The Impact of the 2012 Olympic Games on SMEs - Case Study Example

The Impact of the London Olympic Games on SMEs BY YOU YOUR ACADEMIC ORGANISATION HERE HERE HERE I have produced the case study partly based on primary information and partly based on secondary information The impact of the 2012 Olympic Games on SMEs Introduction The upcoming London Olympic Games has captured the attention of many of today’s product promoters, business sponsors, and the local community in a variety of different ways. These games provide superior opportunities to expose a company’s brand, from a marketing perspective, to a diverse consumer and professional audience in an attempt to achieve sales success and profitability. Changes to certain landscape infrastructure, also, has improved business activities simply by providing better roadways and structures. However, despite these positive impacts, there are also problems for SMEs which require solution. These problems range from causing undesired changes to business practices and policy to the potential negative impact on budgets and financially-related business aspects. This report focuses on SMEs, in an attempt to measure the impact of the 2012 Games on these enterprises whilst offering solutions on how best to solve these problems posed by the 2012 Games. The information collected for this report was derived from both primary and secondary research, investigating several real-life industries which have been affected by the upcoming 2012 Olympics preparations, spotlighting a variety of different problems for SMEs. In addition, a recommended course of strategic action is offered. The issues One marketing professional offers that the craze which is caused by guerilla-style marketing, a promotional tactic which utilises innovative and somewhat extreme street marketing, has created what is referred to as ambush police. These are individuals, affiliated with the company attempting to promote its products, who stand literally on guard near the brand’s venue during large events to “protect sponsor’s investments”1. If companies, even prior to the launch of the 2012 Games, are using street marketing to promote different branded product interests, this would pose a threat to the small to medium business especially if the brand is a product offered by much larger organizations, such as Coca-Cola. Using ambush police around a particular venue, if nearby to SMEs attempting to sell products in a nearby location, would find their own efforts being undermined by competitive actions so devoted to maintaining positive brand image that they would harm opportunities for SMEs. This would severely limit the marketing and promotional exposure of the SME businesses in the face of higher budget marketing and a dedicated team of ambush police determined to block competition from finding success in the same venue. Also from a marketing viewpoint, another professional in this field identifies that during the 2012 Olympics, and prior to as well, the government intends to clear the airwaves, in local radio stations, to allow for broadcasting of the Games2. For the consumer audience (the listening audience) this would be of high benefit to ensure that no aspect of the event is missed, which would likely drive up the purchase of various broadcast technologies. However, from an advertiser’s perspective, the impact on SMEs is rather obvious: Limited exposure to a very reputable medium for advertising which can reach a very wide audience of people. For example, an SME which is focused on creating unique clothing fashions which relies on public radio broadcasting to market its products might have to find a wholly different method of reaching its buying population. When the government intervenes in public areas, such as with radio in this case, the impacts on businesses are quite negative if no airtime is allowed the business to remain active in its promotional marketplace. Though there would likely be some time for the SME to prepare for finding an alternative advertising forum, having to rely on non-broadcast advertisement (due to limited financial marketing budgets) might cause serious sales disruption and profit declines. Because the impact on these SMEs is largely marketing related, it is best to remain on this subject. The London Organizing Committee of the Olympic Games, a major powerhouse in the planning effort for the Games, has caused yet another potential crisis related to marketing: This Committee has recently appointed one specific organisation to handle all of the public relations and advertising for the upcoming Olympics3. The appointed agency, McCann Erikson, will now have absolute control over the sponsorship agreements, how they are managed and coordinated, and most regulatory control over the method by which company branded literature will be developed and distributed during the event. For SMEs which have limited budgets in this area, they will be working with a regulatory body who poses certain limitations such as denying media coverage of the SME business activity at the Games. The limitations for finding negative or non-existent public relations are quite considerable. For example, an SME has worked out a sponsorship with a larger company as a co-branding strategy designed to build higher consumer. The two organizations in this partnership even create physical banners and other promotional materials. However, after regulations from McCann Erikson, it is determined that the partnered companies must move their venue to another location at the Games, which was not in an area originally deemed to have the best exposure to their buying markets. The SME is now at the mercy of the various planning organisations who might cause their marketing efforts to meet with poor sales success. A London marketing magazine highlights, also, that the various committees responsible for organising the Olympic events still are not certain about how best to promote the event itself to the global community4.This essentially means that these planners are unsure about certain aspects of promoting to the right target audience (consumer groups) or what type of messages would be most appropriate for getting people across the world excited about the Games. Again, the impact on SMEs is considerable. Small to medium businesses which will be highlighting their unique products and services are going to desire and expect very high attendance ratios of people to visit the Games. The SME, in this case, does not have the authority to intervene toward this effort because this is left to the planning committees. If the committees responsible for bringing in higher tourists and visitors do not yet have a plan of action, such as having a sound marketing strategy, they are likely going to fail to reach the markets who are interested in attending the 2012 Games. Marketing from this perspective involves having an understanding of buyer behaviour, learning about how best to position their products to invoke a positive brand image in buyers, and also understanding which type of person, based on lifestyle, would be most interested in attending the Games. Currently, the promoters of the event itself do not have an appropriate plan of action, therefore SMEs would not be able to project the expected volume of visitors they can achieve at the events. This is a type of business risk to the business caused by the poor planning activities of several external planners and regulatory groups. Since the goal of these marketing efforts are to “leave a lasting impression on the city and the country”, the potential consequences to SMEs are significant when there is no solidified plan in place to attain this goal through promotion and advertisement. A primary study The problems with SMEs, identified as being strategically-tied to marketing issues, required further investigation into real-life organizations who will be operating in the London region. For this study, three managers of different U.K. businesses were interviewed to ask of their potential involvement in the upcoming Olympics and whether they, as businesspeople, perceive any difficulties for small to medium sized companies which might stem from external parties. For ethics purposes, the managers and their unique industries will be kept anonymous. The manager from the first industry, a restaurant, did not indicate involvement in the 2012 Olympics, but had many opinions about the impact of the Games on SMEs in the London region. This manager believed that infrastructure problems, such as large-scale demolition and roadway work in the region, was causing small and mid-sized companies problems because local traffic did not wish to travel roads where delays were possible. This means less people to purchase goods and services from local companies. The second management professional, hailing from a manufacturing facility, was personally involved in the 2012 Games as a supplier of various chemicals and raw materials being used in construction projects associated with the Games. This manager identified one problem which was directly related to the planning committees in terms of setting up an appropriate floor plan for certain small vendors at the events. Many of this manager’s raw materials were being used for construction purposes and delivery of in-stock items, which were ordered by certain groups, were causing inventory problems for his company due to limited storage space. The third manager, from a fast food restaurant franchise, had no involvement in the Games, however marketing and advertising was mentioned as a problem for SMEs involved in the Olympics. His particular company, as a corporate whole, had lost a bid to be involved with certain promotional activities at the Games, which was affecting how much money the franchise owner was making (or could make at the Games). Currently, local fast food restaurants are offering certain branded merchandise which promotes Games sponsors and this particular franchise was missing all of these earnings opportunities. The recommended strategies It seems that from a strategic level, the largest issue lies not only in marketing, but the regulatory and planning bodies which are responsible for managing the event itself. Ineffectual marketing strategy will definitely impact SMEs negatively if visitor ratios are down due to poor communications from these entities. At the same time, promotional opportunities are limited by these types of third parties, as identified earlier in this report. One recommended solution is to become more involved in planning committee work by expressing potential and current problems to these committees in a roundtable type of environment. Meetings such as these can put SME issues on the forefront of planning efforts to ensure that they are represented in areas of marketing, promotion and advertisement. If they are missing opportunities to broadcast their products due to government intervention in radio broadcasting, these should also be highlighted using an appropriate legal medium to ensure SME representation and interests are protected. Further, SMEs cannot afford to lose sales profitability due to disruptive competitive actions (such as street marketing and ambush police) and must be represented equally at the Games in similar fashion as their larger competitors. If the competition is simply too large to battle, the recommended solution is for SMEs to consider alternative marketing strategies which can be beneficial in outperforming competition and also satisfy budget issues at the same time. Similar street marketing tactics could be adopted where junior members of staff volunteer to perform similar brand protection efforts and work to really engage members of local communities to get excited about the Games and their unique product or business service. This would avoid the need to devote higher financial resources to payroll (to hire ambush police-style workers) and also be a competitive tactic. The SME might also consider using more innovative marketing focusing on a specific aspect which people can relate to, such as by promoting greener products. One company, at the 2012 Games, is attempting to create low-carbon drink dispensers5. SMEs could innovate a new product or service concept such as this, or green-focused, and use the opportunity to market themselves in a different way. This would give several different marketing options in the event that one of their original concepts is disrupted by external forces. Greener marketing appeals to the buyer’s values and beliefs, thus creating the lifestyle connection necessary to get buyers interested in a particular product brand. Though the recommended course of action does not necessarily have to be a green or environmental focus, the key is to use lifestyle-oriented promotion to create positive public relations as part of corporate social responsibility. Conclusion Infrastructure issues and problems with lost advertising revenue due to lost business bids are not in the control of most SMEs. Therefore, no logical solution could be provided as a strategic method for controlling the negative impact on SMEs. However, there is clearly a disconnect between marketing and the planning organizations responsible for overseeing the 2012 Olympic Games. SMEs face current and upcoming problems because of these situations and activities and must ensure that their unique business needs are represented in this process. The proposed solutions are most appropriate for SME action and should be considered immediately to avoid further problems stemming from poor external relationships and efforts. Clearly, competitive actions and marketing-related issues are causing the most difficulty for businesses involved in the 2012 Olympics. Multiple, competitive branding efforts create a scenario which is difficult for the SME trying to find business success. Competitive efforts will be a challenge to a wide variety of smaller-sized companies in an attempt to make their own promotions seem more significant than larger-scale companies with both the resources and labour necessary to outperform SMEs in this area. Any business which desires to compete for marketing visibility must consider how best to make their product offerings stand out amidst extremely heavy competition. Innovation will be key in finding competitive marketing success. Bibliography Blitz, Roger. 2008. Olympic organisers urged to stop meddling with design. Financial Times, London. 22 November 2008: 7. Blitz, Roger. 2009. Ambush marketing threat to 2012 Olympics. Financial Times, London. 3 July 2009: 4. Bradshaw, Tim. 2009. Ofcom to clear airwaves for 2012 Olympics. Financial Times, London. 28 May 2009: 4. Brand Strategy. 2005. Bursting with London pride. 9 Jun 2005: 18. Eaglesham, Jean. 2009. Brown and Cameron trade charges of deceit. Financial Times, London. 2 July 2009: 2. Financial Times. 2008. No place for elites in London 2012. 3 Sep 2008: 12. Guthrie, Jonathan. 2009. Cash-starved start-ups wait for the cavalry. Financial Times, London. 28 May 2009: 13. Marketing Week. 2009. 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