Executive Summary
The effects of globalization on Today’s business ventures continue increasing with time. All (sporting) business entities, whether private, public or non-governmental, need to establish and posses an edge that distinguishes them uniquely from their related opponents. The edge should be something that will make them more interesting and appealing to both the media and the public.
It is from this perspective that the author developed this report for the London Organizing Committee for the Olympic Games (LOCOG). The report’s main aim rested on helping in the raising of LOCOG’s international profile and boosting its future targeted share of the market. In achieving the stated aim, the author incorporated the following as the key sections upon which the report was build on:
To start with, the author tackled the introduction section that did present a review of important literature on the topic.
This was followed by a critical analysis of the effectiveness of LOGOG’s current marketing practices. In this section, 5 concepts were discussed in detail and their application by LOCOG assessed by the author.
Succeeding this section was the identification of the current 5 challenges facing or likely to face the organization in achieving its marketing objectives.
Following this, the author identified 4 technology oriented opportunities that can also be maximised by the marketing team. This was followed by a discussion of recommendations that can be implemented by LOCOG’s marketing to achieve success.
To sum up, the author provided a brief summary of the discussed findings in the conclusion stage.
Introduction
The Olympics Games are global arenas that attract forth the best world athletes and large spectator audiences. This is important since it is a recipe for cooperation and unity of different groups of people across the globe. For this reason, Olympics have won the powerful marketing function which is contrary in the ancient past when the event was considered a political platform where different ideologies were propagated.
The trend in ideology ceased in the 20th century as the sporting event took an economic turn (McLoughlin & David 2010). For that matter, marketing and advertising become practices that were prioritized to enable generate considerable profit from this mega sporting event.
Tellingly, the sporting activities related to Olympics have become an occupation, a lifestyle and a great source of entertainment. Based on this, marketing functions are therefore fundamental to ensure that these sporting activities generate great profits for the organizers and hosting state.
Moreover, it is also imperative to acknowledge that sporting activities plays most considerable role in people’s social life around the globe hence the mass media has been forced to cover these events on large scale modes.
Nonetheless, it is important to affirm that in the current times, it has become imperative that marketing function be applied smartly to assure maximum revenue turnover from events of the Olympics magnitude. As a matter of fact, each year, executives and entrepreneurs in the sporting industry are faced with problems of persuading advertisers to acquire commercial airtime during any sporting event.
However, in relation to Olympic Games, the author found out that they are regarded as the most profitable and large scale sporting event in the world. This has made winning and attraction of sponsors, supporters and media partners a less tasking issue.
In line with the above perspectives, this report explored the current marketing practices of the London Organizing Committee for the Olympic Games (LOCOG). Nevertheless, it covered key aspects of marketing.
For instance, the general concepts that included proper promotion of the games, use of technology to advance the marketing, new marketing trends that relate to Olympics and finally challenges related to marketing of mega sports such as the Olympics.
A critical analysis of the effectiveness of LOGOG’s current marketing practices
Proper marketing or promotional strategies
To begin with, the report revealed that marketing managers of mega sporting events such as the Olympics are required to implement best and unique promotional strategies that capture and aid in availing event information to consumers. To achieve this, they can use promotional mixes. According to Schwarz and others (2010, p.163) promotional mixes include advertising, sponsorship, public relations and atmospherics.
Advertising
Advertising is a major primary element of the promotional strategy. It can be defined as the process of attracting public attention to a sport product or sport business through paid announcements in the print, broadcast or electronic media (Schwartz et al. 2010, p.164). It is the major communication process that event managers should use to relay event activities to their consumers.
According to Funk (2008), advertising and selling techniques can communicate specific attributes and benefits of the sport product to influence socialising agents. This in return enhances brand promotion, segmentation, differentiation and positioning.
Notably, advertisement in Olympics usually differs from other forms of advertisements. This is so since ways of getting revenue from Olympic advertisement is limited and specific. For instance, revenue is only obtained from either endorsement of an athletic, purchase of broadcasting right and revenues from sponsorship.
In terms of sponsorship, it does not only mean financial support, but it also means provision of services, products, expertise, technology and human resource that aid in the organization and marketing of such event.
With regard to how LOCOG has effectively implemented this promotional element, the author established that the committee had and was still carrying out an aggressive advertising campaign both in the electronic and print media. For instance, in one of its online advertising scheme, the organization had developed an attractive site (www.london2012.com) endowed with specific attributes and benefits.
The site has on its topmost page a persuasive message for the local leaders. As such, it urges them to get ready to celebrate the 2012 anticipated extravaganza.
Sponsorship
The process of sponsorship involves issuing affiliation rights to a sports business or product. This helps the parties involved to have a mutual sharing (Irwin, et al. 2008, p.154). As a promotional mix, it plays a significant role of providing additional revenues, increasing awareness of the event on the target market, improving organization image, market share as well the sales share (Masteralexis 2011, p.188).
In reviewing of the sponsorship plan as adopted by LOCOG, the author inferred that the organizers of the forthcoming 2012 Olympic Games had done a wonderful job of allocating sponsorship rights to reputable company brands in the world.
These include amongst others ADIDAS, BMW, BP, British Airways, BT, Coca Cola, Omega, P&G (LOCOG Homepage 2012). The chosen sponsors are financially strong to provide the much needed additional revenues for hosting the event successfully.
Public or corporate relations
Marketing managers are also required enhance public relations. Public relations refer to collections of activities, media and communication coverage to convey the vision of the organization responsible for organizing the event. Corporate relations describe what makes up the sporting organization.
Event and marketing managers implement corporate relations by working closely with the media fraternity thus maximising on the coverage of their event activities. Corporate relations help event managers to improve on their corporation and event images thus attracting an increased spectator presence which in turn generates a lot of income.
LOCOG has failed to enlist reputable media houses as its partners and supporters stakeholders. This is a risky venture since the event risks being accorded limited coverage rights as determined by the paid adverts. As such, a limited spectator audience will be realized leading to less revenue collection. The management team should correct on this short coming.
Atmospherics
Event marketers are also required to promote their activities by utilizing on the designs of visual communication in environments. This entices potential event participants’ emotional and perceptual responses; thus confirming their full participation in the sporting event.
Event managers and marketers may oversee the following operations that constitute implementation of atmospheric promotional mix.
Temperature
The marketing capture aspects such as ensuring that stadiums roofing system allows for proper ventilation or air conditioning.
Lighting
The stadiums should market as well lit by providing best energy saving bulbs. In addition natural lighting should be preferred during day time matches.
Assessing the effectiveness of LOCOG in achieving the above, the researcher found out that the organization did not spend a lot of resources in achieving the above since the chosen venues were already known to contain the above. Examples of such venues include the Greenwich Park, Hampton Court Palace, Earls Court, and Wembley Stadium just to list a few.
Proper financial planning/ budgeting for the marketing function
Too often many sporting events have been held even when careful studies would have cleared revealed that the sporting events were heading for financial disasters. In such cases, most event managers place poorly constructed and unrealistic marketing budgets before them.
The financial aspect in sporting events has been ignored mainly because the organizing teams assume that the events will be able to sponsor itself; especially from event ticketing. This is not the case for successful events.
In staging successful sporting events, event managers are required to brainstorm all potential areas of expenditure and income under the obvious catch all categories such as marketing, administration, event control, social events and merchandising (Collins & Trenbertha 2005, p.366).
Woods (2007, p.148) carried out conclusive studies that showed that in assessing the monetary sources associated with specific events, event managers are required to evaluate the hosting city’s attractiveness to corporate sponsorship; since this is a key factor along with the proposed television package for broadcasting the event in question.
A good example of how event managers successfully “tapped” on this factor occurred during the staging of the 1996 Olympic Games. The event managers, in their efforts to stage a successful event, chose on Atlanta, Coca Cola’s home territory, as the hosting city.
As a result of its strategic positioning, the event was able to attract Coke’s corporate sponsorship when the giant multinational corporation seized the chance to advertise its products and services to the event’s global audience.
Collins and Trenbertha (2005) went ahead and postulated that, “the acceptance that for the participants, the event begins before they arrive and extends beyond the time they leave, has financial implications-presenting revenue opportunities that extend well beyond the typical entry fees, gate takings, hot dogs and programme sales (p.366).
In trying to overcome the financial constraints associated with staging major events, event managers are therefore required to understand that their experience or knowledge is above the worth of the sporting event itself.
According to the statistics availed on LOCOG website, the organization has achieved notable results in achieving the above marketing concepts. These statistics revealed that the 2012 project was to be funded by two organizations. These were the privately owned organizing committee (which had achieved its collection budget of £2 billion) and the public sector delivery organization.
The later was being funded by the Department of Culture, Media and Sports, The Greater London Authority, The National Lottery amongst others. So far, the parties had realized a commendable figure of £2.2 billion.
The 4 dimensions of a marketing plan
According to Sindell (2005), marketing practices are the “set of controllable variables and their levels that firms use to influence the target market”. (p.35). Good marketing strategy needs to be formulated in order to meet the ever changing customer needs.
Any marketing plan adopted by the organization, needs to put customer needs as its central focus. A marketing strategy that is adopted which prioritize customer needs entails four dimensions.
These include: product which in the case of London Organizing Committee for the Olympic Games (LOCOG), are Olympic games, price which is the pricing of entry tickets to venues, promotion which entails all steps taken to popularize the London Organizing Committee for the Olympic Games (LOCOG) to potential spectators and lastly, place which entails specific venue points that the Olympic games will be taking place at.
These aspects have all been effectively achieved by LOCOG.
Achieving the elements contained in a marketing plan
It is vital that the marketing of mega sporting events should successfully achieve the key elements of any marketing plan such as situational analysis where by the current situation is analyzed by considering sales, industry attractiveness, customers, competitors and resource analysis.
In addition, a marketing plan also includes planning assumptions which entail the potential market for the product, allocation of resources and forecast of market and brand aspects.
Additionally, objectives for carrying out the marketing of a particular event (for our case Olympics) also form elements of any proper marketing plan. Apart from objectives, marketing practices are also outlined in this section to indicate how this marketing exercise will be carried out.
In this study, the author did not get the opportunity to review the contents of the LOCOG’s marketing plan due to its unavailability. As such, determination of its effectiveness was impossible. However, the author established that the kernel of the marketing plan was devised by the respected Sir Keith Mills, who also topped up as the vice chairman to the LOCOG (Beard & English 2006).
Challenges associated with mega-sports marketing (1pg)
The ever changing consumer needs
In this study, the author derived the first challenge that faces LOCOG in its marketing role are the hardship to meet the current dynamic consumer needs.
This had arisen from the fact that London has been forced to re-invent what the Olympic and Paralympic games might be expected to deliver for smaller or developing nations in the current prudent financial times. This challenge has been summarized and reframed by some researchers as “building a model for the 21st Century Olympic Games” (Rogan & Martin 2011, p.194).
The 2005 bombings
To add, the author found that the organizing and the marketing committee faced serious credibility challenges including the July 7, 2005 bombings in the hosting city of London. This created the impression that the city was unsafe for the anticipated large spectator audience.
The changing needs/demands for the event
More so, it has been revealed by the marketing team that the earlier documented budget for the 2012 Olympic Games has kept on changing thus pushing up the costs. For instance, in 2006, it was marketed that 10,000 guards at a cost of €339 million were enough for the event period. However, this figure has been reviewed after a closer analysis to 23,700 thus calling for a rise in the costs to €665 million.
Mismanagement
The task of event managers in ensuring success for various events is not that easy- simply because marketing managers are required to keep track on all activities happening before, on and even after the occurrence of Olympic events (Allen 2005, p.67). The LOCOG team has not been an exception in relation to this challenge especially with the unpredictable inflation being experienced all over the world.
Environmental/ weather related challenges
Extreme weather conditions caused by global warming have posed a challenge of reducing the visibility levels thus leading to postponement of events.
Technology oriented opportunities
To compete successfully in the current competitive global markets, marketing managers of mega sporting events such as the Olympics have been forced to think ‘smart’ before embarking on complex marketing-performance-improvement programs; by determining the type and extent of changes that can be achieved by use of Information Technology to achieve their marketing outcomes (Ramakrishnan 2008)
Information technology departments have played great roles in the lengthy processes associated with successfully re-engineering change processes in the marketing of sporting events. As a result of the useful role played by IT staff in the re-engineering change processes, the hiring of IT staffs has shifted from highly specialized in-house technicians to good project marketers.
As Cameron and Green (2004, p.252) noted, “those IT people who can understand technology, be aware of what is ‘out there’ and what it can do for an organization, plus grasp how to create the changes desired by the organization are highly valuable”.
The following constituted the ways in which IT related opportunities can be maximally utilized to enhance the marketing function by the LOCOG:
First, LOCOG marketing managers can utilize software packages that are custom-designed to easily store and retrieve the much needed information. These custom-designed programmes help them to generate schedules of work and monitor the progress of the various activities in the particular events (Allen 2002, pp. 205-210).
Second, the marketing team can use IT applications such as Corel Draw and Adobe Photoshop to create solid press kits that incorporates the event’s information, brochures, its staff profile as well as their pictures and bios of the leading organizing personalities and role models to demonstrate their competency for this upcoming mega sporting events.
Third, LOCOG marketers can also maximise on the use existing popular social blogs for instance twitter to communicate the message to literate audiences who have habits of interacting with the internet.
Fourth, the organization can tap on the use of IT by ddeveloping a dynamic websites that will be regularly updated with LOCOG’s awareness messages.
Recommendations for strategic responses
Development of a marketing strategy that responds to the changing environment
LOCOG must anticipate changing marketing environment and therefore develop marketing practices that are responsive to the changing needs of the customer. For that matter, it is important to develop marketing practices that are customer oriented.
This can be attained through creating a culture that enables marketing firms to collaborate with customers (Botha et. Al., 2007). However, for this to be possible there is need to design systems, platforms and tools that promote collaboration.
Bernthal and Sawyer (2004) argued that it is pertinent and imperative that those in charge of marketing practices should pay keen interest to participant expectations and the other factors likely to influence these expectations.
In assessing participant expectations, marketers should make use of various variables, for example, the use of the participants’ skill levels (either advanced or lower) can assist marketing event managers to clearly match these events with their appropriate sponsors; thus benefiting both the sponsors and the specific events.
Reduction of the uncertainty
Uncertainty in Olympic events occurs when inadequate information is availed on future events thus making it difficult to predict on their outcomes as well as their alternatives. By setting organizational goals, LOCOG’s marketing event managers were likely to reduce uncertainty levels by arriving at consensuses on the most relevant organizational goals.
Performance Appraisal of the marketing team
LOCOG marketers are required to assess the performances of both sub-units and individuals involved in the marketing operations. In assessing their success factor, the organization can use the stated organizational goals to act as benchmarks on which the best contributors will be retained and poor contributors will be relieved of their roles.
For instance, if the committee tasked with marketing the event states in one of its goals that for the event to deemed successful, then staff should successfully achieve their set targets, then based on this, the committee can go ahead to evaluate the performance of the hired staff and give additional bonuses to the best performers or achievers. Likewise, this committee can go ahead to terminate the services of non-performers.
MaClean (2001) went ahead to advise that performance appraisal is not an isolated event that happens only at a specific time during the organizational cycle. Rather, it must be thought of as a process with several steps of events that occur in sequences (MaClean 2001, p.7).
Conclusion
This report was very useful in achieving its purpose of critically analyzing the current marketing practices and how they have been effectively applied by LOCOG. In brief, the author established that the marketing team for this organization had put in great efforts to achieve their outcomes.
However, to improve on their current role, the author went an extra mile to suggest how IT can be maximised to advance the marketing roles. The identification of key challenges likely to face the marketing team was also discussed. The report ended by providing vital recommendations to the organization.
References
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Masteralexis, (2011). Principles and practice of sport management. Canada: Jones & Bartlett Publishers.
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Ramakrishnan, V. (2008) The psychology of change management. Web.
Rogan, M. & Martin R. (2011) Britain and the Olympic Games: Past, present, legacy. Matador, UK: Troubador Publishing Ltd.
Schwarz, E. C. et al. (2010) Sport facility operations management: A global perspective. Oxford: Butterworth-Heinemann.
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Appendices
Sample of the chosen reutable sponsors/partners
Sample of the chosen hosting venues in London city
