brand management essay

08/02/2016 Brand Management

Assignment TwoPrinciples of Marketing for BusinessMK 2003Chloe Welsby and Georgina Atkinson

It is widely known that in the football world, to switch support to a different team is a

major taboo. Even though clubs swap players frequently, for a fan this is unthinkable

(Hawksley,2014). When growing up football fans often support the team of their

parents and this continues into adulthood. So is it a shock to anyone, that with the

history of Manchester United going back 138 years and the success of the team in

the time frame, has resulted in them currently having 659 million supporters

worldwide. The club has won twenty league titles, the most of any English club. Had

legendary players such as Ryan Giggs, Cristiano Ronaldo, David Beckham and are

the first club to achieve a “treble” which is to win the Premier League, the FA cup and

the UEFA Champions League (Bevan, 2013). When most people think of

Manchester United the see a successful football club that has a very loyal fan base,

what they don’t realise it is also a brand. In fact, Manchester United as a brand is

currently worth £789 million, which according to Brand Finance (2015). the leading

international brand valuation and strategy consultancy, makes Manchester United

the most valuable football brand in the world.

Brand Value

Brand Finance (2015), uses a wide range of factors to calculate both a club’s brand

value and brand rating. The brand rating reflects the image of the club, as the public

would perceive it. It also takes into account the reputation, heritage, on-pitch

performance, and how aware people are of them. That brand rating is then combined

with revenue, both current and projected, to estimate a brand value, which is of

particular interest to the marketing and sponsorship industries. Pope (1998) suggests

that business’s need to carefully examine what aspects of their brand image they

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CHLOE WELSBY AND GEORGINA ATKINSON – BRAND MANAGEMENT – ASSIGNMENT TWO

wish to advance, prior to embarking on a sponsorship program. With Adidas and

Manchester United both being in the sporting industry, and both wanting to be the

leader in their fields, has resulted in Adidas offering Manchester United a £750m

sponsorship deal and a prospect of a three-year TV deal starting in 2016 estimated

to be worth more than £5bn in domestic rights alone (Gillooly,2015). This

sponsorship has already sent Adidas’s brand value rocketing by 63 per cent. This in

turn has made a significant impact on Adidas’s share price. Kinney & Bell (2003)

concur that the announcement of a new sponsorship deal, always raises the share

price of the sponsoring company. In November last year, Hall (2015), reported that

shares in Adidas jumped nearly 9 percent and sales accelerated by 17.7 percent,

with net earnings growing by 20 percent. As you can see this a clear advantage for

Adidas’ sponsorship of Manchester United, as it has already helped them with their

goal of regaining market share from Nike (Martin,2014).

Brand Management

When you mention the words management and Manchester United, people

immediately think of names such as Sir Alex Ferguson or Louis Van Gaal. They do

not realise that the management of the team and brand, consist of much more than

one person. The effect of how the team in managed by Louis Van Gaal will impact

the team performance, but the way the team’s performance is marketed and

advertised impacts the brand. For example, according to European Football Statistics

(2010) Manchester United lost the FA Cup, Champions League and League Cup in

2010. A very disappointing performance, resulted in dissatisfied fans. As a result,

Manchester United marketing team released a new pre-season campaign. This

included a TV advertisement showing the extra training the team had undergone to

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improve their performance, slogans such as “Code Red! New Season, New Battle,

New Shirt” and using the new social media platforms such as Facebook to reach

their wider fan base. The objectives of the campaign was to “inspire and enable their

audience of passionate, young footballers to kick off their pre-season early. And

hard.” The result of the campaign led to 1.7 million YouTube hits, 320,000 new fans

on Facebook and three lucky winners to train with the Manchester United team. Not

only did this campaign work by increasing the amount of followers on Facebook and

fans for the club, but Manchester United went on to win the Champions League and

the League Cup in 2011, showing how the brand performs exceptionally well on the

marketing platform, on the field and how both link together to produce a successful

season.

Brand Culture

According to the Journal of brand strategy (Richelieu, 2014) when fans take

ownership of a sports brand, they create rituals and become ambassadors for thier

team. This is no different for Manchester United’s fans, according to an article posted

by Manchester United (2013) some fans would eat the same meals, wear the same

clothes and some even have a pre match prayer. Fans truly believe that without

doing these rituals it will lead to the clubs losing a match, reinforcing the need to

attend matches or watch them in certain ways.

For any football fan that has supported a team for the past forty years will have seen

a massive cultural change within football. In an interview by Tribal Football (2011),

Sir Alex Ferguson explains the cultural shift in football fans throughout the years.

Using an example of a photograph from a Manchester United vs Leeds United match

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in the 1960’s. He states that “in the photograph there’s absolute mayhem in the

middle of the pitch, the players are fighting and in the background the fans did not

have a bit of emotion on their faces. See the culture of the fans today. They are over

the fence, screaming and bawling. It's a different time”. There has been a lot of

discussion in recent times over the cultural change in football. Some argue that this

cultural shift has had a positive effect and was a needed change to the football

industry (Direct, 2010). However, others state that people known as “football

hooligans” have ruined the experience for genuine fans and consequently, can also

run the risk of destroying the reputation of the teams they claim to support (Krøvel &

Roksvold, 2012). For Manchester United in particular, they need to control any

affiliation with hooligan organizations such as “The Red Army”, which is one of the

largest hooligan firms in the football industry, which support Manchester United

(Scots Man, 2006). If the actions of an organization such as The Red Army, reach

the press this could have a damaging effect on the Manchester United brand, if

associated with them.

Position of the brand

When Manchester United decided to positon themselves as a brand, they made it

very clear their message of “relentless pursuit of excellence” would appear in every

aspect of the brand strategy (Business Case Studies,2010). The timing of

Manchester United making their fan base figures (659 million) public, was part of

their brand strategy. As it was the same time that the club was releasing its Initial

Public Offering (IPO), to the New York stock exchange and included the fan figures

into their pitch’s to potential investors (Prior, 2013). Therefore, it makes sense why

that they have agreed to a collaboration sponsorship with Adidas this year, which has

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resulted in the club receiving a record breaking sponsorship deal off £750 million

(Gillooly,2015). Even though the club has benefited massively by receiving this

sponsorship, Adidas will also profit by having its logo on the uniform of the world’s

best known and most visible football club. According to Guy Masterman (2012)

sponsorships can offer a great platform for PR operations. Adidas and other

sponsors can invite their best client’s to football games, enabling it to strengthen

business relationships in a more convivial environment. Nike was Manchester United

last main sponsor before Adidas and as part of the new agreement, Manchester

United has now taken ownership of the commercial ventures previously operated by

Nike, as a result it now retains 100% of the profits from all commercial sales

(Gillolly,2015). Now that Manchester United, is fully responsible for the sales and

marketing of their service, they will need to explore their marketing mix and define

what distinct them from their competitors to increase their profit margin and sales

forecast.

Marking Mix

In the Introduction to Integrated Communication Journal (2009) explains the

marketing mix as the development of connections by understanding the needs and

wants of the customers, satisfying those needs through product development,

offering at a price, making it available and developing an advertisement or promotion

to generate interest. These are known as the four P’s – Product, Price, Place and

Promotions all of these are a part of what is known as the marketing mix. Basic

marketing is to generate a campaign including all four elements to reach the target

consumer market. Marketers must be knowledgeable of the different problems that

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can occur with each element of the mix and how to combine them to make an

effective marketing campaign.

Firstly, the product that Manchester United offer is not only their merchandise they

sell, but having an exceptional team that wins matches to boost the customers

experience at a game. Tsiotsou & Alexandris (2009) proposed that highly attached

fans are more likely to develop a positive image for their team sponsor, exhibit higher

intention for purchasing and recommending the sponsors product. The place is the

surroundings were the experience is shared whether it be at Old Trafford or away

games at different grounds, having different sections for better viewing i.e VIP areas.

It also includes Manchester United selling their merchandise across the world,

through the team’s website and other media platforms. For promoting themselves,

they have decided to use social media, with has resulted, in them gaining 68 million

Facebook followers and 8.8 million Instagram followers. They have run successful

marketing campaigns such as the 2014 Front Row campaign that led to a

collaboration with Google (MediaPoondi , 2014 ). Last is price, this all depends on

the success of the club and which league they are currently playing in. As this

reflects on the price they can charge for their tickets and merchandise. For example

if your team is in the Champions League the average ticket price is £280 (Sheen,

2015), the Premier League average ticket price is £30.68 (BBC, 2015) and for

League One the average ticket price is £20.14 (BBC, 2015). Consequently, pressure

for the team to perform well, is as important to the fans as it is to the brand (Business

Case Studies,2012).

Brand Image

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According to the Journal of brand strategy (2014) a brand is either “a name, a word,

a sign, a drawing or a combination of all of the above.” As you can see this is why,

one of Manchester United biggest advantages as a brand, is their brand image. Even

for people who do not support football they recognised the logo and know the team

colours are red and white (Andrew D,2004). This has made it possible for the club to

expand into different sectors such as ownership of TV channels i.e. Manchester

United Television (Campaign,1998) . People recognise the brand, and to associate

yourself with it gives business an advertising platform unlike any other. With an

average of 12.3 million potential customer watching a premier league game

(Pilger,2014) and the opportunity to link your marketing campaign to Manchester

United’s brand, for example when Chevrolet casted the teams four main players in

their 2014 TV advert (Rice, 2014). You can understand the attraction of why

business are willing to spend millions on sponsorship deals with Manchester United.

Social Media and TV engagement

Manchester United Football Club have multiple sponsorship's including Chevrolet,

DHL, Epson and Adidas. All of these sponsors benefit from advertising, TV coverage,

promotion of their corporate image and the potential of spectators as customers.

Dolphin (2003) concludes that sponsorship has a significant part to play in increasing

sales, enhancing corporate image and leveraging employee morale. Manchester

United football club has currently 256 million fans worldwide and 68 million Facebook

followers (Social Bakers, 2016). The launch of United's new Adidas kit is the fastest

football kit launch ever, as it has already generated over £1.5m in social media value

in its first three days of trading, according to figures compiled by sports industry

researcher and adviser Repucom (2015). The group's head of digital in UK and

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Ireland, commented: "This was the big one for Adidas. They needed to show they

made the right decision following their world record deal to kit out Manchester United

for the next decade. Value generated through social media was always going to play

a huge role and the figures so far for the brand are encouraging”.

There has been controversy over Manchester United decision, to switch sponsorship from

Nike to Adidas, claiming that they care more about money than loyalty (Crafton, 2014).

The truth of the situation is, that with out the sponsorship deals, clubs like

Manchester United could not afford to pay thier player such high wages. Therefore,

opening the risk of players moving to another rival club. This would result in

Manchester United having a much inferior team and would put their ‘champions’ title

under threat. If this would continue they could disengage their fans and potentially

lose them. As you can see all these aspects are connected and the sponsorship

money Manchester United receive is an essential necessity. With Adidas offering

such a large world breaking amount and beneficial term for Manchester United such

as retaining 100 percent off all commercial ventures, you can see why the team

jumped at the opportunity of a sponsorship deal with Adidas.

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