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The Real Madrid

Case Study Presentation

Brittany Ray

on 20 September 2012

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Transcript of The Real Madrid

The Real Madrid By
Jazmin Lopez Torres
Brittany Ray
Elsa Booras
Ellie Petschek
Rodrigo Lomonaco Gomes 1902 2003 David Beckham joins the Real Madrid team, bringing with him the world's second-largest live TV audience ever and a large Asian marketability. The same Asian popularity brought a total revenue to the Real Madrid of 8 million Euros, proving their strategic player buy was well worth it. Increased revenues were seen the same day of Beckham's inauguration proven by the selling of 8,000 jerseys, each with a price ranging from 62 to 78 Euros each. The Madrid Foot Ball Club is established with the help of Spanish soccer fans. In 1905, the team has its first international game, making their brand known in places other than Spain. 1920 The King of Spain granted the title of ¨Real¨to the club, making it the Real Madrid Foot Ball Club. 1943 Bernabeu, one of the Real Madrid´s all-time top stars, becomes the club's presidents through unanimous appointment. One year later, he starts building the "Bernabeu Stadium," which opens in 1947 and is rater by the international press as the best in Europe. 1966 By 1966, Real Madrid had already won a total of 6 European Cups, making them the world's best known soccer team.
The club's operations and marketing approach did not match its reputation in sports.
The club's mission was not clear and deemed not important. Financially Struggling:
Shareholding through public/private sectors Financially Sturggling:
Legal Right Fight & Sponsoring Licences Perez worked to obtain approval to rezone the clubs old training facilities.
20 percent were sold to private developers
The remainder to local regional governments netting 500million € The club also wanted to set up a stand-alone legal entity (Sociedad Mixta) where some of Reals Madrid´s rights were theirs to own and manage.
audiovisual rights
merchandising and licensing
sponsorships and player-image
distribution business
online and new technology business
international development Shareholders:
Caja Madrid- 20% share
Sogecable: 10% share

Real Madrid Sponsors:
Real Madrid receives 50% of the image rights for every player hired for sponsorship terms.
Main Problems: Transforming the
Infrastructure Perez sets out to build a professional organization.
"We structured ourselves as a company and began to think of ourselves as content providers."- Martinez de Alboroz. He found it necessary to point out the key factors that drive the brand value:
Size of audience
Frequency with which the audience engaged with the brand, as a measure of commitment
Sociodemographic characteristics of the audience
Bridges that could be built to link the brand and the audience, typically in the form of local fan associations Marketing the brand internationally Recruited countries with a growing market Approached the U.S. with a four-pronged strategy Dealt with four major contributions to effectively strategize Soccer as a business Thinking about future Looking not only inside the country, but all around the world -> Create a culture LESSONS REAL MADRID LEARNED
2000 Perez is elected club president, promising to turn around the club's finances, bring in world-class talent, and extend the club's brand around the world through multiple channels. Soccer: How It Works. Soccer clubs are organized into leagues, following an open system where the clubs can be promoted or demoted between the premier and secondary national leagues according to performance.
This means that European soccer clubs have relatively few regulations to interfere with free market principles. If you have the money to buy the star players, you easily dominate not just the playing field, but the media and the marketplace.
These players earn recognition depending on their strong scoring power, ranking amongst themselves, and the scores of top competitions and championships. 1995 European Court of Justice outlaws the payment-of-transfer fees for players whose contracts had expired, as well as lifted the limit of three foreign players per team. With the limit for foreign players lifted, as well as hefty transfer fees outlawed, soccer clubs took the opportunities to persuade players to switch over with large sums of money.
2000:59.8 Million Euro transfer fee for Luis Figo
2001: 75.5 Million Euro transfer fee for Zidane Revenues for soccer teams can usually be accounted through the following means:
Match-day: 62,000 out of 80,000 seats reserved for season ticket holders and VIP.
Merchandising products: jerseys, mugs, caps, watches, etc. Ex. In 2002, 480,000 Zidane jerseys were sold following his transfer; 350,000 Real Madrid jerseys sold in Britain after Beckham's.
Sponsorship: Using the player not only as a brand for the team, but as a brand for a lifestyle of soccer.
TV Rights Soccer is not only a game • 2000-2001 – Newcastle United began advertising on TV, created cross-promotions and made the merchandise available for purchase • 2001 – Clubs and tours began to grow
• 2002 – FIFA held the World Cup in Japan and South Korea
• 2003 – Real Madrid toured Asia with plans of recruiting a fan base by putting up soccer academies, specialty shops, restaurants and cafes • RESULTS: Tokyo fans spent $210,000 on club apparel at a trial/practice session 1. Take advantage of the club’s increased global brand equity – emphasize on the international aspect of brand
2. Capitalize on the club’s assets by generating returns in the U.S. market – easily accessible, convenient for consumers 3. Create a virtuous cycle in which economic returns strengthen the brand in the U.S. and vice versa – potentially open more specialty shops, affiliate themselves with other big name brands 4. Deploy assets in such a manner that the club establishes a foundation at the grass-roots level – build credibility with fans/consumers 1. Content development
2. Fan loyalty 3. Development of intangible assets 4. Asset deployment Other Thoughts *A U.S. tour could potentially happen on the conditions of Real Madrid playing against the U.S. national team, along with ad hoc teams with local players

*Marketing to the U.S. would require pairing with a big American name brand and promoting on TV and Internet

**In 2002, five out of 11 countries voted Real Madrid as the Leading Soccer Club making it the number one soccer club in Europe. A second initiative was to recapture exploitation rights sold to various operators and licenses.
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