The Olympic Games Effect MKT-231 Book Review: The Olympic Games Effect The book: The Olympic Games Effect wrote by John A. Davis, is mainly discussing about the sport market, especially the Olympic market. The book made a key contribution to learning the economics of the Olympics, marketing of the Olympics. It is really help marketers to understand how brands promote in such a huge event.The author explains his idea in five different sections: the first, History, Legacy, Tradition; the second, Success and Achievement; the third, Controversy and Challenge; the forth, Reputation Development; and the fifth, Olympic Marketing Victory.
In different aspect, he analysis how the big brand – the Olympic effect our lives, how it attracts such a numbers of athletes, media workers, audiences, TV viewers and so much companies put their money into the event to sponsor it.I summarize several important points from this book which I will list as follows. Section 1: History, Legacy, Tradition This part explains why the Olympic is the special one, the phenomenon. Because the Olympic Games is more than a sports event, it is comes from the ancient Greek, it is a wonderful legacy that our ancestor left to us, it is all about tradition, human spirit, competition, just like it’s motto: Faster, Higher, Stronger. It represents the basic human good from inward.The slogan of London 2012 Olympics is Inspire a Generation, the slogan of Beijing 2008 Olympics is One World, One Dream. We can catch the idea from these slogans, it is not just an athletic competition, and it is greater than that. People inspired from our ancestor, by those heroes, myths, legends in the history in history of this game.
Once a company becomes a sponsor of the Olympic Games, it will be a good fit for the company’s core value, is there some other way that better than the Olympics’ spirits playing this role?The Olympics Games could bring more to us, at this every 2-year feast (include both summer and winter Olympics) we could acquire not economical profits, but also some other benefits in religion or political aspects. For example, North Korea Olympic team join South Korea Olympic team as companion at the Olympic opening ceremony at Beijing 2008; the United States Man soccer team played a fantastic game with Iran Man soccer team several days later, no matter the leaders from these countries are having some political difference at that time.When we saw woman athletes from Middle East took part in the 100 meter race with kerchief, I may think it funny but at meanwhile I celebrate for the women freedom in these countries. When we see injured athletes still in the game, when we see handicapped athletes trying to be excellent in the field, I believe once a company becomes a sponsor of the Olympic Games, it will be a good fit for the company’s core value, is there some other way that better than the Olympics’ spirits playing this role?The Olympic could also offer the host city; even the whole nation could get huge benefits from it. A success Olympic Game means number of venues, new facilities, thousands of work opportunities, volunteers, hotel and food, media support, security and others, that is all relate to investment and revenue.
The whole event start from the moment that Chairman of International Olympic Committee announced which city will hold the Olympic, which was seven years before the actually opening. Or we can say the work has already started when the nation decided to apply the Olympic Game.I have been through the whole seven years from the moment Samaranch announced that Beijing holds the 2008 Summer Olympic Games to the moment that Olympic Flag was given to the Mayor of London. I lived in Beijing and almost to be a volunteer of that game. I can tell the changes and difference that brought to Beijing because of the Olympic, better environment, better transportation, civilians have more interests to join sports. Section 2: Success and Achievement In this section, the author explains why and how the Olympic Game is the biggest sport event in this world.The author provides figures and reasons to support his idea.
The Olympic has the biggest audience, the London 2012 Olympic just broke the record of viewers. Most of it should give credit to TV broadcasting. Broadcasting become a big part of the whole Olympic revenues, it is increases dramatically in recent 30 years, from 88 million of US dollars 1980 in Moscow to 1739 million 2008 in Beijing. The broadcast revenue growth is impressive and coincides with the increasing sophistication of the Olympic Games as a viable marketing platform for companies.The revenue increases reflect not just the growing global stage that the Olympics command in a commercial sense, but the credibility born of thousands of years of reputation building that reminds fans of the unique values and aspirations closely associated with the games. When such a reputation is developed over centuries, the associated integrity is almost beyond compare, conferring the mythical, gold-plated status we now associate with almost anything related to the Olympics.The power of this appeal is not lost on the world’s countries and companies, hence the continued increases and sophistication of host city bids, rising Olympic sponsor fee, and the vigilant protection the IOC exerts over the Olympics and Olympic related trademarks and intellectual property. Because of the quality associated with the Olympics and the large global audience, companies clamor for the right to reach this attractive and influential group of viewer.
Broadcasters around the world, Particularly those in the United states, know that this vast audience offers tremendous commercial potential to advertisers, bid aggressively large sums for the right to broadcast the Olympics, and know that their own fortunes as broadcasters are tied directly to their ability to create compelling content that offers extensive coverage of the carious events, athlete profiles, and stories of Olympic success and failure, while also conveying the intangible appeal and mystique of Olympic values and traditions.Another important issue in this section is the Olympic halo effect, which is also a main point in the whole book. The author discusses how a company to be an Olympic sponsor and take advantage from it both in short term and in long term.
From the author’s point of view, the keys to success with an Olympic sponsorship include entering into it with an open mind, a deep respect for Olympic history, and an appreciation for one’s own company and its relative fit with Olympic values.Assuming this self-analysis confirms that an Olympic sponsorship make sense, then marketers must determine the most effective and appropriate way to take advantage of it, since any potential halo effect may be fleeting if the sponsorship is executed poorly. Companies must first focus on clarifying the connection between their strategic brand objectives and their Olympic sponsorship. Company leadership can then determine the short-term tactics and marketing programs to use in support of their strategy. Section 3: Controversy and ChallengeThe author mainly explained the potential risk for corporate sponsors in this part. If global reach were the only noteworthy statistic, every company would want to be involved in Olympic sponsorship. However, with such vast exposure comes an increased risk that any indiscretion or negative issue will be seen by a worldwide audience. Protest groups can also take advantage of the exposure, as can competitors seeking to take obtain the benefits of sponsorship without having to pay for it.
Reputational risks lurk in all forms of sports sponsorship, particularly Olympic sponsorship. These must be borne in mind.It is important to be aware of them so that you can prospectively guard against them and prepare for if, and when, they appear suddenly.
According to survey after Summer Olympic in 2012 in London. This is not as evident as one might think. Despite topping the ranking – together with Coca-Cola – when it comes to spontaneous associations with the Olympic Games, negative health associations caused a quarter of consumers interviewed to disagree completely that McDonald’s is a good fit with the Olympics, with 32% saying the brand actually conflicts with what the Olympics is trying to promote.Even worse: Financial services company Visa, one of the main sponsors, has suffered lots of negative publicity, many consumers thinking at the company’s exclusivity deal which stops consumers using other cards for Olympic transactions and which is perceived as a tentative to ‘monopolies the cash machines at the Olympics’.
Some brands which paid relatively small sums to be associated as ‘supporters’, such as Cadbury and UPS, are scoring higher than main sponsors, the survey shows. Others even benefit from their sponsoring of other sporting events.This clearly shows that offering (financial) support to popular events is not enough and that the return will largely depend on the sponsoring company’s own communication about its involvement in the sponsored event.
An important point the author talked about in this section is ambush marketing. Ambush marketing is primarily seen at high-profile events, where global publicity is virtually guaranteed. Ambush marketing is where a company seeks to obtain the benefits of official sponsorship without paying any sponsorship fees.
Prior to the 2000 Sydney Olympics, Ansett, an official sponsor, issued injunction proceedings against Qantas, who were not official sponsors but who ran adverts featuring Cathy Freeman and Olympic stadia. Proceedings were issued, but the case was settled before a court decision was ever made. There was no declaration of infringing conduct, no injunction or corrective advertisement ordered and in all likelihood, Qantas were the victors. Official sponsors of the 2012 Olympics should benefit from the London Olympic Games and Paralympic Games Act 2006 (the 2006 Act).
The Act was aimed at fighting ambush marketing as well as controlling advertising, street trading, ticket sales and transport. Prior to the Act coming into force, event organizers were forced to rely on copyright, trademarks and contractual provisions to protect their interests. The 2006 Act should make preventing ambush marketing a great deal easier. The key provision of the 2006 Act, so far as ambush marketing is concerned, is that it prevents a number of Olympic-related words from being used in a manner that is likely to suggest to the public that there is an association with London 2012.If there is such unauthorized use leading to confusion among the public, the ‘London Olympics Association Right’ is likely to have been breached, constituting a criminal offence potentially resulting in a ? 20,000 fine. As the Olympics is unusual in not allowing sponsors’ branding in the stadia or on athletes’ clothing, the Act is likely to afford sponsors greater protection against ambush marketing and other unlawful acts, therefore enabling them to make the maximum return on their investment. Section 4: Reputation DevelopmentAn important point the author talked about in this section is ambush marketing.
Ambush marketing is primarily seen at high-profile events, where global publicity is virtually guaranteed. Ambush marketing is where a company seeks to obtain the benefits of official sponsorship without paying any sponsorship fees. Prior to the 2000 Sydney Olympics, Ansett, an official sponsor, issued injunction proceedings against Qantas, who were not official sponsors but who ran adverts featuring Cathy Freeman and Olympic stadia. Proceedings were issued, but the case was settled before a court decision was ever made.There was no declaration of infringing conduct, no injunction or corrective advertisement ordered and in all likelihood, Qantas were the victors. Official sponsors of the 2012 Olympics should benefit from the London Olympic Games and Paralympic Games Act 2006 (the 2006 Act). The Act was aimed at fighting ambush marketing as well as controlling advertising, street trading, ticket sales and transport.
Prior to the Act coming into force, event organizers were forced to rely on copyright, trademarks and contractual provisions to protect their interests.The 2006 Act should make preventing ambush marketing a great deal easier. The key provision of the 2006 Act, so far as ambush marketing is concerned, is that it prevents a number of Olympic-related words from being used in a manner that is likely to suggest to the public that there is an association with London 2012. If there is such unauthorized use leading to confusion among the public, the ‘London Olympics Association Right’ is likely to have been breached, constituting a criminal offence potentially resulting in a ? 20,000 fine.As the Olympics is unusual in not allowing sponsors’ branding in the stadia or on athletes’ clothing, the Act is likely to afford sponsors greater protection against ambush marketing and other unlawful acts, therefore enabling them to make the maximum return on their investment. Section 5: Olympic Marketing Victory.
In the last part, the author discussed how Olympic sponsors design their sponsorship program plans based on research, on clear understanding of sports fans, creative execution, and marketing communications. Sports fan is a tremendous number of populations in this world.A good marketer understands who the sports fans really are and how sponsors can use and improve this information so that their sponsorship activities have a greater chance of success. Sports fan are different from countries, races, genders, or ages, even a group of fans have similar background may love different kinds of sports. The author classified the fans into three groups: Intense Enthusiasts (IE), or avid Olympics fans, is the heart of the fan base, they love the Games and the intensity of the competition, and they will watch hours of Olympic overage on TV or on line each day. The second group is Shared Enthusiasts (SE), they are the immediate networks of family, close friends, and professional colleagues of IE fans, and they may share community experience. The SE’s relationship the IE fans is partly what motivates their interest in the Olympics.
The last kind of fan group is Casual Enthusiasts (CE), they might be connected to the shared enthusiasts though social or professional networks, but they are just as likely to be entirely separate from the other two layers. CEs are more relaxed about their Olympic interests.After fan group classification, sponsor marketers should still rely on traditional marketing frameworks to future deepen their knowledge of target segments. Classic marketing theory says that there are four segmentation approaches: Demographics, Psychographics, Geographic and Product use. Marketers use these segmentation approaches separately or in some combination to identify common characteristics that could be exploited in the integrated marketing plan. Creation is not a new word in business world, especially in marketing and advertisement.In the book, for creative execution to success today requires much more than a simply emphasis on bold visuals for building awareness, in fact, bold visuals may have little or no impact.
As tempting as daring creative execution might be, its use must occur in the context of longer term strategic objectives. Companies must evaluate their sports sponsorships cognizant of the reasons for investing in the first place and the possible benefits to be derived. The benefits will include increased awareness, and superb creative execution can facilitate this.From the whole book, there are some useful and valuable information we can learn as marketers.
For bigger companies, a clear understanding of core value of both company itself and the event the company plan to sponsor for is very important. To be an official sponsor may not see the payback immediately, but for the long term, to be a good sponsor of The Olympic Game, maybe the most well-known brand in the whole world, it is a strategic investment in the growth and development of the firm’s value ensures that the sponsorship is supported and viewed seriously, rather than as a one-time expendable tactic.The example of McDonald’s we discussed above may not be a good example of this. For small companies, determine right target market is very important. Although the Olympic looks like a promise to customer, companies still may fail to sponsor it, sometimes it is not even the company’s mistake, for example, the 2002 Winter Olympic Game in Salt Lake City, the scandal broke the Olympic spirit. Sponsor may impute to bad luck, but small companies do not have that much money compete to bigger one, they are more likely cannot afford to lose, so good positioning of the company and find right audience to promote might help.