REAL MADRID Ines SCHULLERLambert ROLLATBrittni PINGGuru PRASADXiadong JIANG (Vincent) Chantal INGRAMRong 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