Who is The Official Beijing Olympic Sponsors? Is it Effective?

Whos is the Official Beijing Olympic Sponsors? Is it Effective?Adidas and Internet portal Sohu have coughed up serious money to sponsor the Beijing 2008 Olympics. Estimates have computer maker Lenovo paying $80 million to $100 million to be the official sponsor of the games. Eleven global sponsors–including Coca-Cola and McDonald’s–spent a combined $850 million to sponsor the Turin and Beijing Olympics.

With marketers salivating at the thought of selling to China’s emerging 250 million-strong middle class, especially in light of the sub-prime debacle in the U.S. combined with slowing retail sales, many companies feel that sponsoring the Olympics is a great way to build brand awareness with Chinese consumers and increase sales. For even the largest companies, like Johnson & Johnson (said as: JNJ  ), winning China has become critical to hitting the annual numbers Wall Street demands.

A firm named the China Market Research Group, emphasized to see just how effective Olympic sponsorship has been toward creating brand awareness, loyalty and more important, triggering sales in China. Over the past three months, this China Market Group conducted several hundred interviews and surveys with Chinese men and women between the ages of 18 and 45 in 10 cities throughout the country (source: Forbes).

The results of the research were disheartening for those companies that have pointed up the kind of money involved in becoming an Olympic sponsor:

  1. Nearly 80% of those Chinese consumers they polled said they “did not care” who the official sponsors were and the vast majority “did not consider official Olympic sponsorship” when buying a product.
  2. Ultimately, 40% of respondents felt that Nike was the official Olympic sponsor, vs. 50% for the actual sponsor, Adidas, and 10% for Chinese brand Li Ning. Despite a great marketing campaign featuring the Chinese people carrying China’s Olympic stars on their shoulders and an emphasis not only on the events but on China’s entrance onto the global stage, Adidas has not made their sponsorship stand out.
  3. The vast majority of consumers we interviewed failed to identify the official sponsor when given several choices in nearly all product sponsorship categories, from beverages to credit cards to automobiles. Instead, consumers often named as sponsor the brand they considered “best” in the marketplace according to their own preexisting notions.  For example: In the sportswear category, the researcher found that people usually responded correctly if they could recall a specific Adidas Olympics advertisement. But if respondents had not seen or could not remember the ad, they almost all believed that Nike was the official sponsor.
  4. They (The China Marker Research Group) also said that Chinese consumers increasingly buy the products and services they consider to be of the highest value and the brands that fit their image of the ideal life rather than by which company is the official sponsor. It is clear that in order to win the hearts, minds and wallets of Chinese consumers, multinationals need to become more consumer-oriented, create long-term brand image and shape the market toward their products and services.
  5. Nike avoided the nine-digit sponsorship fee that Adidas shelled out, while its alignment with hurdler Liu Xiang, one of China’s most popular Olympic athletes, has done just as well in harnessing this important sporting event to create long-term brand image. Respondents said that they wanted to buy Nike because they associated Liu’s success with the type of athletic gear he uses and they want to be like him–much as scores of children on playgrounds throughout the U.S. buy Air Jordans in the hope of soaring like Michael.
  6. Being an official Olympic sponsor did clearly help trigger sales if the product was viewed as related to the Olympics–such as sports apparel or beverages, where 20% of respondents said they were more likely to buy the official sponsor. The halo effect was not true with companies like China Mobile (nyse: CHL – news – people ), China Netcom, China Electric Grid or mining giant BHP Billiton (nyse: BBL – news – people ).
  7. Although many marketers complain that Chinese consumers are not brand loyal, the researcher found the opposite was true and that official sponsorship did little to increase sales. Take Pepsi and Coke, for example. While Coke is the official sponsor, the majority of respondents at 60% named Pepsi, mainly because they considered it the superior brand with a “wider range of products” and “better taste.”

 

Shaun Rein, Founder and Managing Director of the China Market Research Group said:

Too often, brands become lost in a sea of look-alikes and weak brand positioning. Increasingly, brand-savvy Chinese consumers will not remain loyal to a brand that is easily replaceable or which does not connect with them. Instead, they gravitate toward brands that consistently carve out their positioning–like Gillette–or which have points of sale that ease the shopping experience and highlights a brand’s image, like Nike. Companies need to think long and hard about how to brand in China, what the most effective marketing communication mediums are and whether it makes sense to align with the Olympics by becoming official sponsors. Official sponsorship is expensive and, while it does provide a sales bump in most categories, the effect is not consistently that much better than typical long-term branding campaigns. If companies are trying to reach Chinese consumers, becoming a sponsor might not be the best use of money. Instead, it is key to build the brand image long-term, carving out a niche in the minds of Chinese consumers through on-going marketing campaigns that win the hearts and minds, and thus the wallets, of Chinese consumers. Five years from now, Olympic sponsors will likely be forgotten, but consumers will remember brands that focus on point of sale, style and quality….

 

I’m not in the position to say the reaseracher is right or wrong; I have no idea. But, should the reaseracher compare the situation with before and after Olympic campaign roll-out? Or what about sales numbers? OR: Nike vs. addidas spending (for example) on marketing in China? Or the actual message these companies are trying to deliver?

From someone that regularly does global sponsorship ROI measurement; thinking the claims that sponsorship is ineffective might not been proven yet, based on the survey alone.

Asking people direct questions whether the Olympic sponsorship makes them change their purchase intention may not questions that produce meaningful answers. People all over the world will provide a rational (functional) answer as they did buy something to not want to seen to be influenced by marketing.

Sponsorship effectiveness measurement maybe more complex than just asking a few general questions to the general population.

Is a several hundred surveys/opinions sounds very unscientific for this universe size?. Isn’t it hard to know the potential impact for an event that has not yet happened?

Author: Lie Dharma Putra

Putra is a CPA. His last position, in the corporate world, was a controller for a corporation in Costa Mesa, CA. After spending 15 years as a nine-to-five employee, he decided to serve more companies, families and even individuals, as a trusted business advisor. He blogs about accounting, finance and tax, during his spare time, and helps accounting students (around the globe) to understand the subject matter easier , faster. Follow him on twitter @LieDharmaPutra or add him to your circle at Google Plus Lie+

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