Sports marketing big for firms
Events being harnessed for maximum effect
By Yoon Ja-young
Passion, power and perseverance are what make sports what they are.
These elements also work in the world of marketing with sports as tools.
Korean firms are actively involved in efforts to harness the marketability of sports to promote their products and advance their image.
Olympics, the festival for all
Each person has their own appetite for sports, but the Olympics is loved by almost everyone. But the doors are open to only a handful of global companies. Firms vie to be Olympics sponsors, but money isn’t everything in the bidding process. The sponsors have to fit the spirit of the Games and Samsung Electronics has been one of those chosen.
Samsung’s sports marketing at the Olympics dates back to 1988 in Seoul when it was a local sponsor. It strengthened its Olympic marketing effort from the Nagano Games in 1998, becoming an official sponsor in wireless telecommunications. It has been an Olympic partner seven times so far, the latest of which was at the Winter Games in Vancouver last year. Samsung’s official sponsorship is also scheduled to continue at the London 2012 Olympics and in Rio in 2016.
How does it benefit firms when they become Olympic sponsors? Marketing experts say that global sports events are the best places to make their brands known. Despite good technology, Korean products have been under evaluated in global markets due to lack of brand power. Being an Olympic sponsor helped Samsung make a leap forward and the effect has been visible in sales.
Samsung Electronics’ brand value is estimated to have grown by over five times during the past ten years of Olympics sponsorship. According to Inter Brand, Samsung’s brand value was estimated at $3.2 billion in 1999, a year after Samsung started its official sponsorship. The value grew to $17.5 billion in 2009, ranking Samsung in the top 19 in the Best Global Brands survey.
The increased brand power led to sales growth. Samsung took 11.5 percent of the Chinese cell phone market in 2007, but in September 2008, right after the Beijing Olympics, its share surged to 21.2 percent.
Football, the most exciting arena
Among various sports events, football is the most passionate venue for marketing. Samsung cites its sponsorship of Chelsea Football Club as the most successful football marketing.
Samsung has been sponsoring English Premier League side Chelsea from 2005, where football fans see the Samsung logo on Chelsea kits and around the stadium. The Premier League annually attracts over 4 billion viewers from 203 countries and Chelsea have won several trophies under Samsung’s sponsorship.
Samsung estimates that its brand exposure to the media through sponsoring Chelsea is valued at over $100 million per season. Its sales in Europe doubled to 36.2 trillion won in 2009 from 17.8 trillion won in 2004, and it rose to be the top player in the LCD TV market. Its share in the cell phone market jumped to 23.9 percent in 2010 from 9.5 percent of 2004.
LG Electronics, which pulled up its brand awareness to over 50 percent from 4 percent through sponsoring Fulham, is continuing in football marketing. To enhance its leadership in Latin America, LG is sponsoring the Copa America, the biggest football event on the continent this year, following sponsorship in 2004 and 2007. Dubbed “the World Cup of South America,” the event draws an average viewership of 5 billion from around 200 countries.
As the official sponsor, LG Electronics can use the Copa America logo for marketing and set advertizing around the stadium. It can also use the game videos for promotions, and run a brand promotion booth at the stadiums, on top of promoting the LG brand on the official Copa America website. It has pulled up sales by between 20 to 50 percent on the continent through sponsorship in 2004 and 2007, and expects at least a $100 million marketing effect through the firm’s sponsorship this time around.
It has also sponsored a number of football squads in Latin America, including Sao Paolo FC of Brazil and Boca Juniors of Argentina.
Sports stars coupled with technology
Businesses want the positive images of sports stars to overlap their brands. Samsung Electronics has previously used world renowned footballers like Michael Ballack and Didier Drogba to promote Samsung cell phones.
Sports stars show consumers how they use the latest devices from the global electronics companies, and the positive image of athletes using the products is transferred to the IT brands.
They also regard sports events as chances to boast their technology. Samsung Electronics, for example, operated “Olympic Rendezvous @ Samsung” at the Sydney Olympics in 2000, to promote its products to fans there as well as supporting athletes to make phone calls to their families back home, and set up the “Samsung Asian Games Pavilion” when it sponsored the 2010 Gwangzhou Asian Games. It exhibited diverse products such as 3D LED TVs, Galaxy smartphones and digital cameras.
At the London Games, Samsung is to offer a mobile payment service using Near Field Communication technology with VISA, at 60,000 VISA franchises in London, and at diverse Olympics facilities.
Looking for its niche
On top of sponsoring mega events like F1, LG Electronics is looking for niches in global sports marketing. “Though little known in Korea, cricket is very popular in certain parts of the world. We have been sponsoring the International Cricket Council from 2009 through 2015,” a spokesman for LG said.
LG has been sponsoring cricket in India from 1999, and succeeded in building up a friendly corporate image there through cricket marketing.
It also has sponsored the Snowboard World Cup for the past three years. The LG logo was everywhere throughout the event, including on the athletes clothing, advertisement panels, and promotional booths. LG estimated they benefitted from $30 million in marketing effects.
LG also sponsored the LG Cup South American Golf Championship, the only amateur golf championship in Latin America, where 11,000 golfers from 11 countries competed for six months. It was broadcast on the Golf Channel Latin America, with 5 million golf lovers watching. “We expect the event to enhance brand preference among customers with high purchasing power, and add to our premium brand image there,” the LG spokesman said.