MasterCard International: Marketing and Sponsorship Analysis

This report provides a comprehensive analysis of MasterCard International's marketing strategies, with a specific focus on its use of sports sponsorships. The report begins by outlining MasterCard's business model, emphasizing its role as a global payment gateway and its partnerships with international banks. It then delves into MasterCard's marketing approach, highlighting the company's strategy of sponsoring major international sports events like the World Cup and Olympics to enhance brand equity and differentiate itself from competitors such as Visa. The report examines how these sponsorships have enabled MasterCard to reach a global consumer base, increase market penetration, and generate substantial revenue. It also discusses the company's organizational structure and decision-making processes. Furthermore, the report evaluates the effectiveness of MasterCard's sponsorship strategy, concluding that it has been a successful strategic marketing tool. The report also includes references to relevant sources and provides insights into the potential benefits and drawbacks of continuing this strategy. The report concludes by recommending the continuation of the same strategy to maintain a competitive edge. This report is available on Desklib, a platform that provides past papers and solved assignments for students.

Running head: MARKETING OF MASTERCARD INTERNATIONAL
Marketing of MasterCard International
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MARKETING OF MASTERCARD INTERNATIONAL
MasterCard International is an American financial corporation listed on the New York
Stock Exchange. The company provides one of the world’s biggest payment gateways using
debit cards and credit cards. The company partners with various international banks like Bank
of America and government all round the world. The payment gateways of MasterCard are
protected by passwords and help the payers secure their financial details against frauds and
data thefts.
MasterCard’s distinctive business model consisted of three components. They were
a global family of payment gateways, a global system of accepting payments and
communication of all the payments customers made using their debit cards and credit cards.
MasterCard was the manufacturer and marketer of three of the most accepted international
payment gateways namely, MasterCard, Cirrus, Maestro and Mondex. These cards found
acceptance from millions of customers globally in more than a hundred countries. They all
had the logo of MasterCard showing interlocking circles, which enforced the brand power of
the company internationally. MasterCard allowed processing of secured payments all over the
world, which helped banks and people to conduct electronic transactions. The communication
system notifying the customer about the payments made through debit cards and credit cards
enabled the customers to gain information about their available bank balances and take
prompt actions in case of discrepancies. This facility created tremendous customer
satisfaction for both the member banks and MasterCard. This customer centric business
model enabled MasterCard to earn huge revenue, which gave it the financial strength to form
a new strategy of promoting its brand equity by sponsoring sports events like World Cup
and Olympics. The able organisation structure was under the leadership of able CEOs and
while its board of directors consisted of top bank officials. The dynamic business decision-
making capability of these able leaders enabled MasterCard to make strategies to promote
sports events.

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MARKETING OF MASTERCARD INTERNATIONAL
The new strategy of MasterCard was to sponsor international sports events like the
World Cup matches, which helped it to position itself in the market as an international
sponsor. The new strategy helped the company to differentiate its products like MasterCard
and Maestro from its competitors mainly Visa and Diner’s Club, its toughest competitors
International events like the World Cup enabled MasterCard to promote itself among a global
consumer base and promoted itself as a secure payment gateway. This new strategy of using
the platform sports events as a medium for marketing enabled the company and its partner
banks to generate huge revenue.
The sponsorship worth of MasterCard increased manifold due to its participation
in several international sports events like the World Cup, the Olympics and the ISL. These
events allowed MasterCard to gain access to customer bases all round the world, which gave
it an opportunity to display the usage and benefits of its products. The sporsorship worth of
MasterCard became so high that it led to fall in the market capturing of the competitor
products like Visa. The huge sponsorship worth of MasterCard encouraged the customers,
especially the spectators and the guests at the matches to use the card to make payments. This
generated heavy promotion of the company products, which resulted in huge revenue and
market penetration globally.
The new business model and the international sports sponsorships enabled
MasterCard to gain economies of scale in all its markets around the world. The company
had to spend billions of dollars to operate in the international market, which had presence of
strong competitors like Visa. Association with international sports events acted as a
differentiation strategy, which helped MasterCard to differentiate itself from its rivals and
attract more users. This led to generation of huge revenue, which the company could allocate
towards chip technology cards, which required heavy investments. Thus the sports
sponsorship enabled MasterCard to gain economies scale.

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MARKETING OF MASTERCARD INTERNATIONAL
MasterCard standardised its products and adopted the advertising strategy around
the sponsorship of sports events. This advertising strategy helped MasterCard to connect
emotionally to the customers. The customers as a result retained the advertisements of the
company for longer span of time and preferred to use it over other payment gateways. This
marketing strategy helped the company and its partner banks earn huge revenue worldwide.
The renewal of sponsorship of the 1999-2002 package of sponsoring the World Cup
match should not renewed by MasterCard. This is because the international sponsorship
bodies like ISL were charging high amount of entry fees and had altered the event content,
which may not be profitable for MasterCard.
It can be evaluated from the above discussion that the strategy of MasterCard to
sponsor international sports events was effective as a strategic marketing tool. The company
must adopt the same strategy in future to gain competitive advantage in the market and
strengthen its position.

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MARKETING OF MASTERCARD INTERNATIONAL
References:
“Master Brand,” Delaney Report February 22, 1999
“Master Card to allow banks to move its Logo,” Business Times(Singapore), June 28, 1999,
p.24
IEG Sponsorship Report, cited in MasterCard documents
Jason Fargo, “Behind Citi’s feud with Visa,”, Credit Card Management, April 1999, p.30
Lance Egelson, quoted in Kathleen V. Schimdt, “Vendor-partner Deals Winning Proposition
for All,” Marketing News August 16, 1999.
McCormack was the founder of IMG, one of the most powerful agencies in the marketing of
sporting event right with a 1993 turnover estimated at US$800 million.