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Arup Ganguly -6

Ashish Sharma-7
Ashok Mathur-8
Avinash Singh-9
Chander Shekhar-10

MANCHESTER UNITED
TRYING TO ESTABLISH A
GLOBAL BRAND
Case Background

• Manchester United a.k.a. (ManUtd) – Most famous and


financially successful football clubs in the world
• Originally founded in 1878 as Newton Heath Y and LR
Cricket and Football club
• Went bankrupt in 1902 and was reformed as ManUtd
• Listed on LSE in 1991 with Market capitalization of $466
MM
• 200 fan clubs – 151 in UK, 25 in Ireland, 24 in rest of the
world
• 1999 tour to Australia and China helped raise the brand
profile even higher
• Fan base of 50 million worldwide – 5 million in US, 30
million in Asia and 15 million in Europe
ManUtd’s recent successes

2002 2001 2000 1999 1998

FA Premier 3rd Champions Champions Champions 2nd


League

FA 4th round 4th round n/a Winners 5th round


Challenge
Cup

European Semi- Qtr-final Qtr-final Winners Qtr-final


Champions final
League
Alliances and Tie-ups
• Prior to Asian-Pacific tour, tie-up with Umbro – Sportswear
supplier and Australian Woolmark company
• FA Premier League TV contracts for season 2001/02 for
£1.6 billion
• MUTV – TV channel airing ManUtd 7 days a week
• On line access to the club through www.manutd.com
• Global sponsorship alliance –
– Four year sponsorship deal with Vodafone for £30 million
– Appointed Japan Sports Vision as its master merchandising
licensee partner in Japan in a five year deal
– Sponsorship alliance deal with Budweiser from 2002/03 season
– £300 million over 13 years deal with Nike as sponsors for their
uniform and merchandising partner
Source of Revenue
Revenue 2002 – 2001 –
£ MM £ MM
Gate Receipts and programme sales 56.3 51.8
Media (mainly TV) 51.9 31.2
Commercial (sponsorships) 26.5 27.4
Merchandising 11.4 19.2
Total Revenue 146.1 129.6

Launched two financial services products in 1998 – “Save and Support” savings
account with Britannia and the club Master Card
Opened stores in Singapore, Dublin, Kuala Lumpur and Cape Town in 2000
Investment in two hotel projects – The Quality Hotel (25% stake) and Sleep In
(31.4% stake)
Questions
1. Discuss and explain how the different alliances can
increase the competitiveness of ManUtd
2. Which environmental factors are most important for
ManUtd to monitor in the international environment
(political, economic or socio-cultural factors)
3. What are the main threats to retaining ‘Manchester
United’ as a global brand
Discuss and explain how the different alliances
can increase the competitiveness of ManUtd

• Vodafone: Apart from traditional sponsorship,


support in launch of first WAP-service to provide
• All latest club news,
• Live match updates and
• Other groundbreaking stories.
Delivering self-produced content to global audience
through 3G wireless, the Internet and broadband TV
thus giving a competitive edge to Manutd over other
clubs by connecting more closely with its global fans
Contd…
Discuss and explain how the different alliances
can increase the competitiveness of ManUtd
• Japan Sports Vision (JSV) – Leading sports
retailer with over 25 stores across Japan. Tie-up
provides –
– 2002 World Cup evoked huge interest in football in
Japan and the whole Asian area;
– Excellent strategic move by association with JSV, a
leading sports retailer of Japan at the same time gave
the competitive edge to ManUtd for their merchandise
sale
– With a five-year deal with JSV which has over 25
stores across Japan, ManUtd ensured the recurring
revenue through high thruput outlets of JSV
Contd…
Discuss and explain how the different alliances
can increase the competitiveness of ManUtd
• Budweiser – World’s best selling beer, available in more than 80 countries-
– Will have exclusive beer-pouring rights at club’s Old Trafford stadium,
– Receive on-field, in-stadium and concourse signage,
– Have right to use official marks and logos of the club in advertising,
promotions and packaging
Resulting in,
– Association with Budweiser gives ManUtd a cutting edge advantage in
enhancing its brand image;
– Direct and in-direct brand communication of ManUtd by usage of its
official marks and logos by Budweiser in its media campaign and
packaging in more than 80 countries;
– Enter the elite club of Budweiser’s sporting association who was official
beer of FIFA World Cups in 2002, 2006, Chelsea Football Club, Major
League Soccer, NBA, Salt Lake City Olympic Winter Games
Contd…
Discuss and explain how the different alliances
can increase the competitiveness of ManUtd
• Nike – Deal for 13 years with the arrangement –
– ManUtd turning over uniform-replica merchandising business to Nike
– Nike will pay royalty for the use of ManUtd’s brand, develop
merchandise and sell through its global network
Resulting in,
Win-win situation for both the brands wherein
ManUtd –
Readily available global distribution network of Nike
Earn royalty for use of its brand
Association with Nike, a world leader in sportswear, enhancing its brand
image
Nike –
Ready available 50 millions fans of ManUtd worldwide as customers
Association with ManUtd, the most popular and successful soccer club,
enhancing its brand image
Which environmental factors are most important for ManUtd to monitor
in the international environment (political, economic or socio-cultural
factors)
• Most important factors in
descending order-
– Socio-cultural – Awareness
and interest in Football critical
Socio-Cultural
for ManUtd to enter / expand
in a particular market
– Political – Having players on
board of different nationality,
any turmoil in political
relationship between UK and
the respective country can
hamper the association of the
player of that country with the
club Political Economic

– Economic – Per Capita


income and spend can also be
decisive factor for ManUtd

At times more than one factor can be important for


consideration, depending on the respective country
What are the main threats to retaining ‘Manchester United’
as a global brand

• Manutd derives its brand power from its


football stars –
– Retaining and extending the contracts with
star players –
– Consistent performance on-field
• Consistency in the reputation of the brand
with whom ManUtd has association
Current
• Expected to hit gross turnover of £300
million for FY 2008, growth by 20%
• Market capitalization at $2 billion
• Asia tour scheduled from July 2009
• Ready to enter India thru –
– Tie-up with Airtel for sponsorship deal
– Seeking a licensing deal for a multi-city rollout
of upscale café bars in India
– Association with AIFF to spot young talent
Current Issues
• AIG confirming non-renewal of
sponsorship deal with ManUtd
• Retirement of three veterans – Ryan
Giggs, Gary Neville and Paul Scholes
• Star performer Cristiano Ronaldo
expressed his desire to join Real Madrid
• Insufficient finances into academics and
junior football
SWOT Analysis
Strenghts: Weakness:
Global recognition Flourishing hence losing
Exceptional reputation its origin
Ticket sales

Opportunity: Threat:
Penetrating US market Star performers being
Research based product taken away by rival
development clubs
THANK YOU!

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