Why Sports Marketing and Sponsorship Is Becoming Popular in Asia

Asia has no doubt now become a marketing playground for multinational brands and businesses to expand their niche beyond normal reach. Many companies have recognized that sports have an incredible potential to be turned into an influential and lucrative marketing tool for any brand’s growth and it certainly outshines traditional marketing efforts by reaching a mass which far outnumbers those of any other channels.

Brands are able to capture an unbridled passion with sports which it could not achieve through other platforms. A sports sponsorship can reach large numbers of people by bridging the divide between label and consumer, allowing people to engage with the sport or its star players on a more personal and emotional level. It is no longer an advertisement waiting to be skipped; it becomes the energy that ignites the sport. The brand will be seizing the prospect of lifetime loyalty with their consumers by investing in relationships rather than advertising which prove to be a more economical and cohesive approach to marketing.

For example, 192 million people tuned in to their television sets to watch Southeast Asia’s national football competition the 2010 AFF Suzuki Cup, and a total of 15 million people watched the two final leg games in record breaking numbers. The enormous viewership clutches the attention of millions of fans across the region, not to mention the sell-out crowd at the stadium, followers on social networking sites and many more viewers of its online broadcasts. A survey has shown that traditional above-the-line advertising at such level would cost significantly more while yielding smaller impressions and revenues.

Sponsorship opportunities will affect a company’s market segment by offering them the chance to develop awareness and devotion to the brand. The passion derived from the target market is what the brand relies on to achieve a positive sponsorship. By putting together their own brand values with that of the sport, companies are able to uphold its brand trust, effect buyers’ spending trends and better capitalize on customer relationship.

A compatible sponsorship will leave a strong impact on an audience and will likely rouse a surge in sales and profitability. Therefore, it isn’t all just about jumping on the bandwagon like everyone else but a careful selection process needs to take place beforehand to maximize the brand’s visibility and exposure in line with its core values and objectives. Sports marketing have revolutionized the way brands are being depicted to consumers. It pervades more advertising channels and cuts your costs, targets a broader and more focused group, and is definitely more effective than traditional marketing activities.

Hallyu – An Effective Method for Marketing and Advertising in Asia

In 2012, A Korean song called “Gangnam Style” went viral on YouTube with more than a billion viewers at the time. People in western countries including America started to pay attention to South Korean Music. However, for young people in South and Southeast Asian countries, KPOP or Korean Pop Music was not something new to them. As a matter of fact, KPOP has dominated in many Asian countries since the early 21st century.

KPOP, together with Korean TV dramas and movies, is referred to as Hallyu or Korean Cultural Wave in Asia. The popularity of Korean TV dramas, Korean pop music, and their associated celebrities has made a strong influence on the Asian consumer culture. When travelling to China, Thailand, or Vietnam, it is very common to catch a high school student decorating her backpack with pictures of a well-known Korean pop star.

Especially, Korean TV dramas are very popular not only among teenagers but also among adults in Asian countries. When a popular Korean drama is aired in an Asian country, people tend to buy any products that are used by their favorite characters in the drama. The Korean products, from electronic products to food, therefore quickly become popular in many Asian countries. Understanding the big impact of Hallyu in Asia, many Korean companies has collaborated with Korean leading entertainment companies such as SM and YG in order to use the famous celebrities from these companies to endorse their products. Hallyu or Korean Cultural Wave therefore has become an effective method for marketing and advertising not only for Korean companies but also for any international corporation that plans to enter the South and Southeast Asian markets.

The reason KPOP has become so popular in Asia is that it features Korean idols that are good-looking and have independent personalities. Korean pop stars are also the symbols of beauty and fashion for their young Asian fans to follow. The Korean stars are extremely good at communicating with their fans in order to be close to them through social media. They like to reveal their normal lives to their fans to show how they live and what they eat, wear, or use in daily days. International companies can use their “fan services” as a tool to promote their products. For instance, a fashion company can contract with a KPOP star to wear their clothes either on stage or in daily activities. Food companies can also take advantage of this “fan service” as well. For example, a fast-food restaurant company can contract with a South Korean channel to have their restaurants appear on its up coming TV drama. If the drama turns out to be a hit when it airs, then the promotion campaign will be successful not only in Korea but also in many other Asian countries.

The Korean Wave has become a global idea for marketing and promoting in Asia. However, when using the image of a well-known Korean star to promote and advertise in another Asian country, companies must necessarily make changes in the campaigns in order to better fit the traditions and cultures of a specific country like China or Malaysia. The reason is that different countries have different cultures and traditions, and the promotions need to be adjusted into these traditions and cultures no matter how famous the Korean Cultural Wave is. One more thing to be noticed, the price for hiring a famous Korean celebrity is of course very high. Companies need to plan carefully before launching a marketing campaign with a well-known Korean star. Up to now, the use of Korean stars for promotion is most effective in prosperous countries like China and Japan. For less developed countries like the Philippines or Vietnam, the payoff may not turn out to be very well even though the Korean Cultural Wave is also very popular in these countries.

Right-Sizing Channel Partners for Your Newest Products

In the electronic component market today, precious little money is available to invest on inventory that has little chance of moving off the shelf. With operating margins in component distribution under increasing pressure, the battle over bin space and inventory spend is not getting any easier.

While some may argue we are on the upside of recovery after a long and deep recession, distributors are looking forward and seeing many red flags when it comes to doing business in the new year. First, if short- or long-term debt are part of your operating scenario, it seems likely that your cost of capital will be going up soon as interest rates begin to climb from levels they’ve been for the past couple of years. Sure, large distributors can carry lots of inventory, but manufacturers had better be sure it’s going to move if they want distributors to take it. And with distributor margins continuing to get condensed, the decision on which parts go on the shelf becomes a fairly easy one. With new products, not only are manufacturers asking distributors to cover the cost of inventory investment, they have no guarantees that the parts will actually find a home among design engineers looking to develop their own next great product. And what’s that Mr. Customer, you want to EXTEND your payment terms? If I’m going to spend a penny on it, it better have legs.

Consider this situation from the perspective of the supplier. In a rotten economy over a two-year period, component manufacturers have stayed busy, feverishly developing new parts which they hope will sustain them until a solid recovery is under way. As these products begin to come out of development and into the market, the component supplier needs a distribution channel willing to accept new- and possibly unproven- products, as well as to help carry the burden of inventory investment, demand creation, order fulfillment and marketing. After all, he’s the manufacturer. His distributor partner should take all of his parts and put them on the shelf gladly, right?!

Don’t hold your breath Manufacturer. First, consider industry in US history. Look at any mature manufactured product in the US and you quickly find a pattern. You can start at the beginning and look at the paper and textile industries. Follow those with any other industry you choose. Furniture, maybe? How about cars? Calculators, TV, electronics, computer, software, etc. Not convinced. Maybe drill down a bit more then: capacitors, printed circuit boards, fabricated sheet metal, molded plastics. It is starting to happen in earnest with even the stalwart old power connectors which were never on the radar of the consumer products focused Asian manufacturers. The path toward the maturity of the market as well as the broad decline of the domestic market associated with these industries is the same- and they all lead to Asia. Notice, though, our choice of terms: “decline”. Go back to our start. You see, while it has been reported, for example, that the paper business is dead in the US, this industry is actually on a comeback. Why, you may ask? Specialization and focus on specific- and high margin- business. Sure, they took a beating by Asian countries able to manufacture the same product at a much lower cost. But ingenuity, investment and a significant amount of re-tooling has allowed them to refocus their businesses on segments that offer better margins. Segments that, up until a few years ago, didn’t even exist within the paper industry “target customer” profile.

Any product is susceptible to aggressive competition from overseas manufacturers. None is more susceptible, however, than a product which shares a few key similarities: high volume; made using plentiful, well-trained, low-cost labor; being built on well-developed equipment with repetitive processes; can be easily shipped. Despite the hopes of the US in the early part of the 21st century, this is now true for high technology products, medium volume products, as well as medical products. Where it isn’t yet true is on higher margin specialty, niche or new products looking to be designed into, used, or sold to customers here in the US.

Now consider the typical supply chain against this same backdrop and it is remarkably consistent. Large distributors continue to focus on transaction volume as they work to increase their inventory turns on “A” moving parts. Limited resources require sales efforts to focus on the higher volume customers. As EMS business grows exponentially, large Asian distributors are becoming larger and gaining increasing shares of the market. As these Asian distributors grow larger, they continue to pressure margins and gain marketshare, as domestic distributors see the onset of broad declines.

Distributor: Let me get this straight, you have a new part that has never seen the light of day, and you want me to invest in inventory on the chance that it could be a winner?

Supplier: Yes. How many will you take?

As the Manufacturer, you already know how difficult it can be to get the attention and mindshare you need from the large distributors on your latest products. After all, you do have your broad line suppliers. Perhaps they are a national or even an ultra-national or multi-national. Suffice it to say, they are big, they are dependable and they take and move product. But when it comes to new products, you know you have a hole.

What to do? Right-size.

That’s right. You remember right-sizing when it first hit the lexicon during the recession in the late eighties. Back then, companies were adjusting their workforce to match the requirements of the situation and economic times. Well, that’s what we are talking about here as well: match your needs with those distributors who are out there focusing on specific products and specific markets. You wouldn’t hire a municipal salt truck to sprinkle salt on your asparagus. So don’t ask the Big Disty’s to present your product to their customer list. With 500+ suppliers all trying to get the same amount of attention from the large distributors, you are going to get lost in the sludge.

Today’s smaller, regional, specialized and niche distributors are focused in on the social media shift which has suddenly made the playing field surprisingly level. These distributors have the resources available to them now to immediate get your message out to users across multiple social media sites and forums used by engineers, buyers, tech writers and other users. What’s more, you are a big fish to these smaller distributors. A little attention paid to these distributors can go a long way to getting a toehold in the customers where these companies do very well. There are hundreds of these smaller distributors who are willing to share the burden of new products. With parts on the shelf, salespeople on the street and a willingness to move new product for a higher-than-market margin, right-sizing can be exactly what your new products need to get their very own set of legs.