Real Madrid Brand Equity Essay

1) Define Real Madrid’s brand platform by describing the following: a) Brand Identity
Real Madrid has a very powerful brand identity. It is always on top of everyone’s list when speaking about football clubs. In essence, Real Madrid’s core brand identity is that it as a well renowned football club that has been prevalent for over a hundred years. It is known for greatness, competition, class, top notch talent and being champions. The extended identity also stands for: Product offering: High quality content portraying international players and games, high level of excitement and championship level competition.

Endorsements: Association of large brands shows the value and worth of the club. Relationship/Heritage: The city’s name Madrid and use of membership/fan cards show a sense of acceptance and pride. Logo: Depicting royalty with the crown and name.

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b) Real Madrid’s brand personality involves excitement, excellence, competition, acceptance and exclusivity. We see that some of these descriptions are so strong that fans return them with the same.

For instance, we see that Real Madrid shows acceptance of their fans by offering them exclusive membership cards, and also giving all types of fans what they want, from competition to pride of being affiliated with the brand. In return the people of Madrid proudly lent their name to the team and showed profuse loyalty.

c) Real Madrid’s Customer Value Proposition consists of 3 benefits, functional, emotional, and self-expressive. A brief description is as followed: Functional: fans can receive content (football games) anywhere at any time. Real Madrid made it so that all types of fans would have something to enjoy, whether competition or star power. Emotional benefits: pride for having a premier football team from your city/country. Self-expressive benefits: Being part of a community; being able to associate themselves with winners.

2) Using the Aaker model of brand equity, do an analysis of the Real Madrid brand a) Awareness:
In 2003, Real Madrid had 93 million fans worldwide. They had over 80,000 television subscribers for their TV station in 2004, with a potential of 3.5 million households. They had their own website, realmadrid.com, with 1.5 million Unique visiting monthly (only 28% accounting from Spain). They used Telefonica to reach customer bases in 14 countries apart from Spain. According to a worldwide survey Real Madrid was considered One of Top football clubs in almost every country that responded. They also used their Real Madrid stores, restaurants, coffee shops, fan card, and magazines. Their awareness continues to grow in many countries

b) Perceived Quality: The quality of the brand goes hand in hand with how well the team plays and in which tournament they play. So the team’s participation and performance in major competitive events, their premium pricing for content; and their annual growth in merchandising and licensing revenues shows that they are perceived as a very high quality brand. The fact that they won so many championships helps with the premium image of being a winner

c) Associations: Real Madrid’s major associations are with their superstar players. It differentiated them at the point of the case as champions and winners. This association also guaranteed excitement and almost assured mass following. The fact that they were associated with players from around the world increased their international positioning substantially.

d) Loyalty: We know that almost all football teams in Europe enjoy a lot of customer loyalty. But we see that with Real Madrid it is more so. To begin with we see that the owners themselves are members of the team. The loyalty is such that they do not need to market too heavily to existing fans, it would not make a difference, the current fans would always stay fans. They are trying to invoke loyalty in new fans by hiring top class players and opening retails around the new segment. We know from experience as well as the case that there is not much threat from competition for loyalty. Once a fan always a fan. They also use Real Madrid fan cards and match-day VIP packages to improve loyalty. e) Other Assets: Grassroots connections with their local fans. Madridismo.

3) Fan Segmentation: Real Madrid fans can be characterized into four main segments Members (Socios): They are very loyal fans. They pay for season tickets. They love being part of the team and have a vote for important decisions of the team. They are the ones that have self-expressive benefits Fans/Supporters: People who list the team as their favorite but are not members of the club. They prefer supporting their home team, but still love Real Madrid. This segment can be satiated by winning championships and trying to expand the sense of community to people not living in Madrid. International: We see this segment as having the most growth potential, Real Madrid is currently doing the right things to attract this segment, i.e. signing superstars and opening retails in said countries to expand awareness.

Age Grouping: This is another way of segmenting the fans. This type of segmentation is used by various football clubs. The segments are – Children: (“Get them while they are young” “once a fan always a fan”) Targeted with the use of special merchandise such as toys. -Teenagers: can be targeted through star power, winning and unique merchandising such as clothing for teens -Adults: Segment where most money is made from, ticket sales and merchandise sales for themselves, their children etc. Also influencers for other segments such as their children.

4) What risks does Real Madrid face going forward with this business model The Real Madrid business model faces various risks. First, their business model is easily imitated. We see new clubs with very wealthy owners such as Chelsea spending copious amount of money to attract the best players in the world. This will pose a challenge to retain talent for Real Madrid. We saw that some teams are offering players double their respective salaries. With offers like that it will be hard to maintain loyalty from talent. And as we see Real Madrid’s superstar talent is one of the focal points to their strategy for current success and growth. Without said stars, they will not be able to provide the quality of content that they are associated by.

The second issue which may arise is replacing the current team with new talent. “Los Galacticos” will eventually get old and lose effectiveness, to maintain their brand image, Real Madrid has to be able to replace these stars with players as good or better. And there is no guarantee that they will be able to sway the younger players to play for Real Madrid. So it is essential to have a strategy in place that would sustain Madrid’s image as a brand worth playing for. The last major issue which could arise is the over commercialization of the brand. As we saw football teams mean much more than just a sports team, it is a sense of identity. We saw in the case that Man United risked alienating their fans and shareholders through excessive commercialization. Real Madrid has done a good job so far with this; they just have to ensure that they do not try to increase short term profits by sacrificing long term loyalty. That being said, Real Madrid’s plans to enter the US may cause this to happen. They just have to make sure that they do not go too far from their core, which is Football.

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