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Relationship between Education Sponsorship and Brand Equity amongst Beverage Companies in Nairobi City County
- Gatana Michael Muchira
- Stephen Maore
- Simon Muriithi
- 1746-1755
- Mar 18, 2024
- Education
Relationship between Education Sponsorship and Brand Equity amongst Beverage Companies in Nairobi City County
Gatana Michael Muchira1 *, Stephen Maore 2 & Simon Muriithi 3
1,2,3 School of Business and Economics, Kenya Methodist University
Corresponding Author*
DOI: https://dx.doi.org/10.47772/IJRISS.2024.802124
Received: 12 January 2024; Revised: 17 January 2024; Accepted: 22 January 2024; Published: 18 March 2024
ABSTRACT
Global competition has called for companies to be more innovative in the way they position their brand to achieve a competitive edge. Therefore, companies have adopted more non-traditional ways to showcase their products each more audiences as possible, one of the innovative ways of marketing that have gained more attraction among corporate marketers is corporate sponsorship. Marketers have found corporate sponsorship to be more effective in creating brand awareness and re-shaping brand attitudes amongst prospective customers. The purpose of the current study was to investigate the relationship between corporate sponsorship and brand equity among beverage companies in Nairobi County. The specific objectives of the study were to establish the relationship between education sponsorship and brand equity amongst beverage companies in Nairobi City County. The study involved 237 public relations and marketing managers in 10 beverage companies sponsoring different education. Sampling for the study was conducted through a stratified random sampling technique. Data for the study was collected using questionnaires that were administered physically as well as online. Collected data was analyzed through descriptive and inferential analysis. Descriptive statistics included: mean, frequency, percentage, and standard deviation. Inferential analysis on the other hand included correlation as well as regression analysis. Education sponsorship and Brand Equity revealed a β= 0.254, t= 2.566, and a p-value of 0.012. The study concluded that education sponsorship had a positive and significant relationship with brand equity. Public relations managers and marketing managers need to identify needy and also bright students in society who are enrolled in schools by giving them scholarships to boost their corporate image.
Key Words: Corporate sponsorship, education, Brand equity, Beverage Companies, Nairobi City Count
INTRODUCTION
Organizations use sponsorship the same way they use advertisement to promote the brand image, the product as well as the service to its prospective customers. However, the way the message about the product is given is quite different. Whereas advertisement is used to communicate directly the message about the product through paid advertisement through a more controlled approach, sponsorship, on the other hand, involves sending messages to the prospective customers indirectly by having the message linked to a particular event (Jungbok, 2015). The commercial sponsors are focused mainly on the logos, trademarks, and brand names while associating such with the activities/attributes of the sponsors. Sponsorship tries to achieve a noble course that may include, promoting a certain attractive behavior for instance sponsorship activities in racing, sports, and arts may be carried out to promote good health activities (Cornwell & Kwon, 2020).
Companies all over the world have incorporated the use of corporate sponsorship to improve or instead maintain the company’s brand name. Furthermore, the impression and interactions of consumers with the brand establish the brand equity’s worth. A corporation has substantial brand equity if consumers are appreciative of it (Hernandez & Longman, 2020). Moreover, a brand has negative brand equity when it continually underperforms and disappoints to the point that consumers advise others to steer clear of it. Businesses participate in point-of-sale contribution programs not only because they may be profitable but also because it allow them to contribute to a society that is consistent with their overall brand statement (Keller et al., 2020).
Major global corporations partner with non-governmental organizations that channel their resources to society. For instance, an innovative nonprofit organization known as Team Rubicon organizes with willing veterans who assist in response to natural catastrophes; Mountain Dew supports the organization with a $1 million grant to start (Azadi, 2016). They also created limited-edition items, including tents, backpacks, and other fantastic gear, to present to Team Rubicon employees and veterans. This is a singular instance of a business supporting a nonprofit organization to promote its brand, corporate ethos, and public image (Keller et al., 2020).
Beverage companies globally use different strategies to maintain their relevance in the market, including social marketing. The use of marketing concepts and strategies to influence behavior change in a specific demographic is what is meant by the term “social marketing” (Mulei, 2019). Social marketing employs marketing concepts and processes to influence behavior and change in a specific audience. Social advertising campaigns aim to spread concepts that either support good conduct, like protecting the environment or using seat belts or oppose lousy behavior, like accelerating or openly in public venues—social marketing functions as a means of “selling” the welfare of society as a whole. Nonprofit organizations, humanitarian organizations, mass transit departments, and governmental organizations are the primary users of social marketing. Emergency agencies like the police and fire departments also use it. Some commercial businesses will also employ social marketing methods on occasion (Lee et al., 2015).
The largest audience for social marketing is society as a whole. However, the society that the marketer is trying to alter determines the target for social marketing (Vale, et al., 2019). While some efforts aim to increase awareness of regional problems, others have the grand ambition of transforming the globe. Moreover, positive social marketing efforts provide the chance to make a difference even if small because most people naturally desire to do good. Self-worth and self-esteem are two intangible rewards people might get from contributing to society (Storey et al., 2015). By aligning businesses with charity initiatives, these relationships enable consumers to connect the brand with the charitable organization and create a broader feeling of social good. More than 75% of Millennial workers say they would like to work for a company that actively supports charity giving (Raudeliūnienė et al., 2018). It isn’t easy to run a charitable foundation. The need to collect money is continual, and there is an infinite list of objectives to achieve. To remain solvent, nonprofit organizations often depend on contributions from kind people and businesses.
Big companies, including PepsiCo, have systems to provide donations and contributions to charity organizations. Through the PepsiCo Foundation, PepsiCo has donated upwards of 900 million dollars in gifts-in-kind and grants amounting to more than $900 million since 2005. Additionally, it has donated innumerable products to surrounding enterprises (Raudeliūnienė et al., 2018). A skeptic may see Pepsi’s complex sponsorship strategies as another platform to promote their beverages, but their partnership with charities is reciprocal. Without a doubt, customers will purchase Pepsi goods more often the more frequently they associate the brand with favorable attributes (Lang, Buu, & Hien, 2020). That embodies behavioral science in its purest form. However, every philanthropic organization associated with the Pepsi brand will be highlighted in the same favorable light. The linked charity will benefit from a more extensive donor base and more revenue from the same enhanced want to purchase readily converting into a desire to give. Either side of the issue does have something to offer (Raudeliūnienė et al., 2018).
Kenyan businesses have been operating in a highly dynamic marketing environment for the last ten years. In Kenya in the early 1990s, numerous companies benefited from uncontested monopolies and government protection. Given the lack of competition and the limited selection of products available to customers at the time, the production marketing concept seems to have prevailed. Competitive pricing was the primary strategy for outperforming any rivals at the time. Consequently, companies in Kenya associate with non-profit organizations, including orphanages, homes, and schools to give back to society. For instance, the Coca-Cola Foundation provides community assistance initiatives that raise the standard of living in local communities. During the COVID-19 pandemic, Coca-Cola companies in Nairobi County donated to neighboring communities such as Kibera and Muthurua. With an emphasis on the global pillars of environmental conservation, active and healthy lifestyle culture, communal recycling, and training, The Coca-Cola Company’s social investment initiatives reflect the company’s international and domestic aspects (Jungbok, 2015).
Education Sponsorship
Businesses usually support individuals financially to pursue education through scholarships for students or partnering with educational institutions through research and education programs. Needy students are offered grants that cover their school fees (tuition), textbooks, and upkeep Money. Besides, corporate businesses also engage in education sponsorship by partnering with institutions of higher learning to develop infrastructure and also through research programs. Additionally, businesses also undertake education projects to offer education in the community. Lastly, companies that intend to create a name for themselves in the business world also offer internship opportunities and training programs that help in furthering the education, skills, and knowledge of certain individuals (Hernandez & Longman, 2020).
Brand Equity
A brand is associated with a logo of the product, slogans, image as well as the perception that is associated with a particular product. The brand is pushed into the minds of the consumer through advertising, market communication, sponsorship, public relations, etc. With time the product/brand sells information about quality as well as performance which enables the consumer to choose a product over others in the market. Consumers who trust a product may even pay a premium for it and choose it over other competing products. A trusted and valued product has a value that is referred to as brand equity. Positive brand equity refers to a situation of the difference between what consumers pay for a product against the benefits the consumers receive from buying the product. On the other hand, negative brand equity exists when there is a catastrophic event that leads to a massive recall of the product or the existence of negative press attention (Kotler, 2012; Keller, 2011)
Management of brands presents a competitive advantage for organizations. Brand equity supports the customers’ value by enhancing brand awareness, loyalty to the brand as well as profit margin. Brand equity is the major motivation for customers to buy from certain products and not those of the company in competition with it. Brand equity represents the value of a product with a well-known name tag. Therefore, a well-known brand would be the cause to buy certain products and not others that are less known. Therefore, brand equity is the worth of the brand or the image of the brand itself. Brand equity is mainly derived from brand awareness or the consciousness of about the product. Brand equity can be presumed to be the brand worthiness that is in the mind of the consumers as the value of the product. Organizations with strong brands have been argued to enjoy cost advantage as well as demand advantage (Ebrahim, 2020).
Corporate sponsorship has gained more attraction among marketers over traditional marketing, with over $97 billion spent globally by companies to market their products in the year 2020. Marketers have found corporate sponsorship to be more effective in creating brand awareness and re-shaping brand attitudes amongst prospective customers. If anything, the spending on corporate sponsorship is projected to double by the year 2030. The effect of sponsorship has been companies conducting sponsorship double their returns on investments (ROI), as well as an increase in net profits (Ebrahim, 2020).
Environmental dynamics presented by new global competition, innovativeness, and changes in tastes and preferences have made beverage companies come up with long-lasting ways of maintaining loyal customers as well as attracting new ones, Gul, et al (2021) noted that companies are pumping more and more resources in marketing strategies that enhance closers attention and relationship with customers through the creation of brand awareness, however, there are no automatic results from corporate sponsorship because companies have to do more than pumping money in projects associated to their business allies. A match is always desired between marketing outcomes and the resources employed otherwise businesses would suffer huge marketing costs at low sales outcomes. It is therefore important to investigate the relationship between corporate sponsorship and brand equity, specifically among beverage companies in Nairobi County, by specifically looking at the relationship between education sponsorship and brand equity.
Objective: to determine the influence of education sponsorship on the brand equity of beverage companies in Nairobi County
LITERATURE AND HYPOTHESIS
Excellence Theory of Public Relations
The use of good relations with the public is in reducing negative publicity and increases the sales of the organization. The public relations department or team has the responsibility of identifying the strategic public and therefore building a long-term relationship with them through bringing symmetrical information between the two players and therefore achieving the public relations value. The corporate image that the general public has about an organization is a result of the roles played by the public relations department (Shortal, 2020).
In excellence theory in public relations is identified with the following areas: a) the empowerment that is given to the public relations function as an important function of management b) the public relations department also needs to play the communication role in the management as well as the administration c) the public relations function should play the role of the organization by having the place of public relation well defined other than being ingrained in the marketing function (Rizzo, 2018). The theory of excellence in public relations is important to the study by helping in the understanding of the important relationship between education sponsorship and brand equity which includes awareness of the brand, the image of the brand as well as the loyalty that customers can build on the particular brand in the beverage companies in Kenya.
Empirical Literature
George et al. (2012), studied the influence of education sponsorship on marketing communication performance for Airtel in Ghana. the study was a social survey with 120 participants in the study. A questionnaire with 15 items was used in collecting quantitative data for the study. Data were analyzed through SPSS version 18. The researcher established that increased brand awareness, brand acceptability, corporate image, and brand recall affect increased sales, which also impact the organizational value of Airtel.
However, Marketing Strategies that may apply to services may not necessarily apply to the product, which leads to the conclusion that it is important to establish the relationship there is between corporate sponsorship of beverage products and brand equity in Kenya.
Tufail, et al. (2014), studied the effect that sponsorship and publicity had on brand equity in all the big cities in Pakistan among 200 educated students. The data for the study was collected through questionnaires that had Likert-type questions on a five-point scale. The questionnaires had 30 items/indicators. The study used Aker’s (1997) model of brand equity including brand reliability, brand association, perceived value, and brand consciousness. The study instrument was pretested for reliability using the Cronbach alpha value/coefficient at 0.7 which was presumed acceptable for further analysis. The data for the study was analyzed through hierarchical regression. The study revealed an R-square of 0.341 indicating that publicity and sponsorship explained 35% of the changes in brand equity. The results of the study revealed that publicity and sponsorship had a significant positive effect on brand equity. However, the study did not consider any specific brand by the sponsor, it was a general study. It is therefore important to conduct a study that focuses on particular sponsors or brands. The study also considered publicity as one of the variables, however, the current study included sponsorship alone and was conducted locally in Kenya.
Kończak (2020) assessed the activities of corporate sponsorship of small and medium enterprises in West Germany, the study was a descriptive survey of the top 10 small and medium enterprises in information communication and technology business. Data for the study was qualitative data, collected through interviews and focused group discussions. Results of the study revealed that corporates have for a long time been engaged in schools by providing financial assistance and in return having their logos and the company name displayed or disseminated throughout the institution. Due to the limited funding by the government for the public schools, the private sector has been at the forefront of supporting some key projects in the schools including construction activities or gifts of stationery, and learning equipment as well as giving scholarships to bright and needy students. This idea has the advantage of not only lessening the burden on the students but also providing an opportunity for the student to have access to resources needed for learning that otherwise without the sponsor would not have been available. Schools are required to have enough supplies of stationery, computer equipment, and laboratory equipment that are essential for learning.
Schools are facing rampant budget cuts resulting in the loss of funding for important activities in schools such as sports, early childhood education programs, and elderly education programs, there has been the loss of art, music, and physical education opportunities in schools, corporate sponsorship has on their part contributed to the extracurricular activities as well as the school programs. Under Armour has continuously donated amounts in millions for simply allowing students in athletics departments to wear shirts whose collars have the initials ‘UA’. Other programs sponsored mainly by the institution include graphics and design, fashions and design, cinemas, interior design as well as dance classes (Nuseir, 2020).
Elasri et al. (2020) studied the roles played by corporate sponsorship with a case study of a Coca-Cola company in Lagos, Nigeria. the study was a case study descriptive study, where data for the study was gathered through questionnaires that were administered in person. The study sample size comprised 231 marketing managers and public relations officers. Besides the study interviewed principals of 12 top high schools and 5 private universities /colleges in Lagos. Results of the study revealed that corporate sponsorship has played crucial roles in supporting and reviving programs that had been deemed non-essential and were also in the blink of termination. Coca-Cola company has been at the forefront of issuing scholarships to bright students in universities and high schools, due to financial challenges and difficult times facing families across the globe, with Coca-Cola only having a vending machine at some institutions students still enjoy the benefits of scholarships. The scholarships are given under three areas: Coca-Cola community college academic team scholarship, Coca-Cola leaders or promise scholarships, and Coca-Cola scholars scholarship. Critiques have, however, argued that corporate sponsorship has compromised the integrity of the learning institutions by involving students in non-learning activities such as exposure to Coca-Cola. However, corporate sponsorship benefits far outweigh the risks involved. Corporate sponsorship has ensured needy students stay in schools, and it has enhanced and expanded programs such as information, communication, technology, dance, and music classes, as well as the establishment of classrooms or even dormitories. Through sponsorship of education, companies can create brand awareness as well as image. The study recommended that schools should strive to have corporate sponsors who instill a positive attitude.
HO1: Education sponsorship does not have a significant relationship with brand equity amongst beverage companies in Nairobi County.
DATA AND METHODS
Target Population: The population of the study included 10 beverage and food manufacturing companies in Kenya carrying out simultaneously all four corporate sponsorships: sports, education, arts, and culture (KNBS, 2021), they acted as the unit of analysis. 237 Marketing managers and public relations officers were the target respondents in the study or the unit of observation (Delloite, 2021).
Data Collection Instrument and Method: Data for the study was collected through a questionnaire. The questionnaire was chosen because of its ease of administration as well as the ability to collect data with ease. Data for the study was collected through both physical and electronic methods.
Data Analysis: Data analysis involved descriptive and inferential analysis. Descriptive Analysis involved measures of central tendency as well as measures of dispersion. Measures of central tendency involved: mean, frequency, and percentage, whereas measures of dispersion will involve standard deviation whereas inferential analysis involves a simple linear regression model of the following form:
Y= α+ β1X1+ ℇ………………………………………………….……………………. equation (a)
Whereby Y was the Brand equity as the dependent variable and the independent variable is education sponsorship (X1), whereas the ℇ is the error term in the fit model.
RESULTS AND DISCUSSIONS
Response Rate: The study sought to collect data from 149 participants, both publication relations managers and marketing managers in 10 Beverage companies carrying out different forms of corporate sponsorship in Nairobi County. The study however managed to collect 116 useful responses among the participants which represented a 77.85% response rate.
Descriptive Statistics on Education Sponsorship
Table 1, revealed that the respondents agreed that their institution had sponsored bright students in society (M=4.7), sponsored ICT programs in schools (M=4.16), used sponsorship of extra-curricular activities in schools to enhance talent identification (M=4.19), and had their brand logos displayed within the educational institutions they sponsored (M=3.97). Elasri Ejjaberi, et al. (2020) noted similarly that the Coca-Cola company has been at the forefront of issuing scholarships to bright students in universities globally, due to financial challenges and difficult times facing families across the globe. The scholarships are given under three areas: Coca-Cola community college academic team scholarship, Coca-Cola leaders or promise scholarships, and Coca-Cola scholars scholarship. Microsoft is also another institution offering scholarships to benefit students in universities.
Table 4.1: Descriptive statistics on Education Sponsorship
SD | D | N | A | SA | ||||||||
Statement on Education Sponsorship | F | % | F | % | F | % | F | % | F | % | Mean | Std Dev |
Our institution has sponsored bright students in society | – | 0 | 8 | 6.9 | 7 | 6 | 70 | 60.3 | 31 | 26.7 | 4.07 | 0.777 |
We have sponsored ICT Programs in schools | – | 0 | 4 | 3.4 | 10 | 8.6 | 65 | 56 | 37 | 31.9 | 4.16 | 0.722 |
We have used sponsorship of extra-curricular activities in schools to enhance the talent identification of students | 3 | 2.6 | 4 | 3.4 | 8 | 6.9 | 54 | 46.6 | 47 | 40.5 | 4.19 | 0.903 |
we have our brand logos displayed within the educational institutions we sponsor | 5 | 4.3 | – | 0 | 11 | 9.5 | 77 | 66.4 | 23 | 19.8 | 3.97 | 0.828 |
Descriptive Statistics on Brand Equity
Table 2 indicates that the respondents agreed that their brand visibility had increased as a result of sponsorship(M=4.25), respondents also agreed that customers were more connected to their product as a result of sponsorship (M=4.26), respondents further agreed that customers were more likely to stick with the brand (M=4.32), finally, respondents agreed that products were more acceptable by the customers (M=4.24). Alhaddad (2015) agrees that a brand is one of the most attractive, / valuable assets that a brand owner can enjoy the financial value associated with its value associated with the brand includes the profit margin, market share, recognition of brand logos, and perception of product quality. Benefits associated with brand equity fall into quantitative and qualitative measures. The quantitative measures include profit margins as well as market share. On the other side, the qualitative benefits include prestige associated with customers using the product as well as the association of interests.
Table 4.2: Descriptive Statistics on Brand Equity
SD | D | N | A | SA | ||||||||
Statement on Brand Equity | F | % | F | % | F | % | F | % | F | % | Mean | Std Dev |
Our brand is more visible as a result of sponsorship | – | 0 | 5 | 4.3 | 5 | 4.3 | 62 | 54.3 | 44 | 37.9 | 4.25 | 0.733 |
Customers are more connected to our product due to corporate sponsorship | 2 | 1.7 | 4 | 3.4 | 7 | 6.0 | 52 | 44.8 | 51 | 44.0 | 4.26 | 0.856 |
Our customers are more likely to stick with us as a result of sponsorship | 1 | 0.9 | 5 | 4.3 | 10 | 8.6 | 40 | 34.5 | 60 | 51.7 | 4.32 | 0.871 |
Our products are more accepted by our customers | 2 | 1.7 | 8 | 6.9 | 4 | 3.4 | 48 | 41.4 | 54 | 46.6 | 4.24 | 0.938 |
Regression Analysis
Relationship Between Trade Shows, Conferences, and Brand Equity
Table 3 revealed an R-square of 0.333 which implied that 33.3% of changes in brand equity can be explained by education sponsorship. Further, the results of the analysis of variance revealed an F-ratio of 56.952 which was associated with a p-value of 0.001<0.05, which implied that the model was statistically significant in predicting the brand equity among the beverage companies in Nairobi county. Regression analysis further revealed a β=0.557, t=7.547, which was associated with a p-value of 0.001 which implied that education sponsorship significantly and positively had a relationship with brand equity among beverage companies in Nairobi county. Tufail, et al. (2014) were in agreement with the current study findings when they studied the effect that sponsorship and publicity had on brand equity in all the big cities in Pakistan among 200 educated students. The results of the study revealed that publicity and sponsorship had a significant positive effect on brand equity.
Table 4.17: Trade Shows, Conferences, and Brand Equity
Model Summary | ||||||
Model | R | R Square | Adjusted R Square | Std. Error of the Estimate | ||
1 | .559a | 0.312 | 0.306 | 0.48777 | ||
ANOVAa | ||||||
Model | Sum of Squares | df | Mean Square | F | Sig. | |
1 | Regression | 12.327 | 1 | 12.327 | 51.809 | .000b |
Residual | 27.123 | 114 | 0.238 | |||
Total | 39.45 | 115 | ||||
Coefficients | ||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||
B | Std. Error | Beta | ||||
1 | (Constant) | 1.391 | 0.386 | 3.606 | 0 | |
Trade shows, and conferences | 0.663 | 0.092 | 0.559 | 7.198 | 0 |
- Dependent Variable: Brand equity
- Trade shows, and conferences
Source: Research (2023)
CONCLUSIONS AND RECOMMENDATIONS
The study concluded that education sponsorship had a positive and significant relationship with brand equity. The study, therefore, rejected the null hypothesis that: education sponsorship does not have a significant relationship with brand equity. Researchers that were in support of the conclusions include (Tufail, et al., 2014; Hernandez & Longman, 2020). Tufail, et al. (2014) were in agreement with the current study findings when they studied the effect that sponsorship and publicity had on brand equity in all the big cities in Pakistan among 200 educated students. The results of the study revealed that publicity and sponsorship had a significant positive effect on brand equity.
Through sponsorship of education, companies can create brand awareness as well as image. Schools should strive to have corporate sponsors who instill a positive attitude in the students such as Microsoft promoting the attitude of students engaging themselves in software development in universities (Hernandez & Longman, 2020). The findings also support the goal path theory that every institution has goals that are more than mere desires, organizations are involved in sponsorship activities, particularly in education sponsorship to enhance brand image.
The study recommends that public relations managers and marketing managers need to identify needy and also bright students in society who enrolled in high school, colleges, or even universities but cannot afford school fees by giving them scholarships. By doing so the sponsored students become the brand ambassadors. Besides, the marketing managers can identify gaps in society and the need for a particular ICT need in society and sponsor people in society by paying professionals and technicians maybe about Microsoft Office or new technology.
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