Sponsorship Generates Significant Marketing Advantage for the Sponsor - Literature review Example

Literature Review: Sponsorship generates significant marketing advantage for the sponsor The entire study deals with various dimensions related to sponsorship. Integrated marketing communication is regarded as a framework that delivers common brand message through wide array of communication channels. This study demonstrates importance of event sponsorship and even highlights implications of marketing practitioners. Sponsorship activities create long term impact on target audience since it is a platform to communicate efficiently with individuals. Contents Contents 2 Introduction 3 Main Body 4 Roots of Sponsorship 4 Sponsorship Growth 4 Effective Sponsorship 5 Advances in Sponsorship research 5 Measurement of sponsorship objectives 6 Sponsorship as marketing communication tool 7 Event Sponsorships 7 Marketing Practitioner Implications 9 Conclusion 12 References 13 Appendices 15 Appendix1: 15 Appendix2: 15 Introduction Integrated marketing communications can be stated as a major tool for driving customer attention and sustaining market position. It is often regarded as brand messaging application that communicates standard messages across non-traditional as well as traditional media. Various promotional techniques are encompassed within this approach so as to deliver appropriate messages to end customers. Through this integrated platform a synergy is established amongst all communication channels. The concept of integrated marketing communications was originally framed by American Association of Advertising. Promotional measures which are incorporated by a firm helps to achieve set marketing campaign objectives. IMC can also be stated as a framework that defines wide array of marketing strategic roles such as advertising, public relations, sales promotions, etc. In modern world apart from maintaining desired level of quality in products or services it is also essential to enhance clarity in brand messages. The diverse set of techniques when effectively combined with communications plan enhances consistency, impact and overall clarity. IMC or integrated marketing communication has evolved due to some shifts. The shift has occurred from low accountability, traditional, mass media to a high accountability, specialized and interactive media. In all form of business activities integration is an essential component. For instance in marketing activities, integration enables business stakeholders to work in coordination with one another. The benefits of this innovative approach can be further determined on basis of search marketing, accessibility and convenience, aggregation of information and services, social media and mobile growth. There are different marketing communication tools and sponsorship is to be focused on in this study. In present scenario sponsorship is not only beneficial for sponsors in terms of spreading brand awareness but even serves as a strong financial base for the events taking place. It is an advertising tool that is implemented in order to bring in integration and enable a strong association between advertiser and publisher. Main Body Roots of Sponsorship According to Alba and Hutchinson (2008), sponsorship is usually considered to be a new media in context of communications mix adopted by a firm. Gaius Maecenas was the building block behind sponsorship activities. He was an advisor and friend of Caesar Augustus in 70 BC in Rome. In present scenario the term Maecenas is widely used in different context such as research matters, community and arts. It has even resulted into extensive support towards sports sponsorship. Event sponsorship can be closely associated with a single sponsorship activity known as Olympic Games. Since 1950s, cultural sponsorship has also gained a great deal of significance. Arts sponsorship which was majorly facilitated by Rowohlt a German publisher is inclined towards artistic music. Commercial sponsorships are another aspect that is closely knitted with sophisticated and elitist arts (Alba and Hutchinson, 2008). There are firms who do not sponsor any events but associated brand with events sponsored by competitors. This is often regarded as ambush or parasitic marketing in business world. Sponsorship Growth As per Abratt (2007), there are wide array of factors that can be related to demand and supply side of sponsorship activities. Forces behind sponsorship growth have been portrayed in Appendix1. The major contributing factors from sponsor’s perspective are escalating cost associated with advertising space, advertising efficiency, and desires of firms to interact directly with customers. During the last few decades advertising costs has significantly increased due to wide range of advertisers and fragmented media usage. Marketers has realized the fact that extensive information if delivered through media advertising cannot bring in significant changes in terms of an individual’s experience with a brand. On the contrary, event sponsorships provide a platform through which customers can participate and interact with brand (Abratt, 2007). As stated by Bruner (2007), there is a public sector withdrawal observed in sports and cultural activities. This has even initiated a need towards identifying funds in private sector. Demand for additional funds has provided an opportunity to sponsors. Co-branding is a vital component which occupies strong position in consumer’s mind. On basis of this approach profile of events can be raised as well as additional sponsors can be acquired. In certain cases it has been observed that sponsors provide additional advantage to sponsees whereby they are able to access customer base and communication channels of sponsors (Bruner, 2007). Effective Sponsorship According to Maignan (2008), there is a framework of seven elements that helps a firm to identify effective sponsorships. Appendix 2 states the seven keys of effective sponsorship. A sponsorship strategy should be framed in a way that it is able to address set objectives. There exist three major sponsorship objectives such as relationship development, awareness and association development. Proper knowledge about value proposition is essential before engaging into any form of sponsorship activities. The second element deals with appropriate selection of event sponsorship. Exceptional fit is third element and it is about linking a product or service with core image of event (Maignan, 2008). The other factors that increase effectiveness of sponsorship are publicity opportunities, taking into consideration multiple payoffs of sponsorship and efficiently managing diverse range of sponsorships. Advances in Sponsorship research As per Churchill (2009), sponsorship research is a new discipline within integrated marketing communications framework. The sponsorship practice has changed and evolved in earlier times and this has posed serious challenge to researchers in context of analyzing development in this particular field. Managerial aspects of sponsorship is to be focused on by many researchers since it deals with corporate motivations, target audience description, media objectives and objectives related to sponsorship. On the other hand, effects of sponsorship need to be measured appropriately in order to determine relationships between consumer perception and sponsorship stimuli (Churchill, 2009). There are certain tax implications and legal constraints on sponsorship activities that needs to be analyzed properly and researchers are focusing on this area. Measurement of sponsorship objectives As stated by Crimmins (2010), there are some distinct sponsorship objectives and it is measured on basis of some set parameters. Increasing awareness of a brand within specific target audience forms one of the major sponsorship objectives. Often it is witnessed that sponsors incorporate their logo within the event or even print it in jerseys. This helps to grasp attention of customers and even associate quickly with brand. Enhancing or changing brand image forms another objective of sponsorship activities. The image of sponsor’s brand is subjected to a transfer from sponsor to sponsored entity (Crimmins, 2010). Cornwell (2007) in his studies stated that researchers even state that extra efforts should be made by firms in order to change perception of visitors so as to ensure they identify relevancy between brand and event. Guest hospitality is an essential factor and event sponsorship can be treated as a cost effective way to reward employees or customers. Sales promotion is a common mechanism that is adopted while sponsoring an event. Sports equipment manufacturers generally utilize this concept so as to promote their products. Personal objectives of a firm are to increase their customer base by making sponsorship activities a platform to spread brand awareness (Cornwell, 2007). Direct marketing is often not effective in context of changing customer perception so this form of approach is used to strongly connect with customers. Sponsorship as marketing communication tool According to Gardner (2006), sponsorship is an effective marketing communication tool in present scenario. This form of activity is centred towards target audience and is highly responsible for changing as well as forming customer attitudes. Sponsorship to a great extent affects attention, desire and interest of customers. This in turn leads to final purchase decision. In comparison to advertising, sponsorship is able to create sustained medium to long term impact. It is even regarded as a tool that has least direct control from managers (Gardner, 2006). This activity even creates content which can be effectively utilized in wide array of communication channels such as sales promotion or advertising. Event Sponsorships As stated by Grimes (2008), event sponsorship is highly distinct from the term called as event marketing. Sponsored events usually take place without any such high level of involvement from respective sponsors. The major objective of sponsor is to spread brand awareness and sponsees acquire sponsors so as to generate required funds for an event. At sponsored events the main area of focus is science, art or music but not the brand. It is innovative skills of a firm as how they relate brand with the event. Audiences attending sponsored events are highly engaged with the activity and focus more on event. They are less involved with the sponsors or brand. On the contrary, marketing events are closely linked with promoting a brand or product. As there is progress of sponsorship activities the boundary between event marketing and event sponsorship tends to get blurred (Grimes, 2008). According to Zaichowsky (2005), sponsored events are usually organized when there is a strong coordination between sponsor and event organizer. In certain cases it is observed that ideas provided by sponsors’ forms an integral part of the entire event. When sponsors are inclined towards creating a brand experience for event visitors then automatically engage into event marketing. Event sponsorship possesses certain unique characteristics such as it facilitates providing brand experience, demonstrates new technologies or products, and enables a brand to play significant role in an event or customer’s lives. There is a competitive advantage which sponsorship has over advertising. Event sponsorship provides a platform through which a firm can communicate with target audience in a more subtle way. Events have diverse background audiences and each of them has distinct preferences or tastes. To be more precise this wide set of customer demand is an opportunity for sponsors to attract maximum customers. On the other hand, if sponsor is able to associate brand with event effectively then brand image can be retained in customer minds for long term. In previous research studies focus has been on TV audiences but there exists large base of audiences who prefer to visit such events. Audiences can be categorized into synchronism dimensions, event involvement and physical presence (Zaichowsky, 2005). As per Stipp (2009), the wide range of audience groups can be explored through marketing communication mix elements. Synchronism is a vital component that draws in relation between live versus recorded. There are reasons behind why it is important to watch an event at later point of time or that moment. Level of arousal brought forth by a live event is comparatively more in comparison to recorded event. On the other hand, viewing time for live events is comparatively more than recorded events. This gives an opportunity to sponsors in context of enhancing brand image since more time is spend by viewers on the event. However recorded show does not guarantee that perception can be build in consumer mind regarding brand and event. Physical presence is a critical aspect because viewers can view brand promotions and relate it closely with an event. On-site audience would be able to gain deeper experience from the event in relation to TV audiences. Event involvement is the degree to which an event holds importance in individual’s life (Stipp, 2009). This is an influential factor in terms of building up brand equity of an organization. On-site audiences are highly involved in any event that is organized. They are involved because desirable time and money is associated with attending an event. High level of involvement even outlines the reasons behind actual participants becoming a major part of sponsorship audience. In brand promotion activities it is essential to for firms to adopt practices that can retain information in customer minds. Involvement in such sponsored events facilitates long term retention of brand information. Marketing Practitioner Implications According to the authors Isabelle Maignan and T. Bettina Cornwell the practice of marketing and advertising depends a lot on sponsorship. In the modern world the corporate sponsorship of different events, sports, arts etc have increased dramatically in last few years. The huge money involved in sponsorship has several implications in the marketing activities of a business. It is one of the strongest promotional tools both for the sponsored company and sponsoring company (Cornwell and Maignan, 2013).The modern competitive industry different types of sponsorship have gained its significant importance. The concept of this reflects in the strategies formulation of the business. Sponsorship of events and sports are involved in high level of media coverage. It helps to reach maximum amount of customer within a short time which has a beneficial impact on the sponsorship agreement. This new form of advertising increases the visibility of the brand. Practicing strong communication is supported by sponsorship. The funds generated for this practice influences the marketing activities of both the companies. For example different ongoing program includes sponsorship by providing scholarship, performing programs renewal of projects etc. These activities are known as cause-related marketing. Theses marketing practices can be linked with international and national social causes. A kayak manufacture donates a certain percentage of its revenue to a river conservation institution which supports its effective marketing process and also helps in social activities. According to the writer Tony Meenaghan marketing Practitioner gets the opportunities to position there product in the marketplace by the support of sponsorship. It helps to deliver the brand message by building a strong image of the brand. The practitioner also believes that sponsorship becomes very effective with the help of the company fans. As stated by the author Hastings the brand building approach of the company influence it to get involve in sponsoring activities (Hastings, 2009).The company builds its brand which focuses on the mobilization of the organization, new technologies, product development, brand association which all becomes an effective part in building the relationship of the customers with the company. The different theories of sponsorship determine the supply and demands factors. These factors influence the opportunities and growth of the company. The marketing implications based on these contribute in the development of the goals and objectives of the company. The author stated that a sustainable brand image is developed by effective sponsorship. Statistical report shows that sports sponsorship is a rapid growing promotional tool. The sponsorship functions which are associated with the presence of celebrities establish a similarity or dissimilate attributes influencing the response of the customers and according to that the company performs its marketing activities. During the event, sponsoring products increase the outcomes of the events. Implications of the marketing practice influence the marketing communications and event marketing activities of the company. The direct and indirect effect of corporate sponsor creates a positive impact on the business by developing strong marketing strategies. As per Shuman (2007), there are even some threats related to sponsorship activities that reduce the degree of marketing advantage. Ambush marketing forms a major aspect of theoretical model and is a disadvantage of sponsorship activities. Many firms enhance brand image and serves as an exclusive or special sponsor. This in turn results into a challenge for other firms and it even serves as a promotional technique. Firms that are involved in this kind of promoting activities do not pay any sponsorship fees. These enterprises do not pay any fees nor are they involved in breaking laws. Majority of the firms are focused towards paying high fees so as to ensure that they get privilege during event sponsorship. FIFA World Cup is a platform where many firms engage into sponsorship activities. For instance Budweiser has been paying lump sum amount in sponsorship activities during World Cup. There are firms holding strong brand presence in the industry but are not actively involved in sponsorship activities. On the contrary, brands such as Pepsi, Barclays, Sahara, etc., strengthen its brand presence through event sponsorship. Media coverage of wide array of sports events has resulted into non-sponsors exploring another company’s marketing campaign. In comparison to British markets, European markets possess great deal of television sponsorship clutter. Television sponsorship on the other hand poses a lot of challenge since intrusion levels or clutter can annoy customers (Shuman, 2007). According to Sandler (2009), though there are negative features associated with sponsorship activity but it can influence brand awareness and customer perception. In overall context it can be stated that firms which has a strong financial base would be able to manage such sponsorship activities. There is a vital component associated with effectiveness of sponsorship and it is associated with financial strength. Those firms providing high amount are able to gain privilege in sponsorship activities. Marketing advantage of sponsors is in context of reaching to wide base of customers. Event sponsorship offers a platform through which firms can connect with customers as well as transmit their brand message. Different strategies are framed by firms in order to facilitate brand association. There are even conditions when brand cannot be closely integrated with event. In such scenarios, customers are not able to retain information about brands (Sandler, 2009). A strong correlation cannot be always established between brand and event and this eventually leads to loss from firm’s perspective. Return on investment is a matter of concern for firms engaging into sponsorship activities. Conclusion As per the study sponsorship activities is a major marketing communication tool. Firms mainly focus on marketing strategies as it helps to gain competitive advantage. There are different tools that are included in integrated marketing communications and it depends on firm’s objectives to determine most appropriate tool. IMC is a framework which combines all possible communication tools so as to deliver common brand message. Brand position can only be enhanced when firms engage into external activities. Event sponsorships are a framework that facilitates firms to associate brand with events. In this context even proper strategies should be formulated so as to ensure that brand can closely relate with cultural, sports or arts events. Sponsorship activities also encompass ambush marketing. This aspect exploits marketing communication strategies adopted by other firms. It is often witnessed that some firms pay lump sum amount towards event sponsorship. On the contrary, many enterprises simply associate brand with event activities without indulging into any form of sponsorship activities. Olympic Games are an event that encompasses various sponsors since lot of funds is required to execute the event. In this event different firms participate so as to promote their brand and communicate directly with customers. Television advertising is a promotional measure that is adopted by firms. However the impact which is created by television advertising is less in comparison to sponsorship activities. Event sponsorship comprises of diverse background audience and each of them possesses different taste or preferences. It can be stated that communicating with target group efficiently is only possible through event sponsorship. In modern world cost effective promotional techniques are implemented and sponsorship provides a competent marketing advantage. References Abratt, R., 2007. Corporate objectives in sports sponsorship. International Journal of Advertising, 13(9), pp. 299-311. Alba, J. W., and Hutchinson, J. W., 2008. Dimensions of consumer expertise. Journal of Consumer Research, 24(3), pp. 411-454. Bruner, G. C., 2007. Music, mood, and marketing. Journal of Marketing, 64(8), pp. 94-104. Churchill, G., 2009. A paradigm for developing better measures of marketing constructs. Journal of Marketing Research, 25(4), pp. 98-116. Cornwell, B and Maignan, I., 2013. An international review of sponsorship research. Journal of Advertising. 27(1). Pp 1-21. Cornwell, B. T., 2007. Exploring managers perceptions of the impact of sponsorship on brand equity. Journal of Advertising, 45(6), pp. 50-69. Crimmins, J., 2010. Sponsorship: from management ego trip to marketing success. Journal of Advertising Research, 56(7), pp. 42-51. Gardner, M. P., 2006. Mood states and consumer behaviour: a critical review. Journal of Consumer Research, 25(2), pp. 17-32. Grimes, E., 2008. Focusing commercial sponsorship on the internal corporate audience. International Journal of Advertising, 17(2), pp. 75-102. Hastings, G. B., 2009. Sponsorship works differently from advertising. International Journal of Advertising, 29(3), pp. 47-57. Maignan, I., 2008. An international review of sponsorship research. Journal of Advertising, 36(4), pp. 13-24. Sandler, D., 2009. Olympic games versus ambush marketing. Journal of Advertising Research, 34(5), pp. 167-235. Shuman, P. J., 2007. Sponsorship: an important component of the promotions mix. Journal of Advertising, 23(2), pp. 186-192. Stipp, H., 2009. Modelling the impact of Olympic sponsorship on corporate image. Journal of Advertising Research, 38(2), pp. 233-313. Zaichowsky, J. L., 2005. Measuring the involvement construct. Journal of Consumer Research, 15 (3), pp. 341-352. Appendices Appendix1: Figure 1: Forces behind growth of sponsorship Appendix2: Figure 2: Effective Sponsorship Read More