Ferrari Marketing Strategy.

Ferrari is a myth and a legend in the automotive industry.

The Ferrari tale is one of an astounding and unique worldwide success.

An unparalleled one.

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.

Ferrari Achievement.

The Ferrari case is of maximum interest in marketing strategy. To understand how Ferrari
achieved this stunning result, we must review the beginning of Ferrari, and its
development.

Enzo Ferrari founded Ferrari back in 1943, during WW II. The first Ferrari premises were
bombed and heavily damaged.
Enzo Ferrari was not an Engineer, nor he was an enterpreneur. Enzo Ferrari never went to
college, not even high school, no PhD, never made and MBA.

Enzo Ferrari was "just" a mechanic at Alfa Romeo, with a strong passion for engines,
speed and racing. He was a tough guy, and he had his own ideas on engines and cars.

Passion has always been the "drive" of Ferrari.

And its only marketing tool.

Ferrari Passion.

The first Ferrari car was the 125 S. It was built in1947. Only 3 of them were produced.
None survived to our days, yet a 125 S engine is on display in Galleria Ferrari in
Maranello, Ferrari dynamic museum. Galleria Ferrari is the Louvre, the Guggenheim, the
Moma of Car Racing. You feel the thrill, an overwhelming excitement and admiration
when you are inside. A unique, amazing experience.

After the 125 S, the Ferrari 166 came, and the races. Formula 1 was not even existing at
that time.
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.

Insight on Ferrari Distribution and Ferrari main geographical markets.

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The Man Who Saved Ferrari

CEO di Montezemolo's moves are starting to pay off

Luca Cordero di Montezemolo wasn't pleased when a popular Italian women's magazine
ranked him as one of its top 10 examples of ''ideal masculine beauty.'' Trailing slightly
behind Sean Connery and Harrison Ford in a poll of 1,000 Italian women, the 51-year-old
chairman and CEO of auto maker Ferrari (FIA) immediately complained to the
magazine's editors. ''I am a manager, not a movie star,'' he says.

Nevertheless, di Montezemolo knows that sex appeal is what Italy's luxury car industry is
all about. Elegantly dressed, engaging, and always quick with a broad smile, di
Montezemolo has plenty of what the Italians call bella figura, the ability to make a good
impression. But beneath the polished image--including the bright red cellular phone with
the Ferrari logo and the $5,000 Girard Perregaux wristwatch--is also a shrewd
businessman. ''Montezemolo is atypical in Italy because he follows through,'' says
Francesco Casolari, director of the Industrial Association of Modena. ''In Italy, a lot of
people do a lot of talk, but little action. He is a man of action.''

Since taking over Ferrari in 1992, di Montezemolo has thoroughly transformed the once
deeply troubled auto maker. Back then, Ferrari, which is now 90% controlled by auto
giant Fiat, was losing millions of dollars a year. At its low point in 1993, it sold only
2,289 of the ultra-pricey roadsters--just half of the cars it produced annually during the
1980s.

To fix the mess, di Montezemolo spent $80 million modernizing its factories. He brought
in engineers and designers from Fiat to rethink every step of production and design. At
the same time, he overhauled Ferrari's offerings by rushing out nine new models, up from
just two, including the legendary Testarossa. The $160,000 Ferrari 355--yes, that's the
low end--has sold particularly well since its 1994 launch. The moves trimmed costs and
improved efficiencies while preserving Ferrari's elite image. The result: Ferrari, though
still tiny in size, is back on solid financial footing. With sticker prices that range up to
$280,000 for the top-of-the-line four-passenger 456M, Ferrari sold 3,637 cars in 1998.
Last year, pretax profits rose to an estimated $24 million on sales of $623 million. That's
a big leap from the puny $2 million it earned on $399 million in sales in 1995.

DOUBLE TROUBLE. As if that weren't enough, in 1998, di Montezemolo acquired

Maserati, an even more troubled Italian auto company that had been losing money for 15
years. He spent $75 million to refurbish its plant and introduce the new 3200 GT coupe
last November. And he established a new dealer network featuring both Ferraris and the
far more affordable Maserati models. Maserati is on track to sell 2,000 of its 3200 GTs,
which go for $88,000, in 1999. Di Montezemolo predicts that the unit will break even by
the end of this year.

With both Ferrari and Maserati regaining their momentum, di Montezemolo is emerging
as one of Italy's more accomplished marketing maestros. ''He has kept alive Ferrari's
image as the icon of a super luxury sports car,'' says Helmut Panke, a management board
member at BMW. Di Montezemolo says his success stems from ''creativity, teamwork,
and enthusiasm.'' But it also hasn't hurt that Ferrari's largest market, the U.S., which
accounts for 23% of sales, is in the midst of a roaring bull market that creates a new crop
of millionaires with every Internet IPO.

Still, Ferrari couldn't have found a better cheerleader for its cars. Di Montezemolo's eyes
gleam with delight when he talks about the 360 Modena, the latest Ferrari model, which
will hit European showrooms in April and will go on sale in the U.S. for $170,000 later
this year. A master at generating hype, di Montezemolo last year turned heads when he
covered a prototype of the 360 Modena with cardboard and masking tape while driving
back and forth between his country house near Bologna and his office, 22 miles away, in
Maranello. Indeed, he misses no opportunity to play the promotional pitchman--though
always with an Italian twist. ''A Ferrari is like a beautiful girl that makes you fall in love
at first sight,'' he says in slightly accented English.

The problem, of course, is that this beauty has always been more pleasing to look at than
it was to possess. Ferrari's founder, racing pioneer Enzo Ferrari, engineered his sports
cars with a single objective in mind: speed. His legacy became uncomfortable cars that
appealed only to professional racers or well-heeled daredevils. When Ferrari died in
1988, the company was already teetering on the edge of bankruptcy.

After several more troubled years, Italian automobile titan Gianni Agnelli, then chairman
of Fiat, handpicked di Montezemolo in 1992 to revive the luxury auto maker. Agnelli
needed someone to restructure Ferrari, renew its car line, and refurbish its dated plants.
So why di Montezemolo? In the world of Italian aristocrats, family connections go a long
way. And Agnelli and di Montezemolo's father were old and close friends. Still, di
Montezemolo had some selling points all his own. He had already worked for both
Ferrari and Fiat earlier in his career, and he later made a name for himself as a marketing
whiz at Cinzano, the liquor company.

But what really sold Agnelli on di Montezemolo was his record as a sports-event
marketer. Prior to joining Ferrari, he had been in charge of organizing Italy's 1990 World
Cup Soccer championships. His duties ranged from putting together fund-raising concerts
featuring Luciano Pavarotti to getting corporate sponsorships for the event. The games,
which turned di Montezemolo into a bit of a national celebrity, were a huge financial and
public-relations success.

When he arrived at Ferrari, di Montezemolo found a company stuck in the 1980s. ''The
range of products, the mentality, the way work was organized all needed to be changed,''
he says. He quickly rolled out the lower-priced and popular 355. And he made that and
other models far more comfortable to drive and even put a back seat in the 456M--
unheard of in the older models. To make more room in another model, di Montezemolo
bucked a longstanding Ferrari tradition and ordered the engine moved from the rear to the
front. ''My technicians said I was crazy,'' he recalls.

LESSONS INCLUDED. He also offered the cars in a range of 16 colors and gave each
new owner racing lessons on the company's private track. And with the addition of the
Maserati to Ferrari showrooms, consumers now stand a better chance of finding a car
they might be able to afford when they come in to gawk at those Ferraris. Says Standard
& Poor's dri auto analyst Pietro Frigerio: ''Montezemolo has imported the idea of
customer service from the U.S.''

Di Montezemolo also has something for those who can only afford the price of a key
chain. An extensive merchandising sideline he has developed now accounts for 10% of
the company's profits. Stores in Rome, New York, and Los Angeles sell Ferrari T-shirts,
watches, bathrobes, hats, and other gear. And last year, Mattel signed a deal to sell toy
Ferraris.

How does di Montezemolo relax? A few years ago, he and a friend, shoemaker Diego
Della Valle, bought the rights to a defunct perfume called Acqua di Parma, once made
famous by Audrey Hepburn and Ava Gardner. They now sell the stuff at Bergdorf
Goodman (H) and, soon, at Saks Fifth Avenue (SKS) stores across the U.S. And in 1995,
di Montezemolo bought Web Line, a sunglasses company that had $13 million in sales
last year. Its shades have already been spotted on the likes of Sharon Stone and Princess
Caroline of Monaco, a fact di Montezemolo hasn't been shy about publicizing. That's di
Montezemolo for you--a marketing maestro who never stops selling.

Ferrari is a myth and a legend in the automotive industry.

The Ferrari tale is one of an astounding and unique worldwide success.

An unparalleled one.

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 factory never spent a penny in advertisement. The

Ferrari factory has a comprehensive website but does very little marketing, instead
leaving marketing communications to a worldwide viral network, of dealers using
eMarketing to enthusiasts and loyal groups – the ultimate in “word-of-mouth” social
network marketing and social media marketing.
Ferrari Achievement.
The Ferrari case is of maximum interest in marketing strategy. To understand how Ferrari
achieved this stunning result, we must review the beginning of Ferrari, and its
development.

Enzo Ferrari founded Ferrari back in 1943, during WW II. The first Ferrari premises were
bombed and heavily damaged.

Enzo Ferrari was not an Engineer, nor was he an entrepreneur. Enzo Ferrari never went to
college, not even high school, no PhD, never made an MBA.

Enzo Ferrari was “just” a mechanic at Alfa Romeo, with a strong passion for engines,
speed and racing. He was a tough guy, and he had his own ideas on engines and cars.

Passion has always been the “drive” of Ferrari.

And it’s only marketing tool.

Ferrari Passion.
The first Ferrari car was the 125 S. It was built in1947. Only 3 of them were produced.
None survived to our days, yet a 125 S engine is on display in Galleria Ferrari in
Maranello, Ferrari dynamic museum. Galleria Ferrari is the Louvre, the Guggenheim, and
the Moma of Car Racing. You feel the thrill, an overwhelming excitement and admiration
when you are inside. A unique, amazing experience.

After the 125 S, the Ferrari 166 came, and the races. Formula 1 did not even exist at that
time.

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.
Ferrari Distribution.

In 2007 Ferrari sold 6400 sports cars. 88% of the production is exported.

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High Performance super cars. Though the company is also heavily into 3rd party
merchandising.

Pricing

Priced at a premium, they start at prices upwardly of 175,000 $US. Vintage Ferrari cars
are also a great investment as Vintage Ferraris appreciate in value & are known to cost
millions of US Dollars.

Promotions

The strongest promotion for Ferrari is in its merchandising. It already enjoys immense
awareness throughout the world, even in places it doesn’t do any promotion. To the
extent that in India, wherein the brand is not even present as of yet, it is very well known.
Furthermore, the merchandising is done on a royalty & license basis to other brands (Eg.
Puma selling Ferrari-Puma branded shoes).

Place

It has its exclusive Ferrari dealerships spread over 52 countries as of yet with plans to
expand it’s dealerships to other countries & markets.

People

A very inspired, well taken care of & satisfied work-force who are proud to be attached
with the brand is what Ferrari offers its “people”. With factories, production units &
workplaces built around the safety & health of its workers, Ferrari was voted the “Best
Place to Work in Europe 2007″.

Process

They are reliant heavily into R&D, innovation & staying at the cutting edge of
technology. Therefore, their process is in a constant state of flux which is forever
changing & adapting with what the environment around them demands.

Physical Evidence

Dealerships across the globe showcasing their cars along with merchandise offering the
customer a lounge sort of experience rather than that of a showroom. This is done
keeping in mind the lifestyle of their potential customers.