The 2021 Tokyo Olympics is on the go right now enthralling the viewers with the mind-boggling talents of the participants. Unlike the earlier times, host cities have started to make profits during the event. The onset of this trend can be traced back to the 1984 Olympics held in Los Angeles. Until then the host cities had to incur large losses.
With the help of various corporate’s, they introduced new changes wherein they sold television rights and advertised the products of various corporate's throughout the games. Hence, the 1984 Olympics was a huge financial success where they shared their costs between the sponsors which not only mitigated loss but also generated profits of more than $200 million. However one cannot forget the marketing strategy of McDonald's which backfired in an unprecedented manner.
The time when Olympics was hosted by Los Angeles was when there was severe hostility between the US and the Soviet Union regarding Afghanistan. The US had boycotted the 1980 Olympics that was held in Moscow due to Soviet Union's incessant warfare in Afghanistan.
In the Olympics, before that, the US had won the third position while the first and second position was backed by the Soviet Union and East Germany respectively.
The problem with McDonald's marketing Campaign
Since the US boycotted the 1980 Olympics and things weren't still great between the USA and the Soviet Union, the latter decided to boycott the 1984 Olympics. So did East Germany.
McDonald's marketers did not factor in this new change before they announced their campaign where they gave Free Meal for every medal that the US wins. Every time one purchase something from McDonald’s, they will get a scratch card on which the name of an Olympic event will be written.
If the US representative wins a medal in that event the customer is entitled to a free meal. If the US wins gold, they will get a free big Mac, if silver then French fries and a bronze mean they get a soft drink.
The campaign was popularised with the tagline “When US Wins, You Win”. The campaign not only became a hit but also invited large investments into the event. However, their practical materialisation of the campaign was not so favourable as far as McDonald's were concerned.
The outcome of the McDonald's Marketing Campaign
Many outlets (more than 6000) across the US went out of big Macs. People crowded the stores to avail themselves of their coupons only to get more coupons every time they buy something.
As far as the US medal tally is concerned there was a whopping increase in the number of medals from 94 to 174. In 1976 US had won 34 gold medals and in 1984, it reached 83 in 1984.
McDonald's have not yet issued a report regarding the extent of loss it had incurred with its floor plan. However various reports suggest that the amount has run into millions.
Interestingly, there have been instances where citizens later revealed that they survived on McDonald's meals during those times when they were left destitute due to poverty.
It was a blessing for people like this where every purchase led to another scratch card wherein a medal for the US was almost assured. Sometimes customers used to get scratch cards of events that were already over and won by the country which led to the immediate availing of the respective coupon.
Although such an initiative has been a big blessing for many poor families, it was a huge miss-step from the side of McDonald’s.
As Olympic fever is getting high across the world, many eyes are on this fast-food chain that is known for its sports sponsorships and advertisements. While the campaigns of McDonald's have been successful in reeling in profits for the hosts during the 1984 Olympics, the loss that it had to incur was distressing.
It is a clear example of a monetary loss that resulted due to insufficient analysis of the market conditions and social realities.
Which country boycotted the 1984 Olympics?
The Soviet Union and East Germany boycotted the 1984 Olympics.
How many medals did the United States win in the 1984 Olympics?
United States won 83 Gold, 61 Silver and 30 Bronze medals.