CORPORATE SPONSORSHIP EFFECTS IN BUSINESS-TO-BUSINESS MARKETS

Mark Groza – Northern Illinois University

Joe Cobbs – Northern Kentucky University

Research Motivation

Research Question

How does sponsorship affect B2B buyers?

Can sponsorship enhance supportive behaviors (i.e., WOM, Loyalty, Share of Wallet)?

What does the ‘black-box’ of this process look like?

B2B versus B2C Buying Process

Buyer Behavior Professional Buyers Experts Well Trained, Rational

Product Large Quantities – Volume

Discounts Customized solutions

Promotion Salespeople important part of

selling firm’s promotional strategy

Buyers are engaging venders later in purchase process

Buyer Behavior Non-Professional Buyers Knowledge Gap No formal training, Emotional

Product Smaller volumes Standardized

Promotion Salespeople not as important to

selling firm’s promotional strategy

Buyers are engaging venders later in purchase process

B2B B2C

B2B Buying Process

With all that said:

B2B buyers buy from brands and people they trust – Relationships are extremely important (Mudambi 2002)

“Analyzing data from more than 100,000 business decision makers, Chally discovered that 39% of B2B Buyers select a vendor according to the skills of the salesperson rather than price, quality, or service features.” – Fogel, Hoffmeister, Rocco and Strunk (2012 HBR)

Theoretical Framework

Social Identity Theory (Tajfel and Turner 1985)

Customer-Company Identification (CCID) Bhattacharya and Sen (2003)

Individuals identify with companies to satisfy key self-definitional needs. The need for…. Self-Continuity Self-Distinctiveness Self-Enhancement

Conceptual Model

Customer- Company

Identification

Perceived Prestige of Sponsored

Entity

Sincerity of Sponsorship

Customer Loyalty

Word-of-Mouth

H3

H1

H2H5

ControlsAge

GenderTenure

Share-of-Wallet

H4

Sample and Measures

Customers of a North American industrial supply company

552 (992) 56% response rate

Sample consisted of customers who were aware of the company’s sponsorship but not directly engaged (i.e., attending an event) in the sponsorship

Measures

Construct Items

Source

Prestige 4 Mael and Ashforth, 1992

Sincerity 5 Speed and Thompson, 2000

CCID 2 Bergami and Bagozzi, 2000

Loyalty 3 Palmatier, Scheer and Steenkamp, 2007

WOM 5 Harrison-Walker, 2001)

Share-of-Wallet

1 Lichtenstein, Drumwright and Braig, 2010 CFA (RMSEA = 0.057, CFI = 0. 96, GFI = 0.93, NFI = 0.94)

Factor Loadings (all above .7, but 1 (.68) AVE (all above .60)

SEM Results

  Hypothesized Model

Alternative

ModelH1

Prestige CC-ID .167** .154**

H2

Sincerity CC-ID .454** .412**

H3

CC-ID Loyalty .814** .761**

H4

CC-ID WOM .878** .831**

H5

CC-ID Share-of-Wallet .538** .556**

Controls     Age CC-ID -.169** -.177**  Gender CC-ID .015 .015  Tenure CC-ID -.047 -.049Direct Effects     Prestige Loyalty   n.s.  Prestige WOM   n.s.  Prestige Share-of-

Wallet  n.s.

  Sincerity Loyalty   .095*  Sincerity WOM   n.s.  Sincerity Share-of-

Wallet  n.s.

Note: ** p < .01; * p < .05; n.s. Not Significant

Theoretical Implications

CCID is key driver of B2B supportive behaviors (opening the black box)

Affiliated organizations (i.e., sponsored orgs) can influence a customer’s identification levels

Linking an inter-organizational relationship to customer supportive behaviors

Practical Implications

Prestige (def: perceptions that other people believe the organization is well regarded, Bergami and Bagozzi 2000) is an important antecedent

Sponsors must appear to be sincere

B2B firms should use sponsorship to build long-term customer relationship

Limitations & Future Research Limitations

Self-report data Customers from one firm, one industry, one

sponsorship

Future Research Include additional antecedents Use longitudinal data Use objective sales data

Questions?