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.