Present

29111311 Haidir Afesina 29111363 Wirania Swasty 29111384 Chairunnisa Mirhelina 29111387 F X Kresna Paska 29111398 Aqsa Adhiperwira 29111400 Fajar Liem

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Galactico by Oxford Dictionary

noun (plural galacticos) - lktk Informal - an exceptionally skilled and celebrated soccer player.

Origin: early 21st century: Spanish galctico, literally 'galactic person' (i.e. bigger than a star)

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Prominent Quotes
In Spain, it is easier to change SPOUSES,

POLITICAL PARTY or RELIGION that it is to change SOCCER CLUB. In soccer, a fan is a FAN FOR LIFE

Real Madrid Manager

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Case Synopsis
Form in 1902 as Madrid Foot Ball Club In 1920, King granted the title Real (Royal) 1947, Build Bernebeau Stadium By 1970, the team had won 6 European Cup By 2003, under Perezs Management bought Beckham

Half of all Spaniards considered themselves soccer

fans (60% follower RM, 30% women spectator ) Emulate success of Manchester United and Lion King for RM globalization & commercialization strategy

Soccer Business
1904, FIFA founded in Paris
Set of rules regulating 204-member organizations

Open-league system 1990s, transitioned to strategy of maximizing merchandising, TV revenue, stock values

Soccer Industry Analysis

Porter 5 Forces
Threat of new Entrants
LOW & Attractive Depend on new investors

Supplier Power
LOW & Attractive Licensing & various of sponsorships Low switching cost Players iconic sponsor (50% image rights)cost

Rivalry Competition
LOW & Attractive Regional Big Clubs (Manchester United, Juventus)

Buyer Power
LOW & Attractive Broadcast & Pay TV Stock Values Die-hard fans (seasonal & match day ticket, merchandise) Fans in Asia (world tour visit) 6 million tourist visit Madrid

Threat of Substitutes

LOW & Attractive Other Men`s sports during off season (Basketball, NFL, Rugby, Baseball)

Attractive market but the revenue is dynamic

Transforming the Real

Vision Mission
Goals
To be the best soccer club in the world

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To transform Real Madrid we went partly againts what experts were used to -SanchezTo nurture and project the Real Madrid brand worldwide

1. Give Real Madrid the financial flexibility to acquire talent and expand its brand reach
2. Assemble a team of top

players

3. Leverage Real Madrid brand and content across a variety of channels

Brand Value 1. Size of audience 2. Frequency audience engage with the brand
3. Sociodemographics characteristic of the audience 4. Bridges to link the brand and the audience

Transforming the Real

3 simple truths; 1. The best players pay for themselves 2. Real Madrid is a brand 3. The product (the players and the games) is the content

Arenas
Worldwide Young Male & women Firm Asian & USA market
Strategy

Rivalry

Staging
Worldwide retail Firm network.

Vehicle
Economic Logic
4 wholly owned Merchandising store. Firm Licensing Strategy & franchising. Disney world of Rivalry Madridismo club training

Various discounts to Firm Real Madrid fan car holders Strategy Strategy (ticket, restaurants, theme Rivalry Rivalry Park, cinemas, merchandise)

Differentiator Firm
Bring in World class players. Strategy One onRivalry One Relationship: (Internet media, wifi, telephone,etc)

Transforming the Real

Revenue Streams
Licensing & Sponsorship

Category
Major Sponsor Secondary Sponsor Official Providers

Brand
Adidas Siemens Mobile Audi Pepsi, telefonica Mahou, Unilever, Sanitas, Solan, Kraft, Viceroy, Sanchez Romero Real Madrid TV TV pay per view Spanish Radio Realmadrid.com

Place
Shirt & Kit, name on jersey Bernebau Stadium Press conference, website, and publishing

Value

3 years (12 mill Euro/year) 30 vehicle for team

Broadcasting

TV

Radio Internet
Gate Receipts Merchandising The Socieded Mixta Joint Venture, Merger Tickets Reservations

2.25 mil Euro/year 3.5 mill Euro/year 2 million people 1 mill Euro/year Stadium, Website, retailer 55% increased since 2000 4 mill Euro/year 78.1 mill Euro for 20% share 39.05 mill Euro for 10% share All benefit 25% tax rate

Accessories (fan card, shirts) Caja Madrid Sogecable

RM Stores

Marketing revenue expected to rise: 39 mill Euro (2000-01) 83 mill Euro (2003-04) 142 mill Euro (2005-06) Marketing activities forecast in 2003-04: 36% turnover, 8% competition, 27% match day revenues, 30% TV rights

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Santiago Bernabeu Stadium

Brandirectory.com Best Football Brand in 2010

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Manchester United
Master of the globalization & commercialization model
1. Product segmentation by age Niche Supporters
Targeting Product Children Fred The Red (Soccer ball, t-shirts, children accessories) Teenager The MUFC (backpackers, caps, binders) Adults The Red Devil (quality shirts & sweaters)

2. Digitization
Team`s web site: www.manutd.com unique content library (value at 354.4 mill euro)

3. Sponsorship
Nike signed a 13-year 640 mill Euro, Vodafone signed 4-year 51,5 mill Euro

4. Subsidiary Manchester United International

International expansion in Asia and USA (preseason tours) Theater of Dreams A shop & Coffee house & restaurant (Asia & Middle east) Open in Dublin targeting Irish supporters

5. Public Share Offers Reached over 576 million Euro

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Problem Identification
1. To make a local brand with worldwide awareness to a real global brand with marketing capabilities

2. To manage the brand and the content from overexposure and commercialization along with an element of uncertainty in soccer

Real Madrid Brand Equity

Fans (One-oneone relationship) 4. RELATIONSHIPS =

What about you and me?

3. RESPONSE = Los Galacticos FEELINGS What about you?

2. MEANING = World Class

Team & Performance

Ellite, Luxury (Sport, Celebrities)

What are you?

Strong Brand Awareness (Strong Logo Recall & recognition)

1. IDENTITY =

Who are you?

15

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WHAT IS REAL MADRID BUSINESS MODEL? IS IT UNIQUE?

The movie we are selling is worth more if, say, Tom Cruise is in the lead Sanchez referring to Zidane

Business Model
KEY PARTNER KEY ACTIVITIES VALUE PROPOSITION RELATIONSHIPS CUSTOMER SEGMENTS

KEY RESOURCES

CHANNELS

COST STRUCTURE

REVENUE STREAMS

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Unique Business Model

Buy the best and famous players, earn profit from merchandise/marketing by using their names. Guarantee big salary Player contracts gives RMFC 50% of image right Beat Barcelona in market, not in field

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Revenue Stream
Match-day
Ticket VIP Ticket

Merchandising
Jersey, mugs, T-Shirt of stars 5%-20% from revenues

International Competition
Champions League League World Cup others

Sponsored and alliance

Adidas, Pepsi, Siemens >15% top club revenue

Broadcast and Pay TV

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Business Model
Forecast Real Madrid Revenue and Net Profit in 04/05

22%

Match Day International Competition Broadcast/TV

47% 21%

10%

Marketing

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RM Starting 11, before and after Perez

2000/2001 2003/2004

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WHO ARE REAL MADRIDS CUSTOMERS? HOW IS THE MARKET SEGMENTED?

The key is to convert real Madrid fans into real Madrid customers wherever they are in the world - Valdano

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Real Madrid Worldwide Popularity

Q: The leading football club ?
Rank Argentina Brazil Latin America
Real Madrid Corinthians

U.S

Japan

England

France

Germany

Spain

Europe

1.
2. 3. 4.

Boca Junior

Corinthia ns Sao Paulo

Man Utd

Parma

Man Utd

Real Madrid Man utd

Bayern

Real Madrid Barca

Real Madrid Man Utd

River Plate

Real Madrid DC United Milan

Milan

Liverpool

Real Madrid Man utd

Man Utd

Flamengo

Barca

Real Madrid Roma

Real Madrid Barca

Juventus

Man Utd

Bayern

Roma

Palmeiras

Sao Paulo

PSG

Barca

Bayern

Juventus

5.

Real Madrid

Inter Milan

Palmeiras

Barca

Juventus

Arsenal

Marseille

Inter

Milan

Barca

Exhibit 3. Leading soccer club as per survey in selected countries

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Real Madrid Customers

Soccer player and fans around the world Real Madrid fans Hispanic descendants Loyalty Program:
Youth soccer academy Co-Sponsorship Soccer lectures Games and merchandising

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Target Market, by geographic

Europe and Spain
Website, Online Shopping
Telefonica serve in 14 countries

Magazine Real Madrid TV, Pay per View Socios abonados Card
Discounted seats, magazine Attend UEFA and Cups game Exclusiveness

Asia
China: wanted get 10% sports merchandise Japan: Asian Tour, soccer academics, restaurant caf Asian Tour (China, Hong Kong, Thailand, Japan)

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Target Market, by geographic

USA
U.S Tour Competitive domestic competition Partner with Disney and Viacom Hiring U.S Born Player

Latin America (exhi. 3)

Mexico Argentina Brazil Hispanic descendants

Real Madrids U.S. Strategy

1. 2. 3. 4. Take advantage of the clubs increased global brand equity Capitalize on assets by generating returns in the US market Create a virtous cycle in which economic strengthen the brand in US Deploy assests in such a manner that the club establishes a foundation at the grass-roots level

Content development ( training videos, cartoon series) Fan loyalty (youth soccer organization, co-sponsorship) Development of intangible assets (lectures, soccer academies) Asset deployment (first-team tours, licensing & distribution)

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WHO HAS MORE POWER, REAL MADRID OR PLAYERS?

Player who join us know that they are taking a step forward, in prestige and in satisfaction as a soccer player Valdano

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Who is Powerful; Team or Player?

STAR PLAYER is more powerful

increase RM income and merchandising sales bring new customer, increase fan loyalty determine purchasing financial power and commerce

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Team or Player?
Team is more powerful

Cristiano Ronaldo Total earnings: $42.5 million Salary/winnings: $20.5 million Endorsements: $22 million

Player give up 50% of income to RM RM give high salary High resume, title chance Opportunity to play in champs league RM is more powerful in term of management

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WHAT RISKS DOES REAL MADRID FACE?

We are always worried that great players will cease to exist, but then every year we seem to be faced with a miracle! - Valdano

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Risky Business
Team do not do well in league or cups
Crash out of champions league

Star player got injured, age out, or underperformed (Torres) No star player as classy as Figo, Zidane, Ronaldo emerge anymore. Stretch the brand too far (Man Utd)
Fans are not customer