Winning ways

LONDON: The last weekend of October was bad for Chelsea FC after the Blues lost for the first time in three years to Liverpool. If sport is a proxy for business, then the game being played in England's soccer clubs should worry Roman Abramovich, the Russian oil and steel magnate who controls Chelsea.

However, the English soccer club is also a ready source of money for Samsung which has been the official sponsor of the Chelsea Club since 2005.

It appears that no matter who wins a Chelsea match, Samsung is ultimately the biggest winner because the South Korean conglomerate's (electronics, heavy industry such as ship building, and engineering and construction) brand is shown live and via TV across Europe (as well as via satellite across the globe) during the two hour games, exposure equal to billions of US dollars in advertising. Chelsea has an estimated 90 million-plus fans around the world.

Sports have given Samsung a lot of strength as a brand and kicked the electronics giant into a heavy sports marketing strategy. The group has been a sponsor for six Olympic Games since 1997, according to Jose Suh, a communications manager of Samsung Group. In search of young customers, Samsung embraced sports marketing to change consumers' perception about the brand and has since been winning dynamic marketing support from consumers and sports sponsors alike.

A sponsorship agreement with the Beijing Olympic Games saw Samsung's market share in China increase to 21 percent from last year's 14.7 percent, says Suh.

In Europe, only 35.3 percent of customers knew Samsung brands in 2005, but it was 48.2 percent in 2007, and sales in Europe went to $23.5 billion last year, up 38.2 percent from 2005, according to a recent GFK survey.

Sponsoring global sports events have become a popular marketing strategy for international companies to strengthen their reputation in the world market. However, only few Chinese companies have been promoting themselves through sports marketing.

During the Beijing Olympic Games, Lenovo computer group was the only Chinese global sponsor.

The high definition TV crystal design full-HD TV and the iDTV produced by Samsung gained the number one position in Hong Kong following its Olympic sponsorship. Sales of Samsung HDTV jumped from 30 percent to 40 percent from July to August this year compared to the same period last year.

Samsung marketing officials attributed much of this growth to its Olympic sponsorship and other investments in the sports marketing field.

The Olympics set the stage for Samsung's business growth. Hoon Kang, a senior manager of sport marketing of Samsung, says that despite soaring commodity and gas prices and a shaken global financial sector, the company does not see a post-Olympics slowdown in the retail and electronic sectors.

"Samsung maintains a consistent strategic focus and continues to develop a stronger persuasion tactic to approach perspective customers. We need a strong business strategy to fit into the local market culture and influence consumers' purchasing decisions," he says.

He explains that local consumers are more concerned about brand names.

"They tend to look into reliable and trusted brands, whereas Westerners are more concerned with the prices and like to compare product features."

Samsung's "secret weapon," as many may have noticed, is the use of celebrity endorsements, such as the popular South Korean singer Rain, Chelsea superstar and German national team captain Michael Ballack and Chelsea's Didier Drogba, that form the backbone of many of its product launches. The concept is to foster public trust and build credibility by attaching artists' names to Samsung and using their reputation to change the language of the brand.

"Its philosophy has reached beyond innovation and premium image," says another Samsung official.

Because the Olympics drove Samsung's products sales up, Kang says the sports angle has increased its marketing strength with its Chelsea sponsorship. Other product campaigns featuring joint promotion with Hong Kong television channel TVB with HDTV and Pixel Magic will roll out around Christmas time.

(China Daily 11/10/2008 page7)