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Sport sponsorship in China : a strategic investment

University of British Columbia

Sport sponsorship has, in a relatively short period of time, grown into a major industry in the global marketplace. According to IEG Reports (2004), the growing sponsorship market in China, and strong activity in other parts of Asia and Australia, will drive global sponsorship spending in 2005 to $30 billion for the first time. In 2004, overall North American corporate expenditures on sponsorship were $11.11 billion, an 8.4 percent increase from the previous year. IEG projected that European companies will increase sponsorship spending by 8.1% from $7.8 billion in 2004 to $8.4 billion in 2005. Aided by strong increases from countries such as China, Pacific Rim companies will boost sponsorship spending from $5.2 billion to $5.8 billion, a 12.3% gain. With major international sports events now being staged in China, including the Beijing 2008 Olympics and Formula One, corporate interest in sport sponsorship in the country has increased significantly. Although sport sponsorship in China is still in its infancy and going through a difficult transition period (Geng, Burton, & Blakemore, 2002), it has considerable potential for future development and growth. China, with its unique history and cultural background has begun to implement commercialized sport sponsorship about two decades after its western counterparts, and academic research has largely failed to address how international and national corporations perceive the opportunities for sponsorship investment in China. The position taken in this thesis is that in order to design a more adaptive conceptual framework, researchers must attempt to understand sport sponsorship from the perspective of investors and from the standpoint of local, as well as international, markets. This study analyzed how international and national companies have employed sport sponsorship in China as a strategic investment tool to obtain competitive advantages. The research was guided by Gardner & Shuman's (1988) theoretical framework about effects of sport sponsorship, and influenced by previous research on resource-based approaches to sponsorship by Amis, Pant, & Slack (1997), the network approach by Olkkonen (2001), and strategic alliance theories adapted from Das & Teng (1998) and Lorange & Roos (1992). Interviews were conducted with 19 Chinese sport sponsorship authorities working in research and in industry. The thesis revealed four significant findings. 1) Sport sponsorship is a strategic investment. While corporations used it to procure brand equity and relationship benefits, they simultaneously faced considerable risks (five major risks were identified) in the current Chinese market context. 2) Relationships are a resource that can be exploited as an intangible asset to strengthen competitive advantage. 3) Strategic partnerships are a developing trend in the sport sponsorship industry in China. 4) Cultural differences are minimal among the existing sport sponsorship relationships in China. The study makes a number of contributions to the literature on sport sponsorship and has direct implications for corporations wanting to invest in sport sponsorship in China.

Text

2009-12-10

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http://hdl.handle.net/2429/16328

Human Kinetics

University of British Columbia

UBCV

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