The internationalization of sports clubs

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A qualitative study of internationalization in the sports industry

Kiara Dettmer

Department of Business Administration

Master’s Program in Business Development and Internationalization Master´s Thesis in Business Administration III, 30 Credits, Spring 2020

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Abstract

Globalization has opened up new markets. Companies have now endless opportunities to expand their business reach with sports clubs being no exception. Internationalization in sports has its beginnings with foreign players joining a team and changed in 1995 with the Bosman ruling. After the Bosman ruling, the transfer of international players became easier. Not only can one notice the internationalization of sports teams by the transfer of players but also by the expansion of the sports itself. The NFL plays home games in London, the NBA in Mexico City and FC Bayern Munich has opened subsidiaries in the US and China. Yet, this all seems like the whole sports industry is expanding. However, the influences behind this drive are unclear.

The purpose of this thesis is to gain an understanding of internationalization in the sports industry. As the current literature indicates several gaps regarding the internationalization of sports clubs such as the limited view on one sport at the time or the data usage of clubs in their internationalization process, this thesis focuses on offering a broader picture.

Therefore, the research question formulated for this thesis is:

What influences the internationalization in the sports industry?

For answering the research questions and fulfill the purpose of this thesis, an inductive approach was selected with a qualitative exploratory research study. By mixing the pur- posive and self-selected sampling, six semi-structured interviews were conducted among different sports clubs. The findings indicate that there are several different influences in the internationalization process of sports clubs. Leagues and their ambitions are one direct influence. Here, the leagues statutes seem to be guidelines for the clubs and their perspectives on growing. Another influence are the market conditions, where one can distinguish between the home market and foreign market conditions. There are some markets that do not allow much for further grow, as another sport is dominating the industry. For that reason, expanding internationally becomes necessary. Yet, some clubs see more potential on the home market to expand their scope and are thus, not thinking of internationalizing soon. Also influencing the internationalization are partnerships. Partnerships, either new or existing ones, offer the benefit of having knowledge or a business network the club can potentially benefit from.

This study contributes to the literature of sports teams’ internationalization by adding the underlying concept of influences in the process. Understanding the influences will not only support the eventual internationalization but also offers the opportunity to unite organizations in their efforts.

Keywords: Sports Teams Internationalization, Internationalization, Influential Factors, Sport, Brand Management, Relationship Management, Internationalization Models

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Acknowledgements

First and foremost, I would like to express my sincere gratitude to my supervisor Zsu- zsanna Vince for contributing with her time and constructive feedback throughout the whole process of this research. Her guidance, expertise and involvement were vital for

this study.

I would also like to thank the clubs for their time, willingness to participate and sharing their experiences with me. Without them this study would not have been possible.

Finally, I wish to thank my family and friends for their constant support and encourage- ment throughout my study. Thank you!

Umeå, 25^th of May 2020 Kiara Dettmer

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Table of Content

1. INTRODUCTION ... 1

1.1 PROBLEM BACKGROUND ... 1

1.2 RESEARCH GAP ... 4

1.3 RESEARCH PURPOSE ... 4

1.4 EXPECTED CONTRIBUTIONS ... 5

1.5 DELIMITATIONS ... 6

2. LITERATURE REVIEW ... 7

2.1 UNDERSTANDING THE SPORTS INDUSTRY ... 7

2.2 BRAND MANAGEMENT ... 8

2.2.1 Brand Equity ... 9

2.2.2 Brand Awareness ... 10

2.2.3 Brand Association ... 12

2.2.4 Brand Personality ... 13

2.2.5 Brand Loyalty ... 14

2.3 RELATIONSHIP MANAGEMENT AND MARKETING ... 16

2.3.1 Relationship Marketing: Fans ... 17

2.3.2 Relationship Marketing: Sponsors ... 18

2.4 GLOBALIZATION AND INTERNATIONALIZATION ... 19

2.5 DRIVERS FOR INTERNATIONALIZATION ... 20

2.5.1 Market Conditions ... 21

2.5.2 Technological Advancements ... 22

2.6 INTERNATIONALIZATION MODELS ... 23

2.6.1 Uppsala Model and the Network Perspective ... 24

2.6.2 Born Global ... 27

2.6.3 Internationalization as a Sports Team Brand ... 28

2.7 MARKET ENTRY FORMS ... 30

2.7.1 Foreign Direct Investment ... 31

2.7.2 Subsidiary ... 31

2.7.3 Franchising ... 32

2.8 PRELIMINARY FRAMEWORK ... 33

3. SCIENTIFIC METHOD ... 35

3.1 RESEARCH PHILOSOPHY ... 35

3.1.1 Ontology ... 35

3.1.2 Epistemology ... 36

3.1.3 Axiology ... 37

3.2 RESEARCH APPROACH ... 38

3.2.1 Abductive ... 38

3.2.2 Deductive ... 39

3.2.3 Inductive ... 39

3.3 RESEARCH STRATEGY ... 39

3.3.1 Quantitative ... 40

3.3.2 Qualitative ... 40

3.4 RESEARCH DESIGN ... 41

3.5 LITERATURE ... 42

4. PRACTICAL METHODOLOGY ... 44

4.1 QUALITATIVE DATA COLLECTION ... 44

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4.1.1 Interview Structure ... 44

4.1.2 Interview Guide ... 45

4.1.3 Sampling Method ... 47

4.1.4 Pilot Study ... 48

4.1.5 Sample Overview ... 49

4.2 QUALITATIVE DATA ANALYSIS ... 51

4.2.1 Preparing Qualitative Data ... 51

4.2.2 Data Analysis ... 51

4.3 ETHICAL CONSIDERATIONS ... 53

4.4 RELIABILITY AND VALIDITY IN QUALITATIVE RESEARCH ... 54

5. EMPIRICAL FINDINGS ... 57

5.2.1 Fans ... 59

5.2.2 Sponsors ... 60

5.3 COMMUNICATION AND DATA USAGE ... 62

5.3.1 Communication Tools ... 62

5.3.2 Data Collection and Usage ... 63

5.4 INTERNATIONALIZATION ... 65

6. DISCUSSION ... 69

6.2.1 Fans ... 73

6.2.2 Sponsors ... 74

6.3 COMMUNICATION AND DATA USAGE ... 75

6.4 INTERNATIONALIZATION ... 78

6.4.1 International Exposure ... 78

6.4.2 Team ... 79

6.4.3 Leagues ... 80

6.4.4 Partnerships ... 82

6.4.5 Market Conditions ... 83

6.5 REVISED THEORETICAL FRAMEWORK ... 84

7. CONCLUSION ... 86

7.1 GENERAL CONCLUSION ... 86

7.2 STUDY CONTRIBUTIONS ... 88

7.2.1 Theoretical Contributions ... 88

7.2.2 Practical Contributions ... 89

7.2.3 Societal Contributions ... 89

7.3 LIMITATIONS AND FUTURE RESEARCH ... 90

7.3.1 Limitations ... 90

7.3.2 Future Research ... 90

REFERENCES ... 92

APPENDIX ... 113

APPENDIX 1: EMAIL TO PARTICIPATING CLUBS - ENGLISH ... 113

APPENDIX 2: EMAIL TO PARTICIPATING CLUBS – GERMAN ... 113

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APPENDIX 3: INTERVIEW GUIDE – ENGLISH ... 114

APPENDIX 4: INTERVIEW GUIDE – GERMAN ... 115

List of Figures Figure 1: Adapted- Brand Equity ... 10

Figure 2: Adapted- Establishment Chain ... 24

Figure 3: Adapted- The Basic Mechanism of Internationalization: State and Change Aspects ... 25

Figure 4: Preliminary Framework ... 34

Figure 5: Relationship Triangle ... 73

Figure 6: Revised Theoretical Framework ... 85

List of Tables Table 1: Adapted- Five-Stage model of internationalization ... 29

Table 2: Sample Overview ... 49

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List of Abbreviations

AFVD American Football Verband Deutschland BBL Basketball Bundesliga

DEL Deutsche Eishockey Liga EHC European Hockey Clubs FDI Foreign Direct Investment GFL German Football League HQ Headquarter

INVs International New Ventures MLB Major League Baseball MNEs Multinational Enterprises MSL Major Soccer League

NBA National Basketball Association

NFL National Football League, National Football League OEM Original Equipment Manufacturing

ÖFB Cup Cup des Österreichischen Fußball-Bundes SME Small and Medium Sized Enterprise

TMT Top Management Team

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1. Introduction

In this chapter, the problem background that supports the chosen topic will be presented, followed by the identified research gaps. Thereafter, the purpose of this study as well as the research question are introduced. Lastly, the expected theoretical, managerial and societal contributions are stated.

1.1 Problem Background

Globalization- an omnipresent term. Thanks to globalization, our way of thinking and doing things has changed. New opportunities arise due to the opening up of markets and because communicating and interacting with other people has become easier (Araújo &

Fraiz, 2014). Communication is not only easier but also faster. From a business perspective those new opportunities evolved through the opening of new markets. For some the opening of new markets only show the positive sides, for others it creates challenges. One obvious challenge is that there is not only the domestic, but also international competition.

New competitors mean less market space and thus, a saturation of the market is unavoid- able after some time. A saturated market means less profit and hence, new strategies have to be developed. That is where the internationalization process of a company usually starts as internationalization results from globalization.

One industry that is facing growth opportunities due to globalization is the sports industry. Over the past twenty years this industry has been commercialized and professional- ized (Trachsler et al., 2015). With the professionalization of sports, business opportunities emerged for sponsors. In 2018 the sports sponsoring size in North America was about

$17.17 billion which shows the potential of this market (Gough, 2019). The global sponsoring market was valued at $55 billion in 2018 and is expected to increase to about

$86.60 billion in 2025. One reason for this increase can be found in the emergence of new sports leagues which means that sports continue to professionalize (MarketWatch, 2020).

Besides the sponsoring the broadcasting rights for sporting events additionally nurtured the growth in this industry. The English Premier League can be considered as the pioneer in this area, as it introduced new rules regarding broadcasting rights in 1992. In the period from 2016-2019 the broadcasting rights of the Premier League were sold for about £5.136 billion (Gazapo, n.d). Those numbers show the potential of the sports industry as it indicates that the industry is a big business and highly profitable.

Therefore, sports clubs and leagues are no exception from the internationalization processes as it further supports both the growing and commercialization of sports. The internationalization in sports started with the signing of foreign players (Bühler & Nufer, 2012, p. 180). A breakthrough was the Bosman ruling in 1995 as it banned restrictions on foreign European players inside of Europe. Furthermore, it allowed players to move freely from one club to another (Simmons, 1997). Compared to usual business units, sports leagues and clubs face several challenges related to their expansion. One is that sports clubs have factors influencing their economic well-being such as performance and loyal fans. Regular companies’ expansion usually does not affect local buyers. In the literature, there is the idea of deterritorialization of matches to bring awareness to a club. Examples are the NBA (National Basketball Association) playing matches in Mexico City or the NFL (National Football League) in London. Yet, those locational changes affect the local

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fans and can affect a fans loyalty (Hill& Vincent, 2006; Wise & Kirby, 2018). Consider- ing the perspective of a “loyal” fan in Asia, trying to follow a favored club in Europe can be challenging. Challenges are all around when it comes to the internationalization of sport.

Compared to other industries, the sports industry has unique characteristics. One of those is the competition within the same industry. Yet most industries face competition, in the sports industry only a limited number of clubs will become a global brand (Richelieu et al., 2008). The competition does not only occur on the field, but it seems to be a race whichever team becomes a global player and which team will fall behind. The unique characteristic is that not only the same “product” competes, but also other sports compete for the national attention. There are sports that have a natural advantage within this field as it is already a global sport such as tennis or golf. Other sports benefitted from the British colonies such as rugby and cricket. One of the sports people are mostly interested in is soccer (Hill & Vincent, 2006).

Over the past years, researchers have tried to analyze, how soccer clubs internationalized.

In the research the focus is on the bigger clubs as more actions were taken by those. Here common examples are Manchester United or FC Bayern Munich (Hill & Vincent, 2006;

Puck & Wirth, 2009; Szymanski, 1998). In the majority of the existing literature on sports team’s internationalization clubs are considered as brands. The concepts of branding and sports teams are inseparable and therefore, brand management has to be understood in the context of sports clubs.

The existing literature on brand management is vast and considers different directions such as how to build a relationship with your brand customer (Stavros et al., 2008; D.

Aaker & Joachimsthaler, 2000; Abeza et al., 2019). The general understanding of a brand is that it is “a name, a word, a sign, a symbol, a drawing, or a combination of these, which aims for identifying the goods and services of a company and differentiates them from the competitors” (Kotler et al, 2000, p.478). As sports teams get marketed as brands the competition on this market becomes even more imminent (Richelieu et al., 2008). Con- sidering the German Bundesliga alone were 36 clubs are in the first and second league the challenge of brand positioning becomes obvious. There are 36 potential brands that may want to benefit from a market, only considering one sport here. The problem occurring is that most of the clubs will offer a fairly similar product and would need to identify their differentiator as a well-established brand can be key to success (Bauer et al., 2005).

Establishing a differentiator can be done through the creation of brand equity. D. Aaker (1991) was among the first to connect brand equity directly to a consumer. Building brand equity supports a brand in various ways as it can be seen as a summation of benefits and weaknesses a customer relates to. Different concepts such as brand awareness, brand association or brand loyalty all support the building of brand equity. Applying the concepts of brand equity to sports clubs, one might think that only sports fans would be able to identify the different clubs and that the better-known clubs that are exposed in international competitions benefit mostly. Besides having a strong brand, there are considerations within the literature that partners become critical in building brand equity. The exact role of international partners for example in the internationalization process is not well researched yet. An additional challenge for building brand equity in the sports industry is that there are seasonal operating cycles. For instance, the American football season is from April to November. Buying behavior is not only influenced by on-pitch performance

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but also on the operating cycle which leads to a fluctuation in the demand for sports goods.

All those factors influence a sports club’s brand equity immensely and also the internationalization process (Szymosyowskyj et al., 2016).

Since those influences affect a team, fan loyalty becomes a relevant topic in sports. Ac- cording to research, there are several factors that influence brand loyalty. In the field of sports there is only limited research and drivers for loyalty are not clearly identified. Cer- tain factors considered by customers are not necessarily directly connected to the brand name. They rather take prices and promotions in their buying behavior into account (Bris- tow & Sebastian, 2001; Chadhuri & Holbrook, 2001). The underlying questions regarding loyalty are for example what drives loyalty and how exactly is it defined. Within the area of sports those questions would not be clearly identifiable. An example would be whether a fan is more loyal because they attend every match in the stadium in contrast to the person who watches every match at home. There is little research on this matter. One study tried to identify the distinction between die-hard fans and “regular” fans (Bristow

& Sebastian, 2001). They use the example of the Chicago Cubs fans, which at the time of the study, were waiting for their team to win the championship in baseball for several decades. Interestingly, the fans stayed loyal even though the team’s performance on the pitch was poorly (Bristow & Sebastian, 2001). Yet, their study is almost twenty years old and since then new trends have emerged within the industry.

One of those trends is the technological innovation. Today communication has become easier thanks to social media. Therefore, it is understandable that the current literature focuses more on relationship strategies with the help of social media. Relationship management has already been a highly discussed topic within the area of marketing and loyalty building even before the rising of social media platforms (D. Aaker & Joachim- sthaler, 2000; Bee &Kahle, 2006; Stavros et al., 2008). Bee and Kahle (2006) found that sports consumers are usually highly involved meaning, that there is an existing relationship between club and fans. They characterized the fan involvement as for example the purchasing of tickets and merchandise. Moreover, they found that an internalized relationship has the deepest level of influence and is more durable and consistent (Bee &

Kahle, 2006). Here, the current trend of social media can be associated with building a relationship that is internalized by the customer/fan.

Social media can be used in several ways, not only to build a relationship, even though this is the long-term goal each company should strive for (Abeza et al., 2013). In previous research it was found that new technologies have an encouraging effect on sports organizations to communicate and maintain a relationship with their worldwide audience (Stav- ros et al., 2008, Stavros & Westberg, 2009). As social media are available in most of the countries and additionally, a broad spectrum of different medias is offered, such as Face- book, Twitter and Instagram, maintaining relationships has never been that easy. There are differences between Facebook and Twitter and Instagram as the first two contain more written and the latter more graphical content (Anagnostopoulos et al., 2018). Anagnos- topoulos et al. (2018) focused on how professional sports teams can use Instagram as a medium to create a brand image. Crucial for their work was the corresponding brand association customers might have meaning attributes, benefits and attitudes a consumer perceives that are linked to a given team (Anagnostopoulos et al., 2018). Using pictures to form a perception seems to be an interesting take to visualize a brand image. Afterall, clubs/organizations use social media as a communication tool and also for customer service purposes (Abeza et al., 2019). Only limited research focuses on the role social media

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can take in the internationalization process of sports teams. So far, the findings are rather limited as to how exactly social media can be useful. Furthermore, the research conducted only considered Facebook, Twitter and the clubs’ website. One finding was that language availability is an important factor in the international success of a club and that social media marketing is more cost efficient than traditional marketing strategies (Fleischmann

& Fleischmann, 2019).

In the internationalization process several aspects should be considered that could influence either positively or negatively a club’s success in this process. Among potential influences are relationship and brand management. However, current trends should not be underestimated such as social media, partners and emergence of new markets. The sport industry is growing. The further professionalization and commercialization of sports indicate the potential within this industry. A development that becomes more visible is the increasing interest in American football in Europe over the past years.

1.2 Research Gap

Based on the broad review of empirical and theoretical works by several authors within the area of internationalization in the sports industry and marketing literature, several knowledge gaps within the literature were identified. The identified knowledge gaps contribute of this study to theory.

Gap 1: There are several articles discussing the internationalization of sports clubs (Hill

& Vincent, 2006; Giulianotti et al., 2008; Richelieu et al., 2008). The issue occurring is that those studies for the most part focus on soccer. Other sports such as American football or basketball are not researched yet. In order to have a broader understanding of the industry those sports have to be integrated.

Gap 2: Besides the focus of research being only on one sport, the current literature lacks an explanation of the motivations behind an internationalization of sports teams and potential influences. One influence could be that new technological trends are emerging which can support the internationalization process of a club. Social media platforms are developed due to those changes and can endorse brand reputation and building a relationship with a customer or fan (Bee &Kahle, 2006; Araújo & Fraiz, 2014; Anagnostopoulos et al., 2018; Abeza et al., 2019, Fleischmann & Fleischmann, 2020). Considering the current literature, the general usage of data and social media platforms and its influences on an internationalization process have to be analyzed.

1.3 Research Purpose

The purpose of this thesis is to find out what influences the internationalization in the sports industry. Beyond the common interest of growth of a club, very little is known about the influences leading up to the decision of internationalization. Therefore, this study´s purpose is to deepen the general understanding in this area. Further, this thesis aims to include other sports besides the in Europe dominant soccer. By providing a broader picture, this study will contribute to the existing literature of sports teams’ internationalization.

Most of the literature on internationalization of sports teams try to explain how they internationalize. The problem is that many of the potential influences are still unnoticed by

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research. While this thesis aims to gain an understanding of the early phase in the internationalization process it considers technological changes and strategic partnerships as potential influences. Emphasizing on partnerships will further, shed light on the influences at a regional level.

In order to answer the set research question:

What influences the internationalization in the sports industry?

a theoretical framework will be constructed, with the help of relevant literature of brand management, relationship management, marketing, and internationalization models.

1.4 Expected Contributions

Expected Theoretical Contribution: This work aims to contribute to the understanding of internationalization in the sports industry by highlighting different influences that might be relevant in an international expansion (Anagnostopoulos et al., 2018; Abeza et al., 2019; Fleischmann & Fleischmann, 2020). One potential influence being the usage of data, in particular social media channels for the internationalization of organizations. The existing literature on sports internationalization focuses mainly on soccer or to state it differently, the literature focuses on one sport at a time (Hill & Vincent, 2006; Puck &

Wirth, 2009; Szymanski, 1998). A cross study of different sports does not exist. There- fore, researching different clubs from different kinds of sports, may broaden the understanding of influences in the decision-making of internationalization. Understanding the role of brand management, relationship management, marketing, and different internationalization models might enlighten influences in the early phase of the internationaliza- tion process of a sports team.

Expected Practical Contribution: As there might be different influences involved in the internationalization, the understanding of those might offer an opportunity to practition- ers to analyze their own, current strategy regarding international expansion. Yet, it de- pends on what influences the process as internationalization can be rather circumstantial.

Drivers for internationalization can be motivated by for instance entrepreneurial behavior or market saturation. Understanding what drives the internationalization in the sports industry in the first place might further support the strategy building. Moreover, as the leagues and clubs might not be aligned regarding the international ambitions or in the understanding of the need for it, this study could potentially be used as a connection for communication among different organizations.

Expected Societal Contribution: The general sports interest in society is rather high and sports is played all around the world. By understanding the influences of internationalization, sports clubs might consider expanding their scope further and enable people to experience the sport in their home country. As mentioned before, internationalization is rather circumstantial as market conditions can influence the decision. Seeing it from a fan’s perspective, their local market might not offer the same sports product. Therefore, internationalization of sports clubs can be beneficial for the clubs themselves and for society. Moreover, by analyzing different sports, the study will be more inclusive and relat- able to more people as not only one sport is covered.

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1.5 Delimitations

In order to avoid potential misunderstandings certain delimitations have to be outlined.

There are three main delimitations in this study. First, the clubs interviewed for this study had to be of considerable size and playing in an established league. Some clubs are not suitable for the purpose of this thesis. Moreover, going in the same line of argumentation individual athletes are not considered in this study as those are not known to have any international ambitions and can hardly be considered as brands. The second delimitation is that many clubs from different sports and countries are contacted and considered. There is no intentional ignorance of clubs or sports meaning that this study is not narrowing down to one specific country or sport. However, due to the COVID-19 crisis the response rate might be limited and rather country specific. Therefore, the need for secondary data will emerge. Lastly, the financial situation of the clubs was not considered for two main reasons. Clubs are dependent on external financial aid and bigger clubs might have an advantage. Nevertheless, financially weaker clubs might still consider internationalization as a form to grow and should therefore not be excluded from this study. Secondly, as mentioned this thesis is written during the COVID-19 crisis which is challenging for clubs as the future is uncertain. Due to the crisis leagues are disrupted which can cause financial disbalance for the clubs.

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2. Literature Review

This chapter provides the theoretical framework for the thesis. The theories presented will be helpful to construct later on the interview guide. The idea of the structure of the theoretical framework is to firstly understand prerequisites for internationalization be- fore diving deeper into the overall concept of globalization and internationalization.

First off, a brief overview of sports marketing is given as it has some differential points than the usual marketing. To deepen the understanding, the theory of brand management with all its underlying concepts will be introduced. Hereinafter, relationship marketing from the perspective of a sponsor and fan will be discussed. Finally, based on the given marketing tools, drivers for internationalization, internationalization theories as well as market entry forms will be examined.

2.1 Understanding the Sports Industry

Understanding the sports industry is necessary in order to understand how and why sports clubs do business the way they are. Sports itself is an intangible good, but it can possess tangible characteristics such as jerseys (Lagae, 2005, p.7). Some differences compared to other industries are for instance the simultaneous competition and cooperation among many organizations. Moreover, the industry is considered as less demanding as people tend to think the job done by an athlete or coach is easily performed. Also, compared to other markets, the sports market has not only a high personal interest by its consumers but at the same time also a high involvement of those (Mullin, Hardy & Sutton, 2000, p.14-15; Lagae, 2005, p.7). Those characteristics make it slightly more challenging to fully understand the industry itself.

In the literature, there are limited articles describing sport marketing as an individual dis- cipline. For the purpose of this thesis the concept becomes crucial as understanding the underlying ideas behind sports clubs’ efforts is important to comprehend their need to internationalize. The history of sport marketing goes far back. There already existed types of promoters in ancient Greece and Rome. However, it is not up until the 1990´s that the area of sport marketing became more important to marketers. One of the reasons for this phenomenon is the increased media coverage in this decade (Mullin et al., 2000). Mullin et al. (2000) define sport marketing as “[…] activities designed to meet the needs and wants of sports consumers through exchange processes. Sport marketing has developed two major thrusts: the marketing of sports products and services directly to consumers of sport, and marketing of other consumer and industrial products or services through the use of sport promotions” (Mullin et al., 2000, p.9). The first related to for instance the selling of merchandise to a fan whereas the latter refers to for example commercials of non-sports industries shown at the Super Bowl. For this thesis, only the first part of the definition is relevant as the aim is to gain a better understanding of sports club’s internationalization processes. The activities a club does to meet their consumers/fans needs and wants is crucial.

The main idea behind sport marketing is to understand the driving forces that generate the need of marketing strategies in the sports industry. Further, sport marketers determine the obstacles faced within this industry and recognizing the components of the sports product. Lastly, the factors that make the sports industry unique are identified (Mullin et al., 2000). Yet, it is important to see that the sports “product” itself does already offer

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certain characteristics that other products do not have. The core benefits for people of the sports product are for example health, entertainment, sociability and achievement. Due to exactly those characteristics the sports product becomes unique. Furthermore, there are other elements that can describe sports more as a “service” rather than a “product”. Sports can be something intangible (as a consumer who is not directly doing the sports himself but attending a game), short-lived, experiential and it usually has a subjective nature (Mullin et al., 2000, p.13). Especially the subjective nature of sports makes it more challenging for a sport marketer as it becomes difficult to predict customer satisfaction unlike for other kinds of products.

Besides the unique characteristics of the sports industry, the way of sports consumption in general has changed over the past years. The term sports consumption entails a multi- tude of involvement stages. In the current literature, the term “involvement” is highly discussed. There is no uniform definition, however, the most resent definition of sports involvement states that one has to simply measure the participation of an individual in a given activity. The measurement is based on a self-evaluation by the individual (Beaton, Funk, Ridinger & Jordan, 2010, p.129). Kapferer and Laurent (1985, p.52) argued that involvement should not be measured as a single level but rather considering it as a unidi- mensional construct as involvement differs among customers. Thus, bringing the concept of involvement back to sports, Mullin et al. (2000, p.56-57) divided the involvement of a sports consumer in three categories: the behavioral cognitive and affective involvement.

The behavioral involvement includes two main activities; playing sports at practice or the involvement of fans at a game by watching or listening to it and rooting (Crawford, 2004;

Mullin et al., 2000). By studying, acquiring information or knowledge, a person is cogni- tively involved. Important media to gather information are magazines, newspapers or the radio (Mullin et al., 2000, p.56). Affective involvement describes the attitudes, feelings and emotions that a consumer has towards an activity (Mullin et al., 2000, p.57). Sports consumption itself is crucial for this work because other consumption patterns than on the home market can be expected when internationalizing.

As important as understanding the introduced concepts are, another relevant concept for the sports product is, how it can be differentiated from the competition. Competition in the sports industry is fierce. Thus, part of the work of a sport marketer is to build a strong brand. The next chapter deals with brand management and the underlying concepts of a brand.

2.2 Brand Management

In changing environments and excess choices, having an outstanding product from that of a competitor is of great importance for a company. Through globalization, markets have become more open and the competition has increased. Hence, a company has to protect its brand and doing so, brand management is a crucial part of the daily work of brand marketers (Kapferer, 2008). One of the most crucial parts of brand management is the branding process. Two things usually can get branded; a product or a service. There- fore, the idea behind branding is to highlight differential characteristics from the competitor’s product (D. Aaker, 1991; Christodoulides, 2009; Kohli, Suri, Kapoor, 2015).

Building a strong brand with brand awareness, positive customer experiences, products, services and channels, needs work. Kapferer states that all those points of contact with a brand need to be managed in an “integrated and focused way” (Kapferer, 2008, p. 2).

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Leaning on this idea, companies usually establish a brand management organization, which operates as another layer of the management of a company (Kotler & Keller, 2009, p. 669).

Difficulties in managing a brand successfully can be related to the right positioning which has to be continuously communicated to consumers. Such a steady communication is costly and hence, advertisement costs increase (Kotler & Armstrong, 2010, p. 268). More- over, there has to be the right person on the job. In the literature it is stated that brand managers usually only manage a brand for a short time which leads to the failure of establishing a long-term strength of the brand (Kotler & Keller, 2009, p. 670).

Yet, over the past years, another threat for the traditional branding has evolved: the inter- net and social media platforms (Christodoulides, 2009; Kohli et al., 2015). New technologies change the way of doing things. In the case of brand management, social media is changing the way marketing and branding works. Change aspects in branding are that it will become more transparent and the reliance on physical attributes will decrease. Also, introducing new brands to the market becomes easier and overall, social media can potentially be more cost efficient than the traditional branding model (Kohli et al., 2015).

In sports, managing a club as a brand implies challenges as there are other factors that influence the brand such as performance. Further, in the football environment for example are seasonal operating cycles, buying behavior is influenced by on-pitch performance and demand fluctuates. All those factors influence a sports clubs’ brand immensely and thus, also the internationalization process (Szymosyowskyj et al., 2016).

Building up a brand in the sports industry is necessary for the internationalization of a club. Lacking a strong brand will complicate the overall process. Therefore, in the next chapter of this thesis, the emphasis will be on building brand equity and its underlying concepts. Since the aim is to understand the internationalization patterns of clubs in the sports industry, the brand equity model provides a good understanding of a brand. This understanding will then help to identify the influences in an internationalization process.

2.2.1 Brand Equity

When researching more in depth the different constitutes of a brand, brand equity becomes one of the most crucial concepts. Brand equity combines almost all relevant ideas of brands. One of the first researchers to connect brand equity directly to consumers was D. Aaker (1991). In his work he thinks of brand equity as a summation of benefits and weaknesses a customer relates to either a brand or symbol. The definition he provides in his book is that brand equity is “a set of assets such as name awareness, loyal customers, perceived quality, and associations […] that are linked to the brand (its name and sym- bol) and add value to the product or service being offered” (Aaker, 1991, p.4). Based on this definition, brand equity can be seen as a driving force for the value creation of a product or service (D. Aaker, 1991).

Keller (1993) continued to work on the concept of brand equity linked to the customer with D. Aaker’s framework as a foundation. Keller defines customer-based brand equity as a “differential effect of brand knowledge on consumer response to the marketing of a brand” (Keller, 1993, p.1). The term brand knowledge gets divided into two components, brand awareness and brand image (Keller, 1993, p.2). Furthermore, Keller elaborates that

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studying brand equity as such can be beneficial for creating a marketing strategy and hence, improve the marketing productivity of a firm (Keller,1993). Yet, one of the most outstanding ideas of his work is the linkage between brand knowledge and customer response to the concept of brand awareness. Crucial for the success of a brand, hence, is having a memorable characteristic, that a customer can easily identify (Keller, 1993).

In sports, some challenges can be related to building brand equity. Bauer, Sauer and Schmitt (2009) examined in their paper the importance of brand equity in the German Bundesliga. They found that having a brand can lead to economic success without a cor- relation to the athletic success (Bauer, Sauer & Schmitt, 2009). Also, customer-based brand equity has to be used carefully in categories with high consumer knowledge (Bauer et al., 2009, p. 508). Considering the sports environment and fans as the customers, the likelihood of them knowing most of the other teams or brands is quite high. Finding a characteristic that distinguishes one team from another team is quite challenging. To over- come those challenges, building up a strong brand is necessary. In the definition of brand equity one can already identify important elements for the sports industry such as brand loyalty. Therefore, the following sub-chapters will go more into detail of how to build up a strong brand that, in return, will build brand equity, which go in line with the framework by D. Aaker represented in Figure 1. However, as perceived quality is not as fitting for the sports industry it is replaced by the more fitting brand personality in the following.

Figure 1: Adapted- Brand Equity

Source: D. Aaker, 1991, p.17

2.2.2 Brand Awareness

Building on the brand equity model, brand awareness is one concept that contributes to a company´s overall brand equity in the end. Brand awareness is the ability of a customer to identify a brand under different conditions, based on brand recognition or brand recall (D. Aaker, 1991, p.61; Kotler & Keller, 2009, p.783). Under brand recognition one un- derstands whether a customer is able to recognize a brand. Doing so requires that the customer already knows the brand. Brand recall explains that a customer recalls a certain brand during a decision-making process without previous consideration. Here, the customer goes through the decision-making process prior to the purchase (Huang &

Sarigöllü, 2014, p.127). Brand awareness faces key questions each company has to be aware of in order to construct a fitting strategy. The questions are:

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How valuable is brand awareness in the market the company is competing in?

What are differentiators to the competition and how well-known is the brand? (D. Aaker, 1991, p.27)

Those questions become quite relevant as the differentiation from the competition is challenging and being a well-recognized brand helps to increase sales. Also, there certainly are markets where brand awareness is less valuable than in others. Ultimately, there are different factors that influence a consumer to choose one brand over another (D. Aaker, 1991; Huang & Sarigöllü, 2014; Kotler & Keller, 2009; Macdonald & Sharp, 2000). Yet, the driving forces behind why a customer selects one brand over another are not well researched. It is assumed that based on a high brand awareness, customers purchase one product or brand instead of an alternative one (D. Aaker, 1991; Kotler & Keller, 2009).

However, Huang and Sarigöllü (2014, p.127) found that it is vice-versa; brand awareness is driven by consumers purchases and usages. This knowledge is important as it helps to create a marketing strategy that fits the consumer in a more targeted way.

Targeting the right consumer and building on a strong marketing campaign are only two aspects of the importance of brand awareness. It is also relevant, how a company can gain brand awareness in the first place. According to D. Aaker (1991, p.62), there are two main tasks to be performed: create a brand name identity and linking the product to a product class. Since the main focus of this work is the sports industry, the brand name and identity are of more importance than the linkage to the product. That is because in the sports industry, everyone is basically selling the exact same product. Hence, for internationalization, the name and identity of a club are more important than the product itself. How- ever, additional services a club may offer are not excluded.

Building on the creation of a brand name identity, names, symbols and slogans are part of generating brand awareness (D. Aaker, 1991). The name of a company is the core indicator of each brand. It is the basis of both brand awareness and communication efforts a company can perform. The name helps to generate associations which serving to describe a brand (D. Aaker, 1991, p.187).

Bringing the concept of brand awareness to the sports industry, names symbols and slogans become eminent. Usually, in the cases of sports clubs each club has a unique name.

Often, the name of the city the club resides in, is part of the name. Known examples are for instance FC Bayern Munich, Real Madrid or Los Angeles Lakers. The name of a club forms their identity and also their brand.

Moreover, most of the clubs do have unique symbols that distinguishes one club from another. Those symbols can create brand awareness as they make it easy to recognize the brands. In the case of clubs, their logos can be seen as symbols (D. Aaker, 1991, p.198).

Lastly, slogans can contribute in creating brand awareness. Slogans can help in the positioning process of a brand and usually have fewer legal limitations than other things such as songs. Furthermore, slogans create an additional association to a brand (D. Aaker, 1991, p.198). Some examples for slogans can be found in the sports industry´s clubs: Mia San Mia (FC Bayern Munich), Més que un club (FC Barcelona) or You´ll never walk

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alone (Liverpool). Fans recognize their club by the slogans and those slogans will create more brand awareness once a club decides to internationalize.

Brand awareness is an important component of not only brand equity but also for the internationalization of a club. The better known a club is, the easier it may get to win fans over. Consequently, the more awareness a club has, the easier is the internationalization process. Another way to get brand awareness is through the performance and exposure of a team. Playing in international competition will support the formation of a fan base on a foreign market. Yet, for building a strong brand equity, brand awareness alone is not suf- ficient. Rather, a club has to create associations to stay in their customers minds.

2.2.3 Brand Association

Enabling the creation of brand awareness, a brands aim is to make customers associate certain attributes to the brand. Brand association is defined as “all brand-related thoughts, feelings, perceptions, images, experiences, beliefs, attitudes […] that become linked to the brand node” (Kotler & Keller, 2009, p.783). For a brand manager, the task of creating the right association for a brand is quite challenging. Associations do not only exist in a customer’s mind; associations have a level of strength to link a brand stronger to a consumer mindset the more experience or exposure to communicate the brand exist (D.

Aaker, 1991, p.109).

According to Cheng-Hsui Chen (2001, p.439) brand associations are the core asset for building strong brand equity. Further he states that stronger brands must have a higher awareness level than weaker brands, due to previous exposures of a brand (Cheng-Hsui Chen, 2001). Biel (1992) argued that brand associations have different points of depar- ture, meaning that certain associations can come from a corporate image, the image of a customer of a product and a usage image. Here, Biel distinguishes between two possible perceptions: utilitarian/functional attributes such as speed or simplicity and soft/emo- tional attributes such as the innovativeness of a product (Biel, 1992, p. 9). Other brand associations are for instance the perceived quality of a product or service (D. Aaker, 1991;

Cheng-Hsui Chen, 2001). Thus, relating those attributes to the sports environment, one could argue that the associations of a fan relate to the performance of a team or the exposure in international competitions. There is little research about how to build strong associations linked to a club. Nevertheless, there are different models such as the memory network model by Krishnan (1996) that tries to explain how associations can be build.

Krishnan (1996) uses a memory network model to identify various association characteristics that support consumer-based equity. Focus of the work is the customer perspective in building associations. Interestingly, Krishnan differentiates emerging brands from mature brands. Emerging brands have the advantage of not having any associations yet and thus, the work with such brands is slightly easier. Mature brands have been exposed for many years and hence, customers have already established associations related to the brand. Those associations may be positive or negative. In the latter case, a brand manager would now have to focus on “rebuilding” the associations (Krishnan, 1996, p.390). Krish- nan proposes a memory model which links various perceptions of a brand. The building block usually is a node which represents just a piece of information. This node can rep- resent a brand, attribute or product. Links between those different nodes are the respective brand associations (Krishnan, 1996, p. 391). Connected to the memory model and network of brand associations is the idea of a brand map (John et al., 2006). With this

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technique brand associations can be identified and also how associations are connected to a brand (John et al., 2006, p.549). This concept is interesting as it can help a brand to find the right positioning. However, not only the maps but the whole concept of brand associations can help a company to identify the right market positioning (D. Aaker, 1991;

John et al., 2006; Kotler & Keller, 2009).

For sports clubs the idea of a brand map could potentially help in the internationalization process. Clubs could gain an understanding of how they are perceived and if it is in line with their core values. Moreover, comparing the own map to the one of the competition or other sports could provide an in-depth picture of the targeted market. If a club plays a poor season, positive brand associations from previous seasons might help to keep the fan. An issue arising in brand associations in sports is that there are certain influences a club cannot steer. One could be the association linked to a sponsor. Depending on this sponsor, other fans could easily downsize a club to its sponsor. A sponsor in the internationalization process of a club can also create positive brand associations. An international sponsor might attract new customers to the club by its own network.

Overall, brand associations support the brand building process. Different methods and models describe how associations are shaped in the brand equity model. Furthermore, brand associations can help to form a brands’ personality (J. Aaker,1997)

2.2.4 Brand Personality

Brand associations are meant to help creating a certain image and identity of a brand. A brand can have several different characteristics that are associated with it. However, there are unique brand personality traits that support the brand building process and the long- term goal of creating brand equity.

The literature for brand personality is vast. There are several frameworks that try to explain the concept. One of the most cited theoretical frameworks that deals with building brand personality was established by Jennifer Aaker (1997). J. Aaker defines brand personality as a set of human characteristics that are associated with a brand (Keller, 1993;

J. Aaker, 1997, p. 347). Her framework consists of five different dimensions:

(1) Sincerity (down-to-earth, honest, wholesome and cheerful) (2) Excitement (daring, spirited, imaginative, up to date) (3) Competence (reliable, intelligent, successful)

(4) Sophistication (upper class, charming)

(5) Ruggedness (outdoorsy, though) (J. Aaker, 1997, p.352)

Those dimensions should help to form the characteristics to determine a brands personality. There is no prove whether those dimensions can actually be applied across different cultures. Therefore, this framework is criticized in the literature.

Azoulay and Kapferer (2003) argue that the current scales of brand personality do not measure the concept itself but rather merges several dimensions of brand identity. They state that the personification of brands is created by celebrities who endorse brands (Azoulay &Kapferer, 2003, p. 143). This argument is interesting as consumers might think of brands as if they were celebrities or well-known historical figures (Rook, 1985).

Hence, brand managers can build on this sentiment for the creation of brand equity.

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Another point Azoulay and Kapferer bring up is the demand of a stricter definition of brand personality as they see the problem that the brand is more defined by its performance (Azoulay & Kapferer, 2003, p.145). The origin of brand personality is from a non- product-based definition of a brand. The definition includes all the characteristics that were formerly not bound to the products use or performance (Azoulay & Kapferer, 2003, p.145). Brand personality as such is a broad concept and needs a well-understanding to be used appropriately.

Bringing brand personality to the area of sports is again a challenging task. Smith et al.

(2006) worked with the framework by J. Aaker. They applied it to a membership-based sports organization by adding innovation as a trait. One of their arguments is that branding, and brand personality can lead to an increased sports participation (Smith et al., 2006, p. 252). The difficulty identified in the sports industry is that the brand personality is affected by the pervasiveness of the marketing or other communication strategies of a sports club. For a sports club the difficulty emerges to separate the product from the organization, according to Smith et al. (Smith et al., 2006, p.262-63).

In contrast to Smith et al. work, Schade et al. (2014, p.652) argue that J. Aaker´s framework of brand personality is not applicable for sport clubs. The product category “sports club” is a unique and different form compared to other categories as the core products outcome is unpredictable (Braunstein & Ross, 2010; Schade et al., 2014 Tsiotsou, 2012;).

Furthermore, they see brand personality as a complex construct and hence, most of the existing scales lack various traits to measure brand personality of sports clubs. Traits that could potentially be included are terms such as “rebellious”, “sociable”, “faithful” and

“tolerant” (Schade et al., 2014, p. 658).

The importance of brand personality is that the more consumers can identify themselves with the personality traits by an organization, the easier it becomes to have a connection point and have more loyal customers.

2.2.5 Brand Loyalty

Brand loyalty is one of the most important components of building brand equity (Aaker, 1991; Keller, 1993). Over the years many researchers tried to understand this concept.

Not only are there several different factors that can potentially influence brand loyalty, but there are also many perspectives on how to define the term. Jacoby and Kyner (1973, p.2) for example, defined brand loyalty as:

“(1) a biased (i.e., nonrandom), (2) behavioral response (i.e. purchase) (3) expressed over time (4) by some decision-making units (5) with respect to one or more alternative brands (6) as a function of psychological (decision making, evaluate) processes”.

Other researchers pointed out that there are mainly two dimensions that are relevant to define brand loyalty; behavioral and attitudinal loyalty (Day, 1969; Jacoby & Chestnut, 1978). Behavioral loyalty is the tendency of a consumer to repurchase the same brand frequently over time (Jacoby & Chestnut, 1978) whereas attitudinal loyalty refers to the attitudes a consumer has towards a brand. If the attitude is more positive towards a brand, consumers tend to stay longer committed to a brand (Gladden & Funk, 2001). Connected to the attitudinal loyalty of a consumer is the spurious loyalty. Day (1969, p.100) defined spurious loyalty as “purchases that are guided not by a concomitant strong attitude but