Massive marketing campaigns for the 2008 Olympic Games in Beijing have been in place for several years, but it’s only recently that companies have begun splashing their logos on billboards and products across China. The countdown to the most anticipated Olympics in recent memory is now on.

Sponsors are hoping to leverage their high profile in Beijing and the six other host cities to build their brands, using China’s coming-out party as a way to solidify their position in that vast consumer market. According to most experts, they are likely to succeed as long as they exploit the unique characteristics of the Chinese market.

“Companies are betting that if they become associated with the success of the Beijing Olympics, it will have a greater impact on the Chinese than on anyone else in the world – and in turn those consumers will give greater support to that company by buying its products,” says George Haley, professor of industrial and international marketing and director of the Center for International Industry Competitiveness at the University of New Haven in Connecticut.

The fervour behind the Olympic marketing effort is not surprising.

The sun shines on China’s market
China is the world’s fastest growing economy. By 2025 it is expected to be home to a large middle class with significant spending power. The nation’s rapid growth in recent years has led to changing spending habits as consumers enjoy their new wealth. And although marketers understand that the Games will not provide an economic boost to the nation, its consumer market will be affected in other ways.

“For China, the Olympics are a watershed moment. It is the relaunch of China as a world power,” explains Michael Ip, president of Greater China and Southeast Asia at Landor Associates, a brand consultancy firm. “Chinese authorities will use the Games to demonstrate to the world how far China has come in the last 20 years. Marketers who understand and support this ambition will have an advantage in winning the hearts and minds of China’s consumers.”

“If you look at the host countries of past Olympic Games, there is an uncanny linkage between their hosting the Games and their emergence on the global stage,” explains Ann Wool, SVP, director of Ketchum Sports Network. The linkage is a sensitive one for China. “The Chinese... feel they have not been getting the respect due their country, and they feel this is one of the things that will bring them that respect,” Haley explains.

While western companies have been nurturing their brands for years, they are hoping the Olympics will cement their relationship with the Chinese as well as boost their bottom line.

“Brands are built over the long-term, and the Games is just another opportunity to continue building the brand,” says Wool, who has developed and directed multinational marketing communications and PR programmes for Olympic Games sponsors IBM, Visa International and United Parcel Service. “Although some brands have been there for a while, this is a bigger push. Companies are spending more on marketing.” Official sponsors are expected to spend up to US$2 billion on advertising in the year leading up to the Games.

Western brands, particularly long-time sponsors such as McDonald’s and Visa, are aligning themselves with an event expected to bring national validation. That explains the willingness to spend lavishly. “Marketing investments are substantially larger than [in previous Olympics]. Some of the bids by sponsors are more than twice the asking price,” Haley says.

Going the distance
For marketers, the appeal of the 2008 Olympic Games is the long-term potential. Once the Chinese market gets a taste of foreign brands, the appetite for those brands could be insatiable, and some of the biggest brands are banking on that promise and paying top dollar for it. Among the 11 brands that are official Beijing 2008 partners are Johnson & Johnson, Volkswagen and Adidas.

Adidas and Volkswagen China Group reportedly invested nearly US$100 million each for their partnerships. And the marketing money isn’t just going to sponsorship fees. Adidas, operating more than 2,000 stores in over 300 Chinese cities, plans to double the number of stores in China by 2008. The German sportswear company has invested heavily on multiple marketing fronts. Aside from being the official sportswear partner, it will outfit the Chinese Olympic football team and is sponsoring individual basketball players expected to compete for China.

“Sponsoring the Olympics conveys to the general public a belief in the values that the Games stands for, but it also demonstrates a commitment to the Chinese market,” Ip says.

Like Adidas, McDonald’s is pushing to expand in China. It operates some 800 restaurants and is expected to have 1,000 by the start of the Games. McDonald’s activities involve more than physical expansion – they are trying to turn the Games into a cultural forum of sorts. In early August, the company launched Champion Kids, its newest Olympic Games programme, in which 300 children from around the world travel to the Beijing Games to talk to athletes, visit cultural sights and meet other kids. The fast-food giant also created a live online chat series (featuring business, entertainment and sports figures) with the portal Sina, and Askme.com.cn, a health-oriented website launched in China in 2006.

Companies are also using a combination of word-of-mouth activities and promotions.

For example, Coca-Cola is trying to make up for market share lost to rival PepsiCo by launching its Coca-Cola 2008 Olympic Pin programme last summer, allowing people to design and trade Olympic-themed pins, and even vote on the best designs. Chinese track-and-field champion Liu Xiang, revered by the Chinese for his gold-medal performance in Athens, designed three pins to kick off the programme.

Even non-Olympic sponsors are hoping to cash in – PepsiCo is a sponsor of Team China, but not of the Games themselves.

To successfully tap the market, foreign brands need to be relevant to Chinese consumers. Marketers familiar with the situation say that Chinese consumers are more likely to respond to campaigns that position the product as something that helps them get ahead.

To rise above the pre-Olympics marketing clutter, brands need to key in on unique attributes of the Chinese consumer, such as their strong attachment to the family or their penchant for being cautious spenders. With more than 50 Olympic sponsors vying for brand awareness, standing out won’t be easy. More importantly, brands need to stay engaged with China after the Olympics, and continue to build relationships with their target customers.

“Companies that are able to stand out among the large number of sponsors and communicate something unique about their brand will be successful,” Ip says. “Companies will still need to develop events and campaigns around the Olympics to ensure their target audiences experience the brand. Companies that rely solely on the fact that they’re sponsors and do not invest in building the brand connection will not succeed.”

This highly anticipated event is expected to produce a number of winners, including China’s consumers. In the wake of the Games, these consumers will also enjoy the benefit of energised domestic brands, which will be competing with many foreign brands, and western multinationals are advised to take notice. The brands that will resonate will have to have more than just a product and a heartbeat; they have to be relevant, and they have to convince the consumers that they are in it for the long haul.

“Building brands take time,” Ip says. “Companies that are keen to ensure success must look at China as a long-distance race and not a one-off sprint.”