Olympic Sponsors Cheer the Home Team

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However, unforeseen events in recent months—first the riots in Tibet and then the earthquake in Sichuan province—have sent Chinese nationalist sentiments (BusinessWeek.com, 4/24/08), both inside the country and among Chinese abroad, to unusually high levels and pulled Chinese people closer together. Multinational corporations say the loud protests from "free Tibet" and "save Darfur" groups in the West have not affected their marketing strategy for the Olympics.

Protests Lead to Bigger Donation

Nevertheless, some multinational corporations have caught flak from the raw nationalist fury in China arising from the crises. Weeks after the Mar. 14 riots in Tibet, Chinese consumers launched a boycott against Carrefour (BusinessWeek.com, 4/22/08) (CARR.PA) in response to the protests during the Paris leg of the Olympic torch relay and French President Nicolas Sarkozy's suggestion that he may boycott the opening ceremony. In an effort to appease Chinese nationalists, Carrefour outfitted its entire Beijing staff with new uniforms, including a red T-shirt with China's flag on it and red baseball caps with the Olympic logo. That tactic backfired when the Beijing Games organizing committee ordered Carrefour to stop wearing the caps because it was an illegal use of the Olympic logo.

And despite its China cheerleading, McDonald's hasn't been immune to confrontation with xenophobes. Following the May 12 earthquake, crowds of angry Chinese surrounded McDonald's restaurants in Nanchong, Sichuan province, and Nanjing, Jiangsu. They were furious after hearing rumors the U.S. company had not donated to the earthquake relief efforts. McDonald's originally donated $216,000 to earthquake relief efforts. Two days after the protests, on May 21, McDonald's announced it would donate an additional $1.4 million to rebuild schools in Sichuan.

Post-Olympic Strategies

Most multinational corporations began working on their Olympic strategies in late 2006 or early 2007, well before the riots in Tibet and the earthquake in Sichuan. Those that came up with marketing campaigns appealing to Chinese nationalism appear to have been lucky enough to hit on a way of countering any negative publicity arising from the crises. "With nationalism running high in the country, it's probably safer or 'less risky' for global brands to embrace and utilize nationalism than avoid it," Veronica Chen, senior market analyst with GfK Roper Consulting, a market research company, wrote in an e-mail. "If implemented well, marketing campaigns catering to nationalism will create strong bonds with local consumers."

After the Olympics are over, market research and advertising companies will perform a postmortem on how effective their clients' marketing campaigns were. If the results show a weakening of the connection between consumerism and nationalism by Chinese consumers, they may suggest their clients drop nationalism as a marketing strategy. But, if the nationalism gambit proves effective, sponsors may stay the course and try to build on their relationship with Chinese consumers. "In the short term, to show more support for the Olympics, that's kind of a no-brainer to me," says Binsheng Teng, a professor of strategic management at Cheung Kong Graduate School of Business. "In the long run, whether they want to play this card or play into this surging nationalism, this is a serious issue."

Tschang is a correspondent in BusinessWeek's Beijing bureau.