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08/02/2016 Brand Management
Assignment TwoPrinciples of Marketing for BusinessMK 2003Chloe Welsby and Georgina Atkinson
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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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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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