Following the much publicised 'boot' incident with Alex, Ferguson of late, Manchester United
shares fell by 2%. United whose stock market value is €440, want to use Beckham's appeal to win more fans in the US when they tour there later this year: Along with his Manchester United captain Roy Keane, David Beckham enjoys the highest salary in English Football.
He is paid €140,731 a. week - an annual salary of €7.31 million. When the England skipper (captain) signed a new contract with his club last year, it was stipulated he would be paid around € 109,000 a week salary and €31,000 a week for image rights - the latter taking more than 20 rounds of talks to finalise.
The clause allows the club to use his image on its merchandise, programmes and promotional
material. But outside of this, Beckham owns his own image rights and has signed huge money making deals with numerous brands. And it is through sponsorship that Beckham makes the bulk of his €24.2 million annual earnings - and allows him to live his quasi-Royal, jet set lifestyle with me!! I wish.
Beckham's ability to command top fees partly depends on staying injury-free. When he broke the metatarsal bone in his foot and looked liked missing the World Cup Finals last year, he stood to lose up to €1Omillion in revenue. Last month, it was reported that United sponsors Vodafone were upset his facial injury (as result of getting hit above the eye by a football boot)
would put a proposed advertising shoot in jeopardy. This just goes to show how much of an important asset he is to the biggest football club in the world.
In terms of evaluating Beckham on his 'pulling' power we must look at him in terms of the 4 P's of marketing or the essential marketing mix as it is now being called. These are Product, Price, Promotion & Place. If we look at each of these one at a time, we can see how the companies, who wish to 'use' Beckham as a front for their products, perceive him.
A sports product is a good, a service, or any combination of the two that is designed to provide benefits to a sports spectator, participant, or sponsor. In order to do this, products must be developed that anticipate and satisfy consumers' needs. Sports marketers sell products based on the benefits that they offer to consumers. These benefits are so critical to marketers that sometimes products are defined as ‘bundles of benefits'. In addition to sports and sporting goods, athletes can also be thought of as sports products that possess multiple benefits.
Beckham can certainly be classed in this category. He offers the company many benefits. Not only is he the best .looking man on the planet, he's also captain of the England team, a regular first team member of the prestigious Man Utd football club and a fashion icon. He is known all over the world (USA being the exception) and he has achieved cult status following the Word Cup in Asia as well as in many countries throughout Europe. Numerous by-products have been established around him including the David Beckham football game as well as a whole range of clothing by Marks & Spencer's. He is marketed from a variety of different angles depending on who the target group happens to be. We have seen him marketed from a footballing point of view where the main target group is young boys and soccer fans. In this way, companies seek to use his image in order to sell jerseys and other soccer paraphernalia. He has also been successfully marketed as a “sex symbol” and 'fashion icon' which targets a group that wish to 'look' like him by wearing the same clothes and sunglasses and using the same mobile phone that he uses etc. Finally he has been used as a global icon to market Pepsi as he is so well known right across the globe.
The next 'P' to consider, is that of price. This is perhaps the most important aspect of marketing package as it is on the issue of price and cost that most parties will disagree.
The pricing of sports products is becoming an increasingly important element of the sports marketing mix. Price is a statement of value for a sports product. It is simply a way to quantify the value of the objects being exchanged and regardless of how pricing is defined; value is the central tenet of pricing. Value is defined as the sum of the perceived benefits of the product minus the sum of perceived costs. A variety of factors influence the pricing decisions for any sports product. Similar to the internal and external contingencies that impact the strategic sports marketing process, pricing influences can be categorized as internal or external factors. Internal factors are those under the control of the sports organization, such as the other marketing mix elements, cost, and organizational objectives.
External factors are those factors beyond the control of the sports organization that influence
pricing, these include consumer demand, competition, legal issues, the economy, and technology.
Therefore it can be seen that David Beckham doesn't come cheap. In Marketing Circles he has
become known as THE €300 MILLION MAN due to the amount of revenue he obtains from
endorsement deals. Some of these endorsements are detailed below.
Hair
Beckham became Brylcreem Boy in 1999and has reportedly made over €2 million in the next 3 years. His contract expired last summer.
Eyes
Last month movie star George Clooney replaced Beckham as the face of Police sunglasses in the UK and Japan. Beckham is believed to be paid €2 million a year for an ad campaign and was rumoured to have been dropped because his pay demands were too high.
Voice
The winger is paid over €1 million by Vodafone, the mobile phone company. Vodafone subscribers can have a recording of Beckham's 'sexy' if somewhat squeaky voice on their voicemail. Screensavers, games and quizzes for mobile phones, as well as ads starring Beckham, form part of the two-year deal.
Stomach
Beckham is paid as estimated €1.6 million a year from the soft drinks giant Pepsi. His Pepsi ads have been widely used in the Far East. Despite Beckham's deal with Pepsi, he receives a
percentage of Coca Cola's €9.4 million a year deal to sponsor the England team. They in turn have the right to use his image in certain campaigns.
Feet
His deal with Adidas is thought to be worth €4.68 million a year. As an Adidas-sponsored player, Beckham is under contract to wear the brand whenever he wears sportswear.
Other deals
Last April Beckham signed up for 2 years to endorse BP Oil's Castrol Brand. Advertising has initially appeared in the Asia Pacific region before being rolled out worldwide next year.
He is paid €1.56 million a year by the beleaguered Liverpool computer games firm Rage and he receives royalties from the 'official' David Beckham computer game, which could cost almost double the deal's value.
Beckham also signed a €4 million deal with British Chain Marks & Spencer, who introduced a brand of clothing for boys (although I must admit to owning a t-shirt), called DB07in September 2002.
The third 'P' to examine is that of Promotion. Promotion involves communicating to all types of sports consumers via one or more of the promotion mix elements. The promotion mix elements include advertising, personal selling, sales promotions, public relations, and sponsorship. Within each of these promotion mix elements are more specialized tools to communicate with consumers. For example, advertising may be developed for print media (newspapers, magazines) or broadcasts (radio, television). However, regardless of the promotion mix element that is used by sports marketers, the fundamental process at work is communication. Understanding the communications process provides us with the basis for developing a sound proJ11otional plan. The promotional planning process includes target market considerations, setting promotional objectives, determining the promotional budget; and developing the promotional mix.
In terms of promotion, David Beckham needs no introduction and companies wish to sign him up to endorse their products due to the size of his celebrity status. Neither he nor his wife Victoria can leave their home without being pursued by the paparazzi. His photo is on the front of every newspaper, magazine or TV report and many companies would see this as a form of free advertising as he is always clad in their attire and products. He is also the feature of many advertising campaigns and posters and some examples of these posters can be seen at the end of this report. Beckham, in effect needs very little advertising or promotion as he is one of the UK's biggest celebrities and therefore any company that signs him on their books is assured of massive levels of promotion and much sought after publicity for their product.
The final aspect of the marketing mix to be considered is that of the Place. Place is also known as channel, distribution, or intermediary. It is the mechanism through which goods and/or services are moved from the manufacturer/ service provider to the user or consumer.
There are six basic' channel' decisions:
1. Direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a wholesaler)
2. Single or multiple channels
3. Cumulative length of the multiple channels
4. Types of intermediary (see later)
5. Number, of intermediaries at each level (e.g. how many retailers in Southern Spain).
6. Which companies as intermediaries to avoid' intra channel conflict' (i.e. infighting between local distributors)
Selection consideration - how to decide upon a distributor?
- Market segment -the distributor must be familiar with your target consumer and segment.
- Changes during the product life cycle -different channels can be exploited at different
points in the PLC e.g. Foldaway scooters are now available everywhere. Once they were
sold via a few specific stores.
- Producer -distributor fit -Is there a match between their polices, strategies, image, and yours? Look for 'synergy'.
- Qualification assessment -establishes the experience and track record of your intermediary.
- How much training and support will your distributor require?
Types of Channel Intermediaries.
There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas distributors, direct marketing (from manufacturer to user without an intermediary), and many others. When deciding on a suitable 'place' to market products using David Beckham, the options are limitless. Apart from the USA, where perhaps his wife is better known, the whole world knows who Beckham is and what he stands for. Therefore you will find that most products endorsed by. .Beckham are marketed globally with Pepsi and Adidas being the prime examples. Other products such as the DB07 range of clothing from Marks & Spencer's are primarily targeted in the UK and Europe where he is perhaps best known. That's not forgetting Asia, where he has become a God in the aftermath of the World Cup. Anyone who watched coverage of the competition will have seen the 'mobs' that thronged any place where ever there was the slightest possibility that Beckham would be appearing.
If Beckham is to be examined under the marketing mix, as considered above, we can see that he is the prime candidate that a company would be looking for provided that they could afford him. His image profile fits perfectly with the image profiles of many bright, new, innovative products as we witnessed in the Sport Marketing class back in February where is was examined as a possible candidate to endorse Nokia mobile phones. When both Beckham's and Nokia's image profiles were compared, it was seen that they were near perfect mirror images of one another. We have seen also how the 4 P's of marketing could be applied to the marketing of David Beckham and we are left in doubt that his image has been used the world over to promote a variety of different products.
Who would have thought that a young boy from east London would turn out to be one of the
Biggest superstars of the 21st Century and whose face would be recognised from the four corners of the globe. I bet those companies, like Adidas, who signed him prior to the surge in, his cult status are laughing all the way to the bank now while others have to break the bank just to get him to say a few words on behalf of their company. We must not forget however that 'although money makes the world go round' it's not the be all and end all of life on this planet as we have become all to well aware due to recent events in the Middle east.
Some examples of Beckham's use in advertising campaigns.
REFERENCES:
- Capitale (article): French magazine
- Marketing books
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