Ambush Marketing Should Tough Rules Be Introduced to Protect Sports Sponsors

Ambush Marketing: Should Tough Rules be introduced to Protect Sports Sponsors?

This is a paper that describes the concept of ambush marketing and outlines how it can be detrimental for the official sports sponsors of events such as the World Cup, Tournaments etc. It argues whether there should be laws for curbing this marketing tactic. It has sources.

Lack of business ethics is a problem that is of growing concern in the field of business today. Many individuals and organizations either easily forget or ignore ethical codes when they see business opportunities. This is an issue of immense concern because of the fact that millions of dollars can be jeopardized easily on the part of rightful contractors. Speaking more specifically, this refers to the manner in which sports sponsors at major events are denied their total rights over an event due to interfering investors. These rights are denied as the original and rightful sponsors pay million of dollars to associate their brands with a logo of an event, but may be overshadowed by other companies that also attain these rights due to loopholes in business laws. In order to protect the rights of the original sponsor there is thus, a need for stricter and more ethical business laws.

Business ethics has become an area of particular concern in the last 10-15 years due to trade seeing major changes globally. These changes are ones that directly affect the lives of the working class, and have raised a great deal of concern for millions of people. Under this kind of trade freedom, organizations perhaps believe that they are entitled to ambush big events. This may be asserted because of the fact that capitalist principles might well allow such interception or interference. However, from a business ethic perspective, it is asserted that such interception is unethical because holding an event sponsorship means that the event is purchased and owned by the official sponsor (s) and no one else.

It is obvious that tougher laws need to be made in order to mitigate or nullify the manner in which organizations (ambush marketers) try to infringe the rights of official sponsors in world events. An example of a sponsored event is the recent South African Cricket World Cup 2003, where millions of Dollars were invested. In such events, a country needs to have solid laws so that official sponsors are protected and do not have to worry about ambush marketers cheating them out of their promotions and earnings.

Ambush marketers can be described as organizations that intrude agreements made between an official sponsor and the host of an event. Ambush marketers usually take advantage of their rights to capitalize on business opportunities, and make the most out of someone's business deal. However, in this regard it might be said that ethical approaches to official sponsorship are necessary because of the fact that ambushing official sponsorship is unfair resulting in grave losses to those involved in a contract (Wells, 1995).

If official sponsors continue to suffer in the way that many have suffered through ambush marketing, very shortly there will be a shortage of official sponsors for major events. This is a very big possibility, and yet there are some that still sympathize with organizations that indulge in ambush marketing, believing that they are perhaps justified in approaching business opportunity in this way. They simply regard this as marketing forces or at least a representation of marketing forces. This approach may be the result of lack of opportunity, and also the desire to be part of a major event. Perhaps, ambush marketers believe that it is their right to intrude invents by perceiving denial of their rights to trade or share in the sponsorship of a major event (Schlossberg, 1994).

Some may even ask, "Are they thieves - knowingly stealing something that does not belong to them?" Or are they "Inspired marketers, neutralising competitive advantage?" And then assert that "all is fair in the cut and thrust of the marketing field" (Driving Business Through Sport, 2003). However, even if one really does want to call ambush marketing fair, it still cannot be allowed to carry on due to the fact that it will result in severe repercussions.

In an effort to try and avoid any repercussions and please potential ambush marketers, it might be suggested that sharing in sponsorship could be attempted. However, it must be realized that all organizations might not be willing enough to do so, as their credit could still be overshadowed. Therefore, having a single official sponsor handle the expenses is much simpler, as it reduces several intricacies.

One of the major ways in which ambush marketers may upset official sponsorship in an event is through sponsoring individual athletes. Quite obviously, these athletes will not be ready to strip themselves off their sponsors, as this might void their contracts with them, which would mean that after the event is over the individual athlete's sponsor would not continue sponsoring him or her. Hence, this is a loophole that needs to be taken into consideration, as this kind of situation has occurred in Olympic events where most participants are athletes who are sponsored individually. This means that there is a great chance of ambush marketing taking place, and also calls for business law to focus on these finer details.

In major events, it is already clear enough that ambush marketing is unethical, so, one cannot really make any excuses for these kinds of organizations no matter what form their ambush takes place and no matter how desperate they may seem. This is because of the fact that some may say that there may be unintentional ambushes, and these may take place due to athletes at events wearing tags, etc. that do not belong to the official sponsor.

Considering the supposed unintentional ambushes, it must be said that it is also common for athletes to have favourite sportswear, etc. that carry tags of another company other than the official sponsor's. However, this is something that annoys official sponsors because of the fact that they believe they have bought the entire event and no other company has the right to ambush. It may be asserted here that it should be the responsibility of these athletes to remove such tags from their wear and save a great deal of controversy. Since this removal of tags is desired by the official sponsors, it is a common pre-requisite for participants in an event to remove all tags that do not belong to the official sponsor. As ambush marketing takes this kind of form along with others in most countries, so far there are only few like South Africa that have taken appropriate action against it (Stotlar, 1993).

South Africa is perhaps the only country to take such strong decisions against ambush marketing, and this is exemplified in the way that they warned all concerned prior to the 2003 Cricket World Cup staged there. They announced, "Companies and cricket fans who plan to engage in acts of ambush marketing before or during the forthcoming Cricket World Cup are set to face the full might of the law" (Mokgola, 2002).

Parliament overwhelmingly voted in favour of giving trade and industry minister Alec Erwin the right to protect the Cricket World Cup and other events of similar magnitude against" (Mokgola, 2002). This action alone describes how serious the South African officials are about controlling unethical business actions. They have now even termed ambush marketing as a criminal offence, in which a violator of this law may serve a jail sentence. It is "a criminal offence to carry out ambush marketing"; "Lengthy jail sentences could await individuals and companies participating in ambush marketing activities" (Mokgola, 2002).

Existing law had already prohibited "attempts to pose as an official sponsor of an event, but the new amendment Bill criminalises any misuse of an event logo to promote a product not listed as a co-sponsor" (Mokgola, 2002). The body responsible for the cricketing event reinforced this as well; the ICC said, "officials of companies who use ambush marketing at the Cricket World Cup could face lengthy jail terms after new legislation in host country South Africa" (Donaldson, 2002). In addition to this, the ICC said that in order "To play in the World Cup, players must sign a controversial participation contract which protects the rights of the ICC's sponsors" (Donaldson, 2002). It must be noted here that it was this part of the ICC ruling that caused significant controversy in India. This is because of the fact that there are organizations that have virtually bought over few highly skilled players. These are players that are renowned and fall under the control of these sponsors. "Leading players, particularly from India" were "opposed to the participation contract in its current form as it" would "prohibit private endorsements with companies seen to be in conflict with official World Cup sponsors" (Donaldson, 2002). The ICC remained firm on their contractual proposals, and as a result all players had to conform to what the South African government wanted.

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 of any organization on their kits for competitive sports, without approval from the hosts, etc. This is because if they do they cannot participate, as they may violate the official sponsors. However, if there are co-sponsors around they have to be announced as co-sponsors, instead of remaining as unofficial sponsors, saving themselves expenditure on the competition while gaining brand recognition (Stipp, 1998).

Quite reasonably and clearly it can be seen that official sponsors of an event are the ones to lose because of ambush marketing. Since the official sponsors lose out in this way, naturally they would be hesitant to venture forth to sponsor another major event after a bitter experience of no proper legal protection. The end result of this hesitation would be a complete denial of sponsorship on the part of official sponsors. In order to prevent official sponsors from losing faith in countries and hosts that wish to have them as sponsors, the government of South Africa has taken steps to protect these organizations, and other countries should follow them.

The government of South Africa has taken steps that are severe, and these steps are ones that have the potential to prevent ambush marketing in the future, as they are threaten to end business ventures of organizations (ambush marketers) that dare to violate them. Those in charge of a marketing ambush could end up in jail too.

A jail sentence for violating a law against ambush marketing to some may sound like making a mountain out of a molehill. However, it must be considered that if such action is not taken or at least if these kinds of threats are not imposed then there will be severe repercussions. As a result of this, many people stand a chance of being effected. This is because of the fact that the economy and everything related to it can be affected.