The effects of sports sponsorship on brand equity: a best-worst scaling approach
Sports sponsorship can be an expensive marketing tool that companies use to achieve several marketing-related objectives, of which enhancing brand equity is one. However, the effects of sports sponsorship on brand equity outcomes, like price premium and market share, have not been well-investigated. The existing literature is also not conclusive about whether sponsorship can enhance the brand equity of less prominent brands, nor about the role team identification and team performance may play in that connection. The present thesis seeks to address these limitations of previous research by conducting three studies.
Study 1 employs a best-worst discrete choice experiment (BWDCE) to explore the effects of sports sponsorship on two brand equity-related outcomes: price premium and market share. The total sample in this study included 409 fans of three Australian soccer teams sponsored by three different apparel brands—Nike, Adidas, and Puma. The study reveals that sports sponsorship generally results in fans being willing to pay more for the sponsor’s t-shirt, with the sponsoring brand acquiring the highest market share. However, the sponsor’s existing market prominence appears to play a crucial role. The higher the sponsor’s prominence in the market, the higher its market share among the sponsee’s fans
Study 2 investigates the effectiveness of sports sponsorship as a brand equity enhancement strategy for less prominent brands. This study uses repeated cross-sectional data and the BWDCE method to track changes in fans’ preferences, examining the moderating role of fans’ identification with their team. The total sample consists of 232 fans of one of the most popular Australian soccer teams sponsored by an apparel (i.e., sportswear) brand that is not prominent in the Australian sportswear market. The results show that fans’ preferences for the less prominent brand shifted positively three years after the brand began sponsoring their team, leading to an increased willingness to pay a premium and greater market share. In addition, spotlight analysis shows that team identification positively moderates this change in fan preferences. However, despite these significant changes, the less prominent sponsoring brand did not outperform its more prominent rivals among the fans included in the study.
Study 3 goes further than Study 2 by examining the role of both team identification and team performance in helping less prominent (or challenger) sportswear brands to compete with their prominent counterparts. By using two choice-modelling experiments, this study reveals that team identification and team performance not only help sponsoring brands become the most strongly preferred brands, but also stimulate fans to pay a price premium for the sponsoring brands compared to their more prominent rivals.
The findings of these three studies advances the literature of sports sponsorship and brand equity by showing that sports sponsorship can increase price premium and market share of the sponsoring brand even if it is not the most prominent brand in a market. This is an important step towards a better understanding of how return on investment in sports sponsorship can be assessed.