Marketing Strategy and Innovation at Michelin (Published)
The great management guru, Peter F. Drucker, once made a very profound observation that, “Because the purpose of business is to create customers, a business enterprise has two and only two basic functions – marketing and innovation. Marketing and innovation produce results; all the rest are costs” (Drucker, 1995). In this paper, we focus on the marketing strategies and innovation strengths at the France based company, Michelin. The company simply produces tires made of rubber, but still has a multi-billion dollar empire and is a leader in the tire industry, and continues to generate new plans for advancing its business. Indeed, Michelin has one of the most recognizable logo in the world (see above). We delve into the history of Michelin, its association with French culture, and seek to deduce what are the factors resulting in its marketing and innovation models that contribute to its huge success over the last 125+ years. The central scope of the paper is to understand the marketing strategy of Michelin in the global marketplace, and, at the same time, to analyze how Michelin has been successful in being able to innovate and maintain a stronghold in this sector in terms of market share. With respect to innovation, we note key disruptions that Michelin has been producing in its research labs and with respect to its marketing. We dig deeply into the strategic-branding approach at Michelin and analyze topics such as brand positioning, brand image and equity, advertising, market segmentation, and targeting, all in the aforementioned global setting.