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All of these sports belong to the long list of sports sponsorships, on which Red Bull takes pride in representing. 3.1.7.2. Football/Soccer Sponsorship.
Typology: Lecture notes
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David Coelho de Brito Dissertation submitted as a partial requirement for the conferral of Master in Marketing Supervisor and Co-Supervisor: Professor Rui Manuel Vinhas da Silva, Department of Marketing, Operation and Management Professor Catarina Maria Valente Antunes Marques, Department of Quantitative Methods for Management and Economics September 2019
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iii Abstract: Sponsorship has proven to be a fast-flourishing marketing tool. Its main essence is, in the companies´ perspective, to effectively promote their products and services. Therefore, over the years, companies have begun to behold and consider this tool as a massive gateway for a successful strategical long-term plan. Previous sponsorship studies, have instigated to examine its concept on multiple situations and the implications they entail, but often lack new effective measures and approaches. Hence, the purpose of this investigation is to better understand and scrutinize the effects of Sports Sponsorship – its Awareness, Perceived Quality and Image - on Brand Equity variables, in particular, on Brand Image, Brand Awareness, Brand Loyalty and Perceived Brand Quality. Consequently, with that in mind, there is an examination of the effect/influence on the consumer´s Brand Purchasing Intention and Brand Recommendation. Moreover, Red Bull, is used as a main reference. The energy drinks´ company was placed on a Sports Sponsorship context, with 3 main sports highlighted (Football/Soccer, Air Racing and Formula 1). The respondents (from a diverse age range), were asked several questions considering Sponsorship and Brand Equity´s variables and, their a-posteriori Brand Purchasing Intention and Recommendation – always heeding the Brand´s Sports Sponsorship they consider to be the most important. The results gathered by the following research propose that the presence of a Sports Sponsorship initiative brings no direct influence on a Brand´s Purchasing Intention and Recommendation. In addition, Perceived Brand Quality affects both final variables, whereas Brand Awareness impacts none. Keywords: S ports Sponsorship; Brand Equity; Brand Purchasing Intention; Brand Recommendation JEL Classification: M3 7 : Marketing and Advertising - Advertising M16: Business Administration - International Business Administration
v Resumo: O Patrocínio tem-se revelado uma ferramenta de rápido crescimento, tendo como principal objetivo, do ponto de vista das empresas, a promoção eficaz dos seus produtos e serviços. Com o passar dos anos, as empresas começaram a reconhecer esta ferramenta como um portal sólido para o sucesso estratégico, no longo prazo. Estudos prévios sobre o Patrocínio têm exibido detalhadas análises, sob diversas situações, todavia, sem um fio condutor eficaz. Portanto, o objetivo desta investigação consiste num melhor escrutínio dos efeitos do Patrocínio no Desporto – a sua Consciência, Qualidade Percetível e Imagem – nas variáveis referentes ao Valor da Marca, mais exatamente, a Imagem da Marca, a Consciência da Marca, a Lealdade à Marca e a Qualidade Percetível da Marca. Consequentemente, é examinado o efeito na Intenção de Compra e Recomendação da Marca. Para além disso, Red Bull, é usada como referência principal de estudo. A empresa de bebidas energéticas foi colocada no contexto dos seus patrocínios desportivos, com realce a três (Futebol, Air Racing e Formula 1). Os inquiridos foram questionados relativamente às variáveis de Patrocínio e Valor da Marca, como também, à Intenção de Compra e Recomendação da Marca – considerando o Patrocínio de Desporto por eles considerado como o mais importante para a Marca. Os resultados recolhidos da investigação apontam para que as iniciativas de Patrocínio no Desporto não tenham uma influência direta na Intenção de Compra e Recomendação da Marca. Ademais, a Qualidade Percetível da Marca produz um efeito direto nas duas variáveis dependentes, ao invés da Consciência à Marca. Palavras-chave: Patrocínio no Desporto; Valor da Marca; Intenção de Compra da Marca; Recomendação da Marca Classificação JEL: M16: Administração de Empresas – Administração de Empresas Internacional M37: Marketing e Publicidade - Publicidade
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1. Introduction The 21st century has brought several lines of changes in the society and, in the way people perceive it. This has provided a huge breakthrough in the whole trading of goods and services and in the importance given to a customer´s opinion. Companies used to be the centre of the economic universe – however, this situation has changed. Nowadays, consumers occupy this position, as they have managed to become the main and key organization’s success factor. Bearing this in mind, companies and brands have had to quickly adapt and re-arrange their strategies and processes. Business-wise, where rivalry and competition are salient amongst organizations, companies have begun to find new ways of differentiating themselves. The integration of a sports-based strategy has emerged as a powerful tool for a broader consumer mass diffusion. Companies have, recurrently, turned to sponsorship, endorsement or even advertisement strategies in the search for an exclusive customer approach. In the sponsorship panorama, the hosting of an event (apart from its dimension) can have major inputs and a long-lasting impact on the local environment, society and economy (Masterman, 2014). Considering that sporting events involve large levels of zeal and emotions, companies can relish from that upside and become an important communication tool, through an effective and direct marketing method. In fact, sports sponsorship is characterized by its ability to attract a larger segment of the community, to serve diverse niches and rupture all the visible cultural barriers (Sleight, 1989). Thereby, sports can be used as a channel that consents the organization to reach a wider audience and also promote the interaction between different stakeholders. In light of the sponsorship topic, there have been several thoroughgoing studies over the past few years. Per contra, by focusing on sports sponsorship and the possible encompassing effect when analysing brand image, awareness, loyalty and perceived quality, overturns the concept into a unique approach. The main goal is to understand and analyse the customers´ mindsets, when applying a brand specifically to the sports sponsorship paradigm. In this particular case, the scrutinised brand will be Red Bull, since it focuses on several sectors and branches of the sports industry, as they manage to connect to this lifestyle. The main end in view will be to understand if, effectively, Red Bull´s association to the sports industry and, to some famous practitioners, is positively correlated to the augmentation in brand equity, leading to its product consumption
3 “Change/Reinforcement Image” (46%). In the long run, it is patent that brand marketers are inclined to give their brand more exposure in the market for a better client commitment. Notwithstanding the idea of being “externally visible”, brand marketers ambition a more concrete and relevant relationship with their clients, leading to an upsurge in brand engagement and recognition. Ultimately, it is significant to understand that brands might be, at first, associated to some initiatives, segments, or even beliefs. In several cases, Sponsorship might serve as a way for the brand to re-segment their company, their product/service or the way they want to be viewed and remembered as. Now and then, companies analyse and decide if they want to be associated to something that may change the consumers´ perception of their identity and role.
3. Literature Review The Literature Review´s main intent is to investigate the concepts that may guide to a thorough presentation and analysis of the research hypotheses. With that in contemplation, several authors´ opinions and feedbacks were gathered as an explanatory guidance for the considered concepts. This section is divided into some significant clusters. Just like in the model and hypotheses´ development, this literature shall follow a simple and systematized outline. Firstly, the sponsorship concept will be detailed and scrutinised. This notion and its most relevant characteristics will be analysed through a “magnifying glass”, as they highlight the main thesis plot. Following that, the reference to sports and the topic of sports sponsorship will be better elucidated. This latter theme will also go towards the main thesis´ focal point. Last but not least, there will be a concise explanation on some branding concepts, with a generic reference to a brand´s equity. This former topic will be more competently dissected into four others, which will directly impact this investigation´s wave. This sector will be ending with a small part on communication and its back up importance on this study. Just like any other literature review, the broader concepts are introduced and explained, before being constantly reduced to the specific and detailed chunks of information.
4 **3. 1. Sponsorship
6 When a celebrity/athlete´s endorsement contract is being agreed, the company is, in fact, earning the rights to use his/her image in exchange for a monetary reward/compensation (Anthony Carrillat, & d’Astous, 2014 ). Celebrities/athletes´ influence and effect is highly determined by their behaviour, effort and capability of transmitting the brand´s identity and values to the consumers. Basically, they end up moderating the brand´s consequences and outcomes, giving them the major power imbalance (Fiske, & Berdahl, 2007). Nonetheless, only a few are able to contribute positively to this matter, which may result in a downfall of the brand´s recognition and equity. Though, several studies have shown that celebrity/athlete endorsement for a brand is the most effective strategy – with the celebrity/athlete’s expertise, trustworthiness, attractiveness or similarity increasing with the audience (Erdogan, 1999). On the opposing hand, celebrity/athlete sponsorship should be, likewise, looked at and evaluated. In this particular case, the individual needs assistance with his/her expenses, more specifically with material and financial backup, to better elevate their performance (Anthony Carrillat, & d’Astous, 2014 ). In this case, the athlete is controlled by the brand and its predisposition to help and supply the needed support. If the event has a negative outcome, it not only impacts the more controlling partner (sponsored brand/endorsed celebrity or athlete), but the other one should also suffer a downfall (Collins, & Loftus, 1975 ). Both strategies/situations prevail in today´s society and marketplace, with the brands and celebrities trying to make the most of each other. Despite the celebrity endorsement being more visible and impactful market-wise, the sponsorship side is also noticeable and adopted - specially for the athletes - since several of them need some sort of support and assistance to better perform in their respective sport. 3. 1 .3. Celebrity Endorsement McCracken, in 1989, stated that, most of the times, companies rely on celebrities to endorse their products/services as a way of transmitting the meaning associated with them to the respective brand. Given today´s marketplace, where the products are difficult to differentiate (specially on technological means), celebrities play a large and significant advertising role as agents for building and boosting brand equity (Choi, & Rifon, 2012). This might be, in several cases, overviewed as a parallel approach from a company to be
7 connected with their consumers. Often, and constantly visible nowadays, celebrities have progressively become a brand of their own right with own values existent in the consumers´ minds (Seno, & Lukas, 2007). Hence, it is of the companies´ broad interest to explore and analyse a possible association to its values and connotations. For instance, the German model Claudia Schiffer and the association/endorsement with the Opel brand. The car company largely invested in this endorsement, as a way of displaying the model´s beauty and nationality to the car brand´s own identity. This was considered by several, as an intense market penetration, to promote a new Opel car model line, but also, a step towards an engagement of young adult drivers with the brand. One other example, in the tennis world, is the association of the sports brand Uniqlo with the world´s famous athlete Roger Federer. For several analysts, this was seen as a risky move, since the investment was large and the tennis player is with an elder age. However, the brand believes that his image and the whole meaning and symbolism he brings to the sports world - perseverance, hard-work and winning – are a major advantage in the company´s market placement. Not only will they be able to acquire more recognition and consciousness, but also enjoy some economical outburst with the sold merchandising. McCracken (1989) assumes that, at all times, an equal comparison should be made between celebrity endorsers and events. As a whole, the celebrity endorsement concept has been considered a very effective promotional tool, both on the image and meaning transferred perspectives. Marketers have concluded that advertising effectiveness, brand recognition, brand recall, purchase intentions and even purchase behaviour are highly influenced by celebrity endorsements (Spry et al., 2011). Besides, as in of 2006, MarketWatch analysed and concluded that one‐ in‐four advertisements use celebrity endorsement. This trend has been progressively growing in the companies´ strategies but, at a moderate stroke. Companies recognize the importance of deeply understanding the consumers´ responses to celebrity endorsements, in order to better develop an effective approach for its selection (Choi, & Rifon, 2012). A wise choice of a celebrity endorser might help a company excel in any market segment – by the alienation of a dominant image and meaning (and even influence). Brand awareness improvement can be determinant in the brand equity build-up, for the consumers to be able to create any sort of association, perception or quality (Pappu et al., 2006). The transfer of an image and meaning from a brand/celebrity are two preponderant aspects when the term sponsorship is brought up. As seen before, companies may transfer
