Tuesday, January 05, 2010

Taiwan's sports marketing

An article from Taiwan government-sponsored magazine Taiwan Review:


Health and Happiness for Sale
Publication Date:01/01/2010


The Indiana Pacers played the Denver Nuggets in an exhibition match at the Taipei Arena in October 2009, marking the first NBA game ever played in Taiwan. (Central News Agency)

Taiwan’s sports marketers are building upon the success of a recent NBA exhibition game as they promote events and products.

Surveys from the Sports Affairs Council (SAC) show that basketball is the most popular participant ball sport played in Taiwan. Attending basketball games as a fan, however, is another story. Except for the season-ending championship series, for example, most people on the island think twice when asked to pay between NT$150 and $500 (US$4.50 and $15) to watch a regular season game of Taiwan’s semi-professional Super Basketball League (SBL).

And there does not seem to be much “discrimination” between local versus foreign events. When 10 top streetball players from the United States including Phillip “Hot Sauce” Champion and Grayson “The Professor” Boucher visited Taiwan for two exhibition games last September, for example, only 500 fans were willing to pay between NT$1,000 and $2,500 (US$30 and $75) for the first game at a 10,000-seat stadium in Linkou, Taipei County. The second game, originally scheduled to be played in Kaohsiung, southern Taiwan on the following day, was canceled. The marketing company that organized the event told the press that something had obviously gone wrong with their marketing strategy, and adjustments would have to be made if it was to bring another streetball game to Taiwan in the future.

Pleasant Surprise
So Eric Chang, general manager of Bros Sports Marketing, was pleasantly surprised when he learned that people were not hesitating to spend between NT$800 and $12,800 (US$24 to $387) for a ticket to the first-ever National Basketball Association (NBA) game played in Taiwan last October. According to Chang, the organizer of the event, except for the 3,000 tickets reserved for the NBA office and sponsors, all 9,000 tickets available to the public were sold out 15 minutes after online sales opened three months before the game. The eight VIP seats available for the game—which cost NT$200,000 (US$6,060) each and were not available via online sales—also sold out.

The two NBA teams, the Indiana Pacers and the Denver Nuggets, landed in Taipei on October 6. After their open practices on the following day and as part of the NBA Cares program, the players held a coaching session for 82 children sponsored by World Vision who were affected by Typhoon Morakot, which struck southern Taiwan last August. Then in the evening of October 8, about 12,000 fans filled the Taipei Arena to enjoy the power, speed and skills the teams demonstrated in the preseason game, as well as the passes, dunks and three-pointers of star players like Danny Granger of the Pacers and Carmelo Anthony and Chauncey Billups of the Nuggets. Based on the enthusiasm for the event, which was reflected by the high demand for tickets, Chang is confident about bringing in more professional matches—such as the Harlem Globetrotters or even a Major League Baseball game, for example—to Taiwan in the future.

Initially a vendor selling sporting goods and an organizer of sports-related recreation activities at the Hsinchu Science Park, Bros Sports Marketing was founded in 2001 and went on to become one of Taiwan’s first sports marketing firms, mostly because of the founders’ passion toward sports. Over the years, it has grown to become Taiwan’s largest company in the sector, and has helped organize many major sporting events such as 2009’s Kaohsiung World Games and Taipei Deaflympics.

Event-Marketing Approach
Shao Yu-lin, an associate professor of recreation and sports management at the Taipei Physical Education College, thinks that the Chinese Basketball Alliance (CBA), which was Taiwan’s only true professional basketball league before it folded in 1999 after five seasons, and the Chinese Professional Baseball League (CPBL), Taiwan’s professional baseball league, have both been instrumental in the institutionalization of sports marketing in Taiwan, although the CPBL has faced a series of scandals over the years. A professional team’s income is derived from ticket revenues, team merchandise sales, television revenues and advertising sales. Taiwan’s professional teams are all corporate owned. While these enterprises have many ways to market themselves, they usually take the most basic “event-marketing” approach, meaning the use of a single event or an activity to achieve a marketing objective or gain exposure for their teams. Whenever the Uni-President Lions win a season title or the annual championship, for example, all the 7-Elevens in the country, which are operated in Taiwan by Uni-President Corp., offer some kind of sale or discount for several days. These sales are not infrequent, as the Lions have won the Taiwan Series seven times since the league was founded in 1990.


Taiwan Beer takes on the Yulon Dinos in a 2009 semi-final game in the SBL, Taiwan’s semi-professional basketball league. Despite the SBL’s talented players, energetic dancers and core of enthusiastic fans, ticket sales surge only during the playoffs. (Central News Agency)

Although by late last year some of the team’s players were being investigated for fixing matches during the 2009 season, the Brother Elephants, which in the 2003 season became the first CPBL team to turn a profit, has been the most successful team in marketing in terms of developing ad sponsorships. Rather than just placing sponsors’ logos on uniforms and advertisements around the field, the team “quantifies” these ads with reports on details such as exposure time and estimated value. “Sponsors like to see actual figures and the Brother Elephants team provides them,” Shao says. “While other teams go out to look for sponsors, enterprises have approached the Brother Elephants to run their advertisements.”

The La New Bears team is another successful example, although some former La New players were also facing match-fixing allegations in late 2009. Before buying a CPBL team in 2004, footwear manufacturer La New had already been using event marketing for its products by holding annual national health walk activities since 2000. When the company took control of the Bears, it  adopted Kaohsiung’s Cheng-Ching Lake Baseball Stadium and then took a more professional tack in managing the team, working to improve the diet, uniforms, living arrangements and transportation provided to the players. Such actions not only made a strong impression on the players themselves but garnered media attention, which served as free publicity to boost La New’s corporate image.

Shao estimates that the total number of “customers” for the CPBL is about 300,000 people, which is rather small compared to professional sports in other countries. While sports marketing capitalizes on the popularity of sports, it is very difficult for teams to be profitable in a small market like Taiwan. Most of the time, therefore, most teams are operated because the owners have a passion for baseball, rather than an overriding need to turn a profit. And it is most unfortunate that whenever the CPBL is about to turn profitable, a match-fixing scandal seems to bring it down to the bottom. Over the league’s past 20 seasons, there have been five such scandals.

But even with the CPBL’s ups and downs, more local enterprises have begun to warm up to the concept of marketing their products or brand names through sports, seeing it as a means of gaining an edge over their competitors. Giant Bicycles, for example, started sponsoring Spain’s ONCE team in the Tour de France in 2002. Repeated strong performances by the team have improved Giant’s image and helped it break into the high-end bicycle market in European countries.

Top personal computer manufacturer Acer Inc. is another Taiwanese company that has seen good results from marketing through sports. Acer signed New York Yankees pitcher Wang Chien-ming  as a spokesperson for its products in 2005. The “alignment” between the two, as Acer put it when signing Wang, was that both were Taiwanese “products” that, after years of struggle and hard work, earned their “brand names” internationally. It has been reported that when Wang has pitched well, sales of Acer products he endorses have experienced double-digit growth.

Collective Passion
From the point of view of marketing through sports, having an “alignment” with a star like Wang is helpful, but not required. “Sport is one thing that is capable of arousing collective passion,” says Eric Chang of Bros Sports Marketing. “Long-term sponsorship of sports events can usually make fans unconsciously associate a sport or a team with a brand name, however unrelated the two might seem to be.” As such, enterprises have also begun to view sponsoring sports as part of a longer-term plan instead of a one-off initiative. After watching women’s 9-ball billiards games, which have been popular in Taiwan for about a decade, for example, people are likely to think of the brand name Amway, which has been sponsoring the Amway WPA Women’s 9-Ball tournament since 1998. And when watching people jog, ING Antai Life Insurance (now Fubon Life) may come to mind, as the company has sponsored the ING Taipei International Marathon—an event that has drawn more than 100,000 local and international participants every year—since 2004.

Hsu Yang, an associate professor at Aletheia University’s Department of Sport Management, points out that sports marketing is a relatively new field even in the West. Most companies in the sector in Western countries were set up after 1990, while most were established in Taiwan after 2000. Although foreign sports marketing companies usually provide a full range of services in the areas of consulting, merchandising, client management and sports business investment, Taiwan’s companies focus mainly on hosting sporting events and seeking sponsorship. Hsu, however, does not think this difference is a problem. “The purpose of sports marketing is to sell sports products—goods, tickets or sponsorship,” he says. “Creative and good management of events create a good platform for selling these products.”

Organizing events, as Eric Chang sees it, is full of challenges in Taiwan. Preparing for the NBA’s Taipei game, for example, took Chang and his company 10 months of hard work that ranged from applying to the NBA office to host the game and finding sponsors to developing a series of marketing initiatives, including placing posters in cafes and convenience stores, fan activities, online games, downloadable NBA screen savers made available through popular local websites and even ads sent through cellphone text messages.

When planning such a major sporting event, securing financing is usually the first thing a planner has to deal with. The pay, transportation, accommodations and insurance for the NBA players and team staff for the Taipei game totaled US$8 million, of which US$1.8 million came from Chang’s company and the rest from sponsors including Cathay Financial Holding and Chunghwa Telecom. Money alone, however, is not enough to put on such a large event. “You need to have the heart to make it happen,” Chang says. “I’m a fan myself and have always wanted to watch an NBA game played in Taiwan, so it was like making a dream come true.”

Another difficulty for the local industry is a lack of professional experience in the field. Most employees at Bros Sports Marketing, for example, are sports enthusiasts like Chang, but initially had little familiarity with marketing. To help them gain the necessary knowledge, Chang offers his employees many marketing-related and language courses, as well as opportunities to observe how it is done in other countries. The company’s biggest prize at its year-end party, for example, can be flights and tickets to an NBA game.

There are no lack of departments and graduate programs devoted to sports marketing, sports and leisure studies, and sports management at local colleges and universities. The number of Taiwanese going to the United States to study sports marketing has also been increasing. “The problem is that students can’t really design efficient strategies for organization, marketing and human resource management without practical working experiences,” says Hsu Yang. “Meanwhile, college graduates often find it difficult to apply the fragmentary knowledge they’ve learned at school on the job.”

To offer his students some practical experience, Hsu has organized an annual project since 2006, in which sports marketing students are grouped and tasked with promoting sports in Danshui Township, Taipei County, where Aletheia University is located. The project lasts for nine months, spanning two semesters, and the students are required to design, manage and promote events that are able to attract fans and the notice of the media. One of the more successful events, according to Hsu, was a girl’s rugby game that drew about 700 audience members and 30 journalists to the match, with the event covered by Taiwan’s biggest television news channels.

Drawing such attention and media coverage to a non-mainstream sport can be viewed as an accomplishment in the field of sports marketing. A look at the ratio of the number of audience members at the game to the township’s overall population of 200,000, however, reflects the larger challenges of operating in a small market that the industry as a whole has been facing. In other words, just as the Aletheia students had to work hard to attract a small subgroup of women’s rugby fans from Danshui’s small total population, sports marketers for larger events face an uphill climb to attract a sufficient number of local sports fans from Taiwan’s relatively small total population of 23 million.

Like the efforts of nearly all governments around the world to improve physical fitness and quality of life by encouraging their people to make exercise a part of everyday life, Taiwan has also been promoting “sports for all” since the early 2000s by holding and funding sporting events. According to the SAC, about 20 percent of the people on the island now exercise habitually, though the number is still low compared to the 30 or even 40 percent in Western countries.

Although Chang does not offer what he considers a more accurate estimate, he thinks that the SAC’s number is way too high, but that is exactly why he is upbeat about the sports market in Taiwan. “It’s like selling footwear in Africa,” Chang says. “The fact that most people don’t wear shoes, or exercise regularly in our case, represents a huge potential market to be cultivated.” While selling shoes in Africa may be overly optimistic, marketing sports sounds doable in a developed economy where people have the time and money for the pursuit of health and happiness—of sports, that is.