Businessweek Archives

Philips: Playing By Its Own Rules At The World Cup


Sports Business

PHILIPS: PLAYING BY ITS OWN RULES AT THE WORLD CUP

Here's the deal. Got this world-class sports event. Total TV audience is 32 billion. You get to put your company name on stadium walls. You can stick a colorful logo on all the promo hats, T-shirts, jogging suits, and doodads you want. We'll even toss in a couple hundred VIP tickets for every game. All it'll cost you is $20 million. You in?

Offered essentially that deal to become an official sponsor of the month-long 1994 World Cup soccer tournament, Philips Electronics, the $30 billion Dutch industrial giant, said Ja. But signing on to sponsor this--or any other--high-profile sporting event was no open-and-shut decision for management. Nine times out of 10, when asked to sponsor a prestige-laden sports contest, even the Olympic Games, Philips says no. "Sponsoring should start with your marketing problem or opportunity and not with a proposal that lands on your desk," says Peter Verest, Philips' coordinator of sports sponsorships. "That's our prime rule."

It isn't the only one. Philips has a Ten Commandments of sports sponsorship, acquired from the experience it got moving from the amateur ranks of sponsoring national sports events in the 1950s to the big league of global sponsors at World Cup 1986 in Mexico.

With this summer's tourney set to kick off on June 17 in Chicago, the buzz in the sports-marketing world is that some of the World Cup sponsors are not happy campers: Witness the battle between Sprint Corp. and MasterCard International Inc. over the use of the Cup logo, and the instances of "ambush" marketing (BW--May 2). Yet Philips--the sole European company in the lot--so far is pleased with its role and its payoff prospects, largely because the company is following rules it set for itself.

For Philips, the first Cup contest ever held in the U.S. fits an actual marketing need: to beef up its corporate brand name in a growing U.S. market, where its other brands, including Magnavox and Norelco, are better known. One way to do that is to pay some of the $20 million in kind: Soldier Field, where Germany will face Bolivia on opening day, needed upgraded stadium lights. Philips Lighting Co. got the job and is using the stadium as a kind of mega-showroom for its ArenaVision system, necessary for high-definition-TV cameras. Likewise, whenever one of the nine stadium operators needs a TV camera, phone handset, giant video display, security system, or even a coffee maker, the appropriate Philips division will have first crack at providing it. "If we have a choice, we always choose to pay in product," says Verest. "Sponsorship, after all, is a marketing tool."

Philips will also get to highlight products such as its slow-selling Compact Disk-Interactive players: They will be in evidence at or near stadium sites, loaded with World Cup stats, trivia, and past highlights. And Philips' 75%-owned music-and-film affiliate, PolyGram, cut a separate deal for rights to the official World Cup song, Gloryland, as well as to videos of Cup highlights.

DYNAMIC IMAGE. Association with the Cup, Philips hopes, will also contribute to a more dynamic, youthful, and cutting-edge corporate image. But the real goal Philips hopes to score is increased sales. In-stadium advertising rights to signboards on the field perimeter will provide a key assist there. "Viewers should see those boards about 71/2 minutes per [two-hour] broadcast," says Gary Pluchino, vice-president of Lucerne-based ISL Marketing, which negotiated the sponsorship deals.

Philips' experience sponsoring the 1988 and 1992 Olympic Games was less than a smash hit. For one thing, Olympic rules ban the use of ad signboards entirely. And after running four years of sales numbers, Philips exercised its right of first refusal by declining to sponsor the 1994 Winter Games, which Matsushita Electric Industrial Co.'s Panasonic Co. then grabbed.

Despite the excitement aver a world championship, Verest warns that "sponsorship is not just about glamour." Philips hasn't had any major glitches with the World Cup--so far. But snafus such as the week-late arrival of VIP tickets for the 1990 World Cup in Italy can give a global giant the flutters. Some risk, in fact, is always inherent in sponsorship. "When we sign up," Verest notes, "we don't even know who the [Cup] teams will be." Such a risk may be worth taking, though. "In the end," says Verest, "we know we'll be on TV in 180 countries." That's a heads-up play in anyone's book.

PHILIPS' TEN COMMANDMENTS

OF SPONSORSHIP

1 There shall be a natural

relationship to products

2 The event shall fit the

marketing game plan

3 There shall be a mass

audience

4 There shall be direct

exposure

5 The project shall not

be risky

6 Results shall not depend on an athlete or team

7 There shall be a major role for the company

8 There shall be no legal,

environmental, or other hazards

9 The event shall be well

organized

10 There shall be continuity with past sponsorships

DATA: PHILIPS ELECTRONICSPatrick Oster in Eindhoven, the Netherlands


Hollywood Goes YouTube
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus