Visa Sponsorship Marketing Group

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CASE: SPM-5
DATE: 7/22/03

VISA SPONSORSHIP MARKETING

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Visa was the world’s leading payment brand and its vision was to be “The World’s Best Way to Pay.” In 2002, Visa-branded cards (credit; debit and prepaid; corporate; purchasing and business products)1 generated more than $2.4 trillion in annual volume; totaled more than one billion cards worldwide, and were accepted in over 150 countries and territories. Visa was among the most globally recognized brands and it held 7.1 percent share of global personal consumption expenditures (PCE).2 Its U.S. tagline, “It’s everywhere you want to be,” had become part of the American lexicon. Appendix A and Exhibit 1 provide summary information on Visa.

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Visa attributed an important part of its success to high profile sponsorships such as its Olympic Games sponsorship. Visa also sponsored numerous events such as the Rugby World Cup, Best of Broadway, the Toronto Film Festival, NASCAR, the NFL, the Visa Triple Crown, and the Paralympics, and has an international alliance with The Walt Disney Company. In the fall of 2002, Visa announced its decision to extend its Olympic Games sponsorship through 2012. Its original sponsorship deal was structured through the 2004 games in Athens, but the sponsorship was extended because the partnership had become increasingly successful over time. The deal would extend a relationship between Visa and the Olympic Games that started in 1986. The company spent an additional two to three times that of the sponsorship fee it pays for advertising, promotions, and other efforts to maximize the value of the sponsorship - not an atypical amount for such sponsorships.

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Visa International was comprised of six regional operating organizations: Asia-Pacific; Canada; Central & Eastern Europe, Middle East & Africa (CEMEA); European Union; Latin America & Caribbean; the United States. Despite its global reach, Visa remained very much a local organization. Its regional offices had a high degree of operating and marketing autonomy. Visa felt that because its regional organizations were closest to their local markets, they knew best how to help member institutions serve their customers.

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Debit products allowed consumers to access their checking or bank deposit accounts directly. Debit products gave consumers the choice to “pay now,” whereas credit products allowed consumers to “pay later,” and prepaid products to “pay before.” 2

Personal consumer expenditure represented the market value of all goods and services purchased by households and nonprofit institutions, excluding the purchase of homes. In 2003, global PCE was at $19 trillion and was comprised primarily of cash and check payments. Visa had an average annual increase in its share of global PCE of 12 percent over the prior five years. Victoria Chang prepared this case under the supervision of Professor George Foster as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.

Copyright © 2003 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate School of Business.

This document is authorized for use only by Hadi Nejatian until May 2013. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860.

Visa Sponsorship Marketing SPM-5

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Thomas Shepard, Visa’s executive vice president of...
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