Event Sponsorship as a Value Creating Strategy for Brands
Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou University of Patras, Patra, Greece Artemisia Apostolopoulou Robert Morris University, Moon Township, Pennsylvania, USA, and Theofanis Dounis University of Patras, Patras, Greece Abstract Purpose – The present research involves corporations that served as Grand National Sponsors of the Athens 2004 Olympic Games and aims to explore whether a strategic approach was employed in the acquisition and management of their Olympic sponsorship.
Design/methodology/approach – A multiple case study analysis was employed, for which data were collected through semi-structured interviews.The study sample included seven of the ten Grand National Sponsors that signed agreements with ATHOC, the Organizing Committee of the 2004 Athens Olympic Games.Data analysis was organized around ? ve themes inspired by the existing literature.
Findings – With the exception of two ? ms, the majority of the Grand National Sponsors reported no clear or measurable objectives and limited consideration to strategic or brand-related initiatives in their decisions to invest in the national Olympic sponsorship program. However, they did report plans to invest resources to leverage their rights, even though in most cases no speci? c evaluation processes had been designed. Research limitations/implications – Given that the Olympic Games are organized every four years in a new location, the ? ndings of this research may not ? d direct application to other markets and organizing committees that implement their own sponsorship programs. Nevertheless, this research did show relatively poor recognition of the role of sponsorship in creating value and building the corporate brand. Corporations considering becoming involved in sport sponsorship and also event organizers are encouraged to adopt a more strategic approach in the sponsorship solicitation and management process. Originality/value – Existing literature has discussed the role of sport sponsorship in brand management and the communication mix, and has highlighted the bene? s for ? rms that establish long-term ties with the Olympic Games. The present research adds to that line of work by highlighting if and how a strategic and brand building approach was adopted in the context of national-level Olympic partnerships. Keywords Sponsorship, Olympic Games, Brand management, Corporate strategy Paper type Research paper An executive summary for managers and executive readers can be found at the end of this article. Introduction The meaning of sponsorship as an integral element of the marketing mix has been conceptualised by Sandler and Shani (1993) with the following de? ition: “[Sponsorship is] the provision of resources (money, people, or equipment) by an organization directly to an event or activity in exchange for a direct association to the event or activity” (p. 39). Corporate spending on sport sponsorship in many European countries and in North America has increased dramatically (Lachowetz et al. , 2003). Global spending on sponsorship was estimated to reach $US28 billion in 2004 (from $US25. 9 billion in 2003) of which, according to the The current issue and full text archive of this journal is available at www. meraldinsight. com/1061-0421. htm Journal of Product & Brand Management 17/4 (2008) 212– 222 q Emerald Group Publishing Limited [ISSN 1061-0421] [DOI 10. 1108/10610420810887563] International Events Group, 69 per cent relates to sporting events (International Events Group, n. d. ). There is plenty of evidence that sport sponsorship, including Olympic sponsorship, can be very effective in achieving a number of objectives, not the least of which is competitive advantage related to brand image and reputation (Amis et al. 1997; Copeland et al. , 1996; Meenaghan, 1998). The sport marketing literature provides some discussion on the value of sport sponsorship in also delivering other bene? ts, such as increased awareness levels, sales and greater market share, and opportunities to develop employee and client (i. e. hospitality) relations (e. g. Abratt et al. , 1987; Apostolopoulou and Papadimitriou, 2004; Irwin and Asimakopoulos, 1992; Lough et al. , 2000; Ludwig and Karabetsos, 1999; Scott and Suchard, 1992). The technological developments related to porting, events along with the growing interest of the media for such activities, account to some extent for the steady increase of sport-related sponsorship investments (Meenaghan, 1998; Shilbury et al. , 2003). Meanwhile, the decreasing corporate trust in the ef? ciency of traditional media advertising channels may also explain why corporate investments in sport follow a growing trend (Meenaghan, 1998). Despite the pervasive appeal of the sport sector, however, companies have plenty of other event options at a local, national and international level from which to choose; thus greater emphasis on return of 212
Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 investment will prevail their sponsorship decisions (Copeland et al. , 1996). Also, as the corporate demand for accountability in marketing expenditure increases, so does the need for a deeper understanding of the unique elements of event sponsorships as a strategic resource and a tool of marketing (Meenaghan, 1998; Thwaites et al. , 1998). Given the potential bene? ts involved in sponsorship, and in order to maximize ? ancial and other returns, corporations need to be strategic not only in their choice of properties (sport or other) with which to form partnerships but also in the allocation of resources to those agreements. Businesses must consider strategic priorities that suit their needs and systematically exploit the opportunities within their markets, and engage in partnerships that are aligned with those priorities. Furthermore, within those partnerships they need to link corporate objectives to particular strategic initiatives, a process that could turn sponsorship to a value-creating strategy capable of creating a distinctive advantage.
Surprisingly, research is scarce on corporate sponsorship and its importance as a strategic resource and a brand management tool. As Meenaghan (1998) stresses, “The sponsorship literature has traditionally viewed sponsorship as an activity largely similar to advertising and generally, though not always, spoken of in terms of short- rather than long-term horizons” (p. 25). Indeed, most existing studies are descriptive, and focus on objectives and general motivation for making those kinds of investments (e. g. Berrett and Slack, 1999; Cornwell and Maignan, 1998; Doherty and Murray, 2007).
Amis (2003) has also outlined the dearth of research on how intangible resources are identi? ed and managed in relation to image and reputation through sport sponsorship.This is also re? ected in the industry, as many companies invest immense resources but still ignore the capacity of sport sponsorship for ensuring longer-term bene? ts (Amis et al. , 1999). Accordingly, the present study attempts to explore the adoption (or not) of a strategic approach to the sponsorship process on the part of large companies involved in Olympic sponsorship.
This is a research avenue that has been largely unexplored in the existing literature. and ideals and on leveraging its key brand on a national and international level. The Olympic Partner (TOP) program, which represents the IOC’s sponsorship program, holds a key role in the IOC’s overall marketing efforts as it attracts the interest of many international corporations due to a number of factors, including the long-term (a required minimum of four years) linkage to a very attractive intellectual property, exclusive global marketing rights, and the principle of product/service-category exclusivity. The ? st TOP program (1985-1988) involved nine partners and generated $US95 million, a far cry from the more lucrative 2001-2004 program, which engaged 11 corporations contributing $US603 million. Global corporations like Visa, Coca-Cola, Kodak and Panasonic view this type of partnership as strategic, and this is manifested by the fact that since 1986 all of them have invested considerable resources to remain part of the program until at least the 2012 Olympic Games. The IOC has extended their particularly successful marketing concept to a lower stage by introducing Olympic sponsorships at the national level.
Revenues from those sponsorships contribute to the ever-increasing cost of hosting the event. The Organizing Committees of the Olympic Games (OCOGs) manage this program, which involves an array of sponsors, suppliers and providers from the host country (provided they are approved by the IOC). The 2000 Olympics attracted the interest of 93 such national partners who contributed $US492 million to the Organizing Committee of the Sydney Games (SOCOG), while the 2004 Olympic Games held in Athens generated e570 million through their national Olympic sponsorship program (Jeanrenaud, 2006).
Present research The present study focuses on the national companies that signed on as Grand National Sponsors of the 2004 Athens Olympic Games and explores the role of these partnerships in sponsors’ brand management efforts, as perceived by company executives, as well as the degree to which these sponsors’ approach to their Olympic sponsorship was strategic. Furthermore, sponsors’ plans to integrate the sponsorship in corporate strategy and to exploit rights received by the Organizing Committee are also discussed. Given the increased pressure of corporations to maximize ef? iency in the use of their resources and to avoid opportunity cost, there is much interest in identifying whether a strategic approach was adopted in these companies’ Olympic involvement. The practices of these sponsors could provide valuable insight not only to other ? rms considering investment in sport sponsorship, but also to event organizing committees aiming to secure corporate support. The remainder of the paper includes a review of relevant literature, followed by a summary of the methodology and the ? ndings of the study.
The paper concludes with a discussion of the theoretical contributions of the study and also practical recommendations for brand management and marketing executives as well as sport property representatives. Corporate sponsorship and Olympic Games The Olympic Games hold a few distinctive characteristics that make the event a particularly desirable property for a wide range of sponsors, but also for conducting research. First of all, it is a unique and highly prestigious event with a strong ability to reach a global audience through television networks.
Secondly, the marketing program and policies of the International Olympic Committee (IOC), the governing body of the Olympic Movement and the Olympics, actively preserve exclusivity for the limited number of international and national sponsorships and favor long-term partnerships. The IOC has worked extensively to raise awareness about how corporate contributions enhance the Olympic Movement and invests resources to achieve sponsor recognition. Thirdly, Olympic sponsorships are linked to attractive hospitality packages, which corporations value highly for networking, roduct display, and employee incentive purposes. Continuing a pattern which began in the late 1980s, sponsorship investments in the Olympic Games have increased exponentially, accounting for 34 per cent of the IOC’s $US4 billion Olympic marketing revenue for the 2001-2004 Olympic quadrennium (International Olympic Committee, n. d. ). This is the end result of the IOC’s strategic plan, which since 1985 has focused systematically on enhancing the Olympic image 213 Literature review
The review of literature is structured around three themes: 1 sponsorship and corporate strategy; 2 the integration of sponsorship within corporate marketing efforts; and 3 sponsorship and brand management. Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 Sponsorship and corporate strategy Understanding what companies do or do not do to remain competitive in a constantly changing environment is at the heart of strategic thinking.
Practice has shown that sport sponsorship, because of the bene? ts associated with those agreements, is a frequent strategic choice of many multinational corporations. Of the most indicative examples are Coca-Cola, Kodak and Visa International, three companies with long-standing relationships with the Olympic Games. These particular ? rms have integrated those agreements well into their long-term marketing strategies and are continuously promoting their involvement in order to gain competitive advantage (Farrell and Frame, 1997).
However, such costly agreements cannot be treated in an ad hoc manner. Successful corporations are well aware that sponsorship deals should be approached as a resource, with the capability to lead to distinctive competence if effectively combined with other organizational resources (Amis et al. , 1997, 1999). Sport sponsorship, if viewed as a strategic resource, can support brand management objectives by enhancing brand image and reputation and by assisting the company to gain competitive advantage in targeted marketplaces (Amis, 2003).
This, however, implies that corporations are prepared to engage in long-term commitments and to actively exploit those agreements, or otherwise face the disappointment of low return on their investment. Though limited, research evidence has shown that many companies engage in sport sponsorship with limited planning and integration (Farrelly et al. , 1997; Polonsky et al. , 1995). A few companies make those investments with con? ned understanding of the range of bene? ts involved and how those bene? s can be realized. They even lack the growing knowledge of the nature of the particular communication means and this is depicted on their objectives and the poor rationale for involvement. The empirical results of Farrelly et al. (1997) with a sample of North American and Australian companies engaged in sport sponsorship showed that more time is spent into negotiating deals than in integration and planning. Moreover, their research showed that a few North American ? ms approached sponsorship management as a strategic tool, whereas the majority of Australian businesses concentrated more on the communication opportunities of sponsorship (Farrelly et al. , 1997). Similarly, Amis et al. (1999) have provided evidence that companies often engage in sponsorship without integrating it in other marketing initiatives. The consequence involves delivering an unclear and inconsistent image to the customer. Any company considering entering into a sponsorship agreement should ? rst assess the potential bene? s and the probability of gaining a competitive position in the marketplace and then make a decision of whether or not to invest in the sponsorship. Building on the work of Hamel and Prahalad (1994), Amis et al. (1999) argue that sport sponsorship can become a potential source of competitive advantage if it meets three criteria: 1 it allows for a signi? cant increase in the perceived customer value of the service or product; 2 it permits for differentiating the brand from the competitors; and 3 it provides space for exploiting the deal through new services and products. 14 The employment of sport as a strategic tool for developing a position of competitive advantage is well described by Amis (2003) in reference to the case study of Guinness. That particular company has used sport extensively and consistently to build a unifying brand message on a global level. This was achieved by ? rst engaging in a global survey to identify a “key brand bene? t” (“Guinness brings out your inner strength”) that would unify its global brand and also ensure differentiation from other popular beer brands (Amis, 2003, p. 200).
Secondly, the company used sport and sport sponsorship as a central element of its brand positioning strategy, creating advertisements featuring athletes and driving on-trade promotions and sales during world sporting events (Amis, 2003). The critical element of Olympic sponsorship is that it offers sponsors the opportunity to make use of unique business opportunities by providing concrete rights and speci? c bene? ts associated with the strongest sporting brand in the world (i. e. the Olympic Games), depending on the sponsorship category.
Accordingly, and given the competitive nature of the growing Olympic sponsorship industry, other sport and non-sport sponsorship options, and the signi? cant resource investment required to get into a sponsorship agreement, strategic thinking becomes critical. Following the example of multinational corporations, one would expect that sponsors involved in Olympic sponsorships on the national level should also engage ? rst and foremost in fundamental strategic thinking related to company brand management efforts and overall corporate strategy, and consider how a potential sponsorship agreement would enhance corporate strategy and objectives.
This question is the point of exploration of the present study. Integrating sponsorship into organizational marketing In her discussion on sponsorship-linked marketing development, Cornwell (1995) proposes a model of sponsorship development. That model involves six steps, each linked to the next, including: 1 analysis of the situation; 2 determination of objectives; 3 development of sponsorship-related strategy; 4 creation of sponsorship link; 5 sponsorship implementation; and 6 sponsorship evaluation.
In another research effort to standardize the process of selecting a sport sponsorship program and utilizing it as a viable marketing tool, Arthur et al. (1998) proposed a multistep process that involved many of the points discussed earlier by Cornwell. The authors emphasized the necessity of a careful consideration of all options available to an organization in order to achieve company objectives, as well as the need to incorporate the sponsorship within the organization, manage, activate, and evaluate it (Arthur et al. , 1998).
Therefore, it should be stressed that sport sponsorship can be an invaluable tool as long as it is fully integrated into a ? rm’s marketing and communication efforts. This involves ? rst of all placement of the corporate sponsorship activities into the marketing departments, clear and appropriate objectives and planning, and full integration into the communication mix. Otherwise, sponsorship activities, including those linked to the Olympic Games can be turned into costly mistakes with no substantial return on investment.
Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 Sponsorship and brand management Wong and Merrilees (2005) stress that, in pursuing competitive advantage in the marketplace, the brand should be in the heart of corporate strategy. In other words, managers should be able to combine corporate, marketing and promotional plans in a brand-based strategy, which can offer their company a sustainable edge over their competitors and lead to high levels of brand equity.
Brand equity is one of the most fundamental signi? ers of a powerful brand because it represents the end result of strong brand loyalty, high name awareness, positive brand image, favorable brand associations, and the perception of superior quality (Aaker, 1991). As companies strive to build powerful brands with high value in the marketplace, sport sponsorship can serve as a tool for supporting brand management objectives (Amis, 2003; Sandler and Shani, 1993).
Establishing and exploiting a partnership with a sport property can assist a company to strengthen some or all of the elements of brand equity and consequently increase the overall value of its brand (Roy and Cornwell, 2003). A few authors have discussed sport sponsorship’s role in enhancing brand image and reputation, increasing brand awareness and familiarity, and altering public perceptions (e. g. Amis et al. , 1997; Cornwell et al. , 2001; Gwinner and Eaton, 1999; Irwin and Asimakopoulos, 1992). Bene? s have also been reported in terms of brand personality and brand differentiation (Amis et al. , 1999; Cornwell et al. , 2001). The brand-related bene? ts outlined above can be delivered with an even greater effectiveness via Olympic sponsorship agreements. Brown (2000) discussed how AMP (an insurance and investment company) and Visa, both companies in the services sector, used their Olympic sponsorship of the 2000 Olympic Games for brand development and brand differentiation initiatives. Crimmins and Horn (1996) have also reported that Visa has bene? ed from measurable changed perceptions of its brand over MasterCard as a result of the Olympic sponsorship. Furthermore, Stipp (1998) showed that managers are well aware of how sponsor image is signi? cantly affected by the special qualities of Olympic advertising, the favorable public attitudes toward Olympic sponsorship, and the strength of the association between the sponsor and the Olympics. This is attributed to the fact that the general public expresses high respect for the Olympic Games and attaches special value to Olympic sponsorship (Stipp, 1998).
Even though there is evidence that sport sponsorship, and particularly Olympic sponsorship, is a distinctive resource capable of ful? lling brand management objectives, it should be stated that its effectiveness depends on active management (Amis, 2003; Cornwell et al. , 2001), appropriate and adequate leveraging (Chalip and Leyns, 2002), and longterm agreements which allow time for strong associations to be developed between events and brands (Keller, 1993). Companies should not make the mistake of mismanaging sport sponsorship agreements.
They should approach these agreements as a distinctive resource, which needs to be integrated within other company activities in order to produce sustainable competitive advantage (Amis et al. , 1999). Sample On the national level, ATHOC, the Organizing Committee of the 2004 Athens Olympic Games, instituted a sponsorship program, the National Sponsoring Programme, which offered three levels of involvement: 1 Grand Sponsor; 2 Of? cial Supporter; and 3 Of? cial Provider.
This sponsorship program contributed a total of e570 million to the Organizing Committee’s budget (Jeanrenaud, 2006). The present research effort focused on the highest of the three levels, the Grand Sponsors. It was assumed that, given the size of the companies and the extent of their investment, there were higher chances that a strategic and/or brand building orientation would have been adopted at that level. Therefore, the sample for this study was drawn from the population of the Grand National Olympic Sponsors of ATHOC. The ten ompanies that served as Grand sponsors were 1 Alpha Bank (private bank); 2 Athenian Brewery (beer producer); 3 DELTA (dairy product company, co-sponsor with FAGE); 4 FAGE (dairy product company, co-sponsor with DELTA); 5 Hellenic Broadcasting Corporation (ERT, national broadcasting company); 6 Hellenic Post (ELTA, national postal services provider); 7 Hellenic Telecommunications Organization (OTE, national telecommunications company); 8 Hyundai Hellas (automotive company); 9 Olympic Airlines (national airline company); and 10 Public Power Corporation SA (DEI, national electrical power provider).
Data collection The design of this research involved a multiple case study approach. Data were collected through semi-structured interviews conducted with the Marketing Directors or other company executives responsible for coordinating the Olympic sponsorship activities of their particular organization. The particular research design was deemed appropriate for the study objectives as it facilitated the exploratory nature of this research. It also allowed for motivating the interviewees to explore and discuss aspects of their sponsorship-related thinking and enabled in-depth probing into unexpected issues during the discussion.
Interviews took place between January and May 2004, and the duration of each interview was approximately one hour. Research efforts resulted in a total of seven of the possible ten interviews. Consequently, all results are based on information from the seven sponsors interviewed. An interview guide was developed to incorporate the following key themes: . the reason(s) for which the ? rms entered into the Olympic sponsorship agreement; . the way(s) in which the Olympic sponsorship was integrated into the ? rms’ overall corporate strategy, their marketing strategy, and their brand management efforts; . he amount of resources deployed into the sponsorship; . the initiatives introduced to leverage the sponsorship; and . companies’ plans to evaluate the effectiveness of their Olympic sponsorship. 215 Methodology The present study follows a multiple case study approach to investigate the extent to which Grand Sponsors of the 2004 Olympic Games were involved in strategic planning and systematic leveraging activities related to their Olympic sponsorship agreements. Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis
Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 Data analysis In an effort to explore whether a strategic approach was adopted (or not) by the Grand Sponsors of the 2004 Olympics in the acquisition and management of their sponsorship, the present study focused on four indicators, namely: 1 sponsors’ stated goals and/or objectives; 2 resources allocated to the acquisition and activation of the sponsorship; 3 sponsorship leveraging initiatives; and 4 sponsorship evaluation plans The study attempted to assess the degree to which each of these areas was considered in the sponsorship process.
In addition, the perceptions of company-sponsor representatives in terms of the incorporation of their sponsorship in the overall corporate strategy and brand management efforts were used as a ? fth indicator. These ? ve elements were chosen to frame the analysis because they have been proposed in past research (Arthur et al. , 1998; Cornwell, 1995) as indicators of a strategic approach to sport sponsorship, and thus were deemed appropriate for the objectives of the present research.
All data received through the interviews were therefore contentanalyzed based on those ? ve parameters. Results A discussion on each of the ? ve parameters as they relate to the seven companies-sponsors in the sample is presented in the following section. Sponsorship as part of corporate strategy and brand management efforts In order to explore whether a strategic approach was adopted in the acquisition of the Olympic sponsorship at the national level, companies were asked to discuss how iOlympic sponsorship ? tted in their overall (i. . corporate) brand management strategy. From the responses received to that question alone, it appeared that two of the seven companies in the sample clearly saw this sponsorship as an opportunity to support major shifts in the structure and orientation of their companies. More speci? cally, Alpha Bank, a private bank that had gone through a merger in recent years, saw its Olympic sponsorship as a way to support the union of the two banks that merged and also as a cause behind which to unite the two distinct cultures and staffs.
Its involvement with the Olympics was seen as a platform to promote the new, post-merger company and to solidify its new name and identity in the minds of consumers. ELTA, the main postal services provider in Greece, which had been a sponsor of the ? rst modern Olympic Games held in Athens in 1896, was also going through major changes at the time leading up to the Olympic Games as the company was preparing for an initial public offering (IPO). Their main interest was to use their Olympic sponsorship to strengthen and promote their corporate image.
According to a company representative, “we want to promote a modern image of effectiveness and quality; a humane image” (personal communication, February 2, 2004). Their investment in this sponsorship intended to support the company’s brand repositioning efforts that focused on promoting a more positive, a more customer- and service-oriented image. In addition to the role of the sponsorship in shaping a new image 216 for the company, it served as a means to celebrate a milestone in company history, i. e. the 175th anniversary of the establishment of the organization. When asked the same question of how their Olympic sponsorship ? ted with their brand management efforts, the remaining ? ve companies in the sample did not discuss any strategic initiatives that were supposed to be supported by the sponsorship. Instead, they provided reasons for which they decided to become a sponsor. Athenian Brewery, a beer producer, and DELTA, one of the dairy product co-sponsors, mentioned that their decision to become a sponsor was driven primarily by the fact that the Olympic Games was the largest and most important athletic event to occur in the modern history of the country, while the other three cited being a logical choice for the pro? e and size of their company (FAGE, dairy product co-sponsor); obliging to a matter of honor (Olympic Airlines, airline); and supporting their company’s social responsibility strategy (DEI, power provider) as their rationale for entering into those agreements. Even though it seems that, from their responses to that question alone, these ? ve sponsors did not consider any strategic or brand-related initiatives in their decisions to become involved in the program, there was some relevant information that ould be deciphered from their commentary on their sponsorship objectives, which indicates that some consideration of corporate strategy or branding was present. That information is discussed in the following section. Stated goals and/or objectives All of the companies in the sample seemed to have, to a greater or lesser extent, some stated goals for this sponsorship. However, with the exception of two cases, none of them were speci? c or measurable. In general, stated goals/objectives fell into two categories: 1 pro? -oriented (i. e. sales); or 2 brand-oriented. Table I outlines companies’ goals and/or objectives in terms of their Olympic sponsorship agreements and groups them based on their orientation. In terms of the pro? t-oriented goals/objectives, the majority of the sponsors in the sample seemed to agree that increasing sales for one or all of their products/services was one of their goals. Olympic Airlines, the national airline company, had speci? c objectives in terms of the amount of additional traf? it would generate during the summer months and was also expecting long-term repeat business. Alpha Bank, the private bank, was more speci? c in terms of the group it was targeting; it was looking to attract a younger demographic for its services. As was noted, “we are aiming to attract a younger audience [as] the pro? le of our clients is middle age” (personal communication, January 20, 2004). Interestingly, there was also the case of one sponsor (ELTA, postal services provider) that did not declare any speci? pro? t-oriented goals, but rather expressed a desire to at least make up the money they invested in acquiring the sponsorship. As stated by a company representative, one of their goals was “to cover the minimum guaranteed amount spent to acquire the sponsorship” (personal communication, February 2, 2004). The same company representative indicated that they did not view their Olympic sponsorship as a means that would produce any signi? cant commercial bene? ts and that the ? ancial returns were expected to be marginal. In addition to the pro? t-oriented goals, there were also other stated goals/objectives related to some aspects of brand Table I Goals/objectives of Grand National Olympic sponsors Brand-oriented goals/objectives Brand awareness, recognition Brand loyalty Integrate staff members of two banks Integrate two company cultures Brand associations Brand image, positioning Organizational culture, employees (internal branding)
Other goals/ objectives Grand National Olympic Pro? t-oriented goals/ sponsors objectives Alpha Bank Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Strengthen employee relations through leveraging initiatives Support the efforts of ATHOC – altruism 217 Receive moral bene? ts Increase market share Establish the new bank name in the minds of consumers Gain new customers Attract younger consumers Generate pro? of e50 million Athenian Increase sales (target group: Enhance brand recognition Create a legacy Make Heineken a yearBrewery 18-34) of Heineken after the Games round beer Community involvement DELTA Increase sales Create brand recognition, Community Strengthen company image awareness involvement Project interest in community matters and the country FAGE Generate sales from visitors Promote products abroad Turn foreign visitors into upon return to their Create brand awareness consumers of their countries among visitors (foreign products consumers) Hellenic Post [Avoid losses – make up the Create a positive image, (ELTA) money spent on sponsorship] customer- and serviceoriented Support company repositioning efforts Increase prestige as a new Olympic Airlines Increase traf? c by 150,000 Generate exposure and buzz post-Games company travelers (e50 million) Generate repeat travel in the future Create image of trust and Public Power Create credibility association Corporation, SA with the event Create prestige (DEI) Strengthen social pro? le of company Unite employees behind common effort Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 Serve noble cause of sponsorship Coordinate communications under one strategy Take advantage of sponsorship rights
Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 management. More speci? cally, the two areas that seemed to be more prevalent in sponsors’ priorities were brand awareness and recognition and brand image. Five of the seven sponsors in the sample stated that they were interested in raising awareness/recognition levels for their brands or a particular product under their brand. For Athenian Brewery, the beer producer, the goal was “to enhance brand recognition for Heineken [one of the products of that company] [. . . ] to promote Heineken and make it a year-round beer” (personal communication, March 4, 2004).
Alpha Bank, the private bank, was more interested in raising people’s awareness of the new name of the bank, while FAGE, one of the dairy product co-sponsors, was focused on making foreign consumers who were visiting Greece for the Games familiar with their products in hope that they would continue consumption upon return to their native countries. The second aspect of brand building that seemed to be important amongst at least four of the seven Grand National Olympic sponsors in the sample was brand image. Through association with an event as grandiose and unique as the Olympic Games, sponsors felt they could create a more positive image for their company.
This goal was particularly important for ELTA, the postal services provider that was hoping that the sponsorship would support its repositioning efforts. As their representative stated, “our company is at the stage of planning or promoting a change in its nature and orientation [. . . ] we are now shifting from the era of the citizen to the era of the customer, and that is important” (personal communication, February 2, 2004). Using the sponsorship to create an image of trust and credibility was one of the goals of DEI, the national power provider, while projecting their company’s interest in the community and the country and creating prestige as a new company were goals expressed by DELTA (dairy product co-sponsor) and Olympic Airlines (airline), respectively.
Another area related to branding, other than the two mentioned above, which also became evident from the data, is the use of sponsorship for purposes of branding within the organization (i. e. internal branding). Two of the companies in the sample, Alpha Bank (private bank) and DEI (power provider), indicated that they saw their Olympic sponsorship as a means to promote employee relations. According to the representative of one of the sponsors (DEI), “[one of the goals of our company for the Olympic sponsorship is] to unite employees around a vision and a common effort” (personal communication, May 6, 2004). A third company, DELTA (dairy product producer), made reference to that goal not directly, but through the discussion of their sponsorship activation initiatives.
In addition to the two main groups of goals, there were also some other goals/objectives expressed by Grand National Olympic sponsors. Those re? ected mainly altruistic motives and moral bene? ts sought through their involvement in the particular sponsorship program. Allocated resources Another indication of whether a sponsorship is seen as an investment and a brand building tool is the amount of resources invested in the process. There were two types of resources examined in this study, i. e. human and material resources. Furthermore, material resources were distinguished between in-cash versus in-kind, and those invested in the acquisition versus the activation of the sponsorship. 218
In terms of human resources allocated to their Olympic sponsorship, all companies in the sample formed some type of committee that was responsible for managing all sponsorshiprelated activities. The size of those committees ranged from two to 15 members and, in most cases, membership included employees from a number of departments within the organization. Furthermore, two of the companies in the sample, Alpha Bank and Athenian Brewery, discussed their intention to involve their employees in the process by initiating employee Olympic volunteer programs. Not all sponsors in the sample were willing to disclose the ? nancial investments they made to acquire their Olympic sponsorships. Of the seven companies in the sample, six provided some information in terms of the ? nancial resources allocated to becoming a Grand Olympic sponsor.
From the information provided through the interviews, it was concluded that Athenian Brewery and DELTA invested in cash only, DEI invested in kind only, while Alpha Bank, ELTA and Olympic Airlines invested both in cash and in kind. In general, there seemed to be a commitment toward the sponsorship, which became more apparent from the stated intentions of sponsors to allocate ? nancial resources in sponsorship activation initiatives. Even though all seven companies in the sample discussed some sponsorship activation plans, only four of the sponsors (Alpha Bank, Athenian Brewery, FAGE, Olympic Airlines) mentioned that they were planning to invest ? ancial resources on that aspect, with two of those (Alpha Bank and Olympic Airlines) disclosing the speci? c amounts. Some more information on sponsorship activation is provided in the section below. Sponsorship activation In addition to the resources allocated to sponsorship activation, information was collected on speci? c leveraging initiatives. Although there was some variation in terms of the means chosen by each company to activate their sponsorship, most initiatives involved the use of the Olympic logo and symbols as well as the Olympic mascots on sponsors’ products, employees, distribution vehicles, and at points of sale. The most common sponsorship activation initiatives involved Olympic-themed sales promotions (e. g. ontests), themed packaging, new products (e. g. Olympic-themed credit card), and collectible pins. Furthermore, three of the sponsors in the sample (Alpha Bank, ELTA and Olympic Airlines) mentioned the existence of a hospitality program for their clients or partners. In terms of the use of communication media to activate their Olympic sponsorship, the most popular choices appeared to be advertising through mass electronic (e. g. television) and print (e. g. newspaper) media, posters and billboards, displays at sponsors’ distribution outlets or specially created kiosks, and internal company communication media or publications (e. g. employee newsletter).
Surprisingly, the use of the internet and the companies’ websites (provided one existed) did not appear to be prevalent, with only three sponsors (Athenian Brewery, Alpha Bank and FAGE) mentioning its use in leveraging their sponsorship agreement, while three other companies (DELTA, ELTA and Olympic Airlines) indicated that promotion through the internet would be limited. Sponsorship evaluation Of all ? ve indicators used to determine the role of these sponsorship agreements in companies’ strategy and brand management efforts, this measure is probably the one for Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 which more general and more vague responses were received.
With the exception of three companies that either did not provide any information on this area (Alpha Bank) or provided very general information (Olympic Airlines and DEI), the remaining sponsors in the sample indicated at least some plans to measure sales, company awareness/recognition levels, and perceived image amongst consumers, or to conduct cost-bene? t analyses after the Games. Discussion In light of the ? ndings received from a representative group of the Grand National Sponsors of the 2004 Athens Olympic Games, some general observations and practical recommendations are offered for marketing and brand management executives interested in investing in sport sponsorship. Firstly, even though the marketing literature has repeatedly cautioned corporate executives about the need to be strategic with their decisions to invest in sponsorship and also in the selection of an appropriate property that could further corporate objectives (e. g. Farrelly et al. , 1997; Meenaghan, 1998), the ? dings of this study indicate that only a small number of the national sponsors of the Athens Olympic Games truly saw this sponsorship as a tool to further corporate strategy. For a number of other ? rms becoming a sponsor was explained by generally stated objectives of assisting the Organizing Committee’s efforts to put on a good event of the greatest national importance. However, even those companies that did not speak about corporate strategy and brand management made it clear throughout their interviews that solidifying an association with the Olympic Games could affect their brand image and positioning in a positive manner. The use of words such as “legacy”, “honor”, “prestige” and “image” indicates that these companies were well aware of how an of? ial relationship with an event as unique as the Olympic Games and as important for the history of the country (i. e. Greece) would help to build strong brand associations. This con? rms past research suggesting that sport sponsorship can be used as a brand-building tool through the creation of positive and favorable brand associations (e. g. Amis, 2003; Roy and Cornwell, 2003). Secondly, the companies in the sample highlighted the key strengths of their national Olympic sponsorships by stating the goals and objectives attached to those agreements, even though they were not, in most cases, speci? c or measurable as it has been recommended through past literature (e. g. Arthur et al. , 1998).
Interestingly, many of the goals and objectives stated were brand-related. It was evident through the interviews that companies recognized the opportunity to sharpen their brand image and increase levels of brand awareness, but also saw the chance to do that in a favorable light by taking advantage of the positive feelings and emotions people had toward the Olympic Games. Being seen as one of the contributors to an event as important to the country and its citizens – even though not directly related to pro? toriented objectives – if achieved, could have led to positive outcomes via strengthening the company’s image and emotional connection with current and potential consumers.
Past research also has connected the existence of positive brand associations to favorable consequences for brands (e. g. Amis, 2003; Gladden et al. , 1998). Thirdly, it appeared from the data that all the companies created teams to manage their sponsorships and, in most 219 cases, those teams involved employees from a number of departments. The involvement of various departments in the sponsorship management process could indicate efforts of sponsors to integrate their Olympic sponsorship throughout their organizations. Furthermore, for those companies that decided to involve their employees via Olympic volunteer programs or to incorporate employee bene? s and special corporate hospitality programs, it seems that they also saw this sponsorship as a tool to build employee relations and strengthen their brand internally. Fourthly, the willingness of companies to allocate resources not only in becoming sponsors but also in leveraging their sponsorship relationships indicates an even greater commitment in using this sponsorship as a brand building tool and receiving full bene? ts from their involvement – even though that was not clear from responses related to the ? rst indicator. It also implies that companies saw value in the intellectual property of the Olympic Games and in the rights received through their agreements with the Organizing Committee. Although most of the managers interviewed failed to report with speci? ity the resources committed in sponsorship activation, this ? nding is in agreement with previous research that proposes spending money to leverage the associated bene? ts of a sponsorship (e. g. the $2-for-$1 additional spending found by Farrelly et al. , 1997). The leveraging initiatives described throughout the interviews were clearly efforts to capitalize on the positive feelings and enthusiasm that were widespread throughout the country. Using a variety of promotional and communications initiatives to take advantage of product/service category exclusivity rights (even for the two dairy product producers that signed on as co-sponsors) and of the of? cial af? iation with the Olympic Games could provide a competitive advantage to those corporations and differentiate them from their competition. Lastly, the lack of data on sponsorship evaluation plans might imply that assessment of the effectiveness of process and of the ful? llment of goals might not be an area to which companies devoted much energy, at least in the early stages of their sponsorship relationship. This ? nding is consistent with the existing literature, which indicates that many companies spend signi? cant resources on sponsorship agreements but fail to establish formal sponsorship evaluation systems or procedures (Miyazaki and Morgan, 2001).
Furthermore, the fact that most objectives stated throughout the interviews were rather general and not speci? c could make any effort to evaluate the effectiveness of these sponsorship agreements even harder. Consistent with past literature (e. g. Cornwell, 1995; Meenaghan, 1998), in this case it is also strongly recommended that plans to measure whether corporate objectives were achieved should be an integral part of the sponsorship design and implementation, and not merely an afterthought. Olympic sponsorships, especially at the national level, are somewhat unique in that they are typically once-ina-lifetime opportunities, with sponsorship renewal being less of an issue. Even so, easuring return on investment could prove valuable in guiding a company through future decisions to invest in sport or other sponsorship opportunities. Managerial implications and conclusions Given the increased pressure on corporations to maximize ef? ciency in operations and maximize return on all company investments, sport sponsorship has naturally fallen under Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 scrutiny in terms of its potential to further corporate goals and help strengthen the brand.
The main contribution of this research is showing that there are still large corporations – such as the Grand National sponsors of the Athens 2004 Olympic Games – that enter expensive sponsorship agreements with only moderate consideration to the strategic and brand-building elements of sponsorship. As this study showed, not all cases prove that speci? c brandbuilding initiatives were put in place from the start of those relationships. The ? ndings discussed above hold managerial implications for both sponsorship executives and (sport) event properties. In addition to an overall strategy involving corporate brand management, it is important for sponsors to fully understand what speci? advantages are delivered through their sponsorships and how customers might view those companies’ sponsorship efforts in relation to other media tools. As Farrelly et al. (1997) have suggested, ? rms need to ? rst “research the role of sponsorship in the strategic plan, communication mix, and its place in the organizational hierarchy” (p. 178). Using a manager-based view of the Grand National Olympic sponsorships, the ? ndings are quite clear in showing that this type of thinking had not yet (i. e. at the time of the interviews) been adequately established in these agreements. The majority of the 2004 Olympics Grand sponsors had dif? culties approaching their partnerships as a valuable esource able to create competitive advantage in the marketplace. Nevertheless, the marketing department of ATHOC, the Organizing Committee of the Athens 2004 Olympic Games also holds part of the responsibility for the lack of strategic thinking in the investments of some Grand sponsors. Organizing Committees in general hinge on the success of these agreements in order to generate income and positive evaluations on corporate business developments. In addition to the promotion of the unique image of the Games and the rights of the Olympic sponsorship program, it is in the overall interest of the event property to integrate real strategic thinking in the sponsorship program process.
This strategic thinking can be oriented, for example, by encouraging and/or assisting candidate sponsors to explore their strategic link between the Olympic Games’ audience and their ? rms’ target market and overall brand-related objectives. If the property (in this case OCOG) works proactively to promote the unique business links associated to their audience, the brand bene? ts, as well as the other opportunities for meaningful interactions with costumers, sponsors will be more willing to allocate resources on entering the agreements and spending for their full activation. This could result in real strategic and brand management thinking on the part of the selected national Olympic sponsors, as well.
Given that the Olympic partnerships involve a four-year period of sponsorship privileges, a strategic approach is particularly critical in order to facilitate a sustained long-term successful partnership with mutual bene? ts. In closing, the results of the study imply that the need for adequate planning and strategic integration of sponsorship within other corporate marketing and branding efforts cannot be overstated. Especially with a property as unique as the Olympic Games, the need to be strategic in all decisions related to the sponsorship, to create new and leverage existing unique brand associations, and to implement speci? c measures of success in every step of the process is imperative for sponsors if unique bene? ts are to be realized. 220 References Aaker, D. A. (1991), Managing Brand Equity, The Free Press, New York, NY.
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Thwaites, D. , Aguilar-Manjarrez, R. and Kidd, C. (1998), “Sports sponsorship development in leading Canadian companies: issues and trends”, International Journal of Advertising, Vol. 17, pp. 29-49. Wong, H. Y. and Merrilees, B. (2005), “A brand orientation typology for SMEs: a case research approach”, Journal of Product & Brand Management, Vol. 14 No. 3, pp. 155-62. About the authors Dimitra Papadimitriou is a Lecturer in the Department of Business Management at the University of Patras, Greece. She teaches in the area of sport management and marketing.
Her research interests include organizational theory, sport sponsorship and sport tourism, and her work has appeared in the European Sport Management Quarterly, Sport Marketing Quarterly, Sport Management Review, Managing Leisure, and the International Journal of Sports Marketing & Sponsorship. She is also the author of the book Management of Sport Enterprises and Organizations, published in 2005 by Kleidarithmos Publications. In addition, Dr Papadimitriou is an elected board member of the European Association for Sport Management and serves on the Editorial Board of the European Sport Management Quarterly journal. Dimitra Papadimitriou is the corresponding author and can be contacted at: [email protected] gr Artemisia Apostolopoulou is an Assistant Professor of Sport Management in the School of Business at Robert Morris University, USA. She teaches sport management and marketing at the undergraduate and graduate level.
Her primary area of research involves brand management and brand extension strategies implemented by sport organizations. Her secondary research interests include sponsorship and endorsement issues, as well as entertainment aspects of sport consumption. She has presented work at numerous national and international conferences, co-authored book chapters, and published research in Sport Marketing Quarterly and the International Journal of Sports Marketing & Sponsorship. Theofanis Dounis is a PhD candidate in the Department of Business Management at the University of Patras, Greece. He conducts research in the area of strategic management in the professional football industry.
Executive summary and implications for managers and executives This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full bene? t of the material present. This sporting life Corporate sponsorship of sport is a big business and it is growing. In 2003, for example, spend on sponsorship was calculated at $US25. 9 billion. A year later in 2004, it had risen to $28 billion. In anyone’s money, that’s a big business. Of this spend 69 percent goes to sporting events. Sport, it seems, is the ? rst among equals.
Event sponsorship as a value creating strategy for brands Dimitra Papadimitriou, Artemisia Apostolopoulou and Theofanis Dounis Journal of Product & Brand Management Volume 17 · Number 4 · 2008 · 212 –222 Within this or any other context the Olympic Games has become a phenomenon of our times. The ancients surely could not have imagined what was to come. The late nineteenth century/early twentieth century revivalists would be, one would suppose, either amazed or aghast. Organizers picking up the baton after the Second World War, such as the modest London Games of 1948, would still have little inkling of what was to come. A global TV audience and, some might argue, a shift in values, have changed the game.
For global companies the Olympics deliver a global audience and provide a more or less unique opportunity to reinforce brand values and build reputation. It is an opportunity not to be missed. It only comes around every four years. Athenian outcomes British Prime Minister Harold Macmillan, on being asked what represented the gr