A winning game plan: merchandising the Olympics.
Between July 28th and August 12th, not only the U.S., but the world iwll be focusing its attention on Los Angeles. In fact, it's expected that 2.5 billion people will tune into the events. During that time and in the months prior to the games, many retailers and manufacturers plan to jump on the sporting bandwagon to capitalize on this Olympic spirit.
Manufacturers are closely allying themselves with the Olympics through (in some cases, very expensive) corporate sponsorships. These companies are already touting their affiliation through national advertising; use of Olympic logos on packages; special promotions; point-of-sale shelf talkers and displays; couponing; and related tie-ins.
Of course, retailers and wholesalers are excited about the exposure that this national advertising and the related promotions will bring to the products they sell. They are also working on ways to tie in manufacturer programs with Olympic merchandising programs of their own.
Recently, Progressive Grocer polled its Merchandising Advisory Council to measure retailer and wholesaler enthusiasm for merchandising the Olympics. In general, the feedback was extremely positive. In fact, some respondents said they believe this could be the merchandising opportunity of the decade, if not the century.
Sixty-one of the 75 members of the Council responded to the survey. These retailers and wholesalers are involved in the merchandising decisions of more than 6,000 stores and are considered leaders in their field. Thus, their opinions, in many ways, can be said to reflect the attitudes of the industry in general.
Eighty-five percent wholeheartedly believe that the 1984 Olympics is a good merchandising opportunity for the industry in general, with 60% of that group seeing it as very good or excellent. Four of five view the Olympics as a good merchandising opportunity for their own companies as well, with half of that group rating it very good or excellent.
"It's like motherhood retailer with 75 claims. "Nobody can say it's bad. It gives us an opportunity to be involved with something the consumer feels good about. It gives the manufacturer an opportunity to tie in promotional programs with the Olympics, move more product, and at the same time help sponsor the games."
A Texas grocery supplier agrees: "This is an event the American public will want to be involved in. Tying in the food industry to the Olympic games will make the entire public more aware of food products and the importance of food in the making of an athlete. It's simply goodwill and good advertising for the industry."
Goodwill and patriotism seem to be the two major reasons retailers believe the Olympic theme will be successfull.
Explains a New York retailer: "'It's happening in American and Americans are proud and patriotic. I think there will be a lot of support for the companies who sponsor the games. We've received great interest and positive responses from our Special Olympics' involvement and we hope to do the same with the summer Olympics."
A Southern wholesaler adds, "I think our bigger Northern stores will benefit more, just because they're in more populous communities. But down here in rural Alabama, people are very likely to feel patriotic about the olympics and, for the reason alone, support and advertised products."
Manufacturer promotions offer retailers the opportunity to tie in to a national event with minimum cost. And that opportunity means a great deal to some retailers. "We're jumping on the bandwagon with the big companies," says one New York City retailer, "to take advantage of their advertising push. In support, we'll run full-page ads in the papers, tying in the Olympic theme."
Of course, manufacturer materials are especially helpful for small regional chains and independents. "Because we are in independent wholesaler," says one grocery supplier, "we don't have the chain stores' added dollars for advertising. This special opportunity will definitely be of great help to the independent grocers. When manufacturers put more advertising dollars into their products, they become more attractive to us because of the national exposure."
Fifty-six percent of those surveyed said they are very interested in using good Olympic merchandising ideas and materials from manufacturers, and almost one in four is waiting to hear specific suggestions from manufacturers. In fact, nearly nine out of 10 of those on the Council said they could use help in keeping up-to-date on what Olympic merchandising materials are available for supermarkets.
For some retailers there is real confusion as to who the sponsors are and what materials are available (see accompanying stores). While three out of four of those surveyed said they had been contacted by manufacturers about Olympic merchandising, not one was able to name all of the official Olympic sponsors, only 39% knew some of the sponsors and over half admitted they knew only a few. In fact, one out of 10 couldn't name a single Olympic sponsor.
"There seems to be a lot of interest on the part of retailers," says Don Manuche, national sales manager for Maruchan, supplier of soup to the 1984 Games, "but there's also a lot of confusion. In general, it seems very little information about the sponsors is being passed on to the retailers. I recently called on a large chain in the Northwest and the head merchandiser said he'd been trying to get a list of the Olympic sponsors, but so far had been unsuccessful."
"In talking with our buying department," says a representative of a Colorado chain, "they tell me that we haven't been approached by any companies so far in connection with special merchandising for the summer Olympics. So we have no idea what's available in advertising, special sales, or even what major companies are involved.
"The success of the merchandising plans for the Olympics," adds a retailer in Tennessee, "will depend a great deal on how our manufacturers stand behind us. We start out four to five weeks ahead of time with freestanding advertising. We need to know their general cuts and deals at that time. We need to know how fast they can get to us with tie-ins so we can act upon them."
For most members of the Council, Olympic merchandising represents a long-time commitment. Almost half of those surveyed plan to schedule their promotions before as well as during the Olympics. In fact, the average duration for Olympic promotion is expected to be about five months, though many have already begun to publicize and promote the games in their stores.
"Right now," says a chain representative from Michigan, "we are contacting our individual brokers and principals to begin merchandising in March and April."
"The Olympics," says an Oregon supplier, "offers an opportunity to merchandise over a period of time much longer than a regular holiday even like Christmas. The Olympics can sustain a longer merchandising time span. We'll start after the first of the year and go through July." What POPs Up
While 40% say they plan to only use point-of-purchase materials supplied by manufacturers, an equal percentage say they will use their own p-o-p materials as well. In fact, six out of 10 of those surveyed are planning store-level olympic-related promotions. The most likely activities will include: related item displays, special displays of Olympic sponsors' products. Storewide theme sales, departmental promotions (produce, meat, deli), store contests or tie-ins with manufacturer contests, store display contests, product samplings and other in-aisle activities.
"Our plan," says a California wholesaler, "is to use the product promotions but use our own plan of exposure to the public through newspapers, TV and radio."
Of course, chains in the West are particularly enthusiastic about Olympic merchandising since the games will be taking place in their own backyard. "A 15% to 20% increase in population is expected during the games," explains a California wholesaler. "This will include numerous nationalities and many affluent people. Sales of specialty foods, ethnic products, upscale party-good items and entertainment goodies, all of which have a higher percentage of profits, will increase."
Another California wholesaler agrees: "People will be flooding into Los Angeles in cars and campers, and they'll need food and drink and all the items it takes to live. They'll be buying a good deal of it in L.A. and we're only a half mile from the Olympic site."
According to the Council members, certain product categories seem more adaptable than others to Olympic promotion. For example, a small retailer from California Says, "Intensive advertising will focus attention on high profit items such as soft drinks and snacks. More people will be watching television and that usually means more snacking. We expect sales of chips, crackers and nuts to increase."
Other products thought to be particularly responsive to Olympic merchandising include: juices, cereal, vitamins, nutrition-related foods, health and beauty aids and some Olympic-related general merchandise. Collectible items are expected to sell best in the West, however.
East or West, there's no question the 1984 Olympics offers a golden merchandising opportunity that the industry doesn't plant to miss. THE QUEST FOR THE GOLD: WHO'S ON FIRST
There is a great deal of confusion regarding corporate sponsorship of the Olympics. To many, it seems everyone is claiming to be an official Olympic something or other. In reality, there are definite lines distinguishing sponsors from each other and a great deal of effort has been made to limit the overall number of sponsors.
To begin with, there are several ways a company can claim a connection with the U.S. Olympics. Some affiliations are seemingly more prestigious than others. Some are definitely more expensive.
Basically, there are two main camps:
* The Los Angeles Olympic Organizing Committee (LAOOC), headquartered in Los Angeles, which is the coordinator and financial manager of the 1984 Summer Olympics.
* The United States Olympic Committee (USOC), headquartered in Colorado Springs, which is the founder of the United States Olympic Training Center and official fund raiser for the United States Olympic Team.
Affiliation with the LAOOC allows a company to become an official sponsor of the 1984 games with exclusivity in a particular category. In other words, that manufacturer's product is the only product of that type that can say it is the official such product of the 1984 Olympic Games. For example, The Coca-Cola Company has been designated and the official soft drink of the 1984 Olympics and Fuji Film has been designated the official film. "That means Kodak cannot have any affiliation with us," says George Broder, a spokesman for the LAOOC. They can have an affiliation with the USOC, but they have to be very careful in the wording they use."
The LAOOC has limited the number of "official" sponsors to between 30 and 35. "This," claims Broder, "is quite different from previous years. For example, Moscow had more than 100 sponsors; the Lake Placid Winter Games over 380. So, the sponsors of this year's games are part of a small group--an elite group. Some companies choose to sponsor the Olympics to maintain their preeminence in a category. For others, it establishes them as an up-and-coming newcomer."
Besides the official 35 sponsors, however, the LAOOC has also designated official suppliers and official licensees. There has been no limitation on the number of suppliers, but only 50 to 75 official licensees will be accepted. "We have received hundreds of products wanting the licensed logo," explains Broder. "Name a product and someone wants to put an Olympic logo on it. But we have to maintain a balance. We realize there is a high demand for Olympic memorabalia in the U.S. and around the world. People like to have a coffee cup with the Olympic logo or a tie or a key chain. But you don't want to over-commercialize to the point where you ruin your own market. And of course, it's important that the GAmes be presented in a dignified fashion."
The line that separates sponsors from suppliers and licensees is fine, but it does exist. "Sponsors," explains Broder "can designate their products as official products of the 1984 Summer Games. In general, suppliers and licensees don't have that privilege. So, while Sunkist is the official supplier of citrus fruit to the Games, its orange is not the official orange of the 1984 Olympics. It's a fine line but it is there."
While affiliation with the 1984 Olympic Games seems to be the most coveted by manufacturers, it is also the most expensive. The investment varies, but the average minimal committment is $4 million. Not all sponsorships are based on a straight cash committment, however. "For example," says Broder, "IBM is the offical sponsor of personal computers and word processors. The bulk of its contribution comes in the form of actual goods for Olympic staff use. That comes out to a certain monetary value that may not be the same as Coca-Cola which contributed significantly in terms of cash."
Not just anyone can buy into the Olympics, however. "Sponsorship didn't always go to the highest bidder," says Broder. "The committee had certain requirements, one of which was a history or a willingness to become involved with a youth program. That was very important." There were also certain product categories that were not allowed, such as liquor (other than beer), tobacco and feminine hygiene spray, all products that have been associated with other Olympic events.
Besides exclusivity and the chance to be an "official" product of the 1984 Olympics, corporate sponsors as well as supplies and licensees are allowed the use of Sam the Eagle, the mascot of the '84 Games and the shooting stars logo.
How has corporated sponsorship helped the '84 Games? "From A financial point of view," says Broder, "we feel very good about it. We have excellent contracts with all of our sponsors, suppliers and licensees. Overall, they represent about one third of our revenue for the Games. That's significant. Our overall budget is $475 million. Sponsorship will generate about $125 million in revenue. When you throw in royalty fees from licensees and the goods and services that suppliers commit, than it's up to around $150 million."
About 1,000 miles northeast of Los Angeles in Colorado Springs is the headquarters of the United States Olympic Committee and the home of the United States Olympic Training Center. This operation is completely separate from the LAOOC.
Sponsors of the U.S. Olympic Team and the Olympic Training Center maintain their sponsorship for a period of four years. There are limitations as to who can be a sponsor of the U.S. Olympic team, as well. Products such as alcohol (other than beer), tobacco and athletic gear are not accepted.
The USOC also maintains selection priorities. "Some companie with a great deal of money to offer," says Geri Maestas, assistant to the director of corporate participation, "were rejected because they didn't meet our criteria." The USOC bases its selection on how a company plans to market and distribute its products and how the product will affect the youth of America.
Corporate donations represent 50% of the USOC's income. There are 43 sponsors. Negotiations being at $500,000 and financial contracts vary greatly, depending on the products and services offered.
Sponsors receive categorical exclusivity, the right to identify themselves as a sponsor of the United States Olympic Team, and use of the five ring Olympic logo. In the contract, companies can also negotiate such things as corporate tickets to the Games and use of Olympic athletes in commercials and promotions. Miller Brewing Company is the highest corporate sponsor ($3.4 million) and the sole sponsor of the United States Olympic Training Center. Other Options Are Open
Companies can also be on the national governing boards of particular Olympic sports or official sponsors of these sports. For example, Kodak is the official film of the United States Track and Field Team and Chock Full O' Nuts in an official sponsor of the U.S. Olympic Hockey Team. There are 34 Olympic sports teams (16 are headquartered at the training site) and each sport can have more than one sponsor or supplier.
Just to add to the confusion, don't forget the 1984 Winter Olympics being held in Sarajevo, Yugoslovia this month. There are numerous sponsors of that event as well. And Now a Word From the Sponsors
Various Olympic merchandising displays and promotions are available for use by retailers. Here is a sampling of some of the materials being offered by sponsors, suppliers and licensees of the U.S. Olympics.
Anheuser-Busch considers its relationship with the 1984 Olympics and the U.S. Olympic Team as the "crown jewel" of its sports involvement, says Michael J. Roarty, executive vice president. As an official sponsor, the company has designed an extensive line of permanent and temporary point-of-sale items in support of every brand or brand-supported Olympic promotion. Each of the items feature Olympic graphics that incorporate the brand name with the Olympic logo. Budweiser, Budweiser Light and Michelob paper point-of-purchase displays feature tear-off order forms which consumers can use to order individual Olympic lapel pins, bearing the respective brand, U.S.A. and Olympic rings logo. The pins are available in a limited edition precious metal or a collector's set of enamel pins. Another merchandising promotion is centered around the Budweiser Olympic aRt Exhibit. A set of limited edition lithographs and posters have been developed for sale to consumers via point-of-sale materials. The funds generated by the Olympic Art Series are used to support the U.S. Olympic Team.
Fuji Photo Film's association with the Olympic Games, "is fully consistent with the goals and ideals embodied by photography, the universal language," says Bill Lawrence, director of marketing. Fuji has two Olympic consumer promotions planned for 1984. From January to March, Fuji will again offer consumers the opportunity to purchase a Tom Selleck volleyball poster at a significant reduction. There will be an all-new poster added to the series and an array of exciting new point-of-purchase materials to support the promotion. Proceeds of the poster sales go to support the USA Men's Volleyball Team. In March, Fuji will launch its biggest consumer promotion ever. Consumers will be offered free limited-edition Olympic pins with a two-roll purchase of Fuji film and a chance to win $25,000 in Olympic gold coins and hundreds of other valuable prizes.
"What better association could confectionery have," says Phil Joyce, vice president of sales for M&M/Mars, "than with the Olympics--the epitome of fitness, health and nutrition." Through its Olympic sponsorship, M&M/Mars is committed to improving the image of confectionery as a whole, changing the perception of candy as an indulgent food to a permissible snack. All of its Olympic-related activities are designed to support the company's ongoing message that candy is "okay" to eat. The company is using various Olympic-theme materials include shelf talkers and case cards, Olympic coupon pads, consumer premium patches and window banners. The company has also designed special Olympic counter racks for king-size and singles packages of M&M's and Snickers bars, a counter-top merchandiser that efficiently displays two cases of product. A three-tier, 48-product counter rack and a high-quality corrugated single merchandiser. Each is adorned with Olympic logos designating these products as the "official snack food."
Perrier is promoting itself as the "Olympic thirst quencher" in two upcoming point-of-purchase programs. In April, Perrier will offer an insulated cooler bag with an Olympic logo on a neck hanger (a small booklet hanging around the neck of the bottle). This informational booklet emphasizes that Perrier is the perfect thirst quencher to replace needed body fluids after a strenuous workout. A coupon offering for the cooler bag will appear on the back of the booklet. Point-of-purchase poll toppers and shelf talkers bearing related information will be available to retailers. In addition, Perrier plans to offer an Olympic beach or patio umbrella through a tearoff pad promotion that is also designed for point-of-purchase.
Beatrice Foods is planning two major consumer promotions for its "America's Best" Olympic merchandising program. These promotions will feature Peter Eckrich Meats and Meadow Gold ice cream, milk and other dairy products. As part of America's Best Sweepstakes program, entrants can clip the official Olympic logo imprinted on Eckrich packages to win thousands of dollars. Entry cards will be available for retailer point-of-sale displays. Shelf strips promoting the sweepstakes will also be available for placement on price rails. A second consumers with the purchase of certain Eckrich and Meadow Gold products. Eckrich will distribute the souvenir posters through supermarket delis. Consumers will receive a free poster with the purchase of a designated amount of Eckrich deli meats. A counter-top easel-back card will promote the poster offer. Sweepstake entry blanks will also be attached to the easel-back card. Meadow Gold will provide a self-contained floor stand shipper display for placement next to the ice cream or dairy cases. Each shipper will contain 125 rolled posters and a four-color back card. Customers participating in the offer can simply pick up the authorized Meadow Gold product and a free poster and go the checkout with both. A removable bottom portion of the poster will contain copy and yet another sweeptakes entry form.
Foster Farms, official poultry supplier of the 1984 Olympics, is offering an Olympic Fun and Fitness Calendar filled with health tips, recipes, exercise ideas, coupons and refunds worth more than $10. The calendar is available with only one proof of purchase from any Foster Farms product plus 75 cents postage and handling. Colorful posters, mobiles and newly designed channel strips are available for in-store merchandising. Take-one pads are also available offering complete details of the calendar promotion. In addition, the on-pack calendar offer appears on all Foster Firms products.
Maruchan, official supplier of soup to the 1984 Olympic Games and sponsor of the U.S. Olympic Team, has developed several programs. Large four-color posters showing Maruchan products and highlighting the Olympics tie-in are being offered to retailers for point-of-sale. An Olympic pre-pack display shipper in red, white and blue also features an Olympic back-card. The company is promoting a special consumer mail-in offer for an Olympic sport bag or a t-shirt, as well. In addition, "The Soup of the 1984 Olympics" stock card, product flyers and a Maruchan calendar are available, as well as maruchan slicks utilizing the Olympic emblem for newspaper ads. Newspaper coupon ads highlighting the official Olympic Soup endorsement will run in selected markets and radio campaigns will feature a "win an all expense-paid trip to the Olympics including event tickets."
A. H. Robins, a sponsor of the U.S. Olympic Team, is featuring a summer Olympics sweepstakes. Chap Stick and A. H. Robins vitamins are offering a grand prize trip to the 1984 summer Olympics fro a family of four, plus more than 2,000 other valuable prize. The summer sweepstakes offer expires May 1. Tear-off entry forms are available for point-of-sale displays. No purchase is required.
Johnson & Johnson Band-Aids, a sponsor of the U.S. Olympic Team, is featuring a Levi's Olympic emblem t-shirt promotion. The t-shirt, sold for $9.99 retail, is being offered to consumers for $4.95 with mail-in proof-of-purchase from Band-Aids Flexible Fabric and Tricot Mesh. For each t-shirt ordered, Band-Aid brand will donate 50 cents to the U.S. Olympic Team. Pads of mail-in certificates are available to retailers for point-of-purchase displays. The offer expires May 31.
Kellogg's Olympic point-of-purchase display features various flags of the countries participating in the Olympics. The displays also tie-into a "win a trip to the Olympics" promotion being featured on the back panels of some of its cereal products.
Kodak, as official sponsor of the U.S. Track & Field Team, is offering a series of newsletters--called Inside Track--containing detailed information on the Olympics and Olympic-related matters to dealers in photographic products. Inside Track will contain articles and photographs to keep consumers up-to-date on Olympic happenings.
Currently, the Gillette Co. is promoting an official Olympic travel bag offer to consumers. With a $5 donation to the Olympic team and proof-of-purchase, the consumer receives a travel kit filled with products. This point-of-purchase program is connected with Gillette Good News and Atra blades and razors. In the summer, Gillette also plans to offer a Golden Moments of the Olympics poster. The consumer must send proof of purchase and 50 cents to Gillette to receive the poster. Floor stands and risers for both promotions are available for point-of-purchase display in supermarkets.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||grocery trade|
|Date:||Feb 1, 1984|
|Previous Article:||Uniform standards are needed for determining product liability.|
|Next Article:||Car care shifts into high.|