STRATEGIC SPORTS MARKETING REPORT

Manchester United FC

Executive summary

Manchester United football club is based in professional football and it is located in Old Trafford, Greater Manchester, England. It participates and competes in the Premier League which is considered English football’s top flight. The club was founded in 1878 with the name Newton Health LYR and later changed to Manchester United in 1902 thereafter moving to Old Trafford in 1910.  The team has won many trophies since its inception which has put it in a position of having a large fan base. Increasing commercial revenue is a crucial strategic objective for Manchester United. This report will use the SOSTAC model to evaluate Manchester’s internal and external environment to give recommendations on the strategies of achieving its objective of increasing commercial revenue. The major recommendations are the expansion of sponsors’ portfolio, segmentation and targeting, utilization of current media and mobile opportunities, improve the reach and distribution of their broadcasting rights as well as revenue diversification and margin improvement. Marketing mix assumes the 4P’s of marketing which are; Price, product, promotion, and place.

Table of Contents

Executive summary. 1

Introduction. 3

Situational Analysis of United FC-where we are. 3

External contingencies. 5

The objective. 5

Strategy- How to get there. 6

Sponsors’ portfolio expansion. 6

Further build their retail, merchandising, apparel and product licensing business 6

Utilization of current media and mobile opportunities. 7

Improve the reach and distribution of their broadcasting rights. 8

Revenue diversification and margin improvement 9

Segmentation and Targeting. 9

The tactic- How to exactly get there. 10

Product 10

Place. 11

Price 11

Promotion. 12

Action- what should be done. 12

Control- Did we get there?. 12

Conclusion. 13

Bibliography. 14

Appendeix 14

Introduction

The Manchester United football club other than being a club is a brand and a worldwide sports franchise as well. The global growth of football has been successful that it has become a gap for research. According to [25], the football industry is about 150 billion Euros in net worth; with the English premier league having around 1 billion Euros. Some of the football events that have contributed to generating this revenue are the EPL, World Cup, Spanish La Liga as well as Italian Serie A [25]. Manchester United is one team that has greatly contributed to this revenue by attracting so many fans both locally and internationally. [5] mentions that the club has an estimated fan base of around 1.1 billion people globally. Some of the contributing factors are it is good corporate together with football strategies. The objective of this analysis is to increase the commercial revenue of Manchester United football club. To integrate Manchester’s objectives, strategies, and tactics, the SOSTAC model will be used for the analysis.

Situational Analysis of United FC-where we are.

According to [12], the SOSTAC model provides room for a company to arrange the knowledge, ideas, aims as well as objectives based on social media marketing (SMM). This model touches on the most important components to establish a stronger marketing plan [12]. Situation analysis consists of the internal and external aspects. Brand equity is one internal aspect that has aided the club in generating more revenue and would continue generating more in the future. The organization structure of United FC is the strong corporate governance type [25]. The daily running of the club is left for the current manager Ole Gunnar Solskjær and the board is run by the Glazer family. This management style makes the fan feel like they own the club, thus helps in building stronger brand equity for United FC [15]. The brand is an important component in increasing revenue within a company or business. In a study done by [11], Manchester United had the ambition of making its brand stand out and the move was to adopt the “Think locally, act locally” strategy. To attract the large Asia market, the club thus signed Park Ji Sung. Players have many followers and thus, through this approach, the Asian market became Manchester’s making the brand outstand [11].

Product diversification:

Just like other football clubs, Manchester United is comprised of sporting as well as economic status. For full development, a club like Manchester United must be active in the market. United has influenced the market on its own rather than just waiting to adapt to competing clubs or companies [20]. To ensure an active relationship, the club has penetrated new markets and influenced social as well as environmental aspects. The main product sold by this team to the fans is the football game; a service that is majorly offered by the Manchester Football club limited whereas the non-sporting activities have been outsourced though it used to run them on its own. A good case is the betting and gaming service which is offered by Betfred [20]. To increase revenue, the company manages 9 subsidiaries in which only the Manchester United FC is managed directly by the club’s management. The rest have been put in place through the assistance of other business partners. According to[2] diversification is the practice of getting into other lines of business other than the main activity; so, Manchester has diversified its services by entering other lines to increase revenue.[20]further mentions that Manchester United Catering Limited, Man. U Television ltd, Manchester Merchandising Ltd (Nike), Manchester United International Ltd (Nike), Manchester United Football club ltd, Interactive ltd, Alderley Urban Investment ltd, Timecrtae limited, and Manchester United Commercial Enterprise Ltd are the subsidiaries of the club.

External contingencies

SOCIAL – The culture of the society plays a big role in the organization’s environment. Some of the social factors that impact the company are shared beliefs and attitudes; these affect how the marketers of the company would make a marketing design for their sports activities [21]. Demographics is a major role player for the company because of the increased gender equality campaigns. The company must now diversify its products to serve everyone [17].

TECHNOLOGICAL – With the emergence of new technologies, with the fans having increased in number making the need to watch football a pressing matter, the company has decided to go digital by introducing an online Livestream of their matches. This can be accessed through the company’s website, MUTV as well as its social media platforms [21]. The company is also shifting towards social media to gain more followers in the bid of increasing revenues. The club is also in a position to finance current technologies like the VAR, ball line technology, and interactive advertising to fairly compete with its competitors [17].

LEGAL – It is not a guarantee in most countries that the legal framework would protect the rights of that organization. it is therefore the responsibility of that company to be in a position of protecting itself [21]. The company has observed the employment law by employing both male and female personnel but is yet to decide if it could offer them the same pay even if they do the same job. The company is also integrated with the Manchester United catering and security units that are available to ensure the health and safety laws are adhered to [17].

The objective

The objective of this marketing strategy is to increase revenue as well as profitability by enlarging the company’s high growth businesses whose purpose is to leverage the brand, marketing facility, and global community. The focus of the strategy is to sell the brand and make a profit thus increasing revenue.

Strategy- How to get there

Sponsors’ portfolio expansion

Expanding this portfolio implies securing sponsorships with top brands. The team has historically initiated an enterprising approach to identify, secure as well as support sponsors. In 2019, the club announced around 8 new local together with global partners for sponsorship. According to [9], the team attracts more revenue through media than match day. The importance of the media in football is increasing more and more daily and the management of the team must understand this trend for a long time. The team is diversified into Manchester United tv as discussed above and it is made to reach at least 180 homes globally. The mobile apps for MU are present in over 16 countries, currently in Bulgaria and Bangladesh. The company’s website has had a 40% growth annually over the past five years and in the social media segment, the club is the first to have over 20 million Facebook fans. The company is also in partnership with Nike, Audi, DHL, AON, Adidas, 20th Century Fox, Afroflots among other partners whom according to [9], a sum of over 11 million euros has been paid to the company.[25] mentions that the company has opened up offices in Asia, as well as North America together with their London offices and the club, intends to put them in a position of securing major global brands’ sponsorships. Being aware of its brand equity, the club is tapping into this in a bid to generate more revenue via sponsorship deals [25].

Further build their retail, merchandising, apparel and product licensing business

This strategy aims to increase the company’s product range, increase location, and to expand its product licenses’ portfolio around the world [25]. One aspect that this strategy is dependent on is the club’s fan base. Asia has more than half of the company’s fan base with a potential of buying its merchandise [24]. At the moment, the club is in a ten-year agreement with Adidas based on their worldwide technical sponsorship as well as double-branded licensing rights that took effect on 1/8/2015[14]. This agreement is exclusive of the mono-branded licensing rights. The company intends to put an investment in expanding its product portfolio licenses to improve the availability of its range of products to their followers. Besides, the club may look into ways of refining the segmentation of the various elements of that business. The company again may aim at increasing its focus on building these rights more proactively with other partners [14].

Utilization of current media and mobile opportunities

Social media together with internet mobile has paved new gaps for many growth opportunities as well as new revenue streams [25]. The company intends to leverage on 3rd party sites of social media besides developing their digital properties. It is mentioned by [3] that the club is not appearing in the top five of the most followed clubs on Twitter. This is a good gap for the company to shift most of its followers to this platform and earn the engagement of these followers [10]. The company aims to make these social media platforms their primary techniques of follower engagement as well as transactions across the world. From 2013, the company has fully owned the Manchester United television to make sure that they have stronger management of their production, quality of their proprietary content as well as distribution besides having a better knowledge of the ways of evaluating their digital media tactic as the company proceeds to create as well carefully rolling out the current products and services on target [14]. The company made a move in developing and launching a D2C mobile application for subscription on android, iOS as well as MUTV.com in the financial year 2016/2017; a move which enabled their fans to Livestream their first-team tour matches, academy team games, and uniquely generated original productions together with interviews with their team manager as well as players.

The mobile application has enabled the company to capture new territories overseas, besides, their fans in the UK and Ireland for the first time are watching their MUTV channel via their web browser with neither a cable nor satellite subscription. In the fiscal year 2018, the club launched MUTV software on connected platforms for TV like Apple TV, Xbox, Amazon Fire as well as Roku. This provides their fans with a chance of watching their games comfortably in their living rooms regardless of subscription. This has opened up ways for the club to attract the young generation to their fan base which sees it generate a lot of revenue. To have a cleaner content delivery, the company’s website was updated in 2018[14]. This new website is believed to give commercial advantages to the business with bigger E-commerce opportunities as well as more digital inventory to the commercial partners to benefit. Besides this, the company intends to leverage third party media sites as well as other social media as a technique of engaging further with their fans and building a traffic source for their digital media assets. The company’s digital media offerings are still in their younger ages of growth and they pose future growth opportunities [14].

Improve the reach and distribution of their broadcasting rights.

According to [25], fans love live sports as well as consuming those activities in real-time currently. The result of this is higher audiences as well as increased interest in advertisers of television and radio. The company is well-positioned to accrue benefits from the escalated value as well as the distribution growth related to the Premier League, Champions league together with other competitions. The premier league announced its move in selling five of the seven United Kingdom television rights packages in 2018. These were sold to Sky Sports and BT sport at a total cost of up to 4.5 billion euros for the 2019/2020 season. The league that sold the remaining two packages for Amazon Prime Video and BT sports; which was a new entry to the premier league UK contracts of broadcasting. These broadcasting rights have had an increment of about 30[13]. Currently, UEFA clubs’ competition broadcasting rights have had a 33% increase from the past contract. With the MUTV, the company believes that it will take advantage of these contracts and enjoy their benefits of the increased revenue [14].

Revenue diversification and margin improvement

Diversification of revenue as defined by [7], is the shifting from one source of revenue generation to multiple sources. The company aims to escalate its revenue as well as operating margins while expanding further into their big growth commercial businesses that include sponsorship, licensing & media, and mobile. Through the increase of focus on its commercial businesses, the company will diversify more their revenue making them realize increased profitability [25].

Segmentation and Targeting

Market segmentation is an aspect that is properly established in the theory of marketing and is applicable in all sectors of industries. It is not problematic to develop and implement schemes of segmentation in most companies even though it is widely used [4]. Football has grown over the years and currently, it is more loved and watched by many male individuals age 15-35 across the world [18]. Manchester united thus, should majorly focus on segmenting and targeting the millions of people who love to play and watch football around the world; besides targeting those males of age 15 and above across the world. This is possible by focusing majorly on social media platforms like Facebook, Twitter, online tv channels, and YouTube among other platforms because studies like that done by [19] show that most youths like engaging in social media, and through this, a lot of revenue would be generated by the company. Considering the positioning of the club, the company’s popular stadium is Old Trafford is situated in the heart of Manchester city [6]; which is accessible to almost everyone. The stadium has a capacity of around 76000 people which is a good number to generate a proper amount of revenue for the club [6].

The tactic- How to exactly get there

According to a study done by [1] marketing is a business function that defines and identifies the consumer needs besides identifying the target markets and applying products and services to serve such types of markets. It also involves products and services promotion in the marketplace [23]. Marketing is an important aspect of business success as it aims at customer satisfaction, consumer value as well as quality. On the other hand, the marketing mix is a commonly employed strategy in marketing that mixes integral variables to achieve ideal results [1]. In this tactical approach, this strategy will use the four variables of marketing mix known as the 4P’s (Price, Place, Product, Promotion) of marketing [22].

Product

The main product offered by the United company is football match alongside other products like tickets, catering services, MUTV Livestream in a variety of languages among others; however, more research needs to be done on the market concerning the product delivery. The company needs to clearly define their products and services characteristic and evaluate if they reach the customers’ demands. The company could offer good packages for the tickets, increase the number of stadiums they have globally besides improving the contents clarity of the MUTV and the website [8]. This is the potential in attracting more viewers and buyers of broadcasting rights globally.

Manchester United Launches on TikTok in 2020

“Manchester United (NYSE: MANU; the “Company” and the “Group”) – one of the most popular and successful sports teams in the world – today launched a TikTok channel with a mission to inspire and entertain millions of fans worldwide with exclusive behind-the-scenes content, engaging hashtag challenges and thrilling action moments.” [27]

Place

It is mentioned by [1] that place is regarded as the location, distribution, and how the product is delivered to the clients. The stadium; Old Trafford is the main place where the games are watched. The tactic is to increase attendance because more people love to watch live football on match day. Through this, more tickets could be sold to the fans. To increase more attendance and thus more revenue generation, the stadium should be made presentable and ensuring that all the attendees are comfortable by considering that: brandings of Manchester united should be clear and consistent in the stadium’s touchpoints, high-quality services should be available in the stadium i.e. hospitality, catering among other services, monitoring and cleaning of the stadium should be done every time and lastly there should be a high degree of security for the wellbeing of the fans. These ensure that they enjoy the game and thus attracting more fans. The stadium could also be expanded through technology to increase its capacity [23].

Price

This is the amount of money paid by the customers to buy the products and services sold by a company. A business can take into consideration aspects like discounting, cash and credit purchases, price setting as well as credit collection [1]. Manchester United’s ticket prices are lower compared to its competitors like Chelsea with a cost of 900 euros. Increasing this could bring no loss to them considering the quality of services they give their customers and the loyalty from their fan base [16]. A slight increment in the ticket prices could mean an increase in the amount of revenue collected on a matchday [1].

Promotion

This is the act of informing the customers about the values and benefits of a business’ products and services [1]. Manchester can use various promotion and advertising ways like its influential players such as Paul Pogba, Bruno Fernandes, and Rashford who have good fan base loyalty. An increased product endorsement by these players would mean an increased amount of revenue generated for the club. The company can also increase its partnerships with leading global partners like Nike, Adidas, Chevrolet among others to ensure an increased amount of revenue [16].

Action- what should be done

To ensure that the set objectives have been met and properly running, there will be a series of activities done in various categories like daily or weekly team meetings; which will involve question and answer sessions, monitoring of budget, internal communications as well as status meetings. Secondly, analytics on revenue will be done based on a daily check-up of key outcomes. Another aspect will be the brand research which involves checking on the progress of the brand equity. Innovation and experimentation are also another way that will be used to monitor the increment of revenue where 10% of the budget is used to measure new ways of achieving the objective.

Control- Did we get there?

The marketing team must concentrate on the main objective as well as setting several check-ups on the marketing mix to enable them to work towards achieving the main objective of commercial revenue increment.

Conclusion

Increasing revenue in Manchester United was the focus of this report. Marketing is a key issue in the lifecycle of any given business; and to achieve an objective set, there needs to be an appropriate strategy that would make the set objective met. To increase revenue in a business, the marketing department must analyze to find out what appropriate method should be used. A SOSTAC analysis which covers SWOT and PESTLE analysis is an important tool that would aid the marketing department to outline the company’s internal and external contingencies. Through the use of this strategic analysis, Manchester united management would have increased revenue, thus, carrying out an appropriate analysis is crucial to any business.

Bibliography

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Appendix: Manchester’s followers in social media, all around the world

Manchester United’s Stock Chart