Understanding brand loyalty in professional sport: examining the link between brand associations and brand loyalty. (Research Paper).(sports marketing research)(Statistical Data Included)

Abstract: This paper examines the relationship between brand associations (anything in the consumer's mind linked to a specific team brand,) and brand loyalty in US professional sport. To study the relationship between 13 brand association dimensions and brand loyalty, a survey of professional sport consumers was completed (N = 929). Results of multiple regression analysis revealed positive relationships between fan identification, escape, nostalgia, and product delivery, and brand loyalty Negative relationships were found between tradition, star players, and peer group acceptance, and brand loyalty.

Keywords: Brand management, Brand loyalty, Professional sport

Executive Summary

This research broadens the understanding of brand management in professional sport by examining the relationship between brand associations (anything in the consumer's mind linked to a specific brand) and brand loyalty. Specifically, this study utilized Keller's (1993) conceptual framework on brand equity to identify dimensions of brand association in sport. Thirteen different factors were identified as potential brand association dimensions in sport. To study the relationship between these brand dimensions and brand loyalty, a survey of US professional sport consumers was completed (N=929). Data were collected from respondents that allowed for the creation of a brand loyalty measure that accounted for both behavioral loyalty (the propensity to repeatedly attend a team's games or follow the team through the media) and attitudinal loyalty (possessing a consistently favorable attitude toward the team). Information was collected such that this study focused on fans that were already highly committed to a particular team.

Multiple regression analysis was used to examine the relationship between brand associations and brand loyalty. Results demonstrated that seven of the 13 brand association dimensions were significant predictors (four positively related and three negatively related) of brand loyalty among the highly-committed fans involved in this study. In identifying these relationships, this study begins to provide a deeper understanding as to what aspects of the team brand can be focal points when creating marketing strategies geared toward highly- loyal fans. Interestingly, team success was not significantly related to brand loyalty among highly-committed fans. This finding is consistent with both other research and with the notion that brand-loyal fans will provide a stable stream of revenue, regardless of the team's performance. However, fan identification (the ability of a team to provide a vehicle for consumer attachment, particularly when the team wins) was strongly predictive of brand loyalty. This highlights the i mportance of providing an optimal experience and special access to players, coaches, and other team executives as a means of making the highly-identified fan feel like a part of the team. In addition, the ability of a sport team to provide nostalgic memories was also strongly predictive of brand loyalty, underscoring the need to understand the catalysts of nostalgic memories among highly-committed fans. The need for an escape from the daily rigors and routine of life was positively related to brand loyalty. This finding underscores the need to increase the frequency (through such vehicles as fantasy leagues and draft parties) with which the team provides an escape for the highly-committed fan. Finally, efforts geared toward enhancing the entertainment experience are supported by the fact that delivery of the sport product (both the game and peripheral elements) was positively related to brand loyalty. The use of marketing strategies that highlight a tradition of success, a star player, or acceptance by a grou p of peers by virtue of following a team is not supported by this research, given the negative relationships that occurred between these dimensions and brand loyalty.

Introduction

Two years removed from their last championship, the Chicago Bulls continue to thrive. Michael Jordan has not donned a uniform since their last championship and the Bulls produced one of the worst win-loss records in the North American National Basketball Association (NBA) for the second consecutive year. Moreover, interest in the NBA as a whole has declined as evidenced by decreases in both overall attendance and television ratings (King and Mullen, 2000). Yet, individually the Chicago Bulls continue to sell out their games and their merchandise remains among the most popular in the NBA both domestically and internationally. Examples of sport teams that reap similar benefits in spite of poor or mediocre core product performance exist in other realms as well (e.g. Boston Red Sox, Dallas Cowboys, Manchester City). Yet, while these examples exist, little research has been conducted to examine why they exist. Many attribute this phenomenon to the concept of brand loyalty.

Brand loyalty is important to sport teams for two broad reasons. First, brand loyalty ensures a more stable following even when the core product's performance falters (i.e. the team has a losing season). As a result of such loyalty, a price premium can be charged (Aaker, 1991). In many cases, teams have been able to leverage this price premium to increase revenues and help offset areas where expenses are increasing (e.g. player salaries and debt obligation on new stadiums or arenas). Brand loyalty also ensures a more stable following through the broadcast media. Given consistent ratings, broadcasters are able to charge advertisers of teams with loyal followings premiums for advertising time.

Second, brand loyalty creates opportunities for product extensions beyond the core product (Aaker, 1991; Keller, 1993). New products such as team-related merchandise stores and restaurants in close proximity to the venue enable the team to create additional revenue streams by owning and operating the ventures or sharing in profits through licensing agreements. Similarly, admission is now being charged to practice facilities of professional teams. High brand loyalty also allows the team to offer these brand extensions across geographic boundaries. For example, Manchester United of the English Premier League plan to open merchandise stores in Singapore (Stewart, 1999). For these reasons, it is important to extend the understanding of brand loyalty to the sport setting.

An increasing number of studies have examined the loyalty construct in the sport setting (e.g. Mahony, Madrigal and Howard, 2000; Wann and Branscombe, 1993). This study seeks to further existing research by examining loyalty within the broader context of brand management theory, where brand loyalty is a crucial outcome of building brand equity (Aaker, 1991). Utilization of conceptual work on brand management allows for the identification of factors that may be related to, and predictive of, brand loyalty. The examination of such factors then provides managers with directions on which to focus their marketing energies. Specifically, this study uses Keller's (1993) conceptual framework for building consumer-based brand equity as a basis for identifying various dimensions of brand associations that are predictive of brand (i.e. team) loyalty.

The remainder of this paper is presented in four sections. First, a discussion of brand management theory is presented. This section includes a discussion of brand associations and an identification of the predictors of brand loyalty in team sport. This section also examines brand loyalty as it relates to the management of sport teams. Second, the methodology for examining the relationship between brand associations and brand loyalty is described. Third, results from a study that examined the link between brand associations and brand loyalty in US professional team sport are reported. Fourth, the results of this study are discussed paying particular attention to their implications for sport marketers.

Brand Management

The added value a brand name or logo contributes to a product or service is commonly referred to as brand equity (Aaker, 1991). Professional sport teams are likely to possess brand equity by virtue of the added meaning sport consumers attach to the names and logos of their favorite teams (Gladden and Milne, 1998). For example, the New York Yankees and Manchester United names trigger immediate recognition as professional franchises with traditions of winning and of paying premium prices for the best available talent. Similarly, the Green Bay Packers name conjures up associations of championship American football, football played in the cold, and of their legendary coach, Vince Lombardi.

A significant amount of research has been conducted to examine the impact of brand equity on brand extensions, and vice versa (Barwise, 1993). However, a lack of a widely-accepted measure has led researchers to question the utility of brand management theory (Barwise, 1993; Bird, 1997; Ehrenberg, 1997). While some researchers have attempted to quantify brand equity in financial terms (e.g. Simon and Sullivan, 1992), these efforts have not sought to build on, or provide support for prior conceptual pieces (Aaker, 1991; Keller, 1993). Further, while many scholars have highlighted the benefits of brand equity (e.g. Aaker, 1991; Berry, 2000; Keller, 1993; Dyson, Farr and Hollis, 1996; Yoo, Naven and Lee, 2000), other researchers have challenged brand equity's usefulness (Ehrenberg, 1997; Ehrenberg, Barnard, Scriven, 1997; Ehrenberg, Goohardt, Barwise, 1990). Offering the concept of "Double Jeopardy", Ehrenberg and colleagues suggest penetration of brand share is more indicative of a brand's value since factors s uch as repeat buying are directly related to market share. These researchers contend that the relative popularity or market share of competitive brands are statistical manifestations of brand equity (Ehrenberg, et al., 1990) because large market share brands have a greater number of habitual buyers than small market share brands.

This perspective suggests that, during a given time period, sport teams that more frequently sell out games and generate higher numbers of followers through various forms of media broadcasts will also have the highest levels of brand equity. Certainly, in the case of the New York Yankees and Manchester United, this would likely hold true over a period of time. Thus, we acknowledge that Ehrenberg and colleague's notion of Double Jeopardy may be a useful way to examine market share differences among sport teams and their enthusiasts.

However, we suggest that adopting a brand management perspective provides a more complete understanding of the factors influencing the market strength of sport teams. The notion of Double Jeopardy does not account for two factors unique to the professional sport industry. First, unlike a consumer or industrial product, where the market is infinite, the market for a team's seats is finite -- only so many tickets can be sold. Therefore, if attendance were used as a means to identify the strongest market share teams, it would not successfully measure overall consumer interest in a professional sport team. Models applying brand equity to sport (e.g. Gladden and Milne, 1998) more adequately account for this unique facet by identifying a number of factors that contribute to the creation and maintenance of a strong brand over time. Second, professional sport teams are different in that their marketplace is the metropolitan, or at best regional area in which the core product operates (1). In these markets, they rare ly face numerous professional sport competitors (2). Therefore, utilizing market share indicators in the respective markets might not yield a meaningful assessment of brand strength.

In addition, utilizing market share and penetration figures to assess the strength of sport …