The advantages of sponsorship

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Introduction

This case study examines how two businesses that have global appeal are co-operating to achieve their shared visions for their companies and brands.

Company vision

Vodafone: To become a global mobile leader in terms of profit, customers and value, making mobile networks the "nervous system" of the networked economy spanning three major developed markets (Europe, US and Japan).

Manchester United: To remain the most pioneering, best supported and most successful football club in the world.

Brand vision

Vodafone A 'can do' approach that makes life easier for customers.

Manchester United Relentless pursuit of excellence.

Vodafone UK is part of Vodafone Group, the world's largest telecommunications company. In the UK, Vodafone provides mobile telecommunications products and services to three major groups of customers:

  • Private individuals
  • Small businesses
  • Large organisations.

Manchester United has been League Champions fifteen times and European Champions twice, in 1968 and 1999. The club has won the FA Cup a record ten times. It has six million fans in the UK and 50 million global fans. Its matches are regularly televised in 139 countries.

Vodafone´s corporate strategy

Vodafone Group's current target is to become one of the world's top five brands. To achieve this, it is expanding its global presence through dual branding exercises with the 30 other companies around the world in which Vodafone Group holds interests.

This involves using the locally recognised brand and the Vodafone name, i.e. Libertel Vodafone (Libertel is the network in the Netherlands). Once the Vodafone name becomes widely recognised in these markets, the Vodafone brand will become the sole brand. This initiative forms part of an ongoing programme to build the Vodafone brand globally.

Vodafone's current business strategy is to grow through geographic expansion, acquisition of new customers, retention of existing customers and increasing usage through innovations in technology.

This is proving a very successful strategy, as is evident from Vodafone's UK success. Vodafone opened the UK's first cellular network on 1 January 1985. It has been the market leader since 1986; its UK networks carry over 100 million calls each week. Vodafone currently has the largest share of the UK cellular market.

It is anticipated that by 2005 there will be over one billion mobile phone users throughout the world, using a wide range of phones including 'third generation' and Wireless Application Protocol (WAP) enabled phones. Nearly two-thirds of these mobile phones will be WAP enabled and with rapid increases in processing power, third generation mobile phone users will be able to:

  • find out cinema programme schedules and seat availability
  • book the tickets
  • study the best route and where to park
  • access the Internet
  • hold video conferences while on the move.

The mobile phone market is constantly moving forward; the pace of change and development is accelerating. Consumers' desire for better products is intensifying. To move the market forward, Vodafone is continually developing new services which, until they are there, are often beyond the average customer's imagination. Vodafone is well placed to benefit from these developments. As a global telecommunications company, Vodafone benefits from the advantages of operating across a range of markets which enables them to benefit from huge cost savings resulting from dealing with single suppliers worldwide for example.

Vodafone´s marketing strategy

Vodafone's marketing aim in the UK is to retain market leadership. Vodafone's strategy is product-led; the company is continually developing new products and services which utilise the latest technological advances. However, as consumers become increasingly sophisticated users of modern mobile technology, they make new demands and seek added value through product improvements. Consumers are becoming more demanding and suppliers have to listen. Vodafone must feed this back into its product strategy.

In the UK, the mobile phone market has approached maturity in a very short space of time, particularly with young people. To keep its leading edge, Vodafone is continually looking to add value to the services it provides and to the packages it offers to customers.

Soon, within the UK, there will be few new customers available. So the challenge is to provide added value services and competitive charges to existing customers who are becoming more sophisticated and demanding. For example, young people think hard about which mobile phone to buy. In their search for the widest range of appropriate services and the best value for money, young people in particular examine catalogues, surf the Internet and study what their friends have bought. Trying to sell to them is tough.

In order to retain market leadership, Vodafone has established a set of marketing objectives. These are to:

  • obtain new customers
  • keep the customers it already has
  • introduce new technologies and services (eg text messaging, WAP)
  • continue to develop the Vodafone brand.

Vodafone is achieving these objectives by continually updating the range of phones and services offered to keep ahead of its competitors. Vodafone also communicates regularly with its customers to keep them well informed of the benefits of all Vodafone products.

Sponsorship deal with Manchester United

In February 2000 Manchester United and Vodafone UK announced a commercial alliance. Through this, Vodafone became the principal sponsor as well as the telecommunications and equipment service partner of the club. The four-year agreement started on 1st June 2000. It was a logical step for Vodafone to seek ties with Manchester United. Due to Manchester United's global appeal, the dual branding process that Vodafone is currently progressing means that sponsoring such a renowned sporting team, exposes the Vodafone name in countries where it may not have been previously known.

Top companies look to be identified with excellence and are happy to be associated with it. Both Vodafone and Manchester United are seeking to be the best in what they do and in pioneering new ideas. Both brands have a global appeal. Manchester United has a massive supporter base, including areas such as the Far East. These supporters represent potential customers for Vodafone. Clearly, the deal fits with Vodafone's marketing objectives of obtaining new customers, keeping its present ones and continuing to develop the brand. In addition, Vodafone is able to develop new value added services specifically for Manchester United fans.

Marketing benefits

The marketing benefits for Vodafone from the alliance cover three main areas.

Enhancing brand awareness and image

The agreement includes the incorporation of Vodafone's brand logo on the playing kit, the rights to use the Manchester United logo in promotions, advertising and perimeter signage at all Manchester United home games (ex-cluding European Champions League). Vodafone also features strongly in Manchester United marketing materials including match programmes, the Manchester United magazine and internet site www.manutd.com. The association with a football team, especially Manchester United, also adds excitement, passion, fun and emotion to the Vodafone brand. These benefits clearly support marketing objectives by promoting and enhancing the Vodafone brand, which will help to win and retain customers.

Extending the range of products and services

Through the link with Manchester United, Vodafone has the opportunity to increase sales of phones and accessories. With a variety of 'Reds' phones and accessories, Vodafone is offering a range of Manchester United phone covers and cases with different designs. Offering Manchester United branded phones and accessories enables Vodafone to win more customers and increase brand awareness across the globe wherever there is a Manchester United fan.

Adding value to services

The Official Mobile Communications Service for Manchester United fans is manUmobile. It is typical of the added value services that Vodafone is creating. Thanks to manUmobile, fans have direct access, through their mobile phone, to the latest news from the club 24 hours a day. Once users have registered at http://www.manumobile.com from their PC, they can receive a host of information direct to their digital mobile phone via text messaging. These services include text alerts giving fixture lists, match information, match incidents and news flashes. manUmobile ensures that fans know what is happening on the pitch, even if they are not at the game and are miles away from a TV set.

Fans can also register and access the service with a WAP handset via http://www.manumobile.com/wap.

Using this service, fans will have access to club news, details of ticket availability, route guidance to Old Trafford and detailed statistical information about each team or squad member. Under match information they can find fixture details, Premiership league tables, reviews of matches, match reports and so on. Added value services such as manUmobile enable Vodafone to meet its marketing objectives of gaining and retaining its customer base, enhancing the brand and introducing new technologies to an informed and enthusiastic target audience. The marketing benefits described above enable Vodafone to promote its global branding strategy by using the UK as a launchpad for stretching its own brand across the globe through one of the UK's most prestigious global brands: Manchester United.

Measuring the success of the strategy

Vodafone's sponsorship deal with Manchester United costs Vodafone £30 million over a four year period. Vodafone clearly has to evaluate the effectiveness of this partnership in terms of its own marketing objectives. It does so in four ways:

  • General awareness is measured through consumer research. For example, consumers may be asked questions such as "Did you know that Vodafone sponsors Manchester United?"
  • The impact of phones and accessories is measured by charting ongoing improvements in sales.
  • The success of value added services such as manUmobile is monitored in terms of the number of people registered and usage of the services.
  • Media Evaluation - Vodafone monitors TV and press coverage to measure the exposure of the Vodafone brand resulting from the sponsorship.

Keeping check in this way enables Vodafone to assess whether or not it has made a wise strategic move in teaming up with Manchester United. Evidence strongly suggests that it has.

Conclusion

Manchester United and Vodafone each stand to benefit enormously from their sponsorship and commercial alliance. From Vodafone's point of view, having its name on the shirts of the world's best known and most highly visible football club is a clear benefit. The partnership has done much more than that, however. Equally important, Vodafone has become Manchester United's communication and technology partner, enabling the fans of the club to get news and information on the Reds wherever they are, through Vodafone's value-added services. Also, because Manchester United has a global fan base, Vodafone's alliance with the club is enabling Vodafone to develop its own global presence. For Manchester United, the deal not only generates extra income, but also provides valuable new services to its fans. This makes being a Manchester United fan even more attractive and for the club new fans mean new customers to sell to.

Like all the best deals, there really is something in it for everyone.

Vodafone | The advantages of sponsorship

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About this case study:
This case study examines how two businesses that have global appeal are co-operating to achieve their shared visions for their companies and brands.

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