Cause-Related Marketing and the U.S. Sports Industry

As I mentioned before CSR is quickly emerging in the business community; therefore, many organizations are getting involved in socially responsible initiatives (Kotler & Lee, 2005). Among distinct CSR initiatives, CRM is becoming a real trend in the business community. Indeed, many firms have been participating in CRM activities because they see CRM as a strategic tool of corporations (Kotler & Lee, 2005; Nan & Heo, 2007).

In January 2015, International Event Group (IEG) published an online article that shows some data about “The Growth of Cause Marketing” and sponsorship spending by North American companies (International Event Group). IEG has predicted that corporate cause sponsorship spending by North American companies will hit $1.92 billion in 2015, an increase of 3.7%, from $1.85 billion in 2014. It is also interesting to take a closer look at the projected sponsorship by United States and Canadian companies on sports. IEG projected that sports sponsorship spending will almost reach $15 billion in 2015. This shows an increase of 4.4%, from $14.35 billion in 2014.

IEG also reported some data about the projected 2015 shares of the United States' and Canadian sponsorship market. They did not only report the constant and significant growth that causes have had in the past decades but they also stated that causes have been able to maintain their 9% share in the North American sponsorship market. IEG also projected a 70% share dedicated to sports in the sponsorship market.

This data clearly shows how the expenditure for both sponsorship property types is constantly growing and therefore indicating an increase in their importance within the market.
Consistent with the IEG data, the sports industry is actively involved in several marketing activities. It was only in 2002 that Lachowetz and Gladden introduced the term: causerelated sports marketing (CRSM), defining it as “strategic sports marketing aimed at creating a mutually beneficial link between a company, sports organization or athlete, and a social cause through the use of sports events and programs” (p.319). Hence, despite of the rising participation in CRSM initiatives by sports corporations, academic research has just started to study this new phenomenon.

In the majority of the studies that have been conducted, researchers have mostly focused on examining consumer behavior and their responses to CRSM programs. Irwin et all. (2003), investigated how spectators were going to behave in regard to the FedEx St. Jude Classic professional golf tournament. This CRSM program was meant to increase awareness for the FedEx brand and to collect substantial donations for the St. Jude Children’s Research Hospital. The outcome was that spectators were expected to have positive beliefs, attitudes and favorable behavioral intentions towards a for-profit sports organization, associated with a non-profit beneficiary and a relevant cause. Roy and Graeff (2003) also stated that consumers tend to emphatically welcome the idea that professional sports teams, athletes or sports corporations should support charities and causes throughout the country.

Four different CRSM categories can be identified (Babiak & Wolfe, 2006):
1. Professional leagues implemented CRSM;
2. Each franchise team has its own foundation to support the community (e.g. Nascar Foundation; San Francisco Giants Community Fund);
3. Mega-sports events implement socially responsible programs;
4. Individual star athletes support social causes through their own foundations.

An example of a star athlete who is committed to a CRSM program through his very own foundation is the seven-time Tour de France winner, Lance Armstrong, and the Lance Armstrong Foundation (LAF). LAF seeks to provide “a network of support for cancer survivors and their families” (McGlone & Martin 2006,189). This became easier when LAF partnered with the multinational corporation Nike and could benefit from Nike’s fame. Due to this partnership this campaign recorded one of the highest CRSM revenues in 2007, totaling $52 million.

Nowadays, sports clubs and sports corporations feel the pressure to support causes because consumers and stakeholders expect them to do so. When sports organizations decide to support a relevant cause by participating in CRM activities, it generates a positive corporate image for the organization itself. Indeed, Roy and Graeff (2003) stated that consumers have a more positive image towards sports organizations if they are engaged in supporting a social cause, which has to be relevant to its target customers. This approach is seen as a way to give back to society and to help people who are really in need (Williams, 2002). Also, participating in a CRM program could be beneficial for sports organizations, especially for sports clubs. Indeed, their fans are more likely to become involved with the club and strengthen their long-term relationship.

Non-fans could therefore become lifetime fans. This is due to the fact that sports clubs, and their players, are constantly in the public eye. In other words, their behavior and their actions will always have an impact on their image and on how their stakeholders are going to react (Seth & Babiak, 2009).
For this reason, there are some fundamental factors that need to be considered in order to have a successful cause-related sports sponsorship program. These are: CRSM management factors, individual-level factors and some outcome variables.

CRSM management factors:
§ The right fit between a sport and a cause (Adkins, 1999; DeNitto, 1989; Higgins, 2002; Lewis, 2003; Becker-Olsen et al., 2006);
§ Motivation for engaging in CRSM (Barone et al., 2000);
§ Tangible (financial) exchange between a sport organization and a relevant cause (Strahilevitz, 1999).

Individual-level factors:
§ Team identification (Madrigal, 2000);
§ Cause identification (Cornwell & Coote, 2005).

Outcome variables:
§ Consumer choice (Barone et al., 2000);
§ Consumer behavior in regard to CRSM (Pirsch, Gupta, & Grau, 2007);
§ Purchase intention (Cornwell & Coote, 2005).