The Fast Track to Marketing in China

Amin khatibi

2008 Beijing Olympics

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2008 Olympic Sponsorship:Research Objectives

. بررسي تاثيرحمايت مالي از المپيك بر كمپانيهاي 1چند مليتي

.بررسي مزاياي بازاريابي وفرصتهايي كه حاميان 2المپيك براي خود فراهم ميكنند بويژه در زمينه اي

خاص از بازار چين.

حمايت مالي شركتها با اهداف میزان. مقايسه3استراتژيك متنوع

. شناخت فاكتورهاي متعددي كه در تصميم گيري 4حاميان براي حمايت مالي تاثير گذار هستند .

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2008 Olympic Sponsorship:Primary Research Questions

. تحت چه شرايطي حاميان بيشترين منافع را 1كسب ميكنند ؟

-جستجوي فاكتورهاي استراتژيك موثر بر منافع حاميان مالي

-تمركز روي چين و جامعه بين المللي

. آيا ميزان دقيق هزينه ها و منافع حاميان قابل 2تعيين است ؟

-بررسي فاكتورهايي كه از نظر اقتصادي قادر به تعيين هزينه و منفعت هستند .

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2008 Olympic Sponsorship:Hypotheses

.حمايت مالي از المپيك براي شركتهاي كه در بازار چين فعاليت 1ميكنند بسيار سود آورتر از شركتهايي است كه فعاليت ندارند .

. منافع حمايت مالي براي شركتهايي كه به دنبال شهرت جهاني 2هستند بيشتر است .

قابل اندازه گيري ‘ ارتقائ شديد مالي قرار دارد منافع . در انتهاي 3كه شركتهاي حامي پس از اعالم نام آنها از طريق بازيهاي المپيك

تجربه ميكنند .

اندازه گيري كمي منافع غيرمالي بسيار مشكل است ولي ما .4كنجكاويم بدانيم كه حاميان چگونه نگرشي نسبت به اين مشكل

دارند.

.به علت جايگاه بازيها وجو اقتصادي چين حمايت مالي از المپيك 5شبكه منفعتي مشخصي را براي حاميان فراهم ميكند .

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2008 Olympic Sponsorship:Olympic Marketing History

• Prior to 1984, Olympic host cities were forced to underwrite the cost overruns.

– 1976 Summer Games left Montreal saddled with US$1 billion in debt (repayment to be completed in 2006)

– 628 sponsors and suppliers paid a total of US$7 million

• For 1984 Summer Games, Los Angeles was the only serious bidder

• U.S Olympic Games Organization head Peter Ueberroth proposed a new Olympic sponsorship model – aggressively marketing Olympics

should yield a profit for organizers– model was heavily supported by a

few dozen large sponsorships– Ueberroth’s plan succeeded, and the

1984 Summer Olympics yielded a mammoth profit of US$223 million

1984 Los AngelesSummer Games

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2008 Olympic Sponsorship:TOP Sponsors, Exclusive Product Categories

Life Insurance/Annuities

Timing, Scoring, and Venue Results Services

Audio, TV, Video Equipment

Information Technology Services

Information Technology Equipment

Retail Food Services

Consumer Payment Systems

Film, Photographics and Imaging

Non-Alcoholic Beverages

Electricity Supply Protection Services

Wireless Communication Management

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2008 Olympic Sponsorship:Prior Research

• Research into Olympic Sponsorship is highly limited

• No consistent methodology or conclusive evidence among studies

تالشهایی جهت مشخص کردن معیارهای کلیدی -ازقبیل فروشهای فزاینده یا تغیرات در آگاهیها از

imageو brand. انجام شده است

-کاهشهای غیر عادی در قیمت سهام حامیان پس از اعالم نام آنها به عنوان حامیان المپیک نتیجه گرفته

تاثیر منفی بر منافع 1996شد بازیهای المپیک (Farrell & Frame, 1997)سهامداران داشته است .

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2008 Olympic Sponsorship:Prior Research

یافته های تحقیق دیگرحاکی از تاثیر مثبت حمایت -مالی از المپیک بر اهداف استراتژیک شرکتها از

وهمراه کردن brandقبیل افرایش آگاهیها از شرکت و توسعه روابط brandارزشهای خاصی با

با مشتریان و…انگیزش کارمندان و توسعه شهرت و خوش نامی کمپانی به عنوان یک کمپانی

(.Osmon, 2004)مسولیت پذیر و مورد عالقه است .

-در کل, اکثر مطالعات به تاثیر مثبت حمایت مالی ,Pope)از بازیها برای یک کمپانی دست یافته اند

1998.)

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2008 Olympic Sponsorship:Four Identifiable Cost Categories

1. Direct Cost of Obtaining Sponsorship Rights

2. Promotion Costs– Costs incurred by a sponsor while promoting its

sponsorship of the Olympic Games.

3. Value-In-Kind Contributions– Goods and services provided directly to the

Olympic committee

4. Opportunity Costs – Costs of foregoing a chance to sponsor another

event– Highly speculative estimates

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1. Direct Cost of Obtaining Sponsorship Rights– Determined by IOC. Not officially released to the public

– Estimates ranges from US$40 – 60 million

Ex: Lenovo paid ≈ US$65 million in sponsorship fee

Exception: Omega only provides Value-In-Kind contributions

2. Promotion Costs– Marketing and advertising costs including staged events that

showcase athletes and corporate banners.

– Determined by sponsors.

– Usually defined as multiples of direct cost of sponsorship fees (i.e. McDonald’s: 1x, Lenovo: 2 to 3x, Coke: 9x)

2008 Olympic Sponsorship:Costs are Quantifiable by Sponsors

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Ex: Lenovo could spend up to US$130 – US$195 million

Ex: VISA to promote credit education programs to help Chinese to understand benefits of using credit cards

3. Value-In-Kind Costs– Costs depend on products and/or services rendered by the

sponsors

– Ex: Lenovo to provide, test, install, and maintain at least 13,500 PCs at the Games

– Ex: McDonald’s fed more than 300,000 athletes, coaches, officials and spectators at the 2004 Games in Athens

2008 Olympic Sponsorship:Costs are Quantifiable by Sponsors

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2008 Olympic Sponsorship: Sponsorship Benefits: Key Findings

• No consistent methodology used by marketing managers to evaluate the benefits of Olympic sponsorship

-نمی توان با قطعیت تغییرات در فروش رابه دالیلی خاص از قبیل ترویج حمایت مالی از بازیها نسبت

داد .

-نمی توان به صورت ساده لوحانه ای گفت حامی المپیک خود عواید مالی خاصل از این سرمایه گذاری

را تشخیص میدهد .

-در این رابطه فرضیات ما نادرست بود .

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2008 Olympic Sponsorship: Sponsorship Benefits: Key Findings

• Benefits are not easily quantifiable

• Interviews with TOP Sponsors’ executives reveal that non-monetary (brand) benefits are just as important as monetary ones

• Companies’ strategic objectives are most important determinant of perceived benefits

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2008 Olympic Sponsorship: Primary Strategic Benefits

1.Develop international brand

credibility for a local company

Ex. Lenovo showcases its firm as a world-class PC player in hopes of driving global sales.

2. Evolve global brand identity.

Ex. McDonald’s leverages Olympic audience to launch “balanced” lifestyle platform to combat global negative sentiment toward the restaurant provider.

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2008 Olympic Sponsorship: Primary Strategic Benefits

3.Penetrate a new market.

Ex. Visa wants to increase credit card usage in China through educating the Chinese consumer and increasing awareness of the product with sponsorship advertising.

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Exclusive marketing rights for one of the

preeminent international events

Affiliation with the positive brand image and

values of the Olympic Rings

Launching point for entry into new

markets or local/international

strategies

Access to key Access to key strategic strategic

relationships within relationships within government and government and

industryindustry

Scarce resource which provides

distinct advantages over competitors

The costs associated with the sponsorship are also high

• Acquiring the sponsorship (i.e., sponsorship fee, value-in-kind, etc.)• The Olympic marketing campaign itself• Additional costs incurred to realize the long-term benefits of the

sponsorship

The costs associated with the sponsorship are also high

• Acquiring the sponsorship (i.e., sponsorship fee, value-in-kind, etc.)• The Olympic marketing campaign itself• Additional costs incurred to realize the long-term benefits of the

sponsorship

BUT…

The benefits of Olympic sponsorship for a firm are real and substantial The benefits of Olympic sponsorship for a firm are real and substantial

2008 Olympic Sponsorship: Conclusions

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Sponsorship Benefits – Sponsorship Costs = Net Value to the FirmSponsorship Benefits – Sponsorship Costs = Net Value to the Firm

Quantifying benefitsfrom sponsorship isdifficult

• No clear metrics to measure direct effects of sponsorship

• Dependent on strategic use of sponsorship

Quantifying benefitsfrom sponsorship isdifficult

• No clear metrics to measure direct effects of sponsorship

• Dependent on strategic use of sponsorship

The computation ofcosts should be easily determinable

• May be measured internally but not transparent to the public

• Indirect costs far exceed direct sponsorship fee

The computation ofcosts should be easily determinable

• May be measured internally but not transparent to the public

• Indirect costs far exceed direct sponsorship fee

No conclusive findings about sponsorship value

• Several hypothesized calculation methodologies applied in the past

• Both intangible benefits and dilutive effects exist

No conclusive findings about sponsorship value

• Several hypothesized calculation methodologies applied in the past

• Both intangible benefits and dilutive effects exist

Firm management must determine how the Olympic sponsorship can be utilized to further a specific strategy in order to realize the

maximum return from its investment.

Firm management must determine how the Olympic sponsorship can be utilized to further a specific strategy in order to realize the

maximum return from its investment.

2008 Olympic Sponsorship: Conclusions

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International platform for

strategic change

International penetration into a

local market

Global expansion for a local brand

Market Strategy Existing Position Target Goal China Example

2008 Olympic Sponsorship: Conclusions

2008 Beijing Olympics

Questions?