Strategic use of sponsorship: Development of a progression model

Maarten Lammers

Master thesis of Science & Business Management Utrecht University , Netherlands As intern of Incubate, Tilburg, Netherlands

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3Patronage

Marketing

Corporate

Reciprocity

Leverage

Activation

Commitment

Sustainability

Synergy

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Integration in strategy

Goal convergence

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Contents

1. Introduction ....................................................................................................................... 3

2. Methods ............................................................................................................................ 5

2.1 Literature research ....................................................................................................... 5

2.2 Freshheads-Incubate case study ................................................................................. 5

3. How sponsorship evolved ................................................................................................. 7

3.1 Defining sponsorship ................................................................................................... 7

3.2 History of sponsorship research ................................................................................... 7

3.3 Evolution of sponsorship .............................................................................................. 9

3.3.1 Philanthropy .......................................................................................................... 9

3.3.2 Early sponsorship .................................................................................................10

3.3.3 Cause-related marketing ......................................................................................10

3.3.4 Sponsorship as an integral part of the marketing mix ...........................................11

3.4 Resource-based view on sponsorship .........................................................................12

4. Strategic use of sponsorship ............................................................................................13

4.1 Basic sponsorship .......................................................................................................13

4.2 Sponsorship-linked marketing .....................................................................................13

4.2.1 Sponsorship-linked marketing: Advertising ...........................................................13

4.2.2 Sponsorship-linked marketing: Personal selling ....................................................14

4.2.3 Sponsorship-linked marketing: PR and sales promotion .......................................14

4.2.4 Indirect marketing .................................................................................................14

4.3 Strategic alliance .........................................................................................................15

4.4 Co-marketing alliance .................................................................................................15

4.4.1 Sponsorship as a co-marketing alliance ...............................................................16

5. Freshheads-Incubate case-study .....................................................................................18

5.1 Introduction of Incubate and Freshheads ....................................................................18

5.2 Freshheads-Incubate relationship formation ...............................................................18

5.3 Analysis of a relationship ............................................................................................19

5.3.1 Strategic compatibility ...........................................................................................19

5.3.2 Goal convergence ................................................................................................20

5.3.3 Commitment .........................................................................................................20

5.3.4 Trust .....................................................................................................................20

5.3.5 Economic and noneconomic satisfaction ..............................................................21

5.4 A co-marketing alliance? .............................................................................................21

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6. Sponsorship progression model .......................................................................................23

6.1 Other sponsorship-related models ..............................................................................23

6.2 Sponsorship progression model ..................................................................................27

6.3 Anatomy of the SPM ...................................................................................................28

6.3.1 Objectives.............................................................................................................28

6.3.2 Management ........................................................................................................29

6.3.3 Relationship ..........................................................................................................30

6.3.4 Strategy ................................................................................................................31

7. Application ........................................................................................................................33

7.1 Theoretic examples .....................................................................................................33

7.1.1 Basic sponsorship ................................................................................................33

7.1.2 Cause-related marketing ......................................................................................34

7.1.3 Sponsorship-linked marketing...............................................................................35

7.1.4 Strategic sponsorship ...........................................................................................36

7.1.5 Co-marketing alliance ...........................................................................................36

7.2 Practice example ........................................................................................................37

8. Conclusion and recommendations ...................................................................................39

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1. Introduction Sponsorship is one of the most important income generators for the cultural sector, but also for sports and other non-profit properties. Private parties have been donating philanthropically money or in-kind for cultural and sport events for ages, both without any return on investment and as a marketing tool. However, in the past decades companies increasingly started to implement sponsorship as an important marketing tool in their business models. In times of increasing competition for both the sponsors and the sponsored properties the marketing tool of sponsorship is getting to a higher level to stay in advance of their competitors. Sponsorship evolves towards a professional entity which can be seen as a long-term co-marketing alliance, where the sponsor and the sponsored property both invest in a structural relationship to gain maximum result.

Research on sponsorship as a distinct science stream is relatively new, since the mid 1980s when sponsorship investments increased a lot. Sponsorship research started with mainly defining the phenomenon of sponsorship and its characteristics, but later on attention went also to the managerial aspect of sponsorship and soon after towards its implementation in the marketing mix and corporate strategy. An extensive review of early sponsorship research categorized in different streams is published by Cornwell and Maignan (1998).

Most research focuses on sports sponsorship and from the sponsors' side. Research focussing on the arts and culture side is scarce, not mentioning the amount of research focussing on sponsorship from the sponsored properties side in the arts and culture. This research will focus on sponsorship in general. Although Farrelly and Quester (1997) pointed out some minor differences in objectives, audience type, evaluation process, intern management and industry type between sports and arts sponsorship, in this paper the assumption is made that the fundamentals of sponsorship are equal for sports, arts, culture or whatever is sponsored.

This thesis will focus on sponsorship as a global phenomenon, as there are differences in the way sponsorship is implemented in different countries due to cultural (Farrelly, Quester, & Burton, 1997) and legal differences (Steenbergen, 2008). These differences are mainly found in the development of the phenomenon of sponsorship; globalization made differences smaller. Sponsorship nowadays is even used for opening new geographical markets as especially sports have a universal set of values which exceed geographical borders.

This study will give a review on how sponsorship is evolved to the current status of strategic implementation. The history of sponsorship is reviewed, but focus will lie on a review of how actual sponsorships are build and implemented into the corporate strategy of both the sponsors and the sponsored properties. By structuring the contributing components of sponsorships a model is developed; the Sponsorship Progression Model.

The model will give the progression from the most basic version of a sponsorship to a co-marketing alliance, which will be assumed as the most developed kind of sponsorship. Based on that assumption together with keeping the most basic sponsorships in mind, the components of the Sponsorship Progression Model will be selected. The model will bring more structure to the rather chaotic body of literature on sponsorship and can be a handy tool for professionals working in the field of sponsorship to evaluate and improve sponsorships. The model will be applied to five different kinds of sponsorship utilization to give examples of how it can be used as well as examples of where those sponsorship utilizations can be set in the progression line between basic sponsorships and co-marketing alliances.

Large-scale sports sponsorships are investigated to work as co-marketing alliances, but no small-scale art or culture cases are known. This study will give an example of a small-scale arts and culture sponsorship relationship between internet application and graphic design company Freshheads and independent culture festival Incubate, both based in Tilburg, Netherlands. This sponsorship can be seen as a co-marketing alliance. This sponsorship will be studies based on the characteristics of a successful co-marketing alliance as described by Farrelly and Quester (2005b). Finally the Sponsorship Progression Model will be tested by applying it to the Freshheads-Incubate sponsorship.

In short, the objectives of this study can be defined as:

A review of sponsorship from the beginning till the current status.

Development of a progressive sponsorship model.

Research to the question whether a small-scale arts and culture sponsorship relationship could fulfil the basic requirements of a co-marketing alliance. Tested with a case study and appliance to the model.

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First the methods of this study will be described in chapter 2. Chapter 3 will start with defining the phenomenon of sponsorship and following on that a review on the history of sponsorship research and an extensive review on the evolution of sponsorship. In chapter 4 the current strategic use of sponsorship is described with five different kinds of sponsorship. In chapter 5 the Freshheads-Incubate case study well be described and analysed as a co-marketing alliance. In chapter 6 the developed sponsorship progression model will be presented, including a short review of other sponsorship related models. In chapter 7 the application of the model will be described with some theoretic cases and with the practical case of Freshheads and Incubate. Finally chapter 8 will give conclusions and recommendations for further research.

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2. Methods

2.1 Literature research A large amount of academic literature, several conference proceedings, and a few hand books are studied to gain knowledge about the development of the phenomenon of sponsorship. Literature is searched on key words such as "sponsorship", "co-marketing alliance", "strategic sponsorship", "sponsorship-linked marketing". From the journal entries found, I continued searching for specific articles which seem to be interesting for my research via the references. The digital journal collection of Utrecht University and Tilburg University is used, as well as other sources of academic articles on the internet. For hand books the university library of Tilburg is used as well as the literature collection of Incubate.

Articles came from different journals in a variety of sciences ranging from psychology and communication to marketing and business. However a majority of journals publishing on the subject of sponsorship and its related science fields were marketing oriented. Some examples of consulted journals are Business Horizons, European Journal of Marketing, Industrial Marketing Management, Journal of Advertising, Journal of Sport Management, Psychology & Marketing, Sport Marketing Quarterly, and Strategic Management Journal. A complete overview of the references can be seen in the references section. More literature was conducted for this study which without doubt also influences my view on sponsorship, however not being referred to in this thesis.

First a brief history of the origin of sponsorship is given. Mainly hand books and earlier review papers are used for the early sponsorship review. Also the history of sponsorship research is reviewed, mainly based on earlier review papers. The sponsorship research history in this thesis focuses on earlier research at the time when this research field was rather new. From the point sponsorship became a more common science on its own and different strategic usages of sponsorship became a field of research and became commonly integrated into the marketing mix of firms, the review continues in the next chapter of "strategic sponsorship".

Different views on and developments of sponsorship are highlighted and described in chronology of time, however overlap in time occurs. The traditional model is described as being sponsorship linked-marketing. Though sponsorship-linked marketing is often a strategic utilization of sponsorship as well, it is believed that further development of the phenomenon is found to be the strategic use.

The literature review is used for the development of the Sponsorship Progression Model. This model will structure the body of literature on sponsorship. Different components of sponsorship will be defined and structured. These components will be combined into groups which form four main components of sponsorship.

2.2 Freshheads-Incubate case study As this thesis is written internal at Incubate, knowledge about the organization was easy accessible. Many formal and informal conversations took place. However, the first thing I did when entering the organization was reading the policy and business plans of Incubate. Shortly after a first formal interview with external managing director of Incubate Joost Heijthuijsen took place about the view Incubateon the sponsorship relationship. How started the sponsorship relationship, where does it stand now, and how the future of the relationship should look like.

A first interview with strategic manager at Freshheads, Wout Withagen, also responsible for sponsorship, focused on their view on the sponsorship relation. A framework was given to structure the conversation. The framework was based on earlier research by Farrelly & Quester (2005b) who investigated whether sponsorship can be managed as a co-marketing alliance. The basic components were strategic compatibility, goal convergence, commitment, trust and economic and non-economic satisfaction. More about this can be found later in this research. The majority of the conversation was one-way, where Wout Withagen was speaking. Also here, the origin of the sponsorship relation, the current status and the future view was discussed. Later a follow up interview with Wout Withagen took place on some specific internal management aspects and strategic utilization of sponsorship.

Based on these interviews a description of the unique sponsorship relation between Incubate and Freshheads is made. The sponsorship will be tested as a co-marketing alliance. Does it fulfil the attributed which makes the relation a co-marketing alliance? The findings of this research will be compared with the findings of Farrelly & Quester (2005b) who did a big investigation towards the

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potential of operating a sponsorship as a co-marketing alliance. Finally the Sponsorship Progression Model will be applied on this sponsorship.

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3. How sponsorship evolved In this chapter the origin and evolution of sponsorship will be described. First the term sponsorship will be defined. A brief introduction will be given in academic research in the field of sponsorship. Next a review on the evolution of sponsorship will be given. It starts from its origin in philanthropy, continues with early sponsorships and cause-related marketing and ends with sponsorships fully integrated in the marketing-mix. From that point sponsorship is seen as to be evolved to strategic sponsorship, and in a most developed status a sponsorship can be seen as a co-marketing alliance.

3.1 Defining sponsorship When the first studies toward the phenomenon of sponsorship appeared, researchers attempted to define sponsorship. Several definitions are use to describe sponsorship in the past decades. Cornwell & Maignan (1998) mentions and criticised a few definitions from early sponsorship studies: "... sponsorship can be regarded as the provision of assistance either financial or in-kind to an activity by a commercial organization for the purpose of achieving commercial objectives" (Meenaghan, 1983). A clear goal of sponsorship is lacking, and it implies sponsorship cannot be of non-commercial kind. Clearer goals are included in the definition by Gardner & Shuman (1988): "Sponsorship may be defined as investments in causes or events to support corporate objectives (for example, by enhancing corporate image) or marketing objectives (such as increasing brand awareness)." Otker (1988) included the managerial aspect is his definition: "Commercial sponsorship is (1) buying and (2) exploiting an association with an event, a team, a group, etc., for specific marketing (communications) purposes." As many examples exist where sponsorship is not solely used to reach marketing objectives, but also to reach other corporate objectives, Cornwell (1995) defined sponsorship as "Sponsorship is investing in causes and or events to support overall corporate objectives and or marketing objectives."

Sponsorship utilized as solely marketing communication tool, either directly linked or in-direct linked to the product marketed, can be called sponsorship linked-marketing (Cornwell, 1995). A direct link is where the sponsorship directly links to the product as it is used, consumed or demonstrated, for example Peavey Electronics Corp., a manufacturer of a range of musical instruments, sponsoring a rock music tour. An indirect linkage may link to consumers as they watch, attend, and/or participate, for example Jägermeister sponsoring a rock music tour as it believes the audience to be possible consumers of its product.

With the sponsorship-linked marketing approach, focus lies on the link, as a sponsorship usually requires some kind of association between the sponsor and the sponsored property. Hence, Cornwell (1995) defines sponsorship-linked marketing as: "Sponsorship-linked marketing is the orchestration and implementation of marketing activities for the purpose of building and communicating an association (link) to a sponsorship". The word orchestration was chosen by Cornwell (1995) in preference to planning, as sponsorship necessitates harmonious organization. The elements in sponsorship linking are not new to marketing planning, but the challenge of successful implementation of sponsorship lies in the coordination of interacting employees, audiences, volunteers, events, activities, sales promotions, merchandise, co-sponsors, media, etc. (Cornwell, 1995). Also the word marketing was used in preference to promotion, as promotion implies sponsorship is limited to communication alone, however the implications of sponsorships extend beyond (Cornwell, 1995). More about the sponsorship-linked marketing can be found further in this paper.

3.2 History of sponsorship research Although the phenomenon of sponsorship does exist for several decades and started to become a marketing tool in the 1950s, academic research to sponsorship was lacking for a long time. In the 1980s spending on sponsorship worldwide has grown rapidly; from 2 billion in 1984, 4.3 billion in 1993 and 44 billion in 2009 (see Figure 1). This resulted into the first academic research to sponsorship as a phenomenon distinct from other promotional activities launched in the mid 1980s, and an increase in the early 1990s (Cornwell & Maignan, 1998). Still as part of marketing research, although in the end of the 1990s sponsorship got attention from a strategic management point of view (Amis, Slack, & Berrett, 1999). In the early stage of sponsorship it was a new corporate activity and was lacking of an own status within the organization and therefore needed to be associated with another group within

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the business. Researchers found sponsorship to be associated with advertising, public relations, promotions or personal selling, or even to be directly under the responsibility of the CEO (Cornwell & Maignan, 1998).

Figure 1: Worldwide spending on sponsorship in billions of dollars. Compiled from data of IEG.

Table 1: Possible objectives for firms to engage in a sponsorship relation. Partly based on Cornwell (1995) and Amis, Slack, & Berett (1999).

Cornwell & Maignan (1998) published a, according to them, first review of sponsorship research before 1998. This review was limited to the sponsoring firm and not from the perspective of the event organizer. Cornwell & Maignan (1998) identified five streams of sponsorship research: 1) nature of sponsorship, where definitions and characteristics are described, 2) managerial aspects of sponsorship, where corporate motivations and objectives are described, 3) measurement of sponsorship effects, where effectiveness are examined, 4) strategic use of sponsorship, and 5) legal and ethical considerations in sponsorship. Measurement of sponsorship effects is not part of the objectives of this study and therefore not further being reviewed, neither are the legal and ethical considerations. Literature on the strategic use of sponsorship kept most attention after 1998, which also got the most attention for this study.

The first studies (mid 1980s) on sponsorship dealt with the description of the phenomenon of sponsorship (Cornwell & Maignan, 1998) and definition and characteristics are presented (Meenaghan, 1983; Gardner & Shuman, 1988; Otker, 1988). These early sponsorship studies were necessary to establish sponsorship as a new topic of research. Although these studies show an

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increase in use of sponsorship as a marketing tool, they do not provide explanation of this development (Cornwell & Maignan, 1998).

Early research attempted to identify the motivations and objectives of sponsorship investment. In Table 1 a list of possible objectives for firms to engage in a sponsorship relation is given. Cornwell (1995) divided the objectives into corporate and marketing objectives, and additional objectives from Amis, Slack, & Berett (1999) are added or integrated into the table. Note that the "Personal interest of a senior executive" as an objective is actually not a direct corporate objective, but more a patronage objective.

Sponsorships are rarely utilized to fulfil one single objective, more likely a combination of multiple objectives. EU and US scientists reached a consensus on the objectives to sponsor after the body of management literature on sponsoring in the beginning of the 90ties: 1) image transfer, 2) social responsibility, 3) contact with customers and markets (and product promotion), 4) employee motivation (in the workplace and at special events) and 5) the personal interests of corporate executives (Rectanus, 2002). Also the attempt to describe the audience targeted by sponsorship was a topic of interest in the early stage of sponsorship research (Cornwell & Maignan, 1998).

Managerial aspects of sponsorship vary according to the type of firm engaging in sponsorship and the type of cause sponsored (Cornwell & Maignan, 1998). Sponsoring an arts museum requests a different approach as sponsoring a sports event and a soft drink company needs a different managerial approach towards sponsorship as an airplane producer.

The effect of sponsorship, in a direct or in-direct financial way, got the interest from businesses investing in sponsorship. And therefore many researchers attempt to measure the effectiveness of sponsorship (Cornwell & Maignan, 1998). In most cases sponsorship does not directly lead to increasing profit, more likely into an increase in brand awareness. However, brand awareness does not necessarily lead to increasing sales (Zyman, 2002), which means not all sponsorships are successful.

Cornwell & Maignan (1998) found that there was a big lack of research on strategic use of sponsorship before 1998. However, the last decade it got much more attention. In the end of the 1990s studies started to apply the resource-based view of the firm on sponsorship relationships and see them as a resource to create competitive advance (Farrelly, Quester, & Burton, 1997; Amis, Slack, & Berrett, 1999).

3.3 Evolution of sponsorship 3.3.1 Philanthropy Although sponsorship goes back to Caesar’s gladiators in 65 BC (Cornwell, 1995; Hover & Breedveld, 2009), this study will concentrate on the evolution of modern sponsorship, which got its roots in philanthropy and fund raising. In the end of the 19th century the world economy came in a rush and with that also philanthropy. Successful entrepreneurs formed a new group of rich people. Often these entrepreneurs had their own (family) company in which they had much decision-making power. Investing in arts had more prestige than another cause or charity and big parts of this new money went to arts and culture (Steenbergen, 2008).

For example in Amsterdam in this period four cultural institutions were found with this new money: Rijksmuseum (1885), Concertgebouw (1888), Stadsschouwburg (1894) and Stedelijk Museum (1895), and in the beginning of the 20th century several cultural institutes with private money followed: Rembrandthuis (1906), Scheepvaartmuseum (1916/1918) and Koloniaal Instituut (1910/1926) (Steenbergen, 2008). This cannot be seen as corporate sponsorship, but as (corporate) philanthropy. There were no direct commercial reasons for investment in arts and culture. The private parties donated money because of prestige and interest for culture. However, cultural involvement had a positive influence on the image of the donating persons and their companies and brands.

A good example of successful fund raising in the early 20th century is the case of the Scheepvaartmuseum (Maritime Museum) in Amsterdam (Steenbergen, 2008). The Amsterdam harbour was the most important harbour of Netherlands in that time. The foundation needed 1 million Dutch guilders (current value around 13 million euro) to finance the building and collection of the museum. The chairman of the foundation, the shipowner Stoomvaart Maatschappij Nederland, started donating 100.000 guilders with his own company. By asking his network of ship owners, shipbrokers, transhipment companies and traders in Amsterdam he managed to get 640.000 guilders after the first meeting. Besides goodwill all donors also had commercial interest in the museum where they could promote their company, as the competition with the harbour of Rotterdam was increasing. Within several months the foundation found all funds because board members of donation companies started

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to raise funds in their own network, especially traders and bankers. The following years the board members of the Scheepvaartmuseum kept on investing in the collection and therefore the museum became a valuable and prestigious project to be identified within the industry. This model can be seen as collective patronage by network systems.

In contrast with the current situation, in the beginning of the 20th century most cultural and civil institutions and initiatives were initiated by private parties and then they tried to get the government involved in it as well (Steenbergen, 2008). In that time governments hardly had budget for sewerage and garbage collection and so art did not have high priority. Another reason why art traditionally mostly was financed by private parties was that the audience almost exclusively consisted of the higher class (Steenbergen, 2008). However, this started to change at the end of the 19th century. In 1872 the Dutch gentlemen society De Grootste Club included in their society objectives to do something for Amsterdam from now on (Steenbergen, 2008). Within this society they collected funds for their civil initiatives like arts and culture which would be available for a broader audience.

After WWI the traditional collective patronage by rich entrepreneurs started to change (Steenbergen, 2008). The younger generation rather bought a car than a painting. But the structures of museums, concert halls, orchestras and theatre groups were fundamented (Steenbergen, 2008). The whole infrastructure like the buildings, collections but also the exploitations costs were covered by private parties. In 1945, after WWII, the support by private parties decreased rapidly because lack of money, but government institutions could easily take over the existing structure to save institutions from disappearing (Steenbergen, 2008).

Something else changed after the WWII. The traditional society was leaning on strong family bonds, religion and social classes; however after the WWII individualism increased rapidly and with that individual philanthropy was taking over the collective patronage (Steenbergen, 2008). The peer group pressure which made entrepreneurs donating more into charity and arts was disappearing (Steenbergen, 2008). From here donating money to arts and culture started to become more a marketing tool than philanthropy. The market-driven nature of contributions resulted in a change in the use of terms from philanthropy to sponsorship (Cornwell, 1995). Giving money for arts and culture should pay off and therefore is seen as a corporate investment. From this point in time we can talk about (corporate) sponsorship.

3.3.2 Early sponsorship First commercial sponsorships date back in the end of the 19th century, although such sponsorships were rare. For example the Dutch bicycle race team of Jaap Eden was sponsored in 1896 by tire producer Humber-Dunlop (Hover & Breedveld, 2009).

Sponsorship as a marketing promotion tool started to increase slowly since early 1950s (Cornwell, 1995). Since the late 50ties big American corporations started to invest in arts; for example Chase Manhattan Bank and Philip Morris were engaged in art collections and supported symphonies (Rectanus, 2002). David Rockafeller (chairman of the board of Chase Manhattan Bank) established in 1967 the Business Committee for the Arts (BCA), which should encourage business leaders to support arts (Rectanus, 2002). Supporting arts would improve public relations and morale of employees and help attract qualified personnel. Rockafeller’s ideas were beyond corporate philanthropy or patronage. Corporate interest in arts became an instrument for maintaining and documenting social legitimacy.

In the 1970s and 1980s sponsorship grew in popularity (Rectanus, 2002). Lokerman (2004) stated modern sponsorship started in 1970 in Netherlands, as from than sponsorship was not only utilized accidently but more structural. Products became more similar and the need for image marketing increased (Gardner & Shuman, 1988) and therefore sponsorship became a useful tool.

Sport sponsorship preceded cultural sponsorship, social and environmental sponsorship followed in the late 80s in the US and the late 90s in Europe (Rectanus, 2002). In the beginning of the 1990s cultural organizations started to search for more funds, sponsors included, as governments started to cut more on culture (Rectanus, 2002; Steenbergen, 2008). Besides of that, markets emerged in Europe due to the EU and increasing corporate globalization. In the early 90s financial support for causes became integrated in corporate identity, marketing communication and public affairs (Rectanus, 2002). Corporate philanthropy started to be taken over by cause-related marketing in the early 1990s (Varadarajan & Menon, 1988; Cornwell & Maignan, 1998; Rectanus, 2002).

3.3.3 Cause-related marketing Traditionally sponsorship had primarily a philanthropic reasoning. Corporate involvement in social issues began as voluntary response by firms, andevolved into mandated corporate involvement (Stroup, Neubert, & Anderson, 1987). During early 80ties many corporations still perceived support for culture as philanthropy however in the late 1980s corporate philanthropy evolved in a phase in which

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social involvement in social issues is viewed as an investment. Based on these rationale of profit-motivated giving the new term of "cause-related marketing" emerged (Varadarajan & Menon, 1988). Cause-related marketing (CRM) can be seen as corporate philanthropy, or a kind of sponsorship with which the sponsoring firm show social involvement.

Varadarajan & Menon (1988) defined cause-related marketing as "the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives." Like sponsorship, CRM is commercially motivated. However, the difference with sponsorship is that CRM is defined in terms of the activities undertaken how to leverage the association rights (Polonsky & Speed, 2001). For example a sport shoes manufacturer gives 1 Euro of every sold pair of shoes to a project promoting sports in a poor country. So CRM can be seen as a strategy within the broader definition of sponsorship, however in literature it is often seen as a separate subject (Polonsky & Speed, 2001).

Varadajaran & Menon (1988) warned firms that the line between cause-related and cause-exploitive marketing is small; at one side generating increased sales, goodwill and positive publicity and at the other side negative publicity and exploitation of causes.

The same counts for sponsorship in general. Audiences, especially of arts, struggled with the fact that corporations increasingly started to be involved in arts (Rectanus, 2002) and sports. In Hartford (1990) can be read that the sponsorship relation between IBM and the English National Opera (ENO) is blamed to be an "unholy alliance". It would make the sponsor feel good and make its peers look up at him. The sponsor would like to have his name on front of the program and free tickets for its contacts. The sponsor would believe it all is possible because of the sponsor.

Nickson (1991), former director of development at ENO, replied on this blame by explaining the development with a postscript by the sponsorship programme manager of Peter Wilkinson of IBM, sponsoring arts since 1970. In the end 1980s governments were cutting expenditures on arts, and therefore among others ENO needed to find new ways to finance their programme. At the same time sponsors were competing for profile and sponsorship had potential. Wilkinson states in Nickson (1991): "There is the relationship that can build up between the organizations leading to exchanges of skills and ideas. Businesses can offer their expertise in management, promotion and marketing; the arts can offer creativity and a window on a wider world." Nickson writes: "ENO welcomes sponsorship, not only for the much needed money, but for the enthusiastic new audiences and powerful new friends it brings." Besides filling the gaps in the budgets, sponsorship encourages innovation in the arts organization at a business level, what subsidising governments cannot. In the end arts and commercial firms are in the same business of selling and reaching their audiences.

Also in sports corporate sponsorship was not immediately accepted by its audience. For example the introduction of shirt sponsorship at the Dutch soccer premiership “Eredivisie” in 1982-1983 caused for much fuss (Hover & Breedveld, 2009). However, in 1990 the Eredivisie was renamed to "PTT-Telecompetitie" after the league its main sponsor: the Dutch telecom company PTT (now operating as KNP). Again, audience got much difficulty accepting this sponsorship involvement in sports (Hover & Breedveld, 2009).

In the end of the 1980s firms were searching for the balance between the social part and the profit part as cause-related marketing became more socially accepted by both the firms and the not-for-profit organizations (Varadarajan & Menon, Cause-related marketing: A coalignment of marketing strategy and corporate philanthropy, 1988). From the 1990s audiences started to accept sponsorship as a phenomenon which is integral part of the sports and cultural experiences.

3.3.4 Sponsorship as an integral part of the marketing mix From the mid 1990ties sponsorship commonly became an integral part of the marketing mix and became also a subject of research (Cornwell, 1995). The idea of sponsorship as a marketing promotion tool was not new in the 1990s; the implementation of it was, because it became rapidly more popular among corporations (Cornwell, 1995). Mainstream advertising, especially at big events like the Olympic Games, was very popular in the 1990s. This resulted in extreme high prices of advertisement space. Sponsorship became a more cost-effective tool to engage to (Cornwell, 1995). With sponsorship mass media could also be reached. Besides of that sponsorship relationships had much more potential than just advertising. That time sports sponsorship became one of the largest markets for the alcohol and tobacco industry (Rectanus, 2002).

The rapid growth of sponsoring during the 1980s and 1990s was facilitated by an increasing awareness of new definitions and uses of culture and sports within the contexts of everyday life (Rectanus, 2002). Sports and culture became an important part of image creation of the people. The need to create image also became important for firms to gain competitive advance (Gardner &

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Shuman, 1988). Sponsorship became a corporate communication method with which the image of the sponsored entity is attempted to transfer.

Modern sponsorships have a social contract (Gordon, 1995) with the community. These sponsoring firms have their own administrative entities for cultural programming. This is part of the “new partnership” as described in Schreiber (1994). The new partnership between corporations, cultural institutions, sport entities and communities, attempt to engage audiences on an emotional level, also outside their product (Rectanus, 2002). It is important for firms to constantly explore and redefine social boundaries in order to maintain economic, political and social legitimacy. Sponsorship became integrated into corporate identity, communication and management philosophy (Rectanus, 2002), but also in strategic plans (Varadarajan & Cunningham, 1995).

3.4 Resource-based view on sponsorship As described by Amis, Slack & Berrett (1999): Basketball player Michael Jordan and Nike were one of the first examples of sponsorships which involved all facets of the marketing strategy of Nike. Nike started to sponsor Jordan in 1984 at a very early stage of his career when it was not sure how big his success would become. Together they developed and marketed the Air Jordan shoes. Nike did not utilized the Jordan sponsorship for its sneakers, he was part of the whole Nike's marketing package in which Jordan would tie together the brand, the product, the advertising and the athlete into one image. Jordan was also used by Nike for giving motivational talks, hosting sales meetings, glamorizing new product launches, playing golf with clients and employees and helping with product development. And, another important thing: the Jordan sponsorship builds pride for Nike employees and developed a corporate culture. Most employees looked at Jordan rather as a colleague than as an athlete, like all athletes Nike is sponsoring. Nike and Jordan still are partners and in February 2010 the 25th Air Jordan shoe is released. The Nike-Jordan case is a good example of a sustainable sponsor relationship which is used to its maximum. The more a resource can be used and developed, the more valuable it becomes for the organisation (Amis, Slack, & Berrett, 1999). The word "resource" is used; the sponsorship is seen as a resource. Amis, Slack, & Berrett (1999) described the sponsorship from a resourced-based view of the firm.

The resource-based view (RBV) of the firm is to looking at firms in terms of their resources rather than their products (Wernerfelt, A resource-based view of the firm, 1984). With resources is meant anything that can be seen as a strength or a weakness of a firm. Traditionally economists confined these resources as labour, capital and land, but the RBV is looking broader and includes for example brand names, in-house knowledge of technology, employment of skilled staff, networks, capital, etc. (Wernerfelt, A resource-based view of the firm, 1984). But also a sponsorship relation can be a powerful resource(Amis, Slack, & Berrett, 1999; Argus, Farrelly, & Quester, 2004; Farrelly, Fahy, & Quester, 2000). The RBV was first introduced by Wernerfelt (1984), but got almost no attention from the academic field till the 1990s, from when it became an integral part of broad academic field of strategic management (Wernerfelt, 1995).

Applying the RBV does not limit sponsorship utilization as a marketing tool, but rather see it as a corporate component of the firm its whole strategic structure. A firm entering a sponsorship should treat sponsorship as a resource which can singly, or in combination with other resources, result in sustainable distinctive competitive advantage (Amis, Slack, & Berrett, 1999). The appliance of the RBV can help understanding the critical aspects of sponsorship for a firm (Argus, Farrelly, & Quester, 2004). The key resources which can result into sustainable competitive advance are mostly intangible. Argus, Farrelly, & Quester (2004) concluded that key personnel knowledge and effective organisation capabilities and processes to be the two most important key resources.

The RBV contends that the possession of effectively deployed key resources lead to sustainable competitive advance (Argus, Farrelly, & Quester, 2004). Best is to focus on gaining extra competitive advantages on intangible resources, as those are hard to copy and therefore more sustainable as tangible resources (Amis, Slack, & Berrett, 1999). Value, barriers to duplication and appropriability are the essential advantage-creating resources (Farrelly, Fahy, & Quester, 2000; Argus, Farrelly, & Quester, 2004). The organisation capability resources which are critical to successful implementation of sponsorship are market oriented capabilities, branding building capabilities and collaborative capabilities and routines (Farrelly, Fahy, & Quester, 2000). If these resources and capabilities will be developed and deployed, a sponsorship can generate maximum result.

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4. Strategic use of sponsorship Strategic utilization of sponsorship is the key to success. Without clear strategic objectives and goals a firm should not enter a sponsorship. However, the reality is different. Still a majority of businesses have no clear plan while engaging to a sponsorship relation (Farrelly, Quester, & Burton, 1997; Zyman, 2002). The strategy behind the engagement to a sponsorship relation can have various reasons, depending on the objectives, market orientation and business environment. From this point in this paper, the assumption is made every current sponsorship has a strategic reasoning, either a very basic one or a well developed one. In this paragraph four different kinds of sponsorships are described: basic sponsorship, sponsorship-linked marketing, strategic alliance and co-marketing alliance. These four sponsorship types can be seen as the four most common or distinctive sponsorship strategies.

4.1 Basic sponsorship Basic sponsorships are those that do not have an advanced strategic reasoning behind it. These sponsorships are low-profile, short-term and rely on only transactional contributions to the relationship. This is the most common kind of sponsorship which is utilized in most amateur not-for-profit organisations. In most cases philanthropy is an important objective of the sponsoring firm. Not uncommonly the management of the sponsoring firm had personal interest in the activity of the sponsored property. The sponsored property returns advertisement space and the right of association in exchange for financial and/or in-kind support. The relationship has a unilateral nature, the sponsor does the decision making and the sponsored property has no or little impact. Commitment, from both sides, is low and therefore the relationship can fade away easily.

4.2 Sponsorship-linked marketing The term sponsorship-linked marketing (SLM) is earlier in this thesis defined as "the orchestration and implementation of marketing activities for the purpose of building and communicating an association (link) to a sponsorship" (Cornwell, 1995). In this strategic use of sponsorship the key objective is marketing related. Moreover, sponsorship became the central plank of an organisations marketing strategy (Fahy, Farrelly, & Quester, 2004). The difference with the basic sponsorship is the better defined objectives and strategic integration of sponsorship in the marketing mix. Cornwell (1995) presented a few strategies where SLM is a way to implement traditional marketing tools such as advertising, personal selling and PR and sales promotion. These SLM strategies can be understood by analogy (Cornwell, 1995). The next presented strategies can be also combined, depending on the goal the sponsoring firms wants to reach with engaging in a sponsorship relation.

4.2.1 Sponsorship-linked marketing: Advertising SLM accepts the popular analogy to advertising, where target markets are reached by media (Cornwell, 1995). A medium in this case is the general carrier of the message, and can be either social causes, sports, media (TV-broadcasts, magazines, etc.), arts or community related, but can also be combined. Most businesses primarily engage in sponsorship analogous to advertising to link with a particular audience with the general objective to increase improve corporate image and increase product awareness. Certain specific vehicles (like rock concerts or tennis) within a certain medium are used to reach a specific target group. Various advertising-related marketing strategies can be used, or combined. Cornwell (1995) presented a few strategies.

Media concentration strategy: This strategy is when a sponsor focuses on one particular medium such as music, or even one vehicle within this medium. Best outcome can be generated when the target market is well defined and the matched well with the sponsored entity.

Reach strategy: Several media and vehicles are utilized to reach a wide variety of consumers. Obviously, this is most beneficial for companies whose consumers appear in multiple market segments. For example consumers of Coca-Cola can be found among all media and most vehicles within this media.

Flighting strategy: Another strategy can be a flighting strategy where the sponsor chooses an event based on its timing. For example a sun cream manufacturer will preferably promote its products

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in spring/summer as this is the season people consume their product. Therefore a sun cream manufacturer would prefer to sponsor spring/summer events.

Rust & Oliver (1994) forecasted advertising would be death by 2010. Also Zyman (2002) stated advertising as we know it is death. Zyman (2002) stated that advertising is about "selling more stuff more often to more people for more money" and traditional mass advertising became too expensive to give significant return on investment and therefore made SLM increase in popularity among firms.

4.2.2 Sponsorship-linked marketing: Personal selling Another approach to sponsorship strategies are analogous to personal selling (Cornwell, 1995). With these strategies firms primarily engage in a sponsorship to have person-to-person contact with its audience by participate the sponsored activities. In this case the audience of the sponsor is not limited to the target group of the sponsored entity, but can be different audiences of the sponsor as well, such as its shareholders, suppliers, distributors or employees. A few personal selling related sponsorship strategies are presented by Cornwell (1995):

Product demonstration: With this strategy a sponsoring firm demonstrates its product directly to its potential consumers at a sponsored activity. For example the beer brewery Duvel Moortgat NV demonstrates its beer brand Vedett to its target audience by sponsoring Incubate Festival where it delivers free Vedett at among other the opening of the festival to the audience.

Prospect generation: A sponsor plans business meetings at a sponsored event with partners whose field is related to the sponsored event. As the atmosphere has a positive impact on chances the business will work out.

Customer relationship building: A good buyer-seller relation is of major importance for sustainable success, and here sponsorship can help. Relationship development consists of five stages: awareness, exploration, expansion, commitment and dissolution. In the first four stages sponsorship can play a role, especially for awareness. However, firms should be aware sponsorship could also play a role in the dissolution part in case the target group does not feel connected with a sponsorship.

4.2.3 Sponsorship-linked marketing: PR and sales promotion A third approach of strategic SLM can be seen as an extension of PR and sales promotion (Cornwell, 1995). Sponsorship can be an extension of the public relations function to raise your profile in for example a certain geographic region or certain target group. Vedett uses its sponsorship relation to raise its profile in Netherlands. Similarly sales promotion can be extended by engaging to a sponsorship relation. In this case a sponsoring firm particularly engages to a certain event to increase sales immediately. Some firms create own long-term proprietary events solely to help build a life-style around it, and thereby sponsoring for example rock music artists.

Figure 2: The indexed growth increase of expenditure on advertising and sponsorship. Graph is literally taken

from Cornwall (2008).

4.2.4 Indirect marketing Rust & Oliver (1994) blamed the, in that time new, internet and network technology for the death of advisement. However, advertising is not death, but traditional advertising is outdated and needs re-evaluation. Not only because the technology and economy changed, but also the life style of individuals and communities changed (Cornwell, 2008).

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Expenditures on out-of-home activities have been increased in wealthy countries for the last decades, on both arts and sports events (Cornwell, 2008). This also explains why sponsorship became more interesting the last decades. Besides of that, people are more away from home, away from television with its traditional advertising. People increasingly emotionally connect to events of their choice, as they do with modern communication technology (Cornwell, 2008). And this is only increasing. As Cornwell (2008) states: "wirelessness supports the trend to be away and yet connected".

Currently people decide much more for their selves to what media they are connected; due to technologic advance people have more choice. Therefore mass media advertising is reaching a smaller audience, but subgroups are divided in many small networks which requests different advertising strategies. Rules are changing, but not dying. Firms are marketing their products indirectly by marketing sponsorships. Since the early 1990s, expenditures on sponsorship increased much faster than expenditures on advertising, as can be seen in the Figure 2.

SLM is a valuable tool to reach the increasingly emotionally connected subgroups. Sponsorship is an indirect marketing tool (Cornwell, 2008) which became more cost effective as advertisement. With engaging to a sponsorship, a firm want to associate it selves with a certain property and the culture associated with the property. The association says what the sponsoring firm wants to be, or how the firm wants the consumers to see them like (Lokerman, 2004). The sponsoring firm will communicate the association with the sponsored property. Firms attempt to make customers fans of their brand to appeal them by sponsoring events and activities they emotionally feel connected with (Lokerman, 2004).

4.3 Strategic alliance Varadarajan & Cunningham (1995) defined strategic alliances as “Strategic alliances, a manifestation of interorganisational cooperative strategies, entails the pooling of specific resources and skills by the cooperating organizations in order to achieve common goals, as well as goals specific to the individual partners”.

In times of big competition firms always are searching for a way to get competitive advance. Firms create strategic interfirm alliances to take advantage of specific resources of their partner in order to achieve a mutual goal. A sponsorship relation can also be seen and managed as a strategic alliance. Former chief marketing officer of Coca-Cola Sergio Zyman (2002) states the term sponsorship should not be used by firms who incorporate it in their marketing strategy. The term sponsorship still contains a part of a philanthropic idea, and if seen as marketing it should be fully corporate and therefore should get return on investment (Zyman, 2002).

The difference with basic sponsorship and SLM is that the partnership exchanged traditional philanthropic sponsorship for corporate strategic alliances in which also the sponsored property works professionally towards a successful relation. It can be compared to an ordinary B2B alliance, where the sponsored property, a non-profit organisation, does deliver something back to its sponsor in change of the financial or in-kind support of its sponsor. Varadarajan & Cunningham (1995) give an extensive review about strategic alliances and about their conceptual foundation from a B2B point of view. The relationship part of a sponsorship is the key of a successful sponsorship if integrated into the strategic plan (Farrelly, Quester, & Mavondo, 2003).

Traditionally sponsorship is seen as a mostly one-way commitment from the sponsor to the sponsored property. A firm engaged to a sponsorship to associate it selves with the sponsored entity. The image transfer is assumed to be one-way. However, Henseler, Wilson, & De Vreede (2009) argued image transfer equally accounts for the direction from sponsor to sponsored property. A sponsored property can be equally considered as a unique brand as the sponsoring firm (Henseler, Wilson, & De Vreede, 2009) and so the sponsored property should also should considering engaging to a sponsorship with a B2B attitude.

The perception of value of a sponsorship as a strategic alliance is different. Sponsorship became from a tactical tool a strategic tool (Fahy, Farrelly, & Quester, 2004; Farrelly, Quester, & Burton, 2006). But also the perception of value contribution changed from being transactional to relational oriented and from short term to long term (Farrelly, Quester, & Burton, 2006).

4.4 Co-marketing alliance A sponsorship can also be seen as a co-marketing alliance. A co-marketing alliance is a lateral relationship between firms whose products, skills or other resources are complements in the market space (Bucklin & Sengupta, 1993). A co-marketing alliance is a form of working partnership which is

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defined by Anderson & Narus (1990) as “mutual recognition and understanding that the success of each firm depends in part on the other firm”. With a co-marketing alliance both parties intend to amplify user awareness of benefit by contributing to the marketing of a product. However, besides of marketing a product, a co-marketing alliance can also lead to research, product development and production (Bucklin & Sengupta, 1993). A good example of a co-marketing alliance is the alliance between Philips and Douwe Egberts who developed, produced and marketed the Senseo brand and product. A more worldwide known example is the Nike+ Sport Kit sensor by Nike and Apple.

A co-marketing alliance is an extensive version of a strategic alliance. Bucklin & Sengupta (1993) assigned power imbalance in a co-marketing alliance as the largest thread; both partners should be equally endowing resources. To avoid power imbalance equally powerful partners is preferable. Also to minimize costs of the exchange process, as reaching an agreement will be easier if both partners are equally powerful (Bucklin & Sengupta, 1993). Bucklin & Sengupta (1993) identified four characteristics of contractual co-marketing agreements which are necessary to achieve success with engagement to a co-marketing alliance: formality, exit barriers, exclusivity and financial incentives.

A certain degree of formality is needed to define alliance conditions, which can be anything between a simple letter of intent and a complex legal document. Exit barriers are needed as a co-marketing alliance often accompanies interdependency and with that early termination of the agreement by one of the partner can result into big loss of the other partner. Exclusivity is needed to ensure investments in the alliance will benefit the alliance, and not possible other parties outside the alliance, it enhances the position of the partners, and restricts the position of direct competitors. However, exclusivity can also be constrained to redress power disparities. The provision of financial incentives is of higher importance in case of a B2B alliance. In case of a co-marketing alliance as a sponsorship it still is of major importance, however in most case less complex, and therefore need to be contractual defined.

A recent study by Schöbel & Herhausen (2010) founded power imbalance does not influence the capability of a co-marketing alliance. Also Das & Teng (2002) stated that power imbalance does not particularly have negative effect on an alliance, rather the interdependence does critically moderate the performance of an alliance.

4.4.1 Sponsorship as a co-marketing alliance Although a co-marketing alliance originated as a B2B partnership concept, Farrelly & Quester (2005b) stated that a sponsorship can also function as a co-marketing alliance. Some researchers also recognise sponsorships as B2B relationships (Farrelly & Quester, 2005a; 2005b) since according to them the days are gone that firms invest in socially desirable causes or philanthropy. Sponsorship engagements are committed by both parties to achieve their own strategic goals.

In the model where sponsorship functions as a co-marketing alliance five requirements of the sponsorship can be identified: 1) strategic compatibility, 2) goal convergence, 3) commitment, 4) trust, and 5) economic and non-economic satisfaction (Farrelly & Quester, 2005b). Strategic compatibility and goal convergence are both key issues of alliance philosophy and trust, commitment and satisfaction are performance stimulating attributes of an alliance (Farrelly & Quester, 2005b).

Strategic compatibility Shamdasani & Sheth (1995) defined strategic compatibility as “the extent to which an alliance partner has complementary goals and shares similar orientations that facilitate co-ordination of alliance activities and execution of alliance strategies.” Strategic compatibility will result in synergistic activity, including dual decision making and resource input, as part of the sponsorship activation process (Farrelly & Quester, 2005b). Mutual understanding of the benefits for activating the investment is of major importance, as it will lead to a sustainable alliance, which also comes out of interviews by Farrelly & Quester (2005b) with both sponsors as sponsored properties. Goal convergence Goal convergence is a process which leads to a harmonious relationship which can be achieved by five processes: 1) shared vision, 2) convergent policy, 3) mutual education, 4) cultural unity and 5) common cause (Sheth, 1992). In most cases goal convergence does not take place during the early stages of a relationship as it requires a strong relationship with mutual commitment and trust. Farrelly & Quester (2005b) found that goal convergence rarely came from the sponsored properties side; they mostly did not have expectations beyond the contractual obligations.

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Commitment

Commitment can be defined as “commitment to a relationship entails a desire to develop a stable relationship, a willingness to make short-term sacrifices to maintain the relationship and a confidence in the stability of the relationship” (Bucklin & Sengupta, 1993). Farrelly & Quester (2003a) defined commitment in a sponsorship relationship situation as “a willingness by the parties involved in the sponsorship relationship to make short-term investments with the expectation of realising long-term benefits from the relationship”. Farrelly & Quester (2005b) found that sponsors often believe that sponsored properties need to contribute more to grow a sponsorship relationship. This was also recognized by the sponsored entities who admitted that they could be more proactive. Commitment from both sides will result in a mutual beneficial relationship.

Trust Trust is referred as the cornerstone of the strategic partnership (Farrelly & Quester, 2005a; 2005b). It has positive moderating effects on relationship planning, collaboration, investment and performance (Farrelly & Quester, 2005a; 2005b; Anderson & Narus, 1990). Trust in a relationship results in a cooperative atmosphere, open communication and fortifies personal relationships. Trust is a precondition for the exchange of sensitive information vital for implementation of sponsorship objectives (Farrelly & Quester, 2005a). Therefore it reduces overhead costs and increases the economic outcomes of the relationship.

Economic and noneconomic satisfaction Farrelly and Quester (2005a) thought satisfaction is constructed out of economic and noneconomic levels. Economic satisfaction can be defined as “a channel member’s evaluation of the economic outcomes that flow from the relationship with its partner such as sales volume, margins, and discounts” (Farrelly & Quester, 2005b). Farrelly and Quester (2005b) defined noneconomic satisfaction as “the positive affective response to the noneconomic psychosocial aspect of the relationship and is evident if the interactions are fulfilling, gratifying, and easy”. However economic satisfaction is the main objective of a firm to engage to a sponsorship, both sponsors and sponsored properties point out the importance of noneconomic satisfaction. Noneconomic satisfaction is expressed in processes such as servicing the relationship and the accommodation of requests on day to day basis (Farrelly & Quester, 2005b). Especially commitment and trust results in economic and non-economic satisfaction (Farrelly & Quester, 2005b), which is, obviously, the benefit a sponsor wants in return for its investments in sponsorship. Farrelly & Quester (2005a) examined the influence of commitment and trust on economic and non-economic satisfaction due to extensive interviews with sponsors of the Australian Football League (AFL). His hypotheses of a positive influence of sponsors’ relationship commitment to economic satisfaction, trust to both commitment and economic and non-economic satisfaction, and non-economic satisfaction to economic satisfaction were all verified. However, his hypothesis of positive influence of sponsors’ relation commitment to non-economic satisfaction turned out not to be supported. Farrelly & Quester (2005a) suggested that the reason might be the independent operation of the sponsor taking key decisions.

Schöbel & Herhausen (2010) introduced another important overruling performance stimulating attribute: co-marketing capability, the capability of a firm to effectively engage in marketing alliances. It can be concluded that the five co-marketing alliance requirements by Farrelly & Quester (2005b) together form co-marketing capability (CMC). The CMC is of major importance that a co-marketing alliance will work satisfactory for both parties.

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5. Freshheads-Incubate case-study As a case study the sponsorship relationship between internet application and graphic design company Freshheads and independent culture festival Incubate is analysed. The relationship is a strategic alliance, but possible also can be seen as a co-marketing alliance. The relationship will be analysed based on the characteristics given by Farrelly and Quester (2005b). First both organizations will be introduced shortly, following the formation of the relationship. From than the case study will be structured based on the five characteristics identified by Farrelly and Quester (2005b): strategic compatibility, goal convergence, commitment, trust and economic and non-economic satisfaction. Finally a short discussion will follow if this sponsorship can be called a co-marketing alliance or not. Later in this thesis the Incubate-Freahheads sponsorship will be applied to the Sponsorship Progression Model.

5.1 Introduction of Incubate and Freshheads Incubate, formerly known as ZXZW, located in Tilburg, Netherlands, describes itself as follows: “Incubate is the annual celebration of independent culture. Expect a diverse view on indie culture as a whole, including music, contemporary dance, film and visual arts. We bring more than 200 cutting edge artists in an intimate context to an international audience. Black metal next to free jazz. Street art next to academic dance” (Incubate, 2010a). The organization is young and has horizontal structure and has the aim to be innovative. Their main activity is the organization of Incubate festival. Additionally they see themselves as a cultural network organization and community to foster independent culture.

They defined three concepts which form their corporate vision: liberty, equality and fraternity (Incubate, 2010b), which also can be seen as the three main concepts of independent culture. Liberty stands for the independent attitude of the contributing artists towards their work and expression. Equality stands for the equality between the audience and the artists. Fraternity stands for the fact the contributing artists form their own network; they for example release music on each other their labels, perform together, making artwork for each other or doing some audio mastering work for each other. Together those artists form a social network for which the social capital is as important as the economic capital. Incubate has an incubation function where artists, but also audience and partners get in contact with each other and subsequently enhance their network.

Incubate defines three brand values: openness, independency and involvement. These brand values are incorporated in all facets of the organization, from work ethics, artistic vision to their objectives.

Freshheads is a company working in the field of internet applications and graphic design, also based in Tilburg, Netherlands. They help their customers to apply their media more lively, innovative and functional. Freshheads is self-willed, but is always creative in shape and content. They combine strategy and design with technology and logics (Freshheads, 2010a). Freshheads see their characterfullness , creativity and being young and innovative as their main strengths.

Freshheads work clear, logical and always according to a fixed procedure; 1) meeting, 2) inventory, 3) documentary, 4) development, 5) testing, 6) implementation, 7) celebration and finally 8) evaluation (Freshheads, 2010b).

5.2 Freshheads-Incubate relationship formation The relation between Freshheads and Incubate evolved in a relative natural way. Wout Withagen, strategic manager of Freshheads, also responsible for sponsorship, and Frank Kimenai, one of the managing directors and initiators of Incubate, already knew each other from their teenage years. Freshheads and Incubate started to grow in the same period.

The relationship has been created during an informal meeting where Freshheads promised to take care of the graphic design of the printed promotion material of Incubate. This was in 2006, when Incubate still used the name ZXZW and the relationship was a very basic sponsorship. Due to mutual satisfaction and the fact both organizations started to grow, the sponsorship got enhanced and Freshheads did the whole graphic design, house style and website of ZXZW. However Freshheads saw the relation rather as goodwill than as sponsorship, Incubate included the logo of Freshheads in their promotion material and important, started to spread the word in their increasing network of professionals in the cultural sector.

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Incubate become more professional and their team increased, including current external director Joost Heijthuijsen and current senior online marketing and PR employee Erik Luyten. With them Freshheads and Incubate started to create a strategic alliance. They shared ideas about an open-source website which challenged Freshheads and brought them to a higher level. Freshheads had the possibility to experiment with innovative web technology, while Incubate got their website development for free and at the same time could communicate their innovative image and involvement brand value to their audience.

Where in the early years Freshheads worked for Incubate additionally to their ongoing paid projects, after 2008 it started to get a serious work load for the company. Therefore the alliance started to become more structured and it got the exact same status of a paid project of Freshheads, except of the invoice part.

However, at the same time Freshheads aquierednew customers due to name dropping of the Incubate staff in a new market of non-profit cultural organizations. The alliance started to become economically satisfying. In 2009 (when ZXZW also changed their name into Incubate) Incubate closely involved Freshheads as experts in their innovation lecture with main guest Andrew Keen during the Incubate festival. With that Freshheads had the possibility to associate their company with innovation in the web application branch and Andrew Keen as an important personality in this working area. An important additional value for Freshheads, as a growing company, is to get their brand spread among potential employees with similar interest in creative and innovative web applications.

During the whole formation of the sponsorship relationship, also personal relationship grew. Both entities saw each other as friends and enjoyed working together, which resulted in high degrees of commitment and trust.

5.3 Analysis of a relationship The analysis of the sponsorship relationship between Freshheads and Incubate will be based on the five characteristics of a sponsorship managed as a co-marketing alliance identified by Farrelly and Quester (2005b): strategic compatibility, goal convergence, commitment, trust and economic and non-economic satisfaction. Two extensive interviews took place with strategic manager of Freshheads Wout Withagen (see Appendix). The structure of these interviews was also on the characteristics identified by Farrelly and Quester (2005b). Based on those two interviews, some formal and informal small interviews and discussions with external director Joost Heijthuijsen and consulting documents such as year reports, policy plans and business plans of both partners, this analysis is made.

5.3.1 Strategic compatibility According to the definition of Shamdasani & Sheth (1995) strategic compatibility consist of two main components: complementary goals and similar orientations that facilitate co-ordination of alliance activities and the execution of alliance strategies. From this point of view Freshheads and Incubate fit very well. The key compatible strategic component is innovation which includes creativity. The goals of Incubate to have a cutting edge programming with special attention to innovations are compatible with the goals of Freshheads to deliver cutting edge innovative web design and applications. The second component of strategic compatibility, similar orientation, even has a larger fit. Not only on the business part, also on personal part of the involved employees of both organizations. Another important marketing moment of Freshheads is Emerce eDay, an important Dutch e-business convention, which takes place at the same date as Incubate. Wout Withagen commented in an interview: “If we needed to make the choice between being present at Emerce eDay or Incubate we would choose for Incubate, even though our direct target group is at Emerce eDay. We think Incubate is way cooler; we want to be seen together with Incubate. They are an innovative organization which works with their heart, like we do. We both have innovation as focus point”.

Although Freshheads was able to be present on both events, this statement does show that Incubate fits better in the marketing strategy because of the compatibility. Freshheads rather see them associated with a creative and innovative organization such as Incubate than a rather classical convention. Freshheads has the possibility to co-organize the innovation lecture at the Incubate festival, with which they reach a group of creative and innovative individuals and companies present at the event, but also indirectly via media attention generated due to the event. Companies are potential clients, and in the reached individuals they see potential future employees with a similar orientation.

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5.3.2 Goal convergence Goal convergence is an alliance component which usually needs time to develop; a shared vision (Sheth, 1992). A relationship needs to be at a certain level before trust and commitment has enough influence on the relationship to make both parties converge their goals and vision (Farrelly & Quester, 2005b). Usually partners choose each other based high similarity of vision and goals, but goal convergence is more a process of harmonious relationship creation where parties are willing to slightly adjust to each other vision and goals and create shared vision and goals; convergent policy (Sheth, 1992). Also included to the definition of Sheth (1992) are the processes of mutual education, cultural unity and common cause. With also those processes in mind, there is a high degree of goal convergence between Freshheads and Incubate. There is high degree of shared vision, as described in paragraph 5.3.1. Convergent policy is implemented in both parties. It requires a high degree of trust and commitment, which there is between Freshheads and Incubate as will be explained in the next two paragraphs. According to Farrelly and Quester (2005b) goal convergence rarely comes from the sponsored properties site, which had a negative influence on the sponsors’ commitment in case they attempted to build on goal convergence in the relationship. However, Wout Withagen mentioned in an interview he thinks there was a healthy kind of goal convergence, because Incubate tries to involve Freshheads in their program where possible and where it makes sense; for example with network diners. Due to a strong personal relationship and the involvement in the festival, cultural unity exists. Although cultural unity also was an important reason to engage in a sponsorship at first, it only improved during the process. The same accounts for common cause; an important reason they engaged in a sponsorship, as well a component, in this case mainly innovation in the field of web application, which got triggered due to the sponsorship relation.

5.3.3 Commitment Commitment is the desire to develop a stable relationship, willingness to make short-term investments to realize long-term benefits of the relationship. The relationship between Incubate and Freshheads shows a lot of commitment from both sides; which can be concluded from the previous two paragraphs. Also questions on the particular subject resulted in very positive answers.

Wout Withagen experiences a strong dedication from both partners, also because of the personal relationship. He thinks if this was missing, there would not be any synergy. The relationship started rather as a personal relationship than a professional sponsorship relationship. However, the increase of professionalism resulted in better mutual management of the relationship, which resulting in a higher degree of commitment, according to Wout Withagen. He states that Freshheads just tries to fulfil the needs of Incubate, like any other customer. Similarly, Incubate tries to involve Freshheads where possible.

Both partners mentioned they were big fans of each other. They have a good personal relationship; moreover they believe in the qualities of each other and see potential of the sponsorship relationship. Both realize that their own commitment will increase the commitment of the other, and consequently will result in a synergetic alliance.

Commitment not only stimulates their personal and economic satisfaction, but also is part of their strategic plan. Incubate wants to foster the local creative entrepreneurs, such as Freshheads, which would result in a better creative city climate and wants to implement innovative web applications which can enhance their marketing strategy, but also their innovative image. Freshheads wants a playground for experiments on new innovative web applications and can use Incubate for that, but also wants to have access to the large network of potential clients of Incubate in a new target market of non-profit organizations.

5.3.4 Trust Trust is the cornerstone of a strategic partnership (Farrelly & Quester, 2005a; 2005b). Trust will smooth the relationship and has a positive effect on mutual decision making. Obviously, the relationship between Freshheads and Incubate has a high degree of trust. Wout Withagen calls the relationship “open and honest, at the same level, no underdog”. Although the sponsorship managers of the two partners are friends in their personal life as well, they keep the communication linked to the sponsorship at a professional level and try to keep their personal relationship out. However, due to the personal relationship, trust is even higher. They know each other competences, which was also a reason to start the alliance at the first place. But Wout Withagen also states “Freshheads trusts Incubate, we see how they grow, how they become more professional and

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see the quality” and think that Incubate thinks the same about Freshheads, which is the case according to Joost Heijthuijsen. Farrelly and Quester (2005a) found support on the hypothesis that trust would have a positive effect on commitment. This is in line with the Incubate-Freshheads sponsorship. As mentioned earlier, both parties trust in the competence of each other, which results in a high degree of commitment to bring the sponsorship to a higher level.

5.3.5 Economic and noneconomic satisfaction The economic satisfaction of Freshheads was small in the first years of the sponsorship relationship. Wout Withagen stated this was not of big importance in the decision of Freshheads to sponsor Incubate; it was rather a decision with philanthropic objectives, and therefore noneconomic satisfaction was of higher importance; as Wout Withagen stated “the guys need to be cool”. During the first years of the relationship the whole office of Freshheads was closed during the festival, as they were all attending the festival. Nowadays this is not the case anymore, as they company grew and cannot just close for a week. However, the memories still exist and have resulted in a strong feeling of noneconomic satisfaction. The strong relationship which was created in the early years of the sponsorship surely had an effect on the economic satisfaction of Freshheads. Due to recommendations within the network of Incubate, Freshheads got several new clients in the cultural sector, also a new branch for Freshheads which fits to the company. To gain excess to this branch was also a strategic objective of Freshheads to engage to this sponsorship.

Where Farrelly and Quester (2005b) could not verify the hypothesis that sponsors’ commitment to the relationship positively influences their noneconomic satisfaction, this could be concluded to be true in the case of the sponsorship relationship of Incubate and Freshheads. According to Urriolagoitia & Planellas (2007) a personal approach, or informal mechanisms, positively influences the success of an alliance, which could be the advance which that verifies also the hypothesis of commitment positively influencing noneconomic satisfaction. Where the relationship started with more patronage objectives, it evolved more towards corporate objectives. Wout Withagen states the economic interest is high now, although he mentions the economic growth as a result of the sponsorship is hard to measure and unknown. He even does not think the economic growth as a result of the sponsorship is important up to now. Freshheads is satisfied with the association, it has had positive influence on them as a company. Freshheads has the feeling they are dealing with a bigger party. Wout Withagen states “important for Freshheads is that the sponsorship helps them with the recruitment of the right people, among other as a result of Freshheads publishes their results of the sponsorship relation on the Dutch Cowboys blog, the largest 2.0 web blog of Netherlands. Finally, both Freshheads and Incubate see opportunities to enhance the partnership, especially on co-organization innovation related programming during the festival. The sponsorship is not leveragedup to its full potential yet to maximize the economic satisfaction, but both parties have a high degree of commitment to work on this.

5.4 A co-marketing alliance? A sponsorship can be seen as a co-marketing alliance if a “product, brand, or corporate image of the alliance partners are marketed together as a system” (Farrelly & Quester, 2005b). In such a system sponsorship-activation strategies often encompass co-branding initiatives. Sponsorship can be the basis on which the corporate and/or brand positioning strategies are developed (Farrelly & Quester, 2005b). The key to success of an alliance is the leverage of the unique resources and skills which each can bring in (Bucklin & Sengupta, 1993). Farrelly and Quester (2005b) found that the main limiting factor of a sponsorship to develop into a co-marketing alliance is the lack of commitment of the sponsored property. A clear blame has not been identified, however respondents of the research by Farrelly and Quester (2005b) pointed out “that properties had not invested in the relationship because sponsors themselves had done little to optimise the opportunity in the past, thus creating no need for properties to reciprocate”. This proves sponsored properties are often too passive towards the relationship. Consequently, the relationship might not have the chance to create a solid base of commitment and trust in the early stage of the relationship and with that limits the establishment of goal convergence (Farrelly & Quester, 2005b). However, obviously the Incubate-Freshheads sponsorship is not lacking of commitment and reciprocal activeness at all, and is not limited on this point to be seen as a co-marketing alliance. Goal convergence already occurred from the beginning due to the fact they grew together. They helped

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each other further towards their goals of being innovative and creative. Freshheads contributed mainly with bringing in their technology skills and Incubate a platform to present their products and excess to their network of creative entrepreneurs. Freshheads and Incubate successfully co-created and co-branded an open-source website for the festival. But also successfully co-organized the innovation lecture where Incubate contributed their organization skills and Freshheads their knowledge on the subject as important panel member. Plans exist to co-organize a development camp hosted by Freshheads and linked to the 2010 edition of Incubate festival. The whole sponsorship looks like to fulfil the requirements to be seen as a co-marketing alliance. All five characteristics are identified to be present in a significant degree. However, as a strategic alliance is defined as “a manifestation of interorganisational cooperative strategies, entails the pooling of specific resources and skills by the cooperating organizations in order to achieve common goals, as well as goals specific to the individual partners” (Varadarajan & Cunningham, 1995), what would make the Freshheads-Incubate alliance a co-marketing alliance, and not a strategic alliance? First of all, a co-marketing alliance is an extended version of a strategic alliance, which makes this sponsorship a strategic alliance for sure. The Freshheads-Incubate sponsorship can be called a co-marketing alliance. The relationship goes beyond only marketing a product; they co-created a product where they both brought in their unique skills. However, typically of a co-marketing alliance, but also a strategic alliance, is the high degree of corporate objectives. What means the reason of engaging to the sponsorship is purely strategic. The first intention of Freshheads to sponsor Incubate had an almost purely patronage objective; which is totally the opposite of a strategic or co-marketing alliance. However, the sponsorship is still in an early stage, and has been developed towards a co-marketing alliance on all facets.

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6. Sponsorship progression model Based on the body of literature on sponsorship a sponsorship progression model (SPM) is developed. The model is a theoretical model, not based on quantitative values. As academic research on the subject of sponsorship is relatively new, the body of literature on the subject is rather chaotic. Also Fahy, Farrelly and Quester (2004) point out the body of literature is rather fragmented. Fahy, Farrelly and Quester (2004) started to identify key resources in order to maximize sponsorship effectiveness and called for further research on identification of other essential competences. There is a need for further identification of essential competences which form a sponsorship. Moreover, a clear platform or model which brings together all essential competences of sponsorships in general is lacking. Such a model would help professionals in the field of sponsorship evaluate and with that identify potential room for improvement of their sponsorship strategy and utilization. The main criteria for such a model are the usability and inclusivity of essential competences which are of importance for all kinds of sponsorships in all kinds of disciplines.

The SPM is developed to work on the call for further identification of essential competences as called by Fahy, Farrelly and Quester (2004), but also to give a solution for professionals in the field of sponsorship. The SPM has a high degree of usability which makes it implementable for a wide variety of professionals, even the ones with less theoretical knowledge on sponsorships. In this chapter the anatomy of the SPM will be presented. All components of the model are explained and reviewed how they should be interpreted. But first a few older sponsorship-related models will be shortly reviewed.

6.1 Other sponsorship-related models Models, especially sponsorship evaluation models, do exist (Dann, 2008; Fahy, Farrelly, & Quester, 2004; Stotlar, 2004; Urriolagoitia & Planellas, 2007; Gardner & Shuman, 1988). However, these models have all either one certain view on sponsorship which does not apply to all sponsorships or are limited to the one component of sponsorships, e.g. managerial or effectiveness.

Figure 3: Sponsorship model by Gardner & Shuman (1988).

An example of an early sponsorship model is the one by Gardner & Shuman (1988), which

can be seen in Figure 3. This model focuses on the objectives and the effect of sponsorships. It was developed based on public relations models and from a view of small businesses and a wide variety of sponsorships (i.e. sports, arts, etcetera). The authors did make a difference between marketing and corporate objectives by splitting the consumers from indirect parties such as financial institutions, community leaders and employees/channel members. However these objectives are often overlapping in many instances, a separate treatment gives a more clear view on the process.

Cornwell (1995) worked further on the model by Gardner & Shuman (1988) and presented a sponsorship development model as can be seen in Figure 4. The author pointed out that sponsorship

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guidelines did exist but did not fully articulate the development process. The model by Cornwell (1995) is based on general decision making models and gives the development sequence of sponsorships. The model is very practically orientated and limited to sponsorship-linked marketing objectives.

Another example of a sponsorship model based on practical use is the sponsorship evaluation model by Stotlar (2004). It is from a sports sponsorship view and is based on the big amount of contributing factors. The aim of the model was to bridge the gap between theory and practice. The model sums many contributing factors where practitioners should think about and orders them to the different stages of a sponsorship. Similarly to the model by Cornwell (1995) the model includes a feedback loop pointing out that the evaluation stage only makes sense if the output data is looped to the starting point.

Figure 4: The sponsorship development model by Cornwell (1995)

Figure 5: A model of sponsorship-based competative advance by Fahy, Farrelly and Quester (2004).

Fahy, Farrelly & Quester (2004) introduced a conceptual model (see Figure 5) of competitive advantage creating sponsorships. The authors point out that due to the rapid growth of corporate sponsorship the competition within the market for sponsorships increases, and with that the need to

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attain and keep competitive advance. The competitive market of sponsorships results in the rise of ambush marketing, and therefore sponsorship investments should be carefully managed to ensure the effectiveness.

Two levels of competitive advance are defined in the model by Fahy, Farrelly & Quester (2004): first the sustainable competitive advance in the sponsorship, and second sustainable competitive advance in the market. The first level is explained by delineating the resources necessary to underpin an effective sponsorship initiative; to rise above the clutter and project it against competitors to ambush it. The second level delineates that a sponsorship can create additional value to a project and with that create competitive advance. If both levels are managed successfully superior performance will be reached and this leads to the key resources of sponsorship: tangible assets, intangible assets and capabilities, which are again the new input in the model. Also emphasized in this model is the two-way arrow between sponsor and property, meaning the relationship is two-way.

Figure 6: A model of sponsorship-based competative advance by Urriolagoitia & Planellas (2007).

Similarly to the model by Cornwell (1995), Urriolagoitia & Planellas (2007) developed a life-cycle model (Figure 6) that articulates the paths in sponsorship development and the behavior pattern of sponsorship characteristics. Different from the model by Cornwell (1995) is the relational view and that the authors see sponsorship relations as strategic alliances, however the authors emphasized the lack of analytical approach to understand the development procures of such an alliance.

The model by Urriolagoitia & Planellas (2007) identifies three major stages: a formation stage, an operation stage and an outcome stage. Between the stages are transition points which only can be passed to the next stage if certain necessary characteristics are present. The authors capture relational investments, knowledge-sharing routines complementary resources and capabilities, and effective governance as the key characteristics of sponsorship relationships. At the transition point between the formation and the operation stage a relationship can either progress to the next stage or terminate. Between the operation and outcome stage, the transition point leads either to reformation which brings the relation to a higher status, stabilization, declination or termination. The model gives a clear visualization of how a sponsorship relationship develops but the model does not include the components which influence the transitions points.

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Figure 7: Sponsorship asset model by Dann (2008). This are originally four different charts where the three left charts give a more detailed image of the right chart.

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Dann (2008) developed an extensive conceptual model of B2B factors in sponsorship (see Figure 7). It sums many components collected from a literature review and assigns them to three entities of a sponsorship: the sponsor, the sponsored property and the sponsorship asset. He comments himself all arrows are positively framed one-directional hypothesis as a limitation of the model. The sponsorship asset is a virtual organizational asset shared and generated the B2B relationship between the sponsor and the sponsored property. The model is rather chaotic, but gives an extensive overview of components which influence a sponsorship relationship. The proposal to see the relationship as a separate sponsorship asset is new and emphasizes the reciprocity of a strategic sponsorship.

Most of the models have a low the degree of usability for professionals in the field; the model of Cornwell (2005) has the best usability degree of the five models, but is focussing solely on marketing related issues. The model of Fahy, Farrelly and Quester (2004) only focuses on creating sustainable competitive advance and with that excludes much basic sponsorship. The model by Dann (2008) is taking in account a very wide range of contributing factors which results in a high degree of complexity which results in a lower usability degree for professionals in the field. Moreover, it gives a good overview of contributing factors. The model by Dann (2008) also sees a sponsorship as a separate asset, which, especially for basic kinds of sponsorships, does not correspond with many views on sponsorship by both sponsors and sponsored properties.

Figure 8: The Sponsorship Progression Model

6.2 Sponsorship progression model The SPM will take a general view on sponsorship based on the current status of theoretic knowledge on the subject. Unlike the models described earlier, this model should be applicable for all possible modern sponsorship relationships, from the very basic till the highly developed ones. The many characteristics of all kinds of sponsorships which are described in the body of literature of the last decades, is reduced to the key components which apply to all kinds of sponsorship.

The SPM (see Figure 8) can be used by professionals working in the field of sponsorship. Before applying, users are forced to generally analyse their sponsorship. After analysis of a sponsorship, the output of the model can help professionals evaluate their sponsorship relationship. The output visualizes the degree of progression of the sponsorship. The degree of progression can be compared with outputs of other sponsorships, but also with theoretic examples of general kinds of sponsorship as presented in chapter 7.

As the model gives a visualized output it has a high usability in a broad area of managers who not necessarily have much knowledge on sponsorship related issues. The output of the SPM shows at

0

1

2

3Patronage

Marketing

Corporate

Reciprocity

Leverage

Activation

Commitment

Sustainability

Synergy

Association

Integration in strategy

Goal convergence

Sponsorship Progression Model

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which components there is space for improvement. How it must be applied will be explained next by defining all components.

6.3 Anatomy of the SPM The model is divided into four main groups of components: objectives, management, relationship and strategy. These four groups consist all of three components. The components are chosen based on the literature study and are assumed to be the base of a sponsorship relationship.

The development of scale is rather subjective. All components can have a value of 0, 1, 2, or 3. 0 means that this component is not applicable at all. 1 means the component is hardly applicable to a sponsorship but does account a little to the sponsorship. 2 means the components is applicable and has some degree of influence, but not highly developed. 3 means the component is highly developed and important component of the relationship. By applying the SPM to a certain case, all components will be given a value, and a circular line will appear in the chart. The bigger the circle, how more developed the sponsorship. All components will be described in the next paragraphs, including guidelines of value.

It is chosen to add only four stages, as it is all based on subjective human estimation when utilized. However, users could choose to use values with decimals, which might be useful for example to give small differences between two sponsorships.

The chart type is called “spider web chart”. This type is chosen as it gives a clear visual overview, even though it visualizes a complex model. If chosen for a classic chart, the chart would be chaotic and hard to read. Moreover, this chart has the advantage it gives a visualized output which makes it easy to read, even by peers.

6.3.1 Objectives The objectives are the reasons a firm engages to a sponsorship relationship. In paragraph 3.2 is already mentioned that objectives to engage to a sponsorship can be very diverse, though in most case marketing related. See Table 1 for a list of possible objectives. This model cannot go into detail about objectives of a firm engaging to sponsorship. Different from the other three groups is that the objectives usually do not develop to a higher level, as they are set by the sponsor depending on the objective to engage in a sponsorship.

Three main components are chosen which make a difference between essential components of the objectives of a sponsorship: patronage, marketing and corporate. The split between objectives is based on the review by Cornwell (1995), who made the difference between marketing and corporate objectives. This study included the patronage objective, which is applicable for especially many basic sponsorships. In most cases the general objectives will be a mix of these three groups. Patronage Sponsorship origins from patronage and many sponsorship relations today still have partly patronage objectives. However, modern utilization of sponsorship is often pure commercial, as an investment in a resource which should generate increasing profit. Sponsorship has per definition a component of patronage, as firms do transfer value in money or in kind to a non-for-profit entity. The difference lies in the objective of a firm to engage to a sponsorship. In literature attention goes to strategic utilization of sponsorship. Several authors state that firms should not engage to a sponsorship if not integrated fully into the corporate strategy (Zyman, 2002). However, with this statement is not taken in account that many managers engage to sponsorship from a low-profile philanthropic objective, especially for small businesses.

The patronage component will never have a value of 0 by definition. In any case there is a part of patronage involved as there will be value transfer from the sponsoring firm toward the sponsored property, even in extremely commercial sponsorship. A value of 1 will be applied to highly commercial sponsorships in which the sponsoring firm only invests in a sponsorship to gain return on investment. A value 2 means that the sponsorship is commercial, however a part of the objectives are patronage. A 3 will be given to sponsorship which has a very high or almost pure patronage objective. Marketing In this case marketing means if the sponsorship is used to directly market one brand, product or product line; as a direct marketing tool. Sponsorship is often used to generate brand awareness, similarly to advertisement, however also to create a platform from where the product can be tested by for example giving away free samples.

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Sponsorship is generally accepted to be a marketing tool, and with that by definition the main objective for a firm to engage to sponsorship. Sponsorship is mostly applied as image creating marketing tool. The sponsored property its image is attempted to be transferred to the sponsoring firm by associating, however this process also works vice versa (Henseler, Wilson, & De Vreede, 2009). This component needs to be valued based on the degree of importance of the marketing objective in the sponsorship. A value of 0, where there is no marketing objective at all, will be rarely applicable but not impossible. A value of 1 can be given if a sponsorship has little marketing objectives and is focussing more on either patronage, corporate objectives or both. Corporate Corporate objectives differ with marketing objectives that they are not particularly of marketing a brand, product or product line, moreover to promote the firm in general. Examples are the utilization of sponsorship as to get local officials positive toward you company, which can help for legal issues such as getting licenses, employee motivation or to get excess to the sponsoring firm where business contacts can be invited.

Corporate objectives are often combined with marketing objectives, moreover, rarely on its own. A sponsorship being corporately applied does not preclude marketing objectives or patronage objectives. The Nike and Jordan sponsorship is a good example of this. Apart from of the well developed marketing objectives, Nike does use the sponsorship in many other parts like motivating its employees and using Jordan as a spokesman. A well developed sponsorship is incorporated in the general corporate strategy of a firm. A firm engages to a sponsorship to get excess to resources of the sponsored property. To exploit a sponsorship to its maximum, it should be integrated in at many parts of their strategy as possible. This component should be similarly valued as the marketing component. In reality many sponsorships will have a low value on this element, as it is characteristic for well developed sponsorships.

6.3.2 Management The ways sponsorships can be managed differ widely, also depending on the objectives. This group gives the degree of capability to manage the sponsorship relationship. The RBV is generally accepted as the managerial view on sponsorship.

The capability of sponsorship management is of major influence on the success of a sponsorship. Therefore the management of sponsorships is a subject of study in the last decades. Three main parts can be identified: reciprocity, leverage and activation. Weeks et al. (2008) identify leveraging and activation as the main management components influencing the success of a sponsorship. In this model the reciprocity is added, which is seen to have major influence on the ease of decision making process. Reciprocity Reciprocity is about the way how the sponsorship is managed. The degree of reciprocity is based on the decision making process; is it one entity who always does the decision making, or is the decision making process dual. Several studies (Farrelly & Quester, 2005a) pointed out that sponsorships are often one-way managed by the sponsoring firm, which takes initiative.

If the management is reciprocal, better results can be acquired from the relationship. Communication will influence the noneconomic satisfaction of the relationship, and can prevent misunderstandings to occur. Interaction due to collaboration can be the source of new resources and skills (Fahy, Farrelly, & Quester, 2004). Sponsors can learn from the creative talent of the sponsored properties and inversely, sponsored properties can learn about sophisticated business practices (Fahy, Farrelly, & Quester, 2004).

As a sponsorship is a relationship by nature, there is always a degree of communication between the partners which means a value of 0 is impossible for the reciprocity component of a sponsorship. A value of 1 means that decision making after the contractual stage is concentrated at one side. A value of 2 applies for sponsorship relations where initiative and decision making mainly comes from one side, however not fully. A value of 3 is per a well balanced reciprocal relationship. Leverage

Leveraging can be defined as following: “leveraging encompasses all marketing communications collateral to the sponsorship investment” (Weeks, Cornwell, & Drennan, 2008). Sponsoring directly only reaches the direct audience of the sponsored event. With leveraging, the connection to the mass can be made.

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Engaging to a sponsorship is one, but does not result in return on investment by itself. The sponsorship needs to be activated and leveraged. More on the activation process later. Researchers agree a sponsorship can only have a real degree of success if leveraged well, which means it will be used to its full potential. The Jordan and Nike sponsorship is a good example of a well leveraged sponsorship.

If used in its full potential, a value of 3 should be given. If not much is done to get profit out of the relation, a 1. If something is done for leveraging, but improvement is possible, a value of 2 is applicable. If the sponsorship is not leveraged at all, a value of 0 is applicable. Activation Weeks, Cornwell and Drennan (2008) defined activation as “activation relates to those communications that encourage interaction with the sponsor”. The difference with leveraging is the direct communication with the sponsor its audience, where leveraging is collateral to the sponsoring investment. Activation of a sponsorship can be by advertising in the program booklet of an event, by integrating the firm its name in the stadium name, or by giving free samples of your product to the visitors of the sponsored event.

Sponsorships must be activated though complementary marketing activity in order to achieve real degree of success (Farrelly & Quester, 2005b). Activation is a strong indicator of firm’s commitment to the sponsorship relationship (Farrelly & Quester, 2003a). Valuating activation should be done similarly to leveraging, a 0 if the sponsorship is not activated at all, a 1 if a very little is done, and a 3 if the sponsorship is activated close to its maximum.

6.3.3 Relationship A sponsorship is a relationship between a sponsoring firm and a sponsored property. Therefore relationship components are of big importance in a sponsorship. In the last decade sponsorship research became more focussed on the relational side (Farrelly & Quester, 2005a). The quality of the relationship has direct influence on the success, either economically or noneconomically. Three components are identified: commitment, sustainability and synergy. Commitment As mentioned earlier, commitment can be defined as “commitment to a relationship entails a desire to develop a stable relationship, a willingness to make short-term sacrifices to maintain the relationship and a confidence in the stability of the relationship” (Bucklin & Sengupta, 1993). Commitment might be even the most important component which can lead to a successful sponsorship outcome. Commitment is an indicator of relationship quality and the relationship quality is a point on which a firms decide to maintaining a long-term relationship (Walter, Müller, Helfert, & Ritter, 2003; Farrelly & Quester, 2005a). Commitment is of importance for relationship continuance as it a key antecedent of economic satisfaction (Farrelly & Quester, 2005a). Commitment from both sides will result in a mutual beneficial relationship. A sponsorship is ineffective if not accompanied with commitment of sufficient resources (Fahy, Farrelly, & Quester, 2004). A proactive attitude towards the sponsorship is an indicator of commitment, which results in economic satisfaction (Farrelly & Quester, 2005a). Often commitment is lacking from the sponsored property and therefore limiting the development of the sponsorship. A study by Farrelly and Quester (2005b) concluded that often sponsored property did not become more active after increasing of investment by the sponsor to develop the relationship. Stotlar (2004) mentions that most firms do not a post-event report, but this would help a lot. This is also a kind of commitment.

Commitment in a sponsorship means how much both partners are willing to invest in the relationship. If there is lots of commitment from both sides, a value of 3 should be given. If both partners are not committed at all, a value of 0 is appropriate. Sustainability As mentioned in paragraph 3.4 after the Jordan case, sustainability of a relationship will generate more return on investment in the long-term. Therefore a sponsoring firm should carefully select the property it is investing in and focus on sustainable relationship creation. Many authors focus on the influence of sustainability (Fahy, Farrelly, & Quester, 2004; Amis, Slack, & Berrett, 1999; Walter, Müller, Helfert, & Ritter, 2003) to gain competitive advance.

To achieve sustainable advantage over competitors using sponsorship as a method, a firm requires three components (Amis, Slack, & Berrett, 1999): 1) Perceived customer value, the sponsorship should be able to provide a significant increase in customer value of the perceived customer value of the product or service offered by the firm, 2) competitor differentiation, the

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distinctive competence that the firm develops must be unique in order to differentiate the firm from its competitors and 3) extendibility, the competence must be usable in a variety of areas: it must be extendable. These three points are an equilateral triangle. In this theory also the extendibility is included, which also was one of the key elements which made the Jordan-Nike relationship a success.

A relationship is permanently fading. The process of sponsorship relationship fading gets little attention from researchers. Olkonen & Tuominen (2006) attempt to describe, analyse and understand relationship fading between a business sponsor and a sponsored museum in the context of cultural sponsorship. Triggers of fading, according to Olkonen & Tuominen (2006), are: 1) relationship changes between the organisations, 2) changes in the organisations characteristics, 3) changes in potential competitors, and 4) changes in the entire contextual business environment. These triggers affect the development of a relationship by reducing the motivations to invest in the relationship (Olkkonen & Tuominen, 2006). However, these triggers can have positive effect on the relationship as well. Regular evaluation and two-way communication can recognise relationship fading triggers in an early stage and avoid motivation reduction and build, enhance and maintain the relationship (Farrelly & Quester, 2003b; Olkkonen & Tuominen, 2006).

Apart from maintaining association in the minds of consumers, also the sponsorship effectiveness are accumulated in the firm through experience and ongoing effect (Fahy, Farrelly, & Quester, 2004).

If the relationship is long-term, a value of 3 is applicable. A value of 0 only applies if a one-time transaction occurs without further communication. A value of 1 is applicable for short term relationship and a value of 2 if it is not short term, but also neither really long term. Synergy Sponsorships are a way to gain competitive advance and if managed well have a synergetic outcome. A sponsorship partnership can reach more than a firm could reach with a different method if managed well. This component will be more progressed in a well developed sponsorship. Synergy creation needs commitment and investment, and also sustainability will most likely lead to synergy. Also a reason why a sponsorship can be synergetic is that the relationship can give access to new human resources, skills and knowledge from each other (Fahy, Farrelly, & Quester, 2004). This is extremely difficult to copy by other firms, and therefore a strong competitive advance. Varadarajan and Cunningham (1995) see strategic alliances are synthesis of conceptual foundations. It is about pooling skills and resources, which form a synergy. Investment in the activation of the sponsorship and the leveraging process is required to pool the skills, as well as reciprocal management.

If the sponsorship outcome is significantly better due to synergetic relationship, a value of 3 is appropriate. If no synergy takes place at all, a value of 0 is applicable. A value of 1 means little synergy, and value of 2 means the relationship is synergetic, however there is space for improvement.

6.3.4 Strategy This group of elements are about the strategic reasoning of firms to engage to a sponsorship. The strategic role of sponsorship is a main focus of researchers for the last decade (Fahy, Farrelly, & Quester, 2004; Cornwell & Maignan, 1998). This group is split into three components: association, integration in strategy and goal convergence. Association Henseler, Wilson and De Vreede (2009) describe about how association works, with nodes and links, from a network memory model. For any sponsorship there is a degree of association, however the incorporation differs. Association is about the message you want to communicate. The message needs to be clear and not confusing or contradictory (Fahy, Farrelly, & Quester, 2004). It is a strategic decision to associate itself with a certain brand. A firm tries to transfer the image of the sponsored property assuming the audience of the sponsored property will be more interested in the product of the sponsor. A firm wants to associate himself as being youthful, prestigious or independent, etc which are potentially unique. A firm searches for specific characteristics of the sponsored property which may be keys of brand association. Customers are looking for value, a product needs to give them additional value in comparison with another product. The association with a sponsored property can be this additional value (Fahy, Farrelly, & Quester, 2004). However, watch out for ambushing. Therefore association with a sponsored property can be a successful method as it is an intangible asset which is hard to copy

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(Fahy, Farrelly, & Quester, 2004). This potential of a sponsorship is recognised (Amis, Slack, & Berrett, 1999).

Does the firm want to associate himself with the sponsored property? If that is a very important objective, a 3 should be given, 0 of not applicable at all, 1 and 2 in between. Integration in strategy Currently researchers agree sponsorship should be integrated in the corporate strategy (Fahy, Farrelly, & Quester, 2004; Cornwell & Maignan, 1998). Sponsorship should be an integral part of the general marketing strategy, and not focus only on financial resource contribution. Financial resource contributions are very transparent and easy to copy. Focus should lie on intangible resources (Fahy, Farrelly, & Quester, 2004).

Is the sponsorship relation integral part of the corporate strategy of the sponsoring firm? If yes, a 3 should be given. If not at all, a 0 is applicable, a 1 or 2 for in between.

Goal convergence Goal convergence is earlier described in paragraph 4.4.1. It is the process which leads to a harmonious relationship which can be achieved by five processes: 1) shared vision, 2) convergent policy, 3) mutual education, 4) cultural unity and 5) common cause (Sheth, 1992). A strong relationship with mutual commitment and trust are absolute essential for goal convergence to occur and therefore this component only occurs at well progressed sponsorships. Often both parties have already a shared vision, what is the reason they started to relationship after all. From there can be worked on a common cause. And along the time the partnership grows toward a sustainably relationship, it can work on convergent policy, mutual education and cultural unity. This should be a two-way process. If goal convergence is established, a product, brand or corporate image of the partners can be marketed as a system (Varadarajan & Cunningham, 1995; Farrelly & Quester, 2005b).

Do both partners converge their goals towards a mutual goal? If goal convergence is establishing in a high degree, a 3 is appropriate. A value of 0 if no goal convergence is established at all, a value 1 if a little goal convergence is done, a 2 in between.

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7. Application The SPM takes a helicopter view on sponsorship, not focusing on one certain utilization or objective of sponsorship engagement. It visualizes different utilizations of sponsorship from low profile relations to well developed relation; from basic sponsorships to co-marketing alliances. A co-marketing alliance is assumed to be the most developed kind of sponsorship. The model is based on current knowledge about how sponsorships work. All sponsorship kinds are modern, however some more developed than others. Every single sponsorship, however small or big, should be able to be placed in this model. Assumed is that all sponsorships have one objective in common: a common market of both the sponsor and sponsored property. This chapter will give some examples of application of the SPM. Five theoretical examples and some practical examples are given.

7.1 Theoretic examples As examples five general kind of sponsorships are put in the model; basic sponsorship, cause-related marketing, sponsorship-linked marketing, strategic alliance and co-marketing alliance. The cases are non-existing sponsorship but rather a stereotype of all five kinds. This means that a practiced sponsorship which can be categorized within one of the five kinds of sponsorship relations will not necessarily generate a similar output of the SPM as the ones presented below. These examples can also be used as comparison material for managers in the field.

Figure 9: A basic sponsorship filled in the Sponsorship Progression Model

7.1.1 Basic sponsorship A basic sponsorship is the least developed kind of sponsorship, as described earlier, which results in a small outcome chart of the SPM. See Figure 9. In most cases basic sponsorships do not involve big transactions in cash or in-kind.

Objectives are mainly patronage; marketing and corporate objectives are little developed. The relationship is almost entirely one-way and therefore has a low degree of reciprocal management. The activation process, as well as the leverage process, gets little attention. However, this all fits to the patronage objectives of the sponsorship. A firm engaging to a basic sponsorship is not looking for activating and leveraging the sponsorship to a high level, nor is looking for a reciprocal way of management. As that would require additional investment in management costs, which only would be meaningful if the objectives were more marketing or corporate minded.

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The relationship between the sponsor and sponsored property is very basic, mostly limited to transactional contributions. Commitment is low from both sides and the relationship is not sustainable. Often it is a onetime decision and enhancing will be a new decision after every year or event. A sponsored property cannot assume the sponsorship will be renewed. As the leveraging and activation elements are low progressed, there is no synergy. With a basic sponsorship a sponsor does not engage to a sponsorship because of strategic objectives. However there is a link between the partner, association is not of big importance and a sponsor would not activate the sponsorship well to communicate the association. A basic sponsorship is not integrated into the corporate strategy, moreover it is willing to support a certain cause out of patronage. Similarly, goal convergence is no option either as long if the sponsorship is not of strategic kind.

Figure 10: Cause-related marketing filled in the Sponsorship Progression Model

7.1.2 Cause-related marketing Cause-related marketing is a different kind of sponsorship. It is mainly focusing on causes and with that communicating to the general public that the firm is social responsible. According to the definition of sponsorship, cause-related marketing can be defined in terms of sponsorship, moreover, it is used to leverage sponsorships (Polonsky & Speed, 2001). An attempt is made to value an average cause-related marketing campaign in the SPM, see Figure 10 for the result. Although cause-related marketing seems to have a high part of patronage objective, this is not entirely true. Patronage is the marketing tool, the actual reason for a firm to use cause-related marketing are the marketing and corporate objectives and not the patronage reason. Cause-related marketing gives the idea to the audience that the firm is doing good, and uses that to market the brand or product. The management related components all have a value of 2. The way these relations are managed differ a lot from individual cases. Typically cause-relative marketing is activated and leveraged well. Also the reciprocity degree will be progressed fairly well. However, on all three components there is space for enhancement. Commitment and sustainability have similarly to the management component an average value. Also these differ a lot from case to case, however commitment will be an important issue to invest in a good cause to make it successful and with that sustainable. Cause-related marketing typical has a high degree of synergy. A cause is collecting money, and with that can use the marketing skills of corporations. From the other side the association with a cause will create a social responsible image and with that additional value to customers who feel good by buying their product. In that way the relationship has a big synergetic outcome for both partners.

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Association is the main strategic objective to utilize cause-related marketing while the strategic component of integration in strategy is averagely valued with a 2. Individual cases differ, many examples of well strategic integrated cause-related marketing campaigns exist; for example the Postcode Loterij, a Dutch lottery. However generally cause-related marketing campaigns are temporary and will not be fully incorporated in the strategy, moreover collateral with other activities. Goal convergence would rarely be applicable for a partnership on cause-related marketing. Causes and commercial corporations differ too much on their fundamentals.

Figure 11: Sponsorship-linked marketing filled in the Sponsorship Progression Model

7.1.3 Sponsorship-linked marketing Probably the kind of sponsorship most widely utilized is where sponsorship is the main tool of the marketing strategy: sponsorship-linked marketing. Because of the diverse ways of implementation putting it in the SPM as a general sponsorship kind is rather hard. However, an attempt is done where the typical elements are emphasized. The objectives are obviously marketing oriented. Corporate objectives are averagely valued and patronage little. Sponsorship-linked marketing will be applied as marketing strategy and with that be a mainly commercial decision. A sponsorship-linked marketing strategy is generally one-sidedly managed by the sponsoring firm. The firm invests to activate the sponsorship and leverages it by centralizing the sponsorship in the marketing strategy. Sponsorship-linked marketing strategies are sustainable, often 3 to 5 years, because of interdependency (Fahy, Farrelly, & Quester, 2004). Interdependency requires commitment. Sponsorship-linked marketing can be fairly synergetic; beneficial for both partners. Association is the major reason a firm engages to a sponsorship; to associate with the sponsored property and transfer their image to the sponsor. Sponsoring is a key marketing tool within the marketing strategy and therefore valued with a 2 for the integration in strategy component. Goal convergence does not or little occur in most cases, due to the little reciprocity.

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Figure 12: Sponsorship-as a strategic alliance filled in the Sponsorship Progression Model

7.1.4 Strategic sponsorship Recently researchers started to recognise the trend where well progressed sponsorships can be seen as strategic alliances between a profit and a not-for-profit organisation (Amis, Slack, & Berrett, 1999). In Figure 12 the outcome from the SPM is showed when applied to a general sponsorship managed as a strategic alliance. Typically the objectives are highly developed at the corporate component; the sponsorship is integrated in the corporate strategy and will be leveraged at a wide range of corporate objectives. The decision to engage to a sponsorship is a rational strategic choice and therefore the patronage component has little influence. The management group of components are all highly progressed. Being managed as an alliance means a high degree of reciprocity. The activation and leveraging processes are well developed, also because of high degree of commitment. Commitment is high, which also results in the high degree of activation and leveraging. Both partners started the alliance with the intention to create a sustainable mutual beneficial relationship and are willing to invest in the relationship. Commitment is essential to gain success, and commitment will also lead to sustainability and synergy. Association has a value of 2, as an alliance is not always directly focussing on the association part, moreover mutual beneficial management of the sponsorship. Investing in a sponsorship is fully integrated in the corporate strategy and even goals convergence occurs.

7.1.5 Co-marketing alliance A sponsorship managed as a co-marketing alliance is the most developed kind of sponsorship. It is fully developed on all components, except of patronage (see Figure 13). A sponsorship is managed as a strategic alliance which is fully integrated into the corporate strategy by both partners. A mutual product, brand and/or image is marketed where both partners bring in their unique resources. Patronage is the only component with a low value as a co-marketing alliance has a highly commercial marketing and corporate objective. Reciprocity is high, as is investment in the leverage and activation processes.

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Figure 13: A co-marketing alliance filled in the Sponsorship Progression Model

7.2 Practice example As an example from the practice the SPM is applied to the Freshheads-Incubate sponsorship relationship described before. Earlier is stated that this sponsorship can be seen as a co-marketing alliance. The SPM applied to this sponsorship as given in Figure 14 can be compared with the graph of a classic co-marketing alliance as given in Figure 13.

First of all, it does not have the exact same output. However, this does not imply this sponsorship cannot be seen as a co-marketing alliance. Compared with the graph of a classic strategic alliance (Figure 12), it shows some differences as well. This shows all sponsorships are unique and do not particularly correspond with one of the theoretical examples as presented in the previous paragraph. However, it gives a direction. The output of the Freshheads-Incubate sponsorship still does not fully clarify whether it can be called a co-marketing alliance or just a strategic alliance. Now there is an output, managers of the sponsorship can evaluate which components are highly developed. First of all, the objectives say nothing about development; this is based on strategic decision making of the company why they engage to a sponsorship. The other components do give a progression degree. In the Freshheads-Incubate case, the components of goal convergence and activation give lower values. At these components the sponsorship can be improved. Additionally the model is applied to media partners of Incubate festival. This was done with an earlier version of the model and partly helped developing the model to its current form. Though the model is not designed to be applied on media partnerships, it surely is applicable on relationships which have a high degree of similarity with sponsorship relationships.

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Figure 14: The Sponsorship Progression Model applied to the Freshheads-Incubate sponsorship

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8. Conclusion and recommendations This paper gave a brief history of sponsorship and sponsorship research. The different kinds of sponsorships are described with a focus on strategic utilization. It is found that literature on sponsorship is rather chaotic and requires structure. An extensive case study is done on the strategic sponsorship relationship between Freshheads and Incubate. This relationship is analysed whether it fulfils the requirements to be seen as a co-marketing alliance, which turned out to be the case. Though the general objectives of Freshheads to engage in the sponsorship with Incubate are on patronage bases, during the years it has been developed towards a co-marketing alliance. Based on the literature study, four main groups of components are identified: objectives, management, relationship and strategy. These groups are all four split into three components each, which are thought to be the key components of a sponsorship. From these the Sponsorship Progression Model is made to structure the components and to visualize the progression status of a sponsorship. The model had a visual outcome and is relatively easy to apply by managers and researchers. The SPM is applied to five general kinds of sponsorship utilizations; basic sponsorship, cause-related marketing, sponsorship-linked marketing, strategic alliance and co-marketing alliance. The results are discussed and with that partly explained how the model works and how the outcome can be interpreted. Additionally, these graphs can be used as reference images for managers who applied the SPM to real examples of sponsorships. To further test and present the model it is applied to the case study of a sponsorship relation between the Freshheads and Incubate which shows the sponsorship is not a stereotype example of a co-marketing alliance, it could also be defined as a form of strategic alliance.

This paper presents the first stage of the SPM development. Based on a literature review the contributing components are selected and integrated in the SPM. However, the selection is based on assumptions based on theory and not on quantitative research. The hypothesis needs to be empirically tested to further underpin the model. Also desirable would be to link quantitative values to the now qualitative values of the model.

Application of the SPM to more practiced sponsorships would give better insight to possible space for improvement in the usability and component selection.

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