There’s a reason why some marketing terms stand the test of time. Like “first mover advantage”. This idea that companies enter a market first and succeed due to competitive advantage over their competitors is not totally incorrect, but is based on the premise that the environment is also stable – the “all things being equal” assumption. This may hold true for some categories but with technology imposing an even greater impact on how businesses are managed and shaped today, the playing field is quite volatile and unpredictable.
And sports marketing is no different.
Still relatively a small part of most brand manager’s marketing mix, sponsorship in sport and related activities has been growing at a consistent pace. Some key sports that are growing and attracting sponsors are (in descending order of sponsorship $s):
• Basketball
• Cycling (yes… it’s experiencing a renaissance of sorts)
• Football
• American football – though no branding is allowed on the kit or in-stadia in the NFL
• Rugby
• Golf – there is renewed hope post the Tiger era
What is not surprising is that the growth is coming from Asia – in fact, Asia recorded the highest growth with 5.7% in 2016. The data to support it is everywhere starting with the fact that the next three Olympic events are taking place in Asia starting with the Winter Olympic Games in Korea followed by the Summer Olympics in Tokyo (2020) and then again the Winter edition in China in 2022. Add to this the Rugby World Cup in Japan in 2018 and FIFA World Cup in Russia and Qatar in 2018 and 2022 respectively, one could joke that a brand need not even translate its marketing material into English at this rate!
But that’s where the appetite for big ticket sports sponsorship investments are. Take China. Everyone’s favourite topic from manufacturing to media muzzling.
Tap Never Runneth Dry
Chinese companies have invested in pretty much every sport – football, cricket, Olympics, etc. – and there is no sign of this trend reversing. The Chinese Super League spent more than €400m in transfer fees in 2015 and even with some recent curbs enforced by the government, I expect the transfer figures for 2016 to be a lot higher. Chinese mobile brands have not just flooded the market with their products but are investing heavily in sports that resonate in the market in which they operate – Oppo and Vivo in cricket as the most obvious examples. Then there’s Huawei who is a global partner for Arsenal, consumer electronics company Hisense, aligned to Red Bull Racing, the Australian Open and FC Schalke 04 and ZTE, another smartphone brand, who partners the Cleveland Cavaliers and four other NBA teams.
And every brand is targeting millennials. If you don’t have that term in your marketing strategy and plan, you are so 2000.
Take Honor for example, yet another Chinese smartphone brand. They went one step further and signed up the son of a sports icon – 17-year-old Brooklyn Beckham as their global brand ambassador to front the launch of the Honor 8 smartphone. Why? Because Honor thinks the son of David will appeal to their core market who are aged 18 to 34 and contribute 80% of sales.
Or Messi and Ronaldo as brand ambassadors for smartphone brands Huawei and ZTE respectively. Or Dwyane Wade (L), one of the most well-known and popular players in the NBA, has a 10-year endorsement deal with sportswear company Li Ning Co.
Distance running is not to be left behind (pun intended). Marathons have become one of the most fast-growing sporting activities in China – 328 registered marathons took place in China in 2016, an increase of over 40% over 2015. The one local brand that is taking advantage has identified a clear strategic fit – bottled water brand China Resources C’estbon. It partnered 176 marathons, or more than half of the total number of marathons in 2016, using them to champion not just the cause of the brand, but also to “cultivate a positive attitude toward leading a healthy lifestyle and being active among its employees and society in general.” Sounds familiar? Think Tata Consultancy Services.
The Business Benefit
All these investments are linked to clear business objectives and results. (This of course does not include acquisitions made by Chinese companies overseas which itself would be worth a separate discussion.)
• In India, Chinese smartphone brands accounted for more than one in every two phones sold, a market that was once dominated by Samsung. Though still the single most popular smartphone brand in India, Samsung’s market share has slipped to 21% in November from 30% in just under a year thanks to an influx of Chinese brands; brands that have a portfolio of products that provide a far better UI experience due to lower costs, better technology and large investments in marketing (advertising and sponsorships).
• Immediate brand recall is one of the key factors and no one knows this better than Hisense, the white goods manufacturer. Completely unknown elsewhere, this brand sponsored the Euro 2016 and got immediate global branding (and bragging rights) thereby saving precious time in establishing its brands through regular marketing channels. The first Chinese global partner of the UEFA European Championship in the competition’s 56-year history (via Marketing Week).
• Alibaba would like to grow its ex-China market and the vision is to get half its revenue from overseas so it has partnered with the IOC through 2028 and become the tech partner of choice; the aim is to “create an online marketplace for Olympics merchandise and use its computing technology to provide data and analytics for the sporting events”. (internetretailer.com)
Move over Atos. Or any other brand that comes in the way. Because at the end of the day, a lot if not everything, is made in China.