Most organizations look for a return on their support or investment, from goodwill within the community to more complex advantages such as media exposure, increased sales and brand awareness.
Sponsorship is about developing long term relationships. The longer the relationship survives, the bigger the value that can be gained from it. It is not an exact science, however, and manifests itself in a host of different forms on many different levels.
Obtaining sponsorship is a challenging task and can be very competitive – some companies receive over 100 sponsorship enquiries every week.
Many companies nowadays are fully aware of the fact that they need their customers to stay in business and many of them know the high significance which marketing plays in making them compete successfully amongst their competitors. Companies need to satisfy their customers by creatively managing their marketing mix in order to have a competitive advantage over others (Jobber 2007, pp. 793-794).
Promotion is the way for the company to communicate with their target audiences through mass communication (Jobber 2007, p. 21). Promotion, however, includes much more than the traditional forms of advertising. It involves all forms of communication to consumers. For many organizations, sports are quickly becoming a rather effective and efficient way to communicate with both current and potential target markets.
There are many events which companies can sponsor including arts, music, sports, education, broadcasts, fashion shows and cause-related activities. However, empirical surveys have discovered that sport is the most popular sponsorship medium.
Promotional strategy linking a company to sports (sponsorship of competitions, teams, leagues, etc.)
Sport sponsorship is a mutually advantageous relationship between people or organizations in which the sponsor provides benefits for the sponsored in exchange for an association with a sport, events, facilities or sport participants. (European Council – 1981)
In general, sponsorship can be illustrated as a mutually beneficial business relationship between two parties being named as sponsor (usually companies) and sponsored. (Olkkonen – 2001)
Sponsorship is a business method for communicating and marketing which, in the short and long term, has the aim of contributing to the sponsor’s brand awareness and image, as well as increasing the sponsor’s sales. Sponsorship should benefit all those involved, and lead to a result that can be measured against predefined objectives. (Jiffer and Ross – 1999)
Sponsorship is a mutually advantageous business relationship between parties in which the sponsor provides benefits for the sponsored in exchange for a result that can be measured against pre-defined objectives. (David Ross – 2008)
Sports sponsorship is a marketing tool that is frequently used by companies to reach a wide audience on a global basis so as to be placed higher than their competitors and to create awareness as well as make a higher profit margin. Through this platform, specific target audience alongside potential customers are reached as it able to penetrate through quite effectively in the promotional mix and as such, is a significant method being used by many organizations.
Due to the fact that the field of sport sponsorship does not yet have a precise and exact conclusion, many authors and researches carried out are yet to give a clear concept on the whole objectives of sponsorship in sporting events.
A company’s sponsorship success of an event is defined by its objectives and how well the end result can be evaluated and beneficial to the organization. According to Wladimir Andreff and Stefan Szymanski (2006), there are two types of objectives which can be classified as direct and indirect objectives. In the direct objective ‘the sponsor expects a rapid change in behavior of its existing and potential customers’. While in the indirect objective the authors maintain that it is ‘primarily for increased visibility to brands and products, contact with a particular segment of its client base and an enhancement of its image; alongside growth in sales are only a long-term goal’.
Types of Sports Sponsorship
The most common forms of sport sponsorship agreements are the following:
Shirt/Team Sponsorship – Samsung Mobile and Chelsea FC
Squad Sponsorship – Skandia and the British Sailing Team/Aviva and the UK Athletics Team
Athlete Sponsorship – Nike and Wayne Rooney/Chris Hoy and Kellogg’s Bran Flakes
Event Sponsorship – The Barclays Premiership
Venue/Stadium Sponsorship – The Brit Oval/The O2 Arena
Broadcast Sponsorship – Heineken and ITV’s Rugby World Cup coverage
Small Athlete Sponsorship Deal – a hockey player receiving 4 free sticks a year
From Company’s Perspective
The benefits and objectives of companies involvement in sport sponsorship varies from author to author.
Creating promotional opportunities
Sponsoring events is a great way for companies to promote their brands, logos and products
Improving community relations
Social responsibility is a factor of why companies get involved in sponsorship. Sponsorship of schools can help boost the reputation of a company in its given community. This will give a caring and socially responsible image to the consumers
Fostering favorable brand and company associations
This objective is linked to association for a company or brand. The point is meant for a company to associate itself with an event and hopefully, the positivity of the event can be relayed to their products as well.
Creating entertainment opportunities
Companies sponsor events not only for publicity but also to reach out to customers that are highly placed in various fields. Successful employees also benefit from this as they are highly rewarded when top celebrities participate in an organized event.
Sponsorship provides a good platform to reach millions of audience worldwide where some of them are likely to become customers due to the publicity provided by various media coverage internationally which aids in facilitating this process. Sponsorship of certain major events like football aids in drastically producing awareness shifts for various products.
Increasing public awareness of a brand or company
One of the most common objectives for a company entering into a sponsorship is to increase the public awareness of either the company or of a specific brand.
Changing or enhancing company or brand image and reputation
Image and reputation can be seen as resources which enables a company to secure a competitive advantage. Sport sponsorship has, according to the authors, been proven to be an effective tool to either change or enhance company or brand image reputation.
Cornwell and Maignan (1998)
1. Improving goodwill
2. Enhancing image
3. Increasing awareness
4. Improving profitability
5. Management interest
6. Staff recruitment
7. Small and midsized companies in small towns view sponsorship mainly as a tool to support their community and to establish community relations.
1. Enhancing corporate image
2. Increase brand awareness
3. Stimulate sales
4. Corporate reputation
5. Alter public perceptions
6. Build relationships
7. Create goodwill
8. Enhance employee motivation
Mullin et al (2007)
1. To increase public awareness of the company, the product, or both
2. To alter or reinforce public perception of the company
3. To identify the company with the particular market segments
4. To involve the company in the community
5. To build goodwill among decision makers
6. To generate media benefits
7. To achieve sales objectives
8. To showcase unique product features, technologies, or advantages
9. To create an advantage over competitors, through association or exclusivity
10. To gain unique opportunities in terms of hospitality and entertainment
11. To secure entitlement or naming rights
Andreff and Szymanski (2006)
Increase company awareness
Enhance company image
Improve public perception of the Company
Enhance employee motivation
Assist staff recruitment
Increase brand or product awareness
Target specific customer base
From Sport Board’s Perspective
Following are the benefits that can get any sports board/ association/ league/club from sport sponsorship of any organization
Source of Financing and Funding
Sports Board can get funding through sports sponsorship. With the help of these funding they can give salaries, incentives and prizes to the players and performers. Board can invest the amount to earn in future. Insurance amount is covered through financing. Government got taxes from both spectators and sponsors, and board or league got subsidies from government.
Increase employment opportunities
Hiring of ground and maintenance staff due to possible construction of new grounds and offices.
Promotion of sports
More sponsorship, more events then more sports.
Development in sports industry
Sponsorship makes the industry to grow by increasing opportunities for individuals to enter in sports.
Technological Advancement in sports industry
Technology is getting more and more advance in sports. Obviously advancement in technology can easily afford through financing.
Development in sports good manufacturing industry
As the sport industry will grow then sports good manufacturing industry will grow.
Spending on physical fitness of sportsman
Sportsman can be operated and treated easily. More Gym and Medical facilities will be provided.
There will be more construction and better maintenance of Stadiums/ Courts/ Clubs.
Coca-Cola’s sponsorship of the Sydney 2000 Olympic Games is an excellent example of how a company can successfully integrate sponsorship within its marketing strategy. To coincide with the night of the Opening Ceremony, Coca-Cola hosted a music and entertainment event called Red fest in five Australian capital cities. In a bid to reward customer loyalty, Red fest was tied to a cleverly designed consumer promotion. Consumers could attend Red fest events by collecting 15tokens from specially packaged Coca-Cola and Diet Coke products. A Web-site was constructed to inform consumers of competition details and ticket availability. In excess of 100,000 people flocked to the Red fest events to party with celebrities and watch the beginning of the Olympics.
Coca-Cola leveraged its Olympic association with extensive advertising (TV, radio, cinema, transit and outdoor) and a PR campaign involving street teams handing out branded merchandise. In the lead up to the Olympics, Coca-Cola hosted a successful Olympic pin-trading Centre and consolidated its presence during the Games with signage on chairs, tables and umbrellas. As Coca-Cola held exclusive rights to sell its brands at the Olympics, product distribution was also exploited with hundreds of vendor carts spread throughout Olympic venues.
Partnership between Carlsberg and Liverpool FC has been lasting since 1992 and is therefore seen as the most enduring brand sponsorship in football at a club level.
German Bundesliga club Bayer 04 Leverkusen shows how sporting organizations can deal with a leaving sponsor. After seven years, the club’s shirt sponsor RWE decided to drop out of its football sponsorships. In order to thank this longstanding sponsor, Leverkusen put an advert in Germany’s leading sports business magazine which said: ‘Seven years on the chest, forever in the heart – many thanks for a great partnership.
Barclay’s Premier League – Football
Heineken Cup – Rugby Union
NPower Test Series – Cricket.
Walker’s Stadium – Leicester City
Emirate’s Stadium – Arsenal
Reebok Stadium – Bolton Wanderers
Vodafone – England Women’s Cricket Team
O2 – England Rugby Union Team
Norwich Union – UK Athletics
Coca-Cola – 1996 Olympic Games
Seiko – 2000 Winter Olympics
America West Air – PGA Golf Tournament 1999
PepsiCo has won bidding for the rights of title sponsor of the Indian Premier League (IPL) for the five seasons commencing in 2013
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