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Awareness of Sponsorship and Corporate Image: An Empirical Investigation

Article in Journal of Advertising · June 2013

DOI: 10.1080/00913367.1943.10673458

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Awareness of Sponsorship and Corporate Image:
An Empirical Investigation
Rajshekhar G. Javalgi, Mark B. Traylor, Andrew C. Gross and Edward Lampman
Corporate sponsorship is growing in importance as an element of the communications mix. The number of
companies participating in sponsorship, as well as corporate expenditures for sponsoring events, is on the rise
as organizations seek new ways to reach audiences and enhance their image. The importance of corporate
sponsorship is now generally acknowledged, but little research has been done to understand its value and
effectiveness. An exploratory study was conducted to examine the relationship between sponsorship and
corporate image. The results suggest that corporate sponsorship can improve corporate image, but its effects
differ among companies. Moreover, sponsorship is only one of the information sources consumers use to form
their impressions of an organization. Under certain circumstances, corporate sponsorship can damage, rather
than enhance, the image of a company.

Rajshekhar G. Javalgi is a professor in Introduction

the Department of Marketing at the
James J. Nance College of Business
Administration, Cleveland State Univer- In recent years, corporate sponsorship has become an increasingly
sity. His Ph.D. is from the University of visible element in the marketing communications mix. This trend has
Wisconsin, Milwaukee. been accompanied by growing concern about the way sponsorship is
Mark B. Traylor is Director of Quantita- handled by large, diversified companies (Sandier and Sharii 1989). Com-
tive Services at National Market Mea-
sures, Incorporated. His Ph.D. is from panies as diverse as Wrangler, Kentucky Fried Chicken, and Marriott
Michigan State University, East Lansing. have full-time special events managers who plan, select, and execute
Andrew C. Gross is a professor in the sponsored activities on behalf of their companies (Mescon and Tilson
Department of Marketing at the James J. 1987). In 1980, 900 companies spent $300 million to sponsor special
Nance College of Business Administration,
Cleveland State University. His Ph.D. is events; by 1986, 2500 companies had spent $1 billion (Sandier and
from the Ohio State University, Colum- Shani 1989). It is reported that 3700 companies spent more than $1.75
hus.
billion for sponsorships of sporting events alone in 1987—a 500% in-
Edward Lampman works in Business crease from 1982 (Gardner and Shuman 1987; Sandier and Shani 1989;
Development at Picker Intemational,
Incorporated. His MBA is from Cleveland Wilbur 1988).
State University, Cleveland. Sponsorships have tripled in the past several years, reflecting a need
The authors thank the Editor and the to reach specialized target groups as an integral part of the total mar-
anonymous reviewers for their helpful and keting communications effort (Mescon and Tilson 1987). Because spon-
valuable comments on earlier drafts of
this article. sorships are often used to reach a specific audience, they are valuable
and potentially powerful tools for setting strategic communications links.
By associating its name with an event, a company can share in the
image of the event itself in much the same way that a product shares the
image of a celebrity who endorses it. Stevens (1984) refers to this link-
age as "brandstanding" and contends that associating a proven product
or service with an event or issue of interest to consumers "creates for the
brand an aura of excitement, interest, and reliability, and renewed
vitality" (p. 31).
Although both the number of sponsoring companies and the amounts
spent on sponsorship are increasing rapidly, research on corporate spon-
sorship has not kept pace. In fact. Sandier and Shani (1989) note that
"in view of the limited efforts on one hand and the growing amount of
Joumal of Advertising, resources devoted to sponsorship on the other hand, much more re-
Volume XXIII, Number 4 search is required to determine the value and effectiveness of sponsor-
December 1994 ship" (p. 9). This statement expresses a theme common to other discus-
48 Journal of Advertising

sions of sponsorship (e.g., Gardner and Shuman 1987). the formal approach to evaluation."
Very little published empirical work examines the Table 1, a tabulation of 87 companies engaged in
impact of sponsorship. The pvirpose of this article, sponsorship, supports this view. Though not based on
therefore, is to examine the effects of sponsorship on a random sample of sponsoring companies, it illus-
corporate image. trates some of the points raised by Meenaghan. The
types of events and their geographic coverage are
Background and Literature generally articulated. However, the target audiences
are described largely in demographic terms (possibly
Sponsorship Defined a carryover of media-based thinking). The objectives
of sponsorship tend to be vague, and only in a few
Sponsorship is the underwriting of a special event instances do the companies have any formal method
to support corporate objectives by enhancing corpo- for measuring effectiveness. Clearly, corporate spon-
rate image, increasing awareness of brands, or di- sorship is still a practice that is in an early stage of
rectly stimulating sales of products and services. Spon- development.
sorship can be individual or joint; the event can be a In their survey of corporations engaged in sponsor-
one-time affair or a continuing series of activities. ship Gardner and Shuman (1987) asked executives
Sponsorship is distinct from patronage. Patronage is how they measure success in achieving their sponsor-
based on charity, an altruistic activity in which the ship goals. Nearly half of the respondents admitted
patron holds little expectation of concrete benefit that they do not measiore the outcomes of their spon-
(Gross, Traylor, and Shiiman 1987). Sponsorship is a sorship activities; only 17% said they use some form
form of promotion, but it differs from advertising in of audience response research. Of the firms that do
that the medium and creative message are not tightly measure success, 27% rely on market share or sales
controlled by the sponsor. Sponsorships usually are data to assess the success of their sponsorships, and
not handled through conventional media (Gardner nearly 10% of the industrial and commercial firms
and Shuman 1987). Instead, they involve the staging use such data to measure the outcome of what is
of an event around which advertising might or might essentially a communications activity. This approach
not take place. is at odds with the conventional notion that commu-
nications efforts should be linked with communica-
Sponsorship Objectives and tions effects rather than with sales. Moreover, in the
Measurement few instances in which the assessment is made in
communications terms, the measurements borrow
Sponsorship is highly regarded for its perceived very heavily from traditional advertising media re-
ability to accomplish certain objectives relating to search, focusing on brand awareness, recognition, and
overall corporate communications, such as enhanc- some kind of message recall.
ing corporate identity, awareness, or image Sandier and Shani (1989) investigated the effec-
(Meenaghan 1991). Sponsorship may also enhance tiveness of OljTnpic sponsorship and developed the
brand identity, awareness, or image. In the latter concept of "ambush" mtirketing. They tried to deter-
case, a direct sales objective is sometimes coupled mine whether audiences could correctly link sponsors
with an event. Miller High Life, for example, may be with events and whether consumers could be "fooled"
sold at an event sponsored by the brand while other into thinking that other companies sponsored the
brands of beer are excluded. events. Once they had addressed those questions, how-
Neither management practice nor research, how- ever, they made no attempt to see what effect, if any,
ever, has established clear objectives for sponsorship such sponsorship beliefs have on consumers' percep-
activities or formal measiires of their effectiveness. tions of the companies or their products. Influencing
As Meenaghan (1983, p. 47) observes: consumers' perceptions is supposed to be the point of
"In particular, marketing communications should investing in sponsorship. In perceptual terms. Sandier
be set in precise terms, budget levels should be estab- and Shani focused on antecedents without regard to
lished as a consequence of these objectives and the outcomes.
results should be evaluated in terms of the objectives As has sometimes been the case with advertising,
laid down. The practical m a n a g e m e n t of individuals who are responsible for sponsorship may
sponsorship...falls far short of this prescribed level of be reluctant to examine its effects because of possible
rigor in the setting of objectives and, by definition, in career risk, especially as the amount of money de-
December 1994 49

Table 1
Survey of Recent Corporate Sponsorships in Seiected Industries

Industry Specific Basis for Types of Geographic

Group Product/Service n Target Audience Events Coverage Objectives
Sponsored

Fashion, Sunglasses 8 Lifestyle Sports Regional Media Exposure

Accessories Demographics Community National Image/Communications
Fine Arts

Watches 10 Lifestyle Sports All Media Exposure

Demographics Community Image/Positioning/
Awareness
•
Food Fruit Juices 10 Demographics Sports All Image/Positioning/
Fine Arts Awareness
Community Sales

Snack Foods 9 Not Stated Sports Regional Image/Positioning/

Local Awareness
Sales

Fast Food 14 Demographics Sports All Image/Positioning/

Popular Arts Awareness
Fine Arts Sales

Agricultural 8 Lifestyle Sports Local Image/Positioning/

Products Demographics Community Regional Awareness
Sales

Travei, Domestic 11 Demographics Sports All Media Exposure

Tourism Airlines Lifestyle Community Image/Positioning/
Fine Arts Awareness

Car Rental 9 Demographics Sports Local Media Exposure

Agencies Community Regional Image/Positioning/
Awareness

Insurance Life, Health 8 Demographics Sports All Media Exposure

Insurance Community Image/Positioning/
Fine Arts Awareness

{Special Events Report, 11 issues from January 30,1989 to November 19, 1990.)

voted to sponsorship increases. Ironically, this in- thought or because sponsorship fulfills personal ob-
creasing expense makes it imperative for managers jectives that may be outside conventional communi-
to account for sponsorship's effectiveness. Evidence cations objectives (Sedmak 1989). For example, se-
suggests that some managers are simply not con- nior managers may, because of personal interests or
cerned about measxiring the effectiveness of sponsor- career goals, make financial commitments to a local
ship, either because they have not given it much arts organization. Because of their positions, they
50 Journal of Advertising

wield enough influence within their firm to ensure Research Objectives and Hypotheses
sponsorship expenditures in the tens of thousands of
dollars — a considerahle amount to a struggling arts The major objectives of our study were to deter-
company, but a relatively minor expenditxu-e to a mine (1) the relationship between awareness of cor-
highly profitable large business. Although such spon- porate sponsorship and corporate image and (2) the
sorship decisions may be couched in vague references potential effects of various tjrpes of sponsorship on
to community service and support for the arts, they corporate image. More specifically, two research hy-
are essentially made without regard to any direct, potheses were tested:
measurable benefit to the sponsoring company Hj: Persons who are aware of corporate spon-
(Sedmak 1989). sorship have more favorable views of the
Two important conclusions can be drawn from the sponsoring company than persons who are
literatxure on sponsorship. First, emphasis on spon- unaware of corporate sponsorship.
sorship as an element of the communications mix is H^: Organizations that participate in corpo-
growing as a result of increases in both the number of rate sponsorship activities have better
sponsoring companies and the amounts spent for spon- public images than ones that do not par-
soring events. Second, few attempts have been made ticipate in such activities.
to understand the value and effectiveness of sponsor-
ship or to assess the degree of success in achieving Research Method
sponsorship goals.
Corporate Image Measures
Sponsorship and Corporate Image Measures of corporate image were developed that
Beyond managers' personal motivations, two com- reflect managers' goals for their firms' sponsorship
munications objectives seem to characterize most efforts. These measures were derived through a set of
sponsorship activities: enhancement of corporate im- six personal interviews with managers responsible
age and enhancement of brand image. In a survey of for their companies' sponsorships. They conform
managers of sponsorship events for large U.S. con- closely to what are termed "qualitative" characteris-
sumer products companies, 41% of respondents re- tics of a company's personality and are components of
ported brand-related objectives for sponsorship ac- a company's subjective image (Johnson and Zinkhan
tivities and 54% reported a corporate image objective 1990). The final six measures represent six dimen-
(Gross, Javalgi, and Traylor 1992). The importance of sions of corporate image:
corporate image is well documented (Johnson and 1. Has good product^services.
Zinkhan 1990). From a series of personal interviews 2. Is well managed.
with sponsorship managers undertaken to develop 3. Only wants to make money.
the background for our study, the importance of cor- 4. Is involved in the community.
porate image emerged as a consistent theme. Corpo- 5. Responds to consumer needs.
rate image captures the subjective perceptions of the 6. Is a good company to work for.
company so sponsorship should, theoretically, have a
direct impact on it. More precisely, "company [or cor- Companies Studied
porate] image refers to the impressions of a particu-
lar company held by some segment of the public" Five companies were used in the study: a regional
(Johnson and Zinkhan 1990, p. 347). bank, an energy products company, a health care
Another issue that emerged in discussions with insurer, a beverage products company, and a national
managers is the effect of various types of sponsorship chain of retail stores. Each company is considered
on corporate image. Before investing funds in a spon- large in comparison with other companies in its in-
sorship activity, managers must ask: Does sponsor- dustry. Three are multinational. All five are in the
ship of, for example, an activity for handicapped chil- Fortune 500. Three are based in the area where the
dren produce the same impression of the company as study was conducted and their managers psirticipated
sponsorship of a fine arts production or a sporting in the personal interviews used to develop the ques-
event? tionnaire.
December 1994 51

As a group, these five companies are not a random this measvire is consistent with that for the other five
sample of corporations engaged in sponsorship. items.
Rather, they are a judgment sample selected to rep- To control for order bias, half the respondents were
resent a variety of industries serving a diverse set of asked to give the image ratings first, then asked about
markets. When our study was conducted, each had their awareness of sponsored events. The other half
engaged in at least one major sponsorship activity in were measured on awareness first and gave image
the study area in each of the last several years. ratings second. This approach was used to account
In addition to these five companies, a large indus- for the possibility that respondents might process the
trial company was included in the study to test the sponsorship information during the interview. There
effect of different types of sponsorship. This sixth were no statistically significant differences between
company is highly visible in the study area, is head- the two groups on any of their ratings of corporate
quartered there, and is a large employer. It has con- image. Hence, we believe the order of the rating and
ducted a strong national corporate image campaign recall tasks had a negligible effect on the resvdts.
in the conventional media for many years. This com-
pany did not engage in sponsorship, however, so it Projective Experiment
was a good, practical choice to test the potential ef-
fects of initiating different sponsorship activities. A small projective experiment was designed to test
the second hypothesis. Respondents first gave image
Telephone Survey ratings of the sixth company, the one that engaged in
no sponsorship activity. Then each was told that the
Two hundred respondents were picked randomly company had recently sponsored one of the following
from the universe of current residential telephone events: Special Olympics for Handicapped Children,
subscribers in a large midwestem market where the a playhouse theater production of Hamlet, or a visit
sponsorship activities took place. Sampling was based by the U.S. Men's Olympic Basketball Team. The
on plus-one dialing, a random digit dialing method in choice of these events was not based on random sam-
which the last digit of the household listing is pling. Instead, they were picked to represent the kinds
incremented by one. This method was intended to of charitable, cultural, and sports events that manag-
give households with unlisted telephone numbers an ers might consider sponsoring.
even chance of being included in the sample. The After some intervening questions, respondents were
questionnaire was pretested on a small sample of asked to rate the company again. We used these rat-
qualified respondents, and some minor changes in ings to see whether any changes resulted from the
wording were made before the interviewing began. newly gained knowledge about the sponsored event.
Respondents were male or female heads of house-
hold. Trained marketing research interviewers and
the fourth author conducted the interviews. The ques-
tionnaire took about eight minutes to administer. Results and Discussion
Respondents were asked to recall (unaided) any Awareness of Sponsorship Events
event(s) sponsored by each of the companies. Then,
for an event not mentioned, a question was read to To examine the relationship between awareness
determine whether the respondent could correctly and image (Hj), we had to identify respondents whose
match the event with its sponsor. This question was awareness of the sponsorship activities of the five
intended to include sponsorships that consumers may companies was an antecedent to their perceptions of
not be able to recall on their own, but would recognize corporate image. Some respondents made vague ref-
when communicated to them through word of mouth erences to general sponsorship activities (e.g., "they
or some other type of promotion surrounding the event. help the disabled" or "they support the arts"). Others
The order of the companies was randomized. Respon- named the same event for two or three of the compa-
dents used afive-pointLikert scale to rate each com- nies, which suggested an awareness of the event but
pany on each of the six dimensions of company image. not ofthe company sponsoring it. This did not happen
In the analysis, the "only wants to make money" often, but to keep it from affecting the analysis, we
measure was reversed so that a negative rating on required that respondents make a correct association
the scale was counted as a positive rating for the of an actual event with the sponsoring company to be
company. Thus, the interpretation of the results for counted as "aware." This approach is also consistent
52 Journal of Advertising

Table 2
Awareness of Sponsored Events

RECALL
Correct Total
Company Event Unaided (%) Correct (%)

Health Care Mental Health Run

Insurer 1988 Olympics 5.5 28.5

Retail Chain •Marathon Race 67.5 76.5

Regional Bank Ballet 15.0 41.5

Energy Company Popular Arts Festival 13.5 34.5

Beverage *Grand Prix Racing

Products National Air Show 46.0 83.0
Company Popular Arts Festival

*The company name is part of the name of the event.

with the way at least three of the sponsoring compa- it, respectively. The differences between the group
nies reportedly counted awareness. Two of the five means were tested with MANOVA, and Table 3 sum-
companies sponsored more than one event. If the re- marizes the results. The Hotelling T^ statistics pro-
spondent named any of the events correctly, that per- vide a single overall test of the group differences on
son was counted as "aware." the six image dimensions for each company.
Table 2 reports the percentage of respondents who The overall Hotelling test is not significant for the
correctly recalled each event and matched it with the health care insvirer. Respondents who were aware of
sponsoring company. Total recall is unaided plus aided the sponsorship events generally expressed more nega-
recall. If a respondent did not name an event un- tive feelings on most of the image dimensions. Those
aided, the interviewer prompted with a set of events. in the total aware group expressed positive feelings
Aided recall was measured by the respondent's abil- toward three of the image variables: "is well man-
ity to identify the sponsoring company correctly upon aged," "only wants to make money," and "is involved
being read the name of the event. in the community."
The names of two of the events included the names The Hotelling test for the retail chain store is sig-
of the sponsoring companies (e.g., "The XYZ Grand nificant, but several of the individual measures are
Prix"). The company nsune was left out of the event not in the direction predicted. Four of the image vari-
name when it was read to the respondents, but these ables were viewed more negatively by the unaided
events still generated a higher level of sponsor aware- aware group; three of them are statistically signifi-
ness than the others. This finding suggests that com- cant. Only two image variables, "only wants to make
panies should attach their names formally to the titles money" and "is involved in the community," were
of the events they sponsor. viewed more positively by the unaided aware group;
neither of them is statistically significant.
Test of Hypothesis 1 Five of the six image variables were viewed more
negatively by the total aware group. Only one vari-
Respondents in both the unaided aware group and able, "is involved in the community," is consistent
the total aware group were compared with respon- with the research hypotheses and is statistically sig-
dents who were not in those groups—respondents nificant.
who could not recall the company's sponsorship on For the regional bank, Hotelling test is significant
their own and those who were completely unaware of for the total aware group but not for the unaided
December 1994 53

Table 3
Comparison of Aware Groups with Others on image Dimensions for Five Sponsoring Companies
iVIean Score Differences and Resuits of iVIANOVA

Health Care Insurer Unaided Others Difference Total Unaware Difference

Aware Aware

Has good products/services 0.00 .41 -.41 .35 .40 -.05

Is well managed -.27 .24 -.51* .22 .21 .01
Only wants to make money .18 .48 -.30 .54 .43 .11
Is involved in the community .36 .47 -.11 .56 .43 .13
Responds to consumer needs -.18 .28 -.46 .11 .31 -.20
is a good company to worl< for 0.00 .30 -.30 .16 .34 -.18

l-ioteiiing's Test
Approx F-Value 1.01 d.f. = 1,196 .88 d.f.-1,196

Chain of Retail Stores

Has good products/services .79 1.02 -.23 .84 .94 -.10

Is weil managed .27 .82 -.55 ** .38 .68 -.30
Only wants to make money .56 .51 .05 .52 .62 -.10
Is involved in the community .93 .80 .13 .96 .66 .30**
Responds to consumer needs .70 .94 -.24* .76 .83 -.07
Is a good company to work for .21 .63 -.42 ** .29 .55 -.26

Hoteiiing's Test
Approx F-Value 2.88 ** d.f. = 1,196 2.10** d.f.-1,196

**p<.05 "*p<.01

Regional Bank

Has good products/services .87 .59 .28 .73 .56 .17

Is well managed .87 .69 .18 .77 .68 .09
Oniy wants to make money .87 .50 .37* .67 .47 ^.20
Is involved in the community .83 .58 .25 .82 .47 .35**
Responds to consumer needs .80 .61 .19 .78 .54 .24*
Is a good company to work for .47 .53 -.06 .58 .48 .10

Hoteiiing's Test
Approx F-Value 1.69 d.f. = 1, 196 2.11 * d.f.-1,196

Energy Producing Company

Has good products/services .93 .71 .22 .72 .74 -.02

Is weii managed .93 .84 .09 .86 .85 .01
Only wants to make money 1.30 .68 .62** .96 .66 .30*
Is involved in the community 1.18 .66 .52** .96 .62 .34**
Responds to consumer needs .78 .57 .21 .54 .63 -.09
Is a good company to work for .78 .69 .09 .80 .65 .15

Hoteiiing's Test
Approx F-Vaiue 2.45* d.f. = 1,196 2.22* d.f.-1,196

continued.
54 Journal of Advertising

Beverage Products Company

Has good products/services .57 .67 -.10 .62 .61 .01

Is well managed .87 .84 .03 .90 .62 .28*
Only wants to make money .48 .41 .07 .48 .26 .22
Is involved in the community .58 .35 .23 .49 .26 .23
Responds to consumer needs .63 .55 .08 .61 .44 .17
Is a good company to work for .73 .55 .18 .70 .26 .44"

Hoteiling's Test
Approx F-Value 1.32 d.f. = 1,196 1.64 d.f. = 1,196

aware group. Three image variables were viewed more multidimensional or unidimensional construct.
positively by the unaided aware group: "has good prod- In summary, the results in Table 3 are mixed. They
uct^services," "only wants to make money," and "is show that the first hypothesis is supported for the
involved in the community." Two other measvires, "is energy producing company, it is weakly supported for
well managed" and "responds to consumer needs," the beverage company and regional bank, and it is
are also in the direction hypothesized, but the differ- not supported for the health care insurer or for the
ences are not statistically significant. The sixth mea- retail chain.
sure, "is a good company to work for," is opposite the Within a company, sponsorship does not seem to
direction hypothesized, but the difference is not sta- enhance all dimensions of the company's image. Some
tistically significant. For the total aware group, all may be improved, but others stay the same or are
six of the separate image dimensions are in the direc- degraded. Hence, we do not observe the halo effect
tion hypothesized; one of them is statistically signifi- that one might expect to result from awareness of
cant. corporate sponsorship. This finding suggests that the
For the energy producing company, the Hotelling different dimensions of corporate image can be af-
test is significant for both the unaided aware and the fected differently by corporate sponsorship.
total aware groups. The respondents in the unaided We suspect that many consumers merely incorpo-
aware group expressed a positive view on all of the rate knowledge and perceptions of the sponsorship
image dimensions. Two dimensions, "only wants to activities with their knowledge and perceptions of
make more money" and "is involved in the commu- the companies overall. For example, "...a customer's
nity," are significant. Results are more mixed for the image of the company will be affected significantly by
total aware group. Respondents in this group viewed the customer's personal experience with the company's
three of the six dimensions more positively: "is well product" (Johnson and Zinkhan 1990, p. 347).
managed," "is a good company to work for," and "only The health care insiirer had been the subject of
wants to make money." However, only the last vari- extremely negative, highly visible publicity for sev-
able is statistically significant. The other three di- eral years prior to our study. In fact, its image ratings
mensions were viewed more negatively, on average, were significantly lower than those of the other five
by the total aware group. One of them, "is involved in companies (on the basis of separate, paired-compari-
the community," is statistically significant. son t-tests using an overall index of image). The chain
For the beverage producing company, neither of the store had suffered a similar fate a few months before
Hotelling tests is significant. Feelings were generally the research was conducted. Its overall image rating
more positive among respondents who were aware of was roughly the same as those of the other firms, but
the sponsorship events. For this company, none of the significantly higher than that of the health care in-
image dimensions are significant for the unaided surer.
aware group. For the total aware group, "is well man- In both cases, respondents who were more aware of
aged" and "is a good company to work for," are both the sponsorship activities might also have been more
significant. aware of the companies in general, so that their per-
Overall, the results were mirrored in a separate ceptions would have been built on a much wider body
analysis using a global measure that combined the of knowledge, including a great amount of negative
six separate dimensions into a single, general mea- information. This possibility seems especially likely
sxire of corporate image. We therefore reach the same among the unaided aware consumers who, perhaps
conclusions whether corporate image is treated as a as a correlate of their unaided awareness, may have
December 1994 5t

Table 4
Summary of Significant Results from Table 3

Number of Results Direction of Results:

Image Dimension That Were Significant positive negative

Has good products/services 0 0 0

Is well managed 2 1 1
Only wants to make money 3 3 0
Is involved in the community 4 4 0
Responds to consumer needs 2 1 1
Is a good company to work for 2 1 1

Results were considered significant with alpha < .05.

engaged in more thorough information processing Test of Hypothesis 2

about the companies and come to some overall con-
clusion about them. To determine the potential effect of different types
There are nine directional changes in the 30 indi- of sponsorship (vs. no sponsorship) on corporate im-
vidual ratings when the total aware group is com- age (H2), we used a large industrial company that
pared with the unaided aware group, but only one of does not engage in sponsorship. After they had pro-
them is statistically significant: "is involved in the vided image ratings of this company, respondents
community" for the energy producing company. were randomly assigned to be told that it had re-
Table 4 shows some other interesting relationships cently sponsored either a Special Olympics for Handi-
in the individual effects across the companies based capped Children, a theater production of Hamlet, or
on both the unaided aware and total aware test re- the U.S. Men's Olympic Basketball Team. Each re-
sults. This table was derived by examining the num- spondent was given only one event. Then they were
ber of statistically significant differences in Table 3. asked to rate the company again. Admittedly, this
We see little consistency in the results. At best, "is approach is somewhat artificial, but we attempted to
involved in the community" has four significant dif- separate the rating tasks by asking several unrelated
ferences (out of 10 separate tests), all of which are in questions between them.
the direction hypothesized, and "only wants to make Responses were recorded on a five-point scale rang-
money" has three significant differences, all of which ing from "strongly agree" (+2) to "strongly disagree" (-
are in the direction hjrpothesized. Disregarding sta- 2), and the mean values were computed. We found no
tistical significance, we find that nine of the 10 tests differences among the types of sponsorship activity
for "is involved in the community" are in the direction (on the basis of F-tests of the difference between scores
hypothesized; eight of the 10 are in the direction hy- obtained before and after the event, and the "after
pothesized for "only wants to make money." The other only" scores by themselves). One event yielded essen-
four image dimensions vary considerably, some hav- tially the same degree of benefit as another.
ing positive and some having negative effects on con- The differences between the mean scores for before
sumer perceptions. and after knowledge of the sponsorship were also
This evidence, albeit tenuous, implies that some tested by using a paired t-test for differences within
dimensions of image might be more consistently, posi- samples. As shown in Table 5, the scores improved in
tively influenced by corporate sponsorship and less every instance after the respondent was made aweire
susceptible to individual company differences than of the sponsorship. Four of the six image variables
others. Future research could focus more specifically showed statistically significant improvements ("has
on this issue and why some dimensions, but not oth- good product^services," "only wants to make money,"
ers, can be expected to change as a result of corporate "is involved in the community," and "responds to its
image. customers' needs"). Hence, the findings support H2:
Journal of Advertising

Table 5
Industrial Company Mean Score Improvement
(Using paired sample t-tests)

Company... Mean Score

... has good products/services

Before knowledge of sponsorship .730
After knowledge of sponsorship .860'

... is well managed

Before knowledge of sponsorship .775
After knowledge of sponsorship .830
1
... only wants to make money
Before knowledge of sponsorship .560
After knowledge of sponsorship .415'
... is involved in the community
Before knowledge of sponsorship .630
After knowledge of sponsorship .780'

... responds to its customers' needs

Before knowledge of sponsorship .565
After knowledge of sponsorship .695'

... is a good company to work for

Before knowledge of sponsorship .935
After knowledge of sponsorship .945

Scale: +2 - Strongly Agree ** p < .05 *** p < .01

+1 = Agree (n = 200) respondents
0 - Neutral
-1 - Disagree
-2 = Strongly Disagree

companies that use corporate sponsorship have bet- The theoretical explanation, however, could be that
ter public images than ones that do not. Further- the information about the industrial company's ficti-
more, the results suggest that it makes little differ- tious sponsorship was new, not information that sub-
ence what type of event is sponsored. jects had processed previously and brought back (un-
These results seem to contradict those reported pre- aided or aided) from memory. Perhaps the effects of
viously. If making people aware of corporate sponsor- corporate sponsorship are most dramatic when people
ship improves their perceptions of a company so con- are first made aware of it but fade as the information
sistently (as fovmd in the test of H2), why would there is quickly incorporated into other sets of beliefs. In
be such mixed results between those who are aware other words, corporate sponsorship m.ay have a nov-
and those who are unaware (as found in the test of elty effect initially, but the effect may diminish over
Hj)? The contradiction might be explained in terms time.
of testing effects, because the before-after design used If so, corporate sponsorship operates similarly to
to test the second research hypothesis was apparent conventional media advertising campaigns that, de-
to the subjects despite the attempt to separate the spite initial effectiveness, eventually wear out. Com-
two rating tasks. petitive pressures, aging in the target audience, other
December 1994 57

environmental changes, and the effects of repetition which corporate image is formed, but to explore the
lead to a decay in the effectiveness of communica- effects of one extemal stimulus—corporate sponsor-
tions campaigns in general. The implication is that, ship—on corporate image. If awareness of corporate
to derive maximum benefit from sponsorship, a com- sponsorship has differential effects on certain dimen-
peiny should monitor its impact over time and be sions of corporate image, the way sponsorship infor-
prepared to alter it or even switch to new events as mation is processed and the way these dimensions of
conditions warrant. One of the characteristics of the image Eire formed should become the focus of future
companies used to test the first hypothesis was that research. Our study addressed only one internal an-
each had engaged in a consistent pattern of sponsor- tecedent of corporate image—awareness of sponsor-
ship activity for a period of time, and each had spon- ship. The challenge is to uncover other factors that
sored the same event for a nvimber of years — up to affect how companies are perceived. Futxire research
20 years in one case. should explore what these factors might be, how they
Our research hypotheses warrant further inquiry. help determine the way corporate image is formed,
Our results should be replicated and elaborated upon and how they interrelate with extemal, uncontrolled
with improved research designs before firm conclu- communications that affect perceptions of the com-
sions are drawn or management decisions are made. pany.
Even the two companies whose names were linked
Summary and Conclusions with an event were rated differently by persons who
were aware of the event. Hence, awareness of a spon-
Corporate sponsorship is becoming increasingly sorship activity is not sufficient (and perhaps not
important as indicated by both the dollars spent on it necessary) for a strong, positive corporate image.
and the number of events sponsored. It has begun to Consumers' perceptions of a company £ire based on
compete against other elements of the communica- infonnation from a variety of sovirces—face-to-face
tions mix for funding, especially where traditional contact, telephone calls to the customer service de-
methods of reaching fragmented markets are becom- partment, stock ownership, experience in using its
ing more costly and inefficient. products, advertising, publicity, and even employment.
Little information has been published about the Therefore, it may be unrealistic to expect sponsor-
relationships between the goals and the results of ship, by itself, to overcome whatever impressions con-
sponsorship activities. A company's objectives are of- sumers have formed from all the other sovirces. The
ten couched in broad terms such as "better corporate implication is not that companies should not engage
image," but specific definitions of "image" and other in sponsorship, only that managers' expectations
sponsorship goals have been lacking. Similarly, though should be tempered by recognition of consumers' pre-
managers purport to measvire the effectiveness of their viously formed views.
promotional activities, including sponsored events, Our study is a first attempt to link corporate spon-
they seem reluctant to undertake meaningful evalua- sorship with corporate image and has several limita-
tion. Part of the explanation may be that many man- tions that can be overcome in subsequent research.
agers intuitively assume that relatively small sums Certain issues suggested by this study can be ad-
spent on events can go a long way toward enhancing dressed in future resesirch on corporate sponsorship.
the image of the firm. In other words, managers' ex- They can be stated as the following research hjrpoth-
pectations are extremely high. eses:
The findings of our exploratory study suggest that 1. Firms suffering from negative publicity will
corporate sponsorship can enhance corporate image, suffer further if they engage in corporate spon-
but that such an outcome is not automatic. It may sorships.
occxir if the company has a good image before the 2. Corporate sponsorship is less important than
sponsorship. The research also suggests, however, other sources of information about a company,
that corporate sponsorships might exacerbate a nega- including word-of-mouth, direct experience,
tive image if consumers hold prior negative percep- and other elements of the communications
tions. mix.
The lack of a halo effect suggests that the different 3. Corporate sponsorship reinforces prior beliefs
dimensions of corporate image are affected differently about the company. It cannot, by itself, re-
by awareness of corporate sponsorship. The purpose verse prior negative perceptions.
of our research was not to identify the process by
58 Journal of Advertising

4. Corporate sponsorship is most effective when more thorough understanding of corporate image for-
it is first used but diminishes in effectiveness mation, and of the elements that determine corporate
over time. image, would afford insights on this issue. Our study
5. The exact nature of the corporate sponsorship provides some initial basis for understanding the re-
is less important than its novelty—any initial lationship between consvimer awareness of sponsor-
effort will be rewarded by improvement in ship and corporate image, but additional research is
corporate image, regardless of the nature of needed in response to the growing importance of spon-
the event. sorship as an element of the communications mix.
6. The strength of the reaction, positive or nega-
tive, will be greater among persons who can References
bring the sponsorship to mind on their own
than among persons who must be reminded Gardner, Meryl P. and Philip J. Shuman (1987), "Sponsorship: An
Important Component of the Promotions Mix," Journal of
of it. Advertising, 16 (1), 11-17.
Other issues for futvire research are not directly Gross, Andrew C , Mark B. Traylor, and Philip J. Shuman (1987),
related to our results, but can be useful in under- "Corporate Sponsorship of Arts and Sports Events," 40th
ESOMAR Marketing Research Congress Proceedings,
standing the conditions under which corporate spon- Montreux, Switzerland, 535-562.
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is needed to learn why sponsorship seems to work "Sponsorship: Priorities and Practices in the U.S.," Working
well in some instances but not in others. For ex- Paper, Cleveland State University.
Johnson, Madeline and George M. Zinkhan (1990), "Defining and
ample, differences in company size, industry, culture, Measuring Company Image," Proceedings of the Thirteenth
market power, and other variables should be exam- Annual Conference of the Academy of Marketing Science, Vol-
ined. Future research also should address control- ume XIII, New Orleans, 346-350.
lable factors that may make sponsorship activities Meenaghan, John A. (1983), "Commercial Sponsorship," European
Journal of Marketing, 7 (7), 5-73.
more effective, such as the company's other promo- Meenaghan, Tony (1991), TThe Role of Sponsorship in the Mtirket-
tional activities and especially the interaction with ing Communications Mix," International Journal of Advertis-
other elements of the communications mix. Finally, ing. 10 (1), 35-47.
despite evidence that the nature of the event might Mescon, Timothy S. and Donn J. Tilson (1987), "Corporate Philan-
thropy: A Strategic Approach to the Bottom Line," California
not matter when a firm first engages in sponsorship, Management Review, 29 (Winter), 49-61.
future research should address the type of sponsor- Sandier, Dennis M. and David Shani (1989), "Olympic Sponsor-
ship activity, its frequency of occurrence, and its fit ship versus 'Ambush' Marketing: Who Gets the Gold?" Jour-
with prior attitudes about the company. nal of Advertising Research, 29 (August/September), 9-14.
Sedmak, Marina (1989), "Corporate Sponsorship of the Fine Arts
From a consumer standpoint, more research is in Today's Marketing Mix," Unpublished MBA project, Cleve-
needed on the way an audience accepts and processes land State University.
the information that sponsorships commvmicate. Spon- Special Events Report (1989), 8 (2, 3, 11, 12, 17, & 18), January 30-
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It is especially important to determine why, as sug- Wilbur, Del (1988), "Linking Sports and Sponsor," The Journal of
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gested by ovir findings, corporate sponsorship may
damage rather than enhance a company's image. A
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