Forget about drinking Pepsi in the grandstands when you take in the Olympic Games, at least up to 2020. To quote the old advertising slogan, "Coke is it."

Security guards will be asking sports fan if they are carrying "knives, weapons or cans of Pepsi." Those who refuse to leave the banned refreshment at the gates will be shut out.

Coca-Cola has won another round in the fight for the global soft drink market by extending its Olympic TOP (The Olympic Partner Programme) sponsorship by 12 years.

The Winter and Summer Games, to be held in Vancouver in 2010 and London in 2012, will all be a publicity goldmine for the Atlanta-based beverage giant.

"There are very few things in the world that are as universally recognized and loved as the Olympic Games. So for a brand like Coca-Cola and other beverages around the world, to be able to make that connection with people in every country is just a huge opportunity for us," says Peter R. Franklin, worldwide director of sports operations for Coca-Cola.

The world's largest beverage company last week signed an agreement with the International Olympic Committee in Beijing and extended its eight-year sponsorship agreement. The original contract signed in 1996 was scheduled to expire after the 2008 Beijing Olympics.

The company is not disclosing the value of the deal.

The commitment includes cash and services from Coca-Cola in support of athletes and teams from nearly 200 countries and regions. In return, the red giant maintains exclusive marketing rights in the non-alcoholic beverages category and use of the Olympic symbols and mascots in advertising and promotional activities.

The deal extends the partnership of Coca-Cola and the Olympic Games a relationship that began in 1928 to 92 years without interruption.

Coca-Cola looks at "a lot of different values when associating with the Olympics," says Franklin, who has been working on Olympics-related projects for Coca-Cola since the Barcelona Games in 1992.

These values are a combination of both long-term brand building and short and medium sales increases, Franklin says.

"The reason we have been associated with the Olympic Games for so long is because we know in the long-term it will help build the value of our brands," Franklin says.

"The feeling people around the world have towards the brand is what will translate, over the long-term, into increased sales for all of our brands around all the markets where we do business."

Long-lasting sponsorship of a worldwide sporting event creates better brand awareness than short-term sponsorship, according to a report by Performance Research, a company that offers marketing analysis and evaluation for corporate sponsorship of sports and special events.

The report, done in 2000, says Coca-Cola's decades-long association with the Olympic Games has built strong sponsor awareness and consumer appreciation for the company. Coca-Cola tops the list of Olympic sponsors that jumps into many consumers' minds.

"We also use the Olympics with our retail customers on a worldwide basis. Through those retail customers we generate the short and mid-term sales associated with the Olympics," Franklin says.

Earlier media reports said Coca-Cola's profits surged 21 per cent over the same period of the previous year during the third quarter of 1996 when it sponsored the Atlanta Games. Global rival PepsiCo saw profits drop more than 50 per cent during that period.

When China unveiled the "Dancing Beijing" 2008 Olympic Games logo on August 3, 2003, special souvenir Coca-Cola cans printed with the emblem were put on supermarket shelves the same night in Beijing, Shanghai and Qingdao, in East China's Shandong Province. Coca-Cola's sales jumped more than four times in those cities in the following days.

Big spender

All these sales achievements come from generous investment.

The threshold for becoming TOP sponsor has been rising over the years. The package for the Sydney Games in 2000 was around US$40 million for a four-year sponsorship. Now the rights for the 2008 Beijing Olympic Games are set at about US$65 million.

Franklin declines to say how much Coca-Cola plans to invest in the Beijing Games. But he says Coca-Cola usually spends "two or three times what it has spent on rights fees" on promotion activities, such as television advertising, to "communicate with people about the sponsorship."

"At this point I don't know what the programmes in Beijing will look like. But I assume that our activations in Beijing will be one of the more substantial Olympics programmes yet," Franklin says.

China is currently Coca-Cola's fifth largest market, after the United States, Mexico, Germany and Japan. The company controls about 52 per cent of China's carbonated beverages market.

Franklin says some local partners with the organizing committees have invested so much money in the rights fees that they have not put enough into "activation," which refers to what they do with the sponsorship once they have it.

"To derive value from the Olympic association, you have to make people become aware that you are sponsoring the Games," the Olympic marketing veteran says.

That is a key factor determining whether companies can really benefit from the Olympic sponsorship, analysts say.

"Every company must study its own capabilities before investing in the Olympic Games," says Huang Shengmin, director of college of advertising studies under the Communication University of China.

"If you don't have enough resources for follow-up marketing programmes, you will just end up playing ducks and drakes with your money."

Ambush marketing

While Coke preserves its exclusivity within the Olympic venues, it cannot prevent non-official sponsors from attaching themselves to the Olympics in a strategy known as ambush marketing.

"We cannot promote ourselves in the Olympic venues, but there are a lot of things outside the venues that we can make good use of," says Yang Meihong, director of government and media affairs for PepsiCo China Investment Co Ltd.

"The two-week Olympic Games are just one of many opportunities. There is always something Coca-Cola cannot do well. Coca-Cola cannot eat the whole market," Yang says.

But Yang declines to say what marketing programmes PepsiCo plans to launch during the Beijing Games.

Official sponsors are often worried that these ambush sponsors could outpace them in terms of both sponsor recall and the belief that these non-Olympic companies were doing more than many official sponsors to support the Olympic movement.

Yang says that even though PepsiCo does not sponsor global soccer games such as the World Cup, it has signed commercial contracts with soccer superstars such as David Beckham and Raul Gonzalez.

"Many audiences think we were official sponsors of those games," she says.

But Franklin is obviously not afraid of ambush marketing.

"Our strength is our long-term connection with the Olympics and our ability to connect with the Olympic symbols and brands," he says.

"We will be in the venues refreshing both the athletes and the Olympic family consumers. The real downside to ambush marketing is that those companies are not contributing to the development of the athletes and are not helping stage the games."

Finding "the best point of penetration" into Olympic Games-related marketing is very important, says Zhu Weihua, a soft drink market analyst at China Merchants Securities.

"The audience for ambush marketing is definitely smaller than that of official sponsors," Zhu says.

"But to companies that are smaller than Coca-Cola, it is better than nothing to have some involvement in a worldwide event such as the Olympic Games."

(China Daily 08/08/2005 page2)