Analysis of the Importance of Corporate Sponsorship - Essay Example

?Corporate sponsorship has been taking centre stage on many occasions, especially in recent times where it has been discovered as a powerful tool forpromotion and marketing. This power can also be referred to as the key importance that has several perspectives, which are based on the stakeholders they affect. As a result, three parties are involved in the corporate sponsorship of events and they include the audience, event organizers and the corporate institutions themselves. A critical analysis of these three parties raise the question of the importance of having corporate sponsorship, which acts as the motive for carrying out this research to assess and evaluate its importance from the dimensions of three stakeholders. A general analysis of the importance of corporate sponsorship in events to the audience reveals that the audience is often in a position to gain, but these gains can be both positive and negative for the parties involved. On the positive perspective, there is issuance of presents and gifts that corporate sponsors often bring with them to woo and reward the audience into and for attending the sponsored event. This is a crucial aspect in that the audience gets to interact with what the corporates have to offer in terms of services and goods through their attendance and sponsorship. Moreover, it offers the corporate an opportunity to market and promote their products, services to the society thereby tapping into potential markets. However, some of these corporates take advantage of the audience to run entertainment events or, in some cases, competitions. These competitions, which are held as raffles only indulge members of the audience, and they serve to entertain the audience and provide a sense of reality in their interactions. However, this is not fully beneficial for the audience in that some institutions bring out their goods or services in the form of prototypes that they would like to test for the first time. The application of this strategy is usually to the disadvantage of the audience in that any side effects that come to be, only affect the audience, who are usually not informed. However, in some noble cases, the audience is notified of new products by the institution in question, which serves to their benefit in that they engage in a rare feat. Engaging in an event or getting to be part of the unveiling of a new product or service, although as a test product, is a crucial aspect for an audience as it serves as first-hand experience to cherish. Moreover, the service or product is usually free of charge, which means it works for all parties involved in terms of creating an image, as shall be seen later. Altogether, there remains discord towards the benefits and damages of sponsorship towards audiences and their wellbeing. The importance of corporate sponsorship can also be analysed from the perspective of the corporate sponsor, where there are multiple gains for all parties involved, especially the actual sponsor. Events that have corporate sponsors create an ideal opportunity for the latter to advertise their goods and services to the audience in the event, where it creates a form of networking structure for their goods to be marketed to others through the audience. This is evidenced by the application of banners and advertising of the event on different firms of media and branded items, which are provided at the event (Roy and Graeff 2002, p.356). As such, branded items that include shirts, banners and other forms of stationery like pens, books and writing pads put the sponsor out into the world in close contact with the audience. Therefore, the brand is considered as a form of advertisement and as an appropriate marketing strategy for any persons interested. Through this sponsorship, the visibility of certain brands is brought out through raffle competitions for audiences at these events and this translates to more revenue for the sponsors (Fleet News Europe 2009, p.1). Paying attention to the audience from the perspective of the sponsor, the incumbent uses the audience as part of test subjects by bringing out test materials to see how they appeal to the audience, and even how well they would work outside in the real market. This creates an opportunity for direct market feedback, but only prior to the actual marketing campaign, where sponsoring still acts as a marketing campaign of its own. In addition, there is an importance that may have been overlooked in terms of revenue, which has a black side, white side, and a grey area to cater for it. In this case, corporate sponsors have an opportunity to generate large amounts of revenue, as there is chance to get their brands and name out to the world through earlier mentioned use of social networking and marketing strategies (Moler 2000, p.170). It is through this that there is increased sales and appreciation of certain products and services provided by the sponsor meaning that there are more profits, but at a lower cost as compared to application of expensive forms of media for publicity of the same products and services (Jensen and Hsu 2011, p.354). The revenues generated can be used to further improve the image of the corporate body in terms of charitable activities that it offers for the less fortunate and even for the society at large. Considering this scenario, the negative side in terms of revenues comes up in regard to corporate sponsorship of events, this is because it serves as a crucial loophole for tax evasion through charitable events. With this in mind, the same corporate sponsors usually make overstatement of funds spent on charity, which is then eliminated from the taxes that they owe the government. As a result, the government loses lots of financial power to criminal activity under the guise of charity work, which is further covered by corporate sponsorship of events. Another negative importance of the corporate sponsorship of events lies in the application of sponsorship as a part of running bribery frauds or as favours, where the event organizers violate the generosity of corporate institutions to forge their own selfish agenda in terms of squeezing funds out of their pockets. This is not only the case for the event organizers, but also for the corporate sponsors who connive with the organizers to run scams of charity events, where they inflate their figures spent on charity events then make away with big bucks. Going back to the benefits that the sponsors are bound to experience is that they use the opportunity for first hand interaction with their customers and even their target groups (Jinho et al 2011, p.109). This means that both the audience and corporate sponsors interact on a one to one basis, which is difficult under normal circumstances of corporate institutions and normal people. This first hand interaction is crucial for the corporate institution as it helps in image building, in which misconceptions about them can be corrected and trust in products and services be cultivated (Royal blue Events 2010). The third perspective of running an analysis of the importance of corporate sponsorship for events is that of the event organizers part, where the organizer approaches the corporate institution with a proposal. In this case, the event organizer gains grandly in the place as the company they represent stands to gain ground on sales and visibility owing to the improved marketing strategies brought about their sponsors. In order to illustrate this further, corporate sponsors act as a form of outsourced marketers who bring in the funds to finance the marketing and the company in question only reigns in the benefits at no cost, except for pushing their agenda forward lest the entire event be a failure. In addition, this improves how the organizer does things in that it creates an opportunity to grow in that they gain experience from the corporate institution doing the sponsoring. As a consequence of this, the issue of networking comes up in that as a result of the close contact between the two firms, there are improved relations, where each organization understands the other, and event work towards the growth of one another based on public relations (Garecht 2013). As such, since a failure of one firm leads to a loss for the other, the corporate sponsor covers for the organizer while the organizer covers for the sponsor. As a result, it is a symbiotic relationship that develops both firms together by providing means of growing and phasing out outdated publicity stunts by using networking and improved relations between the two. Despite this, the organizers have room to gain in that they ride on the name of the corporate sponsor to get to glory and creating a close relationship works towards this only too well to the extent that the collaboration acts as an attraction for clients. This is to mean that without the sponsorship, there is much to lose, which further brings an outlook on the negative perspective of the sponsorship for the organizers. Hence, with this in mind, should there be any bad blood between the sponsor and the organizer the organizer is bound to suffer in terms of networking in that there is bound to be not much business for them. This is because the relationship turns toxic, even legal implications may arise, and the event organizers may end up being affiliated with the wrongdoings of the sponsor. This is largely evident in cases of charity events, where tax evasion emerges and the event organizer is implicated and charged alongside the sponsor leading to strained relations as the sponsor uses the organizer as a scapegoat or for personal gain. In conclusion, corporate sponsorship for events has many sides to it in terms of its importance, as importance depend on which side they represent and in what manner. As a result, corporate sponsors gain by getting free interactions with potential clients and creating an intricate network with them and having them give feedback. This works as a visibility strategy for them, the same way it is for the organizers. The downside lies in the strained relations that might arise from this and the criminal behaviour affiliated with abuse of sponsorship and charity events found therein. Concerning clients, it is important for creating a rapport with the organizers and the sponsors as well as the gifts that come with it as they get to enjoy special privileges. Altogether, corporate sponsorship is important in many ways in that it allows all parties involved to indulge one another in many ways and each stands to gain. References Jensen, J, and Hsu, A 2011, 'Does sponsorship pay off? An examination of the relationship between investment in sponsorship and business performance', International Journal Of Sports Marketing & Sponsorship, 12, 4, pp. 352-364, Roy, D. and Graeff, T. 2002, 'Influences on Consumer Responses to Winter Olympics Sponsorship', International Journal Of Sports Marketing & Sponsorship, 4, 4, pp. 355-375. Yong Jae, K, Kyoungtae, K, Claussen, C, and Tae Hee, K 2008, 'The effects of sport involvement, sponsor awareness and corporate image on intention to purchase sponsors' products', International Journal Of Sports Marketing & Sponsorship, 9, 2, pp. 79-94. Jinho, C, Tsuji, Y, Hutchinson, M, & Bouchet, A 2011, 'An investigation of sponsorship implications within a state sports festival: the case of the Florida Sunshine State Games', International Journal Of Sports Marketing & Sponsorship, 12, 2, pp. 108-123. Moler, C 2000, 'WANTED: NOT-FOR-PROFIT TO TAKE MONEY..', Parks & Recreation, 35, 9, p. 164. Royal Blue events. (2010). Benefits of Event Sponsorship. [Online] Available at http://royalblueevents.com/blog/?p=145 [Accessed at March 17, 2013] Garecht, J. (2013).10 Step Guide to Cultivating Corporate Sponsors. The Fundraising Authority. [Online] Available at http://www.thefundraisingauthority.com/fundraising-events/cultivating-corporate-sponsors/ [Accessed at March 17, 2013] “Fleet News Europe” (2009). [Online] Available at http://www.fleetnews.co.uk/fn-europe-conference/_files/pdfs/615516_fneurope.pdf [Accessed at March 17, 2013] Read More