SPEX209 - Sponsorship and SCA 1

Sponsorship and Sustainable Competitive Advantage

Learning Outcomes

• Examining the commercial funding of sport through sponsorship.
• Define sport sponsorship and name association.
• Understand the components of sustainable competitive advantage (SCA).
• Examine some of the challenges of measuring and achieving SCA.

Housekeeping

• Reading quizzes: 90/116 completed, 1 in progress.
• Tutorials this week.

Funding Environment for Non-Profit Sport in NZ

• Donations & Grants
• Govt. Investment
• Commercial Sponsorship & Name Association
• Public provision
• Volunteer provision
• Commercial provision

Commercial Sponsorship and Name Association

• Sponsorship:
  • Part of a mix of marketing options
  • Implies a focused, long-term relationship
  • Measurable outcomes for the sponsor.
• Name association:
  • Common in non-profit and volunteer sports organizations in NZ
  • A much looser relationship: short term & limited metrics
  • Often mislabeled as sponsorship
  • Selection of businesses with names associated with the University Rugby Club, 2025

World-wide spending on sport sponsorship

• 2009 - US 5.7bn
• 2011 - US 32.4bn
• 2019 - US 65 bn
• 2020 - US 28.9bn
• 2023 - US 97.4bn
• 2030, projected US 112bn

*Figures are total spend on sponsorship, not activation or promotion costs. Sources: sponsorship.com, sponsor united, and statista.com

• Globally, 22% increase in women’s sport sponsorship 2023 & 2024 (sportspromedia.com)

What is Sport Sponsorship? (Schonbërner et al., 2020)

• Measurable organizational strategy to identify sponsees* and achieve corporate objectives:
  • Increased awareness
  • Enhanced image
  • Increased sales/market share
  • Customer retention
  • Media coverage
  • Branding
• *Sponsees: recipients of sponsorship

Sustainable Competitive Advantage (SCA) (Amis et al., 1995; Jensen et al., 2016; Cobbs et al., 2022)

• Sustainable Competitive Advantage
  • Perceived customer value (PCV)
  • Extendability
  • Differentiation (Diff)

Achieving SCA: Perceived Customer Value (1) (Maanda et al., 2020)

• Strengthens brand awareness (Ellis et al., 2017)
• Strengthens brand equity: perceived value of a brand or ‘halo effect’ (mixed support for this, Vance et al., 2016)
• Brand association: e.g. connection with women’s sport (Doyle et al., 2021)

Perceived Customer Value (2) Gawrysiak, Burton, Jenny & Williams (2020)

• NASCAR fans: loyal to drivers and sponsors:
  • 57% of NASCAR fans are loyal to brand and products affiliated with the sport
  • 3x more likely to purchase race sponsors’ products

Avoid Assumptions About Perceived Customer Value (Doyle et al., 2021)

• Australian study on brand association with women’s pro teams that are linked to men’s sport e.g. AFLW, WBBL, NRLW
  • 29% of respondents supported a women’s team in the same brand portfolio as the men’s equivalent (e.g Brisbane Roar women’s and men’s football)
  • 71% supported a women’s team in a different brand portfolio (e.g. Canberra Raiders [men’s NRL] and Sydney Sixers [women’s cricket])
  • Implications for team branding?
  • Implications for sponsors?

Examples

• Honda's role as Red Bull prepares to replace Lawson with Tsunoda
• Melbourne Mavericks and Lean Cuisine renew partnership for 2025
• 'Embarrassed' Raiders apologize for Vegas dust-up
• Key questions behind Fifa's Saudi World Cup decision
• Former All Black on INEOS' failure to pay: 'They deserve to be hammered'

Achieving SCA: Differentiation (Maanda et al., 2020)

• No other company can copy the sponsorship
• Are extendable: Wednesday

How are PCV and Differentiation Measured? (Crompton, 2004)

• Many companies spend $0 on evaluating sponsorship
• Use of social media (clicks) makes engagement easier to measure.
• Sponsorship only one part of the marketing mix: isolation difficulties
• Brand recognition can be short-term and flawed
• Ongoing problem of measurement (dos Santos & Moreno, 2018)
• “Relationship quality” with individual stars can be more powerful than team association (Merten et al., 2024), e.g. Ronaldo trade to Saudi team Al-Nassr