Principles of Marketing for Business: The of Manchester United - Case Study Example

Principles of Marketing for Business Case study: The case of Manchester United Introduction Despite the competition on behalf of the major world clubs, Manchester United is recognized to be an obvious leader for the past decades (Morillas.com, 2013). Huge demand and popularity of the brand is attributed to a number of factors, including: the obvious successes on the playing field, namely wins of 13 Premier League titles, the cup in 2008, and great plays in the 2009 and 2011 finals; capability to attract huge TV audiences due to excellent results and showy play; enormous popularity of such players as Cristiano Ronaldo, David Backham, Roy Keane, Wayne Rooney and Ryann Giggs; and finally, the legendary trainer Alex Ferguson who left the club in 2013 (Morillas.com, 2013; Bulford, 2014). These are only some of the factors that have contributed to the popularity and brand value of the Manchester United club, and more detailed analysis is required. The aim of this paper is to analyze the brand model of Manchester United in more details, to explore how Manchester United attracts so many sponsors, and to analyze the benefits both the British club and sponsors gain from the arrangement. The Manchester United brand Manchester United football club as a brand represents a long history of its development and promotion. It was a local product which has become a national and global brand in sports (Richeliey & Desborder, 2009). As Kantar Media stated about the Manchester United – “the British club which moved most passions among football fans, with 659 million supporters (Morillas.com, 2013). In order to maintain its status and brand image built up over many years, the football club is committed to attractive match-winning football (Szymanski, 1998). Taking into consideration the fact that the fans tend to choose the club to support for a lifetime period, club’s commitment to victory is a good reasoning. Manchester United resembles such brands of global recognition as McDonalds, Coca-Cola, Apple, Nike, etc. Although these brands compete in markets with high risk of substitution due to extensive availability of superficially similar goods, consumers are more likely to rely on the image established by a specific brand (Szymanski, 1998). While there can be many similar drinks to Coca-Cola (for example, Pepsi), or laptops/smartphones similar to Apple (for example, Samsung), consumers give preference to these specific established brand names and are ready to pay higher price for the same products. In a sense, this is what the Manchester United has achieved (Szymanski, 1998). Among a huge variety of various football clubs, many consumers remain faithful to the British football club. Nowadays, brand name is recognized to be most important asset of a sports club (Richeliey & Desborder, 2009). Brand awareness of the Manchester United is impressive: 100% in the UK, 100% in Korea, 98% in Germany, 90% in China, and 80% in Japan (Precourt, 2011). Popularity of the brand is also extremely high both online and offline: 60 million web page impressions and 88 million fans watching plays every week (Precourt, 2011). Some of the factors that have enabled the Manchester United to become a successful global sport team brand include the following: An impressive historical record on the football field; Well-developed system of communications (team TV, team website, team publications, etc.); A strong community involvement; A strong rivalry among teams; The hiring of some star players; A good range of team merchandise; The support of major equipment makers (Richeliey & Desborder, 2009:16). By adopting brand affinity strategy (think locally, act globally) the team has build a strong base of loyal fans by offering unique emotional experience to them. Further, Manchester United has managed to capitalize on the emotional experience, and thus, to build its brand equity (Richeliey & Desborder, 2009). However, the brand is comprised not only of such aspects as result of the football game, sense of belonging to the team, and the emotions fans experience while supporting their club during a football match, but also team’s merchandising and consumers’ willingness to possess it (Richeliey & Desborder, 2009). Commercial performance of the Manchester United club Manchester United has managed to monetize the value of its global brand (MarketLine, 2013). Due to global recognition of its brand as number one, positive reputation and passion of more than 330 million fans worldwide, the Manchester United has become an attractive partner “whose DNA immediately connotes best-in-class performance” (Clement, cited in Precourt, 2011, n.p.). As of 2013, market value of the Manchester United is estimated as of $3.165 million, where 432 million correspond to the brand of the British club (Morillas.com, 2013). Manchester United club generates the revenue through three principal sectors: Broadcasting, Matchday, and commercial sectors (MarketLine, 2013). Commercial activity has substantially increased during the past years and has become the most important revenue stream for the British club (MarketLine, 2013). Commercial sector also is divided into sub-sectors, including the following: apparel and product licensing, retail, merchandise, new media and mobile, and sponsorship (MarketLine, 2013). Due to sponsorship deals the revenue of Manchester United has grown by 13.4% to £363.2 million during 2012-2013 (Bulford, 2014). Experts believe that commercial success of the Manchester United should be partially attributed to the marketing strategy of segmenting commercial partners into several different categories, and diversification strategy of seeking for different sponsors in different countries in different markets) (Warc.com, 2013). Nowadays, Manchester United has 56 official sponsors and commercial partners on a regional or global basis (Academic.mintel.com, 2014). Among the principle sponsors are such global leaders as Adidas (a ten-year £750 million deal), Chevrolet (a seven-year £344 million deal), and AON (£17 million) (Morillas.com, 2013; Bulford, 2014). Numerous smaller deals with commercial partners contribute more than 1 £million each year to the overall sponsorship budget of the British club (Morillas.com, 2013). These also include partnerships with local brands: Thomas Cook (official travel partner), Kagome (official partner of Manchester United for Japan), Turk Telekom (official integrated telecommunications partner for Turkey) and others (MarketLine, 2013). Moreover, having recognized a potential of Asian markets, Manchester United has also expanded to this region and built win-win partnerships with Asia partners including ZONG in Pakistan, logistics, freight and shipping brand DHL, Telecom and Mister Potato (Malaysia) (Chow, 2012; Marketline, 2013). Also, the British football club has managed to attract significant number of sponsors in Japan, which include: Kagome, Kansai Paint, Yanmar and Toshiba Medical Systems (Marketline, 2013). It is worth to mention that all these four sponsorship agreements with Japanese brands were signed after the Manchester United announced about the signing of Japanese international player Shinji Kagawa in 2012 (Marketline, 2013). Such a behavior of Japan-based brands provides good evidence to the idea that hiring of star players (both local and global) encourages companies to become sponsors of the club. In total there are established partnerships with mobile operators in 44 countries in Asia-Pacific region. Thus, due to these partnerships the Manchester United has managed to strengthen its brand in global scales and to capture a multi-million army of new fans via Asian distribution channels (Chow, 2012). Sport Sponsorship Sport as an activity is very attractive to sponsors. Partly due to the propensity to attract large audiences of football fans - positively disposed, like-minded people, partly due to the high media coverage (Dailly, 2010; Marketingmentor.net, n.d.). Moreover sport is very helpful in market segmentation activities as it helps to fragment the target audience (sport fans) into subcategories and to reach these audiences in the most effective way (Marketingmentor.net, n.d.). During special events, such as FIFA World Cup, sponsors gain opportunity to extensive visibility, which enables them to position/advertise their brands to huge population around the globe (Marketingmentor.net, n.d.). Through a sponsorship of professional football team, an organization (sponsor) can achieve many different objectives, including the following: to increase public awareness of the company; to increase media attention; to build trade/business relations; to enhance companys’ image; to increase awareness of current brand or product; to enhance employee motivation/relations; to alter public perception of the company or target market perception of brand/product; to counter adverse publicity, and others (Thwaites, 1995). As it has been already mentioned, Aon is one of the principal sponsors of the Manchester United. Before the affiliation with British soccer football team, Aon was hardly known to anybody not from Chicago (as it is Chicago-based Company) (Whiteside, 2014). As the Aons Global Chief Marketing and Communications Officer has explained the company’s strategic goals for signing a sponsorship deal with the Manchester United in 2011 were: to unite the firm; to generate new business; and to maximize efficiency of spend (Precourt, 2011). Nowadays, it is globally recognized brand associated with England’s most successful soccer team (Whiteside, 2014). As a result of its sponsorship activity, Aon generated traffic to its site - “66% bump in traffic to Aon.com when they announced the partnership” (Pierce cited in Whiteside, 2014). Thus, the company has achieved one of its main objectives – to increase global awareness of the brand and to build brand equity. Based on the results of the Aon’s annual survey of its target audience (corporate decision makers), brand awareness has grown from 39% in 2010 to 53% in 2013 (Whiteside, 2014). References: Academic.mintel.com, (2014). ‘Football - UK - November 2014 - Mintel Group Ltd.’. [online] Available at: http://academic.mintel.com/display/722305/ Bulford D., (2014). ‘Levelling off:Although the Premier League is popular, club membership levels are set to fall’, IBISWorld Industry Report R93.120 Sports Clubs in the UK. Chow, L (2012). ‘Matching global brands to Asian passions: Insights from the Asia Consumer Summit’, Event Reports: Asia Consumer Summit. Dailly J, (2010). ‘Sponsorship: The value lies in brand’. Admap. Marketingmentor.net, (n.d.). Marketing Mentor. [online] Available at: http://www.marketingmentor.net/wp/?wpid=7050 MarketLine (2013). ‘Monetizing a successful football club’. Manchester United Case Study. ML00013-003. Morillas.com, (2013). ‘Branding and Sport: The case of Manchester United’. [online] Available at: http://www.morillas.com/en/blog-en/branding-and-sport-the-case-of-manchester-united/ Precourt, G. (2011). ‘The Odd Couple: Aon and Manchester United in a win-win sponsorship program’, Event Reports, IEG Sponsorship. 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