A. P. Saliuk, postgraduate student

Simon Kuznets Kharkiv National University of Economics

Sponsorship as a tool of branding

Last decades there is a rapid growth of companies, which choose branding their products. According to this competition in branding also grows up and companies searching for new ways of consolidating their brand in in consciousness of consumers. One of the main roles occupies sponsorship. Therefore, development of recommendations regarding the use sponsorship in branding is very actual task. Hereupon, in order to assist strategic managers, a wide variety of tools and techniques have been developed.

Sponsorship is extremely important for building a strong brand, because it allows you to link an idea of the company to a certain group of consumers.

There are a lot of scientific works of famous economists devoted to the problem of managing the communicational policy of the enterprise and its impact on the efficiency of the organization, namely Antrpova E., Bush, Foster J., Kosenkov S., Strelnikova O., Wieser T. and others. Considering the works of Ukrainian scientists, sponsorships have become the object of research not so long ago - less than a decade. Nevertheless, in their works, sponsorships in branding at the enterprise haven’t been formulated distinctly yet. That is the reason, why subject of this article is vitally pertinent.

The aim of the article is to define the basic use of sponsorship branding to achieve the goals of the organization.

Sponsorships - contributions in cash or in kind made to people or organizations with the expectation of achieving corporate goals and in return for prominent public recognition of this support. There are several forms of sponsorship which include support for the world of sports, the arts and other relevant areas of society. The recipients of sponsorships and the sponsors enter a contractual business relationship which precisely determines the level of the sponsorship and the expected benefits, e. g. wearing the logos or brand signs of the sponsors on their sports equipment, mentioning the sponsorship activities in their newsletters, brochures and advertisements as well as on the tickets for the sponsored events. The sponsors, for their part, can highlight the support they give in their own advertisements (e. g. sponsorship of the top national football league or a title sponsorship of a cup final). The essential principle of sponsorship is that of “give and take” [1].

There is a fundamental distinction between sponsorship and charitable donations which do not carry any expectations of public recognition.

Unlike donations and philanthropic patronage, sponsorships are devised as a tool of the marketing communications mix [5].

There are top errors that should be avoided in product placement:

- the same brands appears too often in the shot or the time during which a product is displayed in sequence seems unnecessarily long, at least from a viewer’s point of view;

- the placement of the products in the shot is blatantly obvious;

- the link between the actors and the brand is exaggerated and felt to be engineered;

- the brand is arbitrarily integrated into the plot; it interrupts the course of action and looks unrealistic or unsuitable;

- there is an overkill of product placements in the film [4].

The sponsorship of sports events, which seeks to profit from the positive image of the sponsored event or of the sportsmen to be sponsored, is seen as an opportunity of image transfer by means of marketing. The question as to if and how this positive image can be transferred from the sports arenas to the sponsoring companies is the crucial criterion in choosing a sponsoring partner. When they support sportsmen, sponsors always risk being affected by sudden popularity swings caused by or related to the recipients of the sponsorship (e. g. footballers, clubs, and fashionable sports).

In order to protect themselves from the negative marketing and media leverage caused by performance lows of individual athletes or from the affairs of sports idols, some sponsors concentrate their activities on sports events and on the promotion of (hopefully) exemplary teams. Currently they are also focusing on junior teams such as the one established and promoted by General Motors in Germany (i. e. Opel). A special risk involved in sports sponsorship derives from its growing attractiveness. This has led to such extensive sponsoring activities in sports that achieve high media leverage such as alpine skiing and car racing that it has become difficult to identify individual sponsorship measures. The sponsorship of such high profile sports only recommends itself to companies whose products are household names or which are fully committed to these sports [2].

Cultural sponsorships include all arts and all forms of cultural expression be they locally important or of international renown. This form of sponsorship, which has recently gained in importance, can be of interest for SMEs in the business-to-business sectors if these companies wish to build up a positive image in their local communities. They can accomplish this by promoting theatres of some local standing, or culture and arts societies. Museums that include substantial technological exhibits or technological museums also constitute interesting locations for producers of capital goods.

Environmental sponsorships is designed to highlight a corporation’s stakeholder orientation which is beginning to play a more important part in view of the growing sensitivity that communities are developing for ecological issues. The related social sponsorships allows companies to demonstrate their interest in societal problems and their willingness to contribute to their mitigation or solution. By these means, sponsorship becomes an instrument of community orientation in marketing. The advantages of social or environmental sponsoring lie mainly in the fact that companies do not depend so much on certain events or persons but are able to commit themselves to solving social problems that are considered to be important for their communities at large [6].

Marketing needs to clarify to what extent the solution of ecological and social problems can be aligned with the corporate philosophy. Social and ecological commitment can be integrated successfully in corporate strategies if the sponsors are in some way linked with the area they are sponsoring.

Local and regional involvement can derive from the company’s major field of activity. The wood processing industry, for instance, might like to sponsor projects for the protection of the forests; manufacturers of solar equipment might launch an environmentally-oriented competition on energy- saving. Moreover, such relationships can be built up with targeted customers, especially between companies that supply consumer goods.

They might, for instance, define young people as target groups and offer support for their training and further education programs. Producers of industrial goods might sponsor projects for their target customers in the processing industries, suppliers of plastic articles might support joint recycling programs with their communities.

The sponsorship of social, cultural and sports events can be viewed critically if the members of a community suspect that the sponsors intend to exert their influence in these areas. This risk obviously exists and, in sponsorship practice, there are numerous examples that sustain such claims.

If companies consider their sponsorship activities to form part of their community image building strategy, they can easily defuse such arguments by choosing the recipients of their sponsorship accordingly. If sponsorship is intended to create a community-friendly corporate image it should always seek to be highly credible and sufficiently independent of short-term economic aspects.

A relatively novel field which has been largely overlooked until now is the sponsorship of the scientific projects which offers interesting perspectives to SMEs as well as major corporations operating in capital markets [2].

Scientific sponsorship can assist universities in raising funds, a prospect which will be of increasing importance in view of the budget shortages in the sector of higher education. Companies may benefit from this form of sponsorship by supporting research projects that will give them the competitive edge over their competitors. Hermanns & Suckrow maintain in their study on this issue [1] that companies that sponsor institutions of higher education are facing objections which primarily concern the independence of scientific research and academic teaching. Universities, on the one hand, need to overcome their reservations about unjustifiable interference by the sponsoring corporations, companies, on the other hand, need to reconsider their view of universities as a drag on industry’s resources and see them as research partners, who are able to transfer considerable knowledge to businesses in practice.

Sponsoring addresses a fairly broad target group and is, therefore, unsuitable for business-to-business enterprises that serve a small and limited market segment. However, it may be worth the consideration of the major players in the industrial sector, such as the truck producers Iveco Magirus and the producers of construction materials Raab Karcher which have repeatedly provided sponsorship for sports. This form of sponsoring is certainly also advisable for companies which wish to reach a large number of medium-sized producers or service providers on a nationwide basis.

As sponsorships aims to achieve long-term image effects, it seems extremely difficult to monitor and evaluate its success. Evaluation requires a systematic planning process which is founded on an image-related situational analysis. The planners would have to specify exactly which factors determine the image and to what extent they should be changed and by when. The overall sponsorship aims would be derived from this analysis.

It is not possible to meet economically quantifiable and measurable short term objectives such as increase in the sales volume, the market share or a company’s competitive position by offering sponsorships. Sponsorships will only be able to make a contribution to these objectives over time and in combination with all the other communications and marketing tools. The definition of the target group, too, is a significant aspect in defining the sponsorship aims. The target customers should be defined just as precisely as is the case with advertising and marketing as a whole. On the basis of these aims and in relation to the specified target group, a sponsorship strategy is formulated. It contains the central issues of the company’s commitment which regards in particular the area to be sponsored. The necessary sponsorship budget is then allocated in line with the formulated strategy and the sponsoring measures to be taken are determined accordingly. Subsequently, contacts are established with the prospective recipients of the sponsorship and a sponsorship agreement is drawn up.

Seen from the perspective of integrated communications, intermeshing a company’s sponsorship activities with its other communication instruments is of specific significance. The diversity of communication measures in general and the variety of sponsorship opportunities in particular require this interlinking in order to ensure the synergetic enhancement of the overall impact of marketing communications. Sponsorship planning as detailed above is charted in Fig. 1.

Fig. 1. Mapping the sponsorship planning process from a corporate perspective [3]

In a nutshell: Sponsorships concentrate on the areas of sports and arts, on the social and ecological environment and the media. They are directed at individuals, groups, organizations and events. This is graphically represented as the sponsorship mix in Fig. 2 which has a horizontal and a vertical dimension.

In terms of sponsorship efficiency, companies need to focus on those sponsorship areas and activities which correspond best with the goals formulated with regard to their image and which involve their target groups as much as possible. The options concerning the recipients of the sponsorships depend, firstly, on the sponsorship budget available and, secondly, on the opportunity to reach the desired target groups.

Fig. 2. Structure and dimensions of the sponsorship mix [1]

Consequently, sponsorship is a tool of wide use for achieving goals of company towards relations with consumers. A special place it has in the in branding of products. By linking the idea of your company with specific groups of consumers, who are interested in sports, science, culture or any other aspects of life, companies are making one more step towards building a strong brand.

References:

1. Busch, R. Marketing communication policies: monography / R. Busch. –

Berlin: Springer-Verlag, 2012. – 378 р.

2. Foster J. How to Turn Bloggers (and Other Influencers) Into Your Brand Champions/ J. Foster// Oxford: Oxford University Press. – 2014. - № 1. – P. 71-79.

3. Middleton, J. The ultimate strategy library: the 50 most influential strategic ideas of all time /J. Middeleton. - Oxford: Capstone, 2008. – 264 p.

4. Nanji A. How Marketers Measure the Effectiveness of Sponsorship and Event Initiatives/ A. Nanji// London: Osprey Publishing . – 2009. - № 3. – С. 114-117.

5. Wieser T. Social-Media Publishers Eager for Paid Sponsorships/T. Wieser// Cambridge University Press. – 2011. - № 2. – С. 23-35.

6. Орлов П. А. Маркетинг: [ навчальний посібник] / П. А. Орлов, С. І. Косенков, Т.П. Прохорова та ін. – Х.: ВД «ІНЖЕК», 2012. – 528 с.