Abstract
The main objective of this study was to explain the effect of sponsorship advertising on customers brand loyalty, the case of Pepsico. As sponsorship has become a most frequently used by companies to engage with their potential consumers, it needs to ascertain the effect that it sets on brand loyalty. The research intended to answer ‘Does sponsorship advertising have an influence on consumers brand loyalty? And four hypotheses’ was formulated based on four independent variables chosen. In order to do so explanatory research was conducted with the aim of ascertain the extent and nature of cause and effect relationships, to conduct this study both primary and secondary sources of data was used. The primary source of data was the gathered response of customers through questionnaires and the secondary data used was different materials; journals and different articles that were helpful in the process of analyzing and interpretation of the collected data. Percentage, table, and graphs are used to process and analyze the collected data also correlation and regression analysis was implemented to assess the significant differences in sponsorship advertising determinants. Based on the analysis undertaken, detailed studied independent variables/attitude towards the brand, fan involvement, good will and brand image/ that have significant influence on the dependent variables/ brand loyalty. Among the variables ‘attitude towards the brand’ has the highest score in linear regression, which implies that consumers intention to purchase is highly and significantly influenced by the attitude they have towards the brand. It is highly recommended that marketing managers should incorporate sponsorship advertising in their marketing strategy, as it has a meaningful and measurable significant positive effect towards influencing brand loyalty of their customers.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Sponsorship is defined as business affiliation between one that provides means, resources or services and individuals, events or organizations offering certain rights and connections that can be used for commercial purposes in return.' As we can see, this partnership is mutually beneficial and is governed by a sponsorship agreement. Most often sports, artistic and music events, socially useful activities, teams, competitions, individuals, fairs, exhibitions are sponsored Jefkins, Frank (2003).
The media pay careful attention to sponsored activities, which is why it is so useful for brand recognition and publicity, as well as for building a sponsoring organization's identity and credibility as a socially responsible company. This is the most common choice to sponsor sporting events because of the great exposure of live broadcasts and the potential to draw a large number of people. The studies by Kotler and Keller (2006) have shown that even 69% of all investments in sponsorship is spent on sponsoring sports events. In 2013, Lamb and associates confirmed this percentage Lamb et al., (2013). Sponsorship provides media advertising for an organization- the events that are followed by the population at large give wide media attention.
Sponsorship is considered to be an essential part of the function of public relations Lawrence, (2001), their significant element Kotler, Keller, (2006); Kotler (2007), specific activity of public relations and public relations strategy Lamb et al., (2013). Sponsorship refers mainly as a way of connecting a brand / business to a specific event such as football, food festivals and concerts, and so on or individuals, with the aim of increasing demand for the goods and services of the company. Authors often regard advertising as a means of economic manipulation, keeping in mind that its consequences are related to the media support‟ Vračar, (2005).
Due to the fast-tracked growth and wider usage of sponsorship, some authors Ognjanov, (2013) Jobber i Fahy, (2006) find sponsorship to be a special instrument of marketing communication. As a special form of marketing, it can be seen mostly in the field of sports marketing, where sponsorship plays a major role that mostly makes these two terms synonymous Sleight, in Vračar, (1999) the suspected disparities in attitudes point to the need for the incorporation and synergy of all means of brand communication instruments Krstić, (2016).
As a purchase decision involves a psychological cycle involving the identification of products with the meaning that events integrate and how it influences the development of a wide variety of attitude metrics over time Gijsenberg (2014a). Mindset metrics are consumer-based sponsor equity metrics such as brand attitude and brand loyalty cf. Olson (2010), Mazodier & Quester (2014).
Success of Company‟s sponsorship in an event can be determined by its goals and how well the outcome can be measured and how it can be of benefit to the organization. According to Wladimir Andreff and Stefan Szymanski (2006), there are two types of objectives which can be classified as direct and indirect objectives. In the direct objective the sponsor expects a quick change in behavior of its existing and potential customers. While in the indirect objective the authors maintain that it is
„primarily for increased visibility to brands and products, contact with a particular segment of its client base and an enhancement of its image; alongside growth in sales are only a long-term goal.
Jobber (2007) notes there are five main sponsorship targets principals. These goals include
§ Creating promotional opportunities,
§ Improving community relationships,
§ Fostering favorable brand,
§ Fostering business associations,
§ Creating opportunities for entertainment and gaining publicity
Sponsoring events is a great way for companies to promote their brands, logos and products Jobber, (2007, p. 653). Items and products such as hats, pens, and bags may have a company logo for easy retention and recognition to reach a wider audience. Social responsibility is another reason why businesses are engaged in sponsorship as a way to give back to their community. Sponsorship by funding colleges, churches and so on will help boost a company's image with in its community. This will give a caring and socially responsible image to the consumers Jobber, (2007). This objective is linked to association for a company or brand according to Jobber (2007). The point is meant for a company to associate itself with an event with a hope of positive return towards its offerings.
Brewing has been mentioned for quite some time in history, and as early as ancient time, and has continued to this day with relatively few changes to the basic recipe. Malted barley is the major ingredient that provides a nourishing sugar- and protein-rich solution called wort (pronounced wert) when milled and heated in water to extract its nutrients; a perfect medium for yeast to grow and to ferment. Hops were added to the boiling wort in comparatively recent times, as it was discovered that hops had antibacterial properties that preserved the wort and fermented beer, and gave the beer a refreshing bitter taste.
The effectiveness of Pepsi‟s sponsorship program in terms of customers‟ response from a variety of perspectives in the Nigeria market is necessary to be investigated because Pepsi‟s expenditures on sponsorship are increasing. Therefore, the research discovers which factors between sponsor and event have strongly effect on brand loyalty to help advertisers give an effective marketing strategy for the sponsors‟ products in the Nigeria market.
1.2 Statement of the problem
By its definition, buying decision is very difficult because of the sophisticated options available but buying intention is mostly related to the actions, perception and attitude of consumers. Consumer intention to purchase is a crucial point for consumers when considering and assessing such Keller items, (2001). Ghosh (1990) said intention to purchase is an effective tool used in predicting purchasing process. If the customers agreed to buy the product at some market, their aim was to move them. However, intention to purchase could be changed by affecting various intrinsic and extrinsic factors, Zeithaml (1988). In addition, consumers were interrupted during the purchase process due to internal impulse and external environment. Their behavior was compelled by the physiological motivation that stimulates their response which brings them to the retail store to fulfill their need Kim and Jin, (2001).
Nigeria's beer market grows every year due to the continuous economic growth of the country. The industry has seen an increase in the number of beer factories that have entered the industry, particularly in the last five years, and the number of different segments added to those established product lines, which is also expected to expand in the future. Because of this attractive industrial growth, the currently existing breweries continuously expand their production capacity and plans to add new plants. Nigerian Brewerries has also joined the wave by adding new product lines and also modernizing and improving its production capacity. its expenditures on sponsorship are increasing from time to time hence the effectiveness of the company‟s sponsorship program in terms of customers‟ response from a variety of perspectives in this competitive industry is necessary to be investigated. Therefore, the research answer which factors between sponsor and event have strongly impact on brand loyalty to help advertisers give an effective marketing strategy for the sponsors‟ products in the Nigeria beer market.
This research was intended to close the gap in the literature by analyzing the impact of sponsorship events on brand loyalty. This research focused on the aspects; attitude towards the brand, involvement of fans, good will and brand image which are perceived to be most important in highlighting the effect of sponsorship on brand loyalty; in the case of Deigeo Nigerian Brewerries S.C.
1.3 Research Question
1.3.1 Main Research Questions
In this study the following research questions was answered.
Does sponsorship advertising have an influence on consumers brand loyalty?
1.3.2 Sub-research Questions
1. To what degree customer‟s images of the sponsoring brand have an effect on the customer‟s brand loyalty?
2. How does fan involvement towards the event have an impact on the customer‟s brand loyalty?
3. To what extent customer‟s attitudes toward the event have an impact on the customer‟s brand loyalty?
4. How does good will related to the sponsoring brand have an effect on customer‟s brand loyalty?
1.4 Objectives of the Study
1.4.1 General Objective of the Study
The main objective of this study is to investigate the effect of sponsorship advertising on brand loyalty of Pepsico.
1.4.2 Specific Objectives of the Study
In the light of this major objective, the specific objectives of the study are:
- To determine the impact of customer‟s image of the sponsoring brand on their brand loyalty.
- To explore the impact of customer‟s fan involvement towards the event on their brand loyalty.
- To investigate the impact of customer's attitude towards the event on the customer‟s brand loyalty.
- To ascertain the impact of good will related to sponsoring brand on their brand loyalty
1.5 Significance of the Study
The study offered various benefits for different stakeholders.
§ The study is necessary for other researchers to expand the cover and to examine the current research subject in detail.
§ The results are useful in defining effective strategy for event marketing activities, increasing the effect on the company's brand recognition and brand loyalty.
§ The study allows for the researcher to develop marketing research skills.
1.6 Scope of the Study
This paper intended to study the effect of sponsorship advertising on influencing customer brand loyalty In the case of Pepsico To achieve this aim, the scope of the study identified different factors,
§ Conceptual scope: although purchasing intention of consumers can be affected by various factors, i.e. triggers, recommendations of a specific brand by families and friends, high expectations of outcome due to prior experience with the brand or even personal associations with the brand, this study had only investigated probable initiated brand loyalty through Customers attitude towards the brand, fan involvement, good will and brand image of the sponsoring brand.
§ Geographical scope: the study was conducted from those consumers who attended different events sponsored by Pepsico in Anambra state
§ Methodological scope: the study use quantitative approach and data was gathered by preparing and distributing questionnaire.
There are many alcohol beverages Pepsi offer to the market but this research studied only focus on bottled beer, drought beer and malt drink (non-alcohol drinks) the result and recommendation may not be applied to other products offered by the company.
1.7 Limitations of the Study
The study was faced by the following limitations:
- The survey was limited to the customers of the sponsored event located in golf club, Anambra state.
- The study sample was selected from the sponsored event customers only; other public members are excluded.
- The study results were only generalized on event customers who live in Anambra state.
1.8 Organization of the Study
This research paper is organized into five chapters. The first chapter is an introduction which includes background of the study, problem statement, objective of the study, research questions, significance of the study and scope and limitation of the study. The second chapter is review of related literatures which consists theoretical background and important findings from different literatures and hypothesis of the study. The third chapter involves methodologies applied in the study. The forth chapter is the analysis part, where the data collected are analyzed and summarized in order to give a meaningful findings and those finding were also summarized at the end of this chapter with respect to their respective hypothesis. And the last chapter includes the summary of findings, conclusion and recommendations.
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