to create global brand
Sports marketing is relatively new in China and Formula 1 racing
may be the first truly international sporting event to create
a permanent footprint in the country.
Shanghai Grand Prix, now in its second year, and the potential
growth of motor sports in China, have offered new opportunities
for businesses to associate themselves with global sporting events.
Formula 1 management and the Shanghai International Circuit organized
a global business conference to examine sports marketing and the
opportunities it creates.
Daily sat down with Michael Payne, the man behind the conference.
Payne is a special advisor to Formula 1 CEO Bernie Eccleston and
the former head of marketing and broadcasting at the International
Daily (CD): What do you think are the key benefits from Friday's
Payne (MP): It takes time for the business community to understand
how you create a brand, but I suppose merely to begin that discussion,
to expose Chinese business leaders to some of the principles so
they can begin identifying their own roadmap so they can go forward.
no magical solution. First we have to understand how to take it
forward and over time to help the business leaders understand.
you fast track it three or four years down the road then clearly
as Chinese companies begin to develop that international position,
to develop that brand identity, then I would fully expect you
would begin to see many Chinese companies as sponsors in Formula
1. Whether they would sponsor a driver, sponsor a team or as a
Major Chinese companies are going overseas. Is there anything
these companies are not doing or any marketing elements they are
not utilizing fully?
Take Lenovo. I did the original deal with Lenovo and the Olympics.
I know the team very well. They had a very clear understanding
of what they wanted out of the Olympics: To create a global brand.
I think they have been developing that very successfully and I
think in the end that will become a good showcase to other Chinese
companies as they begin to develop their international positions.
point is, it is beginning.
At the recent Fortune 500 in Beijing there were 15 Chinese companies
on the list, most State owned, what do you see happening with
them in the future?
Even State companies have to begin to compete. There's competition
within companies in China and from outside and over time State
companies get restructured.
at what's happening in the rest of the world.
fact that you are a government controlled industry or a private
industry doesn't mean that you don't have to go and develop your
business, advertise and market to protect your market share, grow
your market share.
fact that you don't have competition today doesn't mean that you
won't have competition tomorrow. So you have to prepare for it.
How do different sports compare in terms of marketing?
Each sport offers different positioning and different statements.
1 has a very strong technological image and leadership no other
sport really has. If you wanted to make a technological statement
about leadership and engineering you're probably not going to
do that through football.
on the other hand is very popular. Everybody is playing it on
the street. It worked very well for Coca-Cola because it's got
the right brand fit.
basketball situation here with Yao Ming has a particular energy.
is beginning. Again, would Coca-Cola be the very right for golf
with it's very upmarket (image)? Or if you are Omega watches or
Mercedes Benz, golf is the space that you want to fill.
it is Formula 1 or the Olympics or tennis, the principles of how
you develop and how you activate them are very much the same.
you want global exposure and awareness, Formula 1 is probably
unique in that it is in 150 countries and it is every other week
for nine months. There's relatively few properties that are offering
Is Formula 1 more of a European culture?
I think Formula 1 was grounded in Europe but as it moves more
into a global stage with races in the Middle East, races in Asia,
races in the Canada and the United States, it becomes more of
a global event. Look at the Japanese teams that are becoming very
Does Formula 1 provide Chinese companies with access to other
Clearly there is that platform that Formula 1 offers Chinese companies
to develop their position internationally.
at the same time (it provides a platform) for international companies
is, Renault for example, going to do to create it's image here
when they start. They are the Formula 1 champions.
if there isn't mass understanding or participation there is a
growing understanding that it is at the pinnacle. That it is this
super technological, glamorous, dynamic event that maybe we don't
understand very much about yet but it is right up there.
that, right there, is a powerful platform for certain key companies.
Chinese consumers have seen many leaps, like mobile phones, which
are everywhere. Can something similar happen with motor sports?
You're at the beginning.
was the first race last year and it was a lot of novelty. It was
the first undisputed global event that has come here.
having had the race, you have had the TV audience through the
year. People begin to follow a race here and a race there. They
start to build awareness.
are talking about it, they are starting to make a noise. You are
not in 12 months or 24 months suddenly going to create a mammoth
long did it take for soccer, with its various false starts through
the 70s and 80s?
have some of the biggest sponsors in the world, very active in
marketing and using it. So you will probably develop this quicker
than you would with other properties.
Who is watching the races?
If you take the 18 races throughout the course of the season,
you had maybe 100 million people across China watching.
the Chinese market really begins to get some serious traction
both for Chinese and international companies I believe that within
a decade China will be the most important sports market and the
most developed sponsorship market in the world.
will come as part of the legacy of the Olympics as more companies
begin to get involved, part of the legacy of Formula 1.
and more global events are coming here. And the market itself
is opening up. Within a decade, it will be without question the
most important sponsorship market in the world.
is nothing that prepares you for the numbers. You're dealing in
a dimension and a dynamic that you can't relate to.
years ago, everybody was talking about the promise but it wasn't
yet happening. It is now developing, moving.
What role does Formula 1 play to create an audience?
with Formula 1 and go on with the Olympics and what that means
to put China on the world stage. How many people were watching
the Formula 1 race last year around the world? Outside of a news
bulletin, which may or may not have been that flattering... that
they would have seen something about China.
communicate not through a narrow audience of business leaders
on CNN or whatever, you are communicating through the fan base
across Europe. And they are saying 'you know, one of these days
we should go to China.'
the Olympics will magnify that 10 times further.
What will 2008 be like?
2008 will be the year of China on the world stage... the most
incredible coming out party onto the world stage.
think everybody you speak to now will acknowledge that China will
get far more out of (the Olympics) in 2008 than if they had gotten
the games in 2000. It will come at the perfect time to get the
full impact of hosting the Olympic games. And the world is also
hungry to learn a lot more about China.
What are the immediate challenges for F1?
The next stage is clearly beginning to develop motor sports in
China. A Chinese industry that understands the technological showcasing
that Formula 1 offers.
is suggesting that China doesn't have the technological leadership
and there isn't a more dramatic, dynamic field on the world stage
than to prove technological leadership, engineering skills in
the sporting community than Formula 1.
(China Daily 10/15/2005 page6)