Term Paper: Ambush Marketing: Should Tough Rules

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[. . .] These kinds of rulings and rigid stances send "out a very clear message to any company that might be contemplating ambushing the event or its sponsors" no matter what form it takes. "In addition to any damages that they might be liable for, they are now risking jail if they act illegally" (Donaldson, 2002).

Since official sponsors really want to avoid interference with their any of their sponsorship, they would naturally want to or be compelled to lend all athletes and teams their fullest support. This refers to sponsoring sports kits as well in order to avoid labels and tags that are not their property. Preparation of these kits is costly, and in addition to the expenditure on sports kits the other important spending comes to a lot of money that official sponsors have to rake up. This is why "sports sponsorships reportedly represent 65% of total corporate sponsorship spending" (Lee, Sandler, and Shani, 1997).

While sports sponsorship activities range from providing athletes with uniforms to funding entire stadiums (Greising, 1996), the basic premise behind such sponsorships appears to be their proposed ability to increase brand (or corporate) equity by means of enhancing brand (or corporate) image" (Aaker, 1996). This is the most natural of gains that sponsors endeavour from big events. Apparently, organizations gain tremendously from them, and the effects are visible after the event. This clearly indicates the manner in which people fall for sponsors associated with a logo in a big event. In addition to this, it must be said that this is the reason why these official sponsors do not desire any interference in their ventures with big events, as the results are not immediate (McDonald, 1991).

Further highlighting the importance that is given to these events and the desire to officially sponsor them, one may assert that positively perceived events are always fruitful to associated groups provided that they are official. By positively perceived events, it is meant that these events are healthy ones for all individuals. However, as far as business is concerned it is the amount of revenue that may be earned, which is the major attraction. These events are believed to also "enhance brand image via associations with positively perceived events; increase goodwill via perceptions of corporate generosity; and elevate brand awareness due to increased exposure" (Gwinner, 1997). In relation to this, one might consider the element of competition, and this is because of the fact that competition is a major influencing factor in modern business; the more competitive an organization is, the better its chances are for surviving.

Competition is tough nowadays since there are many who are aware of all the tricks in managing business. With certain businesses emerging as the leaders in the market they also have to prove themselves and remain there. Becoming number one is easier than remaining number one. This is because of the fact that there will be other businesses that will mimic similar strategies in order to reach where any other has (Knight, 1995).

As compared to the past when competition between firms was not as tough as it is now, market complexities were not intense. Propagation of these competitions is more than it was too, and is considered an important element to concentrate on for organizational gains. Big events are ideal opportunities for propagation of one's name, and this aids in gaining more customers (Knight, 1995).

No matter which way one wishes to look at the situation of ambush marketers making the most of already sponsored big events, it may be said that such opportunities should not really be ethically available for organizations to seize. This is because official sponsors are the rightful owners of these events, as they pay large sums of cash to run the event, and this is the reason why things such as the logo of the events are directly associated with the sponsor companies. Considering this, ambush marketing may be accurately defined as the unauthorized association of an organization with the marketing of a particular event whereby they gain benefit of the marketing rights of that event without having to pay the license fee applicable in order to be associated with the event. Under this definition and the rest of the related discussion, there are a number of things that come to one's mind. Marketing rights is one of these things, as organizations gain under free trade.

In most cases, there has been apparently no way to stop organizations from interfering with official sponsors if they want to make use of a big event. If other organizations don't get the rights to host an event, they may indulge in ambush marketing. However, it must be realized that this kind of marketing is wrong as the hosts of an event make themselves clear when they want one particular sponsor for the event. It is because of this that one may even describe such a clarification as a business deal being conducted between two parties, with no third party intervening. Having said so, logically speaking, there is no way that a third party should be allowed to interfere in a legal business deal conducted between two parties. For, if one should interfere in such a deal, the interference can be likened to a third person interfering in a contract between two parties (O'Donovan, 1996).

Quite obviously, this interference can be viewed as illegal, and on the basis of this, the third party should be liable to face charges for criminal action. However, for the last 15 years or so, no significant action has been taken against organizations that have ventured into ambush marketing. The result of this has been an accumulation of parasites that indulge in this kind of action.

Parasitic marketing may then be termed as an illness that should be removed as soon as possible from the economic system. If not, these parasites will infect the economy globally by interfering with major events everywhere in the world. Hence, a stance like the South African one is an ideal one, as it has made itself clear that it will not tolerate unethical intrusion of business deals between official sponsors and hosts (Townleys Sports Lawyers, 1991).

In contrast to parasitic marketing that is now defined extensively enough, smart marketing needs to be enhanced. An example of this is the association of organizations with a sponsor that could gain some profit along with the main sponsor. A co-sponsor may also aid an official sponsor financially, but this is only something that can be arrived at through legal agreement between the sponsors. It must also be asserted that that there are events that take place and have co-sponsors aid in hosting an event (Waite, 1979).

In contrast to providing solutions to problems in the market regarding sponsors, ambush marketing has been a problem occurring all over the world. Aside from officials being so tight about big events being held in South Africa, like the Cricket World Cup of 2003, there are other countries that have not been as tough. This has resulted in them suffering tremendously because of the parasitic market of ambush marketers.

One might think that by having sponsors in events that do without the official logo might solve the problem of ambush marketing. However, experience has taught some hosts that even this is not a way to end the parasitic market. This may be said because of the fact that Olympic hosts have witnessed trickery in this regard. An example of this has been demonstrated in the way that American Express ran many advertisements as the unofficial Olympic sponsor, which upset MasterCard who was the official sponsor. Quite naturally, this would be the reaction. Also, in the 1994 Lillehammer Winter Olympics, Norway, Visa paid approximately U.S. $40 million as official sponsor. However, a survey, showed it was American Express that had 52% brand recall thanks to its slogan. The slogan was one that directly targeted the opponent, which is as follows: 'If you are travelling to Lillehammer you will need a passport, but you don't need a Visa'.

Having viewed the slogan above, one can easily see the manner in which organizations behave in order to gain the upper hand over official sponsors. This is the reason why hosts are waking up to the news of a parasitic market, and this is the first step in order to avoid grave financial losses and suffer repercussions in time to come.

It must be realized that ambush marketing is not just something that has only targeted the Olympics; it has the potential to intrude every kind of sport wherever it can get an opening. This is the reason why South Africa has become so strict with reference to ambush marketing. The ICC too has reinforced these kinds of stances by making sure that the cricketing nations follow the instructions laid down by host nations before a major event takes place. Sportsmen are now increasingly being pressured and reminded that they cannot have any logo… [END OF PREVIEW]

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