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The Presentation is Submitted to Kedge Business School . It analyses the position of Team Real Madrid from a case from HBS and recommends solutions for it.
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REAL MADRID Ines SCHULLER
Lambert ROLLAT
Brittni PING
Guru PRASAD
Xiadong JIANG (Vincent)
Chantal INGRAM
Rong XHAI (Vanessa)
« In Spain it is easier to change spouses, political party or religion than it is to change soccer club. In soccer, a fan is a fan for life. »
YOUR NEXT 90 MINUTES +2
• Soccer - birth of legends• Rise & shine• The turn around• Dead end or reaching the stars?• Rivalry• Figuring ways to victory• Scoring our goals• Let’s get busy
SOCCER – BIRTH OF LEGENDS
• Most popular sport worldwide
• Core promise - victory and a good show
• Largest soccer clubs in Spain (Real Madrid - FC Barcelona)
• Associations
RISE & SHINE
• Category: Football Club Spain (La Liga)
• Sector: Sports
• Slogan: Hala Madrid!
• Segment: Millions of people across the world who love to play or watch football
• Target Group: Typically, men in the age group 15 and above globally
RISE & SHINE
1902 19201904 1960 1995
Players are free agents FIFA
Madrid Football Club
King of Spain granted Royal (“real”) to the club
EU Cup Final made Real Madrid best-known soccer team
VISION & MISSION
• Vision: To be the best soccer club in the world
• Mission: To leverage the Real Madrid brand globally
• Goals:• Financial flexibility• Team of top players• Leverage the Real Madrid brand and content across variety
of distribution channels
Name : Florentino Pérez Rodríguez
Position : President of Real Madrid
Tenure : 2000 - 2006 & From - 2009
Background : Businessman / Civil Engineer
2000
THE TURN AROUND
• Old Training pitches• Generates €500 million
Sell Assets
• Boxes in stadiums - €16 million
Buy Back rights
• Refurbish & double boxes• In ground perimeter space
Develop them
Generate Income
SOCIEDAD MIXTA
• Merchandizing• Sponsorships• Distribution business • Online business• Contracts
THE TURN AROUND
• € 16 Mills / Year
70%
20%
10%
Year 2000
Team Real MadridCaja MadridSogecable
2000
€ 78.1 Mills
€ 3 9.05 Mills----------------------- € 117.15 Mills
SELLING SHARES
THE TURN AROUND
• SPONSORS
THE TURN AROUND
2000-2001 2003-2004 2005-2006
39
83
142
Marketing Revenues in Millions €
Forecasted
GROWTH IN REVENUES
THE TURN AROUND
Assembling GALACTICOS
Merchandising
Broadcasting
Others
Match Day
• RM TV• Broadcasting Rights
• www.realmadrid.com• Magazines • Fan Card
Building the walls …
Where is the ROOF ?
THE TURN AROUND
DEAD END OR REACHING THE STARS?
How to transfer Real Madrid fans and supporters into dedicated customers ?
• Ratio: revenue/number of fans (in million €)
-> Manchester United : 251.4/45= 5.50
-> Real Madrid : 192.6/93 = 2.07
SUBISSUES
Tangible
• New market participant – foreign investors
• Overexposure & excessive commercialization
• Player focus
Intangible
• Counterfeit products• Element of uncertainty• Lack of talent
RIVALRY
• Ownership: Private fixed membership – around 55 000.
• Operation: As a professional organization.
• Business model: Pursuing most famous players at all costs.
• Players are portfolios under Real Madrid Brand. RM has 50% of image rights (= 50% of income) – can be win-win for all parts.
• Ownership: Private membership of around 200 000 + public shares.
• Operation: as a professional sports team.
• Business model: Heavily depends on retail, merchandizing, apparel and product licensing performance – fans’ spending.
International marketing and new technologies; 3%
Merchandize; 15%
Sponsorship; 10%
Broadcast; 26%
Match day; 46%
Match day; 41%
Media; 32%
Commercial; 27%
RIVALRY
• Revenue Stream: 2003
• Revenue 2003: 251.4 €m• Number of fans: 51 million
• Revenue Stream: 2003
• Revenue 2003: 192.6 €m• Number of fans: 93 million
STRATEGY
Building a story of value – brand & content – in order to exploit Real Madrid’s brand equity globally
• Clustering China, India & US• Targeting of different segments• Use emotions and sentimental attachment• Player-studded advertising
FIGURING WAYS TO VICTORY
Actions Transformation of fans into customers
Increase revenues
Gain new market share
Image
Public share offers
- ++ + --
Market development
CIU
+ ++ ++ ++
Productdiversification
+++ ++ + ++
Local & MNC partnerships
++ ++ ++ +
Sponsors + ++ + +
Focus on sourcing of
players
++ ++ ++ ++
SCORING OUR GOALS
• Market development China, India & US• Promoting soccer through fan tours• RM Junior Tournament
• Product diversification• Diversification of Socios membership card & Hala Madrid
magazine (local discounts)• Exploit internet-based technologies (website, mobile
internet)• Retail outlets (exclusivity & experience)
SCORING OUR GOALS
• Local & MNC partnerships• Local soccer clubs• Fast Food chains: toys• Limited edition products
• Sponsors• Charity to improve image (UNICEF)
• Focus on sourcing of players• CIU brand ambassadors• Focus on young player program
LET’S GET BUSY
• Philosophy of Marketing:
• 1) Which need does Real Madrid reinforce for its
consumers/fans?
• 2) Which ways could Real Madrid Segment its market?
PROFIT$$
ExperienceCustomer knowledge
DEVIL’S ADVOCATE
• Segmentation
• Marketing/Merchandising
• Cost
• Going Public