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Journal of Business Economics
Published in: Journal of Business Economics 7/2017

14-03-2017 | Original Paper

Are sponsors blamed for edging off? Consumer reactions to sponsorship terminations

Authors: Oliver Schnittka, Alexander Himme, Dominik Papies, David Pellenwessel

Published in: Journal of Business Economics | Issue 7/2017

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Abstract

Firms regularly terminate sponsorships, even without publicly known misconduct by the sponsee such as athlete doping. Consumer reactions to these sponsorship terminations by firms have not been studied despite being a regular occurrence. Using a set of experimental studies, this paper analyzes consumer reactions to these sponsorship terminations (i.e., early and non-renewal) that were not caused by a sponsee’s misconduct, the underlying process that causes the reactions, and the role of several moderating factors (trust, power balance, and locus of control). Our findings reveal that sponsorship terminations have a negative effect on sponsors’ brand images—particularly early terminations that occur before the end of a contract—because consumers perceive these sponsorship terminations as unfair. The results also suggest that a termination is particularly harmful for the sponsor’s perceived fairness if the sponsor is powerful and if the termination decision is under the sponsor’s control. Further, the termination effect is particularly strong for firms that consumers trust.
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Journal of Business Economics

From January 2013, the Zeitschrift für Betriebswirtschaft (ZfB) is published in English under the title Journal of Business Economics (JBE). The Journal of Business Economics (JBE) aims at encouraging theoretical and applied research in the field of business economics and business administration, promoting the exchange of ideas between science and practice.

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Appendix
Available only for authorised users
Footnotes
1
Furthermore, an analysis of the Google Search Volume around the time of exemplary terminations supports the notion that consumers notice sponsorship terminations (see “Appendix A” for details).
 
2
The detailed experimental manipulations for all experimental studies are available upon request.
 
3
Here and in the following analyses, we checked the equality of variances (Levene’s test), and we provide the corresponding corrected t-values and p-values where applicable.
 
4
Here, the question arises whether consumers generally disapprove of contract terminations beyond the case of sponsorship terminations, e.g., when considering a supplier contract. Theory suggests that because these non-sponsoring B2B-contracts do not show the key characteristics of sponsorships that we discussed above, i.e., regular, non-sponsoring B2B-contracts are usually not viewed as arrangements that “provide benefit to society” or “support causes that deserve support”. Thus, a termination should not lead to negative effects on fairness and brand attitude. To assess this, we ran an additional study, which we report in “Appendix C”. As expected, we do not find a significant effect on fairness and brand attitude if a firm terminates a regular B2B contract (e.g., contract with a supplier). This suggests that consumers do differentiate in the judgement between different contract types.
 
5
95% confidence intervals are reported in brackets.
 
6
In addition to these two conditions in which either the sponsor or the sponsee was powerful, an additional intermediate condition was implemented in which the power was equally distributed. The results are similar to the results in the “power in favor of the sponsor” condition; early terminations show a negative effect on perceived fairness compared to the maintenance condition, while non-renewals show no significant differences compared to the maintenance group. For the sake of conceptual clarity and because an equal distributed power balance is quite rare to observe in practice, we omit this condition from the analysis which is presented here, but the results are available from the authors upon request.
 
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Metadata
Title
Are sponsors blamed for edging off? Consumer reactions to sponsorship terminations
Authors
Oliver Schnittka
Alexander Himme
Dominik Papies
David Pellenwessel
Publication date
14-03-2017
Publisher
Springer Berlin Heidelberg
Published in
Journal of Business Economics / Issue 7/2017
Print ISSN: 0044-2372
Electronic ISSN: 1861-8928
DOI
https://doi.org/10.1007/s11573-017-0859-3