Visa Case Questions

VISA Case Questions  

 1) Discuss the growth of the size of the sports sponsorship market over the past 10 - 15 years and the leading categories and brands in the sports space. (Note that the case is data from 2001 but a little outside research should allow you to complete the question and provide updated info on the sponsorship marketplace)

The sports sponsorship market has grown tremendously over the past few years. In 2001 sports sponsorship spending was around $6.5B. In 2015 that figure is expected to be close to $60B. Over the course of just 15 years there has been a 10 fold increase in sports sponsorships. This increase has mostly been in the North America area with sports sponsorships rising to almost $20B in 2015 (up from just $15B in 2008). The top companies were Pepsi and Coca-Cola with spending’s of $350M and $300M respectively. The next largest companies are NIKE, Anheuser-Bush and AT&T ($260M, $255M and $180M). The most active overall categories are insurance, beer, and quick service resteraunts.

  2) Why did Visa use sponsorship and what was their strategy around selection and activation with their sponsor partners?  

Visa sponsored events such as the Olympics, NASCAR, NFL, Visa Tripe Crown and the Walt Disney Company. Visa realized that in the payment service industry they were seen as a quality organization but not unique so they decided to get sponsorships to help them with this issue. Visa’s sponsorships are put into three development cycles, 1) emerging markets (name recognition, branding, and product sampling), 2) maturing markets (name building, signage, advertising, public relations, and promotions), and 3) mature markets (presence, products, partnerships, and alternative media). Visa understands that it is only in the third market that it has to focus on create differentiation. When deciding which sponsors to partner with Vida has 10 criteria: 1) brand fit, 2) usage stimulation on behalf of Visa’s members, 3) event history/credibility, 4) broad reach, 5) governing body control, 6) advocacy creation, 7) low risk, 8) event’s marketing plan, 9) ease of implementation, and 10) strong member interest. Visa then uses it sponsors to build awareness, increase usage of its product, enhance the reach of its marketing efforts, showcase new technologies and create a promotional platform to help create new concepts for the Visa team.

3) Explain why Visa chose to align with the Olympics in the 80s and why in your opinion do they continue to be involved.

The Olympics was THE platform for any company trying to get exposure. For example, during the Olympic Games in Sydney (2000 Summer), more than 3.7 billion viewers across 220 countries watched over 3,500 hours of coverage totaling 36.1 billion viewing hours while athletes from 80 of the 200 countries participating earned 928 medals. Visa decided to partner with the Olympics because they wanted sponsorships that generated awareness at the highest level of consumer purchasing. Visa wanted to be associated as being the pinnacle of excellence, having a universal appeal and have a strong international impact. The Olympics gave Visa ways to reach audiences they had never reached before, to help Visa see that the best international relationships were local at heart and that being excellent and accepted everywhere was of utmost importance. Visa and the Olympics stand for many of the same ideals and we already know Visa has an emerging markets development phase. The Olympics is a great way to reach these markets and is great for helping Visa establish the excellence of their brand.

  4) Elaborate on their campaign/strategy for the Olympics in general which was discussed in the case. Also comment on their campaign and activation around the recent London 2012 Games. (Note that you will obviously need to do outside research as case only goes through 2003)

When Visa first started with the Olympics, Visa was just trying to use the platform as a way to create brand awareness. Since then, however, Visa has started to really take its use of the Olympics to whole new level. For example, in the 1996 Olympics Visa created pre paid cards to be used throughout the Olympic area (Atlanta). Visa’s strategy today is based on many things. Visa wants to create a central marketing theme to complement the Olympic Games. They also want to create lots of programs for Visa members and then promote these to get users to switch over (these include programs for member banks and indirect programs for merchants if they promote the Visa card). Visa also believes in advertising message based on the Olympic games themselves (dream with no boundaries to resonant with endlessness of Australian continent). Visas advertising was very focused on athlete relationships and sponsored individual teams to get individual brands on their side. Visa also made sure they had adequate programs with the host city so that they can extend their Olympic benefits 4-5 years out. Visa assists the host city in created local value and in return Visa reaps tourism, merchants and advertising revenues from the host city partnership. Visa also ensures they are present on site through ATM networks, point of sale terminals, and customer information terminals to help customers understand the value of the Visa brand. In 2012 Visa had an exclusive sponsorship with London Olympics to free out MasterCard and Amex card holders. Visa kept their onsite message strong with lots of ATMs, banners and terminals to keep their brand value at an all time high. Visa managed the entire London Olympics payment system. Visa provided financial assistance and marketing exposure to thousands of Olympic athletes to really create a connection with the players. Visa believes London to be a 6-7 year project so the full results of their partnership is still to be seen.