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Case study. GE's Olympic Sponsorship
 

Case study. GE's Olympic Sponsorship

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    Case study. GE's Olympic Sponsorship Case study. GE's Olympic Sponsorship Document Transcript

    • Imagination at Work and Play: A Case Study Analysis of General Electric’s Olympic Sponsorship Timothy J. Crader, D.B.A. Visiting Assistant Professor, Department of Management John F. Welch College of Business Sacred Heart University Fairfield, CT 06825 USA Email: cradert@sacredheart.edu James Santomier (corresponding author) Professor, Department of Marketing and Sport Management John F. Welch College of Business Sacred Heart University Fairfield, CT 06825 USA santomierj@sacredheart.edu
    • First AuthorTimothy J. Crader, D.B.A.Visiting Assistant Professor of ManagementJohn F. Welch College of BusinessSacred Heart University Timothy Crader, D.B.A., is an experienced Sales and Marketing Executive having had a wide range of responsibilities over many years. He currently serves as a Business Development Leader for GE Energy and has held Sales leadership roles with firms such as HP, Northeast Utilities and Con Edison Solutions. In addition to his role at GE, Tim serves as a Visiting Assistant Professor of Management for the MBA Program of the John F. Welch College of Business at Sacred Heart University in Fairfield Ct. and teaches courses in Marketing Research, Product Management, Statistics and Marketing Management. Dr. Crader holds an MBA from Sacred Heart University and a BGS from the University of Connecticut. He received his Doctorate in Business Administration from the School of Advanced Studies of the University of Phoenix, AZ., where he conducted research in the area of Transformational Core Selling Teams and their impact on Customer Satisfaction.Second AuthorJames SantomierProfessor, Department of Marketing and Sport ManagementSacred Heart UniversityJohn F. Welch College of BusinessFairfield, CT USAJames Santomier is currently a Professor in the Department of Marketing and Sport Managementin the John F. Welch College of Business at Sacred Heart University, Fairfield, Connecticut, USA.He is also a Visiting Professor at the University of Bayreuth, Germany. He received a B.A. andM.A. in Physical Education from Montclair State University, and a Ph.D. in Physical Educationfrom the University of Utah.Areas of study included sport management and the psychosocial aspects of sport. Dr. Santomierhas published extensively in the areas of sport management, sociology of sport, and thepsychosocial aspects of sport. He has presented at numerous international and nationalconferences.
    • Imagination at Work and Play: A Case Study Analysis of General Electric’s Olympic Sponsorship 1
    • AbstractTitle - Imagination at Work and Play: A Case Study Analysis of General Electric’s Olympic SponsorshipAuthors -Purpose –This paper examines the management of General Electric’s Olympic sponsorship andprovides insights related to the organizational and transformational leadership dynamics involvedin the development, implementation and activation of the sponsorship, as well as the results ofpull-through marketing efforts and the sponsorship’s impact on GE’s global business practices,brand equity, and revenue.Design/methodology/approach – The case study method was used due to the complexity andspecificity of the topic, and the fact that only a discrete element of the sport sponsorship sectorand a limited number of events and their relationships were addressed.Findings - The primary objective of GE’s TOP sponsorship was to enter the Chinese market andbuild brand equity across Asia. Using GE’s proprietary WorkOut and Change Accelerationmodels, transformational leaders facilitated the development and implementation of a newintegrated organizational structure that enabled GE to maximize branding opportunities in Asia,product/service pull-through marketing opportunities, and ROO.Practical Implications - This paper demonstrates how GE effectively modified the structure ofits global sales unit, generated revenue, and increased brand recognition in emerging marketsacross Asia. GE’s management of its TOP sponsorship represents an innovative model for CFOs,CMOs, brand managers, and sport marketers considering a long-term sponsorship investment.Article type - Practitioner Paper 2
    • Keywords - sponsorship, The Olympic Partners (TOP), General Electric/NBC Universal,transformational leadership, branding, WorkOut 3
    • Imagination at Work and Play: A Case Study Analysis of General Electric’s Olympic SponsorshipCase SummaryGeneral Electric (GE) is a diversified U.S.-based global infrastructure, energy, transportation,finance and media company, the parent of NBC Universal/NBC Sports, and a member of TheOlympic Partner (TOP) programme. In 2003, NBC Universal/ NBC Sports paid a 33 percentpremium (over what it paid for the broadcast rights for the 2006 and 2008 Games) for thebroadcast rights for the 2010 and 2012 Olympic Games. In addition, General Electric paidapproximately U.S.$180 million to join The Olympic Partner (TOP) programme beginning withthe 2006 Torino Winter Games and ending with the 2012 London Summer Games. The cost ofthe combined broadcast rights/ sponsorship agreement was estimated to be an unparalleledU.S.$2.2 billion (Mickle, 2008). Developed by the International Olympic Committee (IOC) in 1985, The Olympic Partner(TOP) programme provides sponsors with exclusive global marketing rights to the Winter andSummer Olympic Games within a designated product or service category. General Electric’sTOP sponsorship initiative focuses primarily on branding the company worldwide, andmarketing equipment and services from its infrastructure, energy, transportation and medicalequipment units. In order to maximize the potential of GE to develop and implement itssponsorship effectively and reach its goal of branding General Electric in Asia, Peter Foss wasnamed President of GE Olympic Sponsorship. Selected personally by CEO Jeffery Immelt, Foss,a transformational leader, immediately organized a GE WorkOut (Tichy & Sherman, 1993)with the intent of developing the appropriate organizational structure and internal mechanisms tomost effectively facilitate the development and implementation of the sponsorship. As a result of 4
    • the WorkOut, a new integrated organizational structure was developed that enabled GE tomarket and sell across multiple business units and to generate significant “pull-through” revenue.The success of General Electric’s TOP sponsorship results from several factors, including: 1) theclose relationship between NBC Universal/NBC Sports and the IOC; 2) the transformationalleadership and due diligence of key GE executives in preparing the organization for theimplementation of the sponsorship; 3) the development of highly effective marketing andpromotional initiatives across multiple business units; and 4) the success of its sponsorshipactivation strategy, especially with respective to integrated marketing communicationsthroughout Asia, North America, and Europe.Case ElementsThe Global Sport Sponsorship MarketAccording to the PricewaterhouseCoopers Global Entertainment and Media Outlook: 2005-2009, growth in merchandising and sponsorships, new broadcast rights agreements, the 2006FIFA World Cup, and the 2008 Beijing Olympics, were expected to increase the value of theglobal sport market to U.S.$111 billion by 2009, representing a 6.1 percent compound annualgrowth rate (CAGR) over the four year period. Revenues sources identified in the reportincluded live sport events, broadcast rights fees, licensed merchandise sales, sponsorships(including naming rights), and other packages providing rights to sport properties (Zimmerman,2005). The World Sponsorship Monitor (TWSM) 2008 Annual Review cited U.S.-based IEG’sreference to a June, 2008, PricewaterhouseCoopers (PWC) report of the global entertainment andmedia market from 2008 through 2012, which estimated that worldwide sponsorship spendwould increase from U.S.$42.7 billion in 2007 to approximately U.S.$60 billion in 2012. It was 5
    • suggested that the reason for such a significant increase was the integration of mobile andInternet channels into the activation of many sponsorships. Of the 1,446 sponsorships reportedin 2008, sport sponsorships accounted for 79 percent, which represented a slight decrease fromthe 84 percent recorded in 2006 and 2007. Also of interest in 2008 was the increase in thenumber of sponsorships that were valued over U.S.$10 million. This increase was due, at least inpart, to the Olympics, the U.S.-based National Football League (NFL) and Formula One (TheWorld Sponsorship Monitor, 2008). SponsorMap (2009) reported that despite the economic turmoil and the reduction ofmarketing budgets worldwide, spending on sponsorship for 2009 was positive. However, thereport did indicate that growth had slowed from 15 percent in 2008 to 3.9 percent in 2009.Continued growth in sponsorship was attributed to media and consumer fragmentation andglobalization. The “sponsorship of key events is something that does bring this fragmentedaudience together especially as new media integrates with sponsorship itself. For marketing,major events can cross the media clutter and enable marketers to communicate throughsponsorship” (SponsorMap, 2009, p. 1) According to a report by SportsProMedia (2009), in thefirst quarter of 2009 the value of all deals across the global sport industry was approximatelyU.S.$29 billion. Of that amount, approximately U.S.$2.5 billion was spent on sponsorship, whichincluded five sponsorship agreements worth over U.S.$100 million each. The Redmandarin (2009, p.1) agency places B2B sponsorship in “a sub-category ofsponsorship with one or two objectives, either to generate primary or secondary revenue”. B2Bsponsorship, therefore, is focused on targeting the sponsor’s customers, particularly businessdecision makers. Redmandarin contends that although hospitality is an important part of theB2B sponsorship, it is necessary for the sponsor to integrate its products or services into the 6
    • property itself and demonstrate how the company positively impacts the operations or thesuccess of a sport property. For numerous global brands sport sponsorship has emerged as an important dimension oftheir worldwide marketing campaigns. Thus, the acceleration in the growth of sport sponsorshipis due not only to global business complexity and media channel fragmentation, but to a moresophisticated approach to sponsorship on the part of brands and sport properties. This hasincluded improved measurement of the return on investment (ROI) generated from sportsponsorship across a wider range of objectives, better demographic research and increasedflexibility, joint revenues, and performance related contracts. “The remarkable increase in thenumber of sport properties available and the number of sponsors investing in sport propertiessuggest that sponsorship is able to assist a company to achieve its corporate and marketingobjectives” (Seguin and O’Reilly, 2007, p.2). Show (2009) reported that companies interested in brand building continue to focus ondata such as media exposure and surveys that measure awareness and perception. Companiesinterested in direct financial returns continue to track sales leads and market share. In addition,there is a focus on the measurement of the return on objectives (ROO), which includesqualitative metrics. Reid (2006) indicated that a greater level of understanding of theeffectiveness of sponsorship exists and that it has become the purview of procurement specialistsand chief financial officers. Sponsorship is undertaken for a wide range of objectives and itssuccess is judged against those objectives.The Olympic Partners (TOP)The financial success of the 1984 Olympic Games in Los Angeles demonstrated to the IOC thatcorporate sponsors would be required to provide the profit necessary to sustain the Olympic 7
    • Movement. “The Los Angeles Olympic Games in 1984 changed the way in which Olympicsponsorship was conducted and the way in which Olympic sponsorship programmes haveevolved since then” (Kenyon and Palmer, 2008, p. 29). Due to considerable ambush marketing at the 1984 Games, in 1985 the IOC establishedThe Olympic Programme (TOP), which allowed a limited number of sponsors to receive specialbenefits on a worldwide basis while achieving product category exclusivity and protection. Thatprogramme was re-named The Olympic Partners (TOP) in 1995 because of the partner nature ofthe relationship the IOC had with a limited number of multinational companies. The TOPprogramme created a stable revenue base for the IOC and facilitated relationships with majorcorporate sponsors worldwide (Giannoulakis, Stotlar, & Chatziefstathiou, 2008).General ElectricThe General Electric Company is a diversified multinational technology and servicesconglomerate incorporated in the State of New York with its world headquarters in Fairfield,Connecticut, U.S.A. In 2009, Forbes Magazine ranked GE as the worlds largest company, with323,000 employees worldwide and annual revenues exceeding U.S.$180 billion (Forbes.com,2009). As a Worldwide Partner of the Olympic Games, GE is the exclusive provider of a wide range of innovative products and services that are integral to a successful Games. From providing power, lighting, security and modular space solutions at Olympic venues to supplying ultrasound and MRI equipment to help doctors treat athletes, GE works closely with the Organising Committees, local municipalities and other Olympic Partners to understand their needs and then deliver solutions that only GE can. NBC Universal, a division of GE, is the exclusive US media partner of the Games. The GE and NBC 8
    • Universal partnerships extend through 2012. GE is a diversified group of 11 businesses dedicated to creating products and services that make life better. From aircraft engines and power generation to medical imaging, television programming, and plastics, GE operates in more than 100 countries and employs more than 320,000 people worldwide. (International Olympic Committee, 2010, p. 1) Andy Bateman, CEO of Interbrand Corp, which ranked GE No. 4 on its list of best globalbrands in 2008, stated that: GE has been a leader in the whole arena of sustainability and has a strong environmental policy. It is not just a market cause but [also] a real business issue. More than half of GEs revenue now comes from outside the U.S., a figure that is sure to increase as GE invests more brand-building resources in emerging markets such as China, India and EMEA (Europe, the Middle East and Africa). (BtoB Magazine, 2008, p. 1)Transformational LeadershipAccording to GE CEO Immelt (2010, p.1), “we [GE] have always believed that building strongleaders is a strategic imperative. When times are easy, leadership can be taken for granted. Whenthe world is turbulent, you appreciate great people”. Transformational leadership has been animportant dimension of GE culture since Jack Welch became CEO in 1981. One of the keyfactors in transformational leadership is the leader’s ability to motivate all members to achieve acommon goal consistently. Transformational leaders are able to motivate followers in threeunique ways. First, by increasing social identification within a group since when one feels pridein belonging to a group, one is likely to increase productivity performance outputs in order to notlet the group down. Second, by providing a clear vision the transformational leader instillsconfidence in each member of the group that goals can be achieved. Third, by building 9
    • congruency among the individual group members the transformational leader helps each personbelieve strongly that his or her part is meaningful in achieving team goals (Bono & Judge, 2003). Overall, transformational leaders, regardless of the task, display various traits that areoutward focused and more concerned with the group or team outcome. Dubinsky, Yammarino,Jolson, and Spangler (1995) suggested that supervisors who exhibit transformational leadershipincrease awareness of the importance and value of designated group outcomes and enableemployees to transcend their own self-interests for the sake of the group or organization.Research has shown that transformational leadership represents the most active form ofmanaging others to perform beyond transactional expectations. Rubin, Munz, and Bommer(2005, p. 845) cited the following: Podsakoff and colleagues extensively reviewed seven conceptualizations of transformational leadership behavior and found that it included articulating a vision of the future, fostering group-oriented work, setting high expectations, challenging followers’ thinking, supporting followers’ individual needs and acting as a role model. Bass (1985) identified four key characteristics of a transformational leader. First, atransformational leader must display charismatic leadership traits. These include the ability tohave a vision of important issues and the ability to motivate others to move towards that visionthrough trust and confidence. Second, a transformational leader must manifest inspirationalleadership using simple, clear communication. This trait gives a person the sense that he or shecan achieve more than what was originally thought possible. The inspirational leader motivatesothers by creating a sense that he or she has experienced similar issues in the past and cantherefore provide a clear road map to reach the newly stated goals. In effect, these leaders offernew solutions to old problems. Third, a transformational leader must display individualized 10
    • consideration, where each employee or customer is treated as an individual. This type ofleadership instills a feeling of mentoring and builds trust with the employee or customer. Last,the transformational leader must provide intellectual stimulation. Under this scenario, the leaderencourages employees to use new and innovative ideas to solve existing or old problems. Anyprogram that requires massive change in either organizational dynamics or process will requiretransformational leadership.The GE WorkOut  The GE WorkOut was developed in 1988, after CEO Jack Welch emerged from ameeting with mid-level managers in which many of them expressed concern that their leaders didnot share GE values and process was slowing down most decisions (Tichy and Sherman, 1993).In order to address this issue, Welch took action to develop a program where process could bestreamlined and overall ownership could be narrowed to one or a few individuals. The keyprinciples of the new WorkOutprogram were that it: 1) improved process but did not solvetechnical problems; and 2) considered that knowledge of issues and process was in the heads ofthe participants, therefore bureaucracy must be eliminated, and quick decision making bybusiness leaders is critical. The GE WorkOut has been used successfully by hundreds of organizations worldwide.“The focus is on fast implementation of measureable improvements with clear lines ofaccountability - obtained with speed, simplicity, and self-confidence” (C.A. Schifman &Company, 2009, p. 1). The goal is for the organization to become lean, efficient, and responsiveto changing market conditions. WorkOut involves bringing a cross-functional group of peopletogether to develop actionable recommendations to a business challenge that has been identifiedby leadership as a priority for improvement. 11
    • Recommendations are tied to action plans that, if approved by leadership, will be implemented within 90 days. The GE WorkOut process builds cooperation between functional silos and organizational levels, and increases morale by instilling values of excellence, involvement and growth. (C.A. Schifman & Company, 2009, p. 1) A general template for the WorkOut process can be summarized as: 1) a group ofemployees (and other key stakeholders as necessary) and their leader meet; 2) the leader chargesthe group (s) with solving a problem or set of problems shared by the people but whichultimately are the leader’s responsibility; 3) after the leader leaves, the group(s) spends two orthree days working on developing solutions to the problems under the guidance of skilledfacilitators; 4) at the end of the meeting, the responsible leader rejoins the group(s) and hears itsrecommendations -- many other key leaders in the organization are also invited to be presentduring this final session; 5) the leader has two response choices on each recommendation: “yes”or “no;” and 6) the entire activity has strong management support, and middle level resistance tothe process or outcome is not tolerated. In fact, it is acknowledged within GE that obstructing theefforts of the WorkOut process is a “career-limiting move” (Stewart, 1991, p. 4). The WorkOut process has twelve steps that start with an initial session in which groundrules, introductions and roles are defined. In the next step the team identifies the problem thatneeds to be addressed and brainstorms the problems and current barriers to enact change. Oncethe problem and barriers have been identified, they are categorized and prioritized. At this pointthe focus shifts to brainstorming solutions that are then assessed from a pay-off perspective. Asnoted by Welch (2001, p. 182) “WorkOut meant just what the words implied: takingunnecessary work out of the system.” 12
    • An important aspect of WorkOut is that its foundation is built on teamwork and trust.Most people, when newly placed into a team environment, tend to think that others don’t sharethe same values. In fact, people tend to stereotype and when this is coupled with incongruence,an environment of distrust is generated (Bowditch & Buono, 2005). As stated by Bowditch &Buono (2005, p. 170) “conditional trust is a willingness to interact with others as long as eachbehaves appropriately, uses a similar interpretive scheme to define the situation, and can take therole (empathy) of the other.” In contrast, the optimal state of teamwork is unconditional trust,where teammates have confidence in each other values and a sense of mutual identification. General Electric also engages its Change Acceleration Process (CAP) (Von Der Linn,2009), which is linked directly to the outcome of the WorkOut. The CAP is initiated to attainspecific goals, define roles and responsibilities, develop processes and procedures, and manageinterpersonal relationships that are used to define the most appropriate model of teamwork(Tichy and Cardwell, 2002). The CAP is based on four critical dimensions, referred to as GRPI.The first dimension (G) is focused on goals and the mission required to achieve them. Forexample, it is important that the team accept the goals developed during the WorkOut and thatthey are congruent with the team’s environment. The second dimension (R) is related to roles and responsibilities and how the team’scompetency level supports achievement of the goals. The third dimension is focused on havingthe right process and procedures in place (P) to ensure effective problem solving,communication, decision-making, and resource allocation, which should be in line with thegoals. The last dimension of the GRPI model is interpersonal relationships (I), where trust,openness and acceptance are key attributes that must be met for the project to be successful. TheGRPI model is the engine that allows GE teams to move from conditional trust to unconditional 13
    • trust in a timely fashion (Tichy and Cardwell, 2002). In summary, the GE WorkOut providesthe framework of a new initiative while the CAP actually serves to develop the tactical plan forexecution.Case Diagnosis NBC Universal/ NBC Sports, the media business unit of General Electric, has providedbroadcast services for successive Olympic Games since 2000. In May, 2003, when NBC Sportswas bidding for the rights to the 2010 Winter Games in Vancouver and the 2012 Summer Gamesin London, General Electric’s top management made a strategic decision to seek “preferredvendor status” with the International Olympic Committee (IOC). NBC’s winning bid representeda 33 percent premium compared to what NBC Sports paid for the 2006 and 2008 Games. Inaddition, General Electric paid approximately U.S.$180 million to join The Olympic Partners(TOP) sponsorship program. The combined cost of the Olympic broadcast rights and the TOPsponsorship agreement totaled an unparalleled U.S.$2.2 billion (Mickle, 2008). According to Peter Foss, GE’s President of Olympic Sponsorship, the TOP Sponsorshipwas “really for identification. GE, from a standpoint of brand awareness and company awarenesshad an opportunity to highlight our technologies” (Personal communication, March 6, 2009).Although GE’s sponsorship of the Olympic Games extends from 2006 through 2012, and coversvarious countries, GE chose to focus on China because it was determined that the spend forinfrastructure projects and upgrades for the 2008 Beijing Olympics would be in the U.S.$250billion range (Weiner, 2008). Foss confirmed that the sponsorship “was a China play. It wasalso a natural extension of the relationship that NBC has had with the IOC. Clearly, it fit into astrategy we have for growth, big growth, here in Asia” (Weiner, 2008, p.1). Foss (personalcommunication, March 6, 2009) also confirmed the importance of NBC Universal, stating that 14
    • “when you’re trying to develop business in China, there’s substantial value to having thefootprint and branding that NBC Universal has here.” And he also confirmed that GE’s primaryobjective of the TOP sponsorship was to build brand equity across Asia and to enter the Chinesemarket. Beth Comstock, GE’s current Chief Marketing Officer (CMO), indicated that GeneralElectric’s management made the decision to seek preferred vendor status based on: 1) theirvision, rather than on specific market research, and 2) the objective to use the TOP sponsorshipas a vehicle to develop its international business specifically in Asia and Europe (personalcommunication, November 17, 2009). Asked whether there was significant marketing research tosupport the sponsorship, Comstock stated that “no, there really wasn’t. One [factor] was thatNBC already had a great partnership with the IOC, so we had to count on the trust andrelationship that Dick [Ebersol] … had. So, … it made sense for us as a company to take a biggerrole. We didn’t really know what to expect, honestly, until the deal was done and we started tosee what the opportunities were.” Relative to GE’s marketing and selling objectives, Comstock(Personal communication, November 17, 2009) added: The other thing that I have to underscore is at the time we took the Olympics [sponsorship] we really were trying to push from a commercial – a sales and marketing perspective – cross-selling. Selling is the enterprise of GE. And it’s very hard to do. The Olympics allowed us to focus on this …in a very powerful way, that made it real. So the teams that came together for the Olympics- they’ve now gone on and they’re doing other things. So, [now] we [GE] have FIFA soccer stadiums. We have stadiums – projects with the NFL. We have construction projects looking at casinos in Macau- so it (the Olympic TOP Sponsorship) had a multiplier effect that I’d love to tell you was all part of our plan. 15
    • I think the other thing about Beijing specifically is, of course, the same government officials who are making the Olympic decisions …after the Olympics are over, all those relationships are still there. Former GE CMO Dan Henson, who was named B2B Magazine’s Marketer of the Year in2007 (Maddox, 2007), indicated that GE sold over 335 products and infrastructure services aspart of the Beijing initiative, which included anything from rainwater recycling to powerturbines. Henson stated that GE has “always been good at selling in the context of the P&Lstructure, but the Olympics forced us to be adept at responding to opportunities that span three,or four or five business units. Through Beijing, we have learned how to work across our businessunits and present one GE face to the customer” (Maddox, 2007, p. 2). Henson was credited with being instrumental in the development of the GE’s“Ecomagination” initiative, which represented a complete transformation in terms of the mannerin which GE is developing products, selling to customers, and entering emerging markets.According to Maddox (2007, p.1), GE will “double its investment in R&D for environmentallysound products – to U.S.$1.5 billion by 2010. The company also said that it would doublerevenue from products and services that provide measureable environmental performanceadvantages to customers, reaching U.S.$20 billion by 2010.” In fact, even before the Beijing Olympic Games began, GE already had credited its TOPsponsorship with generating over U.S.$700 million in China-related sales. The games allow GE to tout its eco-friendly products, like water filtration systems at the National Stadium and solar-powered lighting at Fengtai Softball Field. GE views the Olympics as practice for other “mega-events” –such as the Asian Games, in Guangzhou and the Shanghai World Expo, both in 2010. (Coster, 2008, p. 2) 16
    • Coster (2008) reported that NBC’s influence in Olympic host cities provided for larger, morelucrative opportunities for GE, particularly in global markets and particularly for GE’s U.S.$58billion infrastructure division, which will continue building power plants and water treatmentfacilities in China and throughout Asia well after the 2008 Beijing Games. In order to maximize the opportunities provided by The Olympic Partner programme, GEwas required to transform its marketing and sales units into a new integrated organizationalstructure that allowed the company to maximize its exposure and to insure that product/servicepull-through marketing opportunities were realized. In order to meet the transformational criteriarequired, GE opted to use the GE WorkOut. When Peter Foss was charged by GE CEO Jeffery Immelt to manage GE’s Olympicsponsorship efforts in 2003, his response to Immelt was that he wanted to create an Olympic-centric organization. After Immelt’s agreement, Foss’s first step was to conduct a WorkOutsession at GE’s Crotonville, N.Y., campus with all key stakeholders (Foss, personalcommunication, March 6, 2009). His vision was a new, very flat, and non-bureaucraticorganization. In fact, he insisted on having a single point of contact from each of GE’s businessunits. That individual would be responsible for driving revenue for his or her respective business,but would also have a matrixed relationship with other profit/loss and cost centers internal to GE. One of the major outputs of the sponsorship-focused WorkOutsession was that fourteams were developed, each with its own focus on revenue generation, public relations,marketing, or hospitality. These teams reported directly to Foss and were matrixed to thebusiness unit leaders. Another critical output of the WorkOut session was the measurement ofprogress towards preset goals for each team and business unit. The team opted to create simple 17
    • visual dashboards that were based on real time data and would indicate red and green markers,where red indicated that a gap existed in reaching goals and green indicated that no gap existed. Data allowed the leadership teams to make quick, fact based decisions and, according toFoss, the data showed where GE had weaknesses or gaps in product or service offerings andwhere they were required to partner with other firms to meet the needs of the customer (Personalcommunication, March 6, 2009). Additionally, GE created “heat maps” that provided flash dataon which specific GE products and services were being utilized at each venue (Katsuleres,personal communication, November 19, 2009). The impact of the Crotonville WorkOut on GE’s Olympic marketing endeavors wasprofound. The most compelling data point was that the growth in non-advertising revenueincreased from U.S.$80 million generated during the 2006 Torino Winter Games to U.S.$700million generated prior to and during the 2008 Beijing Summer Games. Other key metrics ofsuccess included the fact that GE had over 300 Olympic related projects underway in China by2005. This included the construction of the national stadium and major power projects thatinvolved the installation of over 700 gas, hydro, and wind generator systems. According to someestimates China could be a U.S.$1 trillion green technology market for environmentallysustainable "green technologies" going forward. GE involvement emanates from 300 potentialgreen technology options for China, spanning energy, water, buildings, transportation andindustry. Due to the migration of approximately 18 million people from rural areas to urban areaseach year, it is estimated that by 2050 China will have more than 200 cities with populations ofmore than one million people (Wanxian, 2008). Additionally in Beijing, GE sold MRI and ultrasound equipment through its healthcareunit and aided in the design and construction of oil and gas pipelines within China. Most 18
    • importantly, GE created a multi-billion dollar “pipeline” of future opportunities such as theAsian Games in Guangzhou and plans for China to build over forty airports by 2010 (Coster,2008). Thus, GE was able to create a “One GE” approach, replicable across venues anywhere inthe world, to solving large-scale infrastructure problems, such as building the infrastructurenecessary to support entire cities or large complex facilities. According to Chris Katsuleres (personal communication, November 19, 2009), Directorof Olympic Marketing and International Advertising, when GE began its sponsorship activationin Torino, the GE leadership team decided that it was important to educate and engage its330,000 person workforce to ensure that its marketing approach was understood. This wasconsidered to be a critical element of the internal activation phase of the TOP sponsorship. First,GE created an Olympic portal on the company’s intranet to keep all employees informed aboutGE’s Olympic related activities. For example, GE created a selection of global sales programscalled the “Decathlon Challenge,” which was an employee incentive program that enrolledapproximately 40,000 GE salespeople worldwide. Using a simple digital framework, sales teamswere able to develop customized Olympic Games-themed sales incentive programs foremployees and distributors. After a pilot program was initiated for the 2006 Torino WinterGames, 150 Olympic Games-themed sales incentive programs across GE businesses worldwidewere established for the 2008 Beijing Summer Games. These programs resulted in more thanU.S.$190 million in revenue growth in 2007 and 2008 (Katsuleres, personal communication,November 19, 2009). Additionally, GE researched its employee database and discovered that 17 currentemployees had participated in past Olympic games. In fact, of those 17 past Olympians, threewere awarded medals (one gold, one silver and one bronze medal). Once this information was 19
    • secured and validated, various stories about GE’s past Olympians were created and posted on theGE intranet portal in order to effectively communicate these exciting stories to the entire GEcommunity. Another way in which GE engaged its global workforce was at the 2006 Torino WinterGames; employees sent welcome messages to the Olympic community. These were displayed atthe lighted monument that GE constructed in the likeness of a famous local mountain called “IlDente Del Gigante.” It was estimated that over tens of thousands of messages were posted(Katsuleres, personal communication, November 19, 2009). The GE Imagination Center, located on the Olympic Green in Beijing, was the primarylocation for most of GE’s hospitality related events in 2008. The two-story, 16,500 sq. ft./1500sq. meter pavilion showcased the multitude of innovative technologies that GE used to buildmuch of the Olympic infrastructure. The Imagination Center hosted more than 6,000 visitors perday and featured self-guided interactive tours that profiled GE technologies that were related tothe five core Chinese elements of wood, fire, earth, metal, and water (GE.com, 2008). The GEImagination Center connected GE’s energy, water, health care, transportation and lightingbusinesses with Chinese culture in an educational and entertaining way. GE made significantcontributions to more than 400 infrastructure projects in and around Beijing, including all 37official Olympic Games venues and 168 commercial buildings. GE launched an extensive advertising campaign in China prior to and during the 2008Beijing Olympics. The objective of the advertising, according to the executive creative directorof advertising agency BBDO New York, was to humanize GE and at the same time demonstrateto worldwide investors that GE was a major player. BBDO was instrumental in incorporating itssister agencies in Shanghai and Europe to help integrate foreign sensibilities into GE’s ads 20
    • (Deutsch, 2008). According to James Gregory, chief executive of CoreBrand, a brand strategycompany, GE didn’t have universal brand awareness outside of the U.S., and the Olympicsprovided an international forum to increase it (Deutsch, 2008). As the company did in Torino and Beijing, GE developed several marketing initiativesfor the 2010 Vancouver Winter Games and the 2012 Summer Games. According to GE’s GlobalExecutive Director for Advertising and Branding, Judy Hu (personal communication, November17, 2009), GE constructed an outdoor ice rink at the 2006 Winter Games in Torino that was anunmitigated success- it became the focus of much of the socializing that occurred during theevent. Building on that success, in 2007 GE entered into a U.S.$1.6 million sponsorshipagreement with the Province of British Columbia to assist with the refurbishment and reopeningof an ice rink at Robson Square, which was renamed the GE Ice Plaza (Ministry of EconomicDevelopment, 2007). The Minister of Economic Development and Minister for the Asia PacificInitiative and the Olympics, Colin Hansen, stated that “the presence of GE next to the CommerceCentre will give businesses in British Columbia an unprecedented opportunity to access a worldleading corporation that operates in many different business lines” (Ministry of EconomicDevelopment, 2007, p. 1). Also in Vancouver, GE Healthcare provided a U.S.$4.5 millionmobile medical unit, which was funded through GE’s sponsorship value-in-kind agreement withthe Vancouver Organizing Committee (VANOC). At the conclusion of the 2010 Winter Games,the Province of British Columbia purchased the unit from VANOC (Vancouver OrganizingCommittee, 2009). The GE Healthcare unit will also have a significant presence at the 2012 London SummerGames, with much of the value-in-kind-medical equipment remaining in the hospitals of EastLondon after the Games are completed. Interestingly, in May, 2009, GE announced that it would 21
    • spend approximately U.S.$3 billion to create at least 100 health-care innovations that wouldlower costs, increase access and improve the quality of medical care worldwide (Immelt,Govindarajan, & Trimble, 2009). Also, for the 2012 London Games: GE launched a ground-breaking moving image campaign on the side of London taxi cabs featuring a technique known as ‘motion lenticular technology’, never before used on the exterior of a taxi cab. The campaign …. features 300 London cabs displaying the new Olympic Games designs as side panels. Two creative executions have been developed – one that depicts an Olympic hurdler, the other a cyclist. As a result of the printing technology used, as the cab moves along the streets, the images appear to be animated. (General Electric, 2008, p.1) Another initiative for 2012 featured an Olympic-themed business event aimed ateducating audiences about complex infrastructure issues and solutions for host cities. The eventfocused on topics related to smart and sustainable building for the future, and highlightedtechnologies that GE businesses expect to implement for London 2012 and other UKinfrastructure projects (General Electric, 2008).Key “Lessons Learned” • The TOP sponsorship represented a brand-building tool for GE, however, the early decision in 2003 to sponsor the 2008 Beijing Olympics allowed for activation of the sponsorship to begin as early as 2005. This allowed GE to avoid marketing clutter since local sponsors were not ready to activate in 2005. Since GE was ahead of the clutter curve, as sponsorship activity increased among other sponsors, GE modified some of its activation initiatives but also held steady on others. Early activation in China was 22
    • communicated totally in the Chinese language and only in the last few months prior to the start of the Olympics were activation initiatives conducted in both English and Chinese. The GE Imagination Center allowed GE to communicate directly with Chinese consumers and was the only element of the TOP sponsorship with a B2C focus.• Everything GE did to activate the sponsorship on the ground in Beijing was focused on making significant in-kind, real, tangible contributions. Stories about GE’s contributions to infrastructure, energy, health care, etc., were communicated to Chinese businesses and consumers alike.• GE conducted annual Brand Tracker studies in China from 2005-2010, which confirmed the overall impact of association with the Olympics- including brand awareness. In response to the question “are you aware of GE sponsorship of the Olympics?” (aware vs. unaware), host country data were 1/3 higher in awareness in 2010 than in 2005 and indicated overall favorability of GE. Post Vancouver Brand Tracker measurement was comparable to Beijing.• It was comforting and reinforcing for GE to know that their sponsorship investment was paying off in enhanced brand awareness, which was one of the most important objectives of the sponsorship. There also was a strong relationship perceived by Chinese consumers that GE was involved in “green energy” with a focus on sustainable technology, medical devices, aviation, and water purification.• GE focused its sponsorship messages around real contributions, not just the fact the GE was an Olympic sponsor. The GE story was told at the tangible level. For China it was infrastructure, wind turbines, pure water, etc. “What we are doing on the ground is key. Sponsorship messages have to be rooted in what we contribute. In Vancouver the most 23
    • tangible contribution was providing health care for athletes, which included the mobile medical unit, etc., and for London it is infrastructure and health care”. (Katsuleres, personal communication, November 19, 2009). • The real legacy for GE was in the relationships coming out of the Beijing Olympic Games with key government officials – the sponsorship was the “door opener.” In all markets, because of the nature of GE’s business, it has a long-term play. Although the primary relationship is with the IOC, what can’t be underestimated is the importance of developing a positive working relationship with the local organizing committee (LOC). It is of major importance to understand how the LOC is structured and how it functions. • GE realized early on that it couldn’t possibly manage the Beijing Olympic sponsorship from the U.S. There was significant commercial activity on a daily basis in Beijing and it was necessary to have a team there to look at and report the “big” opportunities. Customers want to deal with “one face” – a single point of contact and the GE approach was: How can we help you find a solution?ConclusionIt is clear that to date, the General Electric Company’s B2B-focused TOP sponsorship has been asuccess from branding, return on investment (ROI), and return on objectives (ROO)perspectives. It is also clear that without the transformational leadership and the keen insight ofPeter Foss and other key GE directors, the degree of success would not be nearly as significant.GE opportunistically leveraged the long-term relationship between NBC Universal/ NBC Sportsand the International Olympic Committee to position itself for the sponsorship and for enteringthe diverse and rapidly developing markets of Asia. Focused on infrastructure, water treatment, 24
    • energy and health care, GE developed, implemented, and activated its TOP sponsorship to brandthe company, especially in Asia, and generate revenue in Asia, Europe and North America. Perhaps one of the most interesting aspects of GE’s sponsorship initiative was theinternal transformation of the company through its use of the GE WorkOutand CAP. This wasa critical requirement that was needed in order for GE to reach its key goal of developing theability to provide an "end to end" solution with regard to major infrastructure, energy, and watertreatment - regardless of the venue. GEs leadership team was convinced that this would be a keydifferentiator going forward and was able to demonstrate that the new streamlined model formarketing and sales worked in Torino, Beijing, Vancouver, and London. The GE sponsorship demonstrated that it is essential for a corporation’s sponsorshipgoals to fit the broader objectives of its overall marketing communication strategy. The GEsponsorship was synergistic with the rest of its promotional mix, especially with the“Ecomagination” initiative, and provided an opportunity to complement all of its marketing andbrand building efforts and leverage its sales objectives by creating an integrated marketingprogram. The GE TOP sponsorship provides a successful model for sport marketers, brandmanagers, CMOs and CFOs. 25
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