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Real Madrid

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  • Pages: 3
  • Word count: 567
  • Category: Football

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1) What is the real Madrid business model? What are the key drivers for each revenue stream? The business model is based on purchasing the most famous players even at high cost to then make a profit on merchandising and marketing by the use of their names. One of the keys to this strategy being successful is that those players are given a contract in which they give 50% of their image rights to the club in exchange for a high salary and for the opportunity to play in the elite of the elite: a team that is historically the best and which guarantees (at least more than any of the others), success and titles. Those players signed under these conditions actually gave up 50% of their image rights (and income through them), to be under the Real Madrid’s brand name, which under Florentino’s ambititious marketing plan and given the great growth of the club (Real Madrid as a brand was ranked #1 in the world last year, ahead of Coca-Cola), also guarantees that the 50% they keep is going to be more productive.

It involved the risk of having a great spending at first, but it has been working out 100% Who are Real Madrid’s customers? How is the market segmented? (Colin) 1.Fans Who Watch Live Matches at Stadiums This group of customers comprises the fans who visit the stadiums to watch the live matches, and total up to 80,000. Of the 80,000 seats available in the stadium, 58,000 seats are held by season ticket holders, 4000 box seats and VIPs, while the rest are for sale during the match. A good portion of the VIP seats could be one that is variable, with the club having VIP packages which appeal to premium customers who are willing to pay for the special amenities of a VIP room or box, complete with upmarket meals and beverages. While this number is important, its potential is relatively fixed, apart from the ability to expand the VIP privileges or number of seats.

2.People who purchase Real Madrid-branded Merchandises and Programmes Marketing and merchandising comprises a large proportion of the growing revenues of Real Madrid, and these group of customers involved people from around the world who would visit retail stores to buy all sorts of Real Madrid branded goods.

Sponsors remain an essential part of the revenue stream as well as the brand, with sponsors such as Nike having long-term sponsorship of the apparel for Manchester United. These forms of sponsorship help to build the clubs brand and affinity with the partner brands, and partners help to proliferate the sales of merchandises. As in the case of Nike and Manchester United, partnering with Nike will allow for Manchester United apparel to leverage on Nike’s quality as well as the global network of retail outlets in promoting and building the brand. Thus sponsors as customers of the football club’s advertising is fundamental.

4.TV Broadcasters
With the deregulation of the media industry, broadcasting rights purchased by TV broadcasters from Real Madrid is an increasingly important source of revenue. We see the importance of TV broadcasters as an important customer to… Who are Real Madrid’s customers? How is the market segmented? By geographic

By behavior (loyalty)

What risks does Real Madrid face?
Game performance
Player Behavior
Team Balance
Overstretching the Brand

Player retention
Excessive commercialization
Uncertainty vs. expected results
Team cohesiveness
Maintaining fan loyalty

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