Critically discuss the importance of corporate sponsorship in the Essay

Critically discuss the importance of corporate sponsorship in the event Industry - Essay Example Sponsorship is not only a tool to help a marketer reach new audiences, but also a marketing technique to enhance brand image. This paper explains the conceptual frameworks and theoretical underpinning of corporate sponsorship in the event industry and illustrates its importance in modern marketing situations. Corporate sponsorship and its significance in today’s marketing environment will be examined with a view to recognize why many companies are spending huge amounts in sponsoring events. Corporate Sponsorship Keillor (2007, P. 242) defined sponsorship as cash or in-kind fee that is paid to a property such as a sports event, entertainment, non-profit event, organization etc in return for accessing to the exploitable commercial opportunities associated with that property. More specifically, a company may sponsor all or a part of the expenditures of sports or other types of events in return to advertise the company. Event sponsorship include athletic events, tennis or golf tou rnament, college or university games and sports, Olympics, art and cultural program, entertainment and festivals etc. Sponsorship is more useful in reminding the public about the product or service or their features, rather than informing or persuading them towards the business. Keillor (2007, P. 242) also pointed that sponsorship involves a fee paid in advance for future potential communication values, but advertising offers a more knowable and more controlled communication. As compared to advertising and sales promotion, that are the major two components of IMC, sponsorship is small, but expenditures on corporate sponsorship is increasing, mainly because many companies are finding the results they expected from the sponsorship. As Shimp (2008, P. 563) observed, brand marketers were estimated to spend $ 40 billion on event sponsorships in 2008. US marketers alone spent approximately $ 15 billion sponsoring in 2008. In 2009, the International Events Group Sponsorship Report estimate d that sponsorship expenditures as $ 45.2 billion (Donovan and Henley, 2010, p. 364). Worldwide expenditures on sponsorship have been increasing for last many years mainly due to that many large companies have found it to be an effective marketing strategy for better communicating the brand messages. Sponsorships: worth the money spent? One of the major criticisms is that sponsorship is merely a money waste. Shimp (2008, p. 567) argued that sponsorship is an enormous money waste and a drain on the marketing budget without well planned, structured and well thought business case as well as financial plan. Often, the expenditures spent on sponsorships with a view to build brand loyalty seems not worth. Many critics also argued that sponsorship arrangement involve little more than managerial or corporate ego trips. Many businesses go for sponsoring sports or other events with a view to meet famous athletes, gain great and luxurious accommodation etc. Sponsorship and expenditures pent fo r it can be justified from the marketing view point if there is a proof that brand equity as targeted could be achieved and financial objectives were met as planned. Sponsorship may not be an effective brand communication strategy for a start up business, small scale marketer, newly launched business etc, since these marketers are not already established, but sponsorship