Leveraging Brands in Sport Business

Mark P. Pritchard, Jeffrey L. Stinson, Mark P. Pritchard, Jeffrey L. Stinson

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781136267949
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Marketing
• Index: Marketing

This edited text compiles advanced material relating to strategy and marketing in the field of sports business. Featuring contributions from experts across the sports business field, the book approaches strategy from the standpoint of managing and marketing a brand. With integrated current-day examples highlighting practices and issues, as well as 'real-world' applied video cases, this book is ideal for marketing students and sports business practitioners looking to gain strategic insights into the industry.

Part I

Foundations in Sport Business

1

Brand Equity

Management and Measurement in Sport

Jay Gladden

Indiana University Purdue University, Indianapolis

Abstract: The management of sport brands has received significant attention from both industry and the academe over the past 20 years. This chapter provides an overview of branding in the sport industry, including a summary of research on the brand equity development process. This circular process stipulates that antecedents, such as brand attributes, benefits, and attitudes, result in brand equity. Brand equity results in brand loyalty, which provides many benefits to sport brands, such as the ability to charge price premiums and the development of a consistent base of repeat purchasers. Brand equity also helps prevent drastic revenue decreases during the inevitable swings of performance that occur in sport. This chapter offers suggestions on a model for measuring brand equity. This model suggests both quantitative and qualitative methods for assessing various elements of a company’s brand-building effort.

Keywords: brand, brand equity, brand loyalty, brand management, brand measurement, sport brands

Introduction

The last 20 years have seen sport-oriented businesses increase their focus on managing brands to increase brand equity. Increasingly, corporations sponsoring sport and events use brand-building and image transfer as justifications for their financial investments. Meanwhile, sport organizations see the strong brand resulting in loyal fans, which protects against the intensified competition for the consumer’s leisure dollar. Conversations around branding in sport largely began with a focus on team logos, marks, nicknames, and colors in the early 1990s, but have more recently evolved into a deeper focus on the more strategic elements of brand-building such as customer loyalty, brand image, customer relationship management, and fan development.

Industry provides many examples of this evolution in thinking. For example, SME, a leading brand consultant for sport teams, has evolved significantly during its 20 years of existence. In the 1990s, SME created its corporate brand by providing expertise around logo development and redesign, developing more contemporary marks and color schemes guided by stakeholder insights. The goal of these efforts was to drive popularity for the marks and even the team, resulting in merchandise sales. As the understanding of branding has become more sophisticated, SME evolved into a company that employs a process focused on broadly understanding each brand they serve as a means of providing comprehensive brand-building consulting services.¹ Logo redesign and development remains a piece of SME’s services today, but they are also now heavily involved in defining brand values, and understanding and managing brand image.

Figure 1.1 Overview of Chapter 1

As the complexity and depth of approaches have increased over time, an understanding has emerged of what constitutes brand equity, how it is developed, and how it can be measured in the sport setting. One purpose of this chapter is to summarize the understanding of brand equity in sport and provide some actionable frameworks for brand-building activities. Another purpose is to provide tools that can assist in assessing and measuring brand equity so that it can be managed over time. Measurement efforts to date are summarized, followed by a prescription for a comprehensive brand equity measurement program. Figure 1.1 highlights the focus and flow of the chapter.

This chapter focuses on brand management efforts for a sport property (team, league, facility, event, athlete, etc.). It does not focus on the development of brand equity for the sport sponsor for two reasons. First, our existing knowledge on brand equity in sport is confined to two areas: (a) brand equity development by sport properties and (b) brand image matching measurement as it relates to sponsorship. Because there are prescriptions readily available to measure the brand equity of non-sport brands, this chapter focuses on summarizing the existing understanding of brand equity development by sport properties as it can be used to measure and manage brand equity. Second, and perhaps more importantly, when corporations align with a sport property, they are often seeking to modify or reinforce certain brand image–based elements the property possesses. This chapter provides an understanding of the brand image of a sport property that allows for greater sophistication on the part of sponsors. If the sport brand image is understood, then it stands to reason that the image benefits which the corporation seeks to receive will also be understood, and the degree to which matching or enhancement occurs for the corporate sponsor can be measured.

What Is Brand Equity?

Two of the more significant advances to the thinking around brand equity were offered by David Aaker in his book Managing Brand Equity: Capitalizing on the Value of a Brand Name² and by Kevin Keller, in his 1993 Journal of Marketing article entitled “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity.”³ Aaker’s definition of brand equity as “a set of brand assets and liabilities linked to a brand, its name and symbol, that add to or subtract from the value provided by a product or service to a firm and/or that firm’s customers”⁴ provides a useful way of thinking about brand equity. This perspective suggests branding or brand management can be thought of as understanding and coordinating the portfolio of positive and negative elements attached to an outsider’s view of the brand. Just as a professional tennis event can develop positive associations based on Roger Federer or Maria Sharapova participating, so too can the tournament develop negative associations if none of the top players choose to participate. Aaker suggested that there were five categories of these assets and liabilities: brand loyalty, awareness, perceived quality, brand associations (anything linked to memory in the consumer’s mind), and other proprietary assets.

Keller’s “customer-based brand equity” advanced the thinking on brand equity by focusing on the customer’s knowledge about a brand as the primary driver of brand equity. Keller suggested the knowledge of a brand was built based on brand awareness and brand image.⁵ Although measures of awareness, such as the ability to recall a brand when given a product category or to recognize a brand when given a variety of alternatives, are quite pertinent in a variety of business settings, they are at times less relevant when focusing on sport teams and events. Many sport properties have some level of awareness in their respective marketplaces.⁶ Arguably more important to sport is an understanding of how brand image is built in the minds of consumers, as this begins to provide specific direction on how to manage a spectator sport entity to build equity.

Brand image can be thought of as the strength, uniqueness, and favorability of the associations with the brand.⁷ An illustrative example of this would be stadium development in U.S. Major League Baseball over the past 20 years. As new stadia were first developed, these buildings (such as Camden Yards, home of Major League Baseball’s Baltimore Orioles) provided a strong, unique, and favorable association due to their unique designs, which attempted to capitalize on both the character of the city and the history of the team. In many ways, these new designs effectively generated nostalgic feelings of a positive nature tied to the history of baseball. However, as these new stadia became more prevalent, it could be argued that the impact of each new stadium in developing brand associations lessened because the association with the facility was less unique.

The Benefits of Loyalty: Why Brand Equity Is Important in Spectator Sport

Keller advanced brand equity thinking by suggesting brand loyalty was a key outcome, rather than a component, of brand equity.⁸ As brand equity increases for the sport brand, so too should brand loyalty increase. This thinking justifies the focus on brand equity, as loyalty can be monetized, or translated into revenues. Unlike a mainstream consumer product or even a number of service-oriented products, the spectator sport product’s performance cannot be standardized. In fact, the inconsistency and uncertainty related to the spectator sport product is one of its great attractions. However, injuries, transactions, turnover, playing conditions, and competition all create a situation in which it is very difficult for a property to always be the best. We also know that revenues tend to increase after a team experiences a championship (or close to championship) season, and often decrease when a team has a particularly poor season or does not realize performance expectations. If the marketer relies solely on success as a marketing platform, he or she will be at the mercy of the many uncontrollable factors mentioned above. A broader and more strategic view suggests managers should seek loyalty to the product among the customer base, which allows for the property to weather downturns in team, player, or event performance.

The mechanism for achieving this loyalty is brand management. It mandates a more long-term strategic view by suggesting that the development of a strong brand (which evolves over time) results in brand loyalty. This view does not take a year-to-year approach or employ an exclusive focus on winning/success as a means to building loyalty. It assumes there are other strategies and tactics to build a strong brand and that those will be employed to varying degrees. The end result is a larger and more loyal base of supporters, which protects the sport organization from the sometimes violent swings that can result from significant variance in performance.⁹ Wouldn’t everyone like to have loyal fans like the Chicago Bulls, or the Dallas Cowboys? IndyCar auto racing declined when the sport split into two organizations in 1996. But, because of a well-established brand, and a loyal following, the Indianapolis 500 has still been able t...