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Ferrari: A brand equity report

Extracts from this document...

Introduction

Contents Objective, Scope and Approach.............................................................p. 3 Background.....................................................................................p. 4 Consumer Analysis...............................................................................p. 6 Brand Inventory.............................................................................p. 7 Brand Exploratory..........................................................................p. 12 SWOT Analysis...............................................................................p. 16 Brand Equity Evaluation....................................................................p. 18 Strategic Brand Management Recommendations.......................................p. 19 References..................................................................................p. 20 Appendix....................................................................................p. 22 Objective, Scope and Approach The objective of this report is to provide the reader with a comprehensive analysis of the brand Ferrari S.p.A. [Ferrari]. This will be attempted by taking a closer look at the background of the brand and the automotive industry as well as the type of consumers targeted by Ferrari. The main part of this report is divided into the brand inventory and the brand exploratory, which examine in detail how the firm markets and brands its products and how consumers perceive the brand, respectively. After a SWOT analysis and a brand equity evaluation this report will conclude with recommendations towards the strengthening and development of Ferrari's brand equity. For the purpose of this report the focus will be mainly on the road car division of Ferrari, rather than on the Scuderia Ferrari Formula One team and the merchandising sub-brands of Ferrari. Background The brand: Ferrari is one of the most popular and renowned sports-car makers, if not the most famous in the world. Its 'prancing horse' emblem, taken from an Italian WWI fighter pilot's plane, is one of the best known symbols in motor sport (see Appendix Figure 2). Since 1947 Ferrari produce both race and road cars, guided by its founder's spirit - Enzo Ferrari. The company enjoyed many Formula One [F1] race wins and world championship titles between the 1950s and 1970s and recently made a comeback with Michael Schumacher who won four championship titles since the beginning of the new millennium. Ferrari is the only team in F1 which has been actively racing since the inaugural championship in 1950 (Ferrari World, 2008). The company has a huge fan base which extends much further than the owners of Ferrari cars - also known as Ferraristi. ...read more.

Middle

Lamborghini started with building tractors which it still does today, however it is mainly known for its luxury sports-cars, the Gallardo and the Murcielago. Both are priced slightly cheaper than the Ferrari models they target, at �116,947 and �159,947 respectively (New Car Net, 2008). In terms of performance and prestige the cars are said to be equivalent to Ferraris, however, Lamborghini doesn't offer a four-seater, yet. Lamborghini tries to differentiate itself from Ferrari by offering a less traditional approach to sports-cars. Both its models have four-wheel drive for improved traction and stability on the road, whereas all Ferraris have rear-wheel drive. The Murcielago model also has the famous and often copied 'scissor doors', which open vertically. Porsche compared to Ferrari has a much broader model range with numerous sub-brands. However, the only model which is competing with Ferrari is the 911 Carrera with its Turbo and GT sub-brands. The GT starts at �81,357 and the Turbo at �100,617 (New Car Net, 2008). Aston Martin has cars in price ranges of both Porsche and Ferrari, despite the fact that it hand builds the vehicles. The V8 Vantage at �84,135, the DB9 at �111,985, and the Vanquish at �178,235 (Buy Your Car, 2008). Points of difference: Ferrari's racing heritage and its current involvement in F1 give the road cars their thoroughbred edge. Consumers buying Ferraris want to be part of this history and own a race car for the road, so to say. None of Ferrari's competitors can offer this image to that extent. Many parts in a Ferrari are based on tradition and consumers know that. From the angle of the cylinders to the location of the engine, many technical features have been constructed in the same way in previous models, based on the success of those cars. However, Ferrari is also a design and technology leader in the automotive industry. The company's president Luca di Montezemolo states: "We made a big effort to show the innovative technology we put in our cars. ...read more.

Conclusion

Threats: * Possible problems with F1 team could be projected onto road cars. * New EU requirements for emissions target to be implemented by 2012 are a fourth of what Ferrari cars emit now (Just Auto, 2007). * Pressure to improve fuel economy. * Counterfeiting business could be damaging to image and take some revenue (Barry, 2008). * Tries to reduce fuel consumption and emissions could affect performance. * Talks about an implementation of four-wheel-drive in future cars might deter traditional Ferraristi used to rear-wheel-drive (Left Lane News, 2007). Brand Equity Evaluation Ferrari shows all the main qualities of a strong brand as described by White (2008). Its price is in the premium segment of the industry. It is quite differentiated from competing brands through its history and far from becoming a commodity brand. Furthermore, with its recent growth in sales it exceeded shareholder prospects and shortened its sales cycle. Finally, owning a Ferrari will definitely strike up many conversations, thus generating a high referral rate for potential owners. Strategic Brand Management Recommendations To increase CSR Ferrari could buy hybrid car technology from Toyota and enter the hybrid car market in the near future, being one of the first sports-car makers to provide a true hybrid sports-car. The company should also consider the implementation of the new Fioravanti-patented rotating roof concept into other models as it will further differentiate Ferrari from its competitors. Ferrari should consider developing a four-by-four or SUV model in collaboration with its parent company Fiat, as this market segment grew by over 60% annually in the last years in many countries and is forecasted to grow further at this rate (R.L. Polk & Co., 2007). Also the competitor Porsche's SUV model Cayenne was a huge success, Ferrari should thus attempt to get a share of the 'SUV pie'. Ferrari might also want to consider investing in an extension of its factory to facilitate larger output and thus minimise the customer waiting-list and increase yearly revenue. Finally, Ferrari should attack the counterfeiting business to strengthen the image of quality. ...read more.

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