And now, goodbye

And now, goodbye

Consumer response to sponsor exit Julie A. Ruth and Yuliya Strizhakova Rutgers University

While most sponsorship research focuses on the initiation and maintenance of properties and the brands that sponsor them, little is known about how brands fare when they terminate sponsorship relationships. Building on balance theory and attribution theory, we examine contextual characteristics that mitigate negative effects of sponsor exit, including the brand’s motives for sponsorship, sponsorship duration and the number of sponsors supporting the event. The results of two experimental studies show that, although exit generally harms attitudes towards the exiting brand, contextual characteristics along with the consumer’s involvement with the domain of the event shape differential consumer responses to sponsor exit. The findings have implications for sponsorship theory as well as practical implications for sponsored properties and the brands they seek to attract and maintain as sponsors.

Introduction ‘Great is the art of beginning, but greater is the art of ending.’ Henry Wadsworth Longfellow With annual spending at $46 billion worldwide (IEG 2010), sponsorship continues to be an important marketing communications tool (Walliser 2003; Cornwell et al. 2005; Cornwell 2008). Sponsorship is defined as an exchange between a property (e.g. sports, arts, or cultural organisation or event) that receives compensation from a brand that obtains rights to promote their association with the property (Cornwell & Maignan 1998). Much of the academic research on sponsorship focuses on consumer response to initiation and maintenance of sponsorship arrangements between brands and properties (Gwinner & Eaton 1999; Johar & Pham 1999; Ruth & Simonin 2003, 2006; Rifon et al. 2004; Poon & Prendergast 2006; Pope et al. 2009; Herrmann et al. 2011). Yet, all sponsorships end at some point, and sponsor turnover appears to be quite common. For example, recently the 2010 Vancouver Winter Olympics did not have the participation of long-time global sponsors Johnson & Johnson, Manulife Financial and Lenovo Group (Star-Ledger 2010); South African national sponsor Sasol announced it would not renew its sponsorship of South Africa’s Springboks rugby team (Rees 2010); and US regional PNC Bank dropped its 20-year long sponsorship of the Philadelphia Flower Show (Smith 2011). International Journal of Advertising, 31(1), pp. 39–62 © 2012 Advertising Association Published by Warc, www.warc.com DOI: 10.2501/IJA-31-1-39-62

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International Journal of Advertising, 2012, 31(1)

Despite the prominence of sponsorship turnover, limited research examines how consumers view a brand that elects to end its commitment to a sponsorship. For example, Olkken and Tuominen (2006) present a case analysis focused on organisational factors that contribute to the fading over time of a sponsor–property relationship. In a study of consumer memory, Mason and Cochetel (2006) find that sponsor turnover does not necessarily lead to a reduction in awareness for the brand that ends a sponsorship relationship. The scarcity of research on consumer response to sponsorship termination is surprising because, just as consumers’ attitudes and purchase intentions are affected by learning about properties and the brands that sponsor them (Poon & Prendergast 2006; Pope et al. 2009), consumer response to an exiting brand is likely to be influenced by the brand–event breakup and contextual characteristics associated with it. Similar to break-ups in business and personal relationships (Coulter & Ligas 2000; Davis et al. 2003; Rollie & Duck 2006), sponsor departure signals a lack of commitment to the property and is likely to be perceived negatively by consumers. Hence, it is important to investigate whether the decision to sever a sponsorship relationship is viewed negatively by consumers, and to understand contextual characteristics of the brand–event relationship and its break-up that could mitigate the negative effects of sponsor exit. Frequently, press releases and follow-up media reports blatantly state that business-orientated motives are the focus of the sponsorship and the brand’s decision to exit. For example, press reports suggested Bank of America was terminating its sponsorship of the US Olympic Committee unless the deal was ‘restructured to provide a better return’ (Klayman 2009). In other cases, the sponsor’s business motives are downplayed in relation to its goodwill towards the community. For example, when the Professional Golf Association (PGA) announced the departure of software management company CA Technologies, the PGA thanked the firm ‘for its commitment to the World Golf Championships … over the past four years [and for being] a strong part of golf ’s tradition to give back to the communities in which events are played’ (www.pgatour.com). In addition, the duration of brand–event relationships varies, as suggested by the end of the four-year CA-PGA relationship compared to FedEx ending its 21-year relationship with US college football’s Orange Bowl Classic (Ourand et al. 2010). Accordingly, sponsorship duration may also have a bearing on consumer reactions towards the departing brand. Finally, loss of sponsors jeopardises the existence of events and carries a signal of event quality (Ruth & Simonin 2006), and consumers may respond in light of these signals of event viability and quality. The purpose of this research is to address two research questions as follows: (1) ‘Does sponsor exit generate negative attitude change among consumers?’ and (2) ‘What are some characteristics that mitigate possible negative effects on consumer response towards the exiting brand?’ In addressing these questions, we contribute to sponsorship research in three ways. First, we draw on balance theory and attribution theory to understand how consumers perceive a brand and an event that are associated with one another (Dean 2002; Basil & Herr 2006) and the impact of a brand terminating its relationship with an event property, which we refer to as ‘sponsor exit’. Second, we draw on relationship theory and extant sponsorship research to identify three contextual characteristics of brand–event sponsorship that are hypothesised to affect consumer response to a brand’s exit. Two 40

And now, goodbye: Consumer response to sponsor exit

characteristics – sponsor motives and sponsorship duration – are controllable by the sponsor, whereas the third characteristic – number of sponsors (that is, the event’s ‘roster size’) is not controllable by the sponsor but carries signals regarding the event (Ruth & Simonin 2006). Third, because a sponsor’s exit is likely to resonate with those who find the event topic to be of personal interest or relevance, we incorporate consumer involvement with the focal issue, or domain, of the event (Laurent & Kapferer 1985; Mittal 1995) to understand conditions in which consumer response towards the exiting brand will be most affected by contextual characteristics of the brand–event break-up. We present two studies that investigate hypothesised effects of the brand’s motives for sponsorship, sponsorship duration and the event’s roster size, as moderated by consumer involvement with the event domain. The findings have implications for sponsorship theory as well as for brands and sponsorship managers who seek to promote their properties with and through managing brand–event relationships, even as some sponsors exit.

Literature review Balance theory has been an influential foundation for understanding attitude formation and change. Balance theory applies to situations where an individual (A) evaluates the pairing of two entities, such as two other people (B and C) who are in a relationship (Heider 1958; Crandall et al. 2007). Individuals seek balance in their perceptions and attitudes, so that if A likes B and also likes C, balance will be achieved if the relationship between B and C is also positive. Having been applied to sponsorships and cause-related marketing (Dean 2002; Basil & Herr 2006; Parker & Fink 2010), balance theory can provide a foundation for understanding how a consumer (A) will evaluate a brand (B) deciding to end a relationship with a sponsorship property (C). As Heider (1958) notes, ‘If we hear that a person we like has done something we dislike, we are confronted with a disharmonious situation, and there will arise a tendency to change it to a more balanced situation’ (p. 25). Individuals attain balance in their attitudes towards related entities through attributional processes (Heider 1958; Crandall et al. 2007). A brand’s decision to terminate a relationship with a sponsored event is an act that upsets balance in consumers’ perceptions and attitudes. Severing a relationship is generally perceived as a negative act that signals a lack of commitment in business contexts (Alajoutsijärvi et al. 2000; Coulter & Ligas 2000; Harrison 2004) and interpersonal contexts (Davis et al. 2003; Rollie & Duck 2006). Violating the norms and expectations of an ongoing relationship increases doubts and uncertainties, and tends to undermine favourable perceptions towards the partner ending the relationship (Boon & Holmes 1989; Rollie & Duck 2006; Vangelisti 2006). Attributional processes are used by those within and outside of such relationships in making sense of them and reasons for breakups (Rollie & Duck 2006). By application, we expect that sponsor exit is an act that shows a lack of commitment on the part of a brand to the event. Following balance theory, severing a brand–event relationship is an occurrence that creates an inconsistency that consumers are motivated to understand and bring into balance. Because attribution processes require cognitive effort,

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an individual is more (less) likely to engage in attribution and rebalancing efforts when the individual is more (less) involved with or interested in one or more of the entities (Heider 1958; Crandall et al. 2007). Likewise, consumer research suggests that individuals will engage in more processing and effort as their interest or involvement with the issue increases (Laurent & Kapferer 1985; Mittal 1995; Ellen et al. 2006; Grau & Folse 2007). Accordingly, we expect that consumers (A) with different levels of involvement in the event domain will exhibit different tendencies in reconciling their attitudes towards two unbalanced entities – that is, towards the brand (B) ending its sponsorship commitment to an event (C). Following balance and attribution theories, the effect on attitudes and purchase intentions towards the exiting brand will depend on attributions about the break-up. In the following sections, we discuss two contextual characteristics that can be controlled by the exiting sponsor: the brand’s motives for sponsorship and the point in the brand–event relationship when the commitment ends. Drawing on balance and attribution theories, we describe how consumer involvement with the event domain moderates effects of sponsor motives and sponsorship duration on attitudes and purchase intentions towards the exiting brand. We state our hypotheses and test them in Study 1. In Study 2, we develop and test hypotheses on consumer attributions about the event as judged by the event’s roster size, a contextual characteristic that is not controlled by the exiting brand but carries a signal about event quality.

Sponsor motives Research shows that brand motives for sponsorship influence consumer attitudes and purchase intentions through attributional processes. For example, firms and brands usually engage in sponsorships to achieve business-orientated goals, such as generating sales or profits, on the one hand, and to exhibit their goodwill towards communities, on the other hand (Madrigal 2001; Meenaghan 2001; Dean 2002). Although the business side of brand sponsorships is no surprise to consumers, Rifon et al. (2004) find that when altruistic, goodwill motives are salient, consumers make more positive attributions about the brand’s motives and consumer attitudes towards the sponsor are enhanced. Likewise, Ruth and Simonin (2006) observe that consumers hold less favourable attitudes towards sponsors that emphasise their sales versus goodwill motives. In contrast to these research findings, corporations frequently emphasise the loss of sales and profitability as a primary reason for terminating their sponsorship (with the exception of the PGA sponsorship, examples in the introduction emphasised sales motives). Based on prior research, we expect that consumers will hold less favourable attitudes towards exiting brands with more versus less salient sales-orientated sponsorship motives. However, because sponsor exit refers to negative information that needs to be resolved, we hypothesise that consumer involvement (Laurent & Kapferer 1985; Mittal 1995) will moderate the effect of sponsor motives. Because effort is required to resolve the inconsistency (Heider 1958; Crandall et al. 2007) arising from a change in the brand–event relationship, consumers who are involved with the event domain (e.g. arts 42


and crafts) will be more sensitive to a brand’s decision to end support of the event (e.g. an arts and crafts festival) and, hence, will be more attuned to the brand’s motives for sponsorship. As a result, consumers who are more involved with the event domain will have a stronger attitudinal response to sales-orientated motives than consumers who are less involved. Following Madrigal (2001), consumers’ intentions to purchase the brand in the future are expected to follow a pattern similar to brand attitudes. Therefore, we propose: H1:

The negative effect of sales-orientated motives on consumer attitudes (H1a) and purchase intentions (H1b) towards an exiting brand will be stronger (weaker) among consumers who are more (less) involved with the domain of the sponsored event.

Duration of sponsorship relationship As suggested by the information that FedEx would be ending a 21-year relationship with US college football versus CA Technology’s ending a four-year relationship with the PGA, we expect that brand–event sponsorship duration will play a role in consumer response to sponsor exit. In personal relationships, relationship duration is an indicator of partner quality, with longer compared to shorter relationships perceived as stronger, higher quality and involving greater commitment (Swann & Gill 1997; Levin et al. 2006; Dagger et al. 2009). By application in sponsorship, we expect that consumers will perceive a longer versus shorter sponsorship relationship to be one of greater commitment and quality. Crimmins and Horn (1996) suggest that consumers are grateful to sponsors because of the investment and commitment brands make to events. Likewise, Palmatier et al. (2009) find that relationship-building investments made by service personnel (e.g. time, effort) generate feelings of gratitude among customers, which have a positive effect on purchase intentions. Accordingly, a brand in a longer versus shorter sponsorship relationship is likely to be perceived as making a larger commitment and investment to the event. Thus, the negative effect of exit may be attenuated when exiting brands have been longer rather than shorter supporters of a sponsored event. However, balance and attribution theories suggest that consumer attributions about the brand’s commitment are likely to be different among those who are more versus less involved with the event. For example, Mason and Cochetel (2006) suggest that gratitude is greater among consumers who are interested and involved in a sponsored event. As a result, we expect that high-involvement consumers will place greater value on a longer duration (Yeung & Soman 2007) because of perceptions that the brand had made a greater relationship-based commitment and investment in an event of personal relevance. In contrast, for low-involvement consumers, longer commitments to events they do not care much about are less relevant to them, which in turn suggests a weaker effect on brand attitudes. Indeed, sponsorships and cause-related marketing are effective primarily among consumers who are involved with the sponsored events and causes (Varadarajan & Menon 1988; Osterhus 1997; Grau & Folse 2007). Thus, we predict:

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H2:

Consumers who are more (less) involved with the event domain will have less negative attitudes (H2a) and higher purchase intentions (H2b) towards an exiting brand that has been committed to sponsorship for a longer (shorter) period of time.

Study 1 Study 1 was an experiment that used a 2 × 3 × 2 experimental design, where sponsor motives (high versus low sales-orientated motives) and sponsorship duration (one, five or ten years) were between-subjects factors, and general involvement with the event domain was a within-subjects factor. Individuals were recruited through a US internet survey service and paid to participate in a study pertaining to impressions of marketing programmes. Participants (N = 161; 53.4% female; Mage = 51.13 years, sd = 14.82, range 18 to 82 years; residents of all 50 US states) first responded to questions regarding their familiarity and attitudes towards five brands, including the target sponsor brand. After completing a distraction task, they were exposed to a scenario about an arts and crafts festival that was described as an annual sponsored event in ‘your hometown’. Participants were assigned at random to experimental conditions, which were presented via a description and publicity in the form of a newspaper article describing the event and the sponsor’s exit (see the Appendix for two sample stimuli). Following exposure to the stimulus, participants responded to measures of brand attitudes and purchase intentions, followed by manipulation checks, demographics, questions about general involvement with the event domain (i.e. arts and crafts), and a debriefing explaining the fictitious nature of this scenario. We selected Applebee’s Restaurants as the target sponsor because in the US the brand is familiar and its marketing strategies are aimed at creating associations with neighbourhoods and communities (e.g. ‘There’s no place like the neighborhood’ slogan, Applebee’s ‘Neighborhood-Inspired Burgers’; www.applebees.com), which facilitated believability of the scenario about an event in the participant’s community. The stimulus also mentioned that the economy was ‘soft’ for experimental control purposes, since there has been variability in economic conditions across communities recently, which could affect attributions about sponsor exit.

Independent variables Independent variables were sponsor motives, sponsorship duration and involvement with the event domain, which was measured by three 7-point items (e.g. overall interest in, interest in attending and likelihood of attending arts and crafts events; M = 4.95, sd = 1.62, α = 0.96; Mittal 1995). Consistent with past research (Rifon et al. 2004; Ruth & Simonin 2006), high sales-orientated sponsor motives were manipulated by a statement attributed to an Applebee’s manager, indicating a focus on ‘gaining new customers and sales in the communities in which our restaurants are located. Sponsoring … was one way in which we aimed to achieve our business goals. 44


At the current time … we feel our return on investment for the sponsorship is not worth the money.’ In contrast, low sales-orientated motives were reflected by a focus on ‘caring about the communities in which our restaurants are located. Sponsoring … was one way in which we aimed to express our caring. At the current time … we feel we have done our part in supporting the community and showing we care.’ In line with past research on management perspectives of sponsorship (Cornwell et al. 2001), duration was manipulated at short, moderate and long relationship lengths of one, five and ten years.

Dependent variables The primary dependent variables were measured with seven-point items for attitudes towards Applebee’s (unfavourable/favourable, negative/positive, bad/good; M = 3.78, sd = 1.42, α = 0.97) and future patronage likelihood (very unlikely/very likely, impossible/ possible, improbable/probable; M = 4.41, sd = 1.77, α = 0.96).

Manipulation checks Participants were asked about the extent to which the target sponsor exhibited motives to increase sales or support the community. Participants in high sales-orientated motives conditions showed stronger beliefs about sales motives (Mhigh sales = 6.34; ‘When Applebee’s was sponsoring the Arts and Crafts Festival, to what extent was Applebee’s trying to increase its sales’; not at all/very much) than participants randomly assigned to low sales-orientated motives (Mlow sales = 5.88, t (159) = 2.76, p < 0.01). In addition, participants in high sales-orientated motives had lower beliefs about community-orientated motives (Mhigh sales = 4.70; ‘When Applebee’s was sponsoring the Arts and Crafts Festival, to what extent was Applebee’s trying to support the community’; not at all/very much) than participants randomly assigned to low sales-orientated motives conditions (Mlow sales = 5.38; t (159) = -2.65, p < 0.01). Further, as expected, low sales-orientated motives were perceived as more favourable than high sales-orientated motives (Mlow sales = 5.68 versus Mhigh sales = 4.68; t (159) = 4.26, p < 0.001). Beyond our manipulation of high versus low sales-orientated motives, some individuals might have stronger or weaker general beliefs about sponsorship as a profit-driven marketing tool. We measured general perceptions of sponsorships as not geared/geared towards profits (M = 5.68, sd = 1.40), and found no significant differences across high and low sales-orientated motives conditions (t (159) = 1.75, p > 0.05). In addition, participants were asked three questions about length of sponsorship and event quality (‘An event sponsored for one (five, or ten) years would be a good event’; strongly disagree/strongly agree). Responses were more positive about sponsorships that lasted ten years (M = 5.99) compared to five years (M = 5.61, t (161) = 6.91, p < 0.001) and one year (M = 4.58, t (161) = 11.10, p < 0.001). They were also more positive about sponsorships that lasted five years compared to one year (t (161) = 10.33, p < 0.001).

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Analysis To address our first research question, we examined whether the brand’s decision to end its sponsorship had a negative effect on attitudes. Overall, attitudes towards the brand were lower after learning about the sponsor’s exit (M = 5.04 versus M = 3.78, t (161) = 9.68, p < 0.001). Next, we used hierarchical linear regression analyses to test our hypotheses (Aiken & West 1991; Dawson & Richter 2006) because regression analysis is a more powerful tool than analysis of variance for testing continuous moderators (Fitzsimons 2008). Two covariates were included in our model at step 1 because of potential effects on the dependent variables: participants’ prior attitude towards Applebee’s (e.g. Basil & Herr 2006) and general perceptions of sponsorships as geared towards profit. At step 2, we entered main effects for consumer involvement with the event domain, sponsor motives and sponsorship duration. At step 3, we entered two-way interactions and at step 4 we entered the three-way interaction. Following Aiken and West’s (1991) recommendations for testing interaction effects in regression, we mean-centred our continuous moderator (involvement with the event domain). We coded manipulations so that low sales-orientated motives and one-year sponsorship duration received zero values, and high sales-orientated motives and longer sponsorship durations received higher values.

Results of Study 1 First, we examine our hypotheses in relation to attitudes towards the exiting brand (H1a and H2a; see Table 1). The overall model explains about 18% of variance in attitudes. Although the sponsor’s high sales-orientated motives have a significant negative effect (β = –0.18, p < 0.05) on attitudes, the interaction between sales motives and consumer involvement with the event domain was not significant (β = –0.09, p > 0.05). Although the hypothesised interaction effect of H1a is not supported, the main effect of sales motives suggests that both high- and low-involvement consumers are less negative towards an exiting brand that de-emphasises its sales motives. In line with H2a, there is a marginally significant interaction between sponsorship duration and consumer involvement with the event domain (β = 0.14, p < 0.10). Specifically, consumers who are more involved with the event’s domain tend to hold less negative attitudes towards an exiting brand that had been committed to the sponsorship for a longer duration. Consumers who are less involved with the event’s domain tend to be less negative about brands that exit at a shorter duration. The three-way interaction is not significant. In addition, as expected given the stability of attitudes over time, prior attitude towards the exiting brand is a significant covariate (β = 0.35, p < 0.001). Second, we examine our hypotheses in relation to purchase intentions towards the exiting brand (H1b and H2b; see Table 2). The overall model explains about 34% of variance in purchase intentions. Contrary to H1b, there is no significant interaction between the sponsor’s sales motives and involvement with the event domain. However, consistent with H2b, there is a significant interaction between sponsorship duration and involvement (β = 0.15, p < 0.05). Those who are more involved with the event domain express higher 46


Table 1: Study 1 – Effects of sponsor motives, sponsorship duration and involvement on attitudes towards the exiting brand Model 1 Step 1: Covariates Prior attitudes towards the exiting brand Perceptions of profit motive in sponsorships Step 2: Main effects Involvement with the event domain Sponsor’s sales motives Duration of sponsorship Step 3: Two-way interaction effects Involvement × sponsor’s sales motives Involvement × duration Sponsor’s sales motives × duration Step 4: Three-way interaction effects Involvement × sponsor’s sales motives × duration R2 F-value

Model 2

Model 3

β

t-value

β

0.35

4.57***

0.34 –0.03

4.46*** 0.35 –0.43 –0.04

4.61*** –0.55

–0.05

–0.71

–0.07

–0.95

–0.18 0.03

–2.34* 0.36

–0.18 0.04

–2.34* 0.53

–0.09 0.14 –0.01

–1.24 1.80† –0.06

–0.09 0.13 –0.01

–1.18 1.78† –0.04

0.12

1.63 0.18 3.70***

–0.03

–0.34

–0.07 –0.18

–0.87 –2.41*

0.03

0.36

0.14 5.16***

t-value

β

t-value

0.17 3.79***

Note: ***p < 0.001, *p < 0.05, †p < 0.10

Table 2: Study 1 – Effects of sponsor motives, sponsorship duration and involvement on purchase intentions towards the exiting brand Model 1 Step 1: Covariates Prior attitudes towards the exiting brand

Model 2

Model 3

β

t-value

β

t-value

β

t-value

0.58

8.67***

0.58 –0.03

8.62*** –0.47

0.57 –0.03

8.52*** –0.43

0.04 –0.06 0.01

0.59 –0.98 0.14

0.04 –0.07 0.01

0.66 –0.98 0.09

–0.07 0.15 –0.04

–1.11 2.30* –0.66

–0.07 0.15 –0.04

–1.13 2.30* –0.66

Perceptions of profit motives in sponsorships –0.03 –0.41 Step 2: Main effects Involvement with the event domain 0.03 0.45 Sponsor’s sales motives –0.07 –1.05 Duration of sponsorship 0.01 0.17 Step 3: Two-way interaction effects Involvement × sponsor’s sales motives Involvement × duration Sponsor’s sales motives × duration Step 4: Three-way interaction effects Involvement × sponsor’s sales motives × duration R2 0.33 F-value 16.37***

–0.04 0.34 11.32***

–0.54 0.34 10.05***

Note: ***p < 0.001, *p < 0.05

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purchase intentions towards an exiting brand that had been a sponsor for longer versus shorter period of time. An opposite effect holds for less involved consumers: they express higher purchase intentions towards a brand exiting after a shorter versus longer duration (see Figure 1). The three-way interaction is not significant. In addition, as expected, prior brand attitudes account for a significant amount of variance in purchase intentions towards the exiting brand (β = 0.57, p < 0.001). Figure 1: Study 1 – Two-way interaction effect between sponsorship duration and consumer involvement with the event domain on purchase intentions

Purchase intentions towards the exiting brand

2.0

Short sponsorship duration

1.8 1.6

Long sponsorship duration

1.4 1.2 1.0 0.8 0.6 0.4 0.2 0

Low involvement

High involvement

Summary of Study 1 results Study 1 shows that two contextual characteristics of the brand–event sponsorship – the sponsor’s sales motives and sponsorship duration – affect attitudes and purchase intentions towards the exiting brand. Specifically, blatantly stating that the sponsorship no longer meets the brand’s sales goals, as companies frequently do, has negative effects on attitudes towards the exiting brand, regardless of consumer involvement with the event domain. This result suggests that, irrespective of involvement, consumers appear to resolve the imbalance elicited by the break-up by making negative attributions and developing negative attitudes towards a sales-orientated brand that elects to break its ties with a sponsored property. In contrast, prior involvement shapes the way sponsorship duration impacts consumer response to the brand’s exit. Consistent with balance and attribution theories, consumers who are interested in such events express less negative attitudes and intentions to purchase the brand when it had been committed to the sponsorship for a longer (versus shorter) period of time. This result suggests that, for high involvement consumers, sponsorship duration can mitigate to some degree the negative effects associated with the brand’s exit. Involved consumers’ responses are consistent with a rebalancing 48


process that incorporates gratitude for the past commitment to an event they care about. Consumers with low event interest are more likely to patronise an exiting brand that had been committed for a shorter (versus longer) period of time, consistent with a less negative reaction towards the brand’s exit from an event they do not care much about.

Exiting from the company of others In addition to making attributions about the sponsor and its commitment to the event, consumers are likely to make attributions about the event itself in trying to reach balance in their perceptions and attitudes towards brands exiting sponsorships. On the one hand, hearing about a sponsor’s exit may raise uncertainty about event continuation and viability, especially among consumers who are involved with the event domain. On the other hand, there may be concerns about event quality as a possible reason for sponsorship termination, especially among consumers disinterested in the event in the first place. One signal that is sent by event organisers to shape consumer perceptions and attributions about event viability and event quality is the number of event sponsors. Ruth and Simonin (2006) show that, all things being equal, an event with a larger rather than smaller sponsor roster size is perceived by consumers as a higher quality, more desirable event. Accordingly, a relatively large roster size means that the loss of one sponsor is less likely to put event existence in jeopardy, whereas event existence may be in doubt when one sponsor exits from a smaller roster. Ruth and Simonin (2006) further show that the effects of sponsor motives are shaped by roster size. The unique role of being a sole sponsor is valued by consumers, especially if the brand sponsors for goodwill versus sales motives reasons. As sponsors are added to the roster, the difference in effects of sponsors’ motives is attenuated and disappears, demonstrating a moderating effect of roster size on how motives shape consumer response to sponsorship information. We argue that roster size and motives will interact in influencing consumer response, but that the effects of these contextual characteristics will be dependent on consumer involvement with the event domain. Study 1 showed that both high- and low-involvement consumers exhibit sensitivity to the salience of sales-orientated sponsor motives. Thus, we expect that both high- and low-involvement consumers will be affected by roster size and sponsor motives, but in different ways because of differences in attributions regarding event viability versus quality. For consumers highly involved with the event domain, a smaller roster size signals a threat to event viability. Hence, highly involved consumers are expected to resolve the imbalance and be less negative towards a low sales-orientated brand exiting from an event with a larger compared to smaller roster size. Even though we expect exit to elicit negative brand attitudes overall, these consumers are likely to rebalance their perceptions in favour of a sponsor that departs from a personally relevant event supported by a relatively large number of sponsors. We hypothesise: H3:

In conditions of high involvement with the event domain, consumers will have less (more) negative attitudes (H3a) and higher (lower) purchase intentions 49


(H3b) towards low sales-orientated brands that exit from an event with a larger (smaller) roster size. In contrast, low-involvement consumers do not find the exit of a low sales-orientated sponsor to be threatening because these consumers are less concerned with the possible loss of the event. When an exiting brand restates its goodwill towards the community and event quality appears to be poor through the signal associated with a smaller roster size, low-involvement consumers are expected to reach balance in their brand–event relationships by making more positive attributions about the brand exiting a low-quality event. While we expect exit to elicit negative attitudes overall, we hypothesise: H4:

In conditions of low involvement with the event domain, consumers will have less (more) negative attitudes (H4a) and higher (lower) purchase intentions (H4b) towards low sales-orientated brands that exit from an event with a smaller (larger) roster size.

Study 2 Utilising a similar procedure, Study 2 was a 2 × 2 × 2 experiment, where sponsor motives (high versus low sales-orientated motives) and roster size (two or five sponsors) were between-subjects factors, and general involvement with the event domain was a betweensubjects factor (N = 92; 58.7% female; Mage = 49.63 years, sd = 16.52, range = 18 to 84 years; residents of all 50 U.S. states). Those who participated in Study 1 were excluded from participation in Study 2. Like Study 1, the scenario described Applebee’s terminating its relationship with an arts and crafts festival. In Study 2, we coupled publicity and an ad in which sponsors were thanked for their past support at the same time the exit of the target sponsor was announced, following the example of the departure of CA Technologies as a sponsor of the PGA event. To examine the impact of sponsor motives, roster size and involvement, we controlled sponsorship duration at a moderate level of five years.

Independent variables Motives were manipulated (M = 4.93, SD = 1.91, a = 0.96) and involvement in the event domain was measured (M = 4.77, SD = 1.83, a = 0.97). Following Ruth and Simonin (2006), roster size was manipulated by Applebee’s plus one sponsor or four sponsors so that the property would still have at least one sponsor after the target’s exit. Roster size was manipulated by noting in the introductory material that the advertising manager would be inserting logos from the remaining sponsors. Participants were informed that ‘dotted circles show where those logos will be placed in the ad’. This design element ensured a relatively pure manipulation of number of sponsors. Using real or fictitious brands as co-sponsors could result in each ad being different not only in number but also brands and associated effects due to brand familiarity, image or liking. For the analysis, we coded manipulations so that low sales motives and smaller roster size received zero values, and high sales motives and the larger roster size received values of one. 50


Dependent variables Similar to Study 1, dependent variables were attitudes towards the exiting brand (M = 4.69, sd = 1.56, a = 0.97) and purchase intentions (M = 4.96, sd = 1.74, a = 0.98).

Manipulation checks Participants in high sales-orientated motives conditions showed stronger beliefs about high sales-orientated motives (M = 5.85) than participants randomly assigned to low sales-orientated motives conditions (M = 5.37, t (90) = 2.01, p < 0.05). However, there was no significant difference in the favourability of low versus high sales motives (t (90) = 0.36, p > 0.05). Additionally, there was no significant difference in perceptions of sponsorships as geared towards profits across low and high sales motives conditions (M = 5.61, SD = 1.24; t (90) = 1.87, p > 0.05). All respondents correctly identified whether the event was sponsored by two or five brands. Also, respondents perceived that an event with five sponsors would be of a better quality (M = 5.64; ‘An event sponsored by five companies would be a good event’; strongly disagree/strongly agree) than an event with two sponsors (M = 5.15; ‘An event sponsored by two companies would be a good event’; strongly disagree/strongly agree; t (90) = 5.39, p < 0.001).

Analysis and results of Study 2 Similar to Study 1, attitudes were lower after learning about the brand’s exit from sponsorship (M = 5.23 versus M = 4.69, t (91) = 3.55, p < 0.001). We ran hierarchical linear regression analyses that included two covariates. Our models explained about 28% of variance in attitudes and 49% of variance in purchase intentions towards the exiting brand. In relation to brand attitudes (H3a and H4a; see Table 3), we observe a significant three-way interaction of involvement, sales motives and roster size (β = –0.39, p < 0.05). To interpret the three-way interaction, we used procedures recommended by Dawson and Richter (2006) and estimated t-tests for slope differences (see http://www.jeremydawson. co.uk/slopes.htm) regarding specific interactions (see Figure 2). Consistent with H3a (see (1) and (3) slope difference test in Figure 2), when there is a larger roster size, consumers who are more (less) involved with the event domain have less negative attitudes towards an exiting brand with low (high) sales motives. Consistent with H4a (see (2) and (4) slope difference test in Figure 2), when there is a smaller roster size, consumers who are less (more) involved with the event domain are less negative about brands with low (high) sales motives. In addition (see (1) and (2) slope difference test in Figure 2), when a brand is associated with high sales motives, consumers who are more (less) involved are less negative about brands exiting from an event with a smaller (larger) roster size. Overall, when the exiting brand states low sales motives, high-involvement consumers respond less negatively when there is a larger roster size (consistent with H3a), whereas low-involvement consumers respond more favourably when there is a smaller roster size (consistent with H4a). Additionally, high-involvement consumers are less negative about

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exiting brands with high sales motives exiting from an event with a smaller roster size. Similar to Study 1, prior attitude towards Applebee’s has a significant positive effect on attitudes towards the exiting brand (β = 0.50, p < 0.001). Table 3: Study 2 – Effects of sponsor motives, roster size and involvement on attitudes towards the exiting brand Model 1 β

t-value

0.51

5.30***

0.01

0.01

0.09 –0.08 –0.01

0.89 –0.84 –0.04

Step 1: Covariates Prior attitudes towards the exiting brand Perceptions of profit motives of sponsorship Step 2: Main effects Involvement with the event domain Sponsor’s sales motives Roster size Step 3: Two-way interaction effects Involvement × sponsor’s sales motives Involvement × roster size Sponsor’s sales motives × roster size Step 4: Three-way interaction effects Involvement × sponsor’s sales motives × roster size R2 F-value

Model 2 β

Model 3 β

t-value

0.50 –0.03

5.38*** –0.32

1.87† 0.01 0.50

0.11 –0.03 0.07

0.58 –0.22 0.53

–0.10 –0.74 –0.22 –1.74† –0.11 –0.72

0.18 0.06 –0.11

1.09 0.35 –0.73

t-value

0.51 5.30*** –0.04 –0.42 0.31 0.00 0.07

0.23 6.46***

0.24 4.53***

–0.39 –2.55* 0.28 5.02***

Note: ***p < 0.001, *p < 0.05, †p < 0.10

Figure 2 – Study 2: Three-way interaction effect on attitudes towards the exiting brand (1) High sales motive, large roster size (2) High sales motive, small roster size (3) Low sales motive, large roster size (4) Low sales motive, small roster size Attitude towards the exiting brand

5

52

Slope difference tests:

4 3 2

Pair of slopes

1

(1) and (2) (1) and (3) (1) and (4) (2) and (3) (2) and (4) (3) and (4)

0 –1 –2

Low involvement

High involvement

t-value for slope difference

p-value for slope difference

–3.110 –2.332 1.003 1.011 2.172 1.826

0.003 0.022 0.319 0.315 0.033 0.072


In relation to purchase intentions (see Table 4), we also observe a significant three-way interaction between involvement, sales motives and roster size (β = –0.44, p < 0.01). As shown in Figure 3, the three-way interaction on purchase intentions mirrors the pattern Table 4: Study 2 – Effects of sponsor motives, roster size and involvement on purchase intentions towards the exiting brand Model 1 Step 1: Covariates Prior attitudes towards the exiting brand

Model 2

Model 3

β

t-value

β

0.60

6.90***

0.60 –0.18

6.84*** 0.59 –1.94† –0.17

7.07*** –1.91†

0.36 –0.09 0.07

2.38* –0.77 0.60

0.13 –0.13 0.07

0.79 –1.10 0.65

–0.18 –0.13 –0.05

–1.51 –1.15 –0.34

0.14 0.18 –0.05

0.91 1.24 –0.33

Perceptions of profit motive of sponsorship –0.13 –1.46 Step 2: Main effects Involvement with the event domain 0.14 1.62 Sponsor’s sales motives –0.14 –1.56 Roster size 0.04 0.45 Step 3: Two-way interaction effects Involvement × sponsor’s sales motives Involvement × roster size Sponsor’s sales motives × roster size Step 4: Three-way interaction effects Involvement × sponsor’s sales motives × roster size R2 0.40 F-value 11.36***

β

t-value

0.42 7.52***

t-value

–0.44 –3.24** 0.49 8.61***

Note: ***p < 0.001, **p < 0.01, *p < 0.05, †p < 0.10

Purchase intentions towards the exiting brand

Figure 3: Study 2 – Three-way interaction effect on purchase intentions

(1) High sales motive, large roster size (2) High sales motive, small roster size (3) Low sales motive, large roster size (4) Low sales motive, small roster size 5

Slope difference tests:

4 3 2

Pair of slopes

1

(1) and (2) (1) and (3) (1) and (4) (2) and (3) (2) and (4) (3) and (4)

0 –1 –2

Low involvement

High involvement

t-value for slope difference

p-value for slope difference

–3.217 –3.465 1.438 –0.014 2.548 2.662

0.002 0.001 0.154 0.989 0.013 0.009

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on attitudes towards the exiting brand. Overall and consistent with H3b, when an exiting brand states low sales motives, consumers who are more involved with the event domain express higher purchase intentions towards a brand exiting from a larger roster (see (1) and (3) slope difference test and (3) and (4) slope difference test in Figure 3). In contrast and consistent with H4b, low-involvement consumers express higher purchase intentions when a low sales motive brand is exiting from a smaller roster size event (see (2) and (4) slope difference tests). In addition and consistent with our findings in relation to attitudes, high-involvement consumers also express high purchase intentions towards sales-orientated brands exiting from an event with a smaller roster. Prior brand attitude has a significant positive effect on purchase intentions towards the exiting brand (β = 0.59, p < 0.001), and a general perception of profit motives for sponsorships has a marginally significant negative effect on purchase intentions (β = –0.17, p < 0.10).

Summary of Study 2 results In Study 2, our goal was to assess the effects of roster size on consumer response when event organisers thank sponsors for their prior commitment to the event and exit occurs at a moderate level of sponsorship duration. A smaller compared to larger roster size signals a threat to event existence, on the one hand, and poor event quality, on the other hand. In such circumstances, high versus low-involvement consumers appears to make different attributions about roster size, emphasising and drawing on one of the two signals. Specifically, uninvolved consumers do not care much about event existence because it does not resonate with their general interests. Hence, roster size carries only the signal of poor event quality to uninvolved consumers, and they resolve the imbalance by drawing on negative attributions about the event. In contrast, high-involvement consumers attain balance and favour a low sales-orientated brand making an exit from a high-quality event that is likely to continue through the support of a large number of sponsors. Hence, highinvolvement consumers emphasise importance of event continuation in making positive attributions about exiting sponsors. Interestingly, when high-involvement consumers make attributions about poor event quality as projected by a smaller roster size, they attain balance in their perceptions of the brand and event when the brand states its high (versus low) sales-orientated motives. In other words, involved consumers appear to resolve the imbalance by either drawing positive attributions about the sponsor and the event or by drawing negative attributions about the sponsor and the event.

Discussion All sponsorships end at some point; yet, the impact of a brand’s exit as a sponsor has received scant research attention. Similar to business and personal relationships, severing a relationship with an event signals a lack of commitment on the part of the brand. Across two studies, the findings address our first research question and show that severing a sponsorship relationship elicits negative effects on attitudes towards the exiting brand. Not only important during economic downturns, when financial pressures might provide 54


a credible reason for termination, sponsor motives and other contextual characteristics of the relationship and break-up mitigate such negative effects. Drawing upon balance and attribution theories, we examine effects on consumer attitudes and purchase intentions towards the exiting brand when either publicity (Study 1) or publicity and an ad from event organisers (Study 2) announce the end of the brand– event relationship. To address our second research question regarding contextual characteristics that might mitigate the negative effects of exit, we focus on the sponsor’s motives and sponsorship duration because these characteristics can be controlled by the sponsor and adjusted to minimise negative effects of exit. Roster size, on the other hand, is not directly controlled by the sponsor but carries important signals about the event and should be taken into consideration when exiting. As suggested by the pattern of results across the two studies, we find that exit not only has a negative effect on the departing brand overall, but that exit has the potential for differential effects on consumers who are more, compared to less interested and involved with the event domain.

Summary of findings The pattern of results suggests that exiting brands should be careful in how and when they announce the decision to exit a sponsorship relationship. First, although it appears that sponsors frequently justify their decision to end a sponsorship by their loss of sales or profits, our findings show that a blatant emphasis on sales-orientated motives in corporate PR and media reports has a negative effect on consumer attitudes towards the exiting brand. Companies engage in sponsorships for an array of reasons and although consumers understand that for-profit firms have business-related concerns, consumers are open to seeing the goodwill side of companies, not just in cause-related marketing programmes (Brønn & Vrioni 2001) but also sponsorships. As a result, brand managers should be aware that the negative effects of sponsor exit can be mitigated and managed better when sales-orientated motives of sponsorships are de-emphasised and consumers believe the brand’s actions are centred on community and goodwill. Second, although consumers prefer events that have been in place for a longer rather than shorter period of time, involvement with the event domain plays a role in how consumers resolve the imbalance elicited by a brand ending its sponsorship commitment. Consumers who are involved with the event appear to exhibit responses that are consistent with gratitude for longer commitment and investment; the negative effect of exit is not as strong when the brand exits after a longer duration of sponsorship. Hence, if a brand commits to a sponsorship and wants to build its reputation among event enthusiasts, it should make long-term sponsorship plans and contemplate exit only after proving its commitment through time. In contrast, the negative effect of exit is mitigated when low-involvement consumers learn about a brand exiting at a shorter rather than longer duration of sponsorship. We speculate that short sponsorship duration resonates well with these consumers’ lack of interest in the event domain in the first place. Third, Study 2 shows that negative effects of exit are not fully mitigated by event organisers thanking sponsors, including the exiting one, through an ad. Our findings

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suggest that when such ads accompany media reports about sponsor turnover, response to an exiting brand is contingent on consumer involvement in the event, salience of sales-orientated motives, and number of event sponsors. Consistent with balance and attribution theories, consumers who are more compared to less involved have different perceptions and attributions about the sponsor based on the context of the break-up, and appear to reconcile the imbalance differently. If the brand wants to fare well with highinvolvement consumers, the results suggest that brands should de-emphasise sales motives when they exit from the company of many sponsors, and should emphasise sales motives when exiting from a small roster. In contrast, low-involvement consumers are more positive about the exiting brand when they can judge its intentions favourably, and low-quality perceptions of the event (as attributed to small roster size) resonate well with their own lack of interest in the event.

Future research Balance, attribution and relationship theories are useful foundations for understanding consumer response to sponsor exit and for theory-building extensions to other sponsorship audiences and attitude objects. With respect to audiences, Walliser (2003) suggests that, in addition to consumer-focused research, attention should be allocated to other sponsorship stakeholders such as employees. Just as ‘the integration of personnel at all stages of … sponsorship could possibly lead to spectacular results concerning employee morale’ (Walliser 2003, p. 21), it is also not difficult to envision harm to employee morale due to terminating a sponsorship. As Gilly and Wolfinbarger (1998) suggest with respect to employees as advertising’s most important audience, sponsorship may also entail employees aiming to cultivate relationships with prospects and customers, build camaraderie with co-workers, and build the firm’s capacities and programmes (see Stokes 2005; Olkkonen & Tuominen 2006). When ties with a sponsorship property are severed, employees who have invested time and energy in building up external and internal relationships and capabilities may feel hurt. As a result, organisational pride and commitment may suffer (Gilly & Wolfinbarger 1998). It may be possible that articulation (Cornwell 2008; Pope et al. 2009) of the firm’s motives, the duration of the sponsorship relationship, and number of remaining sponsors would affect not only consumer response but also employee morale when the firm exits a sponsorship relationship. Likewise, while our focus was on consumer response towards the exiting brand, exit may affect attitudes towards properties, which are also valuable brands that must be managed. Whereas extant research tends to focus on how brands can leverage sponsorship associations (Cornwell 2008; Pope et al. 2009), future research might address how properties can leverage these same associations. For example, perhaps impressions of properties are affected by duration of property-sponsor relationships and roster size that remains after one or more sponsors exit. Future research could also explore whether some effects of sponsor exit occur below a conscious level. Herrmann et al. (2011) found that memory for sponsors is not entirely accounted for through explicit measures. For example, they found that even when a brand 56


is not recognised as an event sponsor, consumers exposed (vs not exposed) to a sponsor are more likely to include the brand in their consideration set. Similarly, it is possible that implicit measures would detect some attitudinal effects of sponsor exit that are not accessed by explicit measures. Future research can also address some limitations of our studies. Information about sponsorships can be articulated through advertising, publicity, promotional tie-ins and other marketing communications tools. In Study 2, we utilised two of these tools but found that the manipulation of sales-orientated motives was relatively weak, possibly because the combination of an ad and publicity created a mixed message. To better understand sponsor exit, the combination of (positive or negative) publicity and (positive) advertising deserves additional study. In addition, alternative strategies to de-emphasise sales-orientated motives should be investigated. In our studies, consumer perceptions of sales-orientated motives were still relatively high in the low sales-orientated motives condition, and future research should examine specific wording and imagery that can further affect consumer beliefs about motives. In light of relatively high sales-orientated beliefs about sponsorships, future research could examine whether switching the focus from the sponsor’s motives to future charity work or new sponsorships could be better strategies for exiting brands than an emphasis on their past goodwill towards communities. Also, we acknowledge that directly accessing consumers’ attributional processes would offer theoretical insights. Finally, research attention should be given to the special case of a sole sponsor making a decision to exit. Although we believe that consumers will make negative attributions to a sponsor that exits when no sponsors remain, thus imperilling the viability of the property, this remains an issue for future research.

Appendix: Sample stimuli (Study 1) Stimulus A: Sponsorship length of one year/low sales-orientated motives In the fall, there is an Arts and Crafts Festival in your hometown. The festival has been sponsored by Applebee’s, a national restaurant chain that emphasises a strong connection to local communities. Indeed, their current advertising slogan is ‘there’s no place like the neighborhood.’ Applebee’s has been the sole sponsor of the Arts and Crafts Festival for one year. However, they have recently announced their decision to terminate their sponsorship. Here is a newspaper clip from your local newspaper about this sponsorship break-up. APPLEBEE’S WITHDRAWS FROM SPONSORING ARTS & CRAFTS FESTIVAL Oct 12, 2010 – With leaves turning yellow and red, everyone looks forward to our annual Arts & Crafts Festival. This year the event is in jeopardy because the sole sponsor, Applebee’s, has terminated the sponsorship. In an interview with our newspaper, Applebee’s regional manager Pat Brooks said: ‘We have a focus on caring about the communities in which our restaurants are located. Sponsoring the Arts & Crafts Festival was one way in which we aimed to express our caring. At the

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current time of economic uncertainty, we feel we have done our part in supporting the community and showing we care.’ Festival organisers are actively seeking a new sponsor. At this point, however, it is unclear if they will succeed or if the event will be cancelled.

Stimulus B: Sponsorship length of ten years/high sales-orientated motives In the fall, there is an Arts and Crafts Festival in your hometown. The festival has been sponsored by Applebee’s, a national restaurant chain that emphasises a strong connection to local communities. Indeed, their current advertising slogan is ‘there’s no place like the neighborhood.’ Applebee’s has been the sole sponsor of the Arts and Crafts Festival for ten years. However, they have recently announced their decision to terminate their sponsorship. Here is a newspaper clip from your local newspaper about this sponsorship break-up. APPLEBEE’S WITHDRAWS FROM SPONSORING ARTS & CRAFTS FESTIVAL Oct 12, 2010 – With leaves turning yellow and red, everyone looks forward to our annual Arts & Crafts Festival. This year the event is in jeopardy because the sole sponsor, Applebee’s, has terminated the sponsorship. In the interview to our newspaper, Applebee’s regional manager Pat Brooks said: ‘We have a focus on gaining new customers and sales in the communities in which our restaurants are located. Sponsoring the Arts & Crafts Festival was one way in which we aimed to achieve our business goals. At the current time of economic uncertainty, we feel our return on investment for the sponsorship is not worth the money.’ Festival organisers are actively seeking a new sponsor. At this point, however, it is unclear if they will succeed or if the event will be cancelled.

Sample stimuli: sponsor low sales-orientated motives/small roster size (Study 2) In the fall, there is an Arts and Crafts Festival in your hometown. The festival has been sponsored by Applebee’s, a national restaurant chain that emphasises a strong connection to local communities. Indeed, their current advertising slogan is ‘there’s no place like the neighborhood’. Applebee’s has been a sponsor of the Arts and Crafts Festival for five years. However, they have recently announced their decision to terminate their sponsorship. Applebee’s regional manager Pat Brooks said in an interview to a local newspaper: ’We have a focus on caring about the communities in which our restaurants are located. Sponsoring the Arts & Crafts Festival was one way in which we aimed to express our caring. At the current time of economic uncertainty, and after five years, we feel we have done our part in supporting the community and showing we care.’ At this point, Festival organisers are preparing an ad for the upcoming Arts & Crafts Festival in which they plan to thank sponsors for supporting last year’s Festival. Please take a moment to look at this ad on the next page. 58


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About the authors Julie A. Ruth is an associate professor of marketing at the School of Business, Rutgers University in Camden, NJ. She received her PhD from the University of Michigan. Current research interests include brand alliances, sponsorship, consumer relationships and poor consumers. Her research has been published in the Journal of Marketing Research, Journal of Consumer Research, Journal of Marketing, Journal of Advertising and elsewhere. Yuliya Strizhakova is an assistant professor of marketing at the School of Business, Rutgers University in Camden, NJ. She received her PhD from the University of Connecticut. Her research focuses on branding in the global marketplace, sponsorships and service failures. Her research has been published in the International Journal of Research in Marketing, Journal of International Marketing and elsewhere. Address correspondence to: Julie A. Ruth, Associate Professor, School of Business, Rutgers University, 227 Penn Street, Camden, NJ, USA. Email: [email protected]

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