Guru in a Bottle

The Great Indian Rope Trick!

Ardi Kolah — Mon, 16 Nov 2009 11:40:00 GMT

The headlines about the growth of the Indian economy are eye catching, even extraordinary by modern standards. It’s all too easy to be seduced by the romance and promise of India on your first visit.

For 2009/10 gross domestic product (GDP) growth is expected to top 6.9 percent, India is the third largest economy in the world according to the Purchasing Power Parity (PPP) Index of industrial and emerging nations and cumulative direct foreign investment (FDI) is at record levels, soon to break the $100 billion barrier.

It’s predicted that by 2025 the ‘rural deprived’ will drop from 65% of the total rural population in India to 29%. Overall, it’s estimated that nearly 300m people will move out of poverty over this period when the population will increase by 322m. In effect this means that India will have 465m fewer poor by 2025 than if the poverty rate remained at 2005 levels and over a billion less poor people than if the rate had remained stuck at 1985 levels.

The story of India as one of the world’s largest private consumption markets is seductive for many western companies looking to boost sales against a background of weak domestic demand.

CEOs of successful companies are often seduced by the headline numbers but often fail to appreciate that India is land of contradictions.

For example, it’s often assumed that the growing ‘upper middle class’ provides the most profitable customer segment for Western companies looking to do business in India in many categories.

Wrong.

India’s demand structure manifests itself in many counter-intuitive ways – which some commentators call the great India rope trick of numbers! The fact is that lower income groups spend more money cumulatively than other groups for many products, so simply targeting the wealthy will seriously limit your potential.

About 650m people live on less than US $2 a day but account for 33 percent of all consumption and 20 percent of all savings. Income is US $840 billion (PPP) or equivalent to that of South Africa and 90% of Hong Kong’s. They may be poor, but not backward. They are innovative, savvy and embrace technology just like other better-off consumers.

The question is can you add value to their lives and make money out of it as well?

It’s often said that success leaves a trail. But so too does failure.

A good example of not getting it right first time - and perhaps this is even more surprising given its marketing savvy – is Nike’s experience in India.

In 2004, the sports footwear and apparel giant attempted to translate its dominance of the US sportswear market where it enjoyed 40% market share to the Indian market.

It failed.

Nike wasn’t sufficiently aggressive in penetrating the Indian market.

Its marketing budget wasn’t that high, it used standardised promotions using Michael Jordan who wasn’t that well known in India and Nike was relatively slow in introducing the Indian market to the latest designs.

Its competitor Reebok, on the other hand, had a dual market entry strategy: low cost shoes and a brand for women. As a result, sales have doubled since 2004 from US $59m to over US $100m today. Last year the largest Reebok store in the world opened in Hyderabad in Southern India.

Closer to home, UK-based Home Retail Group (HRG), owners of catalogue and mail order business Argos have recently decided not to develop the pilot scheme they had been running.

HRG had entered into a joint venture with Indian retail partners HyperCity and Shoppers’ Stop back in 2005 for six stores outside of Mumbai plus a telephone and internet ordering service.

However, the venture had problems from the start: out of town locations, delays in shipments and stock-outs were just a few of the difficulties.

Most analysts agree that its market entry strategy was flawed: limited stock, very thin catalogue, no differentiation in-store from local competitors, semi-skilled customer service people in stores on low wages with a sales incentive failed to achieve sales targets.

Argos had made the classic mistake. It had over relied on the strength of its brand, just as Nike had done five years earlier - as a reason for pulling in Indian consumers to buy electric kettles at premium prices – it didn’t happen!

Perhaps we need to ask if the pilot scheme actually reflected the true nature of the Argos business model and that perhaps with a re-think they might turn this around. They wouldn’t be the first.

Argos was defeated by stronger local Indian rivals such as Big Bazaar and hadn’t set out to re-establish itself in the Indian market – its market entry strategy was from the totally wrong perspective - ‘inside-out’ rather than from the perspective of its customers - ‘outside-in’. And this resulted in a financial loss of up to £10m.

These examples illustrate an important truth about India.

And that is you have to set out to discover “Your India”. Brands need to reinvent themselves for the Indian mass market if they are to have any chance of generating profitable incremental growth.

And they need to take the long-term view rather than expect to unlock a treasure trove of riches overnight.

We believe that the journey starts with doing your homework and effective executive education that will prepare you for the unexpected.

Guru in a Bottle and IndiaSavvy has developed a pragmatic one day workshop focussed on understanding the Indian consumer and market dynamics by combining IndiaSavvy’s India expertise and Guru in a Bottle’s sales and marketing training expertise in the UK.

Richard Perry, CEO of IndiaSavvy explains: “Our executive education programme often involves building a team ethic for the clients ‘India team’ that will allow them to win support across the company for the India venture”.

In many cases, the Indian venture needs to be integrated into existing company activities.

And unlike many other training initiatives, we make a big effort to get senior management to understand the realities of doing business in India in an open environment that allows all ideas and concerns to be raised and dealt with.

“We have success in getting senior managers working with the same information, sharing learning and knowledge, developing a clear strategy to be promoted to all employees and ensuring that resources are made available within strict project management guidelines,” adds Perry.

IndiaSavvy has people on the ground in India in order to carry out independent due diligence that often forms the basis for a ‘go, no‐go’ decision on the implementation of a proposed project in India. “We work with one of the leading business intelligence and risk management experts in India, as the basis of being savvy about the market” says Perry.

Ultimately, we help companies build a strategy, manage risk exposure and help build the capability of their team based on senior management backing and realism about operations in India.

And it’s no Indian rope trick.

Living in the Age of Extreme

Ardi Kolah — Mon, 17 Aug 2009 13:26:00 GMT

Mid-tier brands will require intensive care in the next 12 months unless they rewire their sales & marketing now!

This stark warning will be delivered by Dr Erich Joachimsthaler, CEO, Vivaldi Partners in his key note address to the Global Brand Forum 2009 at Cass Business School, London next month.

Joachimsthaler argues that emerging brands such as TATA’s Nano, which will sell for under GBP 2,000 will cause turbulence within the global motor industry and the effects of this will be felt more widely outside of that sector.

“What we’re witnessing within the global motor industry is the emergence of brands that are able to develop a global platform that works at the extreme ends of the market. So Toyota and Honda with mid-market strategies are likely to come under greater competitive pressures.

“Looking at the global picture right now, the key to profitable growth for consumer brands is to cross-leverage capability at both ends of the customer market – at the high and low ends,” says Joachimsthaler.

As evidence for this trend, Joachimsthaler points to the change of strategic marketing direction within Proctor & Gamble.

In the past, P&G’s strategy was to trade up consumers to more expensive brands at a time of affluence. That strategy no longer serves the needs of the business and now the focus within P&G is on ‘affordable luxury’ for hard pressed consumers.

Sales & marketing efficiency within this context means producing a quality product at a lower price point that will attract more consumers rather than just appeal to smaller customer segments.

Within the retail sector, struggling mid-tier brands that are struggling to define a value proposition for themselves in this highly competitive environment include Karstadt in Germany) and Macy in the US. Both are on the ‘danger list’.

“The paradox for brand owners is to think they can appeal to more consumers as a result of being mid-priced but in fact financial success over the next five years will increasingly depend on appealing to niche ends of the market,” he says.

The tequila market in Mexico is another example of market polarisation – the higher end is dominated by Cuervo and the bottom end is dominated by local 120 percent proof brands – with nothing in the middle.

Closer to home, on-line retailer Amelie Fashion is seeing a dramatic increase in demand for haute couture for women - a pair of True Religion Disco Jeans will set you back a cool GBP 200.

Successful marketers are now shifting their focus from ‘inside out’ to ‘outside in’ when looking to position their brands in the age of extreme.

“The focus for successful brand building is now on capturing a larger share of ‘consumption episodes’ irrespective of market segment you’re in, rather than focusing on building brand attributes in the hope that this will attract customer segments for the product or service or indeed historic purchase data.

“Taking an outside-in approach necessarily requires marketers to tap into actual consumer behaviour in order to drive innovation as well as the sales & marketing effort,” he says.

And living in this age of extreme, marketers need to re-think the place of the brand as a means to an end rather than then end itself – which has to be about consumption in the daily lives of consumers.

Ardi Kolah is CEO of sales & marketing training company Guru in a Bottle

The Twittering Classes

Ardi Kolah — Thu, 23 Jul 2009 17:06:00 GMT

Texting began as a way of life for pubescent teens to communicate instantly and much more cheaply than making expensive mobile phone calls to each other. And then texting morphed into a key channel of communication for business people on the move. So will Twitter go the same way as texting and become the next big business phenomenon?

For most people reading this blog – and I’m assuming you’re over 30 for the purposes of this discussion - Twitter is synonymous with middle aged celebs banging on about the banal minutia of their everyday lives for those with a prurient interest in celebrity and pond life in general.

So should marketers write off Twitter as an insignificant channel to market, rather like Facebook?

Well, Mark Shaw and a growing band of Twitter evangelists disagree.

“Although you might not be in the market to know when Stephen Fry is walking up and down Hollywood Boulevard, you may be in the market to buy one of his books. And even though he doesn’t indulge in plugging, you may be surprised that he ends up shifting more books through conventional sales channels as a result,” says Shaw, who’s made it his mission to convert all sales and marketing people into the Twittering Classes.

The message is starting to slowly get through to the business community that Twittering can have an indirect impact on the bottom-line, although only 20 percent of all traffic or content is currently generated by brands and their loyal customers.

Another feature of this emerging channel of influence is that it’s dominated by blokes – although there are signs that this is beginning to change.

According to Shaw – one of the most followed correspondents on Twitter - the balance between personal and business usage is at a tipping point and Twitter is set to morph into a useful platform for business.

As evidence of this, Shaw points to the growing number of enquiries he receives from all over the UK and abroad from companies across all sectors desperate to jump onto the Twitter bandwagon but haven’t a clue of where to start or how to do it.

Companies often fear what they may hear from those who choose to follow them on Twitter and they may not always like what they hear. They are also worried about how to respond to these negative comments, particularly in such an open forum.

But such fears are symptomatic of the lack of understanding of the Twitter medium, argues Shaw.

“Twitter isn’t the same as blogging and about delivering the whole picture, nuts and bolts and everything else in between. Rather, it’s about signposting. And fundamentally, the interaction on Twitter for business is along the lines of where to find great stuff such as useful link to a web site. It’s not about flogging products or services. It is about being honest, transparent and helpful to the community which means you need to be yourself rather than faceless corporate entity that lacks personality,” observes Shaw.

Many sales and marketing people have also been carried away with the idea that they need a mini tribe of loyal followers on Twitter in order to make any impact within the community.

“Wrong”, says Shaw. “It’s about targeted followers. You need people who are listening to what you’re saying and interested in what you’re talking about.”

And a sure sign that you get this wrong is the ‘Monty Python Test’ – that is, people stop following you!

In order to avoid disaster even before you get going, Shaw offers this advice for the Twitter Virgin.

“You need to think through why you want to be on Twitter, what you hope to get from it and how you’re going to measure it before you even start. Assuming you’re clear about all of this stuff, you need to take it seriously. Just showing up occasionally won’t get you anywhere. And it’s important that your Twitter profile should have a nice a photo of you, a helpful biog which is key word rich so that you can be found by others and of course a URL to your web site.”

Get all of that right and you’ll be on your way to join the Twittering Classes.

One Giant Leap for Creative Thinking

Ardi Kolah — Wed, 08 Jul 2009 10:22:00 GMT

At a time when we’re celebrating man’s astonishing achievement of landing on the moon 40 years ago, the father of lateral thinking has written a new book that challenges all of us to take our own ‘giant leap’ - not into some cold, dark void but in our innate ability to think.

It’s not difficult to imagine that the physical intricacy of the human brain, with its complex network of rivers and canal systems is similar to the topology of the moon. And no less challenging to navigate, too.
Dr Edward De Bono may not be a household name to many, yet his contribution to the understanding of why we need to re-wire the way we think is no less impressive or significant than the achievements of Neil Armstrong and the astronauts of Apollo XI.

“Changes in perception will change emotion and therefore behaviour. If your perception changes, you have no choice: your emotions and behaviour change too,” De Bono writes. And of course our own perception of space exploration changed forever on the 21st July 1969.

According to the documentary I’ve just watched on BBC 4, and as hard as it is to believe, the US public got bored of manned lunar landings and as a result NASA pulled the plug on any further expeditions to the moon after Apollo XVII in 1972.

In comparison, de Bono’s journey into the power of ‘thinking about thinking’ has taken the best part of half a century, created an enormous library of books on the subject of lateral thinking, a formidable arsenal of powerful tools that help problem solving – I hate the term ‘brainstorming’ - plus a Foundation in his name. And the work continues to this day, all around the world.

I was fortunate to meet De Bono recently at an international soccer forum rather than at some plenary session at Davos (which perhaps sounds a tad more impressive!).

Nevertheless, it’s perhaps a mark of the portability of his approach to creative thinking that created a path to the door of hundreds of world famous football clubs as well as their sponsors eagerly seeking new ways to make more money and beat the credit crunch; a session that I chaired at Wembley Stadium that explored how clubs and brands could get more creative in their sales and marketing efforts.

What’s surprising, perhaps even baffling, is how simple and easy it is to use these lateral thinking tools.

Perhaps we need to stop long enough to consider someone else’s POV (point of view)? The danger is to take things for granted. “We are so smug and satisfied with our existing thinking that we cannot see how poorly it serves us in the area of human affairs, creativity and design. More and more argument will not produce better ideas,” observes De Bono.

I would tend to agree that critical analysis has its place but an over emphasis one style of thinking over all others can leave the mind paralysed to see beyond this inherent limitation on our ability to think and problem solve.

And that’s not the same as saying our existing thinking is bad. It’s seriously inadequate to deal with the challenges that face all of us today. In his new book, de Bono explains how easy it is to make that giant leap in our creative thinking.

Think! Before It’s Too Late is a précis of all of De Bono’s most revolutionary ideas regarding lateral thinking and tools for creative thinking, including The Six Thinking Hats and The Six Value Medals. De Bono, who has worked with major corporations in the world, such as IBM, Du Pont, British Airways and Ericsson, examines why we think the way we do from a historical perspective and uses some of his famous thinking techniques combined with new ideas to show us how to change the way we think.

If we strengthen our ability and elevate the power of how we think - then anything is possible.

Ardi Kolah is CEO of Guru in a Bottle www.guruinabottle.com, an innovative sales & marketing training and mentoring company.

New Opinion poll puts a price on the loyalty of football fans

Ardi Kolah — Mon, 11 May 2009 12:05:00 GMT

On Wednesday 13 May over 900 movers and shakers from the football world will converge at Wembley Stadium to discuss a wide range of commercial challenges within the sport at Soccerex. And I will be chairing one of the biggest sessions – Football sponsorship in the Recession.

The results of a new Soccerex/NSP Sport poll will be released on Wednesday and it makes interesting reading!

What is striking is the high degree of consensus amongst football clubs and those who are part of the football industry on the way in which fans should be treated.

A key poll finding is that fans’ loyalty comes at a price and that football clubs need to treat fans more like paying consumers and not take their continued loyalty for granted.

In other words, in these credit crunch times where household disposable income is stretched to max clubs won’t be able to get away with hikes in the price of annual season tickets or replica kits in the way they have done so in the past.

Today, fans behave more like traditional consumers than supporters and will turn their back on clubs if the price isn’t right or the product isn’t good enough. The potential loss of revenues for football clubs will be the price paid for having destroyed the loyalty of their supporters that may have been built over years or even generations within the same households.

This level of introspection within the football industry should have happened a long time ago of course. Warning bells are clearly now being heard in club boardrooms up and down the country as the long term sustainability of football clubs has been questioned most recently by an All Party Parliamentary Football Group report that urged them to break free from the legacy of debt-leveraging in order to create a more secure and financially stable future.

Many commentators think that the recession will claim the scalps of football clubs as they fail to retain commercial sponsors over the next five years and revenues from broadcasters start to dry up as a result of a downturn in TV advertising.

And as the rest of the UK struggles to tighten its belt in terms of salaries, perhaps football clubs will have to follow suit, which could usher in a new era in player salaries as well as more realistic approach in managing their finances in the future.

Ardi Kolah is director of NSP Sport, a pioneer in how sports rights holders and commercial brand owners can cost effectively leverage the value of sports sponsorship through a powerful partnership with communities, young people, families and teachers. NSP Sport’s clients include LloydsTSB, Disney, EDF and Norwich Union. NSP Sport is part of National Schools Partnership (NSP), the UK’s leading social partnership marketing specialist.

When the price of a loaf can damage brand reputation

Ardi Kolah — Sun, 29 Mar 2009 08:54:00 GMT

Ocado was a brand that had got many things right. Delivery, quality, reliability, and an obsession with the customer experience made it one of the most successful brands in the home delivery market in the UK.

But like all mega-brands, there are signs that its golden reputation is beginning to tarnish and this will start to have a negative impact on its reputation and ultimately it will lose sales.

Our fortnightly family order for groceries isn’t out of the ordinary. We’ve shopped on line with Ocado since its launch and by and large have had a good customer experience. Navigating a supermarket with two young children on weekly basis isn’t a viable option so Ocado’s delivery service met our rational as well as emotional needs for feeding our hungry family. The online order was placed for home delivery on the 19 March.

First signs of trouble was that the van driver was 45 minutes late. I’d had to put in a series of calls to Ocado Customer Services to find out what was going on as we were left in the dark and uncharacteristically hadn’t been called by Ocado or its driver.

We just managed to get dinner out of the way and the children in bed before the van eventually turned up at 7.45pm. After the driver had left, I noticed that the rye bread sell-by date was 20 March! I know bread is perishable –but I hadn’t anticipated consuming the bread within 24 hours! There must be some mistake?

Normally, if there’s a problem like this, a quick email to Customer Services gets a refund and even a replacement product free of charge.

My email to Ocado Customer Services read:

We eventually got delivery of the shopping only to find that the rye bread expires in 24 hours! This is not what we expect so please can you refund the cost of this item. Thanks

Mid-day the following day, I received the following self-congratulatory email from Ocado Customer Services that made me see red:

Dear Mr Kolah,

Thank you for your recent e-mail.

Ocado prides itself on delivering produce of the highest quality so it concerns me that you were not satisfied with the life of the Buckingham Sliced Rye from your recent order. I would therefore like to take this opportunity to explain how our webshop life guarantee works:

Every product in our Fulfilment Centre has been computer tagged and tracked throughout the entire distribution chain. We do this to ensure we pick and deliver items in the freshest condition and of the highest quality.

For your reference, the webshop also displays a guaranteed life for all products, as well as the average life based on the previous week’s deliveries. This information is intended to help you plan meals more efficiently, and reduce food wastage.

The life with customer guarantee that is shown on our website before an order is placed means that we do have products in our warehouse that will give the customer up to the number of days shown. However, the system does not know when the customer will want to have their shopping delivered. After the customer has placed their order, the life with customer will vary accordingly.

After having investigated the matter, I have found that the Buckingham Sliced Rye you mentioned as having a short life was in fact delivered with an acceptable period of time before the use-by date.

I do hope that my explanation has addressed your concerns. Please be assured that your comments will be passed to the relevant department, as we are always looking at ways we can improve our service.

If we can be of any further help, or you have any further comments or suggestions, then please contact us by e-mailing ocado@ocado.com, or by calling us on 0845 3991122 or 0845 6561234 (8am-11pm Mon to Sat, 12-8pm Sun), seven days a week.

Yours sincerely,

Anna Maidment
Ocado Customer Service Team

I wondered - leaving aside how Ocado deals with customer complaints by starting off in a self congratulatory way about its wonderful customer service - why a loaf of rye bread would need to be consumed within 24 hours or thrown away represented an “acceptable period of time before the use by date”. It may be acceptable for Ocado from a P&L perspective but it certainly didn’t sound like they had our interests at heart.

My follow-up email to Ocado Customer Services read:

Dear Ms Maidment

Thanks for the cut n paste response, which was interesting.

However, please explain why a rye bread product with a Sell By date of 20/3/09 and delivered on 19/3/09 complies with the stated 'acceptable period of time before the use by date'?

Surely Ocado can't assume all products delivered - including perishable items such as bread - will be consumed within 24 hours of receiving them. I have bought rye bread from the shops and never had to consume it within such a short sell by date - so why is Ocado any different?

Obviously your response has slightly dented my impression of the Ocado brand. Perhaps passing on my comments to the PR department may evince a different kind of response.

At a minimum I expect a refund - and an explanation to the points raised above. Yours sincerely”

Not wanting to leave it at that, and interested to see how the complaint will be dealt with when escalated to the Customer Services Manager, I called Ocado as invited by Ms Maidment.

I then got through to another customer service call handler who agreed with me that the whole incident hadn’t been handled in an unacceptable way and that he would personally speak to the Customer Services Manager. Eventually I receive an email from the Customer Services Manager that a refund for the loaf of bread would be made.

But the damage to the Ocado brand and my confidence in it had already been affected.

This story illustrates some simple home truths.

If the customer takes the trouble to call and then follow up a complaint –and is met with a standard cut n’ paste response – then the brand owner can’t expect to create a positive perception or to be taken seriously in its claims for delivering excellent customer service.

When the brand owner states that the complaint has been “investigated” and this leads to an illogical outcome, this simply shakes any residual faith that may be left with the customer for the matter to be resolved satisfactorily and ultimately damages the reputation of the brand.

And trying to shift the blame to other areas of the operation for the inaccuracy of information fed to the customer is also irrelevant. Ocado has chosen Customer Services as the key contact point between itself and its customers, so how a complaint is handled on the telephone in a business which never actually meets its customers carries a higher level of expectation that it will be done well compared with other businesses that can communicate face to face.

The net result is that we’ll now think twice before ordering perishable items from Ocado and readers of this column now have a different impression of the Ocado brand.

So was it really in Ocado’s best interest to dispute a complaint over the price of a loaf when weighed against the long term damage to goodwill and reputation?

Ardi is CEO of Guru in a Bottle, a no fuss sales & marketing and training company. He can be reached on ardi@guruinabottle.com or visit www.guruinabottle.com

Sponsorship industry puts on a brave face despite slowdown in growth

Ardi Kolah — Fri, 27 Feb 2009 13:34:00 GMT

According to the latest figures by The World Sponsorship Monitor (TWSM) Annual Review for 2008, produced by Sports Marketing Surveys, sponsorship deal volume of new deals recorded a 17% increase on 2007 deal flows, from 1,196 to 1,446.

These results reflect reported sponsorship deals with a minimum value of $75,000 (£52,000) and don’t take account of any expenditure incurred in activating those sponsorship rights.

The figures also show a rapid decline in new sponsorship deals in Q4 as the credit crunch started to bite into marketing budgets on a global basis.

In the US, researchers IEG estimated that spending on sponsorship rights fees globally was around $43 billion but this figure included pre-existing sponsorship deals rather than just new deals so looks inflated.

And in June last year, PWC provided an upbeat global outlook for 2008-12 that placed the value of the global sponsorship market at $60 billion by the end of that period.

However, PWC is sensibly in the process of revising its predictions for 2008-12 given that these were based on research and analysis that would have started in October/November 2006, running up to the publication date last year before the global economy went into meltdown.

Given that GDP and corporate profits are core underlying assumptions in any advertising or sponsorship forecast, then its likely PWC’s new predictions in June this year will give the sponsorship industry less to cheer about.

But this hasn’t stopped the sponsorship industry putting a positive spin on the market.

“Sponsorship can perform many marketing functions and is also a very effective way of tackling today’s important issues such as Corporate Responsibility, social education and sustainability” trumpeted Karen Earl who was recently listed as one of the most influential voices in the world on sponsorship.

But with respect to Karen, she’s not quite right on two points.

First, sponsorship is a basket of intellectual property (IP) rights – not marketing functions.

Sponsorship is a platform for marketing and requires a level of activation – using above and below the line activities – in order to achieve a return on objectives and a return on investment for the brand owner/sponsor. Fundamentally, sponsorship is a subset of marketing, not a substitute for it.

Second, Corporate Responsibility is often the by-product of a sponsorship programme rather than the focus for it.

Given that the sponsorship market is dominated by sports - around 84% of all new reported deals - and most of these are to do with football team sponsorship which is largely about brand marketing/awareness – then there’s still a long way to go.

One area which is growing (albeit modestly) is education sponsorship, with the value of new sponsorship deals at around $7.8m, up $1m from 2007.

The marketing support and sponsorship of educational material and education ‘product’ provides brand owners with a highly targeted and cost effective route to a well defined but notoriously difficult to reach customer segment of children, families and young people.

The other advantages are reputational as having access to these customer segments through the school gates helps brands build trust with these groups well into the future.

But perhaps the biggest wake up call for the sponsorship industry is found in the length of sponsorship deals that brand owners are prepared to commit to in the current economic climate.

In terms of all new deals analysed last year, TWSM reported that 53% (766) of these deals were for 12 months, with 11% for two years and 15% for three years.

This may reflect the growing trend amongst marketing directors to think of sponsorship as a short-term tactical fix rather like the marketing tie-in with a Hollywood film that can help shift product over a six month period.

The problem is that in many cases the benefits of sponsorship may come in year two or year three rather than immediately in year one.

And there’s also the question of dialogue that the brand owner has built with fans, spectators, supporters and the public at large – and the trust it has created as a result of its sponsorship activity. All of this can evaporate if the brand owner isn’t seen to be in it for the long term.

This is a key challenge that the sponsorship industry needs to address if it’s to sustain the kind of levels of growth it has enjoyed over the previous decade.

By demonstrating how it can achieve a return on objectives and a return on investment, I believe the sponsorship industry will weather the current storm and ironically emerge stronger for it.

Ardi Kolah is the author of Sponsorship Works: A Brand Marketer’s Casebook, available from www.sportbusiness.com He is CEO of Guru in a Bottle, a new sales & marketing training and mentoring company www.guruinabottle.com

Obama’s ‘Message of Hope’ and what this means for us here in the UK?

Ardi Kolah — Thu, 19 Feb 2009 13:56:00 GMT

It’s easy to become cynical about politics and politicians. I was in conversation with Sir Paul Judge on this subject just this week.

High up on the 18th floor of his magnificent London pad that overlooks the River Thames in Pimlico Sir Paul was waxing lyrical to me about the need for politics and politicians to get back to what really matters – what’s best for the UK and for the constituents who elected them rather than the direction of a political party.

And this is coming from someone who was Chairman of the Conservative Party!

But I couldn’t help thinking Sir Paul had a point.

Do we really need to indulge in discussions about the allowances claimed by Home Secretary Jacqui Smith for her second home rather than thinking how many low income families will be able to afford to pay the rent next month?

Very quickly our conversation turned to the film I made for a special event at the House of Commons commemorating the inauguration of Barack Obama. You can view this in high definition by clicking on the following link:

Made in a record-breaking five days I was still rendering the film at the London College of Communication before I jumped in a taxi to the House of Commons for the live link with Obama’s inauguration, viewed on a sporadic web link via the BBC web site!

Despite the challenges this posed – including losing part of Aretha Franklin's performance! – the experience of witnessing history in the making will live with me forever.

What was interesting was the way in which people responded to Obama’s message of hope and where now everything is possible in much the same way that he has demonstrated.

Ardi Kolah is the founder & CEO of Guru in a Bottle (www.guruinabottle.com), a sales and marketing training and mentoring company that launches in a few weeks’ time. He can be contacted on 077100 77941 and ardi@guruinabottle.com

Head in the Sand

Ardi Kolah — Thu, 12 Jun 2008 11:00:00 GMT

Why did Andy Burnham, Culture Secretary at DCMS feel it necessary to declare to the cross-industry Convergence Think Tank that the UK wasn't ready for product placement on our TV screens. What an earth has he been watching on the telly all of these years? Perhaps the Baby Channel?

Leaving aside that Burnham has made up his mind before the consultation process had even had a chance to run its course (well, that's politics for you), he's exhibiting the 'head in the sand' mentality that sadly this Government is rapidly getting a reputation for.

If Burnham had stopped to look at the evidence of product placement on British TV or had taken a peek at the EU Audiovisual Media Services Directive 2007/65/EC he may have reached a very different conclusion. See http://ec.europa.eu/avpolicy/reg/tvwf/index_en.htm

The point is that we've had product placement on our telly screens in the UK for the last 60 years because terrestrial broadcasters have been importing US programmes that have product placement in them!

In addition, virtually all movies watched on TV have some form of product placement to one degree or other - for example, James Bond movies that perhaps have taken product placement to new levels.

Now I don't happen to subscribe to the view that TV programmes should turn themselves into billboards but that said I've never come across anyone in our industry who wants that to happen either. It's a question of editorial balance.

So what's the alternative? Well, for one thing product placement is here to stay whether Burham likes it or not. Otherwise our TV screens will be blank.

On a broader perspective, programme makers in the UK are struggling with production budgets in order to get their programmes made. So what's wrong in exploring opportunities for product placement where this is managed on a fair and reasonable basis and within certain agreed industry parameters?

All that will happen is that the really good and creative producers will take their business elsewhere where there's a more undertstanding broadcast regime - and will make their programmes outside of the UK - and sell these same programmes to the broadcasters back in the UK!

The net effect is that more talent will follow the money out of the UK and as the consumer, we'll be served more imported product rather than home grown product.

Burnham therefore could at a single stroke cause irreparable damage to our thriving independent sector.

And that surely can't be in the interests of viewers or the DCMS.

New Year's Resolution - Must do better!

Ardi Kolah — Wed, 14 Nov 2007 10:40:00 GMT

I've decided to make an early New Year's resolution. What's yours?

Too many marketers treat sponsorship as alchemy: the right elements, we believe, will surely turn to gold. But it’s time we got scientific. Sponsorship can and should be carried out according to sound business principles.

Billions are spent on sponsorship every year. Top deals of 2007 have included Citigroup’s $400m deal with New York Mets, Visa’s $200m partnership with Fifa and a $150m spend on F1 by Red Bull. There’s no shortage of appetite for sponsorship: it represents 8 per cent of the total spend on advertising globally.

So why is sponsorship so popular? Fragmentation of media has meant that we can’t afford to put all our eggs in one basket. TV advertising won’t guarantee that we’ll reach the audience and customer segments we want to influence: recent research by WPP-owned GroupM in the US indicates that the old interruption model isn’t working as well as it once did.

But does sponsorship work any better? Marketers are a highly secretive lot when it comes to talking about the price paid for the acquisition of rights, or indeed what return on investment was achieved as a result of their sponsorship programme, for fear of divulging sensitive information to their competitors, other rights holders and other sponsors. There’s no standard rate card or even an agreed metric for calculating the value of sponsorship. Rights holders use confidentiality to justify high the rights fees they charge new sponsors and, as a result, the sponsorship industry has a touch of alchemic mystery about it.

Set against the hard realities of diminishing advertising returns, it’s not surprising that global expenditure on sponsorship, with its shroud of secrecy and therefore literally inestimable returns, is rocketing. According to IEG, a whopping $37.7bn was spent on sponsorship globally in 2007, an 11.9 per cent increase from $33.7bn in 2006. ZenithOptimedia estimate total global advertising expenditure rose in contrast by just 5 per cent, hitting $448bn in 2007. Ironically, most of the growth in TV advertising is attributed to the activation of sponsorship around the Beijing Olympic Games in 2008.

But even in sponsorship, marketers are facing new challenges. Globalisation, changes in customer behaviour, issues around permission to interact with audiences and changing technology are the four main forces for change at work.

Turbulent times

As the global movement of people, goods and services, intellectual property and capital becomes less restricted, competition in specific markets intensifies. Brand building will have to adapt to globalisation, and sponsorship may be the answer. Vodafone’s expansion into new markets over ten years worked because it built its global brand by investing in high profile sponsorship of F1 (Ferrari), cricket (England), football (Manchester United) and music (Vodafone Live Music).

At the same time as brands become more global, customer behaviour is changing. Customers are better informed and much more demanding. Traditional sponsorship might have been about transmitting a message, but sponsorship is evolving to meet customer demand at the same time. Thomas Cook, as part of its sponsorship of Manchester City FC, was able to create a suite of travel products under the banner City Travel Club, aimed specifically at the Manchester City fans.

These changes go well beyond the ability of a brand owner to integrate its sponsorship and marketing activities. During the FIFA World Cup Germany 2006, Adidas, MTV and Xbox 360 formed a global alliance focused on the World Cup, which included sponsorship, in-store activities and cross-promotions. Audiences had direct involvement in the content of the sponsorship programme as well as new product development for all three brand owners, including new games, programming on MTV and Adidas merchandise.

The continuing fragmentation of media will lead to further fragmentation of audiences – requiring the brand owner to seek permission (consent) to communicate with a particular group. Audiences will be increasingly able to screen out messages they don’t want. Current laws already seek to protect children and young people from advertising, and traditional marketing activities will appear out of step to this media-savvy generation as they learn to be their own internal censors.

Brand owners will need to earn the right to communicate. And in order to gain such permission, the brand owner will need to demonstrate that it can be trusted. The net result will be more, rather than fewer, opportunities for non-traditional advertising such as sports sponsorship, which can engender a closer relationship between the brand owner and its consumers.

Many aspects of these forces for change (globalisation, behaviour, permission) have been enabled by another – technology. Software tools can now unlock identities, addresses, purchasing habits and intimate information of customers and reach them through emerging channels such as iPods, broadband, 3G mobile devices and gaming platforms.

But to make use of these “transmit” channels, the brand owner must also have a licence to operate. Such permission is only available where the brand owner has earned the trust and confidence of the audience. And building that trust and confidence is where sponsorship comes in.

Sponsorship 2.0

It’s the next step. Sponsorship 2.0 is about turning traditional sponsorship into a collaborative marketing platform, creating a climate of trust and confidence with the audience where sales of a sponsor’s products or services is more likely to take place than not. This can be tougher than it sounds.

Cadbury’s sponsored Coronation Street for so long that the relatively unknown brand, Harveys furniture, faced a tough challenge when taking over the slot. Its response was disappointing. It created an animation sequence of a few ornaments in the break bumpers with a mobile short code on the screen for data capture via a couple of Corrie competitions on the Harveys website.

The result was an almost invisible brand – a bumper blur, a mere cue to re-tune to Corrie consciousness. There was no real attempt to engage with the audience let alone build a dialogue with it. Compare this with Nokia’s previous broadcast sponsorship of ITV’s X-Factor and the difference is breathtaking.

In 2006 Nokia was starting to lose market share in the UK, facing intense competition from cheaper imports as well as growth in existing competition. At the same time there was an onslaught of networks bringing out their own mobile devices. This created two conflicting objectives: driving longer-term brand aspiration with the youth market as well as driving mass market brand appeal and sales.

Nokia adopted a dual-targeting strategy, conscious that its mainstream market activities shouldn’t be detrimental to its youth market focus. The company opted for broadcast sponsorship of talent reality show X-Factor, with ten million viewers per week over four months.

The X-Factor sponsorship was activated in two ways: on screen – promoting the association through commercials, broadcast sponsorship and brand integration; and off-screen – connecting to the consumer through customer promotions and point-of-sale executions.

TV bumpers, in-store promotions at Carphone Warehouse (an exclusive X-Factor 3220 packaged handset with preloaded X-Factor ring tone, screen saver and cut-out covers) prizes, promotions and an interactive site with additional content were on offer. A microsite for X-Factor fans (Club Nokia) was created which assisted in data capture.

Sales doubled on the promoted Nokia handsets as a result and, the company claims, brand preference with the target audience increased by five percentage points. Over 20,000 viewers entered competitions and opt-ins; 82,000 visited Nokia’s microsite.

“What these two very different approaches illustrate is that there seems to be a degree of confusion among sponsors between managing a response and trying to initiate a relationship,” says Andrew McMorran, partner at QM, a brand marketing and sponsorship agency.

“On screen short codes or red buttons are only channels. They were novel once but they aren’t reasons to engage or calls to action. Remember the days when you had to have a website just because everyone else did? Well, it’s the same problem, but different technology.”

Good sponsorship today isn’t just a chance to borrow someone else’s audience for a while. It’s an opportunity for the brand owner to create its own.

Measurement

All of this turns to dust unless sponsorship delivers a return on investment (ROI). ROI shouldn’t be an afterthought or self-justification process. It has to be part of our sponsorship mindset and it comes back to having measurable objectives.

As with all marketing activity, sponsorship 2.0 is only as good as its results. In re-wiring our understanding of sponsorship, we need to apply two tests – will it deliver a return on objectives (ROO) and return on investment? Should any sponsorship programme fails these two tests, we should seriously consider whether we should invest.

ROO requires us to undertake analysis in terms of whether the property type – sports, arts and culture, broadcast, education, environment – is a basic fit with our brand communication, marketing and sales objectives; whether it’s feasible in our time frame; and whether it can be used to drive customer loyalty as well as customer acquisition.

Accurately measuring which parts of a sponsorship campaign have delivered ROI requires commitment from the brand owner and the rights holder to obtain the necessary data and to analyse the sponsorship programme in an open and honest way. The final outcome should be a 360-degree view of the sponsorship programme, from the start of the planning process to the end results achieved.

Ardi Kolah is an author and consultant on sponsorship and other marketing issues. His latest book is Sponsorship Works: A Brand Marketer’s Casebook, available from SportBusiness (www.sportbusiness.com)

Review of Guy Masterman's new book on sponsorship

Ardi Kolah — Sat, 27 Oct 2007 06:43:10 GMT

Sponsorship for a Return on Investment is a new beginners guide to sponsorship. Is it worth a read?

This is a useful book primarily aimed at students that are new to the sponsorship discipline and perhaps need more breadth in the subject which is covered within other marketing and public relations syllabuses.

The book is divided into three sections: an explanation of sponsorship which attempts to place it within the marketing mix; the analysis of the tangible and intangible rights that flow from sponsorship and what makes sponsorship successful – and ultimately generates a return on investment for the sponsor.

From an academic perspective, Masterman had done his home work and each chapter contains a thorough list of references, many of which were published over the last ten years.

Quite naturally, the first third of the book is pretty basic stuff and canters through the basic nuts and bolts of sponsorship.

The second part of the book is more interesting and begins very helpfully with a definition of title rights, presenting rights, naming rights, sector rights and supplier rights. It’s amazing how often many experienced sponsorship practitioners often get confused with the basket of rights each of these represent. For example, naming rights doesn’t apply to teams or shirts or greyhounds but physical structures and stadiums!

There’s a useful discussion on the typical sponsorship structures used by rights holders and examples tend to be taken from major sponsorship programmes such as the Olympic Games by way of illustration.

There’s a whole chapter devoted to endorsement by a famous individual or property but Masterman unfortunately misses the opportunity to discuss how licensing and merchandising has become a key ingredient within the activation of a sponsorship property and frequently involves some form of commercial endorsement. This link is important and from what I can see the whole area of licensing and merchandising has been overlooked by the author.

Masterman is also light on the whole subject of broadcast sponsorship. In my view, most broadcast ‘sponsorship’ is actually advertising by another name. Discussion on the White Paper on channel sponsorship published by OFCOM, the broadcast regulator, in November 2006 is another notable omission for the student of sponsorship theory and practice.

However, that said, there’s a lot to commend in this book. For example, selling sponsorship gets more bandwidth and it’s definitely an area where many in the sponsorship industry ‘could do better’! Masterman has provided some templates which some rights holders I’m sure will find very useful.

The third part of the book covers the important area of rights exploitation. But again, what’s surprising was the lack of discussion around the use of what I call interactive channels, for example, mobile, 3G and broadband and digital rights have become much more valuable to sponsors.

As a result, social networks have become much more important in the context of sponsorship activation and many of the examples given in terms of best practice now look a bit tired because they’re getting quite old. A few more up-to-date case studies would’ve helped the reader to appreciate the way in which brand owners and rights holders must now consider moving to Sponsorship 2.0.

The basics of sponsorship evaluation is covered but again I found this too academic in its approach and it lacked a review of practical methodologies for measurement – which the title of the book sort of promises the reader with the reference to ‘return on investment’.

The book concludes with a brief look at issues such as ambush marketing, ethics and ownership but what I was left wanting to know is how the author believes sponsorship will change in the future and what the implications are for brand owners and rights holders?

The ‘Four Forces for Change’ – globalisation, behaviour, permission and technology – may have been a more fitting way to conclude the book.

On the whole, Masterman has written an admirable introduction to sponsorship theory and practice which should help those who are new to the discipline and want to learn more about the use of this important brand marketing and communication platform.

The Bowden Lecture 2007 - Terry Mansfield

Ardi Kolah — Thu, 11 Oct 2007 10:18:08 GMT

This year's Bowden Address to the Worshipful Company of Marketors was given by Terry Mansfield CBE, President & CEO. It was a brief trip through the incredible life of a major figure in the world of publishing.

The magnificent Fishmonger's Hall was the setting for this year’s Worshipful Company of Marketors’ Bowden Dinner (on Oct 4) with our guest of honour Terry Mansfield CBE. As we all know, fishermen like to tell a good tale, so we were hoping for a good un’ from Terry.

Interestingly, Past Master John Petersen reminded me over the first course that in 1381 Lord Mayor William Walworth, a member of the Fishmongers' Company, stabbed Wat Tyler, leader of the Peasants' Revolt, through the ribs. This didn’t strike me as the sort of thing a Lord Mayor should be up to but the Fishmongers obviously took a different view and now display the 12-inch weapon alongside a life-like wooden statue of the murderous Lord Mayor, dagger in hand! Sort of put me off my second course.

Anyway, back to our esteemed guest speaker.

Without the aid of a lethal weapon or notes, Terry was able to take us on a trip through the highlights of his illustrious career that saw him reach the giddy heights as the first ever President and CEO of NatMags (Cosmo, Esquire, Good Housekeeping, and Harpers & Queen) and the main Board of the Hearst Corporation in New York.

Rather frighteningly, he almost didn’t make it big time in the world of publishing. WWII got in the way and you could say Terry had an enforced career-break. He was shipped off to Christmas Island in the Indian Ocean.

His time as a RAF radio operator would’ve been uneventful had it not been for the regular testing of atomic and hydrogen bombs by the Allies. However, every cloud has a silver lining, observed Terry, and whenever these tests took place, he would get the day off. Um, must have been fun Terry…

After the war, Terry rubbed shoulders with likes of David Bailey, Norman Parkinson and Jean Shrimpton that collectively defined the essence of London in the swinging 60s. It’s not too difficult to imagine Terry feeling right at home with his josticks and bead curtains.

But it was his time with (Sir) Jocelyn Stevens that was to shape Terry’s future career.

Stevens had bought The Queen in 1957 and was a founder investor in pirate radio station Radio Caroline, which was run from the loft of the magazine's Fetter Lane offices when it was launched in 1964.

Women and the US were beginning to play a bigger part in Terry’s life. In fact, so much so, that he joined NatMags for the fifth re-launch of Harpers Bazaar, which in 1970 became Harpers & Queen.

Terry admitted over the course of 40 minutes he actually wanted to be the cigar chomping media impresario Sir Lew Grade. “I like finding talent,” explained Terry who appears to have spent most of his career doing just that. So why he wanted to be Sir Lew remains a mystery.

It seems odd to imagine now, but when Terry was appointed to the main Board at the Hearst Corporation in the US, they had to get the law changed in order to allow him to remain on the Board given that he was a foreign national.

In fact, he’s the only person in the history of the Hearst Corporation to have been appointed only to have to resign in order to be re-appointed for the second time to the Board. It seems a bit extreme.

But for a man whose career has been an amazing adventure in the world of publishing on both sides of the Atlantic, Terry typically took the whole thing in his stride.

Ardi Kolah is a Liveryman of the Worshipful Company of Marketors in the City of London

New sponsorship casebook makes the business case for Passion Branding

Ardi Kolah — Tue, 09 Oct 2007 10:53:30 GMT

My latest book makes the bold claim on its cover ‘Sponsorship Works’ but perhaps what we should be asking ourselves is how best can sponsorship work in delivering against our brand communication, marketing and sales objectives?

This is a more meaningful line of inquiry and one which the book takes the reader through by analysing 23 case studies drawn from a range of property types – sport, arts and entertainment, celebrity, and cause related marketing - from across the world.

What struck me about all of the case studies featured in the book was that they all shared similar starting points – and perhaps in some cases these are exactly the same starting points you currently face in your own brand communication, marketing and sponsorship programmes:

· How can we cut through the noise and beat intense competition that we face in our market segment?

· How do we use sponsorship as part of the brand value proposition and use it to do business on our customers’ terms?

· How does sponsorship help us take an ‘outside in’ rather than ‘inside out’ perspective?

· How do we articulate what we deliver (rather than a shopping list of what we offer) in an emotional and rational way that’s totally compelling, memorable and ultimately influences behaviour of target customer segments?

· How do we use sponsorship to help build relationships that our customer segments actually want to belong to?

· And what does it take to engage with audience and customer segments more deeply and turn them into our brand ambassadors so that we may profitably serve their needs and requirements well into the future?

Sounds familiar? They should.

In order to achieve any or all of the above, we need to apply two ‘tests’ to the sponsorship programme – will the sponsorship under consideration deliver a Return on Objectives (ROO) and a Return on Investment (ROI)?

If any sponsorship programme fails these two ‘tests’ then we should seriously consider whether we should investment in the programme in the first place or continue to re-invest in it.

ROO requires us to undertake analysis in terms of whether the property type (sports, arts and culture, broadcast, education, environment or any other) is a basic fit with our brand communication, marketing and sales objectives; whether it’s feasible in our time frame; and whether it can be used to drive customer loyalty as well as customer acquisition.

Should it tick all the right boxes, then the next challenge is how to bring the investment in the sponsorship property alive.

The creative quotient of any sponsorship programme is its vital ingredient. If we were sitting in the office of an Olympic sponsor we’d be talking about how we can sprinkle the ‘magic dust’ of the Olympic Games on to our communications.

It’s this intellectual process that distinguishes the good from the great. Albert Einstein struggled for years to make sense of the many complexities and contradictions of physics and the real world. The sheer complexity he was trying to explain was mind boggling. However, through creativity he eventually saw the light, by taking a step back and reflecting on the patterns and symmetries, applying hypotheses and deduction, he discovered the relationship between energy and matter was actually very simple, that E=mc².

Increasingly, we’re living in a world where consumers have everything that they need. Wardrobes full of clothes, kitchens full of appliances and garden sheds crammed full of stuff that they can’t squeeze into the cupboards at home. Yet still they want more! The newest, coolest, the best. A basic human need, like hunger and shelter, which consumers constantly seek to satisfy in new ways.

So how do we connect with this thirst for more?

Well, this is where research can help, as illustrated throughout this book. We need to see what everyone has seen but think what nobody else has thought.

In the sponsorship industry, we’re constantly seeking ways to add value beyond the product or service we’re trying to sell. We can boil this down into three individual but linked components:

· Enriching the brand value proposition

· Extending the brand experience

· Enhancing the customer benefits delivered by the product/service.

Great sponsorship is about combining sponsorship discipline in terms of ROO with creativity to unleash innovation where it really matters most. To create difference and engage people in world where it often seems that all the best ideas have already been taken. And the bar is increasingly getting higher, not lower. We need new ideas for new sponsorship solutions.

We need new ideas to exploit existing markets and customer segments better. And we need new ideas to do it more effectively.

The book contains some big ideas that can define and sustain a brand. But what’s also striking is that successful brand owners aren’t complacent even when this has been achieved and constantly strive to innovate in order to ensure the sponsorship programme stays relevant and compelling.

Ideas are the source of value creation. Ideas are the basis of newness. Ideas make sponsorship matter, and also make it the most exhilarating aspect of our work.

But all of this turns to dust unless sponsorship delivers a ROI.

This shouldn’t be an afterthought or self-justification process to ensure that we don’t get fired from our job! This has to be part of our sponsorship mindset. And if it isn’t, then it should be.

As we become increasingly accountable for the money invested in sponsorship, we need to be clear how sponsorship delivers the goods. And of course this varies between sponsors but fundamentally it comes back to having measurable objectives.

And as each of the case studies illustrate, to accurately measure which parts of a sponsorship campaign have delivered the greatest results requires commitment from the brand owner and the rights holder to obtain the necessary data and a commitment from both parties to analyse the sponsorship programme in an open and honest way.

Effective measurement and evaluation is more to do with impact and less to do with output – although it’s essential that outputs are measured in order to feed financial, brand equity, semiotic and econometric models.

The final outcome should be a 360-degree view of the sponsorship programme, from the start of the planning process to the end results achieved.

In today’s hyper-competitive environment, the ability for brand owners to decipher and make sense of vast amounts of marketing data is becoming a critical success factor and a source of competitive advantage.

Only with access to the right granularity of data can a comprehensive sponsorship analysis be performed. And only through a rigorous approach to measurement and evaluation can a brand owner channel the necessary resources and investment to the areas delivering the greatest return on its sponsorship investment.

Case study extract from Sponsorship Works: A Brand Marketer’s Casebook

SPAR Hungary

In August 2006, SPAR Hungary, part of the SPAR multi-national supermarket chain, prepared to launch its own-label bio-food range ‘Natur Pur’.

The brand encapsulated ‘natural, healthy and pure’ attributes and was a major new product category investment for SPAR. The premium-priced products were developed to appeal to health-conscious women customer segments that regularly shop at SPAR’s 168 outlets across Hungary.

Working with its creative agency D’Arcy Avenue, SPAR Hungary set out to identify an appropriate property that would reflect the brand values of ‘Natur Pur’.

Given the overriding health-conscious message it wanted to deliver to women customers, it was important to associate the new own-label range with a sport that directly appealed to women that could embrace its health-conscious message in an appropriate way.

Property selection

In Hungary, women’s handball is extremely popular, with the Hungarian National Handball team enjoying international success at the European and World Championships as well as the Olympic Games in recent years.

In addition, the European Handball Federation (EHF) ranked the Hungarian Women’s National Team as the third highest medal scoring team behind Norway and Denmark in 2006.

However, SPAR Hungary wanted to go further and also recruit a brand ambassador as the face for the new product range rather than simply a handball team to help promote ‘Natur Pur’.

It approached Szabina Tápai, the 20-year old pin-up star of Cornexi-Alcoa-HSB Holding, a highly successful and popular women’s handball team based in Székesfehérvár, 50km outside of Budapest.

In 2005, Cornexi won the EHF Trophy for the first time – which has added to its growing popularity in Hungary as well as helping to raise the profile of its star players.

Tápai is the leading player of the team, having been voted Best Junior Player for two consecutive seasons (2003-04 and 2004-05). She is constantly in the national media spotlight and appears regularly in glossy celebrity magazines that have taken an interest in her glamorous lifestyle.

It was Tápai’s ability to transcend her appeal within handball and reach fans of other sports that made her an ideal spokeswoman for SPAR Hungary.

In 2006, negotiations were entered into with Cornexi-Alcoa-HSB Holding that owned Tápai’s personality rights and a two-year sponsorship deal was struck in June 2006, in time for the own-label launch in August 2006.

Nature of the deal

The sponsorship deal covered the intellectual property rights (IPR) to both the Cornexi home team as well as Tápai’s personality rights.

This included the usual signage and advertising rights at the home stadium (such as advertising panels) as well as ‘Natur Pur’ branding on official casual wear worn by the team.

Cornexi was also obliged to organise the team’s training schedules to fit around advertising production and personal appearances commitments.

Launch of the new ‘Natur Pur’ range

At the heart of the launch were:

· 30 sec and 60 sec TV spots on RTL Klub and M1 in primetime

· Billboards featuring Tápai promoting the product as a sports/fashion icon

· Print media advertising (placed through médiafoglalás) in women’s titles and lifestyle magazines

· Media campaign built around Tápai’s personality, which included photo-shoots, press conferences and media events (organised by Presstige Media)

· Personal appearances by Tápai at social and cultural events as a brand ambassador for ‘Natur Pur’

· Extensive PR campaign across national radio/TV, national newspapers and sports titles.

Analysis

Personality endorsements have been the staple of above-the-line (ALT) advertising campaigns for as long as the medium has existed. However, the need to reduce the risk of failure has increased in response to the broadening of the use of celebrities within brand communication and marketing.

Celebrity endorsement is now an accepted part of the sponsorship mix and therefore faces the same level of scrutiny as any other sales promotion or ALT activation.

Endorsement from a sports star such as Tápai can help connect with fans and consumers on an emotional level as well as help the sponsor SPAR Hungary transcend cultural, linguistic and geographical barriers within its chosen market and customer segments. As a result, the use of sports celebrities in sports sponsorship has become commonplace in Europe, US and Asia and such a tactic is a growing part of the advertising armoury of many brand owners seeking a winning connection with popular sports.

Celebrities are of course fascinating people and it is harder to skip an ad with a star in it than one without a star. In the UK, F1 driver Lewis Hamilton is just beginning to discover just how powerful his endorsement can be for a variety of sponsors.

What’s interesting in the case of Tápai is that an established brand owner such as SPAR Hungary has actively thought about positioning a new product category outside of the way it would normally do things.

There are of course risks with using the power of celebrity, especially in this Big Brother world of ours where nobodies find fame (and sometimes fortune) just by appearing on our TV screens.

But SPAR Hungary had more to lose by getting this badly wrong. Reputation sits at the heart of sponsorship and the risks are magnified when dealing with young athletes who don’t have vast experience of working with sponsors.

It was therefore a smart move to use both the team and its star as part of the promotional effort as this greatly reduced risks of things going wrong but also gave weight to the campaign.

As its gets harder to attract and retain interest of customer segments, passion branding has a place within sponsorship and this is a good example of how it can work in practice.

Details about the book

Sponsorship Works: A Brand Marketer’s Casebook contains:

Best Practice Research – the latest sponsorship research undertaken by the World Advertising Research Centre that examines broadcast sponsorship, event sponsorship, sponsorship management and sponsorship measurement and evaluation.
Market Access – use of sponsorship to gain access to new audience and customer segments.
Brand Building – using sponsorship to build brand value and influence consumer behaviour.
Commercial Strategy – use of sponsorship as part of business strategy to exploit new or existing market and customer segments and achieve a return on objectives
Epilogue – Drawing together the lessons of 23 case studies and pinpoints how you can improve your own sponsorship activities to achieve remarkable results.

Each section features case studies to illustrate a particular sponsorship practice that has achieved the desired Return on Objectives (ROO) and Return on Investment (ROI). Each case study is analysed and a useful check list of the key learning points extracted.

_{List of case studies from around the world:}

ABN AMRO (Volvo Ocean Race)
Amstel (UEFA Champions League)
B&Q/Castrorama (Ellen MacArthur
BMW (Susan G Komen Breast Cancer Foundation)
Brit Insurance (Brit Insurance Oval)
DHL (Football Delivered)
EA Sports (FIFA)
FedEx (NFL)
Fortis (Fortis Turkish Cup)
Lexus (Colin Montgomerie)
Nordea Bank (Latvia National Team)
Norwich Union (UK Athletics)
Pannon GSM (Pannon Cup)
Paris (2012 Olympic Bid)
Polo Ralph Lauren (Wimbledon Tennis Championships)
Pringles (Pringles Dream Team)
Robinsons (Wimbledon Tennis Championships)
Schwartz (Richard & Judy Show, Channel 4)
SPAR Hungary (Cornexi-Alcoa HSB Holding)
Thomas Cook (Manchester City FC)
VISA Europe (Torino Olympic Games)
Vodafone (Vodafone Live!)
Volvo (Volvo Ocean Race).

List of leading agencies featured:

· 20Knots

· Active Sports Marketing

· Bell Pottinger Sport & Sponsorship

· Carat Sponsorship

· Connexus PreciSion

· GCI

· Havas Sports

· iMediasport

· MEC Sponsorship

· Nords Porter Novelli

· OC Group Property

· Octagon

· Pitch PR

· S&B

· Velocity Sports and Entertainment

· SBI

· WSM

About the Editor

Ardi Kolah is one of the most influential voices in the global sponsorship industry and a best selling author for SportBusiness. He has held several high profile appointments with some of the world’s leading brand owners including BBC, Andersen Consulting, CMG plc, Imperial Cancer Research Fund, Cranfield University and the Defence Academy of the United Kingdom. He ran his own agency, Maverick UK, for several years undertaking a variety of brand marketing and sponsorship assignments. He was Chief Strategy Officer and Director of several brand marketing, sport and entertainment sponsorship agencies at WPP plc. He holds several industry awards and in 2003 received the Hollis Award for his work on the British Independent Film Awards. He is a Fellow of the Chartered Institute of Marketing, the Chartered Institute of Public Relations and a Liveryman of the Worshipful Company of Marketors in the City of London.

Contents

Introduction
Best Practice Research
Access
Brand Building
Commercial
Epilogue
Index
List of Tables & Figures
List of Colour Plates
Useful Sources

Price: £149

To order your copy:

Adam Colthorpe, SportBusiness +44 (0) 207 954 3478

adam.colthorpe@sportbusiness.com

SportBusiness Hotline

Tel: +44 (0)20 7954 3514

infoteam@sportbusiness.com