The Advantages of Sponsorship for Businesses - Term Paper Example

A. Task i. Capabilities of sponsorship a) Brand image reinforcement The major benefit of sponsorship is the reinforcement of the image of the sponsoring brand (Lee & Cho 2009, 46) . As the company sponsors an entity such as another company, an individual or an event, the company is linked and associated with the attributes of the sponsored entity. If the associations are in line with the companys brand image, the greater the reinforcement of the brand image (Cunningham, Cornwell & Coote 2009). As the brand image is reinforced through the association created by sponsoring the entity, the companys brand position becomes much clearer in the minds of its target consumers. b) More brand exposure and extendibility Another benefit of sponsorship is its ability to provide extendibility and more exposure to the sponsor (Pope, Voges, & Brown 2009). This is especially true to sponsoring individuals. In cases where companies sponsor individuals such as athletes and celebrities, the individual carries the company trademarks in most of its major appearances. As the company sponsors events, the reach of the event through its own marketing campaign would provide extendibility to the brand. If the event is targeted to the companys main consumers, through the advertising materials and publicity the event would generate, the benefits from the exposure of the sponsoring brand could be enormous. c) Cost-effectiveness Sponsorship is cost-effective by nature. This is because, with the amount of cash or in-kind support the sponsoring brand provides to the sponsored entity, the effect is leveraged in many different ways (Dees, Bennett, & Villegas 2008). These ways could include extendibility and greater brand exposure as previously stated; most especially if the target audience that the sponsored entity can reach is in line with the companys target consumers (Cornwell 2008). The multiplying effect of association with the sponsored entity can usually accomplish more than the objectives that are primarily identified by the company by using sponsorship as an IMC tool. d) Brand involvement and building good will within community In corporate social responsibility events, the involvement of the brand creates a perception about the brands personality, which is part of the overall brand image of the company. If the companys actions are philanthropic by nature, this could bring good will within the community, which leads to a positive attitude toward the brand (Close et al 2006). Even if the event is not a CSR or cause-related by nature, involvement of the brand in different events through sponsorship could create some presence among the community. This brings the brand closer to the consumers (Bennett, et al. 2009). e) Stronger associations through other sponsors As noted previously, one of the benefits of sponsorship to the sponsoring brand is to reinforce its brand image by creating an association between it and the sponsored entity. In many cases, the sponsored entity would have other different sponsors (Popes, Voges, & Brown 2009). By associating with these sponsors, or co-sponsors as they are called, the image between these co-sponsors and the brand, as well as the event as a whole is strongly reinforced (Sirgy et al. 2008, 1096). The stronger the associations between the brand, the image and the co-sponsors, the clearer the position of the brand, through its image, is established. ii. Limitations of sponsorship a) Little exposure in terms of percentage of target audience reached Because sponsorships of events and individuals, or other companies are limited to the level of exposure of the sponsored entity to the public, sponsorship may not be able to reach most of the brands target market (Cornwell 2008). The relative percentage of what these sponsored entities can reach, even when very much targeted would be small compared to the total number of the target audience. This is one of the limitations of sponsorship. Unlike advertising and public relations that can significantly reach a large number of consumers through the mass media, the reach of sponsorship is limited. b) Little or lack of control over the event and outcomes of the event Even if the company co-sponsors an event to the point that it owns it, it is very usual that it does not have a say in the management of the event, or in the case of individuals such as athletes, their performances or personal affairs. This gives the sponsoring company very little control over the entities (Pope, Voges, & Brown 2009). If the event turns out to be a flop, or the athlete loses a game, then the association with the sponsoring company would reflect it. Because of very little or lack of control over the event, the desired effect through the association is usually exposed to some degree of risk. c) Negative associations In line with the sponsoring brands little or lack of control with the entities, negative associations can harm instead of benefit the companys brand image. Negative associations from failed events and individuals, or entities that are hated by the public in any manner could harm the reputation of the company (Simmons & Becker-Olsen 2006, 160). If the events or the individuals attributes are also entirely different, or at the extreme case, the opposite of the attributes of the brand, this can harm the company through wrong associations. Wrong associations or negative associations do not provide any benefit to the brand but blur and distort the image the brand is trying to project to the public. d) Sponsorship Clutter In cases where the event or the individual is highly coveted by different sponsors, there is a tendency for sponsorship clutter. The individual or the event can accept all sponsorship offers, but with little emphasis and exposure to each because of the huge number of them, which could defeat the aim of creating associations (Papadimitriou, Apostolopoulou, & Dounis 2008). Also, because of the diversity and variety of sponsors in highly coveted events, the image of the event is distorted, which makes the association between it and the sponsoring brand weak. This is not favourable to the sponsoring brand as the sponsorship becomes less cost-effective, and the goals that sponsorship as part of the marketing communications mix needs to fulfil are not achieved. e) Difficulty in terms of evaluation Because sponsorship works best by being leveraged with other marketing communications tools, evaluating its effect as a stand-alone tool is usually hard to do for marketers (Papadimitriou, Apostolopoulou, & Dounis 2008) (Alexandris, Tsaousi, & James 2007). In comparison to advertising and public relations where the direct effect such as reach and recall can be measured with the costs, it is relatively hard to do with sponsorship. This is also one of the tools limitations. B. Task 2 i. Recommendations for Sound Choice The use of sponsorship for Sound Choice should be strategic in order to best fulfil the companys IMC objectives. Instead of employing sponsorship as a stand-alone marketing communications tool or as a separate marketing effort, the company must use it as part of a larger integrated marketing communications strategy. This can be done by: first, determining the companys target audience/market; second, identifying the companys IMC objectives in line with the companys marketing objectives; third; coming up with an IMC mix which will leverage sponsorship through other marketing communications tools that will embody the companys IMC message strategy. As the company has identified its geographic markets through the locations of its branches, the companys target audience has to be identified first. If the companys marketing objectives include higher sales either through a larger market share within the geographic area, or through increased consumption, it has to be identified. Since there is no mention of the objectives within the case, it is assumed that Sound Choices marketing objectives in order to boost sales would be to capture a larger market share. In order to come up with a set of objectives, the purchase behaviour should be identified first. In the case of Sound Choice, the choice of music store is peripheral to the choice of music to be bought. Therefore, it falls to the habitual purchase, or the Awareness-Trial-Reinforcement model. This can be used as framework for the companys objectives, where the IMC strategy can be later defined. With all the benefits and limitations of sponsorship as a marketing communications tool as identified in the previous section of this report, sponsorship can be proposed as a major medium to be used as part of Sound Choices IMC mix. In order to achieve Awareness among the companys target market, the company can employ all advertising, sponsorship and publicity. This can be done by using sponsorship, i.e. sponsoring a local event such as street parties, concerts, etc. The company can leverage this by using publicity, i.e. through press releases as well as providing press coverage to the event by inviting the press. The company can advertise the event through the traditional advertising medium, i.e. regional newspapers, cinema and radio. This way, with the sponsorship as the front-runner among the marketing communications tools, it can be leveraged with the use of publicity and advertising in order to achieve the objective of creating awareness among the market. In order to induce trial, Sound Choice can employ sponsorship, sales promotions, and advertising. By sponsoring events, the company can provide freebies, special vouchers and discounts at the event venues. Because the target audience is targeted, sales promotions can induce buyers to go to the companys branches and try a purchase. The advertisement through flyers, banners, etc. within the vicinity of the event that details the locations of the branches of the store, along with the sales promotion which provides incentives can make consumers come to the branches. Sponsorship can also be used for reinforcement, or to reinforce the image of the brand. In fact, the traditional view of the role of sponsorship in marketing communications is to reinforce the image of the brand by strengthening the association between the sponsored entity and the brand. As the company chooses to sponsor a local musical event such as street parties or concert, depending on the image of the event, the link between it and the brand can be established. With press coverage about the event and the involvement of the brand, the image of Sound Choice would be reinforced in the minds of its target market that the articles and broadcasts can reach. As sponsorship can be used alongside the other marketing communications tools in order to fulfil IMC objectives in line with the achievement of the marketing objective, which is to increase sales through getting a larger market share, sponsorship is also a way to reach customers and know them. Depending on the agreement between the company and the event organiser, those who attended the events can opt to identify themselves and volunteer to receive e-mails, e-newsletters, etc. from the company. This is direct marketing being linked to sponsorship. Thus, through the sponsorship, the company can maintain a significant dialogue, or relationship with its consumers without offending them through permissive marketing. As the sponsorship that has been recommended to Sound Choice revolves around sponsorship of an event, the same thing goes with sponsorship of other entities such in the case of sponsoring the local hospitals radio station. The sponsorship of the radio station can create some indirect advertising for the company. If the local hospitals radio station has a good reputation and an image that is in line with that of Sound Choice, the company can benefit from sponsoring it by establishing a connection in the minds of the consumers. In this case, sponsorship can also work with sales promotions and direct marketing. The regular competitions are a kind of sales promotions effort to the company. The company can arrange with the radio stations to get the contact details of consumers who participate in the competitions, and from it can build a database for its direct marketing initiatives. Lastly, this sponsorship tie-up with the company can further be leveraged, through another sponsorship effort. By organising an event, such as a concert or street party in cooperation with the radio station, the company can make use of the relationship with the radio station to advertise the event, as proposed earlier. With it, the relationship between the radio station and the company can further reinforce the brand image of Sound Choice. The benefits that are iterated earlier in using sponsorship alongside publicity, sales promotions, and direct marketing can solidify the companys brand position in the market, as it creates tremendous goodwill among its consumers. References Alexandris, K., Tsaousi, E., & James, J. (2007 September). “Predicting Sponsorship Outcomes from Attitudinal Constructs: The Case of a Professional Basketball Event.” Sport Marketing Quarterly. Volume 16. Issue 3. Retrieved on July 14, 2009 from http://proquest.umi.com/pqdweb?index=42&did=1327321561&SrchMode=1&sid=3&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1247795188&clientId=25727 Bennett, G., Ferreira, M., Lee, J., & Polite, F. (2009 March). “The Role of Involvement in Sports and Sport Spectatorship in Sponsors Brand Use: The Case of Mountain Dew and Action Sports Sponsorship.” Sport Marketing Quarterly. Volume 18. 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Retrieved on July 14, 2009 from http://proquest.umi.com/pqdweb?index=24&did=1492612661&SrchMode=1&sid=3&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1247794975&clientId=25727 Lee, H., & Cho, C. (2009 January). “The Matching Effect of Brand and Sporting Event Personality: Sponsorship Implications.” Journal of Sport Management. Volume 23. Issue 1. Retrieved on July 14, 2009 from http://web.ebscohost.com/ehost/detail?vid=3&hid=105&sid=c5dc5aae-1af2-4e2c-bfe9-dd77c739cb66%40sessionmgr104&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=s3h&AN=36082112 Papadimitriou, D., Apostolopoulou, A., & Dounis, T. (2008). “Event Sponsorship as a Value Creating Strategy for Brands.” The Journal of Product and Brand Management. Volume 17. Issue 4. Retrieved on July 14, 2009 from http://proquest.umi.com/pqdweb?index=22&did=1528447181&SrchMode=1&sid=3&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1247794975&clientId=25727 Pope, N., Voges, K. E., & Brown, M. (2009 Summer). “Winning ways: Immediate and Long-term Effects of Sponsorship on Perceptions of Brand Quality and Corporate Image.” Journal of Advertising. Volume 38. Issue 2. Retrieved on July 14, 2009 from http://proquest.umi.com/pqdweb?index=0&did=1740744441&SrchMode=1&sid=3&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1247793870&clientId=25727 Simmons, C. J., & Becker-Olsen, K. L. (2006 October). “Achieving Marketing Objectives Through Social Sponsorships.” Journal of Marketing. Volume 70. Issue 4. Retrieved on July 14, 2009 from http://zc7xc9dq8b.search.serialssolutions.com/directLink?&atitle=Achieving%20Marketing%20Objectives%20Through%20Social%20Sponsorships&author=Carolyn%20J%20Simmons%3B%20Karen%20L%20Becker-Olsen&issn=00222429&title=Journal%20of%20Marketing&volume=70&issue=4&date=20061001&spage=1&id=doi:&sid=ProQ_ss&genre=article&lang=en Sirgy, M. J., Lee, D., Johar, J. S., & Tidwell, J. (2008 October). “Effect of Self-Congruity with Sponsorship on Brand Loyalty.” Journal of Business Research. Volume 61. Issue 10. Retrieved on July 14, 2009 from http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V7S-4R1FSCB-4&_user=10&_coverDate=10%2F31%2F2008&_rdoc=10&_fmt=high&_orig=browse&_srch=doc-info%28%23toc%235850%232008%23999389989%23696303%23FLA%23display%23Volume%29&_cdi=5850&_sort=d&_docanchor=&_ct=10&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=2f83cf2a2e442affbec2d581d09094bf Read More