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Exhibit 1). This shows a clear connection between endorsements and affected market share,
in both positive and negative situations (Reebok, 1999).
In a similar light of underperformance, an endorser’s unsatisfactory personal also has a
similar impact, as seen in the case of pro golfer Tiger Woods. Consulting company,
Accenture, lost no time in cutting ties with Woods. In the 10 – 15 trading days after the
Tiger Woods scandal, the full portfolio of companies that used Woods as an endorser of
their brands lost more than 2% of market value, concentrated among three core sponsors –
Electronic Arts, Nike, and PepsiCo (Gatorade) (Knittel & Stango, 2014). Companies
experienced similar downturns when Michael Vick pled guilty to dog-fighting charges, and
Lance Armstrong was exposed for association with doping. This reinforces the notion that
poor consumer perception of the endorser translates into poor perception of the product or
brand endorsed (Austad, 2004) (See Exhibit 1).
An additional factor to consider with product endorsement is the “fit” (Farrell, Karels,
Montfort, & McClatchey, 2000) between celebrity endorser and the product or brand they
are endorsing. Studies show that endorsements are not only more effective when the
endorser has a desirable “fit,” or meets the expected trustworthiness, credibility, and
attractiveness that consumers expect from a brand, but that there may in fact be a negative
response to brands who use endorsers that exhibit little to no fit with the product or brand
they are endorsing (Austad, 2004). Any company that incorporates endorsement into their
marketing mix opens themselves up to this risk, yet the potential reward often outweighs
this possibility for many companies.
Sponsorship
Sponsorship is considered a qualitative medium, used as the financial or in-kind support of
an activity, in order to reach specified business goals. It promotes a business in association
with the “sponsee" (i.e., event, team, etc.) by offering unique marketing opportunities that
pave the way to establishing a competitive advantage. Many events use sponsorship
support to offer more exciting programs and to help defray rising costs. For the sponsor it
serves as a complement to other marketing programs, in addition to having a dramatic
influence on customer relations. Sponsoring events that appeal to their target market are
likely to shape buying attitudes and help generate a positive reaction. Additionally,
sponsorship can frequently impact short-term sales, as sponsors have opportunities to
showcase products or encourage sampling of consumables.
Corporate sponsorship in the sports industry is particularly valuable due to high levels of
achieved consumer engagement with teams, athletes, and participating countries.
Companies view sponsorship as a chance to identify with consumers and create valuable
associations with their favorite competitors in order to enhance brand image. In 2007
global investment in sponsorship expenditures rose to USD 38 billion, (Michaelis, 2012) and
continued to grow to USD 53.3 billion by 2013 (IEGSR, 2013). This level of investment
directly reflects the perceived value of this marketing opportunity. In the case of the 2012
London Olympic Games and the 2014 FIFA World Cup, McDonald’s provides several
examples of what companies strive for when entering into a sponsorship deal, such as brand
enhancement, increased market penetration and increased consumer goodwill (Michaelis,
2012), (See Exhibit 2).
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