Sponsor Companies Worried about Tranquil Mood before Rio Olympics
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Olympic Marketing
August 5, 2016, 09:30
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The Rio Olympics kick off on August 6. More than 10,000 athletes are expected to participate in the event from 206 countries around the world and their competition in a total of 306 events is to be aired worldwide via broadcasting stations, which means the host country Brazil and official sponsor companies can show their positive images to the entire world. In general, enterprises that utilize Olympic marketing have enjoyed huge PR effects by showing their products and images to the entire world.
Still, the atmosphere is pretty quiet this year when it comes to Olympic marketing even though the opening of the Olympics is just two weeks away. In South Korea, companies other than Samsung Electronics, an official sponsor of the Rio Olympics, are engaged in few Olympic marketing campaigns. This is because of the ongoing global economic recession and the IOC's ban on such campaigns by those that are not official sponsors.
Olympic sponsor companies are divided into the five categories of worldwide partners, official sponsors, official supporters, official suppliers and suppliers and those in the five groups have different levels of promotional rights. Among these five groups, only worldwide partners can use the Olympic emblem in all the International Olympic Committee member countries and supply products related to the Olympics to the steering committee on a preferential basis. The 11 worldwide partners of this year's summer Olympics are Samsung Electronics, Coca Cola, Panasonic, Visa Card, Adidas, BMW, McDonald's, Omega, GE, Dow and P&G.
Samsung Electronics, which took part in the 1988 Seoul Olympics as a regional sponsor, signed the The Olympic Partner (TOP) contract with the IOC in 1997 and acted as an official sponsor of nine different Olympics games from 1998 to 2014 in order to enhance its global image and brand value and contribute to the Olympic spirit and technological innovation in the field of mobile telephony. The TOP programme is available only for top-tier sponsors in direct agreement with the IOC. In Nanjing, China in August last year, Samsung Electronics vice chairman Lee Jae-yong and IOC president Thomas Bach extended the contract until 2020 so that the company can be a partner of the IOC for more than two decades.
The other South Korean enterprises can be engaged in ambush marketing, though, by launching TV commercials related to Olympics, sponsoring individual athletes, etc. A number of companies, including Hyundai Motor Company, SK and KT, are sponsoring different South Korean athletes in an attempt to better penetrate the Brazilian market.
Entrepreneurs Cheering Up National Team Athletes
With the Rio Olympics around the corner, a number of South Korean entrepreneurs are visiting the Taereung National Village one after another for some pep talks for South Korean national team athletes. Those in charge of different sports associations in the country are showing conspicuous activities in particular.
For example, Hyundai Development Company chairman Chung Mong-kyu, who is to lead South Korean national team members to Rio de Janeiro soon, visited the village on July 10 and donated 300 million won. Two days earlier, Samsung Life Insurance chairman Lee Su-bin and Cheil Worldwide president Kim Jae-yeol donated 500 million won. On July 6, Hanjin Group chairman Jo Yang-ho and SK Group chairman Choi Tae-won contributed 100 million won and 300 million won as well, respectively.
The SK Group chairman is also serving as the head of the Korea Handball Association. He recently watched this year's regular handball match between the South Korean and Japanese national teams with SK executive and staff members. Hyundai Motor Company vice chairman and Korea Archery Association president Chung Eui-seon is to fly to Rio de Janeiro himself to encourage South Korean archers. Hanjin Group chairman Jo Yang-ho is the vice chairman of the Korean Olympic Committee and the head of the Korea Table Tennis Association. The Hanwha Group organized its Galleria Shooting Team in 2001 and has made a continuous contribution since then. Hanwha Group chairman Kim Seong-yeon, although heading no sports association in South Korea as of now, is known to be much interested in horse riding, too.
Marketing Campaigns Utilizing Olympics Going On
Under the circumstances, various South Korean companies are releasing new products and launching marketing campaigns to make the most of the summer Olympics.
Samsung Electronics, which is an official information technology (IT) and wireless communications sponsor of the Rio Olympics, is concentrating on the Galaxy S7 smartphone. It recently unveiled the limited Galaxy S7 Edge Olympic Edition and allotted 2,016 units of the smartphone to each target market such as Brazil, Germany, China, South Korea and the United States. In addition, it is going to provide athletes joining the Rio Olympics with 12,500 Galaxy S7s in cooperation with the IOC.
Hyundai Motor Brasil is utilizing the Olympics well, too. This company, as the only automaker entitled to the exclusive use of images of the Cristo Redentor statue, is preparing various ads and promotions along with free Wi-Fi zones around the statue. KOLON Fashion Material is supplying the athletes with uniforms made of special fabrics so that they do not have to be bothered by mosquitoes.
Skepticism is Rising over Olympic Marketing
Nevertheless, not a few people doubt the effectiveness of such marketing with the public's interest in international sports events on the decline and the Rio Olympics having shown a series of problems during the course of the preparation so far. Some economic experts are saying that the positive economic effect of the Rio Olympics could be nowhere to be found even for the host country Brazil. Credit rating agency Moody's recently commented that the positive effect Brazil can anticipate from the upcoming summer Olympics is likely to stand at infrastructure construction. Recently, Brazil has been downgraded by three big credit-rating agencies: Fitch Ratings, Standard and Poor's and Moody's. Forecasts indicate that our economy is likely to decrease around 2.5-3% this year, according to Kim Shin-jae, a lawyer at a Brazilian law firm TozziniFreire Advogados. She, however, said, "The Olympic Games are a huge step for Brazilian economy and international exposure," adding, "The Olympic spirit will bring a positive mood to the Brazilian internal market with more than 200 million consumers and attractively-priced assets compared to other countries.
At present, Brazil has to deal with political and security unrest. President Dilma Rousseff has been impeached and the Rio Olympics are likely to become the first one of its kind underway in the absence of the head of state. Besides, the venue is highly vulnerable to terrorist attacks targeting random people with such tragic attacks following one after another across the world these days.
Another concern is the zika virus, which has deterred a number of players including some well-known golf and tennis players from joining the event in fear of infection. If the history is any guide, now is the time when Olympic-related advertising and promotional campaigns should be at their peak. Compared to the London Olympics four years ago, however, this year has the lack of festival mood with corporate promotions for cheering up national teams scaled down to a significant extent.