Business Finance
BBA4751 Columbia Southern Ambush Marketing Case Study Paper

BBA4751

Columbia Southern University

Question Description

For this assignment, you will read a case and answer a series of questions concerning an analysis of ethical considerations governing marketing practices, as leaders are responsible for such endeavors. Begin by reading the following case, which can be located within the Business Source Complete database of the CSU Online Library.

Datamonitor. (2010, July). Ambush marketing case study: Successfully leveraging high-profile events to raise brand profile.

Then, draft a two-page paper by addressing each of the following items:

  • In your own words, how would you describe “ambush marketing”? Include two examples with your description.
  • What are the advantages and disadvantages (risks and consequences) of ambush marketing?
  • What was Bavaria Beer hoping to achieve through its ambush marketing tactics?
  • Would you consider Bavaria Beer’s ambush marketing an unethical practice or simply a competitive strategy?
  • Can ambush marketing be both intentional and unintentional? Explain.
  • As a leader of an organization, would you allow the practice of ambush marketing? Explain.

Explain.

Be sure to demonstrate a clear analysis as you address each question. Use APA style to format your assignment.

You are not required to complete additional research for this assignment; however, if you do, use APA Style to cite your sources

Unformatted Attachment Preview

CASE STUDIES Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile Understanding how and why brands look to ambush events Reference Code: CSCM0326 Publication Date: July 2010 DATAMONITOR VIEW CATALYST Dutch alcohol brand Bavaria Beer sparked a major debate in marketing circles as a result of its attempted ambush of official sponsor Budweiser during the 2010 FIFA World Cup in South Africa. While some within the industry have criticized the strategy for its perceived unfairness and insincerity, others are praising its creativity and effectiveness. This case study investigates the concept of ambush marketing by focusing on the recent World Cup example, but also reflects on how select companies that have historically used it effectively or ineffectively. SUMMARY • Bavaria Beer’s ambush of Budweiser during the early stages of the 2010 FIFA World Cup was initially thought to be largely unsuccessful in that it was spotted by event organizers, who removed and punished the participants. However, the subsequent media interest and criticism of FIFA’s handling of the situation resulted in Bavaria Beer receiving a tremendous boost in profile around the world, transforming the move into a big success. • Global-scale sporting events are often the prize target for ambushers. The sheer money that is involved in such events makes them highly lucrative to be affiliated with. Over time, organizers have become savvier to the attempts of ambushers to generate buzz without paying for official sponsorship deals. However, there have still been recent examples of creative ways of circumnavigating restrictions. • Although ambush marketing leads to positive outcomes when successfully executed, the perceived lack of ethics that surround the practice, certainly in some circles, makes it a risky strategy. Ambushes can lead to bad publicity, alienation among powerful bodies, and are sometimes subject to aggressive counter-measures which can potentially damage the brand image severely. The risk/reward conundrum means that companies must consider all the possible outcomes (both positive and negative) before embracing these tactics. Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 1 Ambush Marketing Case Study ANALYSIS What is ambush marketing? When embracing ambush marketing a brand attempts to attach itself to an event without paying official sponsorship rights. Certain requirements must be adhered to (usually the avoidance of using specific terms and slogans in marketing), but if executed correctly the practice is entirely legal. However, ambush marketing poses certain ethical and moral questions which could potentially have a negative effect on a company or brand’s image/reputation. Figure 1 outlines a definition of ambush marketing, as well as a comparison with similar—and sometimes confused— marketing approaches (guerilla and host-parasite marketing). All have their associated advantages and disadvantages, but it is ambush marketing which provides the focus for this particular case study. Figure 1: Definitions of ambush, guerilla and host-parasite marketing Type of marketing Amb ush Gueril la H ost-p arasite Definition A de li berate attempt by an organ iza tio n to a ssocia te itse lf with a n eve nt (often a sp orting event) in order t o gain some of the bene fits asso ciated with bei ng an off icial sponsor wi thou t in curri ng th e costs o f sp onsorship. For example by a dve rt ising during broa dcasts of th e eve nt. The strate gy of targe ting sm all a nd speciali zed cu sto me r groups in su ch a way that bigg er companies wil l no t fi nd it worthwh ile to re taliate . Where one b usine ss uses an other t o gen erate sales throu gh a re ferral/re ferral fee rel ationshi p. Source: Datamonitor analysis, adapted from the Chartered Institute of Marketing DATAMONITOR Although the terms sound like they have negative connotations, they are all legitimate marketing practices which can be extremely effective. It is ambush marketing though that requires the most attention, both from a legal standpoint and to ensure that it works effectively. According to Prof. Simon Chadwick and Andrew Burton (published in the Center for the International Business of Sport, 2009) there are several different types of ambush marketing which fall under two distinct groupings, as summarized by Figure 2 below. The ‘direct ambush’ activities are closer to being (or, in some cases, are actually) illegal. They are generally the more forceful and impactful forms of marketing but carry the most risk as well. This demonstrates how there are a large number of subtleties when it comes to ambush marketing. Although there are more ways of carrying out an indirect ambush, they are generally less effective in terms of being noticed. Distractive ambushing, for example, relies on consumers drawing a parallel with something completely unrelated, which is far from guaranteed. Other types, such as incidental or unintentional ambushes are relatively rare and cannot be relied upon to generate publicity given this fact. Direct ambushes, on the other hand, carry more risk but can also be considerably more rewarding. Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 2 Ambush Marketing Case Study Figure 2: There are several different types of ambush marketing, which can either be classified as direct or indirect DIRECT AMBUSH ACTIVITIES INDIRECT AMBUSHES Predatory Ambushing – intentionally attacking a rival’s official sponsorship in an effort to gain market share and to confuse consumers as to who the official sponsor is Associative Ambushing – the use of imagery or terminology to create an allusion that an organization has links to a sporting event or property Coattail Ambushing – the attempt by a brand to directly associate itself with a property or event by using a legitimate link other than becoming an official sponsor of the property or event. Distractive Ambushing – setting up a promotional presence at or near an event without making specific reference to the event itself Property Infringement – the intentional unauthorized use of protected intellectual property Self-Ambushing – marketing activities by an official sponsor above and beyond what has been agreed on in the sponsorship contract Values Ambushing – the use of an event or property’s central value or theme to imply an association with the property in the mind of the consumer Insurgent Ambushing – the use of surprise street-style promotions at or near an event Parallel Property Ambushing – the creation or sponsorship of an event or property that is somehow related to the ambush target and competes with it for the public’s attention Incidental Ambushing – when consumers think that a brand is a sponsor or is associated with an event or property without any attempt on the brand’s part to establish such a connection Unintentional Ambushing – sometimes media coverage will mention equipment or clothing used by an athlete, or a company that is providing a service in support of an event Saturation Ambushing – saturation ambushers increase their advertising and marketing at the time of an event, but make no reference to the event itself and avoid any associative imagery or suggestion Source: adapted from Chadwick and Burton, MIT Sloan DATAMONITOR Bavaria Beer’s ambush at the 2010 FIFA World Cup sparked a renewed debate about the relative merits and morals of ambush marketing On June 14 2010, Bavaria Beer was accused of initiating an ambush during the FIFA World Cup soccer match between Denmark and the brand’s home country of the Netherlands. Mid-way through the game, 36 female members of the crowd were ejected by FIFA security (FIFA is the governing body of world soccer), with the FIFA citing “a clear ambush marketing activity by a Dutch brewery company”. The crowd members were all models, dressed in identical orange dresses which were part of a gift pack offered by Bavaria Beer. Although the company had made efforts to ensure that the dresses were Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 3 Ambush Marketing Case Study recognized in association with the beer (Sylvia van der Vaart, wife of the prominent Dutch soccer star Rafael, was approached to model the dress to raise brand awareness) the ambush itself was likely to be low-key until the ensuing controversy elevated the stunt to an issue reported worldwide across all media platforms. FIFA was criticized for its handling of the situation, going so far as to arrest two of the participants for their role in orchestrating the ambush. Many felt that the punishment was too severe, but FIFA insisted with some justification that it was going to necessary lengths possible to protect the interests of its official sponsors. Ironically, the heavy-handedness of the actions taken by FIFA has probably guaranteed the brand far more exposure than if they had allowed the ambush to continue unpunished. As far as organizing bodies are concerned, this highlights the importance of judging the appropriateness of a response. Successful ambushes are by their very nature difficult to defend against, so there must be a high degree of consideration regarding how the media and general public will respond to the defense. Figure 3: Bavaria Beer hired models to wear clothing identifiable with the brand at a World Cup soccer game Source: Datamonitor analysis DATAMONITOR This was not the first time Bavaria Beer ambushed the FIFA World Cup. In June 2006, the brand gave out free branded orange lederhosen to around 1,000 Dutch fans to wear at a game between the Netherlands and Ivory Coast. The fans were not allowed into the stadium wearing the lederhosen, and instead were forced to watch in their underwear. The fact that ambushes have occurred at consecutive events heightens anticipation about what the brand might do next time (in 2014, when the World Cup is to be held in Brazil). This kind of elevated interest/anticipation in a brands’ activities give it a stronger platform to generate added exposure (and possibly sales), which only serves to highlight the attraction of embracing ambush marketing. Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 4 Ambush Marketing Case Study Ambushing is an enticing option to companies given its potential to be extremely effective at a far lower cost than paying for official endorsement privileges The primary goal of ambush marketing is to increase brand awareness. Unlike guerilla marketing, where careful placement usually has only a modest effect on brand awareness, the large-scale targets of ambush marketers facilitate opportunities to expose a brand to a wide (global) audience. Major sporting events such as the Olympic Games and FIFA World Cup are billion dollar occasions. According to sponsorship experts IEG, the 2010 FIFA World Cup will generate circa $1.6bn in sponsorship revenue. Major sponsors such as Adidas and Visa have paid around $350m to be official affiliates, while Sony has also signed a deal worth in excess of $300m. Such enormous figures emphasize how potentially lucrative effective marketing can be when associated with such popular attractions. It is therefore inevitable that these types of events are most at risk of ambush when the rewards can be so great. Beer sales peak during a World Cup due to the communal element of viewing games and the fact that soccer mostly appeals to the male demographic (which tends to favor beer as its choice of alcoholic beverage). It is therefore easy to see why Bavaria Beer has attempted to ambush its rivals on this stage. Highlighting this, UK supermarket chain ASDA reported that it expected a 37% increase in beer sales during the month-long tournament. The first match involving England saw 12 million pints of beer sold, according to the British Beer and Pub Association. UK Retailer Marks & Spencer announced that sales of its own-brand beer had doubled during a World Cup promotion. Meanwhile, in the home nation of South Africa, SABMiller’s beer sales exceeded expectations, selling 130,000 hectoliters more than it could expect during a normal JuneJuly sales period. This was 30,000 hectoliters more than anticipated, equating to an additional 44m 340ml beers. Japanese brewer Kirin anticipated a 4% increase in total sales as a result of the competition, while South Korean retailers GS25 and Bokwang Family Mart have both reported a doubling of sales following the participation of their team. Figure 4 below showcases the influence of branding in the alcoholic drinks industry. When asked as part of Datamonitor’s 2009 consumer survey, global respondents ranked ‘brand name’ second, behind only ‘price’ in terms of perceived influence on product choice. In total, two-fifths (40%) of consumers worldwide felt that brand name had either a ‘high’ or ‘very high’ influence on their alcohol consumption choices, while a further 39% stated it had a ‘medium’ amount of influence. Interestingly, in the immediate aftermath of the ambush, the brand’s website Bavaria.com, which was little-visited outside of its core markets, was the fifth most visited beer website according to Experian Hitwise. Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 5 Ambush Marketing Case Study Figure 4: The importance of strong branding is highlighted by the influence that it carries when consumers are purchasing alcoholic beverages 42% 40% High or very high influence 38% 30% 18% 17% gi ng Pa ck a Ha b it y ics /s us Et h C ta in ab ilit ie nc e on ve n ea lth H Pr ic d 11% Br an 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% e % of respondents Please tell us how much influence the following factors have in your alcoholic beverage choice (global response) Source: Datamonitor Consumer Survey, April/May 2009 DATAMONITOR However, consumers are expressing advertising fatigue and ambush marketing can exacerbate this Companies must also bear in mind that consumers are becoming increasingly fatigued with, and skeptical regarding, what is often perceived as too much advertising. Quite simply, many companies relentlessly push brands across multiple channels/touchpoints and this can frustrate consumers, as illustrated by Datamonitor consumer survey fieldwork in recent years. Figure 5 below shows how consumers in a selection of major markets view the sheer quantity of advertising. In each country, more than two-thirds of respondents agreed on some level with the statement “there is too much advertising today”. Generally speaking, consumers are more likely to ‘strongly agree’ than ‘tend to agree’, especially in 2008. In 2010, consumers across all markets have been slightly less likely to agree with the statement, and there has also been an apparent softening of attitudes. While this does suggest that advertisers are becoming more discreet, the results arguably reflect a society that is no longer surprised by the amount of advertising it is exposed to and has grown more accustomed to it. Nevertheless, it is still the majority of individuals in a given country that are expressing negative sentiment towards the amount of advertising they are exposed too. Given that ambush marketing is criticized for being more insincere, this negative sentiment could be exacerbated by a poorly executed ambush. After all, a majority of consumers believe they are already over-exposed to commercial messages even before companies attempt to ambush a form of advertising that is already generally perceived to be credible. Other research highlights there is at least a reasonable degree of trust in brand sponsorships. In April 2009, Nielsen revealed that 64% of global respondents either ’somewhat’ or ‘completely’ trusted this type of advertising/marketing. Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 6 Ambush Marketing Case Study Figure 5: An overwhelming majority of citizens across countries and territories believe that there is too much advertising today, although the intensity of this perception has declined since 2008 QUESTION: To what extent do you agree or disagree with the following statements? There is too much advertising today 100% Strongly agree Tend to agree % of respondents 90% 80% 24% 31% 70% 60% 38% 32% 37% 39% 41% 50% 27% 36% 38% 38% 36% 40% 41% 40% 66% 30% 55% 20% 40% 50% 34% 53% 50% 41% 40% 34% 35% 36% 25% 10% 28% 0% 2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 2008 2010 Australia Brazil China France Germany Source: Datamonitor Consumer Surveys, August 2008 & July 2010 UK US DATAMONITOR Nike has made a habit of successfully ambushing rivals during major sporting events Sports manufacturer Nike has developed a reputation as the most effective creator of ambush marketing, certainly among high-profile brands. Most famously, the company was said to have ambushed Reebok during the 1996 Olympic Games in Atlanta. With sponsorship costs for the games at approximately $50m, Nike chose not to spend on becoming a legitimate endorser and instead concentrated on generating brand exposure in other ways. Billboards around the city of Atlanta were blanketed and a ‘Nike Village’ was constructed outside the athletes’ ‘Olympic Village’. Other examples of Nike seeking to usurp official sponsors include convincing superstar basketball player Michael Jordan to cover his Reebok logo when accepting an Olympic gold medal, and the creation of elaborate television advertisements to accompany major sporting events. Figure 6 shows some examples of the company’s ambush of the 2008 Beijing Olympics. The sports bag contains a logo reminiscent of an ‘8’, while the host city name implies association with the event without specifically mentioning it. The advertising campaign, entitled ‘Courage’, showed a number of athletes with inspirational slogans including “everything you need is already inside”. The company often rolls out extravagant television advertising campaigns to coincide with major sporting events, often leaving consumers feeling as though they are actually connected to the event itself. This type of ambushing is often successful for Nike. According to the Nielsen Company, which measures how much brands are being discussed online, Nike garnered the highest share of online FIFA World Cup “buzz” before the 2010 tournament Ambush Marketing Case Study: successfully leveraging high-profile events to raise brand profile © Datamonitor. This brief is a licensed product and is not to be photocopied CSCM0326/ Published 07/2010 Page 7 Ambush Marketing Case Study (when looking at English language messages). The 30.2% accumulated by the brand more than doubled the share of the second-placed brand and FIFA World Cup official partner, Adidas (14.4%). To contextualize this achievement, the nexthighest non-affiliated competitor was alcoholic drinks brand Carlsberg, with a 3.9% share. H ...
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