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Local event sponsorship, the ultimate way to increase
brand equity and stimulate word of mouth?
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Local event sponsorship, the ultimate way to increase
brand equity and stimulate word of mouth?
Anneke Bouwmeester
University of Groningen
Faculty of Economics & Business
Master thesis BA – Marketing Management
s1839543
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Management Summary
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Preface
Sports is an interesting communication tool to use for marketing objectives. I wanted to find out if the advantageous of sport could be combined with business opportunities. Everyone likes the experience of sport, and sport could be used to tell a story to the consumers. This story is hard not to believe, due to the authenticity of sport. My roots are in sport, which made me decide to write my master thesis about this subject. In this way I combined my knowledge that I gained during by master study, with my interest in sport. I would like to take the opportunity to thank a number of people who have contributed to the conclusion of this master thesis.
First of all I would like to thank Dr. Karel Jan Alsem, who supported me with feedback throughout the production of my thesis. I liked the discussions we had during the meetings about my thesis, and Karel Jan really challenged me during the process of writing my thesis.
Then I would like to thank Unilever for giving me the opportunity to write my master thesis for the brand Lipton Ice Tea. In special thanks to Tijs van Olffen, who supported me during an eight months period I was an intern at Unilever in Rotterdam. I learned a lot during this period, which I am really grateful for. It would be great to see the brand Lipton Ice Tea sponsoring a lot of sport events next year.
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Contents
1. Introduction and problem specification ... 7
1.1 Introduction ... 7
1.2 Current research ... 8
1.3 Research questions ... 10
1.4 Thesis structure overview... 10
2. Literature review ... 11
2.1 Sponsorship definition... 11
2.2 Sponsorship outcomes brand equity and word of mouth ... 14
2.3 Influencing the relationship –moderating effects ... 19
2.4 Conceptual model ... 23
3. Research methodology ... 25
3.1 Subjects and stimuli ... 25
3.2 Research methods and procedure ... 26
3.3 Measures... 26
3.4 Item purification: pre-test ... 28
3.5 Method of analysis ... 29
4. Results ... 30
4.1 Demographic information ... 30
4.2 Validity and reliability ... 31
4.3 Outcomes ... 32
4.4 Testing moderating effects ... 35
5. Conclusion and recommendations ... 38
5.1 Discussion and conclusion ... 38
5.2 Managerial implications ... 39
5.3 Recommendations ... 40
5.4 Limitations and further research ... 40
6. References ... 42
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1. Introduction and problem specification
1.1 Introduction
The rate of growth in sponsorship expenditures is greater than for traditional media advertising and sales promotion (Roy and Cornwell, 2003), which shows the increase in importance of sponsorship as a communication tool. Sponsorship may entail sports, arts, causes, or combinations of these, however this research focuses only on sports sponsorship. A lot of money is spent on sport sponsorship, worldwide $31 billion in 2009 (Akaoui, 2007; Olson, 2010). There are a lot of different types of sponsorship, of which sporting events are the most popular, with an estimated 67 percent of all sponsorship money invested in sporting events (IEG-2000). Event sponsorship is a common subject in research, and most research is on the effect of sponsoring the Olympic Games. Companies paid $2 billion to secure official sponsorship status at the Beijing Olympics in 2008, compared to just $338 million at Seoul in 1988, a substantial increase, even accounting for inflation (Pitt et al, 2008). Since the increase of expenditures on sponsorship, the importance of researching the effectiveness of sponsorship has increased. Furthermore, with the increase of event sponsorship, some disadvantages have arisen. First, sponsoring large events (e.g. the Olympic Games) has lost its spirit and is over-commercialized because of the excessive sponsorship-linked marketing activities (Lee et al, 1997). Sponsorship-linked marketing means using other communication tools in to support the sponsorship. Second, ambush marketing is increasing due to the increasing competition with sponsorship, which means a non-sponsoring company associates itself with an event without paying for sponsorship rights (Shani & Sandler, 1998). In spite of these disadvantages of sponsoring a large event, from a marketing perspective the largest events are the best kind of sport sponsorship due to the highest exposure on a worldwide level.
High media exposure increases the opportunity to reach corporate objectives. There are several key corporate objectives associated with sponsoring of events, such as (1) enhanced brand image via associations with positively perceived events; (2) increased goodwill via perceptions of corporate generosity; and (3) elevated brand awareness due to increased exposure (Gwinner, 1997; Keller, 1993; Walliser, 2003; Irwin et al, 2003). Basically, the main reason for engaging in sponsorship is to generate positive effects that may spill over to a brand (Pope and Voges, 2000). The success of realizing these sponsorship objectives depends on a few requirements. From previous research it is shown that high media exposure is one of the requirements that influences the effectiveness of sponsorship, however sponsoring events with high media exposure is expensive, and to the current knowledge there is no scientific guarantee on positive sponsorship outcomes. In addition, the increasing commercialization and risk of ambushers with the large events, might make it more attractive to sponsor other types of events.
Page 8 It needs to be added that it is possible for an event to grow towards a higher type of event, due to popularity; e.g. Wimbledon was once a local tennis tournament, and is now a worldwide popular tennis event with a lot of spectators and high media exposure.
Table 1.1 – sport event classifications Gratton et al (2000)
Type A Very high media exposure, Very high level of spectators. (generating significant economic activity)
Global events. E.g. Olympic Games, Football World Cup
Type B High media exposure, high level of spectators National events. E.g. FA Cup Final, Wimbledon, Open Golf
Type C Medium media exposure, same level of spectators than contestants of the event
Regional events. E.g. National Championships in most sports Type D Low media exposure, low level of spectators. Mostly
contestants are at the event
Local events. E.g. Youth sporting events, local events
A Type A event is a global event, and the occurrence is limited (at the very most once a year). These type of events attracts a lot of interests and spectators, and media exposure is very high on a global scale. Contrary is a Type D event, which carries no global or national media exposure, and the percentage of contestants is higher than the percentage of spectators. However, Type D events are higher on the level of occurrence, and there are a lot more Type D events compared to Type A events. A Type D event is geographically restricted, and is mostly an event for the sports players from the local area. This research is on the effectiveness of sponsoring a Type D event. From a corporate perspective, each type of event has advantages and disadvantages (e.g. sponsoring higher type of events (A and B) creates more national or global media exposure, however a higher sponsorship fee needs to be paid). To the current knowledge, a lot of sponsorship research has been done on the higher levels of events, and there is no scientific results on the effectiveness of sponsoring a Type D event. Sponsoring a Type D event is interesting for corporate motives for the following reasons: (1) local event sponsorship would be a communication tool which is aimed at the consumers through the clutter of an overload of messages aimed at the consumers (Meenaghan, 1998); (2) local sporting events would associate the company with a charity and suggest that the business is fulfilling a societal obligation to the community from which it draws customers, employees, and investors; (3) local event sponsorship is interesting for a company because it generates goodwill and enhances the image of the business (Dean, 2002); (4) with local event sponsorship the target group can be segmented by region or type of sport. For these reasons, local event sponsorship is the subject of this research and can be seen as a opportunity to reach corporate marketing objectives.
1.2 Current research
Page 9 many sponsors are to increase awareness and to enhance brand image (Cornwell et al, 2001). As Keller (1998) states: the main objective of event sponsorship is to contribute to brand equity. Brand equity is defined as the differential effect of brand knowledge on consumer response to the marketing of that brand (Keller, 1993;1998). Since brand equity is the most valuable consumer behavior outcome of sponsorship, the main objective of this research is to find out if local sponsorship has an impact on the brand equity of the sponsor. Furthermore, consumer behaviour is the foundation of all marketing, and without understanding the consumer, success in marketing is unlikely. The ultimate form of brand equity is brand loyalty, which means a consumer is always willing to repurchase the product/service of the sponsor of the event. Since local event sponsorship is expected to create goodwill and is seen as a social obligation to society, consumers are expected to become truly loyal, and start talking about the sponsor to their family/friends/acquaintance, which is known as positive word of mouth. Word of mouth has found to be a powerful influence on the consumer purchasing process, but has only attracted limited attention as an outcome variable in sponsorship research (Alexandris, 2007). Furthermore, word of mouth is a powerful communication tool, which measures loyalty as a result. Therefore, word of mouth is included as an additional sponsorship measurement to brand equity in this research.
Previous research shows that a lot of variables influence the outcomes of sponsorship. Most research showed the importance of congruency influencing the sponsorship success (Gwinner and Eaton, 1999). Congruency is the perceived similarity between the image and associations of the sponsor and the event. Previous research focused on the impact of congruency on the outcomes brand awareness and brand image, where in general more congruency between the sponsor and sponsored object has higher results of sponsorship effects (Smith et al, 2008). However, when sponsored cause is viewed as incongruent with the firm‟s image, sponsorships may even be harmful (Speed and Thompson, 2000), and message support is needed to support the sponsorship relation. Message support is the use of other communication tools to clarify and support the sponsorship. However, with local sponsorship the use of message support is seen as needless, because that would influence the perceived commercialization. The idea behind sponsorship is that it creates its publicity by itself, this research finds out whether congruency is a necessary condition for the effectiveness of local sponsorship.
Another stream of research focuses on the sponsorship-linked marketing, which is the orchestration and implementation of marketing activities for the purpose of building and communicating an association to a sponsorship (Cornwell et al, 2005). An example is the car brand Volvo, which has implemented sport sponsorship within their overall marketing strategy. Sport sponsorship can be an invaluable tool as long as it is not fully integrated into a firm‟s marketing and communication efforts. Further exploration is needed about the fact that customer-based brand equity is developed through sponsorship-linked communications (Cornwell et al, 2001).
Page 10 Alexandris (2007) found a positive relation between attraction and centrality involvement towards the sponsored property. This is interesting to apply to the current study, since it is expected that both types of involvement are influencing the sponsorship outcomes of local sponsorship. Furthermore, the success of sponsoring a local event is expected to happen due to the beliefs, since the sponsorship is assumed to be seen as an act of goodwill. In addition, the expected success of local event sponsorship is due to the perceived sincerity, since it will be perceived as less commercial compared to a Type A or B event. For an event sponsor, the sports sponsorship can lead to increased sales and/or market share, and contact with desirable consumer audiences and other important constituencies (Amis et al., 1999; Farrelly et al, 2005). As discussed above, a lot of different consumer behavior related variables are expected to influence the effectiveness of local event sponsorship. The outcome of this research will be an answer on the research question described within the following section.
1.3 Research questions
Measuring the effects of local even sponsorship is limited, therefore this research wants to provide an answer to the question: is local event sponsorship effective? Furthermore, it is necessary to include moderating effects which are expected to positively influence this relationship. The main objective therefore of this research is the following:
Gain insight in the effects of local sponsorship on the brand equity of the sponsor and word of mouth, including the consumer behaviour moderating effects of perceived congruency, involvement and sincerity
This research will give an answer to the following questions, which are derived from the research objective:
What is local sponsorship?
What are the effects of local sponsorship on brand equity and word of mouth? What is the role of perceived sincerity in sponsorship?
What is the effect of involvement towards the sport? Why is congruency important?
What is the difference between the target groups
The target groups of this research are all related to sports, either contestants, audience or consumers who carry a certain liking for the sport.
1.4 Thesis structure overview
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2. Literature review
This chapter starts with an exploration on sports sponsorship in general. In section 2.1 an extended definition of sports sponsorship is given, and sponsorship is compared to other communication tools. After reading section 2.2 the relationships within sports sponsorship between sponsor, consumer and sponsored event is clarified. The following sections 2.3 and 2.4 explain the effects within the local event sponsorship relationship and explore the conceptual model of this research.
2.1 Sponsorship definition
The importance of sponsorship increased a lot, and nowadays it is such a common element within the marketing strategy. The most common definition used in research is of Meenaghan (1991), which states sponsorship as „an investment, in cash or in kind, in an activity, in return for access to the exploitable commercial potential associated with that activity‟. Sponsorship is used as a communication tool to reach similar goals as with traditional advertising tools, to increase image and awareness. The sponsorship literature has mainly viewed sponsorship as an activity largely similar to the traditional advertising tools (Meenaghan, 1998). However, sponsorship has some differences over traditional advertising. The first difference is that the donation / sponsorship fee comes first and makes the event possible, and then there is a hoped for change in consumer attitude or behaviour (Cornwell and Coote, 2005). This means that in sponsorship both medium and creative message are not tightly controlled by the sponsor (Javaligi et al, 1994; Theofilou et al, 2008). Advertising offers a much more knowable and controlled communication (Cornwell et al, 2005). The second difference is that sponsorship, compared to advertising, would reach a wider range of public and a more targeted public than traditional advertising (Lings and Owen, 2007). However, with local event sponsorship, the target audience can be carefully selected. The third difference is the involvement of a second party, that is, the activity sponsored, distinguishes sponsorship from advertising (Speed and Thompson, 2000). In sponsorship arrangement all parties can be active and all parties expect to benefit from the arrangement (Olkkonen, 2001). The last difference distinguishes sponsorship the most from advertising through traditional media, since sponsorship can be used as a new way of communication, and to create a competitive advantage.
However, more and more companies use the sponsorship tool, which increases the clutter and makes it more difficult to distinguish. Due to the increased competition of sponsorship ambush marketing , where other firms make consumers believe, incorrectly, that these companies are the actual sponsors of an event (Grohs et al, 2004). Local sponsorship would not have the problem of „ambushers‟ since global and national media exposure is low which decreases attractiveness for competitors. The downside of sponsorship nowadays is that it is seen by the consumer as a commercial activity, and the effectiveness of sponsorship is decreasing. It is expected that this is not the case with local sponsorship, since this is seen as a good deed by the consumers.
Page 12 In addition, within local sponsorship the relationship between sponsor, sponsored event, and consumer is very important. It all boils down to a win-win relationship between all parties involved in the sponsorship. The difference between Type A, B and C sponsorship events is that the consumer is directly influenced (see figure 2.1) and with a Type D event the consumer is for the largest part influenced by the contestant and visitors of the event. This is due to the fact that local sponsorship has a higher percentage of contestants than visitors of the event. Local sponsorship is directly influencing the participants and audience of the event, who influence the consumers by word of mouth. The word of mouth aspect will be elaborated further later in this research.
The relationship of the parties involved with event sponsorship is seen as a triangle, since all relations are equally important. Within the sponsorship relationship, various kinds of organizations can be involved: public and private, profit and non-profit. Most local events are organized by non-profit organizations, where Type A, B and C events are most profit driven (e.g. Word Championships Soccer, Olympic Games). The main objective is that all parties (sponsor, sponsored event, and consumers) have a profitable. Within previous research all definitions of sponsorship are given based on the point of view of the sponsor (e.g. „sponsorship is the underwriting of a special event to support corporate objectives by enhancing corporate image, increasing awareness of brand, or directly stimulating sales of products and services‟). However, in this research it is proposed that sponsorship only works if the sponsored event has something to gain as well, and not only the „cash paid by the sponsor‟. A new definition should be created, like sponsorship is based on an exchange between sponsors and sponsored property, and pursues marketing (communication) objectives by exploiting the association between the sponsor and event, influencing the contestant, visitor and consumer. This should lead to positively influence the third party within the sponsorship relationship, namely consumers. The different relationships within the triangle are discussed next.
1) Sponsor – sponsored event. Modern sponsorship has moved from primarily a philanthropic activity to mutually advantageous business arrangements between sponsors and the sponsored event (Abratt et al, 1987; Gwinner and Swanson, 2003). Therefore, the importance of the relationship between sponsor and the sponsored event is increasing. Previous research shows the importance of congruency in the relationship between the sponsor and the sponsored event. From a consumer perspective, congruency between sponsor and sponsored event occurs when the attitude of the consumer is positive towards this sponsorship relationship. Congruency is the level of associations which are shared between the sponsor and the sponsored event, and is an important predictor of sponsorship success. These effects are elaborated on further in this research.
Type D- local event Type A, B and C events
Sponsor Sponsored event Contestant and visitors Consumer Sponsor Sponsored event Consumer
Figure 2.1 – Sponsorship relationship
Page 13 2) Contestant/visitor/consumer – sponsored event. A lot of attention has been paid towards this relationship in research, since a need exists to develop a better understanding of how a consumers‟ feeling toward a favourite property influences purchase intentions and behaviours (Madrigal, 2001). This is named involvement, and refers to the consumers‟ emotional connection to the sponsored event. Furthermore, the extent to which a consumer has strong positive or negative feelings for an sport event is named affective intensity (also named sponsorship beliefs) (Wakefield and Bennett, 2010). The conclusion of the research on affective intensity of Wakefield and Bennett (2010) is that individuals are more likely to respond positively towards the sponsor and recall sponsors that are in some way related to the property or that are more prominent in the minds of consumers (high congruency). The consumers who affiliate/have positive beliefs with the property are more involved, and have been found more likely to recall or identify the sponsor (Cornwell and Coote, 2005; Gwinner and Swanson, 2003; Madrigal 2000, 2001; Wakefield and Bennett, 2010). Smith et al. (2008) state that a person with low interest in the sponsored event will transfer images differently to a fan of the event.
3) Sponsor and consumer. The sponsorship should have positive effects towards the sponsor. Measuring the effects of sponsorship in research has focused on improving the recall, recognition, or brand associations held in memory (Cornwell et al, 2005). Consumers already have a certain level of brand knowledge in mind about the sponsor. According to Cornwell et al (2005) the following four individual factors that have an influence on this relationship are: arousal, prior experience, knowledge, and involvement. The previous association a consumer has in mind about a brand influences the relationship of the consumer towards the sponsor. This can be explained by the attribution theory. This theory suggests that consumers will act as naïve scientists, attempting to understand why a sponsor has contributed money (or other resources) to an event (Keller, 1993; Dean, 2002). This theory is a family of theories based on the assumption that individuals are social perceivers who make causal inferences about events they observe and experience (Rifon et al, 2004). According to the attribution theory, the reactions of consumers towards local sponsorship is hoped to be with seamless acceptance of the „good deed‟, with minimal perception of profit motives resulting from skepticism. Without this skepticism, the consumer perceives the sponsorship as more sincere, which is expected to have a positive impact on the brand equity and word of mouth results. This is especially needed for contestants and visitors of a local event, influencing the consumers through word of mouth. This is explained further on in this research.
Page 14 Table 2.1 – local versus global sponsorship
LOCAL GLOBAL
Perceived as more sincere Seen as more commercial Less media attention More media exposure
Less costly Higher costs
Based on the experience of the sponsorship
Interesting for sponsorship-linked marketing
Influencing participants/ audience Influencing consumers (spectators) directly
2.2 Sponsorship outcomes brand equity and word of mouth
Sponsorship can play a role in building brand equity (Keller, 1993; Park and Srinivasan, 1994). Corporate goals for sport sponsorship are more related to consumer behaviour (Grohs et al. 2004). This means that the sponsorship objectives are moving from building brand awareness to more enhancing brand image objectives (Cornwell et al, 2005). Therefore, sponsorship is increasing on the level of building customer-based brand equity, which led to including brand equity as a measurement of the sponsorship effectiveness in this research. Measuring brand equity is important for a company to justify the impact of marketing activities. Word of mouth is included as an additional measurement to brand equity, since it is a good measurement for loyalty. Furthermore, word of mouth is valuable, because it explains the real experience of a consumer due to the sponsorship, since talking about an experience shows true loyalty towards a brand. Word of mouth is a highly desirable sponsorship outcome, since it is widely recognized today as one of the most effective communication tools (Laczniak et al, 2001). First a distinction is made between brand equity and word of mouth, lastly the participants are described in this section. Since participation to a sponsorship is needed before any outcome of the sponsorship relation can occur.
2.2.1 Brand equity
Page 15 Keller (2001) proposes the concept of customer-based brand equity, which is defined as „the differential effect of the brand knowledge on consumer response to the marketing of the brand‟. According to this view, brand knowledge is not the facts about the brand, it is all the thoughts, feelings, perceptions and so on that become linked to the brand in the minds of customers. Keller‟s focus on customer-based brand equity shows that brand awareness and brand image are the two most important components of brand knowledge. Contrary to the concept of brand equity of Keller (2001), Aaker (1991) defines brand equity as „a set of assets (and liabilities) linked to a brand‟s name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and/or that firm‟s customers‟. Aaker (1991) described brand equity as one of the most fundamental signifiers 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. The research of Yoo and Donthu (2001) on brand equity incorporated both Aaker‟s and Keller‟s view on brand equity. This led to the following definition: brand equity is „the incremental utility or value added to a product by its brand name‟. This definition is on consumer-based brand equity, since it is about the consumer‟s responses towards a brand which results from the sponsored event. It can be stated that overall brand equity is the value added to a product or service as a result of prior investments in the marketing mix (Keller 1993). If customers judge a particular brand as strong, unique, and desirable, they experience high brand equity (Keller, 2009). Brand equity is the value of a brand due to marketing activities (sponsoring an event) compared to an unbranded product. The above described brand equity theory of Aaker and Keller are the most valued analysis on this subject. The model of Aaker and Keller are visualized in figure 2.1 which have both different views on the brand equity concept.
Figure 2.1 – Brand equity models
Aaker (1991): Keller (1993):
Page 16 The four dimensions (purchase intention excluded) are tested in the research of Yoo and Donthu (2001) and are the most important variables when researching the effectiveness of sponsorship. These dimensions of the research of Yoo and Donthu (2001) will be elaborated on, and additional the dimension purchase intention is discussed.
First brand awareness, which is one of the general elements of brand equity. Brand awareness is defined as the ability for a buyer to recognize or recall the sponsor of an event. Recall is aided memory and recognition is spontaneous awareness. Sponsorship research shows that with large events like the Olympics, consumers recall brands that were not a real sponsor of the event, the so-called „ambushers‟. The effect of local event sponsorship on the brand awareness of the sponsor has never been researched. Second perceived quality of a brand, which is consumer‟s judgment about the sponsor on the overall excellence or superiority. Perceived quality can be influenced by the beliefs about the sponsorship, which is elaborated on later in this chapter. Third brand associations/image, these are essential sources of brand equity to drive customer behaviour (Leone et al, 2006). Associations of a brand need to be strong, favourable, and unique. Image is defined as the total impression that the entity makes on the minds of individuals (Pope and Voges, 1999). There is evidence that sponsorship can contribute to the modification of certain image dimensions (Walliser, 2003), which only occurs for sponsors having a high visibility during the event. Fourth brand loyalty, the ultimate level of brand equity, meaning that the customer is always willing to repurchase the same brand. Brand loyalty can be influenced by the sponsorship, which is also expected to be influenced by the sincerity and sponsorship beliefs explained later on in this research. Lastly, purchase intention is added to the list of brand equity measurements, since this is a valuable sponsorship outcome measurement that has extensively been used in previous research (Crompton, 2004; Meenaghan, 2001). Purchase intentions is an individual‟s conscious plan to make an effort to purchase a brand (Dees et al, 2010). Purchase intentions are an antecedent of actual purchase behaviours, which is a good predictor of sales. Eventually all sponsors want to increase sales due to the sponsorship, and purchase intention is the best way to be able to predict the change in sales due to the sponsored event.
The above described brand equity dimensions can be classified within the customer-based brand equity pyramid (Keller, 2009), where the dimensions are seen as building blocks of brand equity. The lowest level of brand equity is brand awareness, and the highest level is brand loyalty. Brand loyalty occurs when customers are willing to invest time, energy, money, or other resources into the brand beyond those expended during purchase or consumption of the brand (Hoeffler and Keller, 2002). This research distinguished the different levels of brand equity. Since the higher levels of brand equity have never been researched in sponsorship literature it is interesting to find out the differences in effects of the dimensions.
2.2.2 Word of mouth
Page 17 Loyalty is the willingness of someone (a customer, an employee, a friend) to make an investment or personal sacrifice in order to strengthen the relationship. Therefore, customer loyalty is about much more than repeat purchases. However, a loyal customer is not always the most profitable customer for a company, since loyal customers can be more demanding and carry higher retention costs. A loyal customer is profitable when it is positively influencing other customers, which decreases the acquisition costs, and drives top-line growth. Therefore, recommendation towards a friend, colleague or family is a good measurement of loyalty; this can be named positive word of mouth. Word of mouth plays a critical role in the adoption and diffusion of a brand (Mahajan et al, 1995). Within sport sponsorship not much research has been done on the effect of positive word of mouth. The research of Alexandris (2007) is the first research on this subject, and found a positive relation between the attitude towards the event and a positive word of mouth about the event. This relationship focuses on the positive word of mouth about the sponsor of the event. Reichheld developed the Net Promotor Scale (NPS), which measures word of mouth by asking the consumer one question. This measurement of loyalty is valuable, since it is highly related with the increase in sales. The NPS measurement finds out the promoters, and detractors. Promoters speak positively about the sponsored brand, where detractors would not recommend the sponsored brand. The Net Promotor Score is the percentage of promoters minus the percentage of detractors (see figure 2.2).
Figure 2.2 – Net Promoter Score
The NPS measurement is highly applicable in measuring sponsorship, since this measurement is easy to understand, which increases its effectiveness. Knowing the net promoter score is effective, however, knowing who is the promoter is most effective. In that way a company can adjust its strategy to influence promoters. A promoter has in general a high level of enthusiasm and high self-esteem. A disadvantage of the NPS measurement is that it is based on one question, however, adding two more questions and it is a valuable measurement of word of mouth (Reichheld, 1993).
Page 18 2.2.3 Participation
Since this research focuses on the impact of sponsoring a local event on the outcomes brand equity and word of mouth, participants (=contestants and visitors) of the local event needs to be included in this research. Participation to an event is a requirement for creating a change in the brand equity and word of mouth values of a consumer. A participant of the sponsored event is „life‟ present at the event sponsored, and can be a member of the audience, contestant or a active contributor of the event. A participant of a local event is expected to be more involved than someone who is watching the Olympic Games on television. And the more a consumer is involved with a sponsored object, the more they will be aware of all aspects concerning that object and, therefore, the greater will be the communication effect on the consumer (Meenaghan, 1998). Furthermore, audience participation in the sponsorship experience may also facilitate image transfer from the event to the brand (Coppetti et al, 2009). Therefore life presence at an event is positively influencing the outcomes on brand equity.
From the research of Mason and Cochetel (2006) four different levels of participants are distinguished:
Level 1. Visitor or to sponsored event: physical and mental proximity.
Level 2. People interested in sponsored object: not visitors, proximity is mostly mental. Level 3. People interested in sponsorship field: indirect mental proximity.
Level 4. People not interested in sponsored object or sponsorship field.
This study focuses on the first and second level of participants. The second level of participant consists of consumers who are interested in a type of
sport of a certain event, however do not visit that event. The first level of participants are visitors of the event, which consists of the audience and the person who is taking part in the event. With local event sponsorship participation is required for sponsorship to be effective (see type D sponsorship relationship
again). Level 1 participants are the audience and contestants of the event, and level 2 participants are the control group incorporated in this research. Level 1 participants are exposed to the sponsorship and level 2 participants are not exposed to the sponsorship, however are involved with the event or type of sport sponsored. Combining the level 1 (yes sponsorship) and level 2 (no sponsorship) of participation with the sponsorship outcomes brand equity and word of mouth, the first step of the conceptual model is created, followed by the hypothesis.
H1a: There is a positive relationship between participation in the local sponsorship event and brand equity of the sponsor
H1b: There is a positive relationship between participation in the local sponsorship event and word of mouth of the sponsor
H1c:There is a stronger positive relationship between participation in local sponsorship event on brand equity than word of mouth
Page 19 2.3 Influencing the relationship –moderating effects
The relationship between participation in local sport events and the measurements brand equity and word of mouth is described. In research a lot of variables are discussed that influence the sport sponsorship effectiveness. Congruency is found to be the most important moderating effect between the sponsor and the sponsored property. Furthermore, consumer behaviour variables are described. The difficulty is influencing these effects, like involvement and (perceived) sincerity which are consumer behaviour related. However, these variables are expected to be important within local sponsorship (see figure 2.3). The last aspect described in this section is the difference between individual sport event and team sport event sponsoring.
2.3.1 Congruency
The degree of congruence between the sponsor and the event has generally been regarded as the most critical factor of sponsorship effectiveness (Coppetti et al, 2009). First the definition of congruency, which is according to the theory of Keller (1993), the extent to which brand associations are shared. It depends on the prior knowledge and involvement of consumers to what extent the congruency is judged as positive or negative and is seen from the perception of the consumer. Different perspectives on the effect of congruency are discussed in previous research. Rifon et al (2004) who state that a natural level of congruency is enough for creating sponsorship positive effects. Simmons and Becker-Olson (2006) find that a natural level of congruency is not enough, and more commitment from management and other communication tools is needed to have sponsorship effects. Furthermore, low congruency has a negative impact on the brand equity according to Simmons and Becker-Olson (2006). However, the effect can be moderated by the message content, which is supporting the sponsorship by other communication tools which increases congruency. It can be concluded that the lesser the sponsorship is integrated within the marketing strategy, the more congruent the relationship between sponsor and the sponsored object needs to be to reach the same sponsorship outcomes. This is in line with the results of Jagre et al (2001) which shows that an incongruent relationship between sponsor and event can be more positive compared to a congruent relationship. This effect occurs when the accommodation of the sponsorship (the message source) is implemented well, and then the processing of the message is received more positively by the consumer. These results are in line with the outcomes of the Becker-Olson (2006) study. Without a degree of congruency, relationships experience little halo effect, and one of the brands or partners may experience dilution effects rather than brand building (Becker-Olson, 2003). The halo effect can have an influence on the type of sport, for example Nike sponsors football, and football has a rough image in general, therefore Nike would be perceived as rough as well. This research is focusing on local event sponsorship, and it is expected that local sponsorship congruency is important for sponsorship to have an impact on the brand equity outcomes. Therefore the following hypothesis is tested:
Figure 2.3 – moderating effects
1. Congruency 2. Involvement
3. Sponsorship beliefs / sincerity
Page 20 H2a: There is a positive relationship between congruency of the relationship between the sponsor and the local event, and the brand equity of the sponsor
Congruency has not been related to word of mouth in previous sponsorship research. To explore on the previous described research on sponsorship, it is expected that consumers have higher word of mouth about sponsorship when it is perceived as non-congruent, since the sponsorship relation is more surprising. Furthermore, the cognitive processing is higher when the relationship is seen as non-congruent which is assumed to increase word of mouth on the sponsor. It is therefore expected that no positive relationship exists between congruency and word of mouth, since the consumers who perceive the sponsorship as non-congruent are expected to have higher word of mouth
H2b: There is no positive relationship between congruency and word of mouth 2.3.2 Involvement
Page 21 The proposition of Meenaghan (2001) was that there is a positive orientation towards the sponsor who bestows benefit on a consumer‟s favourite activity, which means involvement is positively influencing the sponsorship outcomes. However, involvement has never been researched as an effect in local event sponsorship research. This research proposes the following hypothesis: H3a: There is a positive relationship between the involvement (centrality and attraction) of the participant towards the sponsored event on the brand equity of the sponsor
H3b: Involvement centrality of the participant of the local event is more influencing the brand equity of the sponsor than attraction involvement of the participant
Involvement is influencing word of mouth of the sponsor, since companies can create an attractive and memorable sponsorship experience that provides visitors with the opportunity to get more involved with the brand (Aaker and Joachimsthaler, 2000). With local sponsorship events, consumers are life present and highly involved, and therefore it is expected that the word of mouth on the sponsor is high. This leads to the following hypothesis:
H4: There is a positive relationship between involvement (attraction and centrality) and word of mouth
2.3.3. Sponsorship beliefs
Sponsorship beliefs influence the relationship between the sponsor and the participants of the event. Consumers usually appreciate the benefits of sponsorship for the activities in which the individuals are involved and develop positive beliefs about sponsorship (Madrigal, 2001). However, it is possible that consumers have negative beliefs towards the sponsorship. According to previous research this is the case when consumers associated sponsorship with commercialization.
Page 22 H5a: There is a positive relationship between the sponsorship beliefs of the local event, and the brand equity of the sponsor
H5b: There is a positive relationship between the sponsorship beliefs of the local event, and the word of mouth of the sponsor
2.3.4 Sincerity
One of the main differences of sponsorship compared to advertising is related to consumers‟ perceptions about the benefits of sponsorship (Meenaghan, 2001; Alexandris, 2007). This refers to the sincerity of the sponsor, which can be defined as the extent to which sponsors are perceived to be motivated by philanthropy. Sincerity means the extent to which the consumer perceives the sponsorship as goodwill, and that the sponsorship is not done purely for commercial reasons. The difference of sincerity and sponsorship beliefs, is that sponsorship beliefs is related to the sponsored event, and sincerity is about the consumer behavior towards the sponsor. Sponsor sincerity (also called altruism by Dean (2002) and Rifon et al. (2004), and skepticism by Alexandris et al (2007), has generally be found to have a positive relationship with high-level sponsorship effects. While sincerity has been found to be an important predictor of higher-level sponsorship effects, virtually none of the previous research has attempted to understand the basis for sincerity perceptions. Rifon et al. (2004) used sincerity as a dependent construct, where congruency was found to be a positive predictor. McDonald (1991) found the more local the sponsorship, the more sincerely the sponsor is regarded as enabling the event to take place. The findings suggests that a sponsor who is perceived to be sincere and is well liked by the sponsorship audience can extract superior benefits from sponsorship. (Speed and Thompson, 2000). However, why would local sponsorship be perceived as more sincere? This is due to two reasons, the first one is that consumers perceive local sponsorship more as an obligation to society, which means that the sponsorship is perceived as less commercial (Olson, 2008). Another reason that is expected to have an influence is involvement with the event, which is expected to be positively related with sincerity. Furthermore, perceived sincerity is a good predictor of local sponsorship success for a brand. When consumers perceive the sponsorship as more sincere, it is expected that this is positively related to word of mouth. This leads to the following hypothesis:
H6a: There is a positive relationship between the perceived sincerity of the sponsor after sponsoring an event, and the brand equity of the sponsor
H6b: There is a positive relationship between the perceived sincerity of the sponsor after sponsoring an event, and the word of mouth of the sponsor
Page 23 2.3.5 Individual versus team
There are a couple of reasons a consumer would visit a local sporting event: 1) to join in the sport event, 2) to support family or friends who are competing in the event, 3) the consumer is a real fan of the sport. It is expected that there is a difference between participating in an individual or a team sport event. Not much research on sponsorship has been done about the difference between individual and team sport, however it is expected that group affiliation (referred to as social interaction) is higher with team sport events (Wann et al, 2008). Furthermore, team sport events have a higher level of eustress, which involves gaining excitement and stimulation through sport (Wann et al, 2008). Fans with high levels of eustress motivation become involved with the event because they enjoy the excitement and arousal they experience watching sport. Also, by becoming really involved with a sport, an individual is able to share the experiences with other fans of the same sport (Wann et al, 1999). Consumers visiting a team sport are more likely to interact, due to a higher level of group affiliation, which leads to higher level of word of mouth. Therefore it is expected that sponsoring team sport events leads to higher levels of word of mouth of the visitors of the event. Furthermore, persons with a preference for team sport scored higher on the level of self-esteem, which is an important condition for a promoter (NPS). Lastly, the interaction around team sport events are higher compared to individual sport events. This leads to the following hypothesis:
H7: Sponsoring a team sport event leads to higher levels of word of mouth compared to sponsoring a local individual sport event due to the impact of involvement
2.4 Conceptual model
Page 24 H1c + d H7 H6b H6a H5a H5b H2a H1b H1a H3a+b H4 Brand Equity Brand Associations Perceived Quality Brand Awareness Brand Loyalty Purchase intention Word of Mouth Participants of local sponsorship Yes/no Involvement Attraction & Centrality
Congruency High vs. low Sincerity High vs. low Individual vs. Team Sport Sponsorship beliefs H2b
Page 25
3. Research methodology
The following chapter provides a detailed description of the methodology and design performed in this research. First the research method is explained, followed by a detailed explanation of the dependent and independent variable measurements. This chapter ends by describing the analysis methods.
3.1 Subjects and stimuli
In order to examine the influence of a sponsor‟s brand equity and word of mouth on consumer responses to local sports sponsorship, real brands and events were used in this research to increase external validity. Two types of subjects were included: participants (level 1) (visitors and contestants) and non-participants of the event (level 2) (e.g. consumers with a connection to the sport sponsored). The events had to accomplish the requirements for a local event, which means that it is a competitor-based event (the percentage of contestants is higher than the percentage of spectators), and that there is no national media attention given to the event. Two types of events were distinguished, an individual sporting event and a team sporting event. Football and tennis were chosen as sports, since tennis is the largest individual sport in the Netherlands, and football is the largest team sport. The sponsor of both events is Lipton Ice Tea, which is a worldwide soft drinks brand. The reason for using Lipton Ice Tea as a brand in this research is because this brand wants to sponsor local events, however does not know the effects, since this has never been researched. An impression is given of both tournaments, first the tennis tournament in Rotterdam at the Victoria tennis club. The second event took place in Maarssen, which was a local football event. Both tournaments took place within the same month, therefore results can be compared. The research execution existed of four phases:
Phase I – event selection. Within the first phase of performing the research, two comparable events were selected for sponsorship. This is done by internet research, since a complete list of all events within certain regions was presented. From this list two events were selected which needed to meet a few requirements: 1) satisfying the conditions for local sponsorship; 2) a minimal level of 500 participants and visitors of the event; 3) the event did not have another sponsor; 4) both events (individual and team) needed to occur within the same region and the same month. The two tournaments selected did meet all the above described requirements. Phase II – within the second phase of the research, the sponsorship was organized. Requirement for the sponsor of the event was high visibility during the event, which was approved by both event organizations. The sponsor Lipton Ice Tea gained visibility through the following items: parasols, banners, flags, a refrigerator, free products, prices for the competitors, advertisement in the scheduling program, banner on the website.
Page 26 Phase IV – round up phase. Within this phase the questionnaire was sent to the participants and to the control group, two weeks after the event took place. The control group existed of level two participants, people who are interested in the sponsored event or the type of sport sponsored at the event. The subjects of the control group were randomly selected from the database of the tennis and football foundations. The groups are explained further within the research methods. 3.2 Research methods and procedure
A questionnaire is used as a tool to gain quantitative data. The main dependent variables, brand equity and word of mouth, were measured by the control group (no sponsorship) and the researched group (sponsorship), with different comparable groups, since the groups are not influenced before participating in research. Group 1 and 3 are level 2 participants, and group 2 and 4 are level 1 participants:
Group 1 Tennis non-participants, drawn by convenience from members of the Dutch Tennis Federation (KNLTB)
Group 2 Tennis participants and audience of the event, e-mail addresses gained during the event, questionnaire send one week after the event
Group 3 Football non-participants, drawn by convenience from members of the Dutch Soccer Federation (KNVB)
Group 4 Football participants and audience of the event, e-mail addresses gained during the event, questionnaire was send one week after this event
3.3 Measures
Page 27
Dimension Items
Dependent
Brand equity
(Yoo and Donthu, 1997; Aaker,
1993; Keller, 1996) Perceived quality Brand loyalty Brand familiarity Purchase intention Smith et al (2008)
‘The likely quality of X is extremely high’
‘The likelihood that X would be functional is very high’ ‘I consider myself to be loyal to Lipton Ice Tea’
‘Lipton Ice tea would be my first choice’
‘I will not buy other brand if Lipton Ice Tea is available at the store’ ‘I can recognize Lipton Ice Tea among other competing brands’ ‘I am aware of Lipton Ice Tea’
‘Some characteristics of Lipton Ice Tea come to my mind quickly’ ‘I can quickly recall the symbol or logo of Lipton Ice Tea’
‘I have difficulty in imaging Lipton Ice Tea in my mind’
‘I am more likely to buy products from an organization that sponsors the event’
‘I will always consider buying the products and services of the sponsor of the event before considering the products and services of non-sponsors’
‘I would consider using the products or services of sponsors’
Word of Mouth (Net Promotor Score)
(Reichheld, 2003)
‘How likely is it that you would recommend the sponsor to a friend or colleague?‟
„How strongly do you agree that the sponsor deserves your loyalty?’
‘How likely is it that you will continue to purchase products/services from the sponsor?’
Independent
Congruency
(Olson, 2008)
‘There is a logical connection between the (sponsored property) and the sponsor’
‘Sponsor and the (sponsored property) stand for similar things’ ‘It makes sense to me that Lipton Ice Tea sponsors (sponsored property)’.
Involvement – attraction
Alexandriis (2007)
„Watching tennis is one of the most enjoyable activities for me’
‘I have a lot of interest in watching tennis’ ‘Watching tennis is important to me’
Involvement – centrality
Alexandris (2007)
„I find that a lot of my life is organized around tennis’
‘I enjoy discussing tennis with my friends’
„Most of my friends are in some way connected with tennis’. Sincerity
(Olson, 2008)
‘The main reason why the (sponsor brand) would be involved with the event is because they believe this event deserves support‟
‘(Sponsor brand) likely has the best interest of the sponsored event at heart.’
‘ The sponsor would also support this event if it was at another club’
Sponsorship beliefs
Madrigal (2001) and Lee et al (1997)
Page 28 Since the importance of brand equity as a useful measure, the manner in which this scale is measured must be thoroughly investigated (Washburn and Plank, 2002). The brand equity scale is based on the Yoo and Donthu (1997) measurement of brand equity, which consists of an overall brand equity scale and a multidimensional brand equity scale. This research focuses on the latter, the ten-item multidimensional brand equity (MBE) scale, since this scale carries higher correlations within the study of Yoo and Donthu (1997). This MBE-scale contains four distinct measures that influence the brand equity level, namely brand quality, brand loyalty, and brand awareness/associations. Yoo, Donthu and Lee (2000) confirmed that the level of consumer-based brand equity was positively related to consumer‟s perceptions of these distinct measurements. Within this research, the measurement brand awareness/associations is renamed as: brand familiarity. Since awareness is measured as recall and recognition (aided and unaided awareness), it might be confusing therefore that the brand equity measure is renamed. Additional to the brand equity measurement of Yoo and Donthu (1997), image statements of the brand Lipton Ice Tea are included in the study. These image statements were drawn from a study carried out by MilwardBrown for Lipton Ice Tea. The same statements were tested in this research to find out if these sports events carry spillover effects to the sponsor. Image is not included as a variable within the conceptual model, since this is a sub variable, not influencing the main sponsor relationship. Besides brand equity as a dependent variable, word of mouth is included in this research as a dependent variable. Word of mouth is measured by the scale of Reichheld, which is named the Net Promotor Score. The first question should measure loyalty of the consumers, the other two questions are control items. Forming three questions together creates a good measurement of WOM. The independent variable sponsorship beliefs was modified by Alexandris (2007) from the scales used by Madrigal (2001) and Lee et al (1997). The brand equity items were asked before the items regarding brand attitude and purchase intention to reduce the halo effect. An overview of the questionnaire is presented in appendix 1. Before describing the methods of analysis, a brief description of the pre-test is given.
3.4 Item purification: pre-test
Page 29 3.5 Method of analysis
Page 30
4. Results
This chapter focuses on analyzing and interpreting the effects of local sponsorship on the brand equity and word of mouth of the sponsor, including the consumer related moderating effects. As shown in the conceptual model, a distinction is made between participants and non-participants of the event (level 1 and 2). Furthermore, two different events were included in this research, one individual sports event and one team sports event. This will be elaborated on later in this chapter. First the demographic information is explored, followed by a validity and reliability analysis. The chapter ends with tests performed on the data to check the hypothesis and moderating effects within the section „outcomes‟.
4.1 Demographic information
The research was send to 15.000 respondents, and 702 participants filled out the questionnaire. The response rate is 4,7%, which is low due to the internet used as a tool. Some subjects did not follow instructions and/or completed only part of the survey. These subjects were excluded, which resulted in a final sample size of 686. In total this research contained four statistical comparable groups. The demographics of all groups can been seen in table 4.1. Group 2 and 4 are level 1 participants of the event. Group 1 and 3 are level 2 non-participants of the event. Table 4.1 – demographics of the sample groups
Gender Age Hours sports
Page 31 The high percentage of men within group 3 and 4 can be explained by the fact that more men are participating in football sports. The ratio is 70% men and 30% woman, which corresponds with the percentage found in research. Therefore the demographics are not adjusted to good representation sample of the Dutch sporting population.
Furthermore, all age categories were represented in the research (means: group 1- 29; group 2- 34; group 3- 24; group 4- 28). The non-participants were from all different regions within the Netherlands, where the participants were regionally restricted due to the localization of the event. Then the hours of sports were evenly distributed, which means the participants of the research spend the same amount of time either performing or watching the sport. To find out if the sample of the research presented above is valid, a reliability analysis is conducted, which is presented in the next section.
4.2 Validity and reliability
Page 32 However, the correlation between involvement centrality / attraction and sponsorship beliefs and involvement centrality and congruency is not considered problematic (<0,85) according to Kline (1998).
4.3 Outcomes
To test the hypothesis, two types of analysis are conducted. An independent sample t-test is performed to find out if there is a significant difference in mean between the sponsored and not-sponsored group. Furthermore, the standard deviation (SD) is mentioned, which shows the variation of the mean within the different groups (see table 4.3). The effect on loyalty with the local team event is highest (M∆=1,30; P=0,00), and the effect on familiarity is lowest (M∆=0,58; P=0,00). Furthermore, most results of the individual sport event where not significant, only the independent variables involvement centrality (M∆=0,51;P<0,05) and sincerity (M∆=0,32; P<0,05). Then the average mean score of the individual sport no sponsorship (group 1) are higher than the average mean score of the different variables of the team sport event (group 2). The variables centrality (M∆=1,19), loyalty (M∆=1,14) and familiarity (M∆=1,13) have the highest difference between individual and team sport events.
From table 4.3 can be stated that hypothesis 1a and 1b are partially supported (e.g. local sponsorship participation has a positive impact on the brand equity and word of mouth of the sponsor). This is due to the fact that the results of the team sport event were all significant, and the results of the individual sport event were partly significant.
Page 33 Table 4.3 – means scores and alpha of the dimensions
Alpha Group 1 (N=92) Individual (no sponsorship) Mean SD Group 2 (N=104) Individual (sponsorship) Mean SD M∆ Group 1 - 2 Group 3 (N=347) Team (no sponsorship) Mean SD Group 4 (N=143) Team (sponsorship) Mean SD M∆ Group 3 - 4 M∆ Group 1-3 Dependent variables Brand equity Perceived quality Familiarity Loyalty Purchase Intention 0,909 0,891 0,798 0,922 0,902 4,68 (1,64) 5,61 (1,01) 4,05 (1,61) 4,58 (1,38) 4,80 (1,11) 5,77 (0,83) 4,28 (1,74) 4,89 (1,86) 0,12 0,17 0,23 0,31 4,24*(1,41) 5,14* (1,25) 2,93* (1,67) 3,44* (1,53) 5,26* (1,33) 5,72* (0,88) 4,23* (1,61) 4,32* (1,72) 1,02 0,58 1,30 0,61 0,48 0,47 1,13 1,14 NPS (%) 0,896 6,68 (2,63) 6,80 (1,92) 0,18 5,09* (2,55) 6,64* (2,12) 1,55 1,59 Independent variables Involvement Attraction Centrality 0,930 0,787 5,35 (1,32) 3,69**(1,57) 5,45 (1,20) 4,28** (1,39) 0,10 0,51 5,56* (1,33) 4,88 (1,39) 5,79* (1,66) 4,89 (0,09) 0,23 0,01 0,21 1,19 Sincerity 0,795 4,89**(0,78) 5,21** (1,07) 0,32 4,44* (1,11) 4,95* (0,65) 0,51 0,45 Congruency 0,857 4,60 (1,14) 4,67 (1,27) 0,07 3,90 (1,14) 3,94 (1,13) 0,04 0,70 Sponsorship Beliefs 0,862 4,55 (1,03) 4,73 (1,10) 0,18 3,60*(1,18) 4,64* (1,03) 1,04 0,95 * scores are significant based on a P-value = 0,000 ; ** scores are significant based on a P-value = 0,05
Awareness and image were measured on different forms, namely aided and unaided awareness. To measure aided awareness the respondents were given a list of brand and they were asked to mark the brands they know. Another element of awareness is unaided awareness. This entails the ability to mention the brand name without any form of stimuli. Top of mind is the first soda brand which comes to mind. Within table 4.4 an overview is given of the awareness percentage of the different groups. It shows that the aided awareness of the sponsor „Lipton Ice Tea‟ is exceptionally high (100%), and the effect of sponsorship on aided awareness cannot be shown. However, there is a significant difference between group 1 and 2; and group 3 and 4 on the variable unaided awareness. Coca-cola is mentioned as a reference, since it is the competing brand of the sponsor Lipton Ice Tea with the highest unaided awareness.
Table 4.4 – awareness before and after sponsorship Group 1 Individual- no participants Group 2 Individual - participants Group 3 Team – no participants Group 4 Team - participants Aided awareness (know
Lipton Ice Tea)
Page 34 Then the variable image, which was based on the MillwardBrown items of Lipton Ice Tea, which are used in general research of Lipton Ice Tea and are therefore already tested for reliability. In figure 4.1 the mean scores of each statement are shown of the participants and non-participants of the event. Adding all statements together and see image as one variable does not add value to the study. For that case image has been shown as separate statements. It is shown that with the team sport event sponsorship the statements: natural drink, popular, refreshing, sportive and active are significantly increased (p<0,05). Due to the individual sponsorship, only sportive and thirst quencher were significantly increased (p<0,05).
Figure 4.1 – image statements sponsor
Promoters
Within this research the net promoter score is measured. According to Reichheld (2003) the Net Promotor Score is the percentage of promoters minus the percentage of detractors – against the company‟s revenue growth rate (in this case purchase intention). The % of respondents that scores 8 – 10 are the promoters and the scores 1 – 3 the detractors. The scores were based on the following research question: ‘How likely is it that you would recommend the sponsor to a friend or colleague?‟ Within table 4.5 the influence of the sponsorship on the promoter score is presented.
Table 4.5 – Net Promotor Score and purchase intention
NPS - % Purchase Intention
(Mean) Group 1 – tennis players control group 8,6% 4,62 (p<0,05) Group 2 – tennis players participators 23,1% 4,89 (p<0,05) Group 3 – football players control group 5,2% 3,49 (p=0,00) Group 4 – football players participators 16,1% 4,31 (p=0,00)
Page 35 Figure 4.2 – net promoter score and purchase intention
4.4 Testing moderating effects
A multiple regression is performed on the sample of the total sample of the research. The objective of the multiple regression is to find out the differences in impact of the moderating variables on the dependent variables (brand equity and word of mouth). The total sample of the regression analysis is therefore N = 736.
It is researched what has the most impact on an increase in brand equity and word of mouth due to local sponsorship. A moderating model tests whether the prediction of a dependent variable „Y‟, from an independent variable „X‟, differs across levels of a third variable „Z‟ (see figure 4.3). This leads to the following equation:
The regression coefficient for the interaction term, β3, provides an estimate of the moderation effect. If β3 is statistically different from zero, there is significant moderation of the X-Y relation in the data (Fairchild and MacKinnon, 2009). All the variables for the regression equation were standardized before the multiple regression was performed. Furthermore, a dummy variable was included in the multiple regression analysis for participation, where 0 = non-participation (not sponsored) and 1 = yes-participation (sponsored). Two regression models were created, one with brand equity as the dependent variable, and the second model contained word of mouth as the dependent variable. The brand equity model had a model fit of 0,627 (R²=0,394), which shows that 39,4% of the dependent variable is explained by the moderating variables. The model fit of the word of mouth model is 0,492 (R²=0,242), which has a lower model fit compared to the model of brand equity.
Figure 4.3 – model of moderating effects
