Analysis of Samsung Electronics’ Bangkok Asian Games: Sponsorship
   
 

 

Analysis of Samsung Electronics’ Bangkok Asian Games: Sponsorship

Philip S. T. Cheng, Ph.D. (National Taiwan Normal University)

E-mail: pcheng36@hotmail.com

and David K. Stotlar, Ed. D. (University of Northern Colorado)

Abstract

The 13th Asian Games has been hosted successfully under the strong support of 11 corporations and the sponsors’ marketing objectives have been achieved effectively through this unique marketing platform. In fact, corporate spending on sport sponsorship has been increasing dramatically and the Pacific Rim is projected to be the fastest growing area in the world. However, the potential threats of over-commercialization, ambush marketing, endorsement scandals and ineffective communication are still major obstacles for future relationships in the sponsorship world Asian sport properties and corporations still have a lot to learn about the dynamics of sport sponsorship. The purpose of this paper is to introduce and analyze the successful sponsorship campaign leveraged by Samsung Electronics Co., Ltd. (SEC) in the Bangkok Asian Games. These results provide clear examples for sport leaders and corporations regarding global trends in sport sponsorship. The principles and strategies of a successful sponsorship in the 21st century are also discussed.

 Introduction

Several authors have indicated that the sport industry would suffer without the support of corporations (Carter, 1996; Irwin, 1993). Likewise, the corporations would be less competitive without differentiating themselves through the sport marketing (Schreiber & Lenson, 1994; Cheng, 1997). Research has shown that sponsorship can create symbiotic relationship wherein benefits are gained for sport and corporations (Stotlar, 1993; Schaaf, 1995). Sponsorship spending has been growing at double-digit rates over the last ten years, demonstrating the popularity of this strategy. Worldwide spending by corporations on sponsorship was estimated at $19.2 billion US dollars (1999 Sponsor spending…, 1998).

Unfortunately, various reasons exist for sponsors to drop out. Research has indicated that a decrease in the market of property or a change in cost-benefit perception of the corporation may persuade corporations to discontinue their sponsorship activities. (Niesyn, 1988; Stotlar, 1993). For example, the International Business Machines Corp. (IBM) has ended its 38-year marketing relationship with the International Olympic Committee (IOC) in cost dispute withdrawing from The Olympic Partnership (Narisetti, 1998). Concerns over sport organizing committees have also caused reconsideration from sponsors. After the bribery scandal of 2002 Winter Olympic Games (http://espn.go.com/other/news/1999/990111/01040203.html), Salt Lake City is still about US$245 million short of the US$895 million from sponsors. Furthermore, potential threats of over-commercialization, ambush marketing, endorsement scandals and ineffective communication may endanger future relationships in the sponsorship world. Thus, understanding methods and practices addressing win-win partnerships between sport and corporations has become the major requirement for sport managers in the next millennium (Cheng & Stotlar, 1999).

The Bangkok Asian Games was the last great sport festival of 20th century in Asia. However, the Organizing Committee for Bangkok Asian Games was almost withdrew their agreement with the Olympic Council of Asia (OCA) because of Thailand’s economic hardship caused by the Asian economic crisis and a subsequent political reconstruction of Thailand’s government. However, Asia’s premier sport event had been secured support from 11 corporations (the sponsorship contracts worth about US$85 million) and US$41.6 million from TV broadcasting rights (http://cnnsi.com/ olympics/news/1998/08/28/asia.games). The 13th Asian Games were held in Bangkok between December 6-20, 1998 and were comprised of 38 sports and more than 10,000 athletes/officials from 43 different countries. (http://cnnsi.com/olympics/news/ 1998/12/20/ asiangames_roundup/). The Games drew attention of over 3 billion TV audiences and over 6,000 reporters (http://home.iirt.net/ ~ newscenter/asiangames/ eng_news/53.html).

Theoretical Framework

According to Thompson and Strickland (1998, p. 134), "business strategies are grounded in sustainable competitive advantage. A company has a competitive advantage whenever it has an edge over rivals in attracting customers and defending against competitive forces." Sport sponsorship has proven to be an effective method for developing sustainable competitive advantage (Amis, Pant, & Slack, 1997; Pitts & Stotlar, 1996).

A variety of offensive and defensive strategies are available for creating and maintaining competitive advantage. Among those strategies are; sales promotions, product demonstrations, and customer/distributor communications (Thompson and Strickland, 1998). These activities can be accomplished through sponsorship of sports events such as the Asian Games. This framework provides the essential structure for the strategic analysis section of this article.

The Samsung's Sponsorship in Bangkok

Samsung Electronics Co. Ltd.

Samsung Electronics Co. Ltd. is the US$ 13 billion Flagship Company of the Korean-based Samsung Group and has offices spread located in more than 60 countries with over 85,000 worldwide employees. It operates in three main business units: semiconductors, multimedia and home appliances, and information/telecommunications (http://samsung.com/english/news/index.html).

Philosophy

Samsung’s philosophy is to "devote our human resources and technology to create superior products and services, thereby contributing to a better global society" (http://www.samsung.com/corporate/philosophy.html). Samsung’s corporate values encompass people, technology, and the future. In order to be one of the top brands in the international marketplace in the early 21st century, Samsung has adopted a sport-based philosophy deeply instilling the perspectives of globalization and competition throughout its management. "Challenge the limits" has become Samsung’s motto proclaiming excellence for their new technology and products (Cheng, 1999a). Vice president of corporate communication at Samsung, Il-Hyung Chang, rationalizes the important role of sport sponsorship by stating "sports sponsorship is a strategy that fits well within our operations at Samsung….it’s an integral part of our company’s philosophy". He stresses that "sport sponsorship is a natural medium for Samsung’s long-term promotional efforts (http://sports.samsung.com/english/news/index_2.html). Samsung President, Jong-Yong Yun, indicates "one of our most fundamental corporate goals is to help raise people’s quality of life all around the world and sports sponsorship is just one way of doing this" (Samsung’s 13th Asian Games Press Release, 1999, p. 234).

History of sport involvement

The massive involvement of Samsung’s sport sponsorship began in 1986 with the Seoul Asian Games. Samsung continued to support the 1988 Seoul Olympics and sponsor the 1990 Beijing Asian Games as well as the 1994 Hiroshima Asian Games. In 1996, Samsung was the title sponsor of the Atlanta Expo, which was affiliated with the Summer Olympic Games. In addition, Samsung became the worldwide sponsor of the 1998 Nagano Olympic Winter Games in the wireless communication equipment category. Meanwhile, Samsung localized overseas operations by supporting major sport including 18 professional teams and 8 major sport events (i.e. the Samsung Nations Cup Series, a grand prix equestrian competition, and the Copa Cup) in individual countries. In Korea, Samsung extended its support to many sports from basketball to football and is rated as one of the most aggressive sport sponsors in the country (http://sports.samsung.com/ english/sports/2_2.html). "It is meaningful for Samsung Electronics to sponsor the 13th Asian Games. We expect that the sponsorship will be of great help to increase our market share in the entire Asian region as well as in Thailand" said Il-Hyung Chang, Vice President of Corporate Communication at SEC (Samsung’s 13th Asian Games Press Release, 1999, p. 194). The promotional benefits received from sport sponsorship allow Samsung to compete with Japanese corporations that have dominated the Asian market for years and confirm SEC’s worldwide sport marketing policy of pursuing greater international success. In all, Samsung supported more than 40 sport events on five continents (http://sports.samsung.com/english/sports/2_2. html). As SEC’s 13th Asian Games Press Release states "Samsung’s involvement in the Olympic Games is a source of pride for not only Samsung employees but also for all Koreans. This will be an opportunity to raise the recognition and credibility of Korean companies and Korea in world markets" (http://sports.samsung.com/english/olympic/ 1.html).

Samsung’s marketing campaign

"Let’s Run Together" running festival. With the start of the "Let’s Run Together" running festival held in conjunction with the Bangkok Asian Games Organizing Committee (BAGOC), Samsung launched a three-nation 5K fun-run in Bangkok, Beijing, and New Delhi. Each participant received a free running festival T-shirt at the start of the event. After the event, those who completed the course received a commemorative Samsung-Asian Games pin and a chance to win one of more than 40 Samsung and Asian Games products in a lucky draw. Prizes included a color television, DVD players, refrigerators, washing machines and tickets for the 13th Asian Games opening and closing ceremonies. Samsung pledged to contribute US$ 1 for every participant who completed the five-kilometer run or walk. A total of about US$ 33,000 was raised and donated to the Track & Field Associations and the National Olympic Committees (NOC) of the three participating countries. The Samsung running festival, with its slogan of friendship "Let's run together," was symbolized by a composite of yellow, red and green stars. This logo presented a visual identity appearing on all promotional materials such as staff uniforms, T-shirts, and prizes from the running events. The annual Samsung running festival, which was originally started by SEC Hungary in 1995 has become one of the largest public sport events in Central Europe with over 200,000 people joining and running for peace and harmony every year (http://sports.samsung.com/english/bangkok/passage/ index_ 3.html).

High tech market street pavilion. As part of the 13th Asian Games programs, the market street pavilions opened with official partners on December 4, 1998. Samsung’s two, high tech showcases measuring 1,200 square meters and 400 square meters at Thammasart sports complex and Hua Mark sports center, provided 17-day entertainment for over 250,000 visitors. People visited Samsung’s exhibition rooms showcasing their latest technology and products; watched movies; got their faces painted (with Thai flags, Games logos or mascot Chai-yo); and had their photo taken with an 8-meter-tall elephant balloon, the Games’ biggest mascot. Samsung’s outdoor activity area offered visitors the chance to test their physical skills. The exhibit a 7-meter rock climbing wall, allowing people to scale new heights, and the limbo challenge, for those less adventurous. Large crowds also attended evening concerts and enjoyed the performance of some leading Thai pop artists on stage. Free gifts for visitors included pins, stickers, T-shirts and caps. The cap with the "Challenge the Limits" slogan was the most popular item and the Chai-yo stickers were liked most by children. Many parents appreciated Samsung’s badges, which listed names and telephone numbers for lost kids. Samsung’s market street pavilion cost US$ 650,000 and took more than two months to construct (Samsung’s 13th Asian Games Press Release, 1999).

Products promotion. As an official partner, Samsung supplied BAGOC with a total of 3,600 televisions, VCRs, refrigerators, washing machines, microwaves and air conditioners worth US$ 1,000,000. These home appliances were used by OCA officials, athletes, correspondents, broadcasters and sponsors in the athletes’ village, the International Broadcasting Center (IBC) and Main Press Center (MPC) during the Games. In addition, another 33 venues including the entrances to stadiums, BAGOC and operation headquarter hotels were equipped with Samsung televisions and large projection televisions showing daily competition, sport events and results. For the general public, Samsung’s US$ 770,000 giant 4x3 meter mobile Supervision (the world’s largest mobile television), traveled between Asian Games venues and major shopping areas in Bangkok. This screen provided local fans and massive crowds live telecasts of the Asiad’s most popular sport events (Samsung’s 13th Asian Games Press Release, 1999).

Sales promotion. Samsung implemented three sales promotions before the 13th Asian games in South Korea and Thailand. In the Korean market, Samsung promised consumers who purchased a 29-inch or larger television, a chance to win another 20-inch television if South Korea’s football and baseball teams won gold. Around 7,000 people took the offer which cost Samsung US$ 2 million. In late September 1998 Thai Samsung launched its US$ 184,000 "Quick in, Quick out" sales competition through more than 200 dealers in Bangkok. Local dealers were encouraged to make fast turnarounds on Samsung’s products tied to sponsorship and advertising support. Samsung also conducted a US$ 842,100 advertising campaign via daily newspapers, radio and television commercials throughout January 15, 1999. This sales promotion offered anyone buying a Samsung product, the chance to win Asian Games prizes including tickets of the opening/closing ceremonies, commemorative Asian Games gold medals and cash.

Athletics’ bib sponsorship. Women track athletes, men’s marathon, decathlon, field and walk competitors all wore bibs on the front of their sport wear with their competition number and Samsung’s logo. Samsung spent an extra US$ 300,000 to sponsor the production of athletics bibs and increased its own corporation exposure with region-wide publicity (Samsung’s 13th Asian Games Press Release, 1999).

Suwon Philharmonic Orchestra. As part of the official cultural program of the Games, Samsung brought the 84-member Suwon Philharmonic Orchestra led by Maestro Nanse Gum to Bangkok. Maestro Gum and members of this Korean orchestra conducted a "Master Class" for 80 students from the Thai Youth Orchestra on December 17. His Highness Prince Bhisatej Rajani, President of OCA, Sheik Ahmad al-Fahad al-Sabah were the guests of honor at the Asian Encounter Concert on December 18. Other invited guests included BAGOC, OCA, NOC representatives, former and present Tai politicians, business leaders, foreign ambassadors, senior personnel of international sport organizations and others. The concert featured music by world famous composers with performances by popular Thai singers. The orchestra also performed an Asian Games farewell concert in the athletes’ village on December 19 with a program of popular classical/modern music and film soundtracks (http://sports.samsung.com/english/bangkok/news/index_2_14. html). Samsang’s Asian Encounter Concert focused on reinforcing relationships between people from different countries in the region and welcoming all to celebrate the 14th Pusan Asian Games 2002 in Korea.

MVP Award. Endorsed by OCA and BAGOC, the Samsung Most Valued Performance (MVP) Award is an official program of the Games recognizing the highest achiever amongst the Games athletes. The award recipient was selected through a vote by all journalists covering the Games. Samsung presented presented a trophy at the closing ceremony on December 20 as well as a US$ 100,000 cheque to the National Olympic Council of the chosen athlete’s country, to be transferred towards the athlete’s training and other expenses. Every sport reporters participating in the vote had his/her name placed into a drawing to win one of five Samsung multi-system VCR players (Samsung’s 13th Asian Games Press Release, 1999).

Environment protection. With an estimated 70 tons of rubbish generated at Thammasat Sports Complex everyday during the Games, Samsung encouraged visitors to recycle their empty cans by awarding free gifts. Samsung’s artistically designed trash bins were located within the corporation’s market street pavilion at the Thammasat Sports Complex and helped Thai people to protect their environment (Samsung’s 13th Asian Games Press Release, 1999).

The Strategic Analysis

Samsung was in an advantageous position for activating an integrated promotion to a market with 60% of the world’s population and the world’s highest growth potential. Through the positive perception of the Games logos and sponsorship title, SEC was bale to assist BAGOC in successfully uniting all of Asia in one place at one time. In operating the Games, BAGOC and Samsung were able to attract people throughout the continent.

Games promotion

The only way for sponsors to prevent a negative association with the Games is to ensure success through their complete commitment to the event. Samsung recognized the significant role sponsorship plays as a catalyst for mutual success. Consequently, with long-term involvement in the Asian Games since 1986, Samsung’s marketing efforts were rewarded along with the continuous success of the Games.

Affiliation

"Let’s Run Together" running festivals, Samsung’s High Tech Market Street Pavilion, Suwon Philharmonic Orchestra, and the MVP Award are all official programs of the 13th Asian Games hosted by Samsung. These official programs allowed Samsung to differentiate itself from their competition and legitimize their products through promotional activities in the Pan Asia region. Samsung believed that sponsorship would be more effective than traditional commercial advertising. The exposure gained through these events clearly supports that contention.

Appreciation

Thailand’s Deputy Prime Minister and Chairman of BAGOC, Khun Bhichai Rattakul praised Samsung’s dedication in bringing alive the spirit of this great sport event throughout the Asian region. "We are fortunate to have the support of 13th Asian Games sponsors such as Samsung, who are completely dedicated to the promotion of sports and sportsmanship," and "the quality products provided by Samsung make a great contribution to the successful operation of the Bangkok Asian games" His Excellency, Khun Bhichai said (http://sports.samsung.com/english/bangkok/ news/ index_2_2.html; Samsung’s 13th Asian Games Press Release, 1999, p. 211). Besides that, the exclusive Samsung MVP Award, mobile giant television service, and recycle program have earned the appreciation of Thai people and Asians as well.

Passion

Passion refers to fans’ constant involvement in the sport event (IEG Sponsorship Report, 1999). Samsung’s multi-country running festivals spread the Games’ positive message of "Friendship Beyond Frontiers" throughout Asia under the slogan of "Let’s run together for Asia". Regardless of one’s gender, age, nationality, religion or physical ability, all people were welcomed to participate in the fun run with their nation’s top celebrities and sport heroes. About 33,000 participants showed support for their national athletes and the Games. Samsung also recognized that, similar to sport, music breaks boundaries and is able to unite all Asians. The Asian Encounter Concert featured Korea’s Suwon Philharmonic Orchestra and demonstrated the international friendship between the people of Korea, Thailand, and all Asian nations. Wherever a consumer went or was having leisure time during the Games, Samsung was there with a relevant Asian Games message.

Interaction

Samsung’s High Tech Market Street Pavilion positioned Samsung as the entertainment destination and satisfied the attendees by conveying information in an engaging and memorable way. Samsung increased awareness of its products, customer-base, and brand equity through these interactive and well-designed forms of communication.

Integration

It is essential for sponsorship goals to fit the broader goals of the corporation’s overall communication strategy (Howard & Crompton, 1995). Samsung leveraged its sponsorship, by integrating Asian Games promotions and strategies to reflect the core values of the corporation’s products and the corporation itself. Leveraging sponsorship with corporate objectives has proven effective based on Wilkinson’s standards (1993, p. 162) by meeting the following objectives:

  1. On-site activity
  2. Advertising
  3. Sales promotion
  4. Public relations
  5. Customer hospitality
  6. Employee motivation
  7. Product sampling

The long-term partnership with the Asian Games was effective in transferring Samsung’s one-time customer value into customer life value.

Localization

Managing Director of Thai SEC, Suk-Min Chung, indicates "the 13th Asian Games allow us the opportunity to raise Samsung’s profile throughout Asia and mostly so in Thailand…we are focusing strongly on building long-term relationship with consumers and dealers here in Thailand" (Samsung’s 13th Asian Games Press Release, p. 195). By positioning itself as an international corporation in Asia and the world, Samsung is communicating with a consistent voice at one point in time and over time through relevant sport events.

Summary

Although Samsung’s sponsorship in the 13th Asian Games has been successful through leveraging and integrated marketing as a branding platform, the win-win partnership will continue to accelerate more sponsorship opportunities for the Asiad. However, there will be no winner in the relationship if the positive emotional tie that customers have with sport is missing. To summarize, the key to a successful sport sponsorship depends on the creativity and marriage-style partnership is perceived and managed by the leaders in sport and corporations in the new millennium. Through their creative marketing programs and a close cooperation with the Games organizers, Samsung was able to fully utilize the benefits of the Games. In addition, the Games were able to benefit from Samsung’s financial contribution to provide participants and spectators with a successful event.

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