Wheels in motion to increase stock market value
By valuing the Pirelli brand and quantifying the ROI on hallmark brand investments, we showed the City how Pirelli was on track to build a premium global tire brand and achieve its business growth targets.
Following a number of spin-offs, Pirelli came back to its core in 2010, with an ambitious five-year plan to become the world’s leading global premium tire manufacturer. CEO, Marco Tronchetti, recognized that a strong Pirelli brand was key to delivering on its premium positioning aspirations, as well as to preserve support from the City for its strategy.
Pirelli became the first Italian company to communicate brand value to the financial community, establishing it as a KPI for the business, in addition to analysis to demonstrate the ROI on hallmark sponsorship investments.
We developed an economic model that proved, quantified, and explained the ROI on four hallmark brand investments, including Formula 1 and the Pirelli calendar, but also Inter FC sponsorship and the PZero Fashion line. By combining quantitative research with financial modeling, we demonstrated that awareness of these initiatives did, in fact, increase consideration and preference for the Pirelli brand and drove brand value higher.
Our work has been presented during the company’s industrial plan presentations to the global financial community to demonstrate the value being created for the business by the Pirelli brand. It was part of the strategy that boosted the Pirelli share price by approximately 250% over 4 years, leading to Pirelli’s acquisition by ChemChina in 2015 for $7.7 billion (with the brand representing nearly one third of this value).