Friday, May 30, 2003

Sports Marketing in India: The Cricket Conundrum

The Business of Sports:
Sports… one of the two fastest growing consumer entertainment segments in the world, along with video games. Bigger than music. Bigger than movies. Bigger than books. The real “universal” language.

Football, Tennis, Basketball, Golf, Racing… marketing platforms with dedicated audiences, with followers who have an emotional response, where loyalties go beyond interest, where people put their wallets where their mouths are.

Players, events, broadcasts, clothing, merchandising, reporting, grassroots development, fan management, talent development, advertising… every single aspect of sport has been analysed, professionalized and monetised.

All of which makes sports a serious business.

The Indian Scenario:
India is been very different from any other country in terms of sports marketing. Indian sports marketing is essentially just cricket marketing, with cricket cannibalising all other sports, leaving a few sports like Golf, Tennis, Racing and Football to fight over the scraps. This is very different from other countries, where you never see one sport monopolising funds to such extent.

Every country has between one and four dominant sports, but no major country has a scenario where one sport captures over 80% of all brand spending on sports related advertising and sponsorships.

While Golf seems to have carved a small niche for itself, most Indian sports have failed to attract much sponsorship.
This essentially leads to a situation of dual cannibalisation, where cricket cannibalises other sports by draining them of funds, while the monster cricket brands like Pepsi, LG, Samsung, Hero Honda and Sahara make it increasingly difficult for smaller brands to keep up, to be heard, without spending similar amounts of money.

The Cricket Conundrum:
Movies and cricket are India’s 2 great national passions, the lowest common denominators. Nothing else can bring in the same audiences, with cricket surpassing even movies in its cross-regional and cross-linguistic appeal.

As a result, brands in India are increasingly being put in a situation where they can no longer afford to spend the amounts needed to be heard, to stand out in the middle of the cricket clutter. However, they are left with little choice but to continue spending on cricket despite the lack of returns simply because they see no other platform that can deliver the audiences that cricket does.

Proposals to sponsor other sports are met with comparative TRP ratings, and statements about how other sports don’t have much of a following.

Of course, no sport will have much of a following in the absence of grassroots initiatives, the creation of home-grown heroes, and the opportunity to experience other sports first-hand… all of which only happen if funds are put into a sport and a holistic marketing and development approach applied to it.

This is clearly the responsibility of sports administrators, and not companies, and it is understandable when brand managers insist that their duty is to create ROI or their shareholders, not to promote sports. And if there is an audience for a sport other than cricket, then the brand will certainly engage in the sport, but until then they will continue to focus on cricket as their primary sporting platform, simply because of the ROI’s provided by cricket.

The ROI Myth:
There is no absolute consensus on how this ROI is defined. Clearly, association with cricket increases brand recognition. And despite the inability of many Indian marketers to differentiate between Brand Recognition and Brand Appreciation (with Reliance India Mobile “Sehwag ki Maa” Ad being just one example), let us, for the moment also accept that an association with cricket also increases Brand Acceptance and Brand Appreciation.

The question that needs to be asked is whether cricket is necessarily the best way to achieve this. Whether cricket delivers the greatest Returns in terms of Brand Appreciation for every rupee Invested. A cursory glance at last year’s A&M/Mode Annual Survey of the Top 10 brands in India reveals that only one of the Top 10, Britannia, has a significant and sustained involvement with cricket.

Let us make a marketing leap of faith and assume that in the new paradigm, the objective of marketing is not Brand Building but sales impact. Let us assume that the association with cricket has contributed to the sales figures of everyone from a Pepsi to a Samsung. Again the key here is not the absolute impact on units sold, but the Return on Investment. There are simply no quantitative or qualitative tools that can determine whether Rs.5 crores of cricket related spending per year leads to more sales than Rs.5 crores of sales promotion activity at the retail level.

So, what we have is a situation where:
1) If the objective of marketing is sales, it is debatable whether cricket sponsorships have a greater impact on sales than other lower cost methods
2) If the objective is Brand Appreciation, are very few brands that are able to effectively translate awareness into appreciation, and except in a few isolated instances like MAK Lubricants, those that do, do so at a price point that is often unsustainable in the long term.

Marketing by Formula:
Truth is, marketing in India is increasingly becoming a formulaic discipline. Crunch the numbers, cover your bases, do what everyone else is doing. Leading to a situation where the returns on the marketing rupee are not questioned enough, or if they are, are questioned along the wrong lines.
“X has Yuvraj, so we must have Sehwag”, and if you manage to sign Sehwag, and people see the Sehwag ad, that is all that matters. So run the ad 20 times a day, especially when Sehwag gets out, or if India is not playing, during the broadcast of the latest thriller between Bangladesh and South Africa. That is what the average marketer in India understands of marketing ROI.

Don’t worry about the qualitative aspects, ranging from what feeling the ad creates in the audience to whether you have truly been able to leverage the player or the sport in the most effective way.

As a classic example, the recent World Cup saw brands falling over each other to clamber on to the cricket bandwagon. Yet, the highest ROI on marketing investment was probably the celebrity-free MAK Lubricants… low cost, but completely memorable. In terms of ground-level promotions, the Britannia Khao World Cup Jao,, a sustained property from 1998-99 and again in 2002 – 03, is an example of a low-cost, highly effective marketing campaign. Which translated in the high recall for both brands post-World Cup 2003.

The point here is not that cricket sponsorships and cricket endorsements don’t work. Of course they do. But the key to making them work is a clearer understanding of what sports marketing really is about. Cricket sponsorship that is driven by the fear of being left behind, will result in a worse evil, spending shareholder money in activities that create no differentiation, that are lost in the clutter.

MAK Lubricants works because there is a clear understanding of how to leverage sports as a marketing platform, how to capture the essence of a sport and use it to strengthen your brand, regardless of the linkage between the brand and the sport.

Reliance India Mobile does not work because it is a crude attempt to hitch on to the bandwagon, without understanding how the sport can bring value to the brand.
Because sports’ marketing is not about hitching on to the most popular sport in the country, it is about leveraging a sport in the most effective way to create value for your brand. And despite the huge amounts of money being spent on cricket, few brands in India have an understanding of what sports marketing is really about.

Sports Marketing… the evolution:
There is a reason why sport is such an effective platform for marketers globally. It creates an emotional impact, has a loyalty quotient, is a part of the tapestry of people’s lives, in a way that few other things are.

But sports marketing can never be about one sport. This is why we don’t have half the world’s sports marketing budgets allocated to football. Because as sports marketing evolves in any market, the awareness creeps in that sports’ marketing is not about putting all your eggs in one basket. Because as every brand tries putting its eggs in that basket, then regardless of how big the basket is, one day the eggs will spill over and break.

Sports’ marketing follows a very well defined evolutionary pattern, especially in emerging markets.

1) 3-5 sports in a country that have high fan interest, with one of the sports being a national passion

2) Increased professionalism in the leading sport and increased corporate interest in the sport

3) An explosive growth in sponsorship for the leading sport and cash crunch in other sports

4) Niche-based and philanthropic support for the other sports functioning almost as a life-support system while the lead sport reaches saturation point.

5) Rationalisation in sponsorship for the lead sport as sponsors start taking low cost-leadership positions in other sports, seeking to achieve differentiation, to be a leader in 2 or 3 niches rather than a minor voice in the lead sport

6) The other sports begin growing until they reach a stage where they are well supported by companies, have loyal, dedicated followings and are a cost-effective platform for brands. Meanwhile the lead sport continues to draw the highest audiences and funding, but at a more sustainable, less cluttered scenario.

A good example of stage 6 is England where football is the dominant sport, but where there is strong corporate funding for sports like rugby and racing. An even better example is Australia where Aussie Rules is the dominant sport but Cricket, Rugby, Tennis and a host of other smaller sports, all receive substantial corporate support and have strong fan interest.

India and Sports Marketing… a summary:
India today is somewhere between stage 3 and 4 in the evolutionary model. However, marketing hubris seems to be stopping brand managers from thinking, from being innovative, from moving to the next level.

It’s time for marketers to start thinking about and questioning their involvement with cricket. Marketers must realise that while “me-too” marketing is the easily justifiable strategy in the short term, it can be hugely damaging in the long term. A minor voice on a major bandwagon can never be a great brand. Great brands are innovative, intelligent and have the ability to identify niches where they can establish a leadership position… a position that is gradually extended to more and more niches.

The opportunity to use sports as a platform for marketing leadership is out there… it remains to be seen whether Indian marketers have the ability to play ball.

The Blah

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