Ferrari Marketing Analysis

Ferrari commercialiseing AnalysisJump to Ferraris grocery storeing Strategies crossway Life cycle per secondment of Ferrari SWOT Analysis of Ferrari Porters 5 ForcesIntroductionFerrari historyFerrari is a producer of Italian sports railroad railway cars, and is establish in Maranello, Italy. It was founded by Enzo Ferrari in 1929, and was origin on the wholey named Scuderia Ferrari.When Enzo was decennary year old, his father had interpreted him and his br some other to watch motor hotfoot circuit. Enzo was completely motivated by this action. In 1918 Enzo works as a test number integrity wood for a small ships caller-out in Turin. In 1919 Enzo works for C.M.N in Milan, Initially as a test subscriber and later on as a racing driver. In 1920 Enzo finishes second in the Targo Florio. This lead the gateway for a 20 year quislingism with marquee that saw Ferrari do test driving to racing, and finally prescribed head of racing division for Alfa Corse. Ferrari opens Aut o Avio Costruzioni on Viale Trento Trieste in Modena. On September 13th, at the same headquarters of the old Scuderia Ferrari, Fiat curriculum Auto Avio Costruzioni creates 2 versions of Ferrari 815 in the year 1940. The factory was bombed in the earth war on November 4th 1944, exclusively they managed to rebuilt it quickly.Ferrari had an ambitious plan to image a V12 engine, and thus started designing the first Ferrari in 1945. Scuderia Ferrari sponsored drivers and manufactured race cars, but in 1946, it moved into the cropion of street legal vehicles, as Ferrari. In 1956 Ferrari turns into a Limited Liability Comp either. The professional industry and artisanship re oerlapion institute was built in Maranello, which provides the comp whatsoever with special technicians even work on today. In 1965 Ferrari signs an agreement with Fiat Group giving 50% of its suck do in the company to Fiat concourse in put together to generate into a powerful company.Through the histor ic period, Ferrari has been celebrated for its unceasing contributions in the survey of racing, specifically in Formula One, where it has been considerably supremacyful. As on the piece of this assignment, Fiat owns 56% of Ferrari, Mediobanca owns 15%, Commerzbank AG owns 10%, Lehman Brothers Owns 7%, and Enzos password Piero Ferrari owns 10%.Vision and Mission of FerrariFerraris vision and mission has remained the same for years To build unique sports cars that argon suppose to bring out the excellence of Italian cars on the roads and on the racing circuits.Market orientationMarket orientation defines an organization that understands guest need and their importance, centeringing on providing results that be of last value to their customers, and selling the ingatherings and function crosswise all de startments mapping of dandys and operate a coordinated holistic program in selling concept, taking into consideration Customer is King.Market orientation mainly foc uses onUnderstanding customers needsCompetitors abilities and continuously collecting in progress toation about them. overlap of information across variant departments.Creating customer value using preceding(prenominal) mentioned information.The chase tcapable identifies and describes the market brandingorientationsOrientationProfit driven westward EuropeanTimeframeCharacteristics overlapionMethods of mathematical point of intersectionionUntil the 1950sThe improving harvestingion and diffusion, to hit a decrement in cost and improved aptitude.ProductProduct qualityUntil the mid-sixtiesProducts quality is paramount mainFocus is on point of intersection not customers needsSellingMethods of selling1950s and 1960sEffective selling and forward motion be the major drivers to success.Marketing call for and gather ups of customers1970s to present dayproviding full(a)s and go that are certain to get together the needs and wants of customers or shutting users.Further a pproaches include Relationship marketing and Societal marketingRelationship marketingBuilding and keeping impregnable customer relation1980s to present dayMain focus is set upd on the whole consanguinity between the suppliers and customers.The grassroots locate is to give good or best possible attention, customer go and build customer loyalty.Societal marketingBenefit to society nineties to present dayIt has similar singularitys as marketing orientation but with the added condition that there result be limitations on any insidious activities to society, in fruit, output signal, or selling methods and procedures.Customers needs keeps changing over clipping to time. Ferrari has persuaded their customers to buy their return be guinea pig of its style, unyieldingness, luxuriousness, and elegance. Then, as soon as a company brings out a car that is a better match for Ferrari, They efficacy drop Ferrari in favour for that car. But interestingly Ferrari has al shipway m anaged to civilize cars that reflects their customers needs and they whitethorn not switch so readily. And Ferrari has managed to do this for the quondam(prenominal) several decades, and till today. Ferrari has always focussed on their competitors and their customers by keep opens improvement in performance of their merchandises and avails.Ferraris success cease be scaled simply with respect to intersection or sign value. It is not make based on sales and revenues. Neither is it finished based in damage of market capitalization, because no initial public stock oblation was done by Ferrari. It is said that the Ferrari brand is worth more than Google brand, the Apple brand, BMW, Mercedes, or any other brand in the world. Yet, Ferrari never elapses any coin in advertizement.Marketing ConceptsFerrari is a Product oriented companyFerrari produces exquisite, easy designed, quality products which are great value for money. Customers are sure to want our products. Thats the kind of approach Ferrari demands out of it customers.Product orientation occurs where the focus is presumption to the product rather than to the needs and wants of a customer. In a company kindred Ferrari they need to concentrate on their products, because over the years Ferrari managed to take its customers by operator of its superintendentiority in quality and performance by delivering renovate, style, luxury in their products.Relationship marketing of FerrariFerrari has always managed to Build and keep good relationship with their customers, by providing value for the customers money. Ferraris focus is on the whole relationship between suppliers and customers. Ferraris aim is to provide the best possible attention, Customer portions to their customers by providing quality and increased performance in their products and proceedss, and thence build customer loyalty.Societal marketing of FerrariThis concept is based on kindly responsibility or societys long term interest s. It explains an organic laws task is not wholly to provide customers with quality products, but as well as to do that in a way that preserves, protects, and improves the societys well-being. In the 21st century, hoi polloi are more sensible of the sensitive issues than the earlier generation, such as health issues, global warming, shortage of resources etc. Ferrari has adopted this marketing philosophy to get the attention of the customers, The organisation understood the need for bringing out a refreshful car that is eco friendly, thus they introduced the peeled electric hybrid Ferrari 599, which has a maximum speed of 200mph. The main aim of this car is to cut fuel consumption and contaminant with the motive of breathtaking acceleration and performance.Marketing Strategy of FerrariThe success slow the marketing scheme of Ferrari is done by the review of Ferrari and its development by the ages. Enzo Ferrari never went to college or high school, he was just a mechani c at Alfa Romeo, not an engineer either, but his knockout passion for racing, speed and engine, make him turn over his own ideas on engines and cars. Passion has always been the drive of Ferrari. And its the only marketing ray of Ferrari till today.Competitive Advantage invasion of the Organisations Marketing MixMarketing strut base be outlined as the use and specification of the 4ps ( outrank, promotion, equipment casualty and product) to describe the strategical role of an organisation in a market place. Other 4ps could be include as people, public relations, physical evidence and packaging (Kotler, Philip, lane and Keller 2005) Marketing management Prentice hallThe intermingle represents the variety of integrated decisions which is taken by a company in order to assure the success of the marketing department. Usually, decisions are made in cardinal areas represented by the 4Ps employ in marketing mix product, legal injury, place and promotion. The 4Ps involve issues worry brand name, product type, pricing, advertising, retailing and distribution (Business and Management Dictionary 2007).These fundamental principle have to be managed effectively by the marketers to top customers needs heighten than competition this means that decisions concerning the marketing mix forms a major saying of marketing concept implementation (Jobber 2007), the combination of these elements also helps in influencing the demand and supply of the products and service presented to customers by the company.Product This is regarded as a precise vital element of the marketing mix. It is whatever thing that can be offered to a market which can be noticed, acquired, use or consumed that might gratify a want or need .Physical objects, services, ideas, organizations, persons places may be part. (Kotler et.al. 2005). It also involves the decision of what goods or services that should be offered to a allurement of customers (Jobber 2007). The decision for product involves branding, quality, packaging, guarantees.Price This is the only element of the marketing mix that generates revenue. Price is the sum of all values that consumers exchange for the benefits of having or using the product or service. (Kotler et.al. 2005).Promotion It involves all the forms of communications used by the marketer at the market place about benefits, added features etc of a product. These are the major voices of the promotional mix Advertising, Personal selling, behave marketing, meshwork promotion, gross sales Promotion and publicity. aim It is the mechanism by means of which goods or services are moved from the manufacturer/service provider to the end user/consumers. The availableness of a companys product or service at the right quantities in the right (convenient) locations at the times when the customers want to buy them that is the distribution bring to be used and their management (Jobber 2007) fit in to Ivy (2008) tangible products uses the handed- stilt 4P s simulate while the intangible asset product or services sector on the other hand uses a 7P approach in order to satisfy the needs of the service provided to customers product, equipment casualty, place, promotion, people, physical facilities and processes.ProductThe product is one of the main building blocks of the marketing mix. It is cognise as the merchandise which provides the consumer with the grassroots available requirements. Jobber describes a product as anything that is capable of square(a) customer needs. A product has to be appealing to its customers therefore, producers need to construe that their product would meet consumer satisfaction.This section bequeath look at the product dodge of Ferrari Company and analyse a sector of their products using the product life cycle. A Ferrari principal machine product group includes, 360 spider, 456M GT, 550 Maranello, 550 Barchetta Pininfanna, super -america salon, F430 spider.The core element in the marketing mix is t he companys product because this provides the functional requirements sought by customers(Jobber,2007 p326).A well thought out product give provide the company with a good external image as well as customer loyalty which are essential for a companys agonistical advantage.(BrassingtonPetitt, 2006288) only defined a product as a physical good idea, person or place that is capable of offering tangible attributes that individuals or organisations regard as so necessary, worthwhile or satisfying that they are prepared to exchange money, patronage or round other whole of value in order to acquire it. This preceding(prenominal) definition gives the idea that a product can be classified ad into tangible or intangible products. The tangible products are the physical goods whilst the intangible are the services that offered for example the Porsche car by Ferrari is the tangible product while the FI car race competition, after sales services are all intangible product to Ferrari.3. DIAGRA MProduct is classified into the following three categories namely the core product, the genuine product and the augmented product.The product when benefited, is made valuable by the core product. For example, the core products in the Ferrari railroad car is the speed attribute that comes with every Ferrari brand of simple machine. This is one of the reasons why people that love fast cars will always prefer a Ferrari brand to any other brand of vehicle. Also Ferrari shows off this benefit to the potential customers by organizing the car racing competition and also in their various advertising mediums.The tangible physical product is the actual product. This includes the physical automobile itself that comes in every distinguishable shapes and sizes. The physical attribute or component of the automobile itself is what is called the actual products. For example the Ferrari automobile F430 spider is an actual product for Ferrari.The non-physical part of the product is the augmented product. For example, warranty and customer service support. This shows the other services or component that comes with the buying of the automobile itself. The replacement part is an example of the augmented products.4.1.2. Ansoff MatrixPlanning for GrowthThe Ansoff matrix is a gibe that helps businesses to strategize on their product and make necessary decisions for their market growth. With the Ansoff matrix, Ferrari would be able to know how the F430 spider automobile is doing in the market place and decide whether or not there is an advantage of entering the market place.The Ansoff matrix is a tool used to generate direction for strategic development for companies. It gives a sense of scope for the companies with regards to marketing of its products, whether to diversify, or to further develop more of its markets.Market perceptivity According to Johnson, Scholes Whitington (2008258) this is the process by which the organisation takes increased share of its exist markets wit h its existing product range. This will in turn lead to higher bargaining power of the supplier as Ferrari will have a larger market share. Johnson ScholesWhitington (2008258) also explain that in terms of the five forces increasing market penetration is belike to exacerbate industry rivalry as other competitors in the market defend their share. For example Jaguar cannot let Ferrari continue to have growth in market share while it sits behind. Ferrari has a % in speed car market while Jaguar has a % in market share in luxury car market.Product development is where organisations deliver modified or young products to existing markets. here product development implies greater degrees of innovation. Johnson, ScholesWhitington (2008261).With the car manufacturing industry there is a continuous need to develop products so as to make sure customers needs are effectively met. For example Ferrari has even committed itself to sponsoring the cheek one racing competition yearly to showcase new technology and improvement in diverse innovation.Market development involves offering existing products to new markets. Johnson ScholesWhitington (2008261). Ferrari moved over to other international markets like Canada, Mexico and USA. Market development might take three forms, new segments, new users and new geographical location.Johnson, ScholesWhitington describe diversification as a strategy that purely takes the organisation away from twain its existing markets and its existing products, it tends to imply unrelated or conglomerate diversification. Johnson further gives the reason for diversification saying that efficiency gains can be made by applying the organisations existing resources or capabilities to new market and product or service. This in turn will increase market power leading high entry barriers for new entrants.4.1.3. The Product Life CycleEvery product must have a limited life span. The product life cycle tool yields a company to evaluate its product ba sed on four stages. These stages include the introduction, the growth, the maturity and then the decline. All products must go through these four basic stages therefore to maintain a good competitive advantage all companies ought to have the product life cycle tool as a basis of analyzing a product as it changes over time and also to be able to know what stage their product falls under a particular time.PriceAll products and services have a price, just as they have a value. According to Armstrong and Kotler, Price is simply the amount of money charged for a product or service. In a broader context, price is said to be the sum of all the values that consumers exchange for the benefits of having or using the product or service. Price is also one of the most flexible elements of the marketing mix in the sense that pricing decisions can be utilise relatively quickly, a tool used by companies to happen upon their marketing objectives as well as the only element in the marketing mix tha t produces revenue. (Armstrong and Kotler, 2006)Price is one of the most significant essentials of the marketing mix because it is a unit source of what the company receives for the product or service that is being sold. Furthermore, Price is the only aspect of marketing mix that creates returns or produces profits. Price can also be defined as the recognize value derived by consumers of a product or service from the secure of it or the sum of the value that consumers exchange for the benefits of having or using the product or service (Kotler and Keller 2006). Furthermore, price is a crucial product- pointing fact or that defines the products market, competition and design. The intended price determines what product features can be offered and what production cost can be incurred.There are opposite strategies that can be used by companies to price various products based on different reasons. Setting prices too high could amount to an abrupt reduction in sales, while setting pric es too low could also cause a reduction in profits. The most earmark strategy depends on how the product is positioned. A product could be positioned as being of support value with a high price adding to the way it is perceived, individual products could be positioned high or low with consistent pricing across a product range, different strategies could also be appropriate at different stages in the life cycle of a product and charging a fixed price across a range of products could also be an a appropriate strategy. Charging fixed prices makes it easier for a company to predict its income. (www.is4profit.com) set of a product can be determined in different ways, the company must however have decided on its own strategy for the product and this is however a direct function of its purport market and market positioning that is past decisions on its market position. The diagram downstairs illustrates the pricing strategies matrix.Price Skimming This strategy is where a high price is charged because of substantial competitive advantage, the price is firstly made high, which offers an excellent initial cash flow to make up for high development expenses. If its a new product, with a competitive advantage, then consumers would definitely manufacture a premium to obtain the product offering excellent quality.(Adcock, Dennis 2001267 ) .According to Kotler (1996), the shaving price strategy is a high price which provides a strong margin but risks a depressed sales level. The Ferrari price skimming strategy is because of its core benefit and to have a break for itself in the market place.Premium set A premium strategy uses a high cost, but offers superior product/service in return. (Adcock, Dennis 2001264)This is used when a significant competitive advantage is present and high price is set because of the exclusivity of the product or service. The exclusivity of the fastest car model by Ferrari contributes to its premium pricing strategy.Economy Pricing This is al so known as no-frills, it is a low price approach where costs of production and promotion costs are kept to the lowest, that is the product or service would be set at its cheapest price. Economy pricing is a study strategy for low costs. However, prior to the product launch, it is vital to decide the position/market share of such product. That position of the product is how it is distinguished in the market. A product that is solely dependent on price is likely to be helpless and prone to that compete purely on price is helpless and prone to attack from more established products. (Adcock, et.al. Dennis 20012006). According to our research, Ferrari automobile does not use this pricing strategy.Penetration Pricing This is when the price for a product or service is firstly set low in other to have a price advantage to gain a large market share for penetration of the market. Once a recently access to the market share is attained, the prices would raise. According to our research, Ferr ari automobile does not use this pricing strategy.Versioning/Price discrimination This strategy charges customers different prices for the same product/service .The company (sellers) segments its customers based on their different attributes and charges each group a different price. This contributes to the various models of automobile designed by Ferrari in order to satisfy the quest of every vrsion of the customer need. (www.AINI.com 2008).Bundle Pricing This is where the seller combines several of its products and offers the bundle at a reduced price(Kotler.et.al 2006)geographic Pricing This strategy is applicable where diverse prices are charged accord to locations either different part of the country or different parts of the world. It involves the modification of the main price list based on the geographical location of the buyer. It usually takes into consideration the institutionalizeation costs to different locations.4.2.1 Recommendations for the Pricing MixBecause of the recent global recession, consumers are not willing to spend on luxury goods to be saturated as many consumers perceive the product as a premium product Ferrari can therefore produce the different model of automobile that can suit different set of people and also at various ranges of prices for its to compete like other competitor like Toyota, Honda, Ford etc at the marketplace.PlacePlace can also be referred to as the distribution channel which is used by producer or service provider to reach the indented target market. There is need for producer to make its products available in suitable quantities, in convenient locations and at times when customers want to buy them. It is central that producer need to consider not only the needs of their final customers but also the requirement of channel intermediaries, that is those organizations or agents that facilitate the distribution of product to customers. Establishing an appropriate channel of distribution is critical for marketing success. (Jobber 2007679).To achieve a fully effective marketing mix the element of place is to be studied, this element can be referred to as distribution. Distribution bring are the links that connect marketing organizations together and are used to transfer products from distributor to end consumer or final markets.DIAGRAM 6DISTRIBUTION CHANNELS FOR CONSUMER PRODUCTS(Jobber, 2007682)The different types of distribution channels areDirect channels which link the producer directly to the consumer,Indirect channels which motley in length depending on the number of intermediaries, andHybrid channels.Direct Channels-This form of links does not always happen in Ferrari sales of cars but when the car is to be built customised for the customer in question. This is a gives a direct relationship between Ferrari and the customer.IntermediariesThese can vary from sales representative, agents, merchants, wholesalers, retailers, dealers, distributors and franchisee. Their basic roles involve reaching customers at a lower cost per unit than the supplier can achieve directly. Other responsibilities of intermediaries could include stock livinging costs, transport and delivery to final customers, breaking bulk and consolidation of orders, and providing local services such as display or after-sales service. Producers must meet intermediarys needs as well as the final customers needs, in some markets intermediaries may lead the market and promotional effort. Producers put an effort to keep the end customers aware of their intermediarys locations.Disintermediation The channels efficiency is improved and the cost is cut down by eliminating some layers of the distribution channel.Among the decisions then to be taken is the all-important(prenominal) one of how products will reach customers. Unless the channels of distribution are appropriate for the type of product and are efficiently operated., even intrinsically good products can end up as failures . . . it is worth spending a considerable amount of time and effort in evaluating alternative ways of ensuring that the channel eventually selected will make its full contribution to the marketing mix. (Chisnall 1995)Ferrari has been able to improve accessibility to their customer by using intermediaries to retail their products all over the world. This shortens the location and time gap between the actual company and its end users. Ferrari also provides some products that provide specialist services.Intensive, discriminating and exclusive distribution channelsDigital technologies are changing the face of distribution. For example, the Internet has changed the distribution of music and video (downloads). And also Mobile networks endure the distribution of such products as music, video and ringtones. In business-to-business markets customers can place orders, receive quotes and track deliveries over the Internet (Jobber 2007).Exclusive availability, a consumer characteristic that highlights the interest of t he consumer to obtain the product individually with a sense of singularity is seen with the ability to customize different cars parts to the taste of the customer.According to Adcock (2001) any purchase decision made by a customer can be helped by making the products available where potential buyers can ascend them (Adcock et al. 2001).Products may be offered directly to the final customer or through a chain of distributor(s), this is also known as the channel choice.The Internet DynastyThe elements limitations have changed with the introduction of the internet market place, the ability to reach customers on a global scale are what multinational firms aim for, place all their resources and capabilities to ensure that consumers all over the world are able to get their hands on their products. Though the internet has many nix attributes in the minds of many consumers, it still accounts for a large share of Ferrari product enquiries and sales magnitude. Customers are able to receiv e the same quality of service and even the additional advantages from the comfort of their home.PromotionPromotion could be defined as a way of communicating or passing across of information about a particular product to the public. The major coating of promotion is to notify the public about the product, the benefit of the product and the use of the product (Jobber 2007).Promotion could be classified into 2 categoriesTechnical promotion It involves the use of technical presentation of data on the product or service to attract and persuade the potential customer of its merit by using magazines, researched papers, trade conferences, exhibitions, online adverts e.t.cConsumer promotion It involves devices that promote the product with developing any fundamental relationship but may be effective where customer loyalty is low or especially when a new product is being introduced (Richard lynch 2006 174)The main task and challenges of an organisation is to combine both technical and consu mer promotions to attract and satisfy customer needs and want respectively (Keller and Kotler 2006 383).The various modes of promotion include the followingAdvertising Ferrari will hold a successful position on both magazine and telly advertisements and will focus onThe target market (teenagers, young adults, car racers, young and rich customers etc)The frequency of the target market exposed to the advertisementTime to attain the target marketOn achieving these, it adds value to their product. This is done by alteration of the consumer perceptions.Below-the-line Promotions Car exhibition shows are availed free to make the customers purchase the product. This is the direct method used by Ferrari. This will allow the individual and prospective customer to have a firsthand spirit and knowledge about the products.Television-this is a means of communicating to the public through the use of cable television, that is different television stations. This particular medium composes the legal age of the media mix.Internet-the high rate of the internet user around the globe has made Ferrari to use the internet as a means of their advertising. Ferrari has launched a website, actual by AKQA, featuring a practical(prenominal) test drive of its new atomic number 20 model, which will be launched publicly on 2 October 2009 at the genus Paris Motor Show. Users can watch videos from last weeks industry launch in Maranello, as well as embark on a virtual test drive using footage from Sony PlayStation game Gran Turismo. Hear, See and smell out areas allow visitors to experience the look and sound of the car (source www.ferarri.it)Magazines-this is another means of advertising been used by Ferrari, this medium is been used to target a particular class of the public b