Olympic Sponsorships (Part 3). Lessons on Conducting Research and Analysis

Thursday, August 7, 2008 11:35
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Looking back at Part 1 and Part 2 of this series, I think that we are seeing an excellent case study of research and analysis practices in China.

During my many conversations with firms entering China, or those looking to expand, there invariably is a question of how to measure the potential market of China. Of course there are 1.3 billion people in China, but every firm will have a different segment of that population which would offer the potential for a sale.

1) How much of Samsung’s growth was in consumer products (telephones) vs. industrial products (software)

Why this is important, is that industrial firms I have spoken with are doing very well already for reasons I covered in the part 2. typically less about branding, the industrial sponsors are able to walk into a second or third city and say:

  • “it was our steel that built the birds nest” – deal for 1000 tons of steel for new soccer stadium inked
  • “we put the lights into the water cube” – done deal for new street lighting in Suzhou
  • “Our security systems are in the Beijing airport” – done, 120 airport deal

Additionally, the network that it took to get the steel into the Birds Nest would also be very valuable for introductions when other stadium projects come online

2) Who are the people being interviewed? What is the geographic spread? and does 2,000 people in a Forbes survey constitute a population that can accurately predict a “China” level analysis?

This is something that I think many fail to consider, and find themselves trapped in. China is a very diverse place, and you can honestly skew your measurements very easily by failing to respect this fact. I once spoke to an NGO who had interviewed people about environmental awareness in 3 cities in China in the summer of 200t. One of the cities was Wuxi, which had just had a major environmental catastrophe, and they failed to accurately adjust for that.

So, is it best to pick 2000 people from Beijing (primary consumers) or 2000 people from Huangshi (a market that will develop in 3-5 years). Firms at in this segment (FMCG) have already spent hundreds of millions advertising in the 1st, 2nd, 3rd, and 4th tier cities. So, how far do you have to measure before you tap a truly virgin market that could be measured?

3) What should be the true scope of assessing the success of a sponsorship?

this could perhaps be the most important. I have been watching Panasonic advertise their Olympic products for the last 2 weeks, and it is clear to me that their goal is to get large stadium projects in other markets (2012 Olympics and other venues), and perhaps that is where Coke and McDonald’s are going for?

Shaun and the MSNBC took a very China focused view as part of their interviews, and there is nothing inherently wrong with that. However, it is important to note that given the global scope of the Olympics, perhaps solely basing conclusions of success on China, or a part of China, may not be the best measurement for a sponsor.

4) What is the time frame that is important?

In China, every one of China’s 31 provinces, and let’s follow the assumption we are only tracking the impact of China, have developed at different phases. Looking back 5 years, Shanghai and Beijing were the only markets that had luxury branded stores, but now Chengdu has a Rolls Royce dealership, and the highest earning Armani shop in China ($/m). Yet, that took 3 years to develop after the Shanghai store, and I am sure they Armani is looking at other markets for the next 3-5 years.

If you are a sports apparel team, perhaps you want to make sure that you hold your key sports markets, but see the Olympics as a way to penetrate into China’s 4th tier market and branding Yao Ming may be the way to do it.

So, time frame.

Through this series, the most important lesson I think to take away is context, and to make sure that when researching markets, analyzing data, and considering the findings, that it is being done in the right context. None of the studies I sourced could be considered wrong, and while there are a number of ways that I would have adjusted were I an industrial group, it is important to understand that each group would have (should have) their own technique and measurements.

It is very easy to treat China as a market, or the market, when in fact it may be a fraction of the China market that is the market


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