I can only imagine that Dany Bahar is going for the “price penetration” approach, though using the Lotus brand name rather than price. One of the theories of marketing is that when it comes to launching a new product, you can go about it in two ways: price skimming, or price penetration. Skimming involves pricing yourself at the top of the market, targeting a niche of consumers who are willing to pay for what they perceive to be quality in the product. Penetration, on the other hand, involves undercutting the competition and stealing away market share with a cheaper product. Both skimming and penetration have their own advantages and disadvantages; penetration makes it easier to build up a market base, but once you start trying to put the price up, you’ll start losing consumers quickly as their entire introduction to your product was based on the low price. Bahar, I suspect, is trying to do this with the Lotus brand: penetrating the motorsport community on such a level that Lotus has an enormous presence, and then use that as the core of their marketing campaign for their road cars. Once the next generation of Lotus road cars goes into production, the manfacturer’s motorsport connections will no doubt be emphasised.
As risky as it is, Bahar deserves credit for the position he’s put the brand in. If you look at every series Lotus Cars has entered as a sponsor, they all have one thing in common: success. Lotus F1 has a former World Champion and the reigning GP2 champion racing for them. Lotus ART regularly dominate both the GP2 and GP3 series, and is one of the most successful teams in both categories. So there’s a lot of success, and a lot of potential for success, in the teams they are associated with. From a pure marketing standpoint, that’s exactly what you want. It hasn’t gone as smoothly as they would like, though. They haven’t really attached themselves to a big-name Indycar team like Chip Ganassi or a driver like Will Power, and they got a bit of bad publicity when they were late delivering their engine and so lost KV Racing Technology. Likewise, they recruited the designer of the Peugeot 908 to design their LMP car, but then quietly shelved the project (though the Lola chassis is a good starting point for them, and Kolles is an experienced Le Mans team). And a lot is hinging on their Blancpain entry, since it’s probably going to be one of their own cars – an Evora? – prepared for racing. They can get away with this, though, as Indycar, Le Mans and other endurance series are not as set in the public consciousness as the likes of Formula 1.
From a pure marketing strategy, I think this is utterly brilliant – Bahar has found a way to get Lotus Cars maximum exposure in motorsport for a minimal outlay; he’s probably got the company sponsoring all of these teams and buying the naming rights to them for less than the price of setting up a single team. But strategy will only get you so far; I’m sure Napoleon had a fantastic strategy in mind when he went to Trafalgar. The potential for disaster comes in the execution of the project. Lotus is spending a lot of money, but they’re not really producing anything on their own, and they’re probably going to struggle to break even on it until they can start getting cars out there. A lot is riding on Lotus’ Formula 1 project, because if that falters, then it doesn’t matter how well they do in GP2, GP3, Indycar, Le Mans and the Blancpain series – another season in Formula 1 like 2011, and the whole exercise is going to derail in a very messy fashion.
At the end of the day, I think history is going to remember Lotus’ motorsport plans as being either pure brilliance or an unmitigated disaster.