EXECUTIVE SUMMARY and CRITIGUE
Abstract
The document will make an overview on the Olympic Movement as observed from the past ten decades. It will study the increased dependency on financial support especially from corporate, which has been taken by the movement. It will also check on its evolution in terms of sponsorship program as well as the marketing strategies being used now and those in the future. Challenges concerned in the whole process will be looked at as well. Finally, there will be a detailed analysis of the whole process i.e. critique that will mainly look into Evolution of sponsorship programs in Beijing and Turin in terms of its mutual benefits to concerned parties such as IOC and TOP, beyond Beijing and lastly on the impacts and challenges of this programs.
- Executive Summary
It has been observed that over the past years the Olympic bodies have increased their dependency on sponsorship provided by corporations. A study in this case shows that bodies such as IOC (International Olympic Committee), NOCs (National Olympic Committee) just to mention but a few are increasingly relying on corporate sponsors’ financial support to run their Olympic programs. According to Stotlar, (2005) notes that the movements not only rely on financial support but also but also on the products, services, technologies in addition to expertise to be used in organizing games. Citing an example of Lake Winter Olympic games in 2002, Stotlar observes that sponsorship accounted for 54% of all income spend in the program. This was one of the largest sponsorship in Olympic Games. The case of Olympics in Athens in Greece was the second largest ever held, with sponsorship accounting for 23% of the budget that was made by the Olympic Committee in 2004.
However, there are observed failures realized in carrying out advertising programs. There has been use of traditional methods of advertising that are not much efficient. This has made some companies to stop their sponsorship programs towards these games. According to Lee,(2005) he cites an example of Xerox company that had scheduled its sponsorship program for 40 years but had to stop it for the same reason of inefficiency in the advertising means. It can be realized that most of the sponsorship corporate are withdrawing their sponsorship from Olympic Games and diverting the resources into other means that could help create customer loyalty to their products.Kodak, for instance has preferred to end its long 112 year period it has been sponsoring the games. This is in addition to other sponsors such as Manulife, a Canadian insurer who has been a big sponsor of TOP games. It is therefore important to make critical observation into the dynamics of Olympic Sponsorship programs so as to come up with the best forms that will reduce the challenges being faced by the corporate sponsors of the games. This can mainly be done trough observations into the sponsorship evolution in the past years, benefits, marketing trends and challenges in the past sponsorships as well as the impacts that sponsorship activities has yielded on the Olympic Movements.
2.0 Critique of the Sponsorship of Olympic Programs
This part gives a detailed analysis and the assessment of the Olympic Sponsorship programs. The aim is to look into the dynamism of the programs through the evolutions in the past, the benefits that were accrued both to the corporate bodies that carried out the sponsorship activity and the Olympic Movements that were sponsored in the process. It will also go through the challenges met by both parties as well as the impacts that the programs yielded in the end, as below;
- The Evolution of the Sponsorship Programs
Olympic sponsorship program emerged since 776 BC from the ancient cities of Greece. Sponsorship was done through giving facilities and equipment to trainers. The winners were awarded and their sponsors and their own cities secured huge recognition. Up until 1912, the sponsoring corporations did not have the rights to own specific features associated with their sponsorship activities. This was initiated in the Stockholm Olympic Games whereby companies could purchase certain official from the International Olympic Committee, which gave the rights upon. These features were the advertising labels that a sponsor company could use. The Organizing Committee gave great association between the sponsor companies and the IOC that enabled them to capitalize on their marketing strategies, hence gaining on their investments. Sponsor Companies continued to increase from 11 in 1932 to 46 companies in 1960s which has now grown to over 628 sponsors from 1976.
- Benefits of IOC and the Olympic Partners
The Olympic Partner (TOP) was formed due to the over commercialization effect that resulted when many sponsor companies that had wanted to benefit from the program, entered the market. This was after high financial gains that have been observed in the program.
TOP was an initiative of IOC aimed at ensuring mutual benefits between it and the IOC.Its mandate was to control the parasitic influx of companies in the sponsorship programs. The movement is a marketing initiative that is mandated to control a limited number of sponsor companies which are given special treatment and enhanced worldwide marketing of their products. It is an organizing body that coordinates the general sponsorship of the events for all teams participating under the IOC. It thus ensures a stable and properly controlled revenues base for IOC. In addition, it has ensured a reduced number of sponsors and increased quality of the sponsorship program thus increasing profits for sponsor movements on their investments. Despite this mutual association, there are differences in gains whereby, TOP revenues are more than those of IOC. This is explained from the fact that there is exercise of product exclusivity, accessibility to tickets, hospitality, varied public relations etc.
Sponsorship in this two cases seemed to vary as result of different TV ratings and coverage from other countries.US ratings for Turin were low and hence reducing consumer coverage.
Comparing the past media coverage on superstars, it also reveals that modern media is so much fragmented and the superstars produced are short term ones. The coverage does not therefore attract large number of consumers on the web as it was in 2006 Olympic Games in Turin.
There is also effect of negative publicity as revealed by some players thus creating bad image in the presence of consumers. For instance, athletes working under effects of intoxications. Such undesirability’s affects the profitability of the sponsors in the case when he has acquired to use the image of the athlete.
- Challenges in the Olympic Sponsorship program
There are challenges in this program which includes the best way for evaluating ones return on the investment. This has mainly resulted because of the changing nature of Olympic Games.
Other concerns are in the area of the privileges the sponsors should have in advertising programs on media coverage. It is argued that they should further have their investments in the media for a significant benefit, Davis (2012).
- Impacts of Olympic Sponsorship
Studies reveal that consumers are more willing to buy products that are associated with a certain sponsor company in the Olympics. This has made the IOC to go further in creating awareness on corporate sponsorship and improving and sustaining the corporate image of Olympic Games
Olympic Sponsorship has resulted in the need to extensively protect image of the sponsor movements. This is because of the increasing level of corruption and marketing scandals observed.
Sponsorship has also welcomed critics who view the process as being more on marketing and business issue as well as politics instead of dwelling on games. This indicate that sponsorship is a continuous movement that that requires finding of new way to maximize on their returns and investment.
Conclusion
Besides being an entertainment provision, Olympic Games have tremendously changed the occupations and lifestyle. History has indicated that there is increasing dependence of Olympic Movements on corporate sponsors. Studies have revealed that the nature in which sponsorship is done has not slowed despite the escalating costs imposed by IOC and over commercialization issues, which are forecasted to influence the process in the future. In addition, It is clears that Olympic Sponsors will always find ways to maintain their benefits in the program.
References
Davis, J. (2012). The Olympic Games Effect How Sports Marketing Builds Strong Brands. Hoboken: John Wiley & Sons.
