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Being A Sponsor Of The Olympic Games Marketing Essay

Paper Type: Free Essay Subject: Marketing
Wordcount: 1471 words Published: 1st Jan 2015

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Global marketing is defined by the Oxford University Press as “marketing on a worldwide scale reconciling or taking commercial advantage of global operational differences, similarities and opportunities in order to meet global objectives.” With globalization and advanced technology, global marketing becomes more important, and some activities are used as new global marketing tool such as worldwide sports events. The modern Olympic Game is held every four years since 1896 except in 1916, 1940 and 1944 because of the world wars. For now, the Olympic Games are considered to be the world’s most popular sports competition, with more than 200 nations participating, and so many companies use it as a global marketing tool. But does this tool work well? This essay will discuss the benefits and the drawbacks of using the Olympic Games as a global marketing communication tool and evaluate its effectiveness.

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Becoming a sponsor of the Olympic Games is one of the most common ways to use the Olympic as a global marketing tool. Being a sponsor is a big business, it always costs a company millions of dollars to acquire the marketing rights to use the events including its image and logo. The sponsor fee does not include the advertisement expense, meaning that companies need to spend more money to promote their brand or products. Indeed, visa alone was estimated to have spent $886 million on its official sponsorship of the 2008 Olympic Game (CNBC, 2008). With such a large amount of money, being a sponsor of the Olympic Games seems really risky. There are four main disadvantages that a company may face when they use the Olympic Games to promote their brands.

Firstly, using the Olympic Game- a worldwide sports event – can let more people know the brands or companies and find some potential customers, it also ignores the inconsistency in consumer needs. A customer in America will be different from a customer in South African. So a good global marketing activity should not just depend on the fame of the Olympic Game and use the same means of propaganda all over the world. It also needs different marketing strategy for different countries to address different consumer needs.

Furthermore, the inconsistency in consumer needs is not the only factors different from one area to another and people in one country may also react differently as compared to a consumer in another country. To a company, customers are one of the most important elements, so the reactions from consumers influence a companies’ next move. The Olympic Games usually lasts about two weeks, and during this time, companies marketing activities are received by people all over the world. It is difficult to collect different reactions from different people and improve the next marketing method in time. In the end, marketing activities may be not attractive for some potential consumers which could lead to fall of the whole global marketing plan.

Moreover, consumers’ loyalty is also one of the factors influencing global marketing achievement. When people get used to buying goods of one brand, it will be very difficult to change their choice. Using the Olympic Game let people know a brand is effective, but Japanese might like a product to have a traditional touch, whereas an American might like to add a retro modern look to it. In this case, the Olympic Game global marketing strategy is difficult to devise.

In the end, the laws of the land have to be considered. Usually, original company policies may be devised according to the laws of home countries. But when it comes to the global scale, the overseas laws perhaps are conflicting in these policies. The sponsors spend tons of money to purchasers the right to use the Olympic Game logo and image, but if their advertisement could not published in some countries just because laws conflict, then all the effort will be in vain. So it is necessary for a company to know laws and rules abroad before they make the global marketing strategy.

On the other hand, global marketing also brings benefits to companies. First and foremost, using the Olympic Games as global marketing tool can increase brand awareness. As the Olympic Game is a worldwide sports event involved more than 200 nations, almost every nation will purchase broadcast rights. So advertising at this moment can reach potential customers all over the world effectively, especially with the Olympic image and logo. Moreover, in an extreme case, the sponsor may get a chance for free advertising. In the 2008 Beijing Olympic Game, the last torchbearer- the athlete who lights the stadium flame was Li Ning who is a former gymnast who won six medals. In the last few minutes of the ceremony, Li Ning run into the stadium and lighted the flame as billions of people watched. For that 2 or 3 minutes millions of people who did not know this Li Ning brand before learned it (Pitt, 2010, p.282).

Secondly, using the Olympic Game as a marketing tool to promote products and brands could also increase brand recognition. An example of this is the study carried out by John and Martin (2009, pp.126-127) in which compared brand recognition level between Nike (sponsor) and Adidas (non-sponsor) by collecting respondents of Australian adults from nine months before the 2000 Olympics to three months after it. The results show that at the beginning of the survey, 77% of Australian individuals recognized Nike, while only 47% of them knew Adidas. During the Games, the recognition level of Adidas suffered a drop from 67% to 56%, but Nike’s recognition level as official Olympic sponsor was still over 70%.

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Thirdly, using the Olympic Game as a marketing tool becomes a unique experience. Global marketing is a multi-million dollar business but it is never only about money. Being a successful sponsor of the Olympic Game and gaining expected benefits is not easy. It includes setting appropriate marketing goal, making accurate marketing niche and using various marketing strategies. All the factors can be practiced during the marketing process. When the Olympic Games are over, sponsors can get feedback and try to improve their marketing policy to get more achievement in the next global marketing activity. For example, the Coca-Cola joined the Olympic Torch Relay. Since 1996 Coca-Cola has been a member of the Olympic Torch Relay and started to use it as on of the significant sponsor able constituents. In the next 5 Olympic Games, summer and winter, Coca-Cola learned from the successful previous Olympic Torch Relay programmes and improved its marketing strategies. As a result, Coca-Cola launched its new marketing strategy. The company did not just use the offline platform to promote but by using both online and offline platform at the 2008 Beijing Olympics, to allow more customers in China to know the Olympic spirit and to be more loyal towards the Coca-Cola brand (Choi, 2008, pp.248-249).

Finally, global marketing could lead to lower marketing costs and increase revenues. Worldwide sponsorship generated $866million for the 2006-2008 Torino/Beijing Olympic cycles. Eleven multinational sponsors paid an average of $72 million each. More remarkably, these numbers represent only the fees for sponsorship rights; sponsors still had to pay for the advertising itself (CNBC, 2008). According to this figure, the cost of using the Olympic Games to promote brand or product is really high, but is even higher if the company has to market a product differently in every country that it is selling. In addition with same input, the effect of Olympic marketing tends to be 2-4 times more than conventional marketing. GE illustrates this point clearly. GE is one of the Olympics’ Game sponsors. During the Games its company-wide sales revenues exceeded US$1.7 billion, includes NBC Universal, GE’s subsidiary media company, more than US$1 billion in advertising revenue was made which generate a record and make Beijing the most successful Games in GE’s history (Hanssen, 2009, pp.126-127 ).

This essay has discussed the benefits and drawbacks that using the Olympic Games as a global marketing tool can bring to a company. Indeed, there are some disadvantages about the inconsistency in consumer needs and reactions, but all the problems could be solved by tracing outcomes and improving marketing strategy after the marketing activity. However, the advantage of global marketing is widely agreed, otherwise companies would not spent large amounts of money on it. Overall, the benefits of the global marketing outweigh the drawbacks and it would be interesting to find what is the most important factor could influence the effects of global marketing.

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