Case Study Analysis of the Brand – Manchester United
Introduction
You may not a football fan, but you should’ve heard of the renowned name, Manchester United. Since Sir Alex Ferguson appointed as Manager on 1986, the club has won more than 30 trophies, and successfully transformed from a middle-size team to probably one of the best football club in the world.
Not only the football team, but also the business built behind the brand “Manchester United” are also doing well during the Ferguson Era. Manchester United is now a holding company that owns the following subsidiaries: Manchester United Football Club, Manchester United Catering (Agency Company) and Manchester United Interactive. The company’s products and services included financial services, media, retail, tickets and stadiums visit.
Time flies and now Sir Alex Ferguson is now 67. After managing the club for more than 20 years, we may foresee the day he step down form the position and retied is coming soon. Though it is almost certain that the club performance would be affected negatively, the affect the brand itself is yet to know. This paper is going to analysis base on this point
History of Manchester United
Manchester United Football Club is an English football club, based at Old Trafford in Manchester, and is one of the most popular football clubs in the word. The club was first formed in 1878, under the name Newton Heath LYR (Lancashire and Yorkshine Railway). In 1902, the club changed its name to Manchester United Football Club.
The club was a founding member of the Premier League in 1992, and has played in the top division of English football since 1938, with the exception of the 1974–75 seasons. Average attendances at the club have been higher than any other team in English football for all but six seasons since 1964–65
Manchester United are the reigning English champions and European and Club World Cup holders, having won the 2007–08 Premier League, the 2007–08 UEFA Champions League, and the 2008 FIFA Club World Cup. The club is one of the most successful in the history of English football and has won 21 major honors since Alex Ferguson became manager in November 1986. In 1968, they became the first English club to win the European Cup, beating Benfica 4–1. They won a second European Cup as part of a Treble in 1999, before winning their third in 2008. The club also holds the record for the most FA Cup titles with 11.
Since the late 1990s, the club has been one of the richest in the world with the highest revenue of any football club, and is currently ranked as the richest and most valuable club in any sport, with an estimated value of £897 million (€1.333 billion / $1.8 billion) as of September 2008.
Brand Analysis
Current Brand Propositions
A brand proposition can be defined as a succinct expression of what a brand promises. It is considered as a vital point which support brand awareness. Thus, it focus on clarification of what brand to offer, to whom and in what format, together on how to attain it (BrandPromisesDelivered n.d.).
Manchester United is considered as one of the leading clubs in the world football or soccer, with a global brand and following that embodies the passion and excitement of the most popular sport in the world.
As one of the most popular and influential brand in the world, the company focuses on innovation, commitment and evolution, in order to protect and develop the brand by sustaining the playing success on the field and growing the business in order to improve the financial strength of the entire group. Thus, the brand focuses on maintaining the playing success, developing the value of the media rights, leveraging the global brand and converting more fans into customers (Machester United Football Club n.d.).
Brand Strategies and Growth
Brand names, logos or trademarks support and persuade people to avail of a given product because they give the customers the benefit that they are seeking including familiarity and safety to status and self esteem. Manchester United FC had been able to use brand in order to give itself the perceived improved image with the customers, which focus on clear positioning statement and brand image (Horner & Swarbrooke 2005, p. 87).
Manchester United had been able to know the importance of the said aspect, thus it enables the brand to focuses on the association brand.
Because of that, Manchester United, primarily focuses on the different needs of their customers such as self-actualization, self-esteem and affiliation needs, together with the value systems.
Manchester United company focuses on the consumers’ social needs or the need to feel part of something including a movement, an in-crowd or even a given class of people. Manchester United supporters the world over feel a strong affiliation with the English football club, based on the success of the team. According to Peter Kenyon, the Chief Executive of the company, the team has a worldwide fan base of 20 million, and the figure is said to double in the future and the said number of people want to be part of the success of the team (Van Gelder 2003, p. 146).
Aside from that, the company also focuses on giving information to the club supporters in order to generate brand loyalty. In order to support the said branding strategies, the company started to invest money and efforts towards online marketing by integrating a newsletters and articles services to the members of their websites, which enables their members to be updated and informed regarding what is going on with the team, as well as the different innovations about the brand. Aside from that, the company also focuses on different tours which enable the supporters to see the team in flesh.
Brand Extensions – Product and Service Line Expansions
Manchester United is not only football club to recognize the opportunity to generate income off the pitch from dedicated supporters, but it is significantly ahead of its competitors. As a result of its licensing programme, whereby third parties are authorized to apply the club name and badge to different types of approved merchandise, it is arguable that the name has developed into more of a brand than just the name of the football club (Isaac 2000, p. 129).
As a result, the company focuses on offering different merchandize which hold the logo, trademark and brand name of the team. The product ranges from the different uniforms such as home kit, away kit, third kit, champions league, training kit, kids gear, retro range, Nike merchandize, leisurewear, women’s wear, accessories, DVDs, gifts as well as posters and calendars which features the famous players of the team. In connection, the company continued its expansion in investing in the retailing industry by establishing Megastore which sells products of the company.
Manchester United also immersed in the media industry by launching and investing in MUTV, the television channel that is dedicated to Manchester United. Thus, the company is offering different media services which include subscription in MUTV online with the price of £39 a year and £4 a month.
One of the most out of the line product expansion of Manchester United is its Finance. In the UK, the company is offering different financial services including credit card, insurance, mortgage and savings. The said offerings are connected with the entire brand, because the company is offering ₤40 Megastore voucher with every mortgage completion.
In order to expand more, the company started to invest money towards hospitality services which focuses on travel packages with connection to the team. This is because of the fact that the team had been able to build a strong bond with the fans, thus, people tend to travel in order to watch their games live. The said popularity was take advantage by the company and builds its own hospitality service that will be directly connected to the team. The company is offering different hospitality services which include tickets, plane and transportation and hotels.
Globalization of Brand’s Products and Services
Effective strategies had take account of marketplace development, and as the 21st century got underway, the trend of globalization was considered as apparent in the world of business. Aninat (2002) defined globalization as the process through which an increasingly free flow of ideas, people, goods and services and capital leads to the process of integrating economies and societies. Thus, it resulted in nation states forging links through trade, investments and activities international companies participating in the world economy (cited in Hill & Vincent 2006).
Just like other companies, Manchester United had been able to feel the pressure and possible benefits or advantages of globalization towards the company. As a result, the company launch its Theatre of Dream project, which considered as the attempt to relocate the Old Trafford experience for United’s fan in other countries. The main goal of the project is to exploit and take advantage of the large fan base in the Far East, which has developed through the extensive use of the Internet and satellite TV broadcasting. Thus, the company focused on the Asia, because of the fact that the club estimated that there are about 30 million fans in Asia alone (Andrews 2004).
In 2000, Manchester United struck an innovative partnership with Vodafone AirTouch, the British mobile phone network. Under the said agreement, Vodafone paid Manchester United ₤30 million over four years to put its name and logo on the player’s shirts (Wood 2000). In addition, the company also stepped up its marketing efforts in the United States, where it estimates that it has 5 million fans (Maidment 2002), thus in 2001, the company joined with the New York Yankees in order to enhance the global reach of the brand. The two organizations, both marketing powerhouses, joined together in order to advance their own team in the other country (Andrews 2004). As a result, currently, all of the services and products of the company is already available in the different continent, particularly in Asia.
Future Challenges
There are different factors that must be considered by the company in order to ensure the success of the brand. First, it is important to consider the factors that are directly and indirectly connected to the team itself, together with the members and the coach.
One of the major resources of Manchester United’s competitive advantage is its endowment of coaching resources. Sir Ferguson was first appointed in November 1986, after a very successful stint as manager of Aberdeen. Ferguson stint is the longer by some distance of any premiership manager. Thus, Ferguson’s Premiership experience and success rate is considered unequalled. He had been able to manage Manchester United for all of the team’s Premiership games with a points-per-game ration of 2.11 (Andrews 2004, p. 82). Because of that, Sir Ferguson is considered as the most successful manager in the entire British football history, winning more than 30 trophies in Manchester United (Manchester United). He gained the said knowledge and skills throughout his entire 22 years in the industry. Thus, it can be said that Ferguson had already created an important role in the team, and the brand itself. He had been able to create his own image and icon, thus he can be considered as irreplaceable. Therefore his retirement has a great impact on the team because of the fact that there is a very clear link in terms of professional team sports between the team performance and managerial tenure. Successful teams tend to have long-serving managers because the fundamental relationship is clearly two-way. Successful managers get hold of substantial implicit knowledge, building up their experience with individual players and the club organization and culture (Andrews 2004, p. 82). Thus, it can be said that the said retirement will have a great impact over the performance of the team, because they are already used with the management approaches and styles of Sir Ferguson.
However, there are also some candidates or successors if the said case happened. Different names including Steve McClaren, Bryan Robson and Roy Keane were considered. However, according to Sir Ferguson, it will be important for the successor to be experienced, thus Jose Mourinho would fit the criteria because of the trophy-laden time he has spent with Porto, Chelsea and in Inter Milan (Mole 2009). However, if ever it will be Mourinho, even though he is experienced in terms of managing and coaching, he is still not very familiar with the behaviors and attitudes of the players, thus it can affect the relationship and communication process.
Internal and External Issues
Vulnerability to Financial Crisis
As of now, all of businesses, sectors and industry in the world are being affected by one of the most global factors, financial crisis. According to the England Football Association chairman, David Triesman warns that it will be possible for the Premier League football club to go bankrupt in the face of the global financial crisis. Although club finances are not public knowledge, English football has a debt that is about 3 billion British pounds which equivalent to US.2 billion. Thus, four team account for almost 33% of the said debt (Xomba).
In terms of the team, the company will be affected by the global financial crisis, because other companies that are doing sponsorship will decrease the amount that they spending in sponsoring games and teams, because they have to cut costs in order to ensure that they have the right amount to sustain their operation. Therefore, the revenue of the company will be affected.
On the other hand, in terms of the customers, it is important to consider that the global financial crisis has a great impact on the buying behavior of the customers, particularly because of the fact that Manchester United is involved in the travel and hospitality industry. It is important to consider that consumers will refrain from traveling in order to save more money for the future. Thus, it has a great impact over the sales of the merchandises of the company, together with the performance of their retailing business. On the other hand, the business will be directly affected by the global financial crisis due to its finance sector with focus on credit cards, savings and insurance.
Club’s Financial Situation
On the other hand, it have been mentioned that Manchester United is one of the sports organization in Europe with the highest debt. Thus, it can affect the internal issues which can affect the overall brand image of the company.
One of the important factors to consider is the long-term debt of the company during the Glazer family takeover. In 2005, Malcom Glazer took over the Old Trafford giant and sent shockwaves through the huge fan base of the club, when he unveiled the full funding details about his £790m takeover. He had borrowed £540 million in order to finance the said deal, and there is a great need to spend £46 million per year in interests’ payments in order to service the debt. Therefore, it will equate to staggering £126,164 per day before any capital payments will be made. In addition, the payments of £46 million a year is considered as twice compare with the annual profits of the club of £19.4 million (Harris 2005). Therefore, the over borrowing happened during the leadership of the said family, and it will affect the overall performance of the company.
Another important factor which is connected to the financial aspect of the company is the huge amount that Manchester United is spending for its players. During the 2 seasons, Glazers declared that the company had spent a total of 36 million and sold a total value of 21.5 million in 2007. The next season, the company purchased Hargreaves for 16 million, Nani for 14 million, Anderson for 18 million and Kuszczakck for 4 million (Seedat 2007).
Recommendation
In order to sustain the current brand position of the company in the global market, it will be important to change some strategies that will help to improve the brand name, and its reputation towards the company.
First, it will be important for the company to focus on social responsibility. Corporate Social Responsibility of CRS can be defined as the continuing commitment by business to behave in ethical manner, at the same time contribute to the economic development, at the same time, improve the quality of life of the workforce, their families as well as the local community and society at large (World Business Council for Sustainable Development). Thus, it can be achieved when the company has built lasting, meaningful relationship within the corporate sector and its immediate community in effective and sustainable manner. Furthermore, the business practices must ensure that the entire company operates in order to meet and exceed the ethical, legal, commercial and public expectations (Corporate Responsibility Index).
In that case it will be important for the business to focus on the different marketing strategy which will help to build up the morale and ethics of the company including programs that will improve the lives of the people in a given community. Thus, it will be important to focus on the different activities including activities that will support the less fortunate people in the society. Because the brand is famous in different countries in the world, including Asia, it will be important to focus on the said developing countries in order to help less fortunate people.
It will also be important to focus on the importance of education, particularly with those children and youth who are willing and have the ability to learn. It will also be important to focus on the projects that will motivate children to join football sports. Thus, it can help youth to be on the right track in life.
Thus, the business can connect its brand image on being physically active, thus awakening the current changes in the customer behavior towards physical and mental health. Thus, the company can launch different activities that will motivate people to be physically active in order to prevent different disease including
Above all, there is an ongoing issue regarding the environment such as global warming. Thus, it will be important for the company to launch different campaigns and projects that will enable the business to be known because of its campaign towards greenness. Therefore, the company can focus on applying some changes in the entire brand packaging of the company by adding the idea or principle of green. This can be done by including green-based activities in the website of the company.
References
Andrews, D 2004, Manchester United: A Thematic Study, Routledge, New York
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Harris, N 2005, Glazer Saddles United with A£540m Debt: But Ferguson is to Stay ‘At Least For Now’, viewed 19 May 2009, <http://www.independent.co.uk/news/business/news/glazer-saddles-united-with-acircpound540m-debt-but-ferguson-is-to-stay-at-least-for-now-490699.html>
Hill, J & Vincent, J 2006, Globalization and Sports Branding: The Case of Manchester United, Access My Library, viewed 19, May 2009, < http://www.accessmylibrary.com/coms2/summary_0286-15768977_ITM >
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Seedat, S 2007, Why Manchester United’s Spending is Not the Same as Chelsea’s, SoccerLens, viewed 19 May 2009, <http://soccerlens.com/why-manchester-uniteds-spending-is-not-the-same-as-chelseas/2293/>
Van Gelder, S 2003, Global Brand Strategy: Unlocking Brand Potential Countries, Cultures & Markets, Kogan Page Publishers
What is Corporate Social Responsibility? 2007, Corporate Responsibility Index. Copyright – St. James Ethics Centre
Xomba, Global Financial Crisis Endangers Top English Football Clubs, viewed 19 May 2009, <http://www.xomba.co m/global_financial_crisis_endangers_top_english_football_clubs>
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