Going for the gold: small businesses really can profit from the Olympics

Entrepreneur, July, 1996 by Christopher D. Lancette

THE OLYMPIC EXPERIENCE of the product licensees who sell the Games is much like that of the athletes who compete in them: For the select few who qualify for the world's greatest sporting event, it is an opportunity to reap golden rewards from the unparalleled exposure unleashed by a medal-winning performance.

Gross revenues from merchandising this summer's Centennial Olympic Games in Atlanta, for instance, is expected to exceed $1 billion--more than twice the total licensing revenues for the 1984 Los Angeles and 1992 Barcelona Summer Olympic Games combined. And those numbers don't include the sales raked in by companies that launch themselves to a new level as a result of participating in the Games.

Even better news for small-business owners is that you don't have to be a traditional powerhouse to break in. "The major companies get most of the Olympic licenses, but that doesn't mean small companies don't have the opportunity to get in," says Karen Raugust, executive editor of The Licensing Letter, a licensing trade journal. "If you have a distributing niche or a unique product that no one else is making or that no one else is making well, that's your edge. You have to convince the licensor you are the right company and have something that sets you apart."

Although the merchandising arm of the Atlanta Olympics accepted only 130 or so of the more than 10,000 licensee applications filed, approximately a dozen small companies, including those profiled here, demonstrated that certain je ne sais quoi. Contrary to popular opinion, though, the Games don't automatically mean instant success. Profiting from Olympic merchandising is a labor more resembling a marathon than a sprint.

"The Olympics are a one-shot deal," Raugust says, "but if the licensees are successful, they're going to become known to other sports licensors, and that could provide them an entree to other opportunities." That could include other ways to tap the sports licensing industry, which Raugust says produced $13.4 billion in sales in the United States and Canada last year. "The Olympics also represent a chance to reach new customers, besides the target audience, that will help a small business in the long term."

Of course, the short term can also be quite rewarding if you calculate your risks correctly. That includes figuring out how much product to produce, how many different lines to use, what your competition is likely to do, and planning how to react to any unforeseen changes in the market that occur during your production time.

On the plus side, there are several inherent advantages to marketing Olympic goods you don't get from licensing other products. First and foremost are the Olympic trademarks and symbols.

"The Olympic marks [such as the five interlocking rings and the torch] are some of the most recognized marks in the world," says Darby Coker, director of communications for marketing at the Atlanta Committee for the Olympic Games. "They have close to a universal appeal. Demographics show they're equally recognized by males and females, old and young, rich and poor. All kinds of positive images come with the Olympic marks. Products with the marks are already well-positioned in the market; little development is necessary because people already understand them."

The second major bonus of licensing Olympic products is the marketing support you receive from the merchandising division of the organizing committee. The marketing program in Atlanta, directed by Atlanta Centennial Olympic Properties (ACOP), is a comprehensive retail and marketing support effort that includes assistance in distribution, promotions, public relations, mailings, point-of-purchase materials and a score of other areas.

On the following pages, you'll meet three companies that are reaching their Olympic goals. Each is a creative leader in its field, and each brings something different to the table. Each also has advice to offer other entrepreneurs interested in merchandising future Olympics.

* ENERGY IN MOTION

Mack II Inc. owner and president Mack Wilbourn is a walking ball of energy. He doesn't even sit down for interviews. The 52-year-old former McDonald's franchisee answers questions about his color-changing coffee mugs, color-changing glassware and other products while bouncing off what some people say should be his color-changing walls.

Indeed, Wilbourn's downtown Atlanta office is painted a most eye-opening shade of pink. While the color was his decorator's idea, he likes it. The vibrant, feel-good shade suits him, especially when he's asked why he chose to get involved with the Olympics. Shaking imaginary pom-poms and imitating the leap of a high school cheerleader, he says, "Because of the excitement!"

Wilbourn's products change colors and show motion when either hot or cold liquid is added. Pour coffee into one of his mugs, and the soccer player on the side drills a shot into the back of the goal net; into another, and leafy ornamentation appears over various Atlanta Olympic symbols. Pour a cold beverage into his Coca-Cola glass, and the route of the nationwide Olympic torch run shoots across a map of the country.