F1 - the marketing and advertising of

[raymondu999]

You're not entirely off the mark. However at the same time, Pirelli as "endorsed" by F1 (by virtue of simply, "F1 uses Pirelli") is also a competition. The fastest form of motorsport, the pinnacle, uses Pirelli.

It's not saying, "our tyres beat Bridgestone/Goodyear/Michelin's in F1," but rather, "the best of the best use Pirelli, and no other." which has been rather consistent with their motorsports sponsorships and supplies. WSBK, WRC (I think they've since pulled out though)

[bhall]

I'd agree that such is the intention. But I also wouldn't be surprised if they're taking steps backwards because of their involvement thus far.

Either way, there's no doubt in my mind that this situation is being watched very closely, as this is largely uncharted territory in the marketing world.

[Fil]

Nobody will buy Pirelli tires because they see a picture of Lewis Hamilton leaning against a stack of Pirelli tires. Nor will they buy Pirelli tires because they're used in F1. It just doesn't work that way. Something must set the endorsement from him, or whoever/whatever, apart from all the rest.

Why was Gatorade's "Be Like Mike" ad campaign with Michael Jordan so successful? It implied that if you drank Gatorade, you could play basketball like Michael Jordan, i.e., you could beat everyone.

It does work that way.
Have a read straight from Bridgestone as to why they first entered F1.. http://mshistory.bridgestone.co.jp/en/prologue/1996/ and take note nowhere in their corporate objectives was there mention of 'winning', only participating. From the horse's mouth, that must tell you what is more important for these companies on a corporate marketing level; brand awareness, not winning.
Their internal competitive spirit/ego drove their desire to win, not their aim to dominate the European market.

" F1 could be a major tool to put Bridgestone on the world stage."
"the objectives of F1 involvement were now clearly laid out as gaining world awareness for the Bridgestone name and global appreciation of our technology."
"I strongly backed F1 participation as the ideal way to both build status for our brand and to display our technical strengths."
Sources: http://mshistory.bridgestone.co.jp/en/prologue/1996/ / http://mshistory.bridgestone.co.jp/db/c ... 37&lang=en

Michelin understood that in order for their involvement in F1 to be commercially successful, something had to set them apart else their involvement wouldn't matter. That something was competition against another tire manufacturer. That's one of the reasons why they didn't even bother to submit a tender offer for the contract to be the exclusive tire provider for F1. Bridgestone learned this lesson, too. That's why they left the sport.

You realise Michelin actually did bid for the current F1 contract? The FIA president actually endorsed them, before Bernie renegotiated under Todt's nose and got a better deal with Pirelli.
Bridgestone left because they had reached the inevitable plateau in global brand awareness & targeted market penetration. Their aimed ROI was reached. Yet they still bid for the current tyre contract too.

Pirelli, Michelin & Avon were the final three official tenders. With Bridgestone & Kumho being the first to have their tenders rejected.

The psychology behind these kinds of endorsements is rooted in the idea that they denote an ability to share the success of whoever/whatever is endorsing them.

Exactly right. And there are two types of success we are talking about sharing in: 1) Winning. 2) Being a part of Formula 1.
Either works for marketing your brand. The first matters to the fan. The second works for the rest of the world (as Bridgestone noted).



Although in one sense we disagree, fundamentally we're saying the same thing. Brands are in F1 to look successful. How we define that is different i guess. You look at it only at a fan level, others see if from a global market perspective. That's fine. We just need to be open to both.

[bhall]

When I mentioned Michelin's disinterest, I was referring to their 2006 decision to leave the sport.

When Bridgestone entered F1 in 1998, they entered to compete, not to just be there. When they left after 2010 - voluntarily; they tendered nothing - it was because...

The decision made by the board of directors of Bridgestone comes after considerable and lengthy evaluations, and has been based on the company's need to redirect its resources towards the further intensive development of innovative technologies and strategic products.

That's French for, "We're not getting anything out of this." This is evidenced by...

According to The Associated Press, Bridgestone – one of the world's two largest tyre-makers, along with Michelin – revealed a net loss of 38.34 billion yen ($420 million) for the first half of 2009, contrasting starkly with the profit of 37.24 billion yen in the same period of 2008. The net profit for the current financial year to March 2010 is expected to plummet by 42 percent year-on-year to six billion yen ($66.7 million).

While I respect your opinion on the subject, I don't really want to do this back-and-forth thing. I know enough to know what I'm talking about here. It's sort of what I do.

Just watch Pirelli's strategy in the coming months. They have to adjust, and they know it.

EDIT: That last bit sounds awful, I know. I just haven't slept.

[SeijaKessen]

In response to the original post...

The performance of different tire manufacturers in Formula 1 would not impact my decision to buy a tire they make for road cars. Because F1 exists within a bubble, and what the current, as well as past tire situations have proven, is that tires can be made to do anything F1 wants them to do. It's not really indicative of the manufacturer how their tires perform in F1 at all.

[ESPImperium]

When I mentioned Michelin's disinterest, I was referring to their 2006 decision to leave the sport.

When Bridgestone entered F1 in 1998, they entered to compete, not to just be there. When they left after 2010 - voluntarily; they tendered nothing - it was because...

The decision made by the board of directors of Bridgestone comes after considerable and lengthy evaluations, and has been based on the company's need to redirect its resources towards the further intensive development of innovative technologies and strategic products.

That's French for, "We're not getting anything out of this." This is evidenced by...

According to The Associated Press, Bridgestone – one of the world's two largest tyre-makers, along with Michelin – revealed a net loss of 38.34 billion yen ($420 million) for the first half of 2009, contrasting starkly with the profit of 37.24 billion yen in the same period of 2008. The net profit for the current financial year to March 2010 is expected to plummet by 42 percent year-on-year to six billion yen ($66.7 million).

While I respect your opinion on the subject, I don't really want to do this back-and-forth thing. I know enough to know what I'm talking about here. It's sort of what I do.

Just watch Pirelli's strategy in the coming months. They have to adjust, and they know it.

EDIT: That last bit sounds awful, I know. I just haven't slept.

True but what Bridgestone did was throw money at F1 with each of the new teams in 2010 getting $10m from them, and then every team from P9 in the constructors title the year previous getting $2m more. They also invested $250m in F1 tyre manufacture and distrubution. Each team got 6 embedded tyre engineers with another 6 at GP weekends joining each team from their "Global F1 Support Team".

Pirelli are giving each team $4m a year regardless of WCC placing with 3 embedded and 2 more at every event. Pirelli have abudget of $120m a season and that includes the running of a Renault R30 chassis for 6 tests a year with a team of 20 guys running the car. Renault provided the chassis for a nominal fee, id recon $400,000 with Renault Sport F1 supplying free engine support as well.

Pirelli are doing a great job for the money.

Pirelli are arguably better money, and personally id buy a Pirelli over a Bridgestone at present for my car.

[xpensive]

I always wondered why Ferrari never seemed to consider Pirelli tyres in F1 when the option was there for decades?

[Fat_T0ny]

Agreed. Only an idiot would think that there is a relationship between an F1 tyre and a road car tyre.

In response to the original post...

The performance of different tire manufacturers in Formula 1 would not impact my decision to buy a tire they make for road cars. Because F1 exists within a bubble, and what the current, as well as past tire situations have proven, is that tires can be made to do anything F1 wants them to do. It's not really indicative of the manufacturer how their tires perform in F1 at all.

[Cam]

Agreed. Only an idiot would think that there is a relationship between an F1 tyre and a road car tyre.

That's true, but it also happens. There's lots of different demographics on this planet - many don't make smart choices. Fact. To what extent Pirelli has factored this, I do not know. Will it make a difference, I do not know.

What Pirelli do for the rest of the year however, will tell us the answer. If they go on the offensive we'll know F1 has had a negative an impact. If nothing happens, then they are confident in their strategy. It's good to see a range of opinions though.

For the record, I wouldn't buy Pirelli tyres. Not because I 'think' they degrade so the consumer car tyres degrade too, not at all, I don't like the brand and they haven't won me over. Simple. I am a consumer too. My money counts. And the message they give me is negative.

[strad]

I disagree. I see F1 as the "celebrity endorser" of the Pirelli brand.

Quite true
for the rest...man such generalizations...especially about NASCAR...unbelievable.

[Fil]

Q: What is the F1 commitment doing for the Pirelli brand? The board has surely evaluated that with a cost-benefit calculation. How does it look?

PH: I cannot give you the numbers, but I can say that the company is extremely happy with our return on investment in Formula One, as it goes in parallel with our brand positioning as a global premium tyre supplier. We supply all the premium sporty brands of car manufacturers in the world. Formula One is almost an affirmation of that positioning, as it is a genuine global sport. We are a global company and we have the ambition to grow, and we have aggressive plans to do exactly this. For sure we will have some problems along the way, but that is life, and it is more about how you manage these problems.
Source: Formula1.com

Straight from the horse's mouth. Pirelli's ROI on its F1 program is based around an affirmation of brand positioning synergies. And they're quite aware and prepared to deal with potential on-track issues affecting their marketing strategy.

Pirelli are giving each team $4m a year regardless of WCC placing with 3 embedded and 2 more at every event. Pirelli have abudget of $120m a season and that includes the running of a Renault R30 chassis for 6 tests a year with a team of 20 guys running the car. Renault provided the chassis for a nominal fee, id recon $400,000 with Renault Sport F1 supplying free engine support as well.

ESP, what do you mean when you say 'giving $4m a year'?

Pirelli's CEO Marco Tronchetti Provera publicly stated in 2011 that the teams are all paying €1.25m per season.
He also claimed that their investment in F1 would be $0 due to a reallocation of funds from other series (most notably from WRC). I wonder how true that ended up being.

[Cam]

Straight from the horse's mouth.

LOL he's hardly going to say anything negative. For all we know it's battle stations in there. Unless you're in the team reading the figures, you have no idea...... unless you're in the team?

[Cam]

For sure we will have some problems along the way, but that is life, and it is more about how you manage these problems.

So he at least admits that there could be potential problems. At least he's considering it and planning for it - that's what I would have envisioned. It did seem rather strange to think there would be NO blow back at all.

[raymondu999]

What he means by brand positioning is in the hierarchy of the industry. Pirelli want to attract the consumers with the top cars - the Ferraris, Lamborghinis etc. F1 is the top motorsport, and in that way it is aligned. It in fact confirms what I was saying - that they're in it for branding, and not product recognition/awareness

[Cam]

What he means by brand positioning is in the hierarchy of the industry. Pirelli want to attract the consumers with the top cars - the Ferraris, Lamborghinis etc. F1 is the top motorsport, and in that way it is aligned. It in fact confirms what I was saying - that they're in it for branding, and not product recognition/awareness

Yeah, it seems so. I'm a little surprised.

When I first started asking this question "does the tyre controversy damage the Pirelli brand', I was certain I would get 'yes, but not that much', instead it seems there's a resounding 'no'.

PH: For sure we will have some problems along the way, but that is life, and it is more about how you manage these problems.

It still seems like they're planning for some backlash though. I wonder if that's brand damage or associated product sales?