http://www.youtube.com/watch?v=cUkL8mze1WM&feature=player_embedded

From founder Enzo Ferrari to current chairman Luca di Montezemolo.

Ferrari History

• Originally founded in 1929 as Scuderia Ferrari

• Founded: Maranello, Italy by Enzo Ferrari

• Began by sponsoring & manufacturing race cars only

• 1947- production of street legal vehicles begins

Scuderia Ferrari

• Racing division of Ferrari motorsports

• Historically involved in many divisions, currently only in Formula One

• Only team to continuously compete in Formula One World Championship since 1950

Corporate Affairs & Partnerships

• Internally managed merchandise line- eyewear, clothing, cologne, watches, etc.

• Museum: Galleria Ferrari in Maranello- In-depth company history for enthusiasts

• Technical partnership with Shell Oil- Testing & supplying fuel & oil for racing teams

Ferrari Products

125 S- 1st Ferrari sports car250 GTO

Ferrari 375 America

Ferrari 360 & F355 Spider

458 Italia (2010)Ferrari California

The Ferrari Store

The Ferrari Factory

- 45 Buildings - 3,000 workers

www.ferrari.com

-Maranello, Italy -Passion, Innovation, Technology

Logistics

International Marketing Chapter 16

Fiat Distribution Management

• The distribution in Italy is currently fully carried out by road

• International – Sea, Air

International Marketing Chapter 13

Ferrari Distribution/Sales

34%

14%14%

13%

6%6%

6% 2% 2% 1%Sales US & Canada

GermanyItaly UKFranceSwitzerlandJapanChinaAustraliaRussia

6,400 sold in 2007 with 88% of production exported

Year Units Sold2000 40702001 42902002 42402003 42402004 48502005 54002006 56002007 6400

Export pricing strategyChapter 11

Export Marketing Mix

• Skimming, market, penetration pricing insignificant

• Ferrari Insensitive to pricing as are the “rich” consumers– Safest way is all that matters.

• Ferrari works directly with specific dealers in other countries Export pricing

strategyChapter 11

Gray Ferrari Background

• Ferrari sells a limited number of cars in U.S. each year

• To avoid wait list, buyers import Ferrari’s through gray market Registered Imports

• Gray market goods are manufactured abroad and imported into U.S. without trademark holders consent

Gray Ferrari Background

• Imported vehicles must meet importation guidelines & conform with North American standards

• Importing can mean savings of 30%-40%

• Concerns about safety & company reputation led to Ferrari challenging this market in 2001

Gray Ferrari Background

• National Highway Traffic Safety Administration issued decision on issue (April 10, 2002)

• “This notice announces the decision by the NHTSA that 2001 Ferrari 360 passenger cars not originally manufactured to

comply with all applicable Federal motor vehicle safety standards are eligible for importation into the United States

because they are substantially similar to vehicle manufactured for importation into and sale in the United States and certified by their manufacturer as complying with the safety standards,

and are capable of being readily altered to conform to the standards.”

International Marketing Chapter 13

Strengths

• Loyal Customers

• Strong Brand Reputation, Image

• Strong financial position

• Unique products

• “Don’t sell the most, sell the best”

Weaknesses

• Cost of products– $200k - $12Million

• Timeliness(2-3 year wait list)– Lose out on customers– 18 month wait list

• Low Volumes

Opportunities

• Technological Innovations

• Enlargement of Customer Base

• Brand Expansion

• Global Market Growth

Threats

• Economic Slowdown/Recession

• Competition Offers Higher Volumes/Stiff Competition– Ex: Porsche, Lamborghini

• Automotive Policies Strictly Enforced Worldwide

Problem Statement

• Ferrari must find new and creative ways to expand their brand without risking their

reputation.

• Brand expansion through entry into new & important auto markets (India, etc.)

• Enlarge customer base to a wider variety through product adaptations (space, comfort, user-friendly engines, etc.)

• Create technological innovations that address environmental concerns (fuel efficiency & emissions)

• Increase vehicle offerings within America

Alternative Solutions

Brand Expansion/New Markets

• Expansion into new and important auto markets will raise brand recognition

• Take advantage of booming auto markets in certain countries (India)

• Keep up with competition (Porsche has already begun this process)

Entry into New Markets

• Example : India

• Competitor presence

• Risk Rating: A4

• Ease of Doing Business : 122/181– Country in bad financial position– Niche Position of Ferrari

Hofstede’s Dimensions

• Power Distance – High level of inequality of power and wealth

Enlarge Customer Base With Product Expansion

• Begin developing larger luxury vehicles that attract a new type of consumer

• Add comfort, roominess, luggage space

• Maintain traditional Ferrari characteristics/styling

Technological Innovations

• Social standards require modern companies adapt to environmental needs

• Develop technologies focused on reducing fuel efficiency & emissions (hybrids?)

• Helps brand credibility & shows social responsibility

Increased Offerings

• Volume increases in U.S. offerings would help attack gray market

• Could spark American interest in Ferrari, reduce wait times, & change perceptions

• May “cheapen” the brand or lessen the prestige of Ferrari – (Grey Ferrari Case)

Analysis of Alternative Solutions

Costs20%

Sustainability30%

Positive Impact on Reputation

30%Risk20%

Total100%

Entry into new Auto Markets 2(.4) 4(.8) 4(1.2) 1(.2) 2.6

Enlargement of Customer Base 2(.6) 5(1.5) 4(1.2) 3(.6) 3.9Technologically

“Green” 4(.8) 2(.6) 3(.9) 4(.8) 3.1

Increase Volume of Ferraris for sale 2(.4) 3(.9) 1(.9) 3(.6) 2.8

Scale 1-5 5 being lowest risk, highest + impact on reputation, longest

sustainability, and lowest costs

Recommended Solution

Enlarge Customer Base With Product Expansion& Incorporate Hybrid Technologies

• Explore expansion into SUV & larger vehicle markets

• Extensive R&D to determine best fit

• Maintain stylish, luxury look while creating: - More space, durability, luggage room, etc.

• Explore Hybrid technologies to increase interest from environmentally savvy consumers

Implementation

• Sport Utility Vehicle– Targeting New Market Segment

• Weather

– Competing with Porsche and BMW

• Luxury Vehicle (Hybrid)– 5 Passenger– Compete with Mercedes and BMW– Opens completely new market

• Family• Weather

Implementation

• Multiple Variations– Cheaper than designing multiple vehicles• Platform• General Motors

– Allows for buyer selection/customization• Race Version• Sport Version• Luxury Version

Implementation Schedule

• Year 1 – Introduce Hybrid / SUV at auto shows

• Year 2 – Continue to promote Hybrid / SUVS

• Year 3 - Produce and Distribute new products to appeal to a diversified, yet very thin market.

Implementation Concerns

• Cost

• How sports car enthusiasts will react

• Damaging reputation

• Lack of interest

• Economy $

Communication Process

– Receiver then gives feedback to sender. – Ferrari must effectively communicate in order to continue to be

successful.

Chapter 11

What has Happened?

• May officially enter India Market in 2010

• Continuing worldwide expansion

• Introduced Hybrid HY-KERS at 2010 Geneva Auto Show

• According to multiple sources, A Ferrari SUV is on it’s way for 2010-2011

• market.

What has Happened?

Social Media

• Twitter - @InsideFerrari– Scuderia Ferrari: Racing Team

• Ferrari.com Forum

• Driver and Staff Blogs

• Facebook

• Ferrari Owner’s Clubs

Social Media Recommendations

• Start promotional giveaways online– Clothing– Accessories

• Advertise SUV Concept to the larger customer base via Twitter, FB, Forums.

• Continued expansion of Owner’s Clubs

Sources

• http://www.insideline.com/ferrari/ferrari-may-enter-india-officially-in-2010.html

• www.ferrari.com• http://www.ferraricalifornia.com/webapp/• http://www.ferrariclubofamerica.org/• http://www.autoblog.com/category/ferrari/• http://www.shell.com/home/Framework?siteId=fe

rrari-en• http://www.wikiswot.com/SWOT/4_User_Generat

ed/Ferrari.html• http://www.youtube.com/watch?v=cUkL8mze1W

M&feature=player_embedded• http://uk.eurosport.yahoo.com/formula-1/ferrari.h

tml

Any Questions?