Switzerland’s shock defeat of Spain in the World Cup has opened the floodgates of business activity as firms try to cash in on the euphoria of fans.This content was published on June 19, 2010 - 10:14
On Thursday supermarket chain Migros came good on a promise to offer customers a ten per cent discount on all products the day after the victory. Other companies have also offered special promotions based on the football team’s success.
Migros customers scored a result of their own with the “win premium” saving on groceries, furniture, clothing, DIY, electronic and sporting goods from the store. The chain reported bumper revenues and long queues at its various branches.
Based on reported revenues announced last year, Swiss media have speculated that the offer could have cost Migros anything up to SFr10 million ($8.77 million) in lost margins on the day.
But Migros spokesman Martina Bosshard said sales were considerably higher than normal, meaning the group made a gain on the promotion.
“We had a very good day of trading. A lot more customers came into our stores and they also bought more than they normally do. We also had very good feedback from our customers so we are very pleased,” she told swissinfo.ch.
Long term appeal?
Bosshard added that such promotions could not happen every day, but when asked if discounts would be given after future Swiss football wins, she said: “Everything is open.”
This is not the first time Migros has used a football tournament to boost sales. During the 2008 European championships, co-hosted by Switzerland, the chain produced a special M08 brand of goods.
But, marketing expert Achill Prakash, from Swiss consultancy Publicis, does not believe the latest stunt will prove as effective as the M08 campaign two years ago.
“Unlike the M08 brand, this latest Migros promotion does not appear to have much brand value, only perhaps revenue value,” he told swissinfo.ch. “I think they have missed a chance of connecting with fans by building on the M08 value, telling a whole story about the emotions and the fun side of football.”
“I can only see a temporary benefit as people who would not have gone into a Migros store [on Thursday] might decide this is the day to buy a flat-screen television or their groceries. But a one-off ten per cent promotion does not carry long-term value.”
Ambush or not?
Both the M08 promotion and the ten per cent discount offer come under the category of ambush marketing, as Migros declined to become an official tournament sponsor of either football tournament.
World football governing body Fifa would probably have larger fish to fry than Migros while defending the World Cup brand. Its attention is drawn to firms taking bigger liberties, such as the alleged ambush of a beverage company that is said to have hired Dutch women supporters to sport clothing promoting its business during a game.
Fifa would be hard pressed to prosecute every baker that sold football-shaped bread during the tournament. Fifa did not respond to questions relating to the Migros promotion, while the chain dismissed suggestions of ambush marketing.
In any case, many firms, not just in Switzerland, are jumping on the bandwagon.
One Swiss web-hosting firm is offering a ten per cent discount for new customers for every goal scored by the Swiss national team in South Africa. A film processing company says it will give an 11 per cent discount if Switzerland progress from their group.
In France, an electronic goods retailer is offering free televisions if Les Bleus lift the trophy. Most French fans think the company will not lose a euro from the stunt.
Global cash cow
In Britain, an electronic retail chain promises £10 cash back on purchased items for every goal that England score. Retailers all over the world are offering special deals on televisions while the tournament lasts.
Meanwhile, sales of the Vuvuzela plastic horns - that have split opinion as to whether they add to the atmosphere of matches or are a noisy curse – have reportedly taken off even in Switzerland. Retailers have reported the must-have South African football fan accessory as flying off the shelves.
But the constant buzzing noise has proven to much for at least one Swiss public viewing zone – that has banned supporters from bringing the horns.
Swiss football players have reportedly already banked SFr30,000 each in bonuses after beating Spain. The players are guaranteed SFr10,000 from the Swiss Football Association for each point they win at the tournament. A win is worth three points.
But they are also generating income for businesses back in their homeland – and a few bargains for euphoric consumers.
Matthew Allen, swissinfo.ch
Football and money
The term ambush marketing was coined in the early 1990s. It described the strategy of large firms that associated their brand with large events without paying for the privilege.
This marketing behaviour was, at first, most notably associated with the Olympic Games, but soon moved to other sporting events, such as the World Cup and the European Championships.
Several countries have been persuaded by sporting bodies to issue legislation to protect the event's brand. Britain has followed this path to protect the brand name and the Olympic logo during the 2012 Olympic Games.
Ambush marketing has also been called "guerrilla, parasite or freeloader" marketing.
But Fifa will still have plenty of money left to count at the end of the year. In 2009, the organisation drew in revenues of $1.06 billion, leaving it with a $196 million surplus after proceeds were redistributed to member associations and spent on football projects around the world.
Companies including McDonalds, Visa and Coca Cola have paid multiple hundreds of millions of dollars to officially sell their products under the banner of the 2010 World Cup in South Africa.
Football’s world governing body, based in Zurich, has also negotiated tax free deals as it is a sporting body.