports events sponsorship to reach their target consumer groups striving to transfer the positive image of the sports event onto their brand.

Sports sponsorship is one of the most common and significant type of sponsorship, it is including the sponsorship of clubs, teams, associations, events and individual sports men and women (Bühler & Nufer, 2008). The World Sponsorship Monitor provided that the estimated global sponsorship market size is about $30 billion, sports sponsorship was accounted for 84% in 2006 (Sports Marketing Surveys, 2007).

Advantages of event sponsorship

Event sponsorship is flexible to achieve different kinds of objectives (Pitt L., Parent M., Berthon P., Steyn P.G., 2010).

Risk or disadvantages of event sponsorship

Event sponsorship has a risk of waste of money. In order to have a good result about the effectiveness event sponsorship, the company needs to set a clear sponsorship objective of an official sponsor into consideration to achieve that effective result (Bühler & Nufer, 2008).

Chapter 4: Application of Literature on Case Study – Adidas AG

Adidas got the ranking number two at unaided recall value for the official sponsors of the 2006 FIFA World Cup and Adidas was one of the official brands to achieve the best image values in the 2006 FIFA World Cup (Nufer, 2009).

Strong performance driven by the success of 2010 FIFA World Cup

The FIFA world cup has not only increased profit to Adidas successfully but it also enhanced Adidas brand image after the event. The company had an unparalleled presence at the event with twelve teams including the host nation in the finals, combined with its status as official sponsor, supplier and licensee.

The event had a halo effect on the adidas brand overall due to its unprecedented scale of media coverage as the world’s largest television event, broadcast to over 190 countries and an estimated cumulative audience of 26.3 billion.

As of June 21, 2010 (a mere ten days after the competition began), the company achieved record-breaking sales, predicting sales of soccer-related merchandise at least E1.5 billion ($2.2 billion), surpassing the E1.3 billion ($1.9 billion) obtained in football sales in 2008, the last time a record was set in the soccer sales category. These record sales included the sale of 6.5 million replica jerseys (more than two times the 3 million sold at the 2006 World Cup) and 20 million soccer balls (Datamonitor, 2010).

A model of image creation and image transfer in event sponsorship

A model of image creation and image transfer in event sponsorship is developed by Gwinner using a number of external and internal factors. An event’s image may be transferred through association to the sponsoring product in the event sponsorship (Gwinner, 1997). Based on this model, several factors may increase transferable of the brand image.

Event Image

Brand Image

Moderating variables

-Degree of Similarity

-Level of Sponsorship

-Event Frequency

-Product Involvement

Event type

-Sport related

-Music related

-Festival related

-Fine Arts related

-Professional Trade Show related

Event Characteristics

-Event Size

-Event History

-Promotional Appearance

Individual Factors

-Past History

-Number of Meanings

-Strength of Meanings

Figure 4 A model of image creation and image transfer in event sponsorship

Event type

Event Characteristics

Individual Factors

Moderating variables

The linkage of sponsorship and brand image

Sponsorship image transfer model

Receiver

Event/Activity Value

Sponsor brand Values

Transfer

Event/Activity Value

Chapter 5: Summary and Conclusion

Conclusion

As discussed previously, most of the literature research showed that sport sponsorship can help to achieve company’s products goals. Sport sponsorship also can lead to expanding sales market, reinforcing the company image and increase awareness of company brand (Bashiri M., 2010). Sports are an international language that it can over the barriers religious, social and language in different regions (Kaynak E., Salman G.G., Tatoglu E., 2008).

Recommendations

Limitations of study

Due to the limitations of time and word in the study, the variables and extension factors cannot go though in deeply. The research method is a limitation to achieve academic objectives in this project because the project was focus on the secondary data.

Possible Areas for Further Research

This topic has some potential areas to need for the further research in the future.