Brand Extention At Real Madrid
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Case: BRAND EXTENTION AT REAL MADRID
Executive summary
Real Madrid (RM) has been worldwide-known as one of the best soccer club in the world. However, RM has experienced negative profits in recent years due to changes in the soccer environment. To achieve sustainable growth, RM needs to extent its brand worldwide in order to gain profits. To do so, RM needs to set up a new channel of communications and partnership-relationship with retailers, broadcasters and franchisees who are key drivers in enabling RM’s brand extension around the world.
1. Ask SEED Question
Initial Question
What are we trying to achieve?
We want to extent Real Madrid brand worldwide to gain profits.
“Why”
• To have stable profit growth in the future independently from field performance.
• To counter the stagnation of revenue growth from traditional channels (broadcasters, sponsors, match day).
• To sustain the profitability of the club in the long term.
Well, that’s obvious!
The SEED Question
How can Real Madrid gain profits while extending its brand worldwide?
(How Real Madrid can have the best profitability through expanding it brand worldwide).
Why is the SEED Question Important?
• The question is strategic because it is a part of the implementation plan to achieve RM’ new vision and mission
• The question is explicit because it states exactly what kind of brand development we are pursuing.
• The question is executable because RM’ marketing forces can execute an implementation strategy to answer this question.
• The question is because it addresses the declining profit problem that RM is facing.
• While answering this question, we can truly solve the challenge at hand. By extending the brand worldwide, RM can have stable and increasing incomes by selling contents and merchandise and therefore achieve sustainable profitability.
• While answering this question, we will become a champion. When the brand is extended, RM will have stable income sources, therefore RM will not totally depend on incomes from traditional channels which are depending on the team’s performance. By answering this question, RM will become the champion in the soccer business field.
2. Mapping Ecosystem
Ecosystem
2.1. External factors
Law: RM has to follow the regulations in the business environment and the institutional rules framework of UEFA and FIFA without being able to influence them.
Media: RM has to be aware of the media’s influence in presenting a positive image and utilize it to achieve more visibility.
Market: RM needs to take into account market structure and conditions in different geographical regions where it extends its business.
2.2. Individual components
• Strategic partners: Sponsors and players are the strategic partners of RM because they bring RM incomes.
• Players’ sponsors: Sponsors bring incomes to the players, half of which are shared with RM.
• Real Madrid: RM’s management is the heart of the Ecosystem map. The management needs to utilize the other individual components in the map to extend RM’s brand in order to increase profits.
• Competitors: The competitors in the map include RM’s competitors in the field such as other soccer clubs and business competitors.
• Franchisees: Franchisees pay royalties to RM for using its assets such as logo and contents for business purposes.
• Broadcasting: The broadcasters show the club’s games to soccer fans all over the world.
• Customers: Customers are people or organizations who buy products/services from RM or RM’s franchisees.
2.3. Linkages and flows in the map