Athletes Sponsorship's and Companies Sales

SOURCE: www.cleveland.com

The economic principle I’m exploring is the relationship between athletes sponsorship's and the companies sales.

My research question to help me study the economic principle is how do athletes sponsorship's affect companies sales.

The article published by Dr. Karla McCormick titled “Athletic Endorsements and Their Effect on Consumers’ Attitudes and Consumption” demonstrates this economic principle by showing the increase in sales, increases brand recognition, and aids the athletes.

First, when these large companies are able to land a big name athlete it help increase the companies sales. People who are simply fans of the athlete will also become a fan of what that athlete does, so if a fan sees Lebron James for say wearing a Nike shirt they’re more likely to go out and buy that same shirt. Doctor McCormick found that “endorsements pump up a brand’s sales by $10 million a year, on average” which shows just how much of an effect these athletes have. 10 million dollars is a lot of money that is a noticeable jump in sales.

Second, when athletes get sponsored by a brand that brand will receive more recognition because they’re being exposed to a whole new audience. If Lebron James were to be sponsored by an insurance company, that companies main audience probably wouldn’t normally be basketball fans, but with this sponsorship their company is being exposed to all the fans. It also makes more people comfortable with the brands products if they see that their favorite player is wearing the product, which McCormick explained saying “signing a high-profile endorser can help reassure consumers about the true quality of a product.”

Third, these sponsorship's aren’t only good for the company but they actually greatly help out the athletes. These big companies such as Nike have built such a good name for themselves that athletes aspire to wear their products and fans realize that. So when the athletes breaks through and gets this sponsorship people respect them more and realize they must be good to be representing such a big brand. McCormick believes the same stating that “when athletes have success in their respective sport, wearing the endorsed brand, it strengthens both the image of the brand and the athlete, labeling them a ‘winner’.”

In my next blog post I will research the question: Do companies strategically sell their items at times when other companies aren't selling similar items?