On the Offensive: Trelleborg Moves Early to Begin Brand Transition - Tire Review Magazine

On the Offensive: Trelleborg Moves Early to Begin Brand Transition

Trelleborg Moves Early to Begin Brand Transition

Sometimes, they say, the best offense is a good defense. That’s the strategy Trelleborg Wheel Systems (TWS) has taken with its plan to drop the universally recognized Pirelli brand name and rebrand its entire agricultural tire product lineup to the lesser-known Trelleborg name.

During a special media event in western Italy, TWS, a unit of Sweden’s Trelleborg Group with U.S. headquarters in Hartsville, Ohio, announced that it would not extend its licensing agreement with Pirelli SpA and would immediately begin phasing out its use of the Pirelli brand in favor of its own badge.

Since it purchased Pirelli’s ag tire business in 1999, Trelleborg has licensed the use of the Pirelli brand name and logo and has sold an extensive array of Pirelli-brand ag tires. The licensing deal expires in 2010, but TWS wanted to get a jump on the transition, which will include all-new tire molds, signage, promotional materials and advertising.

The reason for the three-year head start is simple, according to Maurizio Vischi, TWS’s president. His company, Vischi said, “wants to control events and the process and not let them control Trelleborg.” The move, he suggested, was driven by simple economics. “We decided to not continue making licensing payments,” he said.

TWS derives some 72% of its ag tire sales from European markets – where the Pirelli brand name is quite strong – with the rest coming from North America, South America and Asia. Beginning this quarter, Vischi said, TWS will embark on a multi-year, multi-million dollar communications effort to pave the way for the brand name transition. The communications push will target farm equipment OEMs, equipment and tire dealers and end users, with most of the effort focused on Europe.

How important is the European market to TWS’ transition success? The media event, held at the historic, centuries-old Abbey of Spineto, now a 2,500-acre conference center and retreat in the Tuscan hills, was attended by more than 20 European agricultural and tire journalists and just two from North America.

The brand change will not be an easy one for TWS, though. Some of its most important and vital products – particularly its popular radial TM line of radial ag tires – carry the Pirelli name.

Vischi was asked if he was concerned about losing the high brand awareness of the Pirelli name vs. the Trelleborg brand. He said that while the Pirelli brand carries great cache among consumers, and while easily recognized among TWS’ targeted end users, reaching them will not be as difficult and expensive. “It’s not important that my butcher know the Trelleborg name, but his supplier. We do not need to duplicate Pirelli’s awareness, which was built on car and light truck tires. We only need to focus on the agricultural market.”

Brand Commitment

TWS has some 2,000 employees on five continents, including a manufacturing plant in Hartsville. In addition to ag tires, TWS also produces forestry and industrial units, as well as wheels for industrial and farm applications. Headquartered in Tivoli, near Rome, TWS represents 13% of the Trelleborg Group’s total revenue. Other TWS plants are in Sri Lanka, Sweden and Denmark.

TWS’ agricultural and forestry tires business unit makes up two-thirds of the company’s sales and is headed by business unit President Paolo Pompei.

The brand transition, said Pompei, “is an important step in our long history.

“Brand is more than a name to us,” he said. “Brand is our goals.”

The overall communications push, Pompei said, will focus on trade magazine advertising, Internet activities, POS materials, public relations, events and shows and customer-relationship marketing. All told, TWS will “more than double communications spending” to 4.2% of revenues, he said.

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