JM Week 6 Assignment_ Contemporary Sports Marketing Issues

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Week 6 Assignment: Contemporary Sports Marketing Issues Joan Martinez American Public University November 12, 2023

Topic It goes without saying that businesses support athletes, teams, stadiums, and other entities in the sports world. However, when a business accepts a sponsorship, what happens to its stock market values, and how does Wall Street respond to these developments? Carmen Abril, Joaquin Sanchez, and Teresa Recio chose to investigate just this topic in their paper titled "How Does Wall Street React to Global Sports Sponsorship Announcements?" An examination of the impact on the stock market prices of the sponsoring companies. The overall impact on an organization's stock market value over a ten-year period following the announcement of a global sports sponsorship is examined in this study. Throughout the course of the ten years, it examines sports research disputes in international sporting events as well as ways to increase shareholder wealth through announcements of global sports sponsorship. It was discovered that investors are appreciative of sponsorship announcements when they are made initially, but that appreciation wanes with time.The findings also showed that when a sponsorship showed national and functional congruence between the business and the customer, investors were more likely to respond favorably. Here, "national congruence" means that the sponsor is from the same country as the organization, and "functional congruence" means that the sponsor's products are really utilized in the field. Analysis Because a company's marketing initiatives directly affect sales impact and market share, this piece is crucial to sports marketing. A company's brand image is likely to be more positive when it is performing well on Wall Street since it is evident to the public that the business is significant.The FIFA World Cup, the Olympic Games, and the EFA European Soccer Championship were among the sporting events examined in this study. All sponsorships for these

events had a positive impact on a company's stock price, which in turn had a positive impact on their marketing initiatives because sponsorship is a marketing tool. Sports events like the America's Cup, which are thought of as more exclusive or costly events, have a detrimental effect on stock market values and are thus not a wise choice for marketing purposes. Not to add that two thirds of all estimated sponsorship investments made worldwide go into sports sponsorship, making it one of the largest sponsorship accounts. Because sponsorships raise brand awareness, businesses most frequently sign them in order to acquire a competitive edge over other businesses. Because of this, sponsorships can increase brand recognition, enhance the overall perception of the company, and foster client loyalty. Using Pepsi Co. as an example, we can see how well-versed the company is in sports marketing and how it can contribute significantly to the sports experience. Pepsico,the name is familiar to consumers from stadiums and fields, but the company uses sponsorships as a major component of its marketing mix and prioritizes them throughout the year. According to Jenny Storms, senior vice president of Pepsi, the company works closely with sports groups from the start to understand how to give customers the greatest possible experience.In general, there was no evidence of author bias in the main paper. It was evident that all three writers valued the earlier research but were prepared to build on it in order to support more investigation. I believe that understanding how investors and stock market prices impact an organization's overall image will be helpful to the marketing mix as a whole; the more knowledge, the more of an impact it will have on firms. The Impact Sports sponsorships are difficult to quantify, and many researchers have given up on the subject since long-term effects and outcomes are elusive and can take a very long time to

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materialize. Furthermore, it might be challenging to determine precisely which factors commercial activity, competition, and other market shifts are influencing revenues. Furthermore, stock prices don't necessarily reflect the instantaneous reactions of investors to a brand's actions. Although scholars frequently believe that a positive perception of sponsorships would lead to an increase in stock price, findings indicate that this is a contentious claim, as an increasing number of recent studies reveal that investors regard sponsorships negatively. The authors discovered that the greatest advantage for businesses thinking about sponsorship agreements is to clarify the expectations with the shareholders before entering into the agreement. A study like this one helps shape the future of sports marketing because it establishes additional factors that businesses may examine in addition to the functional and national congruence criteria that have already been studied when considering sponsorship agreements. Businesses might all learn from Pepsi, which discovered that understanding the business of their partners is essential to successful marketing. The same may be said about understanding stock market prices and how investors react to them; if they put more effort into getting to know their investors, they will be able to collaborate with them more effectively before signing sponsorship agreements. References Abril, C., Sanchez, J., & Recio, T. (2018, September 1). How does wall street react to global sports sponsorship announcements? . the Journal of Advertising Research. https://www.journalofadvertisingresearch.com/content/58/3/297

Sozzi: Pepsi’s Sports Marketing Magic, uncovered - thestreet. (n.d.). https://www.thestreet.com/opinion/sozzi-pepsis-sports-marketing-magic-uncovered- 12671982 Team, T. I. (n.d.). How do brand image and marketing affect market share? . Investopedia. https://www.investopedia.com/ask/answers/032615/how-does-brand-image-and- marketing-affect-market-share.asp

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