Ferrari is one car which has captured the imagination of billions of people all across the world. Ferrari’s brand presence makes it easily the most popular and dreamt about car. With its powerful engines, strong brand associations and excellent designs, Ferrari stands out most uniquely amongst all cars.
Manufactured in Italy, Ferrari was founded by Enzo Ferrari in 1929. Initially, it used to sponsor drivers and participated in manufacturing cars only for races. However, after two decades after leaving a mark in the field of racing, Ferrari decided to manufacture cars for the streets. And this is where an unbelievable and memorable journey of one of the strongest brands began.
Ferrari has always been associated with motorsport especially with Formula One. Competing with other big names in F1, Team Ferrari has always succeeded and gave a great performance, especially with the sports legend Michael Schumacher. Success in the fast and competitive formula one has also added to the ever increasing brand equity of Ferrari.
Ferrari makes sure that each of its brands gives the customer an experience unparalleled. Ferrari has a wide range of cars, all for the premium niche market, and it sells only about 5,000 cars a year. The interior of every Ferrari is customised so as to give exactly what the customer wants. Each Ferrari car in itself becomes a brand name due to the presence of the ‘Ferrari’ name attached to it. Some of the Ferrari models which have made waves in the automobile industry are Ferrari 360 Modena, Ferrari 360 Spider, Ferrari 550 Barchetta, Ferrari 550 Maranello, Ferrari Enzo, Ferrari F40, Ferrari California, 458 Italia and Ferrari F50.
Apart from being one of the finest in the automobile industry, Ferrari has also managed to create a strong market presence through merchandise products. Ferrari products like jackets, caps, perfumes, apparel, watches etc also add to the legacy and brand value of the automobile giant. The prancing horse logo on the yellow shield is one of the most recognisable logos and designs, which increases the brand value of any product manifold. Ferrari also indulges in organising events, races etc which helps in increasing brand visibility. More than that, it gives opportunity to people and corporate to be associated with a powerful and popular brand name like Ferrari. Ferrari World, a theme park, is another initiative to showcase to the world this brand of dreams.
Ferrari has also associated itself other brands by having corporate partnerships and tie-ups with them. Some of the major brands which have formed a partnership with Ferrari are Bridgestone, Shell, Michelin, Pirelli, Bosch etc. Such brand associations also enhances the images of all the brands and it’s a win-win situation for all.
Ferrari success cannot be measured in terms of revenues and sales, or in terms of market capitalization. Ferrari never made an IPO and is not even quoted in any stock exchange market. Ferrari success has to be measured only in terms of Brand Value and Product Value.
Probably the Ferrari brand is worth more than the Google brand, the Apple brand, Nike, GE, IBM, BMW, Mercedes, Exxon, Shell, or any other brand.
No other brand has the allure of the Ferrari Brand.
Ferrari is known and is highly valued everywhere in the world. From the US to Japan, from Germany and Switzerland to India, to France, Australia, New Zealand, Russia, Brazil and Argentina.
Yet, Ferrari never spent a penny in advertisement.
Passion has always been the "drive" of Ferrari.
And its only marketing tool.
Since the beginning Ferrari was doing both things it still does today: Car Racing and constructing extraordinary sports cars for exacting car and speed lovers. How can you call them just clients?
This has been the marketing strategy of Ferrari. The unaware, unstudied, unplanned marketing strategy of Ferrari. The Passion for speed, the Passion for engines, the Passion for Car Racing. And this Passion and excitement goes through to every racing sport lover all around the world.
And this Passion and excitement goes through in each Ferrari 360 Modena, in each Ferrari Enzo, in each 575 Maranello, in each F430 you drive or simply encounter in the streets. Winning races, losing races, fiercely fighting in car racing has built the brand.
Lets
take an example of a single Ferrari product, ‘Ferrari Enzo’. Its remarkable to
know that not just anyone can buy an Enzo. In
fact, unless you are invited by Ferrari, you will not be able to get your hands
on one. Ferrari knows one of the biggest secrets of marketing: nobody ever made
money trying to sell to everyone.
The secret of profitability is not
to sell a lot, but rather to sell a specific offering to a specific group and,
crucially, not to waste time or resources on customers who fall outside the
target group.
Granted, Ferrari's invitation-only
approach is at the extreme end of the spectrum. But too many organisations
believe that mass marketing offers them the biggest potential market and thus
the maximum possible sales.
These organisations discover that
without a specific target market to design their products around they are
poorly positioned and vulnerable to competitors that adopt a more targeted
niche approach.
Ferrari's pricing strategy also
offers a marketing masterclass. If you are invited to buy an Enzo it can be
yours for £430,000. This is, by anyone's standards, a ludicrous amount of
money. But by targeting the world's most opulent customers and limiting
production to 399 cars, Ferrari must ensure that its pricing is contiguous with
its overall marketing strategy.
Ferrari also understands the hidden
dimensions of pricing. Prices are not just the means of generating revenues.
They also signal the quality and exclusivity of the product and the corporate
brand responsible for that product. Enzo will turn a handsome profit. The total
production line has already sold out. But the PR around the price tag will
ensure that Ferrari's brand is reinvigorated and reinforced with new
associations of exclusivity essential to the marque's long-term health.
In truth, the value of the Enzo
should not be measured in fiscal terms, but rather in the impact it will have
on the brand equity of all the vehicles marketed by Ferrari. Most of Ferrari's
revenues are generated by far more attainable models such as the 355 GTS - a
snip at £75,000.
Very few of us will ever market a
product as luxurious or exclusive as a Ferrari Enzo. The idea of inviting only
a select bunch of households to buy our yoghurt or watch our ad is patently
ridiculous. But too often we jump to the other extreme, the mass market.
Somewhere in the middle between the Ferrari’s Enzo and the mass market lies a
very happy medium.
5w model for Ferrari
A company and brand this much
unique, only Ferrari would know their 5w model and its strategies. But with
what we know and what we mentioned about them, we can at least infer what their
model might look like.
Who:
In simple words, the one who has the
money and very high social status. Nothing less than that. Having a lot of
money is not enough to buy a Ferrari. This brand is highly exclusive, owning
their car is dream of almost every individual. And Ferrari has succeeded in
keeping it a dream even for those who can afford it. The brand chooses its
customers, not the other way round. It is because of this reason that it has
created a psyche that the owner of the Ferrari feels like the king of the
world. A feeling that ‘yes I own it, I deserve it, while the rest don’t. I’m
different than others, I’m better than the rest’. This feeling of
differentiation and superiority is what this brand provides, and this what most
of the people desire in this world, yet only few can achieve.
What:
What customers do with Ferrari car
is simple yet astonishing. They fulfill their ‘Passion for Speed’. It is the
brand mantra of this prestigious company, and they actually provide it in their
own different way. One might think that high speeds are provided by many car
manufacturers, then why Ferrari. The answer is that only Ferrari has the
history of providing speed with passion, style and success. A manufacturer
dedicated to speed lovers and maintaining its highest class image from the
start. What they offer is unparalleled by any other car manufacturer. Ferrari
has a proud history, and they transfer their pride to every individual Ferrari
owner. This is the secret of their uniqueness. From road car manufacturing to
Formula 1 Racing, they have nothing but success and pride at their side.
The complementary product compulsory
for owning a Ferrari is that one must also own high status and style, that’s
it.
It is necessary to mention that if
any of the Ferrari models is to be replaced by new or to be sold by the owner,
he/she must consult the company first. The company then advises them with
buying the new car or selling the old one to the appropriate new customer. If
they don’t find a suitable new customer for resale, then they take back the
model instead of hurting their brand image. For a company like Ferrari,
revenues and money does not matter, all they care about is their brand image,
which cannot be compromised at any cost.
Where:
Ferrari can only be bought from
their registered franchises around the world. The procedure of buying is such
that the desired customers are first identified, and then invited to the
Ferrari factory for the promotion of their latest models. The interested buyers
book their cars with customizations. They are put on a waiting list. It is also
interesting to know that Ferrari usually sells 300 to 400 cars per year of any
new model, and they deliberately delay the delivery times in order to increase
the hunger and thrill within the customers. Moreover, Ferrari owns the right to
reject any buyer even after the car has been booked, if they feel the necessity
for it.
When:
Any model of Ferrari is available
for sale when the company decides to launch it. Interesting to know it has
nothing to do with the technological shifts and market requirements. Although
there are many manufacturers who take Ferrari as their main competitor and
challenger like Lamborghini, Porsche, Pagani Zonda, Mercedez, BMW etc, but
Ferrari feels little or no pressure from them. This indicates the power of
‘brand image’. Their product is only available for their selective customers
whenever the company feels the need for it. Like in 2010 and 2011, many sports
car manufacturers came up with latest models and innovations in their cars and
Ferrari wasn’t launching any new car. The experts were very skeptical about
Ferrari losing the potential customers along with competitive edge. Then the
company decided to launch Ferrari California and even that model and its design
was heavily criticized around the world. Ferrari even delayed the deliveries of
California up to 6 months and that was taken negatively as well. But when
finally it was launched and delivered, it became more successful and famous
than any previous model of Ferrari (except Enzo).
Why:
As mentioned before, the customers
don’t choose Ferrari, the company chooses customers for its products. The
exquisite and exclusive nature of this brand combined with its fame and demand
has made it possible for it to take such actions. As mentioned before, they
want and they keep people dreaming about owning their cars. They do not just
offer cars. Along with it they provide luxury, comfort, speed, prestige, fame,
success and a feeling of being unique. Maybe the competitors can provide all
these facilities, but they can never provide the name ‘Ferrari’ with their
cars. You see this is a psychological phenomenon which has more to do with
cognitive processes and feelings than merely the usage of the product. You come
to know that a friend has bought a sports car, we will directly think of its
specifications and its positives and negatives. But if you come to know that a friend
has bought a Ferrari, then we or at least I’m convinced that he got the best
car in the world manufactured by the best company in the world. Then a person
is not hit by he if’s and buts. A total devastation of the Ferrari’s
competitors, nobody would ever say that he should’ve bought that and that car
instead of Ferrari. A great and best value for money. And imagine if this is
what an ordinary person thinks of this brand, then what would the actual owner
be thinking. The feelings that he’d be getting would be simply out of this
world. No competition and regrets exists when a Ferrari car is around. The
owner knows it, the company knows it and even the competitors know this fact.
Again I would say, this is called the power of a strong brand.
Ferrari believes in maintaining long
term relationships with their customers. The deliver the best and their best,
and demand long term loyalty. That is why Ferrari has made owners club around
the world where Ferrari car owners from any era are invited to gather at some
place annually and bring in their cars as well. It’s a kind of promotional
event which focuses on showing respect for their loyal customers and to make
them feel proud of what they own.
Lastly, it is quite absurd to ask after
such long elaboration that why the potential customers won’t buy a Ferrari car.
The answer now is simple, because the company doesn’t consider them worth
while. Ferrari is the name of success, it’s the name of a legend, it’s the name
of a prestigious history, it’s the name of the ‘passion for speed’ and style.
Ferrari is the name of the best sports car manufacturer in the world. That’s
why only few deserve to be tagged along with the Italian prancing horse.
Note:
The introduction part of Ferrari’s
unique marketing insight has been taken from the internet, because it was
explained in the best way and I couldn’t add or alter more. The rest I have
written myself. The reason why I chose Ferrari is because I wanted to discuss
something different. Something which does marketing in its own unique fashion,
defying the conventions of mass marketing and focusing more on the
psychological satisfaction of a specific group. Its techniques are shockingly
different, very knowledgeable and extremely interesting. 1 out of every 5
persons in the world knows the name ‘Ferrari’, and the company runs no
advertisements and promotions at all. I think such a company needs to be
discussed.
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