Emilio Botín, the President of Banco Santander.

ABSTRACT
The day previous to the Formula One Grand Prix in Monza, 200 international journalists witnessed how Emilio Botín, the President of Banco Santander, and Luca di Montezemolo, Ferrari’s President, signed a five-year sponsorship agreement during a press conference. The actual amount was never disclosed but rumours name a sum close to 40 million euros.
Until present, it has been the most important marketing action in the history of Banco Santander. Becoming the main sponsor of the legendary F1 motor-racing team Ferrari permitted the Spanish bank to position itself as a serious contender in the international league. Moreover, this leadership attitude conveys a positive message of economic strength and confidence in the future.

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Sharing common aspects among the concerned parties is a prerequisite for any successful sponsorship. Banco Santander and Ferrari, for instance, started both their businesses on the countryside, share a common passion for competing, invest heavily in cutting-edge technologies, are born winners, and aspire to be ranked among the best in the world: Santander is the world’s third largest bank in terms of profits, while Ferrari possesses an enviable track record of victories. Personality-wise, they are soul mates.

Additionally, Santander will gain something important to complement its image: Ferrari is a luxury company, luxury with a sporty connotation to be precise. Gaining a sense that aspires people will present an enrichment for a financial company whose core business lies basically in mass consumption.

Alliances are essential in today’s business world. No company, whatever size, possesses all the resources needed to be competitive on its own. And in every alliance some aspects might be more difficult to agree on than others, like the fact that the official name of the sponsored party includes a tobacco brand: Scuderia Ferrari Marlboro. Nonetheless, its impact is estimated to be minimal since the days are numbered.

When playing at a global level size matters. If not, how could they dedicate such an important sum of money? Don’t forget that over 60% of Santander’s turnover comes from abroad. In this aspect, Santander has a lot to teach to other Spanish companies that seem well managed, but are close-minded.

Since so much money is at stake, the sponsorship needs to be complemented by additional activation funds to yield results. If not, the return on investments will be minimised or could even be lost. Santander understands this perfectly, but I sense that Escuderia Ferrari is more interested in engines than in any marketing activities, so vital for its sponsor.

There is one exception: The Ferrari stores are much more exciting than those of its sponsor Santander. Santander’s corporate leadership is not well reflected in its points of sales, whose semiotics are rather conventional and little innovative. In the stores the customer is not made aware of the leadership attitude – without being arrogant – and the new routes forwards the firm has been demonstrating in so many ways.

And what are the implications of Fernando Alonso’s exclusive agreement for Ferrari? Despite being flattered by Emilio Botín’s compliments, I think that Santander cares much more about the recuperation of the Brazilian pilot Felipe Massa, who is considered an idol in his home country, seeing that the Brazilian market has four times the size of the Spanish one. I further believe that the Spanish bank wouldn’t mind if Ferrari were to contract Hamilton one day, since the United Kingdom represents a strategic market, and Santander is already in a leadership position in its home country. Finally, both the United Kingdom and Brazil coincide on two aspects: their passion for the Formula 1 and their important domestic markets.

As I heard my colleague, Professor Francisco Vilahur, once say: “Strategy is a denial exercise.
Sometimes you need to say “No” to things that, under different circumstances, would get a “Yes.”

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Lluis Martinez-Ribes
Source: Cinco Días
(October 6th, 2009)