It seems unlikely. This is a season of transition for Manchester United, with a crop of youngsters brought in to replace some of the established players, including England captain and pin-up David Beckham. If the on-field activities have not quite gone according to plan, the business of growing this global brand continues to rumble along at an impressive pace.
The club’s beginnings go as far back as 1878, when a group of men from the Lancashire and Yorkshire Railway Company got together to play soccer on Sunday afternoons. By 1902, the Manchester Heathens, as they were then known, adopted the red and white outfit and became Manchester United.
Many football clubs would shy away from actively describing themselves as a business. But Manchester United was one of the first clubs to position itself in those terms, actively seeking to exploit the commercial potential of its brand with its vast and varied fan base. It was also the first football club to become a publicly listed company. For the twelve months ending July 31, 2003, the club reported a turnover of GB£ 173 million (US$ 308M).
Peter Draper, Director of Marketing at Manchester United, describes the club’s brand strategy in unequivocally international terms. “When you look at Manchester United, we’ve got 50 million fans worldwide,” he explains. “Currently, 90 percent of our business comes out of the UK, but 80 percent of the fan base is abroad. There’s clearly an opportunity for us there. In the future, there is commercial worth in developing our fan base in the US and Asia and the revenues will clearly benefit as a result. If you like, our job on the commercial side is to find the petrol that drives the engine for the team.”
The club is set to tour the US for the second successive year this summer – a tour regarded as so important to the club’s future that star striker Ruud van Nistelrooy has been asked to cut short his honeymoon to enable him to join the rest of the squad for the July 16 trip to the States.
Part of the reason for visiting the US is to demonstrate to United’s blue chip brand partners exactly what they are buying into on home turf. Many of the club’s strategic alliances have been forged with US multinationals – Nike, Budweiser and the like – and the club sees the US tours as perfect opportunities to engage with those partners in the American market. While it’s probably more of a challenge for Manchester United to go to the US rather than Asia, where widespread adulation can be guaranteed, the rewards of cracking the US market remain significant.
Highlighting the need to give information to the club’s supporters as an effective method for generating brand loyalty, Draper says, “We’ve actually launched a membership scheme in the US similar to the one we run in the UK, to coincide with the tour. In effect, we’re taking a key learning from the UK and applying it to the US, where we’ve found out that the main demand is for more information on Manchester United.”
The Man Utd brand development strategy can be neatly split into three distinct areas. Firstly, there is the club’s venue – Old Trafford – which generates revenues on match days as well as being used for concerts, other sports, catering, merchandise sales, and so on. Then there is the club’s media business, which includes its dedicated television channel, MUTV, but also covers traditional sponsorship, financial services products, even restaurants. The club recently opened its first café in Asia named One United, in the Sichuan province of China, with a Beijing branch set to open later this year.
Clearly, this is a brand with vast potential to diversify, developing new products and services to meet the demands of its burgeoning fan base. It’s also a resilient brand. The UK media made much of David Beckham’s departure to Spanish football giants Real Madrid, suggesting that the Beckham brand had formed a key element of Manchester United’s appeal, and that the club would suffer as a result of his absence. In fact, marketing chief Draper took the initiative to measure the “Beckham effect” and argues that it only really impacted the brand in a single market: “The only area where we’ve seen a noticeable wavering of interest in the club as a result of Beckham leaving is Japan. We commissioned MORI to do a survey at the end of 2003 to examine the effect of the departure, and it showed that there had been a bit of defection in Japan as measure against the last two years. Everywhere else shows improved or static brand loyalty,” he says.
The fans demand sporting success, and one can only envisage a loss of brand equity were Manchester United to consistently under-perform against expectations. But, as long as top players continue to sign for the club, and success off the field is matched by championships and cup successes, this is a brand that looks to have a bright future for some time to come.