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.