Analyzing Brand Strategy on an International Scale: The Sponsorship Performance Cycle in Formula One Racing

Abstract

Firms from a variety of industries regularly partner with Formula One racing teams to achieve marketing objectives on an international scale. The sponsored properties offer signals of brand foreignness/localness, country of origin, and the potential for highly visible achievements. Firms enter and exit brand partnerships with some of the world's most famous athletes and iconic teams, yet the partnership decision-making process remains opaque, particularly concerning the impact of geographic origin and team performance among other criteria, including macroeconomic conditions and brand-related factors. This study contributes a quantitative model that analyzes 53 years of data encompassing more than 3,000 sponsorships across six continents. The findings improve understanding of brand partnership continuity/dissolution by explicating a shared nationality effect and a link with sponsored organizational performance that is robust across three distinct eras of Formula One. In doing so, the study contributes to theory by completing the sponsorship performance cycle and distilling partnership limits with regard to brand foreignness. The theory and quantitative analyses are buttressed by interviews with brand decision-makers, excerpts from which also shape the discussion of managerial applications. Implications include efficiencies in partner prospecting that enhance the likelihood of enduring brand relationships in sponsorship-linked international marketing.