Integrated Marketing Communications: Sponsorship - Literature review Example

Integrated Marketing Communications: SPONSORSHIP The study deals with integrated marketing communication tools. Sponsorship has been chosen as a strategic tool that helps to communicate brand message to target audience. There are various theoretical frameworks included in the study to determine the pros and cons of sponsorship. At the end, implication of such models on marketing practitioners has been outlined. Contents Contents 3 Introduction 4 Main Body 5 Significance and History for Today 5 Sponsor’s perspective of sponsorship 6 Brand building by sponsorship 7 7 keys of effective sponsorship 7 Demand and supply side of Sponsorship 8 Sponsorship Exploitation 9 Marketing Practitioner Implications 10 Conclusion 12 References 14 Appendices 16 Introduction Integrated marketing communications is brand messaging application across non-traditional and traditional marketing channels. This concept focuses on utilizing various promotional methods in order to reinforce each other. American Association of Advertising had initially framed the concept of integrated marketing communications. IMC was defined as an approach to succeed towards marketing campaign objectives with the help of well coordinated promotional measures. IMC helps to determine strategic roles of different disciplines of marketing communication such as advertising, sales promotion, public relations, etc. This technique facilitates consistency, clarity and increases overall impact when it is effectively combined with communications plan. There are some fundamental shifts that have initiated the concept of integrated marketing communications. The shift has resulted into interactive marketing, specialized media, high accountability in terms of marketing spend, pervasive connectedness, from traditional marketing, mass media, low accountability and limited connectivity respectively. Integration is a vital component in marketing activities due to technological advancements and interaction amongst business stakeholders. Importance of integrated marketing communications can be further analyzed in context of search marketing, convenience and accessibility, aggregation of services and information, mobile growth and social media. There is wide range of integrated marketing communication tools and amongst them ‘sponsorship’ shall be focused on in this particular study. Sponsorship can be defined as a tool for advertising in order to establish integration and deeper association amongst a publisher and an advertiser. This form of IMC tool is much beyond the concept of banner placements. In this study various aspects of sponsorship shall be studied and its impact will be analyzed on marketing practitioners. The major aim of sponsorship is to set a more unique mode of advertising. Sponsorships mainly encompasses fixed ad placements, content sections related to co-branding, advertorials or any such forms on which publisher and advertiser agrees on jointly. Main Body Significance and History for Today According to Abratt (2007), the roots of sponsorship are tied to Gaius Clinius Maecenas who was a friend and advisor of Cesar Augustus in Rome way back in 70 BC. He used to invite some of the renowned poets such as Virgil and Horacius to his own estate and pay for their living expenses. Today the term Maecenas is used quite often and this stands for altruistic support of various causes like community, arts or research matters. The support from Maecenas had resulted into effective sponsorship for sports. Evolution of sponsorship in modern day can be closely associated with one such event that is regarded as most-coveted and single sponsorship property – Olympic Games. This particular event is a clear example of event sponsorship. Apart from sports sponsorship, cultural sponsorship has also gained its significance since 1950s. Rowohlt was a German publisher who had enabled sponsors to place their respective advertisements in paperback book series of popular “RoRoRo”. Popular arts sponsorship is mainly inclined towards music and is a common approach and practiced across target group (Abratt, 2007). As per Alba and Hutchinson (2008), commercial sponsorships on the other hand are greatly related with elitist and sophisticated arts. A major share of sponsorship’s brand building value is dependent on mental link of customers established with sponsored entity and sponsor. In the present context firms who are not sponsors have started to link their brand with events sponsored by their rival firms. This kind of concept is known as parasitic or ambush marketing. In 1984 Olympics this approach was observed where Kodak a film manufacturer tried to ambush sponsorship of Fuji in the Summer Games. Though Fuji was considered to be Olympics’ global sponsor but its major rival Kodak in turn became official film supplier and sponsor of games broadcast at a much lower rate to U.S. track team (Alba and Hutchinson, 2008). As stated by Bruner (2007), ambush marketing as a result has become a serious threat to corporate sponsor’s investment. The growth of sponsorship has initiated development of a new phenomenon. Sponsors later were not satisfied with just billboards or paying any event bills which they had sponsored. Center-stage approach was eventually more preferred than to stand at the sidelines. This resulted into a new concept of sponsor-owned events. Adidas Streetball Challenge can be stated as an example of this concept by which events are shaped by the company to align them with communication needs. On the other hand, TV program sponsorships are implemented by firms since the evolution of television in United States (Bruner, 2007). Sponsorship to a great extent is associated with cause-related marketing whereby a firm involves into some form of charitable cause. This in turn enhances the level of sales margins and also facilitates improved brand image. Sponsor’s perspective of sponsorship Churchill (2009) in his studies stated it is essential for a firm to set clear objectives and reasons if they are committing for any kind of sponsorship activity. Sponsorship goals should always be associated with promotional objectives and a wider aspect of marketing objectives needs to be included. There is a difference between indirect and direct sponsorship objectives. Direct sponsorship objective indicates that there will be an instant impact on sales and consumer behaviour. On the contrary, indirect sponsorship is related to long term commitment that requires generating company image and awareness much before set indirect objectives are reached (Churchill, 2009). According to Maignan (2008), firstly, a sponsor is focused on creating exclusivity. An organization negotiating licensing or sponsoring agreement would result into being an exclusive sponsor for a particular event. Secondly, sponsorship is an effective medium through which company’s goodwill can be developed. With the support of entertainment and hospitality, a business environment can be developed that can enhance positive image of a company. Through sponsorships a firm can secure naming rights and entitlement. Relationship marketing is also one of the objectives of sponsorship. This concept gives ample space to companies in order to entertain both old and new clients along with themselves. From a sponsor’s perspective competition is also a major factor that initiates sponsorship activity since loss of opportunity for one might result into gain for another (Maignan, 2008). Brand building by sponsorship As per Cornwell (2007), sponsorship is a different tool for brand building in comparison to advertising. It mainly refers to commercial brand association with some form of property like cause, arts, entertainment, cultural attraction, sporting event and team. There are different ways by which sponsorships help to build brands as described in figure1 in Appendices. The result of brand building efforts by sponsorship often holds significance for employees, brand partners and even customers. Partners and employees are actively involved in the process since it is a matter of pride and develops greater synergy level amongst team members. Sponsorship is the necessary lever used to elevate value of technology or product (Cornwell, 2007). Product visibility in turn enhances the link between event and brand. 7 keys of effective sponsorship As stated by Crimmins (2010), there are certain guidelines also known as seven keys which help a firm to manage and locate effective sponsorships. Effective sponsorship keys have been elaborated in Appendices in figure2. As per figure2, a firm needs to possess clear communication objectives. A sponsorship strategy needs to be developed in a manner that it can address such objectives. Three main objectives exist such as association development, relationship development and awareness. It is important to have a proper understanding about value proposition, brand essence and core identity to frame clear communication objectives. The second aspect is an organization needs to be proactive in terms of making an appropriate sponsorship selection. A criteria needs to be designed by a firm for ideal sponsorships and then score has to be given to wide set of choices as per the criteria. Third phase deals with an exceptional fit that needs to be determined by a firm. Exceptional fit is a procedure of demonstrating a product in a way by which it can be linked with core essence of sponsorship. Own sponsorship is an effective mechanism frequently incorporated by firms for its cost effectiveness. The key to success either lies in exclusive right to sponsor or sponsoring own event. Fifth phase states that firm needs to identify publicity opportunities as it would help to achieve objectives of brand building more efficiently and effectively. Sponsorship payoffs have been highlighted in the model as the sixth phase. For instance certain sponsorship activity pays offs for the company itself by creating exposure and facilitating brand associations. The last phase of the model is actively managing sponsorship activity. Effectiveness of sponsorship is related to goals been set, programs been organized and outcomes measured appropriately (Crimmins, 2010). This concept is more of a co-branding experience where a composite logo is consistently developed and brand associations or awareness is also created. Co-brand is the most essential asset of sponsorship. Active management basically relates to extended organization’s involvement. Demand and supply side of Sponsorship According to Crowley (2007), the continuing and powerful growth of this approach can be attributed to wide array of factors both on supply or spouse and demand or sponsor. Reasons for this growth have been highlighted in the model given in figure3 of Appendices. The major contributing factors from sponsor’s perspective is high cost of advertising space, decrease in overall advertising efficiency, bans imposed on some firm’s advertising and wish towards interacting more effectively with customers. Advertising costs has increased drastically over the last few decades due to fragmented media usage and wide array of advertisers. Advertising efficiency has also reduced and this indicates that it is difficult to reach potential customers as well as target market fail in responding properly to advertisements. In such scenario, sponsorship emerged as a mass communication channel mainly for self destructive product manufacturers so as to link with desirable activities of society. This channel even helped to improve customer’s perception about a corporate brand. Non-traditional media is effectively utilized by companies in modern world to create a large base of loyal customers. Event sponsorship develops a branding platform on basis of which customers can actively participate. On the contrary supply side factors mainly encompass government policy on subsidies, increased need for funds and wide range of co-marketing opportunities. In the present scenario there is withdrawal of public sector from sports or cultural activities. This has facilitated more sponsorship activities in this field. Co-marketing opportunities provides the necessary components required for sponsorship agreement (Crowley, 2007). Publicity enables wider reach of target audience for an organization. On the other hand, spouse’s brand is efficiently strengthened through the concept of co-branding. Sponsorship Exploitation As per Gardner (2006), in modern world there are various dimensions of sponsorship exploitation as explained in figure4 of Appendices. As per the model in figure4, audiences of a sponsorship activity differ from one firm to another. Audiences being targeted by a firm can result into sponsorship exploitation such as event visitors who had watched the event partially, TV watchers and wider base of public who did not properly watch an event. Medium for communication is another dimension that results into sponsorship exploitation. There are different forms of medium such as advertising, public relations, merchandising, direct marketing, promotion and event site brand experience. Timing and frequency of sponsorship activity affects the entire mechanism to a great extent. This factor is associated with preparing target audience before an event, supporting memorization in context of brand-event link, and time allocation during broadcast or staging of an event (Gardner, 2006). Brand message needs to be consistent in sponsorship activities. It needs to be integrated with theme of brand communication. Sponsorship as per the model should be event specific and focusing more on the link between event and sponsor. According to Goldsmith Sponsorship creates an impact on the behaviour and mind on the individuals. It provides psychological concepts like attitude forming, learning and involvement of the customers. It focuses on the behaviour of the consumers. In the idea of Harper Collins sponsorship do not differentiate between prearranged and incidental events. Gebhardt defines sponsorship as a unique and organised event which can be involved with music, sports, religion or anything. By this author the sponsorship can be artificial or planned which are organised by some company, club, association etc. This event creates unique experience by its special contents like performance by famous artists. The events are generally combined of aesthetic disciples who include music, sports, and performing arts to name a few. Events generally convey the feeling of togetherness (Kim, Han and Schultz, 2004). The organization of the event brings the audience as one big family which acts as the differentiator with those who are not present at the event. It can be stated that events can act as the building block and they provide the stage where individuals can present their talents to the general audience. However events have now become the gathering places of the post industrial society with acceleration of secularism and individualism. Marketing Practitioner Implications According to Shuman (2007), marketing and advertising practitioners in some critical situations need to consider different dimensions of integrated marketing communication. In practical context event sponsorship has gained its significance in competitive industry. There are various issues being witnessed in this approach and they are taken into consideration by marketing practitioners. Ambush marketing is a major threat related to sponsorship activities as highlighted in the theoretical models. Many companies in order to develop a unique brand image pay more as a special or exclusive sponsor of an event. This in turn creates challenge for other brands and they determine ways of promotion in relation to the event. Firms trying to promote in such way often do not pay sponsorship fee and carries the entire mechanism without breaking any law. Many brands together opt for sponsorship activities but the one paying higher fees gets privilege. This concept is highly reflected in strategy formulation of wide range of firms (Shuman, 2007). For instance, Kodak had given lump sum amount to be official sponsor of Olympics. Budweiser demanded to be authorized beer for FIFA World Cup and paid millions of dollars in order to gain privilege of sponsorship marketing. Grimes (2008) in his studies stated that media coverage and sponsorship clutter has an implication on strategies framed by marketing practitioners. The high degree of media coverage of different events like sports events has enabled non-sponsors to ambush another firm’s marketing campaign (Laiderman, 2005). It has enhanced the level of access and created benefits on the overall sponsorship agreement. In southern European parts like Italy and Spain television sponsorship clutter arises has a major problem. Television in this market is heavily sponsored in comparison to British market. This approach is facing challenges since it comprises of high levels of intrusion and clutter which can annoy customers. However sponsorship still possesses ability to influence consumer perception and spread awareness. Audience has been portrayed in sponsorship exploitation dimension model as one of the components that can positively or negatively affect an event. Marketing practitioners take this factor into consideration and develop strategies accordingly so as to ensure brand association. These practitioners even believe that affinity groups and fans help to make sponsorship an effective marketing tool. Sponsorship framework is designed in such a manner that it can address interest of target audience. It is important for companies to promote brand message as well as encourage customers to actively participate in an event. Media coverage is a critical factor in the overall process and hence a company associates a brand with big events such as Olympic, World Cup or any other events related to culture or entertainment (Grimes, 2008). As per Hastings (2009), brand building is another approach that is focused on by companies indulging into sponsorship. Brands are developed by a firm by focusing on various aspects such as experience building, organization mobilization, demonstration of new technologies or products, creating brand exposures, developing brand associations and becoming an effective part of customer bond or event. These factors are present in sponsorship strategy of any firm since the main focus is on creating sustainable brand image. To be more precise a marketing practitioner usually sets sponsorship objective firstly on basis of which entire strategy is later formulated. It can be stated that all the activities need to be aligned with business motives or goals. The various theoretical frameworks on sponsorship state that demand and supply side factors have initiated the growth of sponsorship. Demand factors are strong enough to stimulate these activities whereas supply side factors such as wide range of customers provide opportunities for further growth. While sponsoring an event it is important that time and frequency of the activity is highlighted by an advertising practitioner. This in turn enables appropriate delivery of brand message and even enhances memorization. It can be stated that brand and event linkage can only be established when customers remember the branding activity (Hastings, 2009). Sponsorship though appears to be a favourable procedure for promotion and advertising but vital factors can affect it positively or negatively. Conclusion The concept of integrated marketing communications is to focus on different types of promotional methods to reinforce each other. The contribution of IMC lies in determination of strategic roles belonging to various disciples like promotion of sales and public relations. The concept of sponsorship can be defined as the methodology or tool with the aim to establish closer association with publisher and advertiser. The idea of sponsorship is to define new modes of advertising techniques. The paper has also discussed the roots of sponsorship and subsequent events. The paper has also dealt with the perspectives of sponsors with sponsorship. Researchers are of the opinion that a firm need to set crystal clear objectives before moving into any kind of sponsorship activities. However the difference between indirect and sponsorship marketing has also been discussed in the paper. Direct sponsorship has direct impact upon the volume of sales while indirect sponsorship deals with long term commitments (Eagle and Kitchen, 2000). Relationship marketing provides sufficient space to the organizations with the aim to entertain the newly acquired and old clients. The advent of competition with sponsorship cannot be ignored. Competition acts as the initiator of sponsorship activities. The activities of sponsorship in brand building of an organization formed the next part of the paper. The outcome of the efforts to brand building is a significant factor for customers as well as employees. Sponsorship can also contribute in elevating the value of advanced technology. 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. 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. Crowley, M. G., 2007. Prioritising the Sponsorship Audience. European Journal of Marketing, 35(8), pp. 472-477. Eagle, L., and Kitchen, P. J., 2000. IMC, Brand Communications, and Corporate Cultures Client / Advertising Agency Co-Ordination and Cohesion. European Journal of Marketing, 34 (5/6), 667–686. 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. Kim,I., Han,D., and Schultz, D.E., 2004. Understanding the Diffusion of Integrated Marketing Communication. Journal of Advertising Research, 44 (1), pp. 31-45. Laiderman, J., 2005. A Structured Approach to B2B Segmentation. Journal of Database Marketing & Customer Strategy Management, 13 (1), 64–75 Maignan, I., 2008. An International Review of Sponsorship Research. Journal of Advertising, 36(4), pp. 13-24. Shuman, P. J., 2007. Sponsorship: An Important Component of the Promotions Mix. Journal of Advertising, 23(2), pp. 186-192. Appendices Figure 1: Brand Building Figure 2: Seven Keys of Effective Sponsorship Figure 3: Forces behind sponsorship growth Figure 4: Sponsorship Exploitation Read More