Customer Relationship management: Brand Royalty in the Sport Industry - Research Paper Example

Using & Сustоmеr Rеlаtiоnshiр Маnаgеmеnt& and & Соnsumеr Bеhаviоr to build brand equity and brand royalty in Sроrt industry Abstract In the recent past, the sports industry has been encountering challenges that relate to the development of strategies to enhance both brand loyalty and equity. The objective of this paper is to provide a frame work of CRM and test the relationship that exists amongst the proposed consequences, antecedents and moderators. Three studies will be conducted to achieve the purpose of the study. The first will include examination of customers to determine the impact of CRM campaigns on licensed team products. A sample of 109 fans will be considered to study which features attracts fans to choose baseball cap. Further a low-fit CRM program will be selected for high-fit program. Nonetheless, fan identification will act as a moderator on the impact of sports on the student’s choice of licensed team products. Secondly, the impact of sports personality on consumer behavior to build brand loyalty and equity will be examined. A sample size of N=86 will be considered to evaluate how CRM program contribute to brand equity and loyalty. Lastly, the study will sample 309 respondents to determine how CRM programs influences consumer behaviors to create a positive image that can promote both brand equity and loyalty. All the three studies coupled with a theoretical framework supports the consequences, antecedents and moderators proposed in CRM marketing model. Introduction Sports industry is an essential facet of modern economies. Notably, the sports industry all over the world have developed and grown markedly overtime. This has seen the growth of professional sports, which have evolved to fascinating investments by capitalizing on new opportunities. Kahle & Meeske (1999) noted team management develops from the field performance to achieve the desired goals. More emphasis needs to be given on customer relational management (CRM) of the team brand considering the volatility of the sports industry. It has been established that sports managers are nowadays implementing CRM programs to achieve brand equity and loyalty. Regrettably, there has been little if no research carried out to shed more light in these efforts. In this vein, the sports marketers are charged with the responsibility of strengthening the relationship between the team and the fans. In this era of internet, CRM can be achieved by promoting relationships in an online environment to bring fans closer to the brands. Furthermore, putting more emphasis on brand loyalty encourages game attendance hence achieving financial goals that are not reliant only on the field performance. CRM activities are referred to as a strategic marketing tool for all companies. Broadly CRM is referred to as a marketing and strategic positioning tool that connects a brand or a company to relevant social cause. Previous studies show that CRM drives the consumers’ choice by increasing sales for a given brand. More over as many firms increasingly become involved in CRM programs, researchers continue to study a number of factors that influence customer response and perception towards CRM initiatives (Beech, Chadwick & Tapp (2000). The emerging trends suggest that CRM programs in the sports industry is actively being implemented as a marketing initiative. Despite many sporting organizations being involved in implementation of CRM initiatives, there have only been descriptive studies aimed at evaluating consumer responses to CRM programs. In addition, even with the existing amount of literatures in regard to CRM marketing, the trends in the sporting industry still remains in the early developing stages and to accumulate a solid body of knowledge, there needs to be a comprehensive theoretical framework for understanding the CRM phenomenon. Moreover, putting into consideration Lieberman (1991) suggestion for further researches on consumer behavior, it is noble to the role played by such behaviors in promoting brand equity and loyalty. This paper is organized in the following manner; first is the background literature regarding the sports consumer and brand equity and loyalty. Second is the conceptual framework for the support team identification to build brand loyalty and equity in the sporting industry and lastly is the identification of the key drivers for customers (fans) identification as the promoters of brand equity. Literature review Sports fan as a consumer In the recent past, CRM has grown to be one of the most powerful communication tools used by many organizations. Recent projections indicated that firms are spending close to $ 1.5 billion in CRM programs. CRM involves programs in which firms contribute a specified amount to influence consumer buying behavior on the company’s products. However, this kind of marketing initiative is different from sponsorship since contribution to the cause does not depend on consumer purchases (Jacoby & Chestnut, 1978). Numerous studies summarize the impact of CRM on band equity and loyalty. One of such factors is the perceived fits between the product beneficiary and the firms which helps in information processing and have been seen to have a positive influence on consumers’ choice. Another notable influencing factor is the consumers’ trades off that consumers are willing to take when purchasing that would benefit the cause. Nonetheless, the extent to which customers are willing to engage in trade off depends on the brand compares with other brands in the industry. The way in which customers identify with sporting firms also plays a key role in explaining the customer’s choice and the success of CRM programs. Previous researches have shown that when a brand is perceived to be too commercial, then the customers are highly likely to embrace a negative affiliation to the brand. This study explores how CRM and consumer behaviors can influence brand equity and consumers loyalty. Notably, sports consumers are primarily characterized by emotional and commitment involvement. Inn today’s, disconnecting society; the sports industry can be considered close to the anchor point with high involvement services with spectators sporting activities providing a rare sense of attraction to the consumers. An avid sports fan is a pervasive part of today’s sporting culture. However, Keller (1993) suggests that behavior and attitude relationship for fans and sporting team are a bit complex compared to similar ones in low level services and consumer goods. Despite the nature of sports lead to exploitation of opportunities for maximization of consumer identification, the methodologies to do so have not been fully utilized and instead many sporting companies relies on short-term growth in revenues at the expense of consumer brand equity and loyalty. Fan identification and brand management Brand equity has become an indispensable facet in the marketing concepts. Holt (1995) defines brand equity as a set of liabilities and assets connected to a brand, its symbol, name that adds or subtract from the value given by either a service or a product to firm’s consumers or the firm itself. From the consumers’ point of view, Hirschman & Holbrook (1982) considers consumer-based brand equity to be present when the consumer have high levels of familiarity and awareness with a given brand and holds some favorable, strong and unique association with the brand. This was further echoed by Gilbert, Powell-Perry & Widijoso (1999) who stated that favorable consumer brand equity can contribute to revenue growth, high profits and low costs which, on the other hand, has direct implications on firms pricing. This also influences the consumers in seeking new distribution channels, effective marketing communication and the success of licensing opportunities and brand extensions. With the growth in research on customer based brand equity, there has been reported growth in the image of professional sporting clubs in terms of the image and their brands. Researchers’ agrees that a royal team-fan relationship grows most effectively when the team manager identifies with a service provider. Nurturing consumer based brand equity in a sports organization is supported by the recognition of the importance of customer identification with the sporting organization and implementation of strategies to encourage deep sense of not only group but also individual affiliation with the team in question. Gladden & Milne (1999) outline four different strategies for boosting customer identification towards a team and includes; creation of opportunities for group participation and affiliation, reinforcement of team’s tradition and history, increasing players accessibility and lastly increase involvement in community services. The researchers argue that these strategies forms part of long term relationship with the sports consumers. From a branding point of view, Hoffman & Novak (1996) suggested that sporting teams should enhance their interaction with the fans by implementation of strategies that support the understanding of fans through interaction between the brand and consumers. Nevertheless, to reinforce leading brand associations, the teams must maintain integrated marketing communications. The role of CRM in brand equity and loyalty In this era of internet, the role of CRM in branding plays a strategic role in marketing. Internet is an appropriate communicating tool that enhances accessibility of sporting fans to foster and establish a long-term relationship. Moreover, the interactive multimedia interface have been found instrumental in providing an ideal ground for building, establishing and managing consumer relationships in the sporting industry (Faircloth, Capella, & Alford, 2001). CRM provides exceptional, unique and interactive sports content that attracts a considerable number of audiences. Such accessibility adds to the identification of fans with the sporting activity by bringing the fans closer to the brand in question. CRM bolsters effective fan-team relationship hence establishment of strong bonds with the sporting services consumers. The conceptual framework Figure-1: A framework for enhancing team identification in sporting industry Source: ANZMAC 2002 Conference Proceedings Figure 1 above shows a framework for enhancing team identification in the sporting industry. The framework proposes the level of consumer based brand equity in which the sports fan can be influenced by the sporting information available in the website. The diagram above indicates that the extent of consumer based brand equity positively impacts on fan identification since it is argued that the element of fan identification gives a good measure of brand loyalty in the sporting industry. The quality of sports interaction medium In this regard, the customers’ service encounter is defined by the interaction between the sporting firms and the consumer. Duncan & Campbell (1999) asserts that such interactions, which promote effective relationships can be nurtured and developed through non-human interactions such as internet. However, on evaluation of effectiveness of websites, WebQual was found to be the appropriate measure to assess the quality of desired websites. WebQual has three dimensions including: information quality, website usability and interaction quality. The web experience represents a brand with the flow dimension manipulated to result to customer experiences or representativeness. According to Ferrand & Pages (1999), information flow as key identification of consumer behavior is described as merging of awareness and actions. Geissler (2001) found that consumer experience is positively related to fun, experimental uses of the website, amount of time spent by consumers reviewing sporting products and for recreational purposes. Nonetheless, this aspect of consuming sporting products is considered as a good source of fantasy which h heightens pleasurable feelings and arousal rather that the mere utilitarian act buying sporting products I under the guise of usual shopping experiences. In this vein, it can be hypothesized that: H1: Fans who report higher levels of brand equity experience corresponding higher WebQual rating. H2: Fans who exhibit greater levels of fan identification experience higher WebQual rating. Brand Equity According to Dayal, Landesberg & Zeisser (2000), previous researches have examined consumer customer based brand equity, but the present research will also test the conceptual framework to establish the effect of favorable brand associations to arrive at brand attitudes and images that lead to very strong theoretical base to assess consumer based brand equity Based of this, the following hypothesis arises:. H3: There is a positive relationship between the level of customers based brand equity and the associated level of team identification. Team loyalty and fan identification Sports clients who are also referred to as fans view the team which is the product as an extension of themselves in terms of success, identification all of which are synonymous to individual’s success. However, team’s failure is also looked from the perspective of an individual’s failure. Delpy & Bosetti (1998) noted that fan identification strongly signifies brand loyalty and further suggests that the efforts of reinforcing the brand identification among the highly committal sports fan are highly necessary for organizations that follow customer focus. Cova & Cova (2002) viewed that distinctive and strong customer orientation is a condition to foster identification. This means that teams should try and provide a maximum experience every time a customer purchases a brand. This will ensure that the fan feels to be part of the team. According to Carbone & Haeckel1994), internet can be utilized in as a mechanism in the provision of such branded services to a customer that will ensure fan identification eventually leading to enhanced brand loyalty. Nonetheless, such a high degree of loyalty forms a strong asset for a marketer. As suggested by Bitner, Booms & Mohr (1994), brand loyalty can be operationalized through two dimensions including attitudinal and behavioral methods. In this light, loyal fans are expected games frequently, promote the team to others, purchase and wear the team’s apparels, willing to pay a significant amount of money just to watch their team play among other things. The repeat patronage or the behavioral consistencies are two important facets to consider as sports managers. This is because were it, not for the two, many teams could hardly collect significant amounts as revenues every season. Bhattacharya, Rao & Glynn, (1995) notes that brand equity acts as a mediating variable in CRM framework. Brand equity refers to the degree which a given brand is associated with product category in consumers’ perspective. In this vein, Bitner, Brown & Meuter (2000) asserts that, most of the conditions which lead to the creation of brand equity are inappropriate and much of the literatures detailing on CRM indicates the consumer attitude being resultant from CRM. Nonetheless, putting into consideration the aspects under which the sports consumers perceive CRM programs, their perceptual responses towards such programs takes place in their mind other than forming brand equity. As such, the consumer attitudes and behavior are therefore, important variables in any CRM framework. Aaker (1996) noted that consumer attitudes either presents as a purchase intention or in actual choice of a given product. Previous researches have indicated the intent of CRM programs is to increase sales which will, on the other hand, boost revenues. Addis & Holbrook (2001) asserts that enhanced brand equity, consumer brand switching and brand loyalty are all the outcomes of having effective CRM programs. Sport brand switching takes place when fans change their preferences in regard to sport teams, licensed products or athletes. However, it is not quite easy for a sport fan to change the preference due to implementation of a CRM program. This was echoed by Bagozzi, Gopinath & Nyer (1999) who claim that it is quite difficult for sports fans to alter their fondness for a brand due to CRM initiatives. Nevertheless, the sports marketers work towards increasing their revenues by implementing CRM programs. Clear and articulate CRM programs could arouse favorable consumer behavior and attitudes toward a given sports organization. More research on CRM examines the antecedents of consumer behavior that influences both consumer attitude and intention during product purchase. However, it is not at all times that positive attitudes and favorable purchase intentions will lead to favorable consumer behavior hence the importance of researching further on impact of CRM initiatives on consumers’ behavior (Bandyopadhyay & Bottone, 1997). Consumer behavior towards a given brand determines which brand to associate with and hence leading to brand loyalty. Research questions How CRM programs do lead to the creation of both brand equity and loyalty? Why do we pay high amounts for buying merchandise, unlike un-branded ones? How consumer behaviors do lead to the creation of both brand equity and loyalty? What is necessary for a brand to turn into a love mark? Conclusions Presently there is increased research in branding. In this paper, it is noted that development of consumer based brand equity and team identification are one of the key considerations in CRM as they increase brand equity and loyalty for professional sports organizations. Many researches indicate the need to gather sufficient information concerning the teams’ consumer base as it is increasingly becoming important for sport marketers to understand the preferences, attitudes and behaviors of their potential clients. Nonetheless, the present research suggests that professional sports practitioners should note the following; that branded interactive websites could be utilized in enhancing customer relationships that would, however, pull the customers closer to the team. Further, by enhancing customer identification, chances of increasing the brand image becomes high to the fans which could result to favorable market consequences such as increase in merchandise sale, increased team awareness amongst fans and most importantly many fan s attending the team’s matches. However, the main limitation of this paper is that it suffers the shortcomings of empirical support at the conceptual framework in terms of actual information necessary to explore the existing relationship between the constructs. In this regard, further research becomes necessary to gain more knowledge in respect to these constructs. The study has immensely contributed to the body of knowledge by shedding more light by determining the moderating effect of the constructs. Nonetheless, this study focused on consumers’ response towards the CRM programs in the sports industry and the impact of customer identification on the purchase of braded team’s products. 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The Public Perspective: A Roper Centre Review of Public Opinion and Polling. 2(6), 28-29. Read More