It will be “the most critical commercial sporting event in our lifetime, any lifetime,” said Beijing-based Greg Paull, founder and principal of R3, an independent marketing consultancy that is tracking brand and star performance connected to the 2008 Games with CSM Media Research.

Despite their enthusiasm, most advertisers in China have been surprisingly slow at putting together strategic activation plans. “On the multinational front, the games have not yet begun,” said Tom Doctoroff, JWT’s China CEO and area director, Northeast Asia in Shanghai.

AdAgeChina, a sister publication to Plastics News, as part of its ongoing coverage of the Olympic Games has prepared this look at what a few national and global sponsors are doing so far. All of the sponsors listed here potentially have plastics-related tie-ins.

Adidas
While there is no official sportswear category at the highest international sponsorship level, the International Olympic Committee’s The Olympic Partners (TOP) program, the Beijing Organizing Committee for the Games (BOCOG) broke with tradition and selected Adidas as its official sportswear partner.

To win the coveted partnership, the German company beat its two strongest rivals in China, the global market leader Nike and Li Ning, the leading local sportswear company. Adidas also paid handsomely, investing between $80 million and $100 million (619.5 million and 774.3 million yuan) in cash, services, products and uniforms.

“Adidas sees it as the critical sporting event to gain China dominance over Nike and Li Ning,” Paull said. The Games are a key driver in the company’s ambitious growth plans. Adidas already has more than 2,000 stores in more than 300 Chinese cities, and plans to have at least 4,000 stores in China by 2008.

The company is investing millions more in marketing, sponsorship, licensing and business development activities surrounding the Games, led by Erica Kerner, director of its Beijing 2008 Olympics Program, who was featured earlier this year in Advertising Age’s annual “Women to Watch” report.

Adidas will supply sportswear for staff, volunteers and technical officials at the Beijing Games and outfit the Chinese Olympic teams competing in Beijing. It is also the only brand licensee partner for the Olympic Games, which means other sponsors can market and distribute products co-branded with the Olympic logo, but only Adidas can sell them. Earlier this year, Adidas introduced its first co-branded retail products, such as clothes and caps, in its Chinese stores.

“BOCOG saw the value of sportswear and elevated it to the highest level,” Kerner said. “That gives us more marketing rights, the ability to work closely with the organizing committee and associate Adidas with the other brands that are top sponsors through strategic marketing alliances.”

Besides its relationship with BOCOG, Adidas has deals with all seven Chinese national football (“soccer,” in American) teams and will outfit the Chinese football team competing in the Beijing 2008 Olympic Games. It also sponsors some individual basketball players who will likely compete for China at the Games.

But Adidas faces two hurdles. It has to differentiate its partnership with the Olympic Games from other events like the World Cup, because the brand is already closely associated with sports. It also faces competition from Nike and Li Ning. While they are not official Olympic sponsors, they back some of China’s strongest athletes and Olympic teams, diluting the impact of Adidas’ sponsorship in China’s cluttered media market.

“Being a sportswear sponsor of a sporting event makes it easier and more difficult for us, compared to other sponsors,” Kerner said. “We have to be smarter and more strategic in how we do it, so consumers remember our message and that we are the official partner.”

Coca-Cola Co.
The American soft drink marketer also is using the next Olympic Games to compete with a strong global rival, in this case PepsiCo, which has a strong connection with Chinese youth through hip marketing and associations with pop stars such as Jay Chou.

Coke has been fighting back by partnering with the popular “World of Warcraft” online game, which is enormously popular among young Chinese, and now through the Olympics and its sponsorship of Chinese track-and-field champion Liu Xiang.

“For Coca-Cola, it is their singular mission to become the dominant brand that bonds with China’s youth through this association,” Paull said.

While the Atlanta-based company has been slow to activate its Olympic marketing platform so far, it plans to tap into the Games on an “unprecedented scale” via national experiential marketing initiatives, said Ilan Sobel, Coke’s Shanghai-based VP-general manager, strategic marketing and innovation in China. “This will be accomplished via a fully integrated marketing program involving Olympic-themed advertising above-the line, on-the-ground activations and rich online experiences.”

It launched a “Coca-Cola 2008 Olympic Pin Program” last August that lets consumers design and trade Olympic-themed pins. The company has been associated with pin trading since it sponsored the first official Olympic pin trading center at the Calgary Olympics in 1988.

The marketing campaign was kicked off by Liu Xiang, who designed three pins. China’s Olympic fans can take part in a nationwide pin design competition called, “Show China to the World,” in which Chinese can nominate local landmarks that capture the spirit and traditions of their hometown for pins and participate in pin design. The best designs will be selected by public vote, through Coca-Cola’s online community i-Coke, and marketed together as a special collection.

McDonald’s Corp.
McDonald’s has also been slow to move beyond the planning stages, although the fast-food chain started to connect its overall children’s well-being program with Olympic mascots last month in China, according to Gary Rosen, Shanghai-based VP-chief marketing & corporate affairs officer for China. McDonald’s already has more than 760 restaurants in China and aims to reach at least 1,000 outlets by the start of the Olympic Games in Beijing. So far, the company’s focus has been on opening stores and boosting burger sales.

McDonald’s developed a live online chat series with the popular portal Sina and Askme.com.cn, a health and nutrition web site launched by McDonald’s in the mainland last March. Consumers can interact with leading sport, entertainment and business figures. The first one-hour episode on Aug. 1 in Beijing featured Houston Rockets basketball star and Shanghai native Yao Ming, who signed a multiyear global partnership deal with McDonald’s in 2004.

Next spring, it will hold its first Olympic Day Run in China in several years. “We’re still planning how it’s going to be integrated in our plans overall in China,” Rosen said. “Children’s well-being is on everyone’s plate across the whole system so the Olympics is a natural message for other countries too, but two years for a non-host country is still a long way out from a planning perspective.”

Visa International
A supplier of another kind of plastic, Visa, is the exclusive payment card and official payment service of the Olympic Games through 2012. The credit card company is yet another marketer in China that has jumped on the Liu Xiang bandwagon along with Coca-Cola, Nike, China Mobile and China’s leading dairy producer Yili.

In May 2006, Visa launched its first marketing effort highlighting its sponsorship of the 2008 Games in Beijing with a campaign by BBDO, Shanghai that showed Liu racing a kangaroo in Australia.

The growth of charge cards in China is increasingly connected to the country’s growing exposure to the outside world, so the Olympics are “a once-in-a-lifetime opportunity to lead the card market as it opens in China,” Paull said.

The ownership and use of charge cards by Chinese still is relatively low. There are few credit rating facilities in China to help residents qualify for them. And only hotels and restaurants catering to international visitors take credit cards. As a result, there is low awareness about how charge cards operate.

According to the McKinsey & Co. consulting group, the number of credit cards in China quadrupled from mid-2003 to mid-2005, but the total number was still just 12 million, a scant figure in a country with a population topping 1.2 billion. Ninety percent of the credit cards belong to the most affluent consumers in China — mostly residents of Shanghai, Beijing, Guangzhou, and Shenzhen with annual incomes above $4,000 (30,975 yuan).

“By working with Liu Xiang, we hope to draw more attention among consumers worldwide to the development of sports in China and the coming 2008 Beijing Olympic Games,” said Richard Chang, Visa’s exec VP and general manager, Greater China.

“As the Chinese economy grows rapidly, overseas travel has become increasingly popular with consumers,” Chang said. “Visa is actively working to create a good electronic payment environment, allowing more Chinese cardholders to enjoy the convenience and ease of using their Visa cards when traveling abroad.”

In addition to sponsoring Liu, Visa, like many advertisers in China, is eagerly attaching its brand to different teams. Visa is now the official partner of the China National Short Track Speed Skating Team, the China National Figure Skating Team and the China National Free Style Skiing Team.

Haier Group
Haier, one of the largest appliance manufacturers in China, was named the official home appliances sponsor of the 2008 Olympics last year. The company said its decision to sponsor the event, whose slogan is “citius, altius, fortius” (faster, higher, stronger), is in line with Haier’s own corporate culture and business philosophy: “self-challenging, exploring, innovating.”

Based in the seaside city of Qingdao, Haier, like Tsingtao Brewery, has been granted national sponsor status — a step below partner — and will help “boost the preparations” for the Games, “especially the Olympic sailing events,” said BOCOG executive VP and secretary-general Wang Wei at the signing ceremony. “On the other hand, sponsoring the world’s greatest sporting event also provides Haier with an unparalleled platform to build up its prestige on a global basis.”

Building a global company is certainly Haier’s aim, but the company has done little to promote its partnership with the Games. In fact, the company has had little success at marketing its own brand in general. Although lauded as one of China’s most experienced overseas manufacturers, its success has depended on widespread distribution through retailers like Wal-Mart, low prices and decent product design.

“In theory, Haier is going to use the Games as leverage for branding, marketing and communication,” said an executive at one of Haier’s ad agencies in China. “As far as we know, Haier has not developed any solid plan for the Beijing Olympics in terms of communication. We are not sure if there is a marketing platform for using the Games. The marketing function is weak, if not nil, in Haier.”

Johnson & Johnson
Johnson & Johnson is promoting its sponsorship of the 2008 Olympic Games with a major branding effort in one of its fastest-growing markets. Although J&J has operated in China for more than 20 years through its various operating companies, few Chinese know the parent company.

“This is the initial phase of the Olympic program we’re putting together,” said Joe McCarthy, Johnson & Johnson’s global VP of advertising and marketing at J&J’s global headquarters in New Brunswick, N.J. “It’s our first corporate brand campaign ever in China, and will run through and after the Games.”

In July 2005, J&J became the ninth national sponsor of the 2008 Olympics. As the official health care partner for the Games, it will provide funding and services for the Chinese Olympic Committee and for Chinese teams competing in the Games. The agreement, which included the 2006 Winter Games in Turin a year ago, covers everything from basic products like Band-Aid bandages to high-tech diagnostics tools.

Since China represents enormous growth potential for J&J, the company hopes the campaign will cement its brand image and diverse line of products with local consumers. Advertising by Ogilvy & Mather connects these themes with the tagline, “Because we love, we live.”

A series of spots tell stories with multiple meanings about Chinese people who are unsung heroes as they care for others. The spots, edited into 90-, 60- and 30-second versions, were shot in China by director Tony Kaye, best-known for the controversial feature film, “American History X.”

J&J “turned to the use of real people, not actors, in authentic situations,” said McCarthy, including nurses, doctors, teachers and students.

“It was somewhat of a surprise for J&J to sign up as an Olympic sponsor, they’ve never sought that kind of profile,” said Beijing-based R3’s Greg Paull. “What this campaign does is prove the importance of families and commitment to Olympic success, and that’s likely to resonate very well with their Chinese target. They have narrowed the gap on bringing meaning to their Olympic investment.”

In R3’s second wave of research, J&J was one of the five most-improved companies, alongside Volkswagen, Bank of China, Adidas and UPS, although only 42 percent of 1,500 people surveyed believed J&J was a sponsor of the Olympics, and fewer than 5 percent mentioned the company without prompting.

“They still have some work to do to close the gap on Coca-Cola, Yili and other packaged goods companies,” said Paull, but this campaign “is driven by a very powerful insight, that the bonds of family have an impact on your life. They have managed to link this insight to their brand through the families of Olympic athletes.”

Johnson & Johnson has focused on its medical and baby-care products, both large categories in China. The company is also looking for opportunities to expand beauty product lines like Neutrogena and Clean & Clear, both rolled out in China in late 2004.

As part of its expansion into the beauty category in China, one of the world’s top 10 cosmetics markets, J&J is seeking approval to acquire state-owned Beijing Dabao Cosmetics Co.

Although it already has one joint venture in China, Xian-Janssen Pharmaceutical, which produces drugs such as Motilium, this deal would help the company grow consumer sales. J&J’s effort to buy Dabao recalls moves by other multinationals like L’Oreal, Procter & Gamble, Shiseido and Avon. They pursued a similar strategy of acquiring local companies to expand beyond the high-end of China’s cosmetics market with more mass-market brands. L’Oreal, for example, has acquired two of China’s most popular local cosmetics brands, Little Nurse and Yue-Sai.

Still, the “golden egg” in J&J’s portfolio is China remains baby care,” said Stephen Drummond, group managing director of the independent shop Nitro in Shanghai, and a former exec at Lowe’s China office. “That proposition has done extremely well in China. The bond between mother and baby is universal but it’s especially strong in China.”

Overall, he added, J&J has done “spectacularly well” in China, growing 15 percent or 20 percent annually for the past few years. “Their sales in China should overtake the U.S. by about 2010, despite the popularity of J&J in its largest market for use by adults themselves as well as for babies.”

General Electric Co.
General Electric Co. has won contracts worth $160 million (1.23 billion yuan) for projects related to the 2008 Olympic Games, such as generation and distribution of electric lighting, water treatment services and security. GE Plastics, a Pittsfield, Mass.-based unit of GE, also will be involved in this sponsorship.

The decision reflects GE’s status as one of the International Olympic Committee’s 11 “The Olympic Partner” (TOP) sponsors. The global sponsors paid tens of millions of dollars to associate their brand with the prestigious sporting event as well as pursue lucrative business opportunities surrounding the Games.

For an industrial giant like GE, that means big business to help build the infrastructure supporting the event, as well as business-to-business marketing opportunities. GE ultimately hopes to win $800 million (6.19 billion yuan) in contracts for the upcoming Games in Beijing. The operating budget for the Games is estimated at $2 billion (15.4 billion yuan).

Normandy Madden is the Hong Kong-based Asia editor for Advertising Age, and editor/managing director of its AdAgeChina e-newsletter, both of which are sister publications of Plastics News and PlasticsNews.com/China.