A proposed model for measuring the brand equity in sports organizations

[65] 335 07 may · august 2007 · esic market A proposed model for measuring the brand equity in sports organizations Ángel F. Villarejo-Ramos, Ph. D. Félix A. Martín-Velicia, Ph. D. Dpt. of Business Administration and Marketing University of Seville Abstract Today, the companies, usually, consider the presence of the intangible assets, specially the brand, in the strategic plans of the organizations. So much the scientific community of marketing, as the managerial world they deal that managing the brand and to know its value is a prior matter in altars to managing to differentiate the products and to reach a competiti- ve advantage. In the world of the sport, in which increasingly the economic interests prevail over other interests of emotional type, it seems to be unavoidable to confront the study of the management of the brand equity of sports entities and clubs. They are organizations that try to compete on a market increasingly competitively and lucratively, and that for it must try to manage and to administer its resources efficiently. And one of these resources it constitutes the brand, the name of the sports entity. In this paper, after approaching the knowledge of the concept brand equity and its components, giving a particular vision of the importance that has the brand equity in sports organizations and proposing a model who helps the sports agent to understand and up to valuing the brand of the entity that it manages. Keywords: Brand equity, measurement model, sport organizations, sport customer equity. JEL Code: M31, M30, L83. Villarejo-Ramos, Ángel F. y Martín-Velicia, Félix A. (2007). ”A proposed model for measuring the brand equity in sports organizations”. EsicMarket, 123, pp. 63-83. may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations 1. Introduction Nowadays, considering the presence of intangible assets and especially the brand in the strategic plans of organizations is not as unusual as it was a few years ago. The scientific community in the discipline of marketing and the enterprising world understand that managing the brand and knowing its value is a high-priority matter in terms of reaching a competitive advantage. In the world of sport, in which economic interests commonly prevail over other interests of an emotional type, confronting the study of brand equity management in sports organizations seems inevitable. These, after all, are organizations that try to compete in an increasingly lucrative market, and for that reason, they must try to manage and administer their resources in the most efficient way. One of those resources constitutes the brand, the name or emblem of the sport organization. After approaching and understanding the concept of brand equity and its components, we will try to give a particular vision of the importance of the brand in sports organizations, and to propose a model that helps the sports manager to include, understand, and value the brand of the organization that he/she manages. 2. Brand equity in sport organizations Since the brand determines the value of a product by virtue of its name, we can say that in the sport industry the name of the organization or club is constituted by the distinguishing brand of each, and this attributes a greater or smaller value by virtue of the differential effect that its name causes in public opinion. We must understand the brand equity as a concept created and maintained in the mind of the consumer, and therefore, to estimate it, it will be necessary to know and to understand the perceptions of the market in relation to the brands that, in each case (leagues, championships, tournaments, etc.), try to compete. Recent studies, principally North American, show the importance of the brand equity for sports organizations and consider it an excellent [66] 336 07 a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market management tool. Nevertheless, few studies dare to quantify the extent to which an organization’s brand reaches in terms of its notoriety and popularity. Little data exists about merchandise sales. Although the data found was trustworthy and calculable, the real sale of official merchandise constitutes only a portion of the true brand equity and in no case reflects the value of the purely intangible components of the sport organization’s brand equity. 2.1. Components of the brand equity in sport organizations Each of the elements composing the brand equity enumerated by Aaker (1991) represents a value carrier for the product that serves to determine the valuation of a sport organization’s brand in order to conquer, maintain, and create marketing loyalty among its fans. It would not be possible to determine a brand’s value without analyzing all elements of which it is composed: the perceived quality, loyalty towards the brand, recognition of the name, and the images associated with the brand. The perceived quality, understood as the consumer’s subjective judgment of the excellence or superiority of a product (Zeithaml, 1988), allows us to understand the importance of a consumer’s experience. The perception of high quality in a product depends on environmental factors that surround the purchasing situation or the usage itself. One of these aspects for the consumer is the brand of a product as the one that identifies and distinguishes the purchasing situation and guarantees the maintenance of the lived experience. In the sports world, the perceived quality is related to the success of the team–its wins and losses. Perceived quality of experience, developed by the consumer (Farquhar, 1989; Rao and Ruekert, 1994), links a satisfactory experience to the fact to improve or weaken a product’s quality. Successi- ve victories will inform a perception of high quality. On the other hand, as Milne and McDonald (1999) indicate, a team that only wins in one season will be perceived of lower quality than teams with consistent winning records. [67] 337 07 may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations In addition to this experience, we indicated that environmental factors condition the perception. The reputation of a brand name identifying the product (Zeithaml, 1988) translates into the reputation of winning teams that enter any competition as the favourites/projected winners. In our country, who dares to predict winners other than Real Madrid or F.C. Barcelona at the beginning of soccer championships? When speaking of loyalty towards the brand, Aaker (1991) considers that the fidelity is located in the base to maintain satisfied, stable customers, guaranteeing the permanence of the company and the high value of its brand versus the competition. In the case of sports, purchasing behaviours are affected by the intangible attributes of a product-brand versus objective characteristics and price levels more attractive (nobody purchases the season tickets of the rival team just because they cost less). The brands reach a high value by maintaining a high degree of loyalty from their consumers. Some definitions of loyalty towards the brand (Alet i Vilaginés, 1994; Oliver, 1997) are centred in the idea of the link that joining the consumer with the product, measuring the probability of the consumer being attracted by the commercial efforts of the competitor. This idea relates to the concepts of fidelity and brand equity because loyal consumer generally offers more favourable answers towards the product-brand, constituting a guarantee and giving greater manoeuvrability to the mark. Loyalty to the teams is elevated by the strong links that join them, which allows an increased value in the sport organization’s brand and accurate estimations about the sales levels that they will reach in each sporting event. The notoriety of the brand is a consumer’s capacity to recognize and/or to remember the name of the brand. Aaker (1991) speaks of the presence of the name in the consumer’s memory, which serves to recognize and to identify the brand under different conditions. It is therefore, the greater or smaller probability that has a brand name to accede to the thought of a consumer. [68] 338 07 a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market When the access to the mind of the client is easy and immediate, it demonstrates that the brand reaches high recognition levels, and that it can therefore be considered with a high level of notoriety. This serves for consumers to consider in their selection the brands that arrive at their mind with little or no effort. Therefore, the well-known brands suppose a competitive advantage in consumer’s selection. In the sport world there are teams toward which the consumers feel a greater familiarity, and these normally are the more known teams that take advantage of this general knowledge and offer spectacles to the mass media. In our country, teams that obtain significant sport success are less recognized because of a lack of brand notoriety. Who remembers soccer teams like R.C.D. Español or Villarreal, F.C. in spite of their level of play and merit last season? The brand associations that constitute the image contribute in the decision-making process of the consumer, seating the bases for the differentiation, the extension of the name and facilitating a reason to buy (Aaker, 1992). If in addition these associations interact and they are connected to each other, they are forming in the mind of the consumer a framework of sensations and facts that consolidate their image and indirectly increase the notoriety of the brand (Yoo, Donthu and Lee, 2000). The associations reach a higher degree and their power to influence the decision is greater when they are based on previous satisfactory experiences that compose the image transmitted by the brand. This can be fomented by efforts in commercial communication by the company. Upon obtaining an image of a consistent, coherent and solid brand, the company can exercise a certain competitive advantage over the other brands of the market. For the sports organizations, the associations are sustained in symbolic attributes (colours) and experiences lived at the time of going to the spectacle (atmosphere in the seats), which must serve the managers to know and to understand the attributes that define and differentiate their brand. [69] 339 07 may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations 3. Model of measurement of the brand equity in sport organizations Based on the conceptual model that recognizes the multidimensional character of the brand equity, we will attempt at this point to identify the different antecedents that affect the brand equity of sport organizations and suggest the consequences of increasing the value where these organizations act. The proposal of Gladden, Milne and Sutton (1998) will serve as a guide for the elaboration of our model that tries to establish the influence of three groups of specific antecedents of the sports organizations on the components of the brand equity. These have positive consequences on the market that will affect a feedback process for the indicated antecedents (Figure 1). [70] 340 07 Source: Adapted of Gladden, Milne and Sutton (1998) Team antecedents Sucess Trainer Star player Company antecedents Reputation and tradition Atmosphere/show League Market antecedents Coverage Geographic location Competence Fans BRAND EQUITY Quality perceived Brand awareness Brand loyalty Brand image BENEFITS TV broadcastings Product sales/Merchandising Sponsorship Environment Ticket sales/Subscribers Market perception Figure 1. Model of the brand equity in sport organizations a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market As the aforesaid authors indicate, the relation between the benefits of the brand equity and its components is of special importance for the brand management of sports organizations. It specifies a system in which the consequences of the brand equity form a perception of the product. In this case, the brand of the sports organization remains reflected in the mind of the consumer and therefore constitutes the market’s perception of the name of the organization. This perception is the result of the antecedents, those related to the team, the organization or the market, and the four components of the brand equity as well as the benefits derived from it. Because this is of intangible and immaterial character, the market’s experience with the sports organization creates a perception associated with the mark of a team. The model has a cyclical character since, although in principle the antecedents are understood like the marketing effort of the sports organization, those that contribute to create brand equity when affecting on their components, the benefits derived from the management form a perception in the market that serves to increase or to diminish the organization’s brand equity. It is now the moment for knowing with something more details about the different antecedents that affect the brand equity’s components and how this one supposes a series of consequences for the final perception of the sport organization’s brand in the market. 3.1. Team antecedents For the sport organization and the management of the brand equity there is nothing like the success of the team: to obtain titles, championships, to win, to contribute to the formation of more elevated brand equity. The perceived quality of the team is improved when: the sport successes arri- ve, the notoriety reached by means of the support of mass media increases, the levels of loyalty of the fans improve when the team provides “joys” to its fans, and the image of a winning brand is associated to the success and the attitude of the public is also seen improved. [71] 341 07 may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations A high brand equity caused by the sport success supposes increase in the sale of entrances to the matches, increases the number of subscribers, the product sales under the standard of the organization, the possibilities of obtaining sponsorship are seen excessively increased, the cover of mass media is increased and improve the income derived by the static publicity of the stadiums. Although the success usually comes endorsed by the present sport triumphs, the created expectations and history can create brands considered successful. The level reached about the brand equity of a traditionally winning team usually is not seen deteriorated by a mediocre campaign, and the historical results and the expectations to surpass the speed bump, suppose for the fan and the public in general, enough reasons to do not diminish the perceived of brand equity. The second of the antecedents related to the team constitutes the figure of the responsible trainer to guide the sport aims of the organization. A trainer recognized, respected and guaranteed by success in previous seasons supposes for the sport organization an increase in the perceived brand equity. This value is increased by the public cover given by mass media when the hiring of the trainer is materialized and creates in the fans high expectations to achieve sport success. The market of the technical people in charge experiences in the dates previous to the celebration of the championship a special boiling that in each case comes endorsed by the team’s success achieved by the team that each trainer directed in previous seasons. The notoriety of the team that manages to contract the best, honoured trainers it seen increased by the space that the organization obtains in mass media in the days of pre-sea- son. In these cases, the own image of the trainer personifies the image of the team and it transmits to the brand name of the sport organization the associations linked to the trainer’s name. In our country and for the case of professional soccer, the continuity examples that were given in the season 2001/02 two great sport organizations’ brands, like those of Real Madrid and F.C. Barcelona, reward ex-players with trainer positions, and [72] 342 07 a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market this transmits an image of continuity and confidence in the house’s products. The third of the antecedents related to the team is constituted by the presence of star players who arrive at the team surrounded by a strong network, guaranteeing the national and international cover of the fact and results in an increase of the sport organization’s brand equity. If something excelled in the pre-season of football 2001/02 in Spain at a mass media level, it was the signing of the French player Zidane by Real Madrid. The story received so much coverage in summer that the sport newspaper leader in our country, placed in its cover the day of beginning of the league, an impressive holder like this: “We promise not to speak all the time about Zidane”. It is undeniable that the successes achieved by a sportsman and that guarantee their race are used by the organization’s brand managers to influence the created atmosphere and sense of expectancy for the season that begin and for this reason to see increased the originating income of the sales entrances, seasonal tickets and products under the emblem of the brand and the figure of the star player contracted. The yield reached about the sold products related to the figure of the player Ronaldo, last draftee of Real Madrid in the beginning of the season, hardly could be improved by the sport yield of the Brazilian player. 3.2. Organizational antecedents Not only the sport success the team affects the formation of the value of a sport organization’s brand, but other activities of the organizations related to the management and administration of the organization can influence the perception of quality of a brand, the degree of recognition of their name, the level of loyalty shown by the fans and the set of favourable associations linked to the name of the team. Between these antecedents related to the organization we emphasized at the first place the reputation and the tradition of the club that manages the organization’s brand name. A solid reputation in the management and [73] 343 07 may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations tough competitors in the equipment market that want to identify itself with two great brands of sport organizations in our country, in a clear attempt to reinforce its positioning versus the competitor. For the sport organization these extraordinary income suppose the possibility of improving the sport yield acceding to the market of draftees or planning the inferior categories, which in the end supposes for the organization to increase the quality perception which supposes the increase of the brand equity by this way of feedback. On the other hand, the fact that companies of recognized prestige, with brands highly valued in the market, bet economically for the teams serves to transmit the tied associations to its brand towards the sport organization, with which the image of brand of this one is improved and with it, increased the brand equity. The fourth of the benefits that obtains the sport organization’s brand thanks to its high value is the creation of a favourable atmosphere of the experience that the fan lives when it goes to see the match of its team. A team that obtains sport results, trained by a charismatic trainer, with an untiring and loyal fan, supposes for the fan an attractive spectacle that will want to repeat in other occasions since the created expectations are highly positive. On the other hand, to maintain the fans highly participative that it provides atmosphere and sense of expectancy before the matches, supposes for the team to obtain notoriety in mass media, attractiveness for the advertisers and promote the sales of products under the emblem of the organization. Of this form, the perception of the market of the sport club’s brand will be being very favourable and the brand equity perceived by the consumers will be feedback. The last one of the benefits that the sport organization obtains to manage a brand of high value is the increase in the sales of entrances. A brand of high value based on the sport success and the high expectations created in an enormously loyal fan, a reliable trainer and the presence of some player stars, can guarantee the increase in the attendance to the mat- [80] 350 07 a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market ches. The brands highly valued therefore, suppose for the organization the guarantee to obtain high income by the sale of entrances for the matches and seasonal tickets. Sport organizations that traditionally manage brands of high value, and whose social mass practically guarantees the sale of the seats of its sport facilities, use the increase in the brand equity to increase the number of privileged seats (theatre boxes, VIPS zones, etc.) that is why the income are increased without increasing the seats. The greater attendance to the matches provides the creation of a better atmosphere, caused by the organized activities and the enthusiasm of the fans, reason why the brand equity it will be being cyclically increased when affecting one of the antecedents of the brand equity relative to the organization as it is the entertainment plan. 4. Final considerations We have seen the importance that has for the companies to have strong brands, of high value, that allows them to differentiate their supply and to operate a competitive advantage. In the sports world, the people in charge of the sport organizations need to know brand equity, and that is why they can develop the model of measurement of the brand equity in sport organizations that we have exposed previously. In this model it have been described, not only the components of the brand equity like dimensions of the concept, but has set out the different antecedents that we considered affect in favourable way to the conformation of the brand equity in sport organization. We have indicated three groups of antecedents, related to the team, the organization and the market that serve to increase in each case the perception of quality of the organization brand, the degree of loyalty of their fans, the notoriety reached about the name of the team and the image of tied brand to the sport organization. The management of the brand equity implies in the proposed model, the consideration of a series of beneficial consequences for the organiza- [81] 351 07 may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations tion that finds in the high brand equity a higher possibility of obtaining cover in mass media, activities of merchandising, sponsorship, atmosphere in the sport events and sales of entrances for the matches. The model displays a cyclical character that is of enormous interest for the sport managers, since they discover that as a result of the brand equity, the perception that obtains the sport organization in the market, serves to feedback the different antecedents of the brand equity, obtaining at the same time the capacity for improvement as well, the level of each one of its components. References AAKER. D.A. (1991). Managing Brand Equity. Capitalizing on the Value of Brand Name, Ed. Free Press, New York. – (1994). Gestión del valor de la marca. Capitalizar el valor de la marca. Ed. Díaz de Santos, Madrid. – (1992). “The Value of Brand Equity”, Journal of Business Strategy, Vol. 13, nº 4, pp: 27-32. AAKER, J. L. (1997). “Dimensions of Brand Personality”, Journal of Marketing Research, Vol. XXXIV, pp: 347-356. ALET I VILAGINÉS, J. (1994). Marketing Relacional. Cómo obtener clientes leales y rentables. Ed. Gestión 2000, Barcelona. BAUER, H. H.; SAUER, N. E.and SCHMITT, P. (2005). “Customerbased brand equity in the team sport industry: Operationalization and impact on the economic success of sport teams”, European Journal of Marketing, Vol. 39, nº 5/6, pp: 496-515. BROOKS, C.M. (1994). Sports Marketing: Competitive, Business Strategies for Sports. Ed. Prentice-Hall, Englewood Cliffs, New Jersey. BURTON, R. and HOWARD, D. (2000). “Recovery Strategies for Sports Marketers”. Marketing Management, Vol. 9, Spring, pp:42-49. FARQUHAR, P. H. (1989). “Managing Brand Equity”, Marketing Research, september, pp: 24-33. [82] 352 07 a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market GLADDEN, J.; MILNE, GR. and SUTTON, W. (1998). “A Conceptual Framework for Assessing Brand Equity in Division I Athletics”, Journal of Sports Management, Vol. 12, nº 1, pp: 1-19. GREEN, B.C. and MULLER, T.E. (2002). “Positioning and Youth Sport Camp: A Brand-Mapping Exercise”, Sport Management Review, nº 5, pp:179-199. GUILLAUME, L. (1993), “Le capital de marque. Perspectives es éléments d’application dans le domaine des études marketing”, Revue Française du Marketing, Vol. 2-3, nº 142-3, pp: 129-142. GWINNER, K.P. and EATON. J. (1999). “Building Brand Image trough Event Sponsorship: The Role of Image Transfer”, Journal of Advertising, Vol. 28, nº 4, pp: 47-57. JALLEH, G.; DONOVAN, R. J.; GILES-CORTI, B. and COLMAN, D. J. (2002). “Sponsorship: Impact on Brand Awareness and Brand Attitudes”, Social Marketing Quarterly, Vol. VIII, nº 1, pp: 35-45. KAPFERER, J.N. (1997), Strategic Brand Management. Ed. Kogan Page, London. KELLER, K.L. (1993), “Conceptualizing, Measuring and Managing Customer-Based Brand Equity”, Journal of Marketing, Vol. 57, january, pp: 1-22. LEUTHESSER, L. (1988). “Defining, Measuring and Managing Brand Equity: a Conference Summary”, Report, Marketing Science Institute, Cambridge. MERRILEES,B.; GETZ,D. and O’BRIEN, D. (2005). “Marketing stakeholder analysis: Branding the Brisbane Goodwill Games”, European Journal of Marketing, Vol.39, nº 9/10, pp:1060-1081. MILNE, G.R. and MCDONALD, M.A. (1999). Sport Marketing: Managing the Exchange Process. Ed. Jones & Bartlett Publishers, Sudbury, MA. MULLIN, B.J.; HARDY, S. and SUTTON, W.A. (1999). Marketing deportivo. Ed. Paidotribo, Barcelona. OLBERDING, D.J. and JISHA, J. (2005). “`The Flying Pig´: Building Brand Equity in a Major Urban Marathon”, Sport Marketing Quarterly, Vol. 14, nº 3, pp: 191-196. [83] 353 07 may · august 2007 · esic market a proposed model for measuring the brand equity in sports organizations OLIVER, R.L. (1997). Satisfaction: A Behavioral Perspective on the Consumer. Ed. McGraw-Hill, New York. PARKER, R. (2000). “Problems in the Marketing of Spectator Sports”, The Mid-Atlantic Journal of Business, Vol. 36, nº 1, pp: 37-47. PONS,F.; MOURALI, M. and NYECK, S. (2006). “Consumer Orientation Toward Sporting Events: Scale Development and Validation”, Journal of Service Research,Vol.8, nº 3, pp: 276-297. RAO, A.R. and RUEKERT, W. (1994). “Brand Alliances as Signals of Product Quality”, Sloan Management Review, Vol. 36, nº 1, fall, pp: 87-97. RICHARDSON, B. and O’DWYER, E. (2003). “Football Supporters and Football Team Brands: A Study in Consumer Brand Loyalty”, Irish Marketing Review, Vol.16, nº 1, pp: 43-53. ROBINSON, M. J. and MILLER, J. J. (2003). “Assessing the Impact of Bobby Knight in the Brand Equity of the Texas Tech Basketball Program”, Sport Marketing Quarterly, Vol. 12, nº 1, pp: 56-59. ROSS, S. (2006). “A Conceptual Framework for Understanding Spectator- Based Brand Equity”, Journal of Sport Management, Vol.20, nº 1 p:1. ROWLEY, J. (2005). “Brand and Club Alliances: Manchester United and Britannia Building Society”, Management Research News, Vol. 28, nº 8, pp: 55-60. ROY, D. P. and CORNWELL, T. B. (2003). “Brand equity’s influence on responses to event sponsorships / Executive summary”, The Journal of Product and Brand Management, Vol.12, nº 6/7, pp: 377-393. SPEED, R. and THOMPSON, P. (2000). “Determinants of sports sponsorship response”, Academy of Marketing Science. Journal, Vol. 28, nº 2, pp: 226-238. STOTLAR, D.K. (1993). Successful Sport Marketing. Ed. Brown & Benchmark, Madison, WI. UNDERWOOD, R.; BOND, E. and BAER, R. (2001). “Building service brands via social identity: Lessons from the sports marketplace”, Journal of Marketing Theory and Practice, Vol. 9, nº 1, pp:1-13. [84] 354 07 a proposed model for measuring the brand equity in sports organizations may · august 2007 · esic market VILLAREJO RAMOS, A.F. (2002). La medición del valor de marca en el ámbito de la gestión de marketing. Ceade Editorial, Sevilla. YOO, B.; DONTHU, N. and LEE, S. (2000). “An Examination of Selected Marketing Mix Elements and Brand Equity”, Journal of the Academy of Marketing Science, Vol. 28, nº 2, primavera, pp: 195-211. YOON, S.-J. and CHOI, Y.-G (2005). “Determinants of successful sports advertisements: The effects of advertisements: The effects of advertising type, product type and sport model”, Journal of Brand Management, Vol.12, nº 3, pp: 191-205. ZEITHAML, V.A. (1988). “Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence”, Journal of Marketing, Vol. 52, july, pp: 2-22. [85] 355 07