Participants: Kevin Ilges, Shell (FORD) Bert Kramer, KOOL/Brown & Williamson (HONDA) John Rodeman, Motorola (MERCEDES-BENZ) Joni Saphir, Pioneer Electronics (TOYOTA) Pat Leahy, CART Moderator * Mike Zizzo, CART ZIZZO (CART): PLEASE GIVE US...
Kevin Ilges, Shell (FORD) Bert Kramer, KOOL/Brown & Williamson (HONDA) John Rodeman, Motorola (MERCEDES-BENZ) Joni Saphir, Pioneer Electronics (TOYOTA) Pat Leahy, CART
Moderator * Mike Zizzo, CART
ZIZZO (CART): PLEASE GIVE US YOUR TITLE AND HOW YOUR COMPANY GOT INVOLVED WITH CART.
SAPHIR (TOYOTA): I'm the manager of Corporate Public Relations for Pioneer. We got involved with CART last year. We got involved for a couple of reasons. We're a global company, our headquarters are in Japan. We have relationships on the OEM side with Toyota and other automotive manufacturers for car stereos. We looked to CART for international flair with its drivers and locations, now and hopefully in the future. It also helps us with dealers and different promotions that we're tying around racing programs. We have been in NHRA. We were in F1 with Ferrari. We're happy about being part of CART now.
ILGES (FORD): I'm the director of sponsorships and events. For the sake of CART, I represent the United States and not necessarily Europe or the rest of the world. We got involved with Team Rahal about eight years ago as an associate sponsor, primarily in our lubricants business. Then it grew to involve the gasoline business and today we are very involved as a primary sponsor. We do a lot of activities with our service stations around the country and it's a relationship that's been very strong.
RODEMAN (MERCEDES): I'm the corporate sports marketing manager. We've been involved with CART for about the past 10 years, but as early back as the early 1900s when we got involved with motor sports. We've been tied through Honda and moved up to the PacWest Racing Group a few years ago and are tied with Mercedes-Benz there. We really tie our program into business-to-business relationships more than anything. It gives us the ability to showcase our high-tech, high-speed products in the world's most high-tech environment and the ability to tout a product that a lot of companies can't. The equipment we place in the PacWest cars and the other teams' cars is the same equipment that people can buy off the shelf at their local retailer. We have a really strong tie to the community as well as the racing organization out here.
KRAMER (HONDA): I'm the director of sponsorships and promotions for Brown & Williamson Tobacco, which owns the KOOL brand. We first got involved in CART in 1996 when we partnered with Barry Green to form what is now Team KOOL Green. In 1996 we started as title sponsor of Barry's Indy Lights effort. In 1997, we expanded into Champ Car effort with one car, and in 1998, into a two Champ Car effort. We're in CART because for us it's a marketing communication program. It's a program to build awareness for our brand. And to help with the association of the positive image that CART brings, to enhance the image of our brand.
LEAHY (CART): I'm the senior vice president of marketing for CART. I spent 27 years at Target.
QUESTION: HOW DO EACH OF YOU DERIVE VALUE FROM YOUR CART SPONSORSHIP? IS THERE ANY WAY TO COMPARE IT TO OTHER SPORTS SPONSORSHIPS YOU MIGHT BE INVOLVED WITH?
RODEMAN (MERCEDES): Everybody here probably falls under the same category, and that is that we're not out there for wins on the track and exposure that way but to develop a business relationship with our customers. It doesn't necessarily mean we have to win every week. If it did, we'd be over with the Target guys because they've been doing a great job for a while. But it's not just about wins on the race track, but wins with our customers and wins with our end users as well.
ILGES (FORD): If you look at what the essence of what a sponsorship is, one of the primary tools or benefits you should get out of that is building the loyalty itself. If you look at what categories of sports give you the biggest percentage of loyalty, motor sports ranks right up there at a very high level. On all of our sponsorships, we do a cost-benefit analysis and included in that are some other things. First, we do measure the loyalty. We measure if it's had an influence on the consumer to buy our product, but it also gives you other things such as awareness. We all need the awareness regardless of how strong our brand is. Then we measure what we get from the individual partner or other customer that we bring here. We try to add numbers to everything.
SAPHIR (TOYOTA): We started with the sponsorship last year, and we had just changed our logo from a 60-year logo. We really needed recognition for the new logo. Recently we found that the logo made a very smooth transition. The transition to the new logo, especially through the car, has been great.
KRAMER (HONDA): I can agree with what everyone's said. For us, we're probably closer aligned with Kevin's comments. We were looking for a major sport to involve ourselves with in 1996 that would help us to reposition our KOOL brand. As we looked around, CART was the most synergistic in terms of imagery, the target audience we were after. We look at it as a marketing communications program. We monitor the awareness we're getting out of it, the image benefits we're getting out of it -- continuously -- to make sure that our activities are delivering on the objectives that we set for the program.
CAN YOU TALK ABOUT THE INTERNATIONAL RACES? DOES IT MAKE A DIFFERENCE?
SAPHIR (TOYOTA): I can say it's great for us. As it happens now with our new Brazilian driver, Brazil is a huge market for us, as well as the new venues that CART is looking at now. Obviously Japan, being both our headquarters and Toyota's headquarters, is a big race for us.
ILGES (FORD): Our business is pretty much domestic, so we prefer that.
RODEMAN (MERCEDES): We're exactly a global company * that's the way we tout ourselves. We have facilities in Mexico, facilities in Europe and stuff in Japan. The ability for us to interact with all of those facilities not only on the employee side but on the business development side and trying to partner with people like Mercedes as well as our customers out there, that gives us a great opportunity to tie this program in. The more international dates that we have the opportunity to participate in, the better off we are as far as our long-term business strategies.
KRAMER (HONDA): We're primarily focused on the US but not averse to the international markets. Our brand is sold in Japan and several other international markets, but our primary focus is the United States.
WE WERE TALKING ABOUT MEASUREMENT BEFORE. ONE OF THE MOST COMMON NUMBERS IS THE JOYCE JULIUS STATISTICS WHERE THEY MEASURE THE TV TIME YOUR LOGO IS ON AND FIGURE OUT THE ADVERTISING COST OF THAT. HOW USEFUL IS THAT?
ILGES (FORD): That's our awareness number. That tells us how many eyeballs. Internally, we discount that. We know how they measure, and we take it and apply our own internal discount factor to it, and that's the number we present.
KRAMER (HONDA): We don't look at any specific element in a vacuum, like the television buy itself. What we do look at is the potential smoking audience that we're trying to attract and we look at the numbers relating to them * how awareness of our program is growing and what that is translating into in terms of our image-enhancing objectives that we're after.
I'D LIKE TO GET BACK TO THE INTERNATIONAL THING A BIT. THERE'S A SHARP DIVIDE. SOME ARE GUNG-HO ON INTERNATIONAL, ONE IS AMBIVALENT AND ANOTHER IS FOCUSED DOMESTICALLY. YET SHELL IS A GLOBAL COMPANY. HOW DOES CART RECONCILE THAT AND COME TO A BASIC PLAN THAT ADDRESSES BOTH OF THOSE ISSUES? HOW WOULD YOU SUGGEST THAT CART APPROACH THAT, AS IT SEEMS TO BE GOING INTERNATIONAL?
RODEMAN (MERCEDES): On Motorola's side, there's a strong international exposure out there as it is. Our international numbers some of the highest out there. Our ability to interact with those international viewers helps to tie our brand identity in even stronger. The ability to grow with CART and take it international allows us to tie in with business units that wouldn't otherwise have the opportunity to participate in. I think a lot of companies have stayed within the United States. For global companies, you have to look at where your other markets fall and see what kind of impact you can make. In Miami, we can interact with South America there, but the extra opportunity to race in Brazil makes that much, much stronger.
LEAHY (CART): That's an excellent question, Dave. From CART's perspective, we have to look at all the companies involved. When I was at Target, there was no interest in the international races whatsoever. But if you think about our ability to expand beyond the US, there's a unique opportunity to get our brand out there. And the associate sponsors on that car had an international flavor. So we did have sponsors on that car interested in international races.
As CART grows globally, we have an opportunity to expand our audience more than we have in the past. In essence, we're trying to activate a passive fan in the US. But there's a good opportunity outside the US, to capture a fan and so this provides us with a unique opportunity to take it up. But I think CART understands that this is a North American product, so the bulk of our races will be in North America. But I think the opportunity to move beyond our borders will get us out in front of a number of audiences.
SAPHIR (TOYOTA): To add to that, in Japan we look to our North American counterparts to see what's going on with trends. Our car division is extremely strong here in the US and it has a ripple effect across the entire company. To be able to have a sponsorship that everyone can relate to that, for lack of a better word, originates in America and goes into the other countries and they can identify it as theirs, that's really a value for our employees and our customers.
LEAHY (CART): I think this panel is a good representation of what CART is all about. Some are focused internationally, some are focused here in the US. We have to play to all of our sponsors. Our engine manufacturers would have an opportunity to be on the international stage. We're going to focus on North America but we're going to move outside our borders so everyone gets the exposure.
WOULD YOU SAY CART'S REPUTATION HAS BEEN DAMAGED OR STRENGTHENED BY THE LOSS OF THE INDY 500 ? HOW DOES IT AFFECT YOUR MARKETING?
KRAMER (HONDA): I don't think you'll find a sponsor in the paddock that doesn't believe the split is a loss and doesn't want this thing to come back together. But by the same token, this is the reality today and I think CART has to get on with business. We have an excellent series that we all participate in. I would love to see all of us at the Indy 500 someday but only under the right circumstances.
RODEMAN (MERCEDES): I have to agree. The Indy 500 provides great opportunity, but CART has an incredible series that runs 20 races a year. If you look at the drivers, the equipment, the manufacturers, we are just as strong as we were in the past. We may need to realign and make sure we're developing those strengths. Pat and his group can do that. We need to support that as much as we can, and that's what we do try to do.
ILGES (FORD): Two things have happened. Number one, the negative effect of not having the Indy 500 has lessened since it first happened. Number two, CART is more about a series than it is about one race. That effect has strengthened CART.
SAPHIR (TOYOTA): Since we came to CART two years ago, that race didn't even exist for us, so it wasn't a issue for us.
LEAHY (CART): We are all in agreement that we'd like to be back at the 500. The Indy 500 hijacked the series. The series rose in May and then would fall off. We forget that this starts in March and it ends in a championship in Fontana. We need to build awareness that we are a series of races, not an event by event that goes from city to city. We're building that now I think. We are stronger.
RATE THIS PARTICULAR EVENT IN TERMS OF DELIVERING WHAT YOU LOOK FOR. WOULD YOU LIKE ALL THE RACES TO BE LIKE THIS?
SAPHIR (TOYOTA): Not only is it our US headquarters in Long Beach, but Toyota's US headquarters is here. It's great to take all of the elements that we use from a sponsorship and have it in our backyard. We have a big dealer event, advertising, we have a big 18-wheeler to showcase our product. We really use it to our best advantage. It's a great race.
ILGES (FORD): It ranks right up at the top. We utilize it. We have over 900 customers that we bring, most through the local retail stations. We do a lot of promotions around this race. It's a great race market and it gives us great television.
RODEMAN (MERCEDES): Long Beach is an incredible market, from the venue to the attendance. The area around here in general provides a lot of energy and excitement. You can't debate the numbers. We've got strong attendance, one of the best climates you can hold a race at. And the ability to interact with countless consumers as well as partner with our dealers and Mercedes, just to throw the biggest organizational gathering of minds that we can when we're in a city. Long Beach is one of the best opportunities to do that.
KRAMER (HONDA): In my view, Long Beach is one of the best events because we have to remember that we are an entertainment property. It's hard to argue that when you walk around in the paddock or on the streets, with the crowd enthusiasm, the consumers here, it is one of the top events in the country.
LEAHY (CART): It is a template for this unique market. You couldn't take this into Lexington. You couldn't take it into Elkhart Lake because it's a different audience. As when we as CART have conversations with promoters, we have to look at the template for the particular market that we're in. While this is a great event, you need to do some things in other markets that might look and feel different from what you can do here.
PAT, COULD YOU ADDRESS THE FUTURE OF SPONSORSHIP OF CART. WHAT TYPE OF KEY SPONSORS IS CART LOOKING FOR IN THE FUTURE?
LEAHY (CART): One of the things we're testing this weekend is putting together a high-tech forum. We've neglected these companies somewhat and we want to develop a relationship with those folks. The folks at this table are phenomenal sponsors. I want to create an interest in the CART brand so the dollars they spend are viewed as a real value. So that when a contract comes up with the series or the team, the question is not "do I renew that contract," but "are there more resources we can put toward that because it's a good value?" These folks have done a fabulous job in supporting the series for a number of years. We're going to raise the bar for everybody. High tech is an interest right now, but I also want to increase the value for these folks at the table.
WHAT CAN YOU LEARN FROM THIS EVENT TO TRANSFER TO OTHER EVENTS?
ILGES (FORD): From our perspective, two things. Number one, hospitality. What we do with people when we bring them here. Number two, how to use our network and tie into two brands, the second brand being the event itself.
SAPHIR (TOYOTA): Geographically, it's a great market for us. However, it's a spread-out course, and it's probably not the most ideal. It's a logistics issue. There are other courses that are much easier to work with.
KRAMER (HONDA): To me, one of the things we can learn is that this event is more than just a motor racing event. It has a broader interest that embraces the community surrounding the event. I think that broader appeal is a lesson we can learn from this thing.
WHEN THE SCHEDULE WAS LEFT OPEN IN MAY, EVERYBODY ASSUMED THAT TEAMS WOULD BUY SOME IRL EQUIPMENT AND RUN AT THE INDY 500. WAS THERE AN INTERNAL VOTE, OR DID YOU EVEN CONSIDER IT AT ALL?
RODEMAN (MERCEDES): For us, the focus for Motorola, PacWest and Mercedes-Benz is winning the CART championship. First and foremost, it was, what do we need to do to put Blundell up on top and win this thing at the end of the year? That's our primary focus for this year.
KRAMER (HONDA): We looked at that aspect as number one. There's an obvious financial aspect that comes into this. When you roll those things together, it was just hard from our standpoint to justify going there.
MY QUESTION IS FOR PAT. HOW DO YOU RECONCILE THE MESSAGE THAT IT'S ABOUT THE SERIES RATHER THAN THE RACE, WHEN WE DON'T HAVE A CHAMPIONSHIP TROPHY THAT WE'RE RACING FOR?
LEAHY (CART): I think that's something we need to look at. I don't know that we want to have -- and this is just Pat Leahy responding off the cuff -- a PPG Cup. I think we need a series cup, something that has some recognition, similar to the Vanderbuilt Cup, as opposed to selling off that asset. It has to be something that stays with us forever -- a long-term trophy. I don't have an answer about making that happen. If we're going to think long term about how we effectively create that brand, then we have to own that brand or whatever that trophy is.
PAT, COULD YOU TELL US HOW FAR ALONG THAT LONG-TERM MARKETING PLAN IS? WHAT INPUT FROM THE SPONSORS HAVE YOU HAD?
LEAHY (CART): I met with the sponsor's council this morning and briefed them. It's a very high-level, strategic plan. Part of the tactics I want to employ is getting fans in the seats. I'm a firm believer that if we're going to get people to watch on television, you have to get them to the track, you have to get them involved with the sport. So, some high-level thinking is that we're going to put some dollars aside. I'm going before the board in May to ask for some additional marketing dollars. And part of those dollars will go back to the sponsors. I want to provide some co-promotional dollars to extend those dollars. If I was to go to Bert and say "I've got $100,000 and if you put $100,000 into the pot with me," we'll extend the promotion around the race or the series. That gives CART some recognition and gives KOOL objectives some recognition toward our goals. Same with the promoters. I want to come to Chris Pook and say "I have $50,000 or $75,000." I'd like to activate some promotion along with you, perhaps a radio promotion where we give away some tickets.
I would also like to have an ambassador for this series. Someone who can speak about CART and who knows it intimately and can speak to the media. Not someone like Pat Leahy * but someone they really care about. It might be a driver, it might be a historical figure we have around here. These are ideas that came to me from a group of people like who are sitting here today - some from my experience at Target, some from sponsors, some from columns, from out of the media. At a high level, that's where the plan is at. I told the sponsors that within a week, I would have a copy of the strategic plan to them and by July we would have some things in place for 2001. If they want to become involved with CART in a deeper way, they could. My objective is to create partners within the series so that we all win together.