The sixth edition of the Indian Premier League (IPL) will start in a few days, but the brand managers of Indian Cements-owned Chennai Super Kings, which won the title twice in succession in 2010 and 2011, is already drawing up plans for life after the final ball is bowled.
Rakesh Singh, joint-president, marketing, India Cements, and Vice President, Marketing, CSK, says IPL's activities are limited to two-and-a-half to three months, but "we are sort of coming out of it now and making it a 12- month affair. The idea is to stay connected with the fans throughout the year and add more revenue streams".
The year-long "connection" with fans has meant taking the brand to tier 2 towns through junior super kings, conducting promotional activities for sports such as chess, snooker, tennis and badminton, taking the team overseas and entry into the health and wellness market by setting up gym-cum-health cafes under the CSK brand.
The exercise includes 'junior super kings' across the state to identify and groom youngsters. Alao, as part of the Super Cup for Corporates, CSK is planning to play in North America and Dubai where the Indian diaspora is quite large, Singh says.
Then comes merchandise. Chandrabhan , GM Marketing ( CSK) India Cements, says at present, 36 per cent of CSK's topline is through sponsorship. This will come down to 30 per cent in the next two years. "This doesn't mean sponsorship will come down, it's just that other revenue stream like merchandise would go up," he adds.
Despite the recession, sponsors seem to be batting for CSK. The company has said sponsorship has gone up by 22 per cent this year, even though the total number of sponsors this year has reduced to 14 from 15 last season.
A study shows at the end of IPL 5, CSK was worth $45.28 million, next to Mumbai Indians.
CSK is selling about 73 different types of merchandise and expecting a 50 per cent increase in revenue this year. The products will be sold through 600 stores, up from 400 outlets last year. The products will be sold overseas as well.
That's not all. CSK has registered as a cricket kit manufacturer, under SuperKings Junior and plans to offer cricket kits endorsed by team members by the end of this month. While the price range is yet to be finalised, the kit is expected to be in a range between Rs 1,500 and Rs 2,000. The company would outsource the products for the kit from manufacturers in places like Ludhiana and Meerut. The kits would be sold through around 60 outlets, of which around 15-20 would be in Chennai, in the beginning.
"Sports clubs worldwide get their major revenue from merchandise. We are moving in the right direction though there is still a long way to go", says Singh. CSK's plan to launch gym-cum-health cafes is in the drawing stage and could be operated through a franchisee route.
Follow the money, brand building will follow," says Singh. He is indeed walking the talk. CSK has increased its marketing budget by 17 per cent to Rs 40 crore this year.
Joffi Thomas, a professor at IIM-Kozhikode where CSK has become a case study, says the IPL team can be a separate business itself. In just five years of its launch, CSK touched an annual revenue of about Rs 150 crore. IPL, he says, is active only for three months in a year; so if CSK operated in all the 12 months, the revenue would have been around Rs 600 crore.
"This shows the brand and revenue potential for an IPL team. If international football clubs like Manchester with a fan-base of 150 to 200 million can generate revenue of Rs 2000-3000 crore, consider what IPL brands can do with a combined fan base of 600 to 700 million, says Thomas.
Boost for India Cements brand
CSK is a good fit for India Cements, says Singh. In the last seven years, the company's advertisement spend dropped by 50 per cent even though the company grew. India Cements' name is printed on the CSK players' T-shirts.
For instance, when India cements wanted to enter the North, roping in distributors was a big challenge since very few were interested in associating with a "brand from the South". Besides, the common question asked was what is so great about it, considering margins are the same, says Thomas.
After winning the first IPL tournament, the scene turned upside down. Distributors started queuing up to become India Cements distributors. Today, the company claims it's a premium brand in a few Northern markets, competing with major brands like Ultratech. "In some of the markets in the North, ours is a real premium brand - purely because of CSK," says Singh.