Hustling for McLaren’s attention: F1 Title Sponsors

The story so far

TJ13 reported back in early March that Gillette were in the hunt to become a McLaren title sponsor. The international toiletries giant then upped the anti by announcing a more modest sponsorship arrangement with McLaren –  for now. Allegedly this made Jenson rather miffed because it was ‘requested’ he tone down his facial impressions of a baboon.

The other 2 contenders we mentioned at the time were GSK, who of course already have a fairly significant link with Woking in the Centre for applied performance, and Telmex who are the personal sponsors of Sergio Perez.

untitledThe considered opinion of TJ13 was that Gillette are in reality a marketing gimmick – albeit one of the best in the world – and McLaren had aspirational values that transcended anything Gillette could offer. It was suggested in the article that GSK appeared to be the best placed long term partner, though which brand would become associated with the McLaren team was unclear.

Many in the F1 media believed Telmex were the front runner last autumn when Perez was signed as a driver, yet this was insight based upon ‘Telecoms out – Telecoms in’, with little further substance.

McLaren ideals

Love them or loathe them, McLaren group have set out their stall to present as a modern corporate group who actively care for the world in which they live. McLaren’s work in implementing green technology at the team’s Woking factory earned it a prestigious Edison Award, which celebrates “innovation and excellence as well as “groundbreaking scientific achievement”. They were recently awarded a another award for achieving a carbon neutral status.

untitledMcLaren have championed the cause of British high technology engineering lobbying the government to develop engineering skills because they believe the future is bright for high technology engineering in the UK export market.

In turn they have aligned themselves with a number of programmes promoting engineers such as the motor industries Skillauto competition whose winners were announced December 2012.

GSK announced last month a new programme for ‘Scientists in Sport’, an education initiative using the excitement of the science behind Formula 1 to encourage an interest in science subjects at school. Part of this programme – The Fast Forward Challenge – is championed by of course, the Vodafone McLaren Mercedes F1 team, who are challenging schools to design a test to help improve the performance of their drivers.

Bye bye Lucozade?

Recently, the Guardian announced that GSK were selling their two brands Lucozade and Ribena following a ‘strategic review of the drinks’. Their chief executive, Andrew Witty did however add, “No decisions have been taken or options ruled out – we could increase investments in certain parts of the world, find a partner or divest the products,”

untitledFollowing a press release yesterday there were a plethora of stories across a number of F1 sites all quoting GSK sales figures. Apparently Lucozade and Ribena sales are flat but their Indian brand Boost was up 23% and Horlicks up 16%.

This has led to speculation that GSK’s strategic drinks review would move their promotion towards their Indian brand ‘Boost’ and it is this that will appear on the cars from Woking – The Boost McLaren Mercedes/Honda.

Boost! Turbo or otherwise?

Whilst this may seem either opportunistic or indeed cheesy in the new era of Turbo engines the theory is that GSK are nice people and their lovely drink for the sub-continent is the antithesis of that nasty stuff the Austrians make in association with their Thai partners.

untitledBoost is marketed by GSK by some of India’s biggest sports stars as a “nutritional energy drink” and campaigns in there have included the strap line – “Vitaminised Energy Fuel”.

The theory continues, now that GSK have a tight fit with McLaren ideals their combined message is – ‘we care about your children’s health; we care about the education of a nation’. This of course is a drastic juxtaposition with the brand message of Red Bull’s high octane brand efforts – ‘get extreme in your sport and maybe you won’t be killed or maimed but you will definitely be high on our stimulants’.

Boost was of course part of McLaren’s livery at the 2012 Indian GP and again the theorists believe this was a market test to see how the brand fared. Yet this action was hardly a serious attempt at reviewing a global marketing strategy as no one in the cricket mad sub-continent cares about F1 and the race organisers saw their GP attendance fall by a third in 2012.

Which Boost drink is it? Or is it chocolate?

untitledThere is another problem with the brand Boost in the UK… ie it already exists as – surprisingly – an energy drink which claims to be the UK’s second largest seller shifting some 60m bottles a year. Its values are more akin to Red Bull’s high octane message than the ‘au natural’ karma from GSK’s Boost India (Boostdrinks.com).

Oh yes… and there is also a popular chocolate bar of the same name… though Cadbury’s may be chuffed by some gratis cross marketing.untitled

Of course GSK are clearly making huge efforts to promote their candidacy to become only the fifth ever title sponsor of the Formula 1 McLaren racing team and some media writers are suggesting this is already a done deal.  TJ13 still believes GSK are an incredibly well suited to partner McLaren, but the question over the title brand which will become the prefix to the McLaren name is still far from clear.

What else is certain is that McLaren will not want to chop and change the title name depending on whichever product GSK wish to next promote. If GSK are seriously plotting to take out Red Bull with a global attack from their Boost ‘nutritious and good for you’ drink’ – well it could be the brand has the longevity to satisfy McLaren’s demands.

Whilst philosophically GSK and McLaren Group are aligned almost to perfection, clearly there are still questions over the GSK bid to become more than a good friend and close partner to McLaren.

Don’t forget the man with the ‘mostest’

untitledThere is of course one other small matter to consider and that is Telmex, run by the son of the richest men in the world. According to Forbes Carlos Slim Snr is worth a cool $73bn, by comparison, Red Bull supremo Dietrich Mateschitz is worth just over $7bn.

Gillette and GSK have been revealing their hands but the Telmex tale is yet to be written. Some believe that this story will be one of investment replacement, rather than pure marketing spend. Even if this were the case, it is easily conceivable that the Telmex brand will yet adorn the nose of the Woking rocket ships and GSK will remain to McLaren ~ ‘just good friends’.

Addendum

Out of interest whilst writing this a marketing company for GSK contacted me asking would TJ13 readers be interested in seeing how Lucozade are working hard with the McLAren drivers. Obliging as I am, here they are.

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27 responses to “Hustling for McLaren’s attention: F1 Title Sponsors

  1. Red Bull were successful largely as they were one of the first entrants in the “energy drink” market. In fact they are one of the few global brands in that market, Monster maybe being another. Could GSK promote an Indian brand around the world, maybe, but I have my doubts. The other problem GSK could encounter if McLaren is used to promote other brands is they would have to stick to non-medical products, as what may be an OTC product in one country could be a prescription product in another, and may countries have laws outlawing prescription medication advertising. NASCAR ran into that problem where some countries banned NASCAR races on television as they were deemed to be advertising prescription drugs.

  2. Depending on what you google, there isn’t enough scientific research to state what effect these drinks have long term.
    I have checked ingredients of different drinks and found none so far contain Aspartame, which in itself is a vile chemical sweetner. But they all contain huge quantities of sugar and caffeine.
    Obviously the market is there for these products, it wouldn’t be worth billions annually otherwise, but in this day and age where US statistics show obesity and diabetes rising annually, maybe it’s time governments and food agencies took action?

    I know, I’m being naive.

    I do not agree with the line “the theory is that GSK are nice people and their lovely drink for the sub-continent is the antithesis of that nasty stuff the Austrians make in association with their Thai partners.”
    GSK is a multi billion pharmaceutical corporation. Those Austrians may manufacture a nasty drink, but that’s it.

    I guess it’s about what you choose to put in your body, but I see more illness in the 21st century than existed with my parents and those before them.

    In the event that people think I’m ranting for no good reason, I have been diabetic for 10 years now, so have done alot of research of my own, know the Glycemic Index intimately and have studied different effects of drugs prescribed to me.
    One case in point, I was prescribed Simvastatin for cholesterol level of 5.3.
    A side effect that they don’t tell you about is pains in arms and shoulders. I stopped 2 years ago against medical advice. My level is now 3.9 and no further pain.
    Anyway, that my 5 minutes of anger out for the evening. Lol

    • Thanks HWS.

      Interesting on a personal level too – I take a daily statin. Wonder how I’d be if I stopped?

      I hope it was clear I was being ‘tongue in cheek’ about the ‘nice people’. It was a view taken and written by others.

      • I appreciated the sarcasm in your article. 😉
        Regarding stopping medication, I guess it depends how high your levels are etc.
        A friend of mine is starting up an organisation to help people, he’s a trained hypnotherapist and is in despair at how the medical profession throws out prescriptions.
        He was in a meeting recently when he sat listening to four people discussing what strength of anti depressants they were using!!
        Instead of looking within, people are blaming everybody else and popping more and more pills.
        I read a biography of Elvis Presley a few years ago and he was appointed an anti drug marshall (iirc). He was also given an award by Nixon for his work against drugs. Yet, when he died his body was full of prescription drugs which allegedly induced heart failure.
        Quite an irony, surely

    • Hi HWS,

      My brother is also diabetic so I have seen a few things although not experienced it. The irony is that if these companies really wanted to help people they would make medication much cheaper. Take insulin as an example, it is very expensive! Yes it costs money to develop these products but I wont trust any pharmaceutical company. There is a book called “Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients” – a must-read in my opinion.”British physician and academic Ben Goldacre writes that the industry finances most of the clinical trials into its products, that it routinely withholds negative data, that trials are often conducted on small groups of unrepresentative subjects, that it funds much of doctors’ continuing education, and that apparently independent academic papers may be planned and even ghostwritten by pharmaceutical companies or their contractors, without disclosure.”

      On top of fizzy drinks that are “healthy and energising” you need to look at the food supplement market. I am an avid sportsman and have done lots of research on which products has the most benefits to either gain weight or slim down. What people seem to forget is that your body is a massive organism and you need everything in a scientific balance. If you guzzle liters of protein shakes it does not mean you will become a well sculpted muscular hulk. All in balance though and you get amazing results… (ask Lance Armstrong :P)

      Energy drinks and stimulants are not new. The problem is that people want a quick fix to a bad lifestyle. If you feel tired and run down… have a sleep, your body is telling you something. Otherwise, yes we are bound to see more chronic diseases as the human race grows older and more “advanced”.

      • I woudn’t trust Ben Goldacre 100%. Everyone has an agenda and they can make things much worse than they really are. And of course with a book like this he will sell, sell, sell. You cannot pick on a small number of cases in relation to so much reaserch that is happening and then say all pharma and doctors are ‘bad’.
        In terms of research costs, yes, you’re right, the cost to research insulin for example may not be much, but pharma spends billions on numerous research products with only a minority reaching the market place. So they need the income from somewhere. It’s a conundrum. Have really cheap drugs and then no money can be put through research and less and less drugs eventually reach the marketplace.
        But in general, not just for pharma, let’s try have some perspective and not be bowled over by the ‘Goldacres’ of any industry.

        Finally, on supplements and energy drinks, I totally agree with you. You want to lose weight? Exercise, don’t eat as much, have some control. You want to bulk up, exercise, eat a bit more than normal, and don’t think it will happen within 6 weeks. No pain no gain either way. Keep it simple.

      • Hello, interesting comments, I’m going to have to find the book. Someone I know well is a director for a pharmaceutical research company. They interview doctors and medical professionals and its truly scary how reports are removed from the final drafts.
        It’s not only drug companies that behave in this manner, sugar manufacturers sponsor health reports which confirm the benefits of sugar or tobacco companies in the past. Omg, once again a rant!

        Anyway, I have to assume you are not in the uk as you mention the price of insulin, in the uk, diabetics qualify for free prescriptions.

        • I am now but I am South African… We pay for EVERYTHING! Think my brother’s insulin costs about £400 per month…

          Agree it’s not just the pharmaceutical companies.

          “The love of money is the root of all evil”

  3. Judge, you’re my favourite F1 site, but…I just saw that Joe Salward (who I don’t really read) was talking about GSK and Boost a couple of days ago with some similar arguments. I guess everyone goes round the same rumour mill.

    Now let me throw a couple more names given F1’s renewed expansion in the US. Coca-Cola and…wait for it, don’t laugh…McDonald’s!

    • “Now let me throw a couple more names given F1′s renewed expansion in the US. Coca-Cola and…wait for it, don’t laugh…McDonald’s!”

      NASCAR already have them. And for the exposure you’ll get in the US from NASCAR that’s where they’ll stay.

    • Now MC78 don’t get all adoring on me 🙂

      Just read JS piece. I think we’re surprisingly on the opposite side of the fence.

      He thinks GSK are to be the title sponsor and he believes is Boost a go-er, but not living in the UK he is probably unaware of the chocolate bar and the other company with a boost drink.

      I can’t see which brand GSK are going to use. Telmex at present appears more likely…

      • Got it. To be honest I only skim-read his article, as I said don’t really read his blogs.

        • … only when on the toilet? 😉

          By the way as to why people are writing about that; there was a press release with a whole set of drinks sales stats included for GSK – obviously designed to get GSK into the F1 press and it worked. The stories did did the rounds on the continent too.

          Like I said – ‘strangely’ (or not) a marketing company contacted TJ13 he same day with some GSK promo video’s I put at the bottom of the post.

          My article was a response to the others who believe ‘Boost McLaren Mercedes’ is a done deal.

      • “Telmex at present appears more likely…”

        And how would that affect Sauber? I’m not sure that Telmex is a great fit for McLaren as a title sponsor. Generally the large garagista’s have had title sponsors that had a global brand or were using the sponsorship to create a global brand. Telmex is a large telco player in Mexico and some parts of South American but nowhere else. A lot of countries have foreign ownership laws which would limit expansion. And while Telmex is a big regional player it’s not really that big compared to others. It’s net income is half of Vodafone’s.

        I also don’t see Boost working primarily when you think of India, healthy products aren’t the first thing that comes into your head.

        I have a sense that there may in fact be some sort of tie-up with Honda if the rumours about them returning are true. And the new title sponsor Japanese

        • Mmm. Japanese sponsor 2014, Honda 2015.

          Are Japanese companies really inclined to splash that sort of cash at present? How much are McLaren looking for a year this time?

          The Slim telecoms group has a decent presence in North America too but without checking I don’t know the numbers.

          Telecoms is a bit of a trading market at present. Vodafone just shifted it’s middle east operations out. It wouldn’t be difficult for Telmex to acquire some partners and therefore an incremental global presence in other regions of the world.

          • “The Slim telecoms group has a decent presence in North America too but without checking I don’t know the numbers.”

            They have minimal presence in the US and none in Canada. His US operation is almost exclusively those pay-as-you-go cell phones you buy in Walmart for $20 that are popular with Mexicans in the US, as you don’t need a credit card to open an account. Outside of that market virtually nobody uses his US service.

          • I’ll also add that in the US, Slim’s telco operations in the US actually don’t own their own network but simply lease capacity from those who do, such as AT&T, Sprint, Verizon, etc. And he could never afford to buy even the smallest of the cell operators, Sprint, as it would cost him around triple what Telmex is worth.

        • By the way Cav, what’s that nonesense about Ferrari cutting road car production to improve brand exclusivity? I was going to do a bit of research and post something on it – but I knew you’d have it already 🙂

          • “what’s that nonesense about Ferrari cutting road car production”

            It’s a great concept. Cut production to increase exclusivity and then raise the price of the car. 🙂

            Seriously, Ferrari’s road car production has almost doubled in the last 10 or 15 years, from around 4000 cars a year to close to 7500. At that rate they run the risk of becoming as common as those rear- engined Volkswagen’s made in Stuttgart

          • “It’s a great concept. Cut production to increase exclusivity and then raise the price of the car.”

            …or could it be there is going to be substantial disruption during the upgrade in the production facility and they can’t make quite as many cars this year as last?

  4. “Mmm. Selective answer methinks. Who the possible Japanese sponsor may be – I see you ducked”

    NTT

    • Right, so a 5% reduction in production will create a huge hike in exclusivity.

      A friend of mine is a car broker, to the Far East. He buys cars in Europe and ships them to places like Singapore.

      By the time import duty is paid plus taxes, a £100k car can end up 4 times the price.

      Anyway he was telling me Ferrari wait times have fallen for a new car. So maybe this is the reason, you can’t be waiting longer for a Porsche than a Ferrari.

    • Maybe this is the connection with Apple? Selling less but making more profit?

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