UNIVERSITY OF KWAZULU-NATAL Perspectives on the Effects of Ambush Marketing: The Case of Nike, the Global Ambusher By Achal Sukram 208512275 A dissertation submitted in fulfilment of the requirements for the degree of Master of Commerce School of Management, IT and Governance College of Law and Management Studies Supervisor: Prof Debbie Ellis 2017 DECLARATION I, Achal Sukram declare that: (i) The research reported in this dissertation/thesis, except where otherwise indicated, is my original research. (ii) This dissertation/thesis has not been submitted for any degree or examination at any other university. (iii) This dissertation/thesis does not contain other persons’ data, pictures, graphs or other information, unless specifically acknowledged as being sourced from other persons. (iv) This dissertation/thesis does not contain other persons’ writing, unless specifically acknowledged as being sourced from other researchers. Where other written sources have been quoted, then: a) their words have been re-written but the general information attributed to them has been referenced; b) where their exact words have been used, their writing has been placed inside quotation marks, and referenced. (v) Where I have reproduced a publication of which I am an author, co-author or editor, I have indicated in detail which part of the publication was actually written by myself alone and have fully referenced such publications. (vi) This dissertation/thesis does not contain text, graphics or tables copied and pasted from the Internet, unless specifically acknowledged, and the source being detailed in the dissertation/thesis and in the References sections. Signature: Date: 16/4/2018 i ACKNOWLEDGEMENTS I wish to express my sincere thanks and appreciation to: Professor Debbie Ellis, my supervisor for her invaluable guidance and support. My family who have encouraged and supported me. ii ABSTRACT Nike is one of the most recognisable brands in world. The brand has developed a reputation for its creative and imaginative marketing strategies, especially its effective and successful use of ambush marketing as a marketing tactic during major sporting events. Thus, it has been dubbed the global ambusher. The growth of ambush marketing as a marketing strategy during major sporting events has raised concern over the value of sponsorship. This is because the ambush marketer may receive similar benefits of sponsorship without the investment in sponsorship fees. As such, this may have a direct effect on major stakeholders in a sponsorship relationship. Therefore, this research is important as its primary purpose is to understand ambush marketing as a marketing strategy and the effects it has on major stakeholders such as the public, spectators and participants, event organisers, sponsors and ambushers. The study focuses on Nike as a case in point. Understanding the effects of ambush marketing is important for policy and law makers developing legislation to prevent ambush marketing. It is also important for event organisers trying to source sponsors to fund events and to protect those sponsors’ sponsorship investments. Then finally for competing companies, understanding the potential benefits and risks of ambush marketing is important as they weigh these up in the development of their competitive strategies. The literature review forms the foundation for this study. It has discussed sponsorship, in particular, sport sponsorship before introducing the concept of ambush marketing and engaging in topics such as ambush marketing strategies, ethics, legal implications and preventive steps. In accordance with the objectives of this study, the focal literature around ambush marketing focuses on the effects of ambush marketing on various stakeholders. The research methodology for this study has focused on Nike as a global ambusher. Data was collected from three different sources. The first source of data collection was academic articles from Google Scholar and the second source was from popular online press articles around the 2014 Soccer World Cup. The final source of data was collected via a website called Social Mention, which tracks data on social media websites. The findings for this study suggest that despite the presence of Nike as an ambusher, Adidas was able to counter-act with its own successful promotional and marketing strategies. iii However, Nike was able to achieve similar results and reactions from its target market without having to spend on sponsorship fees that Adidas had to spend in addition to their promotional and marketing campaigns. It can be concluded, that ambush marketing has a negative effect on various stakeholders, however one should acknowledge the creative and imaginative ability of ambushers to effectively compete with sponsors. In accordance, recommendations were made to the various stakeholders on how to oppose the effects of ambush marketing. iv TABLE OF CONTENTS DECLARATION.................................................................................................................................... i ACKNOWLEDGEMENTS ................................................................................................................. ii ABSTRACT .......................................................................................................................................... iii LIST OF FIGURES ............................................................................................................................ vii CHAPTER 1 - INTRODUCTION ....................................................................................................... 1 1.1. Introduction ................................................................................................................................ 1 1.2. Background to the Study ........................................................................................................... 2 1.3. Nike, the global ambusher ......................................................................................................... 3 1.4. Research problem ...................................................................................................................... 6 1.5. Research question ...................................................................................................................... 7 1.6. Research purpose ....................................................................................................................... 7 1.7. Research objectives .................................................................................................................... 7 1.8. Overview of the Literature Review .......................................................................................... 8 1.9. Overview of the Research Methodology .................................................................................. 9 1.10. Overview of Findings and Discussions ................................................................................. 10 1.11. Overview of Conclusions and Recommendations ............................................................... 10 1.12. Contribution of the study ...................................................................................................... 10 CHAPTER 2 – LITERATURE REVIEW ........................................................................................ 11 2.1. Introduction .............................................................................................................................. 11 2.2. Sponsorship: What is Sponsorship? ....................................................................................... 11 2.3. What is Sport Sponsorship? .................................................................................................... 13 2.3.1. Sport Sponsorship Deals ................................................................................................... 13 2.3.2. Objectives of Sport Sponsorship ...................................................................................... 14 2.3.3. Stakeholders in Sport Sponsorship ................................................................................. 17 2.4. Ambush Marketing .................................................................................................................. 19 2.4.1. The Growth of Ambush Marketing ................................................................................. 21 2.4.2. The emergence of social media ........................................................................................ 22 2.4.3. Ambush Marketing Strategies ......................................................................................... 23 2.5. The legal framework surrounding ambush marketing and potential defences against it . 26 2.6. Perspectives of Ambush Marketing ........................................................................................ 30 2.7. The impact of ambush efforts on consumer recognition and recall of sponsors ................ 33 2.8. Theoretical Framework ........................................................................................................... 35 2.9. Conclusion ................................................................................................................................ 38 Chapter 3 - Research Methodology ................................................................................................... 39 3.1. Statement of the Problem .......................................................................................................