art for the sake of the corporation - jomc 279 · 2011-04-13 · art for the sake of the...

Art for the Sake of the Corporation

Audi, BMW Group, DaimlerChrysler, Montblanc,

Siemens, and Volkswagen Help Explore the Effect

of Sponsorship on Corporate Reputations

MANFRED SCHWAIGER

Ludwig-Maximilians-

University of Munich

[email protected]

MARKO SARSTEDT

Institute for Market-

Based Management

Ludwig-Maximilians-

University of Munich

[email protected]

CHARLES R. TAYLOR

Villanova School of

Business

raymond.taylor@

villanova.edu

This article examines whether exposure to a company's sponsorship of cultural

activities such as "high-brow" arts—including classical music, literature, art exhibitions,

and museums—provides a long-term increase in the general public's assessment of

corporate reputation. As corporate reputation has been found by previous studies to be

composed of two primary dimensions (i.e., the likeability of the firm, the competence of

the firm), it is of particular interest to examine whether sponsorship of cultural events

affects one or both of these dimensions. A two-dimensional model of image transfer

is used as the theoretical basis for a study of more than 3,000 German consumers

conducted in collaboration with 10 major multinational companies (e.g., BMW Group and

Siemens). Results show that some significant effects of culture-sponsoring activities can

be demonstrated for the likeability dimension of corporate reputation and some of its

antecedents. However, no significant link between culture sponsorships and consumer

perceptions of firm competence is found.

INTRODUCTION

The problem of diminishing efficiency of tradi-tional advertising due to a more cluttered environ-ment has given rise to the increased use of otherforms of promotion in an effort to achieve companyobjectives (Ha and McCann, 2008; Sung, de Grego-rio, and Jung, 2009). Corporate sponsorship pro-grams are one tool that has become an increasinglyvisible element in the marketing communicationsmix (Cornwell, 2008; Poon and Prendergast, 2006;Wakefield, Becker-Olsen, and Cornwell, 2007).Although sports events are still the predominantarea of sponsorship, cultural events have attractedincreased attention during the last few decades.

Annual corporate arts contributions in theUnited States grew from $161 million in 1966 toalmost $1.2 billion in 2000 (Kirchberg, 2003). In Ger-many, companies are estimated to collectively con-tribute between €300 and €400 million to culturesponsoring (Pilot Group, 2009). In this respect, thequantitative significance of culture sponsorships is

DOI: 10.2501/S0021849910091208

often underestimated because such expendituresin marketing or advertising budgets are largelyundisclosed (Rectanus, 2002).

At the same time, cultural sponsorships arebecoming increasingly important in keeping artinstitutions open (Thompson, 2005; Stockburger-Sauer and Wetzels, 2007). Whereas in the UnitedStates only 15 to 25 percent of revenues for oper-ating expenses of major arts organizations comefrom public agencies (Kirchberg, 2003), publicfunding accounts for almost 80 percent of budg-ets for cultural institutions in Germany. The sup-port from government is gradually being reduced,however, owing to post-unification budget cutswithin local governments, European integration,and globalization within the cultural sector. Thus,there has been a shift to mixed forms of culturalfinancing that relies on fundraising or corporatesponsorships (Rectanus, p. 10, 2002). In this con-text, "[...] sponsorships will in all likelihood con-tinue to perform an important function in funding

M a r c h 2 0 1 0 JOURIIHL OF HDUERTISIIIG RESEHRCH 7 7

ART FOR THE SAKE OF THE CORPORATION

a substantial percentage of new exhibi-

tions or high-profile events, which could

not occur without the sponsorships"

(Rectanus, 2002, p. 10).

The growing importance of culture

sponsoring is reflected in the proliferation

of recent academic articles, many of which

deal with the effects of social sponsor-

ship activities (Javalgi, Traylor, Gross, and

Lampman, 1994; O'Hagan and Harvey,

2000; Polonsky and Speed, 2001; Quester

and Thompson, 2001; Rifon, Choi, Trimble,

and Li, 2004; Simmons and Becker-Olsen,

2006; Stockburger-Sauer and Wetzels,

2007). In spite of this growing interest,

relatively little attention has focused on

measuring the impact of these programs

on organizational success factors. In fact,

very little empirical work has examined

the effects of culture sponsoring on corpo-

rate reputation.

Of particular interest in this study is

whether the sponsorship of the arts pays

off for companies in terms of improved

corporate reputation when details of the

sponsorship are communicated to the

public. Corporate reputation has been

found to be a two-dimensional construct

consisting of consumer perceptions of:

firm competence, and firm likeability

(Schwaiger, 2004). As it is quite realis-

tic and feasible for firms' sponsoring

events to take measures (e.g., issue press

releases) to gain media coverage, it is

worthw^hile to examine whether such

publicity has a positive impact on con-

sumer perceptions of both dimensions of

corporate reputations.

Our research questions are the following:

• Does publicity associated with the spon-sorship of a "high-brow" cultural eventlead to improved corporate reputation?

• Does publicity associated with the spon-sorship of a "high-brow" cultural eventlead to improved consumer perceptionsof firm competence?

• Does publicity associated with the spon-

sorship of a "high-brow" cultural event

lead to improved consumer perceptions

of firm likeability?

Insight into the degree of effectiveness

of this communication tool is beneficial for

participating companies, as sponsorship

investments will remain under scrutiny

in the future in an environment wherein

advertising and promotional expendi-

tures are questioned in terms of return on

investment (Walliser, 2003). With growing

investments in culture-sponsoring activi-

ties, competitiveness among sponsors will

increase, necessitating a search for per-

formance indicators that can identify con-

nections between communicational and

organizational value.

LITERATURE REVIEW

Culture Sponsoring

Although sponsorship has existed for

some considerable time, there is still no

generally accepted definition. There is

overall agreement, however, that spon-

sorship is a commercial activity that pur-

sues marketing communication objectives

by exploiting the association between

sponsor and sponsored (Walliser, 2003).

A frequently used definition of sponsor-

ship is the purchase (in cash or kind) of an

association with an event, team, activity,

etc., in return for the "exploitable com-

mercial potential linked to that activity"

(Meenaghan, 1991, p. 36). This definition

fits well with cultural-sponsoring activi-

ties that include sponsoring such upscale

arts as dance, drama, classical music, lit-

erature, art exhibitions, and museums. It

also distinguishes culture sponsoring from

corporate philanthropy and cause-related

marketing.

A variety of motivations for compa-

nies making corporate sponsorships have

been advanced (O'Hagan and Harvey,

2000). Both researchers and practitioners

have cited the potential of corporate spon-

soring to increase awareness for brands

of the sponsoring company and to build

up intangible assets such as corporate

image, employee commitment, and trust

or goodwill among opinion leaders and

decision makers (Meenaghan, 1991, 2001;

Kushner, 1996). Sponsoring objectives

differ by category (e.g., arts or sports),

but there is general agreement that

companies engaged in culture-related

sponsoring activities more often pursue

image effects rather than specific objec-

tives, such as building product or brand

awareness. Nevertheless, research on

the measurement of sponsorship effects

has mainly focused on awareness effects

(Walliser, 2003). Only a limited number

of studies have investigated the impact

of sponsoring on corporate image, and

this work has generally focused on sports

sponsorship (Cornwell, Relyea, Irwin,

and Maignan, 2000; Stipp and Schiavone,

1996; Grohs, Wagner, and Vsetecka, 2004).

There exists some evidence, though, that

sponsorship in the cultural domain can

contribute to the modification of certain

dimensions of a company's image.

Some focus-group research finds that

image can be enhanced via five different

sponsorship categories (Meenaghan and

Shipley, 1999). Their qualitative research

results show that involvement in arts such

as ballet or classical music may transfer

specific image dimensions such as "elite"

or "sophisticated." An exploratory study

found that corporate sponsorship can

improve image in some instances but that

effects differ among companies (Javalgi,

Traylor, and Gross, 1994). A mail survey

designed to analyze attitudinal changes of

visitors of the Adelaide Arts Festival shows

more positive attitudes toward sponsoring

companies through sponsorship activities

(Quester and Thompson, 2001). Notably,

neither of the latter tw o studies provided

any broad conceptualization of corporate

7 8 JDURnHL or RDUERTISIl RESERRCR March 2 0 1 0


image, making it difficult to assess the

overall impact of the sponsorship. Moreo-

ver, neither study examined the impact

of sponsorships on overall corporate

reputation.

Corporate reputation is related to—but

distinct from—corporate image, as the

former is a more robust construct with

respect to the company's time and commu-

nicational efforts. The concept of corporate

reputation is, therefore, more intimately

linked with an organization's "personal-

ity" than the communicated image (Eberl

and Schwaiger, 2005).

Corporate Reputation

Reputation has been identified as a con-struct of growing importance, as numerousstudies propose that corporate reputationcan give rise to lasting company success.Several studies refer to higher recruitingand retention rates among companies withstronger reputations (Nakra, 2000; Turbanand Cable, 2003). With respect to custom-ers, a company with a good reputationcan improve confidence in its productsor advertising claims (Fombrun and VanRiel, 1998; Lafferty and Goldsmith, 1999).Higher reputation also makes it possibleto achieve price premiums (Milgrom andRoberts, 1986; Eberl, 2006) and can resultin increased repurchasing rates. Corporatereputation is regarded as an intangibleasset, which is scarce, valuable, and sus-tainable. Consequently, it is suitable forthe building and expanding of strategiccompetitive advantages.

Measuring corporate reputation hasbeen the subject of considerable researchover the past few years, which has led to awide variety of approaches (Chun, 2005).An important validity problem with priorreputation measurement approaches hasbeen that the reputation's multi-dimen-sionality has not been in accordance withthe relevant conceptualization (Eberland Schwaiger, 2005). This critique holds

specifically for Fortune magazine's annual

"Most Admired Companies" indices,

which have been criticized by numerous

authors (Wilczynski, Sarstedt, and Mele-

war, 2009).

Answering the deficiencies of prior con-

cepts, M. Schwaiger, in the Schmalenbach

Business Review (2004) defined corporate

reputation as an attitude-related construct

and developed a two-dimensional meas-

urement model. The first dimension (like-

ability) captures affective judgments and

includes aspects such as identification or

retention, which are typically emotional

attitudes toward a company. The second

dimension (competence) comprises all

cognitive evaluations of a company and is

measured by means of the recognition of

the companies' economic and professional

performance.

Past research has identified four exog-

enous driver constructs of the two dimen-

sions of corporate reputation (Schwaiger,

2004; Eberl, 2006, 2010): quality, perform-

ance, attractiveness, and corporate social

responsibility (CSR). These attributes

allow for explaining how corporate reputa-

tion is formed and, thus, provide the basis

for an effective corporate-level reputation

management. This model has not only

been empirically validated, it holds con-

siderable conceptual appeal in that it is

intuitive that consumers hold opinions

about both how effective a company is at

producing a product or service and how

likeable or pleasant to deal with the com-

pany is (Eberl and Schwaiger, 2005; Eberl,

2006). Thus, Schwaiger's model (2004) is

used to conceptualize corporate reputa-

tion. Figure 1 provides a visual illustration

of the model.

CONCEPTUAL FRAMEWORK

Culture-related sponsoring activities can

positively influence assessments of a com-

pany's reputation among those who visit

an event (Javalgi et al., 1994; Quester and

Thompson, 2001). In addition to changes in

attitudes among those who actually attend

a sponsored event, it is important to exam-

ine attitudes of those who are exposed to

general communications about the spon-

sorship, as this type of communication has

the capacity to reach considerably more

people. In comparison to mass-media ads,

culture-sponsoring activities generally are

associated with a relatively small number

of participants. Consequently, much of the

í Attractiveness) ^ü\

^ ^ ^ ^

^ ^ ' ^( Quality \ — — ^

( Performance )— i

Driver constructs of corporate reputation (antecedents) ¡i

^T—^— • ( Likeabiiity )

^ ^ ^— • ( Competence )

^ , * ^ ^ -^- - • • - - ^

Corporate reputation

Source: Schwaiger (2004).

Figure 1 Research Model

M a r c h 2 0 1 0 JOURIIHL OF HDUERTISinG RESEIIRCH 7 9

ART FOR THE SAKE OF THE OORPORATION

desired strategic benefit comes through

the media coverage of ads. For example,

Audi is the main sponsor of the Salzburg

Festival, one of the world's most promi-

nent music-and-drama festivals. Audi's

sponsorship of this festival is publicized in

many public forums and in traditional ads

from time to time.

Our research hypotheses propose that

the reputation effect of culture sponsoring

is not limited to the visitors of each spon-

sored event but that a positive change in

the sponsor's reputation assessment also

can be realized among persons who obtain

their knowledge of each company's spon-

soring activities through press reports.

Therefore, the measurement of the effects

on reputation arising from the media's

perception of culture-sponsoring activities

formed the core of an investigation that

lasted slightly more than one year.

To develop the hypotheses, the image-

transfer model proposed by S. Ganassali

and L. Didellon in Recherche et Applications

en Marketing (1996) is used. Brief descrip-

tions of these concepts are provided and

hypotheses are proposed.

The Image-Transfer Model

The conceptual framework is based on the

model of image transfer originally used

in celebrity endorser studies but subse-

quently applied to sponsorship by Ganas-

sali and Didellon in 1996. This model

implies a transfer process that operates

on two levels: a cognitive level (transfer of

perceptions) and an emotional level (trans-

fer of emotions). The basic idea is that,

in response to a communication about a

sponsored event, the consumer associates

the image of the sponsored event with

the company at both a rational and emo-

tional level. In this context, conditioning

is a procedure allowing for the explana-

tion of the translation of emotional and

rational elements of a non-conditioned

stimulus (the sponsored event in the case

of sponsorship) toward the conditioned

stimulus (the company; Janiszewski and

Warlop, 1993).

From the company's standpoint, the

goal is that positive thoughts toward the

sponsored event will translate into a posi-

tive perception of the company and its

products. In addition to this, the context

of the sponsored event creates a condition

that is favorable to an affective transfer.

The sponsorship evokes a positive effect

on an affective dimension by creating an

association with the sponsor through posi-

tive stimuli linked to the sponsored event.

This will strengthen the credibility of the

communicational message at an emotional

level and will, therefore, lead to more favo-

rable affective judgments of the company.

Consequently, for the two primary

dimensions of corporate reputation—like-

abiiity and competence—it is hypothe-

sized that if consumers process messages

that publicize the sponsorship, the compa-

nies' reputation on these two dimensions

will be enhanced. If cultural sponsorships

are generally effective, consumers' image

of each company should be positively

affected. This should lead to a favorable

assessment of both dimensions of corpo-

rate reputation among consumers who

know about the sponsoring activities

versus those who are unaware of it. With

respect to likeabiiity, an association with a

desirable event should enhance likeabiiity

of the sponsoring companies. Similarly,

in the case of competence, it makes intui-

tive sense that sponsoring cultural events,

especially those of "high-brow" arts, given

their sophisticated image, will er\hance

reputation, in terms of competence, of

sponsoring companies.

HI: Persons who are aware of thecompanies' culture sponsorshipactivities assess the companies'overall corporate reputationhigher on the dimension of

likeabiiity than persons who are

unaware of the culture sponsor-

ship activities.

H2: Persons who are aware of the

companies' culture sponsorship

activities assess the companies'

corporate reputation higher on

the dimension of competence than

persons who are unaware of the

culture sponsorship activities.

Hypotheses 3 to 6 address the anteced-

ents of the two dimensions of corporate

reputation (see Figure 1). For likeabiiity,

the two primary antecedents are CSR and

attractiveness; the primary antecedents of

competence are quality and performance

(Schwaiger, 2004; Sarstedt and Ringle,

2010).

Cultural events conjure up associa-

tions in the mind of consumers (Gwinner,

1997). By being associated with cultural

activities, companies may benefit from

related values such as being sophisti-

cated, elite, discriminating, up-market,

serious, and pretentious (Meenaghan

and Shipley, 1999). Consequently, if the

assessment of corporate reputation is

improved, certain driver constructs of

reputation should also be affected by the

sponsorship activities.

The general public judges how well

companies respond to their non-economic

agendas (Fombrun and Shanley, 1990).

Culture sponsoring is a way for compa-

nies to demonstrate this social responsive-

ness and follow profit motives at the same

time. Because of the proximity of culture

sponsoring to philanthropy (Polonsky and

Speed, 2001), a positive influence of cul-

tural sponsoring activities on perceptions

of CSR, which captures aspects such as the

companies' socially conscious behavior,

can be expected. Being considered a good

corporate citizen will not only strengthen

the perception of social responsiveness

8 0 JOURnRL OF HDUERTISinG RESERRCH March 2 0 1 0


but help to build corporate identity (Kirch-

berg, 2003).

Several authors have stressed the abil-

ity of culture-sponsoring activities to

strengthen relations with different stake-

holder-groups (Quester and Thompson,

2001; Rectanus, 2002). This facet of cor-

porate reputation is well captured in the

driver construct attractiveness, which

should be positively affected by culture

sponsoring activities. Essentially, it makes

sense that sponsoring good causes would

make a firm more attractive.

Our prediction for perceptions of qual-

ity are based on seminal works that have

led to a wide acceptance of the idea that

uninformative advertising can be used

as a signal of product quality (Kihlstrom

and Riordan, 1984; Milgrom and Roberts,

1986). That is, consumers can correctly

infer vinobservable quality from observable

advertising. This observation also holds for

sponsoring, which conveys no direct infor-

mation about product qualities. Thus, in

the case of "high-brow" cultural events, the

logic is that association with a high-quality

art event will transfer over to the com-

pany. On the basis of this logic, culture-

sponsoring activities should enhance the

assessment of the companies' quality.

A fourth driver construct of corporate

reputation—performance—relates not only

to financial features but to overall com-

pany performance (Schwaiger, 2004). This

includes aspects such as being well man-

aged and economically stable or having a

clear vision about the company's future.

With regard to performance, no positive

effect through culture sponsoring activi-

ties is expected; that is, companies do not

expect sponsorships to improve consumer

perceptions of performance. The reason for

this is that values relevant for this dimen-

sion may be more associated with sports

sponsoring, as sports events suggest ideas

such as healthy, young, fast, masculine, and

vibrant (Meenaghan and Shipley, 1999).

To summarize, we hypothesize the fol-

lowing relationships:




CSR to be higher than persons

who are unaware of the culture

sponsorship activities.




attractiveness higher than per-

sons who are unaware of the


H5: Persons who are aware of thecompanies' culture sponsorshipactivities assess the companies'quality higher than persons whoare unaware of the culture spon-sorship activities.



activities do not assess the com-

panies' performance higher than

persons who are unaware of the


In addition to these hypotheses, analyses

were run to determine whether psycho-

graphic and demographic factors yield

different consumer reactions to cultural

sponsorships. These variables include

level of interest in "high-brow" arts events

and income, and educational level.

RESEARCH METHOD

Measuring Corporate Reputation

Each dimension of corporate reputation(likeability and competence; see Figure 1)is measured by means of three indica-tors and forms a reflectively operation-alized latent construct. The exogenousdriver constructs of quality, performance.

attractiveness, and CSR imply a forma-

tive index operationalization by consti-

tuting, in total, 21 manifest variables that

represent the levers of corporate-level

marketing activities (Diamantopoulos,

Riefler, and Roth, 2008). For example, the

measures of the construct CSR are "[the

company] behaves in a socially conscious

way"; "I have the impression that [the

company] is forthright in giving informa-

tion to the public"; "I have the impres-

sion that [the company] has a fair attitude

towards competitors"; "[the company] is

concerned about the preservation of the

environment"; and "I have the feeling that

[company] is not only concerned about

proflts." A company can be forthright in

giving information to the public without

being concerned about the preservation of

the environment from a stakeholder per-

spective (Eberl, 2010). As a consequence,

the indicators do not necessarily correlate

from a theoretical point of view, with the

resulting implication being the construc-

tion of a formative index. All items used in

this study were measured on seven-point

rating scales (Appendix A).

Experimental Design

Participating Companies. Ten companiesgave their permission and necessary sup-port (by issuing suitable press releases)needed to complete the research. Indi-vidually, this involved the firms of Audi,BMW Group, DaimlerChrysler, E.ONRuhrgas, Montblanc, Nord/LB (a leadingbank), RWE (a large power supplier), Sie-mens, TUI (one of the world's largest tour-ism firms) and Volkswagen.

As the questioning on the reputationindicators for the 10 companies wouldhave taken each interviewee some 40minutes to answer during an online inter-view, the participants were divided intothree panels. Each interviewee thus had toassess between three and four companies,the names of which should at least have

March 2 0 1 0 JDURIIIIL DF flDUERTIBIIIG RESEHRCH 8 1

ART FOR THE SAKE OF THE OORPORATION

In comparison to mass-media ads, cuiture-sponsoring

activities generally are associated with a relatively

small number of participants.

been familiar to the interviewee. In Panel

A, the companies Audi, Volkswagen, and

BMW Group were assessed; in Panel B, the

companies Montblanc, DaimlerChrysler,

and Siemens, whereas Panel C assessed

the companies Nord/LB, RWE, E.ON

Ruhrgas, and TUI. The allocation into

groups had no relevance, as no absolute

reputation values were to be compared

but only relative changes in respect of one

and the same company.

Composition of the Panels. About 25,000

e-mail addresses were purchased from a

professional address broker. Based on this

convenience sample, potential panel par-

ticipants were invited by e-mail to take

part in a study on corporate reputation

conducted by the Ludwig-Maximilians-

University Mvmich, Germany. The research

objective was not revealed. A total of 3,015

persons (12.06 percent) assured their par-

ticipation in the panel. Respondents first

were asked to indicate which of the com-

panies they did not know. They were then

asked demographic questions. As only

persons who had an e-mail address were

contacted, however, the representative-

ness of the sample cannot be guaranteed.

The research questions nonetheless are

posed for a general consumer population,

and an analysis of the distribution of the

socio-demographic features indicates that

the panel's final composition is a striking

reflection of the overall German popula-

tion, providing assurance of the appropri-

ateness of the sample.

Each panel group was randomly divided

into a treatment and a control group of

similar size. This split ensured that the

differences between the treatment and con-

trol groups' assessment of reputation could

be solely traced back to the treatment.

Treatment. The interviewees provided

a detailed assessment of all correspond-

ing companies on the basis of 27 reputa-

tion indicators in an initial survey and a

follow-up conducted one year later. Each

month, the treatment and control groups

of every panel were sent press reports

issued by each company that were stand-

ard 12 lines long. To avoid information

overload, each interviewee received

information on at most only two com-

panies from his or her panel group each

month. The participating companies were

requested to provide summaries of real

press releases (i.e., only the core facts)

in simple text format. Press releases in a

specific visual layout were not permitted,

as we aimed to avoid any influence that

could be traced back to the company in

any way other than specifically its culture

sponsoring commitment. Detailed press

texts with a specific layout could have

given one company a better reputation

assessment than another, simply owing

to a more visually appealing layout.

Each interviewee in the treatment

groups received one report with a culture-

sponsoring theme in the 12 lines on each

firm and any two others (see Appendix B

for two examples). The interviewees in the

control group received only reports with

similar contents but without reference to

any culture sponsoring activities.

In this regard, the following exceptions

should be noted: (1) The BMW Group's

treatment consisted of two cultural reports

for the treatment group (increased treat-

ment) to ascertain whether an increased

treatment would be successfully recog-

nized by the participants; and (2) for TUI,

the treatment and control groups received

two identical sets of information for con-

trol proposes. It was presumed that no

significant differences would be observed

between the control and treatment groups

(Figure 2).

ANALYSIS AND RESULTS

Sample

From the total of 3,015 acquired panelists,

2,763 participated in the reference meas-

urement. Each participant assessed his or

her panel's companies on the basis of 27

reputation indicators. Over a 12-month

period, these panel participants received

press reports compiled for the treatment

and control group, with the request to read

these as conventional newspaper informa-

tion press reports and then to delete them.

Some 1,613 interviewees participated

in the follow-up measurement, giving

the assessments a statistically based valid

database. Even though incentives were

provided (a drawing for a weekend trip

and several specific prizes), about 1,100

participants failed to remain involved for

the duration of the experiment. Contin-

gency tests on the different socio-demo-

graphic characteristics and non-response

did not indicate any significant relation-

ships, so the shrinking size of the panel

was not regarded to be a debilitating

factor.

Effect of the Treatment

To test whether the treatment was effec-tive, respondents had to rate to whatextent each company supports or spon-sors cultural events or artists on a seven-point scale (1 = "not at all," 7 = "to a veryhigh degree"), indicating the differencesbetween follow-up and the referencemeasurement and the respective t-values

8 2 JOURIIHL or HDUERTISIIIG HESEHRCH March 2 0 1 0


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Montblanc

DaimlerChrysler

Siemens

Nord/LB

RWE

E.ON Ruhrgas

TUI

Nord/LB

RWE

E.ON Ruhrgas

TUI

CG: Control group, TG: Treatment groupM^: Referenoe measurement (pretest), M^\

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X

CSl

May

M l

M l

M'

M l

M l

M,

M l

[^

M

M.

Ml

M l

M,

M l

M,

= 26

1

c

= 2

68

c

= 28

2

c

= 2

60

c

CD(Nlic

n=

26

6Figure 2 Experimental Design

of the independent t-tests between thegroups (Table 1). The results show thatthe treatment was effective in almost allcases.

As expected, no significant differ-ences were noticeable with respect toTUI because the treatment and controlgroups were handled identically. Theincreased treatment for the BMW Groupimproved this company's perception asa sponsor of cultural events in the treat-ment group. This is well reflected in theincreased t-value of -4.321. In the case

of DaimlerChrysler, the treatment didnot lead to a significant increase in therespondents' evaluation of the company'sculture-sponsoring activity. Even thoughthe mean difference is higher for the treat-ment group than for the control group,the intensity of the treatment was not suf-ficient to produce significant differencesbetween both (p < 0.10).

In summary, it can be concluded thatthe treatment was successful. The com-parison of treatment and control groupsreveals that, with a single exception

(DaimlerChrysler), interviewees assessedthe companies' cultural sponsorshipactivities to be more pronounced than ayear ago. Because of the lacking treatmenteffect, the DaimlerChrysler sample wasexcluded from the subsequent analyses.(We also conducted an analysis of the fullsample [i.e. including DaimlerChrysler,]which did not yield any different results).As intended, the samples for BMW Groupand TUI are not included in further analy-ses because of the different types of treat-ment designed to serve as checks. For

March 2 0 1 0 JDURnilL OF HDUERTISmG RESERRCH 8 3


T A B L E 1 Analysis of the Full Sample

Effect of the Treatment " * ^ "" ^ ^ ' ^ P ' ^^ evaluate the reflec-tive measurement models with regard to

To What Extent Does [Company] Support or Sponsor Mean Difference , . , . , , . , . ^ , .their reliability by means of Cronbach's

Cultural Events or Artists? Af-Af. t-Value ^ ^•• •• a, which provides a reliability estimate

. ,. .9°".!':?.Lë.i'.0.u.P .9;.692. „ - _ . . based on the indicator intercorrelations.AUQI —O.oJ-^

Treatment group 1.133 In addition, we consider composite reli-

Control group 0.500 ^^^%' ^"^^^ *^^^^ ^"'° account that indi-BMW Group -4 .321" cators have different loadings and can be

Treatment group 1.206interpreted in the same way as Cronbach's

Control group 0.405 „ (Henseler, Ringle, and Sinkovics, 2009).DaimlerChrysler -1.636 ' & '

Treatment group 0.640 The analysis provides evidence for the

Control group 0.576 constructs' reliability as the reliability coef-E.ON Ruhrgas -3 .431" ficients consistently exceed the commonly

Treatment group 1.095 . j .u u u i c 'm /M n" .,, suggested threshold value of .70 (Nunally

Control group 0.807 and Bernstein, 1994). Furthermore, item-Montblanc -2.579"

Treatment group 1.257 to-total correlations were investigated,

- ^ , - ^_„ which are supposed to exceed 0.50 (Chin,Control group 0.560 ^^

Nord/LB -3.843" 1998). In the study, the ranges for item-to-

J'^^^!J^.^°^R h:^. total correlations of the endogenous con-

Control group 0.436 ^ stmcts are 0.621 to 0.734 for competence

Treatment group 0.750 ' ^'^^ 0- 72 to 0.784 for likeability. Conse-

quently, the results indicate a high degreeControl group 0.551 i 7- 6 &

RWE -3.584" o reliability for competence and likeabil-

I^^^^^y[^i^.P ^.:91i ity (T^ble 2). To assess the discriminant

Control group 0.697 validity of the endogenous constructs, theTreatment group 0.716 " ° ' ^ ^ ^ indicators'cross loadings and the Fornell

and Larcker (1981) criterion were exam-Control group 0.463 ^ ^ , , ,

Volkswagen -2 437" med. The results provide evidence thatJ[^^}!J^.^!}}.è'ÎO[>P 9;.?.'?:I the measures of endogenous constructs

M„; reference measurement (pre-test); M,: follow-up measurement (post-test) achieve discriminant validity (see Table 2)." Significant a t a = 0.05 With respect to the construct measured

by formative indicators, these covariance-

example, taking BMW Group into account separately for each group and measure- based procedures are not applicable. The

would have biased the analysis results ment occasion. original scale development by Schwaiger

owing to the increased treatment. Furthermore, several sub-samples were (2004) applies a similar approach to Rossit-

established based on socio-demographic er's C-OAR-SE procedure (Rossiter, 2002),

RESULTS variables (i.e., interest in cultural activi- which is based on content validity, estab-

To test the hypotheses, partial least squares ties, education, and income). For both lished by expert interviews. Consequently,

(PLS) path modeling was used on the data treatment and control groups, and for high content validity for the formative

(Wold, 1974). The software used for the each measurement point, separate mod- constructs can be presumed,

analysis was SmartPLS 2.0 M3 (Ringle, els were estimated. Measures to evaluate An analysis of the measurement mod-

Wende, and Will, 2005). For inside approx- the reliability and discriminant valid- els by means of the bootstrapping pro-

imation, the path-weighting scheme was ity of the endogenous latent constructs cedure (Henseler et al., 2009) revealed

applied, as it ensures well-predicted latent were then computed. The results for the that most weights significantly differ

variable scores (Fornell and Cha, 1994). full model are reported in the following from zero. Additional tests for multicol-

Structural equation models were built section. linearity revealed that the item-specific

8 4 JOURIIHL or HOUERTIBinO RESEHRCH March 2 0 1 0


TABLE 2Reliability, Discriminant Validity, and Goodness-of-Fit measures

Group

CG

TG

Time Latent

Point Variable

0

1

0

H l'Wi

Cronbach's

a

0.79

0.84

0.83

0.85

0.81

0.85

0.82

0.86

Composite

Reliability

0.88

0.90

0.90

0.91

0.89

0.91

0.89

0.92

AVE

0.71

0.75

0.74

0.77

0.72

0.77

0.73

0.78

0.17

0.20

0.24

0.26

0.21

0.24

0.26

0.28

IP

0.61

0.60

0.63

0.60

0.61

0.60

0.65

0.58

(F

0.41

0.44

0.46

0.45

0.43

0.45

0.47

0.45

CG: control group; TG: treatment group; M^: reference measurement (pre-test); M^: follow-up measurement (post-test);

T\ : endogenous latent variable competence, ri^: endogenous latent variable likeabiiity.

Note: All correlations in 4ÂVË -

variance inflation factor (VIF) values never

exceeded the threshold value of 10. Conse-

quently, multicoUinearity is not regarded

as a problem.Criteria applied for evaluating the good-

ness of fit of the endogenous latent con-structs include R^ and the cross-validatedredundancy measure Q (Henseler et al.,2009). All values lie well above the normfor other studies' results (see Table 2),which supports the notion that the overallmodel fit is highly satisfactory.

Hypothesis Tests. In the next step, latentvariable scores provided by the PLS algo-rithm were used to test the hypotheses. Forboth treatment and control groups, differ-ences between reference (f) and follow-upmeasurement (f+1) for each latent variablewere computed using the formula:

are significant ata = 0.01.

Differences between treatment and controlgroups with regard to ATJ and A . werethen compared using independent sam-ple f-tests. Table 3 documents the resultsregarding the full sample.

For the affective dimension of corporatereputation, the mean difference between

TABLE 3Effects in the Full Sample

reference and follow-up measurement is

-0.056 for the control group and 0.020 in a

positive direction for the treatment group.

These means are significantly different at

p = 0.081 (í,3 7¡; , = -1.744), confirming that

the cultural sponsoring activity had a posi-

tive effect on the assessment of the compa-

nies' likeabiiity, providing support for HI.

The mean difference values for compe-

he participants' assess-

decreased more heavily in the control

group (-0.069) compared to the treatment

group (-0.040). The magnitude of changes

implies a positive effect of the cultural

sponsoring activity. However, the degree

is too small to suggest a significant effect

on the general publics' assessment of the

companies' competence (H2).

Consistent with H3, participants in the

treatment group assessed the companies'

CSR significantly higher than partici-

pants in the control group (¿(37 , = -1.950;

p = 0.051). This indicates that the aware-

ness of cultural sponsoring activities is

Construct

Likeabiiity

Competence

CSR

Attractiveness

Quality

Performance

Group

CG

TG

CG

TG

CG

TG

CG

TG

CG

TG

CG

TG

Mean Difference

-0.056

0.020

-0.069

-0.040

0.072

0.145

-0.019

0.093

-0.008

-0.034

0.044

0.011

t-Value

-1.744

-0.865

-1.950

-2.880

-0.141

0.924

p-Value

0.081

0.387

0.051

0.004

0.886

0.355

AÇ; = ^f ' - ç;, (2)

where r\'^ is the vector of latent variable

scores of the endogenous construct m (m

= 1,...,M) for the reference measurement

and £,'. depicts the vector of latent vari-

able scores of the exogenous construct ;

(/ = 1/ •.•//) ror the reference measurement . ç,^, ^^„(^Q, group; TG: treatment group; M„.- reference measurement (pre-test); M,: follow-up measurement (post-test).

March 2 0 1 0 JOURIIRL OF RDUERTISIIIG RESERRCH 8 5


well suited to create social impact, that is,

to convey the image of a company that acts

in a socially conscious way.

The same can be observed with regard

to the assessment of the companies' attrac-

tiveness (H4). Whereas in the treatment

group, the mean difference increased by

0.093 units, this value decreased by 0.019

units in the control group. This differ-

ence between the two groups is significant

(f,3,,,, =-2.880; p = 0.004).

The remaining two antecedents of cor-

porate reputation are not significantly

affected by the treatment. Thus, H5, which

predicted a positive impact on perceived

quality, is not supported. As H6 did not

predict a positive effect for performance,

it is supported.

Socio-Demographic Variables. The

remaining analyses focused on the

interviewees in the treatment groups (n

= 794). Sub-samples based on a median

split of the corresponding socio-demo-

graphic variables were established to

assess whether these have any moderating

influence on the respondents' evaluations

of culture sponsorship activities. Paral-

lel to the full sample analysis, separate

models were computed for each condition

(i.e., low vs. high interest in cultural top-

ics/events; low vs. high level of formal

education; and low vs. high income) and

measurement point. Finally, independent

t-tests on latent variable scores were car-

ried out to assess whether the changes in

the assessments of likeability and compe-

tence were significantly different between

the groups (see equation [1]; Table 4).

The analysis reveals that the variables

interest in cultural activities and education do

not seem to have any moderating influence

on the effect of culture-sponsoring activi-

ties. In the education sub-sample, the direc-

tion of the mean differences is as expected:

In the low-education group, likeability

increased to a slightly higher degree as

compared to the high-education group.

For competence, both groups declined,

but the decrease was less pronounced in

the high-education group. However, these

effects are not significant.

Similarly, for the interest sub-sample, the

expected effect is not supported by the data.

Surprisingly, for both constructs, the treat-

ment even had a negative effect in the high-

interest group. The same can be observed

for the subsample based on income. Like-

ability and competence increased in the

low-income group and decreased in the

group of participants with high incomes.

The mean difference is significant for both

likeability ({„55 , = 2.553; p = 0.011) and com-

petence (t,, 55g) = 2.196; p = 0.028).

TABLE 4 Effects in the Sub-SamplesGENERAL DISCUSSION

Mean Difference Results Summary and Managerial^^r^"^. 6roup rtV^ tyalue pValue implications

Interest in cultural activities This study investigated whether the expo-

I_Q Q g4g sure to information on a culture-sponsor-

Likeability 0.997 0.319 ing commitment is sufficient to enhanceHI -0.009

the assessment of several companies' rep-

Competence - • - • ° - 0.132 0.895 "* ' ' ^ °" " " ' " " ^ * " general public. Overall,HI -0.044 the analysis shows that companies can

Education benefit from such sponsoring activities,

as they do positively affect certain dimen-LO 0.019 • \ r , ,

Likeability -0.045 0.964 ^'°"^ °^ corporate reputation if the pub-Hl 0.022 lie is aware of them. More precisely, theLO -0.043 activities contribute to enhancing the like-

Competence -^ • • - - - -0.150 0.881 ^büity (affective) dimension of reputation,

whereas they do not significantly alter

assessment of the cognitive dimension.

LO 0.077 Likewise, certain antecedents of corpo-Likeability 2.553 0.011 ^ ^ . • • , « . u

HI -0.107 ^^^^ reputation are positively affected by^ ^^ culture-sponsorship activities.

Competence 2.196 0.028 Our results suggest that sponsors ofHI —0 1 91.„.. „.'.„.Î.T: cultural arts events should make efforts

M„; reference measurement (pre-test); M^: follow-up measurement (post-test); LO: group with low interest in cultural tO make sure that the sponsorship is pub-activities/education/income; HI: group witit iiigii interest in cultural activities/education/income. licized to consumers Over a period of time

8 6 JOÜRIIIIL OF HDUERTISinG RESERRCH March 2 0 1 0


It is likely that it is more feasible for com-

panies to get more sustained publicity

for annual or ongoing events as opposed

to "one-shot" events wherein publicity

would likely be limited to a short period.

In this regard, our results suggest that

companies who sponsor events should

make significant efforts to inform the

media about ongoing cultural sponsor-

ships they are involved in.

Our findings suggest that cultural spon-

soring activities are well suited for enhanc-

ing the perception of a company's social

performance. This dimension is of particu-

lar importance, as CSR-related activities

have increasingly been recognized as a via-

ble business tool that can generate rewards

both internally and externally for compa-

nies (Larson et al., 2008). Furthermore, by

positively affecting a company's attrac-

tiveness, the sponsoring of cultural events

may be able to realize other benefits, such

as strengthening its position in the process

of staff recruifing. As potential applicants

usually possess only rudimentary knowl-

edge of possible jobs, the companies' attrac-

tiveness as an employer heavily influences

inifial application decisions (Turban, 2001).

Past research has shown that the two

constructs, CSR and attracfiveness, are

more strongly linked to likeability than

to competence (Schwaiger, 2004; Sarstedt

and Ringle, 2010). As neither the construct

competence nor its primary antecedents

are posifively affected by culture sponsor-

ing, such acfivifies can first and foremost

be viewed as a way to strengthen the affec-

tive judgments cf the companies' reputation.

Through this, companies may strengthen

their source credibility and address issues

more closely related to the way people

feel about the company or the degree to

which it merits trust. Considering the ever-

increasing competition in global markets,

the importance of this dimension becomes

apparent. With regard to the sub-samples,

the analysis results generally did not meet

the expected effects. This finding is surpris-

ing, as past research suggests that high-

brow culture audiences typically consist

of more affluent and highly educated

socio-demographic groups than overall

audiences, and one would think that they

would be more posifively influenced by

these sponsorships (O'Hagan and Harvey,

2000). It may be that people perceive a gen-

eral value to society associated with spon-

sorship of the arts independent of whether

they are interested in such events or not. It

is also possible that certain subgroups may

view the specific nature of the cultural field

as being inconsistent with economics-based

partnerships. Consequently, specific audi-

ences—especially those confronted only

with press releases and not experiencing

the dramafic nature of the event itself—

may view commercially mofivated support

for cultural sponsorships contradictory to

the values of its domain.

Limitations and Further Research

The lack of significant results in some con-structs might be due to the treatment thatmight have been too weak. With respectto each test experiment, only six "presspackages" were sent out with two or threereports each. In fact, this was sufficient toinfluence the observation of sponsoringactivities significantly, but it is possiblethat the absolute increase was too little toaffect the perception of, for example, thecompanies' competence.

Recent research in the social sponsorshipdomain stresses the importance of a strate-gic fit between sponsored cause and a com-pany. Simmons and Becker-Olsen (2006)show that a poor choice of a cause that isincongruent in terms of any key associationwith the company can even have harmfuleffects. It can blur a company's posifion-ing and negatively influence the elabora-fion of the sponsorship, which may thencontribute to a dilufion of the company'sequity. Our study did not account for this

factor. Consequently, future research on the

long-term effects of culture sponsoring will

require the consideration and integrafion of

fit between company and sponsored cause.

It must be noted, however, that the concept

of introducing attitude toward the sponsor-

ship as a mediating construct as proposed

by Simmons and Becker-Olsen (2006) can-

not be simply transferred to our study.

Just as with social sponsorships, spon-

soring activities in the cultural domain

initially may be assessed by the general

public according to their surface mean-

ing—whether they are sophisticated and

eligible. The initial positive inference with

regard to the sponsoring company is fairly

automatic (Campbell and Kirmani, 2000)

and can be modified only if participants

engage in further elaboration in which

they consider secondary information

sources to judge the activity. However, this

requires a high involvement situation as in

the laboratory experiment conducted by

Simmons and Becker-Olsen (2006). Con-

sequently, future research should explore

possibilities to transfer this notion to the

present research setup.

The question of how culture sponsor-

ing can achieve synergy effects when

combined with other communicational

measures could also be of particular inter-

est. In this regard, it would be worthwhile

to revisit Quester and Thompson's (2001)

study and assess these interaction effects

in a real-world pre- and post-test setup.

The final aim of such research efforts,

however, should be to explain what influ-

ence specific investments in culture-spon-

soring activities have on the establishment

of absolute reputation levels held by the

general public. To clarify this, it would be

necessary to publicize the budgets of a suf-

ficiently large number of companies that

invest in this instrument.

March 2 0 1 0 JOURnHL OF HDUERTISinG HESERHCR 8 7


PROFESSOR DR. MANFRED SCHWAIGER is fuii professor of

business administration at the Ludwig-Maximiiians-

University of Munich (LMU) and head of the institute

for Market-Based Management at the LMiJ. He has

been serving as Dean and Dean of Studies at the

LMU for many years. iHis research interests cover

corporate communications, return on mari<eting, and

management of intangibie assets.

DR. MARKO SARSTEOT is assistant professor at the

institute for Mari<et-Based Management at the LMU.

iHis research interests are in the areas of corporate

reputation, scaie deveiopment, singie-item scaiing,

and PLS path modeiing.

PROFESSOR CHARLES R. TAVLOR, PH.D. is the John A.

Murphy Professor of Mari<eting at the Viiianova Schooi

of Business, Viiianova University. He received his Ph.D.

in marketing from Michigan State University. Tayior

aiso serves as editor of the International Journal of

Advertising. He is a past president of the American

Academy of Advertising, and his primary research

interests are in the areas of giobai advertising,

advertising reguiation, and advertising effects.

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March 2 0 1 0 JDURIIHL OF HDUERTISIItG RESEHRCH 8 9


APPENDIX A

Items for the ConstructsAPPENDIX B

Examples of Press Reports

Construct Indicators

Likeabiiity [the company] is a company that i can better identify with than with

other companies,

[the company] is a company that I would more regret not having If it

no longer existed than I would other companies.

I regard [the company] as a likeable company.

Competence [the company] is a top competitor in its market.

As far as i know, [the company] is recognized world-wide.

I believe that [the company] performs at a premium level.

Quaiity The products/services offered by [the company] are of high quality.

In my opinion [the company] tends to be an innovator, rather than an

imitator with respect to [industry].

I think that [the company]'s products/services offer good value for

money.

The services [the company] offers are good.

Customer concerns are held in high regards at [the company],

[the company] seems to be a reliable partner for customers.

I regard [the company] as a trustworthy company.

I have a lot of respect for [the company].

Performance [the company] is a very well managed company,

[the company] is an economically stable company.

I assess the business risk for [the company] as modest compared to

Its competitors.

I think that [the company] has growth potential,

[the company] has a clear vision about the future of the company.

Attractiveness In my opinion [the company] is successful in attracting high-quality

employees.

I could see myself working at [the company].

I like the physical appearance of [the company] (company, buildings,

shops etc.).

CSR [the company] behaves in a socially conscious way.I have the impression that [the company] is forthright in giving

information to the public.I have the impression that [the company] has a fair attitude towards

competitors.

[the company] is concerned about the preservation of the environment.I have the feeling that [the company] is not only concerned about

profits.

Young Directors Project powered by

iVIontblanc-Saizburg Festivai 2005

Hamburg, 2005/1/25—After three

successful years, the culture brand

Montblanc will continue its cultural

commitment to the Salzburg Festival

and will sponsor the innovative Young

Directors Project in its entirety for at

least three more years. Festival boss

Martin Kusej wili present young thea-

tre directors from the "edge" of Europe

in this year's competition. With this

choice, Martin Kusej's wish to offer

the rich, lively, and creative arts of

Europe's neighbours a platform is put

into practice.

Box 1 Press text with acultural theme (example)

Siemens wins Order for Voice-over-IP

in the Netherlands

Munich, 2004/12/3—The Dutch cable

net operator Casema has ordered the

delivery, installation and upkeep of a

solution that will enable country-wide

voice transfer via Internet Protocol (IP)

from Siemens Communications. Voice-

over-IP is markedly cheaper than nor-

mal telephones. Siemens' Voice-over-IP

solution is already successfully used in

the USA.

Box 2 General press reportwithout cultural reference(example)

9 0 JOURflRL or RflUERTISlOG RESERRCR March 2 0 1 0

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