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Sponsors’ splash diluted by rogue marketers

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Times Staff Writer

When former Chinese gymnastics champion Li Ning ascended on a high wire to the top of the Olympic stadium Friday to ignite the caldron, it was a magical finale to a dazzling opening ceremony. It was also a coup for his athletic-wear firm -- especially considering that Li Ning Co. isn’t even an official sponsor of the Games.

The company chairman’s stunt helped drive up Li Ning Co.’s stock 4% on Monday and left rival firms out in the cold. Adidas, for instance, has shelled out millions of dollars to be a sponsor of the Beijing Games.

Allan Chou, managing director of China Polling, a consumer research firm in Beijing, called the Olympic organizing committee’s selection of Li “a slight to other sporting brands” but a boon for the three-time gold medalist’s company. It’s as good as any “guerrilla tactic,” Chou said, referring to unconventional, low-budget marketing.

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The battle for consumers’ attention has long been fierce during the Olympics, but it is particularly intense this year as corporations vie for an advantage in a market with unparalleled scale and potential. A record 63 companies have paid to be sponsors of this year’s Games, with a dozen of them, including Coca-Cola Co., Samsung and Johnson & Johnson, spending an average of $72 million to be “worldwide partners” and for the right to use the famous five-ring logo for marketing globally.

China’s retail sales of consumer products are expected to reach $1.5 trillion this year, according to government figures. That’s nearly triple the amount in 2001, when Beijing won the battle to host the Olympics. With 1.3 billion people, China is already the world’s largest market for goods as varied as washing machines, beer and cellphones.

For the 2004 Summer Games in Athens, Samsung, the South Korean electronics giant, geared its marketing to a global audience.

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“But this time, China is so big and growing so fast, we are really concentrating on China,” said Gyehyun Kwon, Samsung’s head of worldwide sports marketing.

Here in Beijing, Samsung ads are plastered over bus stops and the city’s new subway stations. The company has exhibits at a big Beijing hotel and at an eco-facility that it built at the Olympic Green, the main site of the Games. It has even sponsored a beer garden at a Holiday Inn.

Before the Games began, Samsung paid extra to sponsor the Olympic torch relay and launched a caravan of three 30-foot trucks that stopped at 130 Chinese cities and villages, giving away souvenirs and eye exams. In all, Kwon said, Samsung was spending more than $100 million on Olympic marketing, not including sponsorship fees.

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“We want to be one of the most loved and recognized brands in China,” he said.

But Chinese companies and other firms without official Olympic ties are pouring it on too, with ads of their own and, in some cases, ambush marketing aimed at undercutting official sponsors. The result: a lot of clutter and confusion in the marketplace.

“Everyone thinks everyone is an Olympic sponsor,” said Paul French, founder of Access Asia, a market research firm based in Shanghai.

The Olympic symbol carries a lot of weight. About 54% of China’s urban residents surveyed by CTR, a Beijing research firm, said they would be more willing to buy products from companies with Olympic affiliations. But the trouble is, consumers showed little recognition of those companies.

In the survey, conducted between May and July, more Chinese thought Changhong Electric Co., a TV and appliance maker in Sichuan province, was an Olympic sponsor than thought Samsung was. Changhong isn’t a sponsor.

China’s Tsingtao beer rated far higher than Budweiser, even though both are official sponsors. As for sportswear, 37% of respondents linked Li Ning to the Olympics, compared with 23% for Adidas and 18% for Nike, which isn’t a sponsor either. Li Ning has long been one of China’s leading sports brands, but it has lost ground in recent years to tough global rivals.

Adidas, which is based in Germany, says its tab for Olympic marketing in China is the most in its history for a single market. Spokeswoman Katja Schreiber said her company had no hard feelings about Li’s moment of glory.

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“We thought he really deserved it,” she said, adding that the white-and-red sneakers that the 44-year-old wore during his midair run were unbranded.

Schreiber said that Adidas opened its largest store in the world in Beijing last month -- a four-story, 34,000-square-foot center -- and that the company was on track to surpass $1 billion in sales in China this year.

Adidas and other Olympic sponsors say Chinese officials have worked hard to thwart rogue marketers trying to capitalize on the Games; thousands of unapproved outdoor ads in Beijing have been taken down. But officials have been less successful policing the streets outside Beijing, the airwaves and the Internet.

The dilution and clutter have left some analysts wondering whether Olympic sponsorship -- or even advertising at all during the Games -- was worth the hefty fees. Eastman Kodak Co., an Olympic regular for decades, said this would be its last Games sponsorship. Computer maker Lenovo Group also is dropping its global partnership after Beijing.

For Johnson & Johnson, this is the first Summer Olympics sponsorship. The New Jersey healthcare products company built a 25,000-square-foot pavilion on the Olympic Green, trucking in 4,000 stalks of bamboo from hundreds of miles away. The rooftop has a sleek waterfall. Its main attraction: an exhibit of five authentic terra-cotta warriors unearthed in Xian.

Chinese consumers “know us as primarily a baby-products company,” said Owen Rankin, the company’s vice president of corporate equity and Olympic sponsorship.

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He showed television monitors at the pavilion displaying stories from Sichuan earthquake victims and other ordinary people, meant to convey Johnson & Johnson’s message that it is in the caring business.

Rankin said the company wanted to expand its reach into rural areas -- something that he thinks the Olympics will help it do.

“This is a moment we wanted to be a part of,” he said.

--

don.lee@latimes.com

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