Risk vs. reward
Part two of two
When J.C. Penney CEO Ron Johnson hired entertainer Ellen DeGeneres to be the face of the company earlier this year, his reasoning was very clear. In an interview on “The Daily Ticker,” he said:
“My instinct... is spokespeople aren’t really necessary unless a company is going through a profound change. And because there’s a lot of marketing associated with change, if you can validate that by (hiring) someone who everyone trusts, that can be a powerful advantage.”
Can a celebrity spokesperson or famous athlete profoundly affect business success? Will a close affiliation with a sports team have the same effect? To find out, we asked tire manufacturers what they thought about sports celebrities in particular and sports marketing in general (in part one in our April issue, we looked at sports marketing from the tire dealer’s perspective).
“The Official Tire of...”
Tire brands have been represented by a lot of athletes over the years. Some became iconic pairings, such as Olympian Carl Lewis (in red pumps!) and Pirelli, hall of fame golfer Arnold Palmer and Cooper, and racing legend Mario Andretti and Firestone.
After 40 years together, Andretti still signs autographs at the grand openings of Firestone Complete Auto Care stores.
Bridgestone Americas Inc. spends tens of millions of dollars on sports marketing annually. “It’s a sizeable investment and a good chunk of our overall marketing spend,” says Dan MacDonald, vice president of community and corporate relations.
The Bridgestone brand is the “Official Tire” of the National Football League, National Hockey League and PGA Tour. The company also has sponsorship deals with the Tennessee Titans and the Indianapolis Colts in the NFL and the Nashville Predators in the NHL.
Bridgestone’s sister company, Bridgestone Golf, has professional services contracts with a number of golfers, including Fred Couples, Paula Creamer and Lee Trevino.
The Firestone brand is the Official Tire of the IZOD IndyCar Series and Firestone Indy Lights, as well as Major League Baseball (MLB).
Phil Pacsi, vice president of customer marketing and education for Bridgestone Americas Tire Operations LLC, says in his experience, the pros of using a celebrity or athlete or team to enhance brand awareness outweigh the cons.
“In our case, Mario (Andretti) and the professional golfers lend extra credibility, since Mario spent the majority of his legendary racing career on Firestone brand tires, and the golfers utilize Bridgestone Golf products.
Continental is the Official Tire of Major League Soccer (MLS) and all of its teams. It’s also the Official Tire and exclusive tire supplier to all of the Grand-Am Road Racing Series, including the Rolex Sports Car Series and Continental Tire Sports Car Challenge Series.
“When you look specifically at MLS and Grand-Am, there are very few athletes that transcend their sport or their specific market, so it would be difficult to build an entire brand around them as an individual,” says Travis Roffler, director of marketing for Continental Tire the Americas LLC. “For example, David Beckham is one of the most recognized players in the game of soccer, but he plays for the LA Galaxy. It would be difficult to feature him as we seek to target fans in the New York area who relate more to the Red Bulls and their players.”
Roffler says other factors to consider when sponsoring an individual include the possibility of a player being traded to another team, getting injured, having a bad race/season, etc. “So ultimately, we felt it was a better direction for our brand to have the ability to connect to a variety of athletes and teams based on the circumstances.
“We have implemented a targeted effort that is locally focused. We made it a priority to be relevant to the audience we are working with by featuring players or drivers that they can relate to directly.”
“The use of a celebrity spokesperson can generate positive or negative market awareness for your company depending upon their actions and reputations,” says John Aben, senior vice president of sales and marketing for Nexen Tire America Inc. “Team marketing is less risky. You typically get what you pay for, whether spending high dollars on a successful large market team or going cheap and sponsoring a small market team.”
“I think celebrity spokespeople can work and have worked really well on a local basis,” says Fred Koplin, director of marketing communications for Yokohama Tire Corp. “It’s really good if you pick the right person.
“I think on a national basis, it’s much more risky. Costs go up. It’s hard to pick the right person who appeals to a broad spectrum.”
He cites Sullivan Tire Co. Inc. as a dealer that does it the right way. The 56-store chain based in Norwell, Mass., “has done a good job of linking the high-character individual to (its) high-character, high-quality, high-service brand.”
Team sports marketing
Yokohama sponsors the NBA’s Houston Rockets; MLB’s Los Angeles Angels of Anaheim and Philadelphia Phillies; and NFL’s Dallas Cowboys, Baltimore Ravens and New England Patriots.
“We want to use sports marketing as a way to build accounts with the fan, build brand awareness, etc.,” says Koplin. “We want that promotion to be activated all the way through.”
Yokohama looks at brand awareness and sales trends on a local basis. For example, sales during a promotion are compared to sales made without a promotion.
Hankook Tire America Corp. tends to support professional and college teams as opposed to individual athletes, according to Mark Rowe, director of brand communications. This year, Hankook expanded its in-ballpark marketing program, which features signage behind home plate, to 26 MLB teams.
“This branding billboard visibility also carries over into 85% of the country that watches these games on regional sports cable networks,” says Rowe.
“We have some very well-documented examples of what our sports investments do for Hankook’s, as well as our retail partners’ business. A good example is our ‘Spring Great Catch Rebate and Sweepstakes’ promotion. Dealer enthusiasm for the program is very high, and store level participation rates convince us that sports sell tires.”
Maxxis International sponsors the New York Yankees, Baltimore Orioles, Los Angeles Dodgers and Washington Nationals baseball teams. It also is a sponsor of the NBA’s New York Knicks. The benefits of team sponsorships are twofold, according to Scott Barker, marketing manager of Maxxis International—USA’s Automotive Tire Division: “international recognition of our signage and increased brand awareness.”
Kumho Tire U.S.A. Inc. sponsors two NBA teams, the Los Angeles Lakers and the Miami Heat (see page 52). It also has contracts with NFL teams, the University of Southern California football team and the United States Soccer Federation (USSF).
Kumho shares a sponsorship of the Worcester (Mass.) Sharks minor league hockey team with C&R Tire Co. Inc. Working with C&R Tire, Kumho has in-game signage, a “Pump up the Volume” video board feature, game program ads and in-game promotions with co-branded T-shirts.
Sports marketing is “an opportunity to make connections with dealers and bridge the gap between manufacture and sale,” says Rick Brennan, Kumho’s vice president of marketing.
Because of its direct tie to tires, motorsports is a different kind of sports marketing. Continental calls it endemic marketing.
Continental's General brand is involved primarily in off-road racing, including the Lucas Oil Off-Road Racing Series (LOORRS).
"Ultimately, we want fans to connect with the usage of the tire, and on the General tire side, we find it most effective to do this through sponsoring individual drivers and select events and series' in the off-road racing community," says Roffler. "Nothing can convince a consumer to make a purchase like using the tire in extreme conditions, which off-road racing provides.
"Our goal is to have someone win on General tires -- that shows the consumer that the tire is worthy of purchase. In a sport where there is no tire exclusivity, this becomes paramount, which is why we look to align with the top drivers.
"Having a range of drivers to choose from allows us to market to a variety of people, and it allows us the freedom to build an "evergreen" marketing campaign, if you will. When you focus all your marketing efforts around a single driver, there are too many variables that could work against you. Drivers can switch teams, get injured, have a bad race or season, and even act in a manner that doesn't align with a brand's core values and principles."
Goodyear Tire & Rubber Co. has exclusive tire sponsorships with NASCAR and NHRA (National Hot Rod Association) for its Goodyear brand, and leverages their drivers - "experts who rely heavily on their tires," according to Garth Ely, brand marketing director - to provide support for its "More Driven" marketing campaign. The company also competes in the ALMS Racing Series with its Dunlop brand.
"Goodyear's sponsorship activities provide pass-through rights for dealers to be able to leverage the sponsorship in their Goodyear-related marketing activities," says Ely. "Dealers may supplement Goodyear's sponsorship activities with the league/series governing bodies by establishing local-market relationships with lower-level racing series and/or teams/drivers.
"Dealers also benefit from the tremendous exposure provided to the Goodyear brand and Goodyear dealers through advertising and marketing programs developed on a national level to support Goodyear's sponsorship activities."
According to Cooper Tire, national awareness in its brand increased dramatically in 1997 with the addition of Arnold Palmer, “coupled with the significant increase in advertising media expenditures for the year.” Michelin North America Inc. hopes to accomplish the same thing with Olympic snowboarding champion Shaun White and its BFGoodrich brand.
As for team sponsorships, a recent report on the effects of NFL sponsorships on brand equity revealed “the expected significant three-way interaction between time, sponsorship and fan affinity.” Authors Kirk Wakefield and Anne Rivers came to this conclusion: “Passionate fans... have more positive attitudes toward the official sponsors of the NFL than do less passionate fans,” and that leads to a corresponding increase in sales.
The findings also emphasize “the importance of continuing longer term contracts to build the effects and benefits of the sponsorship linkage.”
Bottom line, sports marketing is more than just a strategy tire manufacturers and dealers are using to sell more tires. It’s also personal on many levels.
“Without the relationship between our salespeople and our dealers, sports marketing would not work,” adds Yokohama’s Koplin. ■
Sponsorship opportunities abound: But tire dealers must get off the sidelines
“It’s essential that we encourage dealer involvement in whatever sponsorship opportunity we take advantage of,” says Rick Brennan, vice president of marketing for Kumho Tire U.S.A. Inc. “Consumers don’t go to the manufacturer to buy tires, they go to the dealer.”
Kumho has created various platforms to help dealers get involved with its various sports team sponsorships. That includes its partnerships with the NBA’s Los Angeles Lakers and Miami Heat (see photo above).
During the regular season, the company partnered with America’s Tire Co. for a retail promotion with the Lakers. It featured a sweepstakes for free Lakers tickets, with at least one winner coming from each of the dealership’s 51 participating Southern California locations every week. (Discount Tire Co. Inc. does business as America’s Tire in California.)
Sponsorship opportunities with a professional sports team like the Lakers is not cost-prohibitive for small businesses, says Chris Hayre, director of corporate partnerships for the Los Angeles Lakers Inc.
“We recognize that every potential sponsor may have a different budget and/or objectives, and analyze each sponsorship opportunity with an open mind. Of course, there is a certain threshold that needs to be met to ensure that a sponsorship is mutually beneficial. The Lakers’ menu of elements can be customized to meet the needs of small and large businesses alike.”
“We have the ability to create customized marketing programs that cater specifically to the goals and objectives of partners of any size,” says Daniel Monahan, manager of corporate partnerships administration for The Heat Group. “With that said, the investment level determines the assets we can provide.”
Kumho encourages its dealers “to come to us for opportunities in areas and regions we currently don’t have sponsorships in,” says Brennan. “The more we can work together, the more success we’ll reap.”