Andy Palmer is explaining to me why Nissan Motor’s Infiniti luxury division is spending millions and millions promoting the brand and its values through Formula One racing: “To move as a global contender.”
And move fast, says the man who, among his many jobs at Nissan, oversees Infiniti – along with global planning, global marketing and communications and global product development. Last year, Infiniti sold 172,000 vehicles around the world, almost all of them in North America. By 2017, the goal is to jump-start Infiniti sales to a goal of 500,000 worldwide – with two-thirds of that growth coming everywhere but North America.
It is a massively ambitious plan. And Infiniti has no hope of succeeding without expanding what Palmer calls the “purchasing funnel.” In simple terms, Infiniti needs desperately to increase what marketing people call “unaided awareness.” That’s the widest part of the funnel at the top where market researchers find people who know about Infiniti unprompted, along the lines of BMW, Mercedes-Benz and Audi. Infiniti needs a massive increase in the number of buyers who are aware of the brand, what it stands for and what vehicles it sells. You might say Infiniti needs to cast a wider net.
F1 racing is a way to create awareness in global markets where the Infiniti brand is unknown. Some estimates suggest a billion people watch each of the F1 races and the circuit is global, with a strong presence where Infiniti is particularly weak – Asia and Europe.
“We need to articulate what Infiniti is,” says Palmer, adding that by becoming a full partner with the Red Bull team that won both the driver’s title and the team crown helps to get that job done; Infiniti’s values are reflected in its F1 relationship.
This has been a project in the works for some time. Initially, Infiniti agreed to a sponsorship deal with Red Bull in the fall of 2010, and then this year Infiniti came on board as a full partner. Bear in mind, however, that while Nissan offers plenty of engineering expertise and impressive research and development capabilities, the racing team itself is run by the same people who steered Red Bull to great success last year and in years before.
Or as Palmer puts it, “the team should run the team,” although he adds that “we [the Nissan side] are more than stickers on a car.”
Palmer argues that Infiniti’s involvement in F1 is paying off. Research, he says, shows that unaided awareness of Infiniti – people who say they are familiar with the brand without any prompting – is up to 29 per cent among consumers, from 14 per cent in 2009. Andreas Sigl, the global director of Infiniti’s F1 effort, says the F1 involvement gave the brand $339-million (U.S.) in measured media exposure last year.
Palmer won’t say how much Nissan is investing in the F1 project, though it’s certainly not $339-million per year. But $100-million-plus is not unreasonable. Of course, the spending will only pay off if buyers flock to the brand and the many new Infiniti models coming within the next five years.
“You don’t build a premium brand overnight,” says Palmer, noting that Nissan’s top management will be patient to a point – 2017, it seems. By then, the world should know exactly what Infiniti is and it’s not what Palmer calls “Nissan Plus.”
“We need Infiniti to be in the same competitive set as BMW, Mercedes and Audi,” he says in the matter-of-fact way of a man who first and foremost calls himself an engineer.