Further Disgrace in Scottish Football

In the second last game of the season, with the Scottish Premier League still not decided, there was further violence directed toward Celtic manager Neil Lennon. A Hearts fan attempted to assault Lennon at the side of the pitch and was subsequently arrested. A bad tempered encounter led to a 3-0 win for Celtic meaning that this Sunday's games will determine the 2010-2011 champions.

Twitter Reacts to Neil Lennon Assault

Daily Mail - Pictures of Neil Lennon Assault

Ch. 7 - Business Marketing

Perhaps the most visible form of business marketing which Celtic engages in is the sale of “Sponsorship Packages” to businesses interested in advertising their firm on a match day. 

A standard package includes:

·         Advertisement in the bi-weekly team magazine.

·         Advertisement in the match-day magazine.

·         Advertising on the big-screens (jumbo-tron) before and during the game.

·         The opportunity to distribute promotional items and literature to the fans.

This is a useful tool for companies looking to generate interest and awareness for their products amongst Celtic fans. It is also a small source of income for Celtic which could potentially lead to larger business marketing opportunities and partnerships. The companies which choose to invest in these packages offered by Celtic can be quite diverse, from local automotive dealers to multi-national brands such as Powerade, Coca-cola, MBNA and Nike. 

It is interesting to note that when a company advertises to Celtic fans, they often choose to market to Rangers fans also. The rivalry between the teams is so intense that opposition fans will actively avoid or even boycott products deemed to be associated with their rivals. An example of such an instance was the sponsorship of Rangers by the McEwans brand of beers from 1987 to 1999. To this day, McEwans is considered to be a “Rangers beer” meaning popularity in pubs and bars associated with Rangers throughout Scotland and Ireland. Conversely, many Celtic fans will refuse to purchase the McEwans brand and establishments with leanings towards Celtic will simply not stock their products. 

Over the years, many sponsors haven chosen to strike deals with both clubs concurrently to avoid alienating supporters and losing business. Examples of joint jersey sponsorship can be seen below:

Celtic also offer corporate hospitality packages targeted specifically at businesses. The Business Class Lounges at the Celtic Park stadium are advertised as offering “the opportunity to entertain clients in an informal setting”.

These packages cost upwards of $6,500 a person each season and offer executive seating, hospitality and service. Whilst networking and personal selling of these corporate packages is the main source of sales, mail outs, email and internet promotion is also used. 

Celtic team up with Ralph Lauren

New York fashion house Ralph Lauren has become Celtic's first official outfitter in the club's 123 year history:

http://www.dailyrecord.co.uk/news/editors-choice/2011/04/11/ralph-lauren-designs-official-celtic-suit-86908-23053525/

http://style.kickette.com/well-suited-celtic-fc-ralph-lauren/

Ch. 8 - Segmenting and Targeting Markets

A market segment is defined as a subgroup of people or organizations sharing one or more characteristic that cause them to have similar product needs.

In my opinion Celtic would use segmentation bases such as general demographic and geographical segmentation. There is, however, one aspect of demographic segmentation which would be of less importance than other organizations offering consumer goods; ethnic segmentation.

There are multiple reasons I believe that ethnicity is of minimal importance to Celtic’s marketing strategy: 

1. Firstly, as established in the first posts of this blog, Celtic was founded as an organization free of discrimination, sectarianism and racism. The Celtic Football Club was founded originally as a charitable organization to help the poor and needy in Glasgow. The beneficiaries of this charitable was almost entirely, but not limited to Irish immigrants and Catholics shunned by society. As a result of these roots, the club positions itself as a sports team “for all”, it is my belief that therefore the general marketing of Celtic related products is “for all”. When marketing a match day ticket or a replica jersey, there is no difference in marketing whether the consumer is black, white, Hispanic, Asian or any variation of these.

2. Secondly, in comparison to other nations, such as England or the United States of America, Scotland is a nation of minimal ethnic diversity. In the last major census study, just 2% of the population of Scotland were from a non-white ethnic group. As Scotland is a country of only 5 million inhabitants, the largest non-white ethnic group (Pakistanis), numbered just 31,000 (Scottish Government, 2001). Whilst these figures have undoubtedly grown since 2001, they do demonstrate quite clearly that ethnicity is not a major factor when marketing products to the residents of Scotland.

3. Lastly, sports themselves are often credited with bringing individuals together from different nations, religion or skin colors based on a common and mutual passion. Whilst a multinational corporation with a wide range of products may see benefit from targeting ethnic groups separately, the brand, products and image of a sports team and specifically Celtic is generally not open to multiple interpretations. The club’s players, values and identity are either attractive to an individual, or they are not. 

When considering the above points, it should be noted that Celtic is attractive to sports fans globally due to its proud history, traditions and passion. Any attempt to tailor this to specific audiences may be seen as diluting what makes the club great and potentially lessen its appeal.

Despite this lack of focus on ethnic segmentation, there is the opportunity to market products to audiences outside of Scotland. These segments would fall under geographic segmentation as opposed to ethnic segmentation. As discussed over previous weeks a player of a particular nationality can generate considerable demand for Celtic products tied to that player in his home nation. Examples include current players such as Emilio Izaguirre (Honduras), Ki Sung Yung (Korea) and Biram Kayal (Israel). Ex-players such as Shunsuke Nakamura (Japan) or Henrik Larsson (Sweden) are excellent examples of how a popular foreign player can generate huge merchandising demand in their home nations and beyond.

Sources:

Analysis of Ethnicity in the 2001 Census - Summary Report

http://www.scotland.gov.uk/Publications/2004/02/18876/32939

Ch. 11 - Developing and Managing Products

Developing and managing products in the traditional sense is not something which Celtic typically engages in solely. There is a limited amount of product development which can be implemented with products such as match day tickets, and products such as merchandise are designed and developed largely by the club’s partners. That said, new products in these areas would undoubtedly go through the seven step new-product development process.

One area where it may be easier to appreciate how the business develops and manages new products is that of the Celtic playing staff. Each player could be considered individually as a product however, the entire playing staff and the ‘on-pitch’ performance is the single greatest product which the company has to offer. As discussed in previous blog posts, without a talented and winning squad of players, sales of all other product lines will suffer. There are some aspects of the new-product development process which could be directly applied to the acquisition of a new player and the development of the Celtic playing product:

New Product Strategy

When considering the addition of a player to the club’s squad, development of a new-product strategy is essential. Considerable thought must be given to the strengths and weaknesses of the current product offering (the players) and determine areas of improvement. The contribution a new signing may make to merchandise and ticket sales will also be an important factor (a high profile player may increase these substantially). Lastly, it must be determined whether the player is of sufficient quality to meet the goals of the business, and whether or not a particular player is available for a reasonable investment.

Brainstorming

The manager of the playing squad (Neil Lennon) is responsible for much of the clubs transfer activities. There is, however, considerable brainstorming internally before any purchase is made. Celtic have an extensive scouting network around the world which is constantly making suggestions as to which players may be interesting products to add to the team’s roster. Often club directors will have their own ideas regarding what would make a good new product for Celtic, these individuals often wish to buy players from potentially lucrative markets for the club’s merchandise (e.g. Recent signings of Korean, Mexican and Israeli players).

Screening

Upon closer inspection potentially attractive players may lack the desired quality, purchase fees and salary demands may be too high, or perhaps the player has a history of lengthy injuries which only becomes apparent after a detailed inspection.

Concept Test

Often players are invited to train and play in practice games with the current members of the Celtic team prior to any contract offer. These ‘trial’ period can last a number of weeks and give the Celtic management the opportunity to evaluate their new-product idea.

Business Analysis

With the purchase of any player there is extensive negotiation with the player’s current club to determine the cost of releasing him from his contract. Following this a satisfactory salary agreement must be reached with the player and his agent. When these figures are closely analyzed, a transfer may or may not be considered a worthwhile investment.

Disturbing and Unprecedented Developments in Scottish Football

This is supposed to be "only a game", and yet, Scottish football is descending into chaos due to the unbelievable actions of narrow minded terrorists:

Parcel bombs sent to Celtic manager Neil Lennon and others associated with the club

Ch. 16 - Integrated Marketing Communications

Despite the large number of products Celtic offers, as previously discussed in previous weeks, it is my belief that the organization has a considerably easier time maintaining integrated marketing communications (IMC) than those in other industries.

IMC is defined as the careful coordination of all promotional messages for a product or a service to assure the consistency of messages at every contact point where the company meets the consumer. Celtic’s two main products, match tickets and merchandise are offered hugely from the club itself and from limited sources within the organizations.

Tickets

Match day tickets, season tickets and corporate hospitality packages may be purchased with by calling the club directly or by purchasing through the Celtic website. Information regarding prices and product features comes directly from the headquarters of Celtic allowing all aspects of advertising and sales promotion to be consistent and clear.

A promotional video for Celtic's hospitality packages can be seen by clicking here.

Merchandise

The majority of merchandising sales are through Celtic’s stores within Scotland & Ireland or through the online superstore. The products offered from both channels are identical and any changes in product offering or price is adjusted quickly and efficiently. Perhaps one aspect where IMC may become cloudy is with merchandise offered through external retail partnerships; often prices in a non-affiliated sports store can differ considerably from prices offered by the club itself.

Public relations and publicity

 These are extremely important for the business as they attempt to grow the Celtic brand globally. Often these aspects of the promotional mix are of added importance as sports teams must regularly handle the controversy and media hype that surrounds popular sports. Over recent years Celtic has been involved in a number of public disputes with both rivals Rangers and the governing body of Scottish football, the SFA. The following link displays Celtic’s PR in response to an attempted ban of manager Neil Lennon:

http://www.scotzine.com/2011/04/sfa-cannot-legally-enforce-lennon-ban-and-back-down/

Ch. 10 - Product Concepts

As discussed over previous weeks, Celtic offers a number of products to customers. Perhaps the most important product which the business offers is the on-field team of players and their performance. A successful team easily generates income through competition prize money and the high ticket sales which are sure to follow as fans flock to see an in-form team.

The success of Celtic on-field has a large effect on the success of other aspects of the club’s product offering, particularly the area of merchandise. A winning team contributes to full cash registers. Celtic offers an extensive selection of products with both considerable product mix width and product line depth.

An example of this product line depth is the Celtic replica football shirts available. The Celtic superstore website provides no less than 18 options for purchase as displayed in the following images:

This seems like a excessive amount of options for a simple purchase but many of the products are offered for a particular age/size group that the club would be foolish to ignore. As tacky as it may be, Scottish, Irish and English infants are regularly seen sporting the clothing of their parents' favorite football team.

This particular product offering, however, barely scratches the surface of potential purchases from the online superstore. There are a further 12 categories (13 including the clearance section) and 65 sub categories of products; whilst some of these will of course be big sellers, there are others such as a Celtic branded Monopoly game that could perhaps be cut.

Delving deeper into the many products offered it is clear that whilst Celtic are looking to provide an item for all customers and occasions, some product line contraction may be a productive exercise. It is worth noting, however, that Celtic are one of the most successful clubs in Europe in terms of income generated from merchandise sales. On this basis it is difficult to criticize the many product concepts too much.

The Dark Side of Soccer in Scotland

Often regarded as the biggest rivalry in not only world soccer, but world sport as a whole, Celtic v Rangers (collectively referred to as 'The Old Firm') is an encounter which at times seems more like a full blown war than a 90 minute long sporting fixture. Complex social issues which have dogged Irish and Scottish societies for hundreds of years are the spark which ignites these matches. Rarely is sport doused in the racism, sectarianism, prejudice and violence which engulfs Scottish football stadiums 4 times a year when these two teams go head to head; all too often the passion on the pitch spills onto the streets of Glasgow, Belfast and beyond. 

To many, this unmatched complexity is what makes The Old Firm such an engrossing spectacle and has caused the relatively small nation of Scotland to possess one of the most watched soccer matches in the world. Unquestionably, this overblown powder keg fixture is good business. People globally will tune in to witness the events unfold, these individuals may have no interest in Scottish soccer but Celtic v Rangers is quite simply considered a 'must-see'. Indeed at 7am in Manhattan (and across the U.S.A) you can find Celtic and Rangers bars packed to the rafters with supporters eagerly awaiting kick-off. In my experience there are often a number of American citizens unfamiliar with the sport who are just along for the ride.

U.S. based online magazine 'Slate' recently offered the following article in an attempt to explain the situation and history to American readers. Often I am asked by people in the United States what game they should see if there are interested in experiencing soccer; I always advise the Old Firm fixture in order to "throw yourself in at the deep end". If you want to be shocked, entertained and engrossed, it doesn't get any bigger or twisted that this.

Slate - The Scottish Play - Celtic vs. Rangers, and what happens when a sports rivalry gets completely out of hand.

Ch. 18 - Sales Promotion and Personal Selling

Personal selling

There is little in the way of true personal selling done by Celtic Football Club on the consumer facing side. As with any business, however, high value propositions that the club is involved in will undoubtedly involve a lengthy sales cycle with many deals taking months to complete. Examples of such situations could be: 

• The sale of assets such as a member playing staff, as there are often multiple parties involved in negotiations and the outcome is rarely reached quickly.

• Sponsorship deals with the likes of Nike, Coca-cola, MBMA, Powerade, Tennents lager and Scottish Leader whisky. 

• Land development projects such as the renovation and expansion of the club’s stadium, training grounds or other property investments.

Sales Promotion

A simple visit to Celtic’s retail stores in Scotland & Ireland or to the club website (www.celticfc.net) displays a huge amount of sales promotion which the business is continuously using to generate increased sales in specific areas. Areas of promotion include:

• Tickets. It is important that the stadium is as full as possible on match days. As a result many incentives are offered, particularly for games against less appealing opposition. Many tactics are used such as price cuts or free admission for a child with each adult ticket purchased. It should be noted that there is a sweepstake at each game at Celtic Park where a customer will win $15,000. The effectiveness of Celtic’s approach to maximizing ticket sales has resulted in the club having the 9^th highest average attendance in world soccer.

• Apparel & Merchandise. As new products must be continuously introduced to keep customers interested there is regularly sales promotions to encourage purchasing. At the moment for example, it is possible to purchase two Celtic DVDs for 10 and there are large price cuts on last year’s fashion and training wear as the spring 2011 lines have just been introduced.

• Corporate Hospitality. Premium packages can be purchased by fans in order to enjoy a game in the executive setting which included fine dining and access to exclusive lounges and the opportunity to meet players and staff after games. Depending on availability and demand these packages are often subject to sales promotions which are generally advertised through mailing to qualified leads and through online means.

Retail Visit - Niketown NYC

As Celtic to not have their own retail presence in North America I decided to visit the most likely retail location to purchase Celtic products. I visited the huge Nike store on East 57^th dubbed "Niketown". The store is massive, spread over numerous levels and covers all aspects of Nike’s product offering; general sporting good, men’s shoes, menswear, women’s shoes, womenswear and products specific to each particular sport. Niketown caters for enthusiasts of soccer, football, basketball, running, yoga and even the likes of snowboarding. 

Upon entering the store I was greeted by around 3 members of staff who were having a conversation amongst themselves, they looked fairly underwhelmed to see a customer enter the largely empty store late on a midweek night. After navigating various floors I found my way to the soccer section which is marked by a famous quote from legendary Liverpool manager Bill Shankly (who was Scottish), it reads:

 “Some people think football is a matter of life and death. I assure you, it's much more serious than that.” (Football in this instance, is of course ‘soccer’)

I promptly located Celtic jerseys hanging alongside other elite teams of world soccer, other Celtic products were available such as branded soccer balls and training gear. I am not currently in the market for a Celtic jersey, but as someone who plays the sport weekly I am in the market for a new pair of cleats with a purchasing limit of around $100. Disappointingly the depth of products available at this flagship Nike store was extremely poor with only 4 types of soccer cleats available for purchase (a quick visit to an online retailer offers 199 different Nike soccer cleats). I was eager to learn if there was more products in another part of a store but found it extremely difficult to find a member of staff to ask, after a long search the sales assistant advised that what they had on display was "everything". "Everything" in this instance is just 2% of an independent retailer's product selection in Nike's flagship store, which is in the center of New York City. If I was a Nike VP i would be concerned at this seemingly lazy approach to promoting what we have to offer in a particular product line.

As none of the products available met my fairly basic criteria I returned home without making a purchase. The Niketown store is impressive in its size and glitzy displays, but this appears to come at the expense of product selection and customer service. Perhaps the most disappointing aspect of my retail visit was that no hot female members of staff winked at me; to add insult to injury, upon returning home I found absolutely no ice cream in my freezer. Maybe next time.

Ch. 17 - Advertising and Public Relations

Celtic Football Club engage in considerable product advertising and pioneering advertising: 

Product advertising is used extensively to attact customers to match tickets, stadium tours, hospitality packages and various merchandise. This advertising is seen in the form of newspaper ads, email campaigns, mailing campaigns and an annual catalogue sent to fans detailing the products available from the club store.

Pioneering advertising is used each summer to promote season tickets for the upcoming season (an annual pass to all Celtic’s home games). This form of advertising can also been seen at the launch of a new club jersey which is a major source of merchandising revenue. Celtic are required to have both a home and away shirt, the release of these new clothing items are 2 years apart and staggered so that each summer there is a popular new product available for customers.

At times the club has engaged in advocacy advertising such as public announcements though the press and online highlighting the clubs achievements, or at times congratulating exceptional traveling Celtic supporter behavior throughout  Europe. Recently, after an extremely heated match against rivals Rangers, the club released statements highlighting the positive behavior of Celtic players as the police and politicians criticized both teams for violent conduct. In a game which saw three players ordered from the field for offenses and 10 players cautions, Celtic pointed out that only three of their players had been carded and all of these were minor cautionable offenses.

Lennon pleased with the Celtic on-pitch 'product'

In this article Celtic manager Neil Lennon highlights the quality of Celtic's on-pitch product, a viewpoint fueled by 2 crucial wins against rivals Rangers in February. It is unusual for soccer managers to use words such as 'product' when describing their players and performance as they strive to distance themselves from the business aspect of soccer and concentrate on results. Neil Lennon is known for his understanding and connection with the fans of Celtic. He is clearly aware that performances on the field are essential to customer satisfaction, and the long term success of the club.

http://news.bbc.co.uk/sport2/hi/football/teams/c/celtic/9403033.stm

Ch. 15 - Retailing

Celtic take a serious approach to retailing in comparison to most soccer teams based in Europe. The club currently operate a chain of 15 stores throughout Scotland and Ireland, depending on the size of the store a wide assortment of products can be found. Celtic’s biggest rivals, Rangers, maintain a presence in just two retail locations.

As mentioned in previous blog posts, through their sponsorship agreement with Nike, Celtic merchandise can be found in Nike stores throughout the world and is presented alongside elite European clubs such as Barcelona, Manchester Utd, Inter Milan, Juventus and Arsenal. This global exposure and inclusion in displays with other popular soccer sides is extremely valuable as the club looks to expand its reach around the world.

Nonstore retailing  is an essential aspect of Celtic’s approach to retailing. Through internet and telephone a wide variety of Celtic merchandise and match tickets can be purchased. At this time, Celtic do not have any exposure to the exciting new possibilities in M-commerce. As a professional sports team it is unlikely that the business would expose themselves to a new and unproven, albeit promising, form of retailing.

A likely path forward for Celtic is to expand their reach globally through electronic retailing and to further leverage their Nike sponsorship partnership. The many products available online targeted at women, children and 50+ males demonstrates the businesses willingness to seek customers out with the main target market of 20-40 year old males.

Ch. 6 - Consumer Decision Making

The consumer decision making process specifically for the purchase of a Replica Celtic Jersey priced at $68:

Need Recognition

Every second year Celtic will release an updated version of the home shirt, a replica of the soccer kit that the players wear on the field. Whilst the overall style of the kit does not change (the green and white hooped design of Celtic’s kit is known around the word) there are many subtle alterations to make the product fashionable, interesting and desirable to the consumer.

Information search / Evaluation of alternatives

Few people choose to buy a football kit and then elect the team’s kit they want. It is fair to assume that the consumer considering the purchase of a Celtic shirt has already decided on the team itself and any information search may be limited to the actual source to purchase from. Celtic Football Club offers its products through many sources, from numerous retail partners in Scotland, Ireland and the U.K. to official Nike stores worldwide. It is possible to purchase from a multitude of sources online and have the product shipped internationally.

Celtic does not attempt to compete with these sources on price, instead it lures customers to purchasing through its official online or retail stores by insisting that all profits from official sources are reinvested directly into the club (no middleman enjoys a cut of the merchandise’s sale). Many consumer choose to purchase from the club itself on this basis.

Purchase

Celtic are aware that their product may be found cheaper through non-official partners. Whilst all sales ultimately result in profit for the business, as discussed above, it is preferable that merchandise is purchased directly though the club. In order to persuade more consumers to follow this preferred path the club offers numerous incentives, many of Celtic’s brand extensions may be purchased at a discount through official sources such as women and children’s clothing, various lines of Celtic casual wear, soccer training clothing and accessories etc. Celtic are also know for their willingness to offer discounted or free shipping regardless of the destination when attempting to maximize sales of a new product.

Post purchase Behavior

Steps are taken to ensure that the consumer is satisfied with their product such as follow up mail and email offering exclusive deals on future purchases and a money back guarantee should the goods not be satisfactory. With the current 2010/12 home kit there was an instance of the first batch sold falling short of consumers quality expectations, Nike and Celtic worked together to address the issues at manufacturing and offer full refund or exchanges to consumers affected.

Ch. 5 - Developing a Global Vision

Recognizing and reacting to international marketing opportunities is of major importance to the business of Celtic. With a relatively small domestic market, the business must target markets throughout the world in order to maximize revenue. Examples of Celtic’s global vision are as follows:

Overseas partnership

Celtic recently formed an alliance with Mexican club Santos Laguna. It is the intention that the arrangement will allow Celtic and Santos to exchange a range of ideas which will benefit the playing and commercial dimensions of both clubs. In entering into the partnership Celtic will expect increased exposure in the large South American market and increased merchandise sales.

Credit card for North American market

With Celtic fans in North America numbering upwards of a million people, a partnership with MBNA has allowed the club to market a credit card to fans overseas.  In doing this they hope to recreate the success of their credit card for the UK market which produced a record amount of applicants from a soccer match.

Pre-season tour

In preseason Celtic often travel out with Scotland to play exhibition games. Most recently Celtic were involved in an extensive tour of North America playing against popular teams such as Seattle Sounders, Philadelphia Union and Manchester United. These matches not only bring in revenue from ticket sales but serve as a valuable opportunity to introduce the Celtic brand to consumers in important foreign markets.

Online store & Nike retail outlets

The online store provides the opportunity to sell and ship Celtic merchandise globally. Through a sponsorship deal with Nike the club also enjoys exposure globally due to availability of Celtic branded clothing and replica jerseys in Nike retail stores. Celtic jerseys can be seen alongside popular teams such as Manchester United, Barcelona and Inter Milan.