Olympics marketing blitz takes off

JIJI

With less than three months to go before the start of the 2012 London Olympics, a marketing spree to capitalize on the global sporting event is getting under way among Japanese companies.

Dentsu Inc., Japan’s biggest advertising agency, estimates the London Games will have a direct ¥368.7 billion effect on consumption, such as purchases of related goods. Including indirect effects, such as the production of these goods, the Olympics will generate economic effects totaling ¥803.7 billion, it said.

Dentsu also forecasts additional effects of ¥41.4 billion if Japanese athletes perform well.

The projected effects include ¥235.3 billion in sales of flat-screen television sets and other digital appliances, ¥61.2 billion for Olympic-related goods, ¥49.8 billion for food and beverage expenditures, and ¥300 million for tours to London.

Although the total is much lower than the nearly ¥540 billion effect generated by the 2008 Beijing Olympics, it is a “good showing” when China’s geographical closeness to Japan is taken into account, a Dentsu official says.

Among specific marketing activities, Asahi Breweries Ltd. will release in July a third-segment beerlike alcoholic beverage under the name of Japan Gold that it has developed for the London Olympics using hops cultivated in Britain. Given the difference in time between Japan and Britain, “lots of people will watch the games on TV at home late at night while drinking,” an Asahi official said.

Travel agency JTB Corp. began marketing a tour last year that includes the opening ceremony for the Olympics. Despite the ¥1.3 million price tag per person, JTB received 10 times more bookings than it expected.

Athletes who compete in the London Olympics will receive clothing and other sporting gear from Mizuno Corp., Descente Ltd. and Asics Corp. An official at Mizuno, which will supply the clothing that athletes will wear at medals ceremonies, said, “The more medals (Japanese) athletes win, the higher the recognition our clothing will win.”

Of all products, digital appliances will see the greatest direct effect of the Olympic Games. But many industry officials are reserved about their expectations because replacement demand for TVs may have already been exhausted following steep sales gains through last year boosted by the Eco-point subsidy program for encouraging purchases of environment-friendly electronics, and the completion of a nationwide switch from analog to digital terrestrial broadcasting.

Nevertheless, many others hope the London Olympics will stimulate strong demand. An official at a leading consumer electronics maker said sales of big-screen TVs will rise as the event nears.

In particular, Blu-ray disc recorders, which offer sharper images than DVD recorders, are expected to see brisk demand as many event finals will be aired early in the morning.