FORMULA ONE SPONSORSHIPS AS A FACTOR IN ENHANCING BRAND IMAGE AND BRAND AWARENESS FOR GLOBAL COMPANIES ABSTRACT During the last decade, Formula One Grand Prix races have attracted extensive media expo-sure, turning the event into an ideal platform for companies operating in the global market. The major branding opportunities, offered by Formula One teams have magnetised billions of sponsorship dollars. This dissertation investigates the cause/effect relationship between Formula One sponsor- ships, enhanced brand image and increased brand awareness. Thereby exploring the possible connection between Formula One sponsorships and brand equity.
The dissertation offers an extensive literature review connecting sport sponsorship, in particular Formula One sponsorship, to important marketing topics, such as brand equity and buyer behaviour. The primary research process involved the conduction of a survey carried out on 37 Formula One sponsors. The research was of a phenomenological nature exploring the Formula One phenomenon and the sponsors’ perceptions and, therefore, used a deductive approach. Although the results of the analysis confirmed the hypothesis, the research discovered further inter-linkages, which reduced the hypothesis’ validity.
Recommendations to that would be suggested by researcher with regards to this project include:The sponsoring companies need to look for co-sponsorship opportunities where they will combine with other sponsors instead of bearing the bill alone. It is also recommended that concerned companies should continue producing high performance brands to be able to satisfy their markets. Companies should also look for ways to continue their brand’s exposure in their target markets through other channels which will support their sponsorship efforts.
Concerned companies also need continuously carry out marketing audits to measure the effectiveness of their sponsorship efforts. Audience analysis is another strong recommendation. Concerned companies need to carry a continuous audience analysis. Concerned companies should also be involved in the Formula One events organizing and ensuring that the events improve and meet the requirements of the targeted audience of the sponsors. Concerned companies should also ensure involvement in the sponsored team’s functionality.
During the process of this investigation, several interesting thoughts and ideas were developed regarding further in-depth research studies. These thoughts were mainly developed while searching for information on very specialised topics. For some reason sport sponsorship is still an underdeveloped field of study, although it has become a phenomenon of the 20th century, into which billion of dollars are invested every year. If companies are investing so much money into sport sponsorships, why has there never been a study on the return on investment of sponsorships. It would also be interesting to develop the results obtained within this study.
Dividing the results by the teams sponsored, or by the level of sponsorship. This should offer valuable insights for companies considering to sponsor a Formula One team. A further study on the direct effect of sport sponsorships on sales, would also prove to be interesting and valuable, however, to my knowledge impossible to perform. Sport sponsorship will continue to grow and become one of the most important marketing tools, therefore, offering many topics to explore. ACKNOWLEDGEMENTS I wish to acknowledge the assistance received from the following people who made it possible for this document to be put together.
My supervisor, Mr. I. Mavhunga who tirelessly guided me in conducting and compiling this dissertation, my mother, my sister, Daniel and friends who gave the encouragement and patiently put up with the difficulties and frustrations faced in getting the work done, and Miss Xolani who did the initial editing and typing on this document with expertise. I also want to express my gratitude to personnel at the Zimbabwe Open University Library and not forgetting those at my Faculty, Faculty of Law and Commerce, involved for their help and assistance. T A B L E O F C O N T E N T S COVER PAGE ……………. ……………………………………………………… I RELEASE FORM ………………………………………………………………. II APPROVAL FORM ……………………………………………………………. … III DEDICATION ……………………………………………………………………. IV ABSTRACT …………………………………………………………………………………………….. V ACKNOWLEDGEMENTS ……………………………………………………….. VI TABLE OF CONTENTS …………………………………………………………. VII LIST OF TABLES …………………………………………………………………VIII LIST OF FIGURES ……………………………………………………………….. IX LIST OF APPENDICES……………………………………………………………X CHAPTER I : INTRODUCTION 1. BACKGROUND TO THE STUDY …………………………………………. 1 2. STATEMENT OF THE PROBLEM ………………………………………….. 2 3. RESEARCH OBJECTIVES ……………………………………………………. 4. RESEARCH QUESTIONS/ SUB-PROBLEMS ………………………………. 3 5. SIGNIFICANCE OF THE STUDY ……………………………………………. 4 6. ASSUMPTION …………………………………………………………………4 7. DEFINITION OF TERMS …………………………………………………….. 4 8. DELIMITATION OF THE STUDY …………………………………………… 5 9. LIMITATIONS …………………………………………………………………6 10. CHAPTER SUMMARY …………………………………………………… 9 CHAPTER II : LITERATURE REVIEW 2. 0 INTRODUCTION ………………………………………………………………10 2. 1 BRAND CONCEPT ……………………………………………………………. 10 2. 1. 1 Brand Definition ………………………………………………………………10 2. 1. 2 Importance of Branding ………………………………………………………. 11 2. 1. 3 Brand Equity …………………………………………………………………. 3 2. 1. 3. 1 Brand Awareness …………………………………………………………… 14 2. 1. 3. 2 Brand Image …………………………………………………………………16 2. 2 SPONSORSHIP …………………………………………………………. ………. 17 2. 2. 1 Sponsorship Defined …………………………………………………. ……….. 17 2. 2. 2 Sub-Group: Sports Sponsorship ……………………………………….. ………. 18 2. 2. 3 Sport Sponsorship: Effect on Buyer Behaviour ……………………….. ………. 19 2. 2. 4 Sponsorship within the Marketing Communications Mix ……………….. …….. 21 2. 2. 5 Sponsorship as a Driver of Brand Equity ………………………………….. …… 23 2. 3 FORMULA ONE SPONSORSHIP ……………………………………………. …24 2. 3. 1 The Impact and Costs of Formula One …………………………………………24 2. . 2 The Formula One Brand Image …………………………………………………25 2. 3. 3 Formula One Sponsorship Risks ……………………………………………….. 26 2. 3. 4 Formula One Sponsorship Levels ………………………………………………27 2. 4 SPONSORSHIP EFFECTIVENESS EVALUATION …………………………… 28 2. 4. 1 Measurement Techniques ………………………………………………………. 28 2. 4. 1. 1 Brand Awareness Measurements in Detail ……………………………………29 2. 4. 1. 2 Brand Image Measurements in Detail ………………………………………… 29 2. 5 CHAPTER SUMMARY ………………………………………………………….. 29 CHAPTER III : RESEARCH METHODOLOGY 3. 0 INTRODUCTION …………………………………………………………………30 3. 1 RESEARCH DESIGN …………………………………………………………….. 30 3. 1. DESIGN TECHNIQUES ………………………………………………………… 30 3. 1. 2 PRIMARY DATA COLLECTION ………………………………………………33 3. 2 RESEARCH SUBJECTS ……………………………………………………………34 3. 2. 1 CHARACTERISTICS OF RESPONDENTS …………………………………….. 35 3. 2. 2 SAMPLING TECHNIQUES …………………………………………………… …37 3. 3 RESEARCH INSTRUMENTS …………………………………………………….. 40 3. 3. 1 SURVEY QUESTIONNAIRE ……………………………………………………40 3. 3. 1. 1 Questionnaire Specifics – Formula One-Team Sponsors …………………. ……41 3. 4 DATA COLLECTION METHODS …………………………………………….. …. 42 3. 4. 1Email Surveys …………………………………………………………………… 42 3. 4. 2 Personal Telephone Interviews ……………………………………………………43 3. DATA ANALYSIS, PRESENTATION AND DISCUSSION ……………………… 45 3. 6 CHAPTER SUMMARY ……………………………………………………………. 47 CHAPTER IV : DATA ANALYSIS, PRESENTATION AND DISCUSSION 4. 0 INTRODUCTION ……………………………………………………………. 48 4. 1 DEMOGRAPHICS OF RESPONDENTS ……………………………………. 48 4. 1. 1 Positions at work ……………………………………………………………. 48 4. 1. 2 Academic and professional Qualifications ………………………………….. 49 4. 1. 3 Age analysis of respondents …………………………………………………49 4. 2 Enhancement of Brand Image …………………………………….. 49 4. 3 Increase in Brand Awareness ………………………………………52 4. 4 BRAND POTENTIAL WITH FORMULA ONE ……………………………. 59 4. HOW TO MAKE SPONSORSHIP EFFECTIVE …………………………….. 61 4. 6 CHAPTER SUMMARY ………………………………………………………63 CHAPTER V : SUMMARY, CONCLUSION AND RECCOMENDATIONS 5. 0 INTRODUCTION ………………………………………………………………64 1. SUMMARY ……………………………………………………………………. 64 2. CONCLUSIONS ………………………………………………………………. 65 5. 2. 1 Brand Awareness …………………………………………………………….. 65 5. 2. 2 Brand Image …………………………………………………………………. 65 5. 2. 3 Industry Specific …………………………………………………………….. 65 5. 2. 4 Improving effectiveness of Formula One Sponsorship ………………………66 5. 3 RECOMMENDATIONS ………………………………………………………67 5. 4 CHAPTER SUMMARY ……………………………………………………….. 68 REFERENCES ……………………………………………………………………. 9 LIST OF TABLES Table 4. 1Positions of respondents …………………………………………….. 48 Table 4. 2Academic and professional Qualifications ………………………….. 49 Table 4. 3 Formula One Television Viewer Demographics (in %) ……………89 Table 4. 4Objectives associated with Formula One Sponsorships …………… 92 LIST OF APPENDICES APPENDIX 1 – EVALUATION OF SECONDARY SOURCES ……………………… 78 APPENDIX 2 – QUESTIONNAIRE …………………………………………………… 79 APPENDIX 3 – INTERVIEW PAPER …………………………………………………82 APPENDIX 4 – COSTS OF FORMULA ONE RACE CAR AD SPACES ……………84 APPENDIX 5 – SPONSORSHIP OBJECTIVES ………………………………………86 APPENDIX 6 – FORMULA ONE AUDIENCE ……………………………………….. 8 APPENDIX 7 – CONSUMER DECISION MAKING PROCESS ……………………. 90 APPENDIX 8 – SURVEY RESULTS OVERALL ……………………………………92 APPENDIX 9 – SURVEY RESULTS TOBACCO COMPANIES ……………………97 APPENDIX 10 – SURVEY RESULTS AUTOMOTIVE COMPANIES………………… 101 APPENDIX 11 – SURVEY RESULTS ELECTRONIC COMPANIES………………….. 105 APPENDIX 12 – SURVEY RESULTS CONSUMER GOODS COMPANIES………. 109 APPENDIX 13 – SURVEY RESULTS BEVERAGE COMPANIES ……………………. 113 APPENDIX 14 – SURVEY RESULTS SERVICE COMPANIES…………………………. 117 APPENDIX 15 – SURVEY RESULTS OIL COMPANIES …………………………………. 21 APPENDIX 16 – BRAND IMAGE AND REASONS FOR CHOOSING F1 ………. 125 APPENDIX 17 – SPONSORSHIP SUPPORTING ACTIVITIES ………………….. 128 LIST OF FIGURES Figure 1 – Importance of Branding ………………………………………….. …… 12 Figure 2 – Brand Equity ……………………………………………………….. …13 Figure 3 – The Consumers’ Mind …………………………………………………14 Figure 4 – Levels of Brand Awareness ……………………………………………15 Figure 5 – Hierarchy of Effects Model ……………………………………………20 Figure 5 – Sponsorship within the Marketing Mix ……………………………….. 21 Figure 6 – Leveraging Sponsorship through IMC ……………………………….. 22 Figure 7 – Formula One Television Audience Worldwide ……………………….. 4 Figure 8 – Multi-Dimensional Brand Image ……………………………………… 25 Figure 9 – Methodological Approach ……………………………………………. 31 Figure 10 – The Scope of the Research Process ………………………………….. 32 Figure 11 – The Survey Sampling Process ……………………………………….. 38 Figure 12 – Primary Research Response Rate ……………………………………. 46 Figure 13 – Sample Characteristics by Team ………………………………………35 Figure 14 – Sample Characteristics by Industry Sector ……………………………. 36 Figure 15- Sample Characteristics by position …………………………………….. 37 Figure 24 – Formula One Sponsorship Has Enhanced Brand Image …………………… 0 Figure 25 – Formula One Sponsorship Has Enhanced Brand Awareness………….. 53 Figure 26 – Brand Awareness Increase In a Country of No/Low Awareness ………54 Figure 28 – Brand Awareness Increase in a Country of High Awareness …………. 55 Figure 29 – Budget of Supporting Marketing Activities ……………………………56 Figure 30 – Formula One Sponsorship Supporting Marketing Activities ………….. 128 Figure 31 – Image Enhancement by Sector …………………………………………. 51 Figure 32 – Awareness increase by Sector in a Country of………………………….. 57 Figure 33 – 1998 Formula One Television Coverage by Team ……………………… 59 Figure – Formula One Race Car Advertising Costs ………………………………….. 5 Formula One Television Audience Worldwide Increase ……………………………. 58 Figure- Consumer Decision Making Process ……………………………………….. 90 Figure – Image Aspired To By Formula One Sponsors …………………………….. 125 Figure – Sponsors Chose to Sponsor F1, Because Other Sports Did Not……………….. 126 Figure – Sponsors Chose to Sponsor F1, Because Other Sports Did Not……………….. 127 CHAPTER 1 INTRODUCTION 1. BACKGROUND TO THE STUDY Formula One – a true phenomenon. The amount of international media coverage generated by each Formula One world championship Grand Prix is staggering.
The total television and print exposure over the 17-race season is approached only by the Olympics and Football’s World Cup Championships. Each year the races fascinate an audience of 53 billion people in more than 200 countries, who watch a total of 1. 46 million minutes of broadcasting and 61. 501 separate broadcasts in 195 countries. Then there are millions of radio listeners and readers, who follow every race, generating thousands of newspaper and news agency reports and feature articles in magazines. Adding all this up, Formula One becomes the most attractive advertising opportunity for global players.
Each of the eleven teams has an average of 25 sponsors, ranging from title sponsors spending $80 million to those with just an association spending of $250. 000. Several billion dollars are invested by sponsors each year hoping to tie their brand to the success of the team, hoping to enhance their image, hoping to become ‘big’. But, what is it that West, Lucky Strike and Marlboro and others truly get out of their $100million investments? Is there really a link between racing and brand equity? May their sponsorships really help them to become one of the top 500 hundred brands of the world?
Does sponsorship really affect buyer behaviour? This study will investigate the phenomenon of Formula One. Will investigate the true relationship between Formula One sponsorships, brand image, brand awareness, and subsequently brand equity. General features of international firms include, they usually have global economy presence, they aim for a varied clientele but within the upper middle class and onwards, main clientele being at times corporate clients, These firms aim for global visibility and international client without global boundaries.
They boast superiority and are visible players on the markets they are in. This study aims at determining the effect of Formula One sponsorship on brand image and brand awareness of sponsors. The effect was determined from sponsors on how their sales went up or brand recognition and awareness and image alteration in their target market’s mindset. If their quality of clientele has since gone up, this means that the sponsorship has paid off more than traditional advertising channels.
The research therefore is to find out these perceptions and to determine if sponsors are satisfied by the reach of the sponsorship and its affect on their brands. The researcher also suggested corrective measures and recommendations. What is the effect of Formula One sponsorship on the brand image and brand awareness of its sponsors. This is the question in most international marketer’s minds when they sign up for the various sponsorship packages. Their aim would be to add value to the brand. Some do not sponsor because of the hefty fees of sponsorship as compared to traditional advertising.
Therefore others would choose less expensive sponsorship packages. The question of the true relationship between Formula One sponsorships, brand image, brand awareness and subsequently brand equity has to be answered after carrying out this study. 2. STATEMENT OF THE PROBLEM There is a lack of research on the subject of sport sponsorship, and in particular Formula One sponsorships. Academic textbooks and magazines as well as specialized research reports provide only very limited insights into these topics and often even negate it.
Various researchers suggest a positive relationship between sport sponsorships and the sponsoring brand’s image and product purchase intention, but the supporting evidence presented does not allow adapting these studies to Formula One sponsorships. For prospective and current sponsors this study will provide evidence, based on surveying Formula One sponsors, that Formula One sponsorships effectively enhance brand image and increase brand awareness, but positive cost/effect relationships are rare, and could not be established to full certainty. 3. RESEARCH OBJECTIVES
With globalisation more and more companies are being faced with bigger and more renowned competition than ever before and more brand flooding their tradition al strongholds giving customers more choice. It is suddenly becoming harder to reach their customers and more and more of them are now focusing on Public Relations avenues than the traditional paying advertising. Instead of just seeing their brand in a 30 (thirty) second advert companies are now searching for ways to get longer and more targeted channels of exposure like that offered by sports sponsorship such as Formula One sponsorship..
Formula One sponsorship has not only given them an avenue where their target market is for long hours on end watching their favourite sport, reading about it. Even more so if their sponsored team wins, their brand automatically becomes associated with the winner. Brands associated with winners automatically stay in the customer’s mind for a long time and more and more people want to be associated with winners. The main objective of this study is to explore and evaluate the Formula One sponsorships’ effect on the sponsoring brands’ image and awareness levels, and its effect on brand equity.
Secondary objectives of the investigation include: • To gain an insight into why companies sponsor Formula One teams; • To understand what image Formula One sponsors want to adopt; • To explore by how much Formula One sponsorships have increased the sponsoring brands awareness levels. 4. RESEARCH QUESTIONS/ SUB-PROBLEMS Sub problems are the minor problems that emanate from the major problems. The sub-problems are: 1. What is the current state of Formula One sponsorships? . What are the functions of sponsorship? 3. What are the effects of sponsorship’s failure to adhere to expectations. 4. What challenges are sponsors facing? 5. What image do Formula One sponsors want to adopt? 6. Why do companies sponsor Formula One teams? 5. SIGNIFICANCE OF THE STUDY This study is being carried out because of the lack of research on the subject of sports sponsorship and in particular international sports that draw a lot of attention like Formula One sponsorship.
It will add new knowledge to other research in the marketing field. It will assist Public Relations practitioners in planning and formulating effective Public Relations strategies in the global economy. It may improve the knowledge of sponsorships that create impact thus marketers will also learn from this study. This improves the marketing strategies thereby Zimbabwe would like to be able to complete with other countries if they become aware of such affective marketing stratagem. 6. ASSUMPTION
The researcher assumed all research respondents were active participants or have considered participating in Formula One sponsorships before. It is assumed that respondents provide accurate information. It is also assumed that the sample used represents Formula One sponsors of all varieties. 7. DEFINITION OF TERMS Brand Definition a brand is referred to Broederick’s et al (2001) definition below: “The Totality of What The Consumer Takes Into Consideration About a Product Before Making a Purchase Decision. ” Brand Equity
According to Aaker (1996), brand equity is “a set of brand assets an liabilities linked to a brand, its name and symbol, that add to or subtract form the value provided by a product to a firm, or to a firm’s customers” Brand Awareness Brand awareness, as an integral component of brand equity, is an essential part for the communications process. Rossiter and Percy (1987) go as far as stating that brand attitude cannot be formed, and the intention to buy cannot occur unless brand awareness has occurred. Brand Image
The second dimension of the brand concept is the consumers’ perception of brand image. The brand image is based on the consumers’ experiences and perceptions of the functional, emotional, and symbolic benefits the brand provides (APQC, 2002), it is essentially the added value beyond the products’ physical constituents. Sponsorship Mediatreks (2002) adapted from Otker (1988; as cited in Mediatreks,2002) – “Commercial sponsorship is (1) buying and (2) exploiting an association with an event, team, a group, etc, for specific marketing communication purposes” Sports sponsorship
The Institute of Sports Sponsorship (2002) offers a definition that describes sports sponsorship as “a partnership between business and sporting organisations and individuals that seeks to achieve benefits for both parties [… ] Sponsorship, therefore, is the deliberate financial support given to an event in order to achieve specific commercial objectives”. Global Brands These are brands with a worldwide presence in multiple global markets. 8. DELIMITATION OF THE STUDY Delimitation refers to the boundary of the study. For the purpose of this study, some delimitation was necessary in order to effectively research the hypothesis.
The following should be noted: • This study covers Formula One sponsorships as a construct within the broad field of sport marketing and the specialized field of motor sport sponsorship; • This study refers to the effectiveness of Formula One sponsorships focusing solely on enhanced brand image and increased awareness; • This study uses the terms “Formula One” and “F1” interchangeably; • Other forms than Formula One sponsorship will not be covered; • A survey conducted on Formula One sponsors will be used to determine how brand image and awareness levels were affected by the company’s Formula One sponsorship. . LIMITATIONS Limitations are the conditions beyond the researcher’s control. The global economic situation including the credit crunch and oil prices influenced the researcher’s observations as companies went for lesser sponsorships at times and not what they would have usually took or what they really wanted. The study was undertaken when the researcher was going to work, thus reducing the amount of time that could be used to study the market. Time zone differences between the researcher and some of the intended subjects.
Some respondents failed to cooperate by leaving the questionnaires incomplete. Some respondents failed to answer some questions due to company privacy policy. This affected the research as some people failed to adequately respond to the researcher’s data collecting instruments such as questionnaires. Despite such problems it is the author’s hope that this study reveal the nature of sponsorships. This is intended to assist in crafting measures to increase brand image brand awareness and subsequently brand equity.
This study, like most academic studies is a cross-sectional investigation (Saunders, 2000), meaning that the research findings and conclusions will very much reflect a momentary trend. Relating this idea to this investigation, implies that the data very much reflect the nature of Formula One sponsorships during the current and possibly last season. This is due to the fact that the teams introduce new sponsors to the sport every season. In turn, this investigation remains a reliable source as long as it is evaluated within the context of these two racing seasons.
This study developed that Formula One sponsorships increase brand awareness dramatically and give companies aspiring to enhance their images, in at least one of the ways mentioned in the results and analysis, a method to do so. Nevertheless, the relationship established must not exclusively be a causal relationship. Other factors, such as additional promotional tools activated to support the sponsorship as explained in section 2. 2. 4, will affect this relationship. Nowadays all Formula One team sponsors use supporting marketing tools, therefore, it is not possible to isolate the effect created solely by the sponsorship.
This, however, does not threaten the study’s validity as the key driver for the established relationship remains the sponsorship activity. Although the general relationship between the variables should hold true for many Formula One team sponsors, the study was more concerned with what was going on in this study’s particular research setting, which refers to those sponsors who were subject to this investigation (see Appendix 1 for detailed listing). The investigation, therefore, has limited generalisibility and any attempts to generalise the findings should be handled with care.
Although, many measures were taken to reduce research bias to a minimum level, there still remain the following limitations to this study: • The quality of this study corresponds directly to the respondents answering the surveys. Although it was attempted to assure that all surveys were answered by people who were directly involved with Formula One sponsorship management within the F1 sponsoring companies, there still remains the possibility that surveys were answered by persons with lesser expertise in this area.
Nevertheless, the email addresses of the respondents matched the email address the survey was sent to in 92% of the cases, this increases the confidentiality that the great majority of surveys are valid and thereby do not threaten the relationship established in this study. • The survey may have introduced possible bias in the research results. The first question for example, asking about the company’s F1 sponsorship objectives, supplied the respondents with 12 possible sponsorship objectives grouped into two categories.
The question asked the respondents to mark the five most important sponsorship objectives associated with their Formula One involvement. This may have resulted in companies having to mark more objectives than actually associated with their Formula One sponsorship. In order to minimise the degree of bias introduced by the survey, it only consisted of structured questions, which intended to ensure content validity (Dane, 1999), pre-tested on two marketing professionals, Chris Dampare from EBS London and Julia Baumhoff from the Jaguar-Racing Marketing Department. The conducted research required the participation of Formula One team sponsors, within these firms either one of the following five were contacted, subject to the availability of contact information: Marketing Manager, Sponsorship Manager, F1 Sponsorship Manager, Press Officer/Media & Communication or CEO. As the information required of them is considered to be of confidential nature, it will not always be guaranteed that the answers provided match the true picture. • Determining the enhancement of brand image through the Formula One sponsorship, was difficult to perform, and relied simply on the perception of the company.
Whether the surveyed companies actually employed any measurement tools testing the brand perceptions of consumers or not, was not determined. To improve the validity of this part of the study, sponsors should have been asked if and how they measured their brands’ image. 10. CHAPTER SUMMARY This chapter briefly outlines the scope of the problem under study. It also focuses on the framework on which the research will be conducted. It provides the purpose and significance of the study. Delimitation of the study has also been spelt out.
In the next chapter, the researcher examines other researcher’s work sponsorships and their effects on brands. The explanatory investigation had a deductive approach (Saunders et al. , 2000) to exploring the objectives mentioned earlier, therefore, the first chapters involve the establishment of the theoretical background and the development of the hypothesis, while later chapters will clearly define the research strategy and test the hypothesis. The second chapter will provide the theoretical and academic basis for this study by reviewing current literature on sport sponsorship and consequently Formula One sponsorship.
Furthermore, it establishes the concepts of marketing related topics, such as brand awareness and brand image. Sponsorship objectives and important measurement techniques are reviewed for the purpose of developing self-administered questionnaires and personal interview papers. Furthermore, this chapter takes an in-depth look at the difficulty of assessing the effectiveness of Formula One sponsorships. This is of vital importance as it defines the context in which this investigation was undertaken. CHAPTER II LITERATURE REVIEW 2. 0 INTRODUCTION
This section addresses the marketing and sponsorship concepts as well as their relation to the consumer decision-making process. Furthermore, it establishes the background to Formula One sponsorship practices. It begins with the importance marketer’s associate with brand building and its components. It leads on to define sponsorship as a tool to achieve brand equity and success, while introducing the reader to the subtopic of sports sponsorship. The last part of the section deals with Formula One as a sponsorship tactic. 2. 1 BRAND CONCEPT
A number of concepts, which are central to the arguments, presented within this study (i. e. brand, brand equity, brand awareness, brand image, sponsorship) are addressed across many different literatures (e. g. marketing, communication, strategic management). Given that multiple perspectives have been adopted and the literature is substantial, no attempt was made to present a comprehensive review of theoretical perspectives. This dissertation, therefore, only discusses how the concepts are defined and otherwise addressed, focusing on the terms of reference adopted for each concept. . 1. 1 Brand Definition In a world of information overload and maximum choice, manufacturers are required to offer more than just a product in order to differentiate themselves. In turn, the situation/market demands manufacturers to offer ‘brands’, an epitome of both the functional and the emotional relationship with the customer (Lord, B. , 2001). A brand incorporates much more than defined by most researchers (Kotler, 2000; Armstrong et al. , 1999; Chernatony, 1998; Aaker, 1996) and has to be approached from the consumers’ point of view.
For the purpose of this study, a brand is referred to Broederick’s et al (2001) definition below: “The Totality of What The Consumer Takes Into Consideration About a Product Before Making a Purchase Decision. ” Kotler (2000) suggests that brands are the single most important asset any company has in today’s selling environment. The concept of branding forms the fundamental base to understanding what companies, who are involved in such costly activities as Formula One sponsorship, are aspiring to achieve. 2. 1. 2 Importance of Branding
Branding is about the values generated in the minds of people as a consequence of the total sum of marketing communication efforts. It is the systematic process of understanding and managing the perceptions and experiences customers have with a brand in a manner that creates added value and preference over competitive alternatives (Broderick & Pickton, 2001). Managing consumer perceptions through branding is an integral part of every company who owns successful brands, having realised the value that is developed both for the company and the customers, as can be seen in Figure 1 below.
Figure 1 – Importance of Branding IMPROVED VALUE TO THE COMPANYTO THE CUSTOMER Marketing Effectiveness Surrogate for Detailed Perceptions Brand Loyalty Brand Equity ProvidesSimplified Purchase PremiumSignificantDecision Process Pricing/Margins/Profits Benefits to the Company and Its Confidence in the CustomersPurchase decision Brand Extensions Competitive AdvantageSatisfaction with Use Source: Adapted from Lieberman Research Worldwide (2002)
The challenge of branding is to develop a deep set of meanings or associations for the brand (Armstrong et al. , 1999). There is much agreement about the importance of building strong brands and the benefits derived from strong brands (Aaker, 1996; Kotler, 2000). Customers care about style, status and the reassurance gained in purchasing a brand, compared with the functional benefit. Ambler (1996; as cited in Resonates, 2002) agrees with this idea, defining brand as “a bundle of functional, economic and psychological benefits for the end user”.
The option of investing into Formula One sponsorships as a tactic of building brands, is available to very few companies, due to the costs associated with this marketing tool, thereby increasing the uniqueness of the attributes added to the product and the brand as it is perceived by consumers. 2. 1. 3 Brand Equity As a new competitive environment is emerging, which is primarily characterised by decreasing product divergence, increasing media costs and the integration of markets, it is essential to engage in brand equity or brand building activities at present and in the imminent future (Tripodi, 2001).
There is no universally accepted definition of brand equity. According to Aaker (1996), brand equity is “a set of brand assets an liabilities linked to a brand, its name and symbol, that add to or subtract form the value provided by a product to a firm, or to a firm’s customers”. Whereas Leuthesser, et al. (1995) write that “brand equity represents the value (to a consumer) of a product, above that which should result form an otherwise identical product without the brand’s name. In other words, brand equity represents the degree to which a brands name alone contributes value to the offering (again, form the consumers’ perspective)”.
Both definitions limit brand equity to the value of a product, derived solely from its name, to either customers or the firm. Brand equity, however, is multi-dimensional and should relate to three distinct elements, as shown in Figure 2 below. Figure 2 – Brand Equity COMPONENTSBRAND EQUITY A customer constituency of some determined size and quality The Marketing Effect That Is Uniquely Who have leverageable association with,Attributable to the Brand and attitudes toward, the brand Which result in a greater willingness to consider, and pay a premium price for, roducts and services with the brand name Source:Adapted from Lieberman Research Worldwide (2002) Customer-based brand equity occurs, when the customer is familiar with the brand and holds favorable, strong and unique associations about the brand (Roy, P. , 1998). Key determinants of the customer-based brand equity concept are brand image, brand awareness, perceived quality and brand loyalty (Roy, P. , 1998). Based on previous research into sponsorship objectives (Heerden, 2001) brand awareness and brand associations (image) are the most relevant dimensions of sport sponsorship.
The desired outcome from high brand equity is brand loyalty, i. e. a high degree of repeat business (Resonates, 2002). A highly loyal customer base is an extremely valuable asset, providing sales and profits, reducing the costs of customer acquisition and marketing, as customer retention is usually cheaper. 2. 1. 3. 1 Brand Awareness Brand awareness, as an integral component of brand equity, is an essential part for the communications process. Rossiter and Percy (1987) go as far as stating that brand attitude cannot be formed, and the intention to buy cannot occur unless brand awareness has occurred.
Brand awareness has a crucial role in the consumer decision making process and in determining the consideration set, which is the small set of brands a consumer gives serious attention to when making a purchase (MacDonald & Sharp, 1996), as demonstrated in Figure 3 below. Figure 3 – The Consumers’ Mind UNAWARE-AWARENESSEVOLVED INERT INEPT NESSSETSETSETSET SET Brand the Brands theBrands theBrands theBrands the Consumer Consumer IsConsumer isConsumerConsumeriswould never not aware ofaware ofprefersindifferent tobuy CONSIDERATION SET Source:Adapted from Dampare, C. 2002) A brand that the consumer is not aware of is not considered and cannot be chosen. Consumers are aware of a large number of brands when making purchase decisions, and brands with higher awareness levels are more likely to be part of the final purchase decision (MacDonald & Sharp, 1996). Wilson (1981 as cited in MacDonald & Sharp, 1996) confirmed in a consumer choice study, that over 70% of consumers selected a known brand of peanut butter from among a choice of three, even though blind taste tests had determined a different brand to have better quality.
This suggests that the higher the position of the brand in the consumer’s mind, the higher the purchase intention, as shown in Figure 4 below. Figure 4 – Levels of Brand Awareness UnawarenessRecognition Recall Top of MindDOMINANCE First you make them aware……………………………………… then you make them care. Source:Adapted from David Shore (2001) Brand awareness is also said to influence the brand’s perceived quality, as found in a consumer choice study by Hoyer and Brown (1990, as cited in MacDonald & Sharp, 1996).
MacDonald et al. (1996) argue, that brand awareness “can determine which brand is chosen from the consideration set”. Further, it was acknowledged that brand awareness is one of the four major brand equity builders, and can lead to sustainable competitive advantages (Aaker, 1996). Again, this only reconfirms what the study on the aims of European sponsors had determined, which is that 85% aspired to increasing their brand awareness (Sport+Markt AG, 2000).
Understanding the importance of brand awareness in its influence over the consumers’ mind in terms of the purchase decision making process, allows to begin comprehending why Formula One sponsorships may be worth the investment. 2. 1. 3. 2 Brand Image The second dimension of the brand concept is the consumers’ perception of brand image. The brand image is based on the consumers’ experiences and perceptions of the functional, emotional, and symbolic benefits the brand provides (APQC, 2002), it is essentially the added value beyond the products’ physical constituents.
Brand image should not be confused with brand identity, which is composed of associations that the marketer attempts to convey through such means as brand name, logo, product attributes, and promotional activities. Brands need to create an image that is positive, relevant and memorable, it needs to establish an emotional association with the product. Creating brand image is achieved mainly through either the direct experience of the consumer with the product, or indirect associations (Wilson,1997).
Studies have confirmed that consumers rely heavily on brand image to assist in their purchase decision, 50% of shoppers were found to purchase with a brand image in mind (Wilson,1997). Furthermore, Pope & Voges (2000) confirmed that a significant relationship exists between a brand’s image and an intention to purchase that brand. Moreover, they established a positive relationship between awareness of sponsorship and corporate image. That is why it will not be surprising to read that within a study on the aims of European sponsors, 77% aspired to enhancing their brand image (Sport+Markt AG, 2000). 2. 2 SPONSORSHIP . 2. 1 Sponsorship Defined Several definitions of sponsorship are in use (Ukman, 2001c; Mintel, 2000;). For example the definition offered by Mediatreks (2002) adapted from Otker (1988; as cited in Mediatreks,2002) – “Commercial sponsorship is (1) buying and (2) exploiting an association with an event, team, a group, etc, for specific marketing communication purposes” – clearly relates sponsorship to fulfil a set marketing objectives. However, Cornwell (1995) suggests that this definition leaves unclear whether the barter of products and services is also included as a form of “buying” the sponsorship (e. . Bridgestone sponsors the West McLaren team as an Official Supplier, in return for the supply of tires, Bridgestone receives sponsorship rights). Another definition by the Mintel Group (2000) – “Sponsorship is a business relationship between a provider of funds, resources or services and an individual, event or organisation, which offers in return rights and association that may be used for commercial advantage” – clearly defines sponsorship but remains too broad for the purpose of this study, considering that commercial advantage could be virtually anything.
These two contributions and others seem to grasp the essence of sponsorship but dismiss important issues such as the different kinds of sponsorship agreements, the underlying motive for sponsoring an individual, event or organisation may have and, moreover, are often too broad and simplistic. In this paper, the definition of sponsorship that will be used is as follows (Pope, 1998): “Sponsorship is the provision of resources (e. g. oney, people, equipment) by an organisation (the sponsor) directly to an individual, authority or body (the sponsee), to enable the latter to pursue some activity in return for benefits contemplated in terms of the sponsor’s promotion strategy, and which can be expressed in terms of corporate, marketing, or media objectives. ” This definition does not limit the provision of sponsorship to money, but instead addresses the provision of resources of any kind.
Furthermore, it relates sponsorship to the achievement of objectives or motives set by the sponsor, which is key to not only this dissertation, but to Formula One sponsorships specifically. Sponsoring Formula One teams without a clear objective and excellent understanding of the motive would be an extreme form of mismanagement and unacceptable, considering that in many cases up to ? 40 million are paid in sponsorship fees. 2. 2. 2 Sub-Group: Sports Sponsorship Sports sponsorship is one of the fastest growing areas of product promotion and development (i. . brand building). The incredible rise of sports-oriented television, cable and radio programmes during the last decade, the establishment of multiple sports networks, the increasing amount of money paid by television networks for rights to broadcast sporting events, is a “testament to the insatiable appetite for sports” (Key Note, 2000). Therefore, it is no surprise that a study conducted by Sport + Markt AG (2000) determined that more than two thirds of all sponsors within Europe had engaged in some form of sport sponsoring during the year 2000.
Despite its obvious importance to companies and consumers, there is a general lack of discussion on this topic within basic marketing texts. Kotler, 2000; Broderick & Pickton, 2001; Armstrong et al, 1999; to name but a few, do not acknowledge that sport sponsorship is the marketing phenomenon of the twentieth Century and dismiss this form of sponsorship completely. Therefore, studies of sport marketing and marketing communication provide the basis of the definition.
The Institute of Sports Sponsorship (2002) offers a definition that describes sports sponsorship as “a partnership between business and sporting organisations and individuals that seeks to achieve benefits for both parties [… ] Sponsorship, therefore, is the deliberate financial support given to an event in order to achieve specific commercial objectives”. This definition in its essence is correct, but again neglects ‘official supplier’ sponsorships. Heerden (2001) is more specific about including possible sponsorship alternatives and defines sport sponsorship as The provision of resources directly to a sponsee, to enable the sponsee to pursue some activity in return for rights contemplated in terms of sponsor’s marketing communication strategy, and which can be expressed in terms of [… ] objectives and measured in terms of [… ] return on investment in monetary and non-monetary terms. ” This definition allows the inclusion of all types of Formula One sponsorships and will be applied for the purpose of this study. 2. 2. 3 Sport Sponsorship: Effect on Buyer Behaviour
Tripodi (2001) explains the effect sport sponsorships have on the behaviour of buyers based on the Hierarchy of Effects Model, illustrated in Figure 5. The model is designed to move the consumer through a number of stages towards the act of purchase. From this model it can be seen that creating or improving brand awareness and brand image via sponsorships “are communication effects which precede and influence the decision to purchase or choose a particular brand (Meenaghan, 1983; as cited in Tripodi, 2001).
Figure 5 – Hierarchy of Effects Model MOVEMENTBEHAVIOURAL RELATED TOWARDS PURCHASEDIMENSIONRESEARCH PurchaseConative – the realm ofSplit-run tests Motives intentions to buy ConvictionProjective Techniques Preference Affective – the realm ofBrand Preference EmotionsImage Measures LikingProjective Techniques Knowledge Cognitive – the realm ofAwareness thoughts Awareness Source:Adapted from Tripodi (2001) The behaviour of buyers is affected by many different factors.
One of these factors is the belief that a company sponsors a sport. A study by Pope & Voges (2000), conducted with 1. 300 individuals, explored the relationship between three variables (a) brand /corporate image (b) prior product use and (c) the belief that a company sponsors a sport in relation to the consumers’ intention to purchase a product. It was established, that higher purchase intention was found on the part of those who believed that a company’s brand is involved in sport sponsorship.
Previous research (Alba & Hutchinson, 1987; Bucks, 1985; Laroche et al. ,1996; as cited in Pope, 2000) indicated that there was a positive relationship between a consumer’s intention to purchase a product and a positive attitude towards a brand and brand familiarity (i. e. brand exposure). They discovered evidence indicating that a consumer’s intentions to purchase is predicated on two influences: (a) a positive attitude towards the brand itself and (b) brand familiarity, which is based on prior experience and brand exposure.
Turco (1994) confirms the findings of Pope & Voges, stating that “increasing product awareness and enhancing product image are two crucial components of the consumer decision making model”. Confirming the positive relationship between sport sponsorships and purchase intention of the sponsor’s brand, thereby it can be concluded that the effect sport sponsorships have on the purchase decision-making process are tremendous (see Appendix 8). 2. 2. 4 Sponsorship within the Marketing Communications Mix
For sponsorship to achieve optimal communication effectiveness it may neither be seen as a replacement for advertising activities nor should it be employed by itself. Sponsorship needs to be implemented and seen as part of the integrated marketing communication (IMC) mix (Heerden, 2001), as can be observed from Figure 5. Figure 5 – Sponsorship within the Marketing Mix Different Target Audiences Sport Marketing EnvironmentMarketing Mix Marketing Communication Mix Elements Advertising, Sales Promotion, Personal Selling, Corporate Public Relations, Marketing Public Relations, Direct Marketing, Sponsorship
Source: Adapted from Mullin et al (2000) Literature, however, is undecided whether sponsorship is a variable of its own or is a subcategory of one of the IMC elements. Kotler (2000) defines sponsorship as a public relations tool, while Dibb et al (1994, as cited in Heerden, 2001) mention sponsorship while discussing sales promotion. In order to fully exploit the effect sponsorships generate, it needs to be leveraged with additional communication activities, and be integrated into the marketing mix, only then will synergy effects achieve optimal effectiveness (Tripodi, 2001), as may be seen in Figure 6 on the next page.
Sponsoring an event is an excellent tool if wanting to increase brand awareness and enhance brand image, but it will only create customer-based brand equity if the sponsorship is communicated to the public (Tripodi, 2001). Figure 6 – Leveraging Sponsorship through IMC Advertising Public Relations e. g. SPONSORSHIPOther promotionalDirect Marketing ToolsInternet Marketing, Merchandising Point of Sale Sales Promotion Personal Selling Source: Adapted from Tripodi (2001) Isolating and evaluating the effect of a particular communication tool is extremely difficult, when other IMC tools are used simultaneously.
However, a study performed by Cornwell et al (1997) has empirically proven that sponsorship is more effective when supported by integrated marketing communication elements. This supports that the main value derived from sponsorship resides in leveraging and being leveraged through elements of the marketing and integrated marketing communication mix (Mintel, 2000). It is estimated that for every dollar spent on the sponsorship another five dollars is spent on sponsorship-linked marketing (Cornwell, B. , 1995). 2. 2. 5 Sponsorship as a Driver of Brand Equity
Tripodi (2001) refers to sponsorship as “an effective brand equity-building strategy”, which makes sense considering that among the key determinants of brand equity is brand awareness and brand image. These being primary sport sponsorship objectives (see Appendix 6) make this activity a brand equity-building strategy, which as acknowledged by Tripodi (2001), is used to position the brand as to increase the value of the brand’s image. This, in turn, enhances its perceived superiority over competitors, achieved through the creation of a strategic partnership between the sponsoring brand and the sports property.
Keller (1993, as cited in Tripodi, 2001) conceptualised this idea by adding that, sponsorships accompanied by an integrated marketing programme can truly generate customer-based brand equity by creating, what he calls a ‘secondary association’ with a sports property. This secondary association will inter-link the sponsoring brand with the attributes and attitudes associated with the sports property in the memories of consumers. Tripodi (2001) confirms, that this implies, that “companies can use sponsorships to familiarise consumers with a particular brand (i. e. ncreased brand awareness) and develop favourable, strong and unique brand associations in consumers’ memories (i. e. enhanced brand image)”. Customer-based brand equity is, thus, generated through the differential consumer response for the brand, resulting in greater purchase propensity of the brand among consumers. Subsequently, sports sponsorship can generate customer-based brand equity, through brand awareness and brand image, when accompanied by an integrated marketing programme, thereby maximising the brands value and creating a sustainable competitive advantage. . 3 FORMULA ONE SPONSORSHIP 2. 3. 1 The Impact and Costs of Formula One Formula One racing is the fastest, most promising and inspiring sport in the world. Its impact on the media is enormous, exponentially increasing sponsors’ exposure. One recent example is, when the Hockenheim Grand Prix was broadcasted live in the Czech Republic, one sponsor’s exposure increased by massive 1656% (Sports Marketing Surveys, 2002). The fees charged to join the prestigious Formula One sponsor club, which profits from the Grand Prix’s worldwide impact, start at ? 0. 000 for an associate sponsorship up to ? 40 million for a title sponsorship (Formula One, 2002). Formula One’s impact on its environment is staggering. The amount of international media coverage generated by each Formula One world championship is approached only by the Olympics and football’s World Cup, and those events only take place once a year (Formula One, 2002). It is estimated that the majority oft the world’s population is at least aware of Formula One, while 500 million people watch each race on television (Formula One, 2002).
On a Grand Prix race weekend, 200 television networks in 200 countries broadcast the spectacle. Formula One Publishing (2002) reported, that last year the total cumulative television audience amounted to “53. 27 billion viewers who watched a total of 1. 46 million minutes of broadcasting and 61,501 separate broadcasts in 195 countries”, as shown in Figure 7. Figure 7 – Formula One Television Audience Worldwide 1990 18 billion 199126 billion 1992 29 billion 1993 33 billion 1994 45 billion 995 45 billion 1996 40 billion 1997 50 billion 2001 53 billion Source:Adapted from Sport Sponsorship and Brand Development (2001) In addition, there are millions of radio listeners and every race generates thousands of newspaper and news-agency reports and feature articles and magazines, last year these totaled “1,257 newspaper and magazine publications and news agencies in 64 countries covered the sport race by race” (Formula One, 2002). Every year numerous Formula One books are ublished in many languages, and in addition to this, endless numbers of official and unofficial web sites are published on the Internet. The statistics of the impact, Formula One has on its environment and the fascination, or better to say the addiction, it causes amongst consumers, attracting A, B, C1, C2 and D’s in equal measure (see Appendix 7), is truly remarkable and unique (Formula One, 2002). 2. 3. 2 The Formula One Brand Image Formula One sponsoring is not only so attractive due to its impact on consumers, but also through its multi-dimensional brand image.
It is this image, that makes the brand Formula One, offering sponsors such a broad platform of associations, so successful, as demonstrated in Figure 8 below. Figure 8 – Multi-Dimensional Brand Image State of the Art TechnologyHeroism PrestigeLuxury Speed Sport GlamourGlobal ExclusivityUniqueness FormulaDynamicsDifferentiation OneFun/EntertainmentExcitement PrecessionAdrenaline kick ProfessionalismCompetitive AdventureTeamwork ChallengeEngineering Excellence Lifestyle
Both up-market and down-market brands find the image portrayed through Formula One a suitable one and attach themselves to it, in order to enhance their own images and increase brand equity (Formula One, 2002). This image as perceived by consumers explains why beverages, cigarettes, automotive and financial services increasingly sponsor this activity, while food and industrial brands are less involved in this kind of sponsorship. (Formula One, 2002). 2. 3. 3 Formula One Sponsorship Risks
Due to the large sums of money invested into Formula One sponsorships and the extreme media focus on the event, there are numerous potential risks, which can limit the effectiveness and return on investment of the sponsorship. Broderick et al (1999) mention four main risks within their discussion of sponsorship as a marketing tool. These are the following: (1) Negative associations: with the focus of media on the private lives of and gossip about the individuals involved in Formula One; the risk of a brand being negatively associated with scandals surrounding the sponsee is very high. 2) Sponsorship clutter: Formula One is at the upper limit of becoming overly sponsored. If the proliferation of sponsorship opportunities within Formula One continues to rise, the result will be a decreasing opportunity to influence consumers (Broderick & Pickton,1999). (3) Over commercialization: Excessive commercialization of the event will also reduce the effectiveness of the sponsorship, eliminating the uniqueness and exclusivity of the event and thereby its attraction. (4) Evaluation problems: Sponsorships are costly and difficult to evaluate (Key Note, 2000).
The multitude of techniques used, as suggested by Boderick et al (1999), do not provide a particularly valid form of evaluation as they are confounded by other marketing tools and carry-over effects from previous campaigns. Furthermore, ambush marketing (i. e. known as ‘parasite marketing’, actions of companies who seek to associate themselves with a sponsored event without paying the requisite fee) has become a common practice in association with many sporting events, and especially Formula One sponsorship (Key Note, 2000).
In Germany, for example, Grolsch, a German beer brand, was sponsoring the Channel RTL broadcast of the Hockenheim Grand Prix, this greatly reduced the benefits other beer brands, like Veltins, Beck’s and Warsteiner were receiving through their team sponsorships. 2. 3. 4 Formula One Sponsorship Levels The eleven Formula One teams offer five levels of sponsorship (Key Note, 2000): • Title Sponsorship This form of sponsorship is probably the most costly, but also most beneficial and cost effective option.
It involves major branding opportunities (integration of name within the team’s name; logo on cars, overalls, helmets, shirts, transporters, banners, official team press paper; license to use design and colour scheme of team on merchandise and product design), provision of VIP passes (VIP hospitality) and promotional programmes (driver appearances; VIP team facilities visits; replica show cars) (Klapp, 1997). • Co-Sponsorship and Associate Sponsorship Are sub-forms of the Title sponsorship, providing sponsors with the same opportunities but to a lesser degree. Technical Partners and Official Suppliers Technical Partners provide key technical components to the team, in return for specific benefits (e. g. corporate hospitality, logo display). Official Suppliers provide the team with products or services in return for specific benefits. Siemens Mobile, for example, provides the West McLaren team with mobile phones and other technical devices. 2. 4 SPONSORSHIP EFFECTIVENESS EVALUATION The evaluation of any sponsorship’s effectiveness is difficult and costly, due to its nature of being integrated in major marketing campaigns, as previously discussed.
Nevertheless, sponsors and researchers agree that the evaluation of sponsorships “is imperative, especially given the scale of investment now occurring” (Javalgi et al, 1994; as cited in Heerden, 2001). 2. 4. 1 Measurement Techniques Meeneghan (1994) identifies five main categories for measuring sponsorship effectiveness: media exposure, levels of awareness, product sales, spectator feedback, and cost-benefit analysis. Measuring the media exposure received through sponsorships provides companies with very impressive numbers that seem to justify their investment.
However, many researchers (Busby, 1997; Wilson, 1997; Heerden, 2001) agree that calculating media exposure gives only limited insight into the true effectiveness, for the reason that (a) the quality of the message is different to that of a commercial advertisement; (b) the media in which the sponsor’s name is featured in a negative context are included in the exposure rating as positive contribution and (c) the cost of bought advertising is measured only at the highest rate, which few major advertisers pay.
Measuring the increase in product sales produced by the sponsorship is virtually impossible, as sponsorships are always part of an extensive marketing campaign, as previously discussed. Wilson (1997) explains that “notions of increased sales can be difficult to quantify and relate to the outcomes of one specific event”. This, he adds, is due to a rarely existent cause/effect relationship between sponsorship, promotional exposure and spectator consumption. To truly assess the effect sponsorships have on sales, sponsors would have to isolate their sport sponsorship from the rest of the communication mix.
Sponsors would, however, never risk stopping all supporting marketing efforts to evaluate sponsorship impact (Edwards, 1991; as cited in Wilson, 1997). 2. 4. 1. 1 Brand Awareness Measurements in Detail Brand awareness is the sponsorship objective most often referred to when questioning sponsors (Wilson, 1997). Measurement techniques used to evaluate increases in brand awareness are pre- and post event surveys evaluating the increase in the sponsors’ name recall and increase in the sponsors’ ecognition (both aided and non-aided), as well as time-trend analyses of product awareness. These measurements are usually undertaken by professional market research agencies employed by the sponsors. 2. 4. 1. 2 Brand Image Measurements in Detail The enhancement of the brand image through the sponsored entity is measured using techniques very similar to the ones employed to measure brand awareness. Both pre- and post-event surveys are performed on consumers measuring reactions and attitudes tow
