A Research Report

on
Impact of Event Sponsorship on Consumers Pre-purchase Evaluation

Submitted to:
Dr. Phanindra Upadhyaya
ACE Institute of Management

Submitted by:
Ram Prasad Sapkota
Student, EMBA 2015
 Abstract

Advertising, a form of commercial mass communication designed to promote the sale of a

product or service, or a message on behalf of an institution, organization, or candidate.
Evidence of advertising can be found in cultures that existed thousands of years ago, but
advertising only became a major industry in the 20th century. Today the industry employs
hundreds of thousands of people and influences the behaviour and buying habits of billions of
people. When detailed product information is not available to consumers inferences are made
using product cues to reduce uncertainty and to form perceptions of products. Advertisers can
make use of sport sponsorship as extrinsic cues to influence consumers pre-purchase
attitudes. These cues are expensive forms of advertising. Managers need to establish whether
they provide a satisfactory return on investment. This study explored consumers attitudes
and the effect of sport event sponsorship endorsement on key brand/manufacturer related
variables such as brand quality, product uniqueness, manufacturer esteem and corporate
citizenship. A total number of 5 respondents participated in the study. A non-probability
sample was used. Results indicate that sport event sponsorship was perceived by participants
as a product uniqueness, manufacturer esteem and corporate citizenship cue, significantly
enhancing responses on product related variables. Using these results managers can
substantiate the use of sport event sponsorship to increase consumers pre-purchase attitudes
of product uniqueness, manufacturer esteem and corporate citizenship to increase their pre-
purchase attitudes of product uniqueness and manufacturer esteem; thus positively affecting
consumers pre-purchase attitudes that may influence buyer behaviour.

Key words: Sport sponsorship; Brand quality; Product uniqueness, Manufacturer, esteem and
corporate citizenship, Buyer Behaviour, Image Transfer, Purchase Intention, Property,
 Introduction

The Nepali advertising industry has grown by leaps and bounds, especially during the last
decade after the restoration of Democracy in the country in 1990. Advertising Industry has
grown due to open economic and market policy and international relationship and also
because of the credibility of print media. Earlier to 1990, during the Panchyat System in
(1961-1990) the industry had very low profile. According to Constitution of the Kingdom of
Nepal-1990, has guaranteed right to freedom of thoughts and expression, Cultural and
Educational rights and the Right to hold any occupation. Likewise, it has also provided the
Right to Press and Publication stating that no reading materials shall be censored. Generally,
the guarantees also imply to the advertising as these are also the medias software that helps
in development of independent media.

Advertising in the real sense came, like elsewhere in the world in the printed form after the
development of printing press. However, the history of printing press in Nepal is only a one
and half century old, which was introduced during the premiership of Junga Bahadur Rana.
Advertising through event sponsorship in Nepal has gradually increasing. Even the sport
events are very less organized as compare to the outer world, it has been increasing rapidly.
After the restoration of democracy extension of electronic media coverage and increase the
access of electronic equipments to the common people, advertising through electronic media
has been rapidly increasing. Many financial institutions, big private and public companies
are sponsoring the sport events and do the advertising of their products and services.

If we see the global status of advertising, South Africans will always be passionate about
sport and there is no better association for a companys brand than an association with sport
(Etzman & Penstone, 2001:14). Performances in the 2007 International Cricket Council
(ICC) World Cup, the 2006 FIFA World Cup, 2007 twenty-twenty Cricket World Cup, and
2007 Rugby World Cup in France, capture the imagination and even below-par results will
not reduce this passion. Marketers can capitalise on this passion for sport for instance, by
utilising sport event sponsorship.

Problem

Companies are investing huge amount in advertising to promote their products. One widely
used method is event sponsorship. Complete product information is rarely available to
consumers and consumers infer information where relevant product information is absent to
form an integrated and overall evaluation.

Purpose of the study

This study will investigate that event sponsorship would only have a positive effect on
consumer pre purchase behaviour and also influence perceptions of product uniqueness,
manufacturer esteem and corporate citizenship.
 Literature review and development of hypotheses

A number of studies have provided an effective direction for the sphere of research to be
undertaken, with many providing the key constructs that require further exploration.
However, in order to productively assemble the extracted constructs, a blueprint was first
adapted using the consumer decision process (CDP) model. The conceptual framework for
this study was developed using the CDP model as a basis and was inclusive of, significantly,
Speed and Thompsons (2000) body of work. They used a classical conditioning framework
to guide their research and their subsequent proposal of sports sponsorship effects, which
they deemed was affected by attitudes towards the event, attitudes towards the sponsor and
perception of congruence between sponsor and event.

According to classical conditioning, simply pairing one stimulus that spontaneously evokes
certain meanings and feelings with another can cause a transfer of these meaning and feelings
from one to the other (R. D. Blackwell, Miniard, P.W., Engel, J.F., 2001). Since this study
explores the sponsorship of major sporting events, seven major components for investigation
exist, which are: event factors, sponsor factors, sponsorship factors, pre-purchase response,
transfer of image values, the intention to purchase and finally actual purchase. These
constructs were extracted from a number of key sponsorship based studies (Meenaghan,
2001; Speed & Thompson, 2000) as well as the CDP model. As a result it was identified that
pre-purchase response was dependent on three constructs: event factors, sponsor factors and
sponsorship factors. Transfer of image is reliant on the pre-purchase response, which is
inclusive of the components of recall, awareness, favourability and interest. Intention to
purchase is dependent on the transfer of image values at the activity level, category level and
image congruence.

Finally, actual purchase is dependent on the consumers intention to purchase. The mapping
of a route towards understanding of sponsorship effects, through the identification and
classification of individual elements may provide a guide to practitioners in their sponsorship
decision making as well as provide an important advance for academics on the road to deeper
insight into this phenomenon (Meenaghan, 2001). While there is growing interest in assessing
the impact of sports and entertainment sponsorships (Copeland, Frisby, & McCarville, 1996;
Schlossberg, 1994; Thomas, 1996) many sponsoring companies do not have formal
sponsorship evaluation systems or procedures. Post hoc cost-benefit analyses of sponsorship
values are often complicated and ambiguous (Miyazaki & Morgan, 2001). Based on the
extant literature review the following relationships were hypothesised:

H1: Event sponsorship has a significant impact on consumers pre-purchase evaluation.

H2: Sponsor-event fit contributes to a positive association with pre-purchase response.
H3: Pre-purchase response is positively associated with image transfer.
H4: Image transfer is positively associated with intention to purchase.
 Method

This research was conducted within the metropolitan city of Kathmandu with five
respondents. They were family members and INGOs staffs who were involve a broad cross
section of the community who were interested in two major sporting events in Nepal like;
Cricket and Football. Aside from the precondition of participants to be over 18 years of age,
there were no other requirements in the selection of participants. Interviewer himself
conducted the research and took the interview with designed questionnaires. Out of five
respondents three were female and two were men who took part in this study.

Research Questionnaires

What are the games you love to see?

How often you see the game? What are your favourite sports?
How did you find the advertisement, which broadcast during sport event?
What are the products that you come to know during advertisement of sport event?
How do you get information about the product that you purchase?
How do you decide which product is more suitable to you?
Do you see games like cricket, football, tennis etc?
What do you think, how effective method is event sponsorship to promote the
product?
Did you buy any product that you know from the advertising done during sport event?

Conclusions and recommendations

The results revealed that event status was in fact positively associated with pre-purchase
response of the consumers to buy the products. This result is somewhat surprising
considering the amount of research conducted in this area which predominantly concurs that
fan involvement is particularly significant. This indicates that sponsor consciousness of actual
audience segmentation is somewhat redundant if the level of fan involvement is insignificant.
There was moderate support for the hypotheses regarding personal beliefs and this is in line
with the findings of Blackwell et al (2001) and Mullin, Hardy and Sutton (2000) who propose
that personal beliefs act purposefully in inadvertently affecting sponsorship response. The
results demonstrate that what consumers have previously believed of the sponsor, whether it
be positive or negative, has a moderate bearing of what they think of the sponsor in the
present and subsequently influences their pre-purchase response. There was moderate support
for the hypothes is pertaining to sponsor and event fit. Previous research has indicated a
divide in opinion regarding the degree to which sponsor-event fit, or congruence, affects the
decision to purchase a sponsors product or service. The result though not highly significant,
indicates that it is still necessary for sponsors and properties to assess the compatibility of a
partnership before making the final decision to engage in such relationship. There was a
strong level of support for the hypothesis concerning image transfer. This includes recall,
favourability and interest which are indicators of the level of image transfer that occurs in the
consumer decision process. Sponsors should engage in sponsorship activities which leverage
image transfer. Finally, image transfer is positively associated with intention to purchase. The
results indicate a snowball effect of image transfer with the intention to purchase. Sponsors
should seek to actively engage their audience in order to obtain a favourable outcome.
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