The dynamics of sport sponsorship: Understanding the sponsorship exchange process

Sport sponsorship has become a multi-billion dollar industry. It is now a significant part of the corporate communication mix and is viewed as a highly cost-effective method of marketing. Sport sponsorship is beginning to compete against other elements of the communication mix for funding; especially where cost savings can be shown. Sponsorships are used to achieve a wide range of objectives. ^ The purpose of this study was threefold. The first part was to determine the reasons companies engage in the sponsorship exchange process. The second part was to describe the decision-making procedures followed by companies in the sponsorship exchange process. The third part was to determine if certain company characteristics are related to the way companies approach the sponsorship exchange process. ^ The sample consisted of 303 companies that have participated in the sponsorship exchange process. Respondents completed a survey instrument that establishes corporate demographics, sponsorship budget, selection criteria, and the decision-making structure of the company. In-depth interviews were conducted with twenty of the corporations surveyed. ^ In general, results revealed that companies engage in the sponsorship exchange process to increase brand awareness, position a product, fortify an image, reach specific demographics, and increase sales. Results also indicated even though the decision makers can be neatly classified, each corporation has a unique decision-making procedure. Results further indicated that there is a significant difference between the decision-making process of small and large companies. This study introduces the relationship continuum and concludes with recommendations for companies and properties engaged in the sponsorship exchange process.