±±¾©Èü³µpk10

The days of Automobile Association members being able to 'Just AAsk' for anything from car insurance to personal loans are numbered, as its venture capitalist joint owners tighten their grip on the roadside services company they acquired from Centrica for £1.75bn.

Last week new chief executive Tim Parker signalled the end of the centralised marketing strategy embodied by the 'Just AAsk' strapline when he axed the company's entire senior marketing team, including AA financial services director Clare Salmon, the strategy's principal architect (Marketing, 6 October).

The move is a significant about-turn for the AA, which just two years ago spent £22m positioning itself as a multi-service provider that could meet the myriad needs of Britain's motorists, from rescuing drivers stuck on the hard shoulder to offering home insurance.

So what has gone wrong? Under Centrica's ownership the AA's multi-service strategy appeared to make sense, fitting perfectly with the parent group's aim to be the ultimate household service provider. By buying the AA, Centrica acquired data on the brand's 9.5m members and the opportunity to cross-sell an array of products and services.

But the AA's new owners, CVC Capital Partners and Permira, are thought to have an altogether different agenda, geared toward selling off parts of the business and floating the remainder within the next three years.

In light of this, Parker's decision to run the AA's various operations as independent businesses and focus on roadside services as the main growth area is entirely logical.

Multi-service competition

The switch in strategy will no doubt please the RAC, the AA's closest compe-titor. Last year it also went down the multi-service route, with a £10m relaunch positioning the business as 'Always there'. The strategy, which includes offering servicing centres at supermarkets, appears to be working - so far this year the RAC has attracted another 500,000 members, bringing its membership to 7m. Conversely, the AA's membership has remained stable at 15m.

However, while motoring services remain the RAC's core focus, critics of the AA believe services such as home and travel insurance attempted to extend the brand too far. Unlike supermarket giant Tesco, which is able to successfully move into areas such as off-the-shelf financial services while retaining the integrity of the brand, in consumers' eyes the AA stands for the Automobile Association - or roadside services.

'Centrica was in danger of killing the golden goose - roadside services,' says one agency contact close to the AA. 'I imagine Parker feels that a disproportionate effort was being spent on becoming a wider financial services player.'

AA insiders believe that some of its products are earmarked by Parker for an early sale. 'I can't see the driving school and publishing arm as core to the brand,' opines one marketer. 'They are a distraction from where the main business lies. I would have thought that the AA could sell its publishing arm to a publishing house and franchise the brand.'

Parker was unavailable to comment for this piece, but his career to date provides some clues as to how he will approach the challenges ahead.

Before he joined Clarks as chief executive in 1996, the troubled shoe firm was losing market share to cheap foreign imports. By the time Parker left in 2002, it had a turnover approaching £1bn a year. One way he achieved this was by closing several of Clarks' factories and outsourcing manufacturing.

It is clear that he is not afraid to take drastic action to improve performance.

Another key issue Parker faces at the AA is a high level of costs. It is one he has already started to address with last week's job cuts. Sources speculate that the £70m marketing budget will be next.

'If Parker is trying to fatten the business in order to sell it then he probably should cut the consumer marketing budget,' says one senior marketer in the sector. A source at AA supports this. 'It's back to basics.

Marketing will no longer be spread across the individual businesses. Instead it will focus on the core road services brand.'

New products

Cost-cutting is not the only thing on Parker's agenda - he has already announced plans to introduce new products. The consensus is that these will be motoring-related - a far cry from Centrica's planned AA-branded mortgages.

Car insurance is a key area for growth. The AA currently has 15m breakdown customers but only 1m car insurance customers. Parker will expect the decentralised AA Insurance division to acquire customers more aggressively. Another opportunity is to pursue fleet and business-to-business customers.

As Parker's vision becomes reality, 'Just AAsk' will no longer be an appropriate strapline. Instead, Marketing has learned the company is re-introducing the iconic 'fourth emergency service' slogan dropped by Centrica in 2002. Its revival is a testament to Parker's belief that the AA must return to its roots.

DATA FILE - THE AA

1905: Automobile Association launched by 90 car enthusiasts to help members avoid running up speeding fines.

1967: AA moves into car insurance after a string of brokerages go bust.

1984: Launches ad campaign with the slogan 'I don't know - but I know a man who does'.

1993: A new ad strategy dubs the AA 'The fourth emergency service'.

1999: The AA is bought by household services provider Centrica for £1.1bn.

2002: Drops 'The fourth emergency service' tagline and introduces the slogan 'Just AAsk'.

2004: The AA is sold by Centrica to venture capitalists CVC Capital Partners and Permira for £1.75bn and drops the 'Just AAsk' strapline.