Business

Saturday April 16, 2011

The Ferrari brandname has not only survived, but thrived without conventional advertising

By EUGENE MAHALINGAM
eugenicz@thestar.com.my


THE Ferrari marque is one of the most iconic and well-known automotive brands in the world.

But here's an interesting fact: The Italian sports car manufacturer does not spend a penny on advertising!

At least not via conventional advertising. Flip through the pages of any automotive magazine or newspapers and you won't find a commercial by Ferrari promoting its latest cars.

Says Scuderia Ferrari Marlboro commercial department head Philippe Tardivel: “It's been a philosophy since the beginning. Enzo Ferrari (Ferrari's founder) himself decided that Ferrari would not advertise.”

F1 presents Ferrari with a unique platform to market its brand. — AP

Tardivel, together with the Scuderia Ferrari Marlboro team, was in Malaysia recently for the 2011 Petronas Malaysian Grand Prix in Sepang.

Scuderia Ferrari Marlboro is the racing team division of the Ferrari automobile company. The team currently only races in Formula One (F1) but has competed in numerous classes of motorsport since its formation in the late 1920s.

So where does the all brand recognition come from? How does Ferrari publicise its latest cars to boost sales?

Tardivel explains: “When we launch our road cars, we usually organise conventions for our dealers. We also have events for our (selected) Ferrari community.

“And when we launch our cars, we have a press launch (which is followed up) by a test drive for the media,” he tells StarBizweek.

Tardivel adds that since the launch of the Ferrari California (at the 2008 Paris Motor Show), the Italian car company has been creating awareness of its latest products through its official website, www.ferrari.com.

He says the website is closely monitored by potential and existing Ferrari clients who are kept abreast of the any new developments regarding the Italian car manufacturer.

According to an analysis by SOS eMarketing, a group comprising creative marketing and technology professionals, Ferrari leaves marketing and communications to a worldwide viral network that comprises dealers, enthusiasts and loyal groups.

Word-of-mouth, social network marketing and social media marketing are the weapons of choice here.

No doubt, Ferrari's unique style of “marketing” seems to be working wonders for the Italian car company.

According to reports, total sales rose 5.4% to 6,573 units in 2010 from a year earlier, making it a new record for the company.

The result was mainly attributed to the increase in emerging markets, especially in Asia. The recovery in the US also contributed.

Total sales amounted to 1.9 billion euros, 7.9% higher than a year earlier. The company's profit rose 26.9% to 302.7 million euros in the same period.

Asia, said Ferrari, saw “extraordinary growth”. In China, nearly 300 Ferrari cars were sold, which was an increase of 43.6%.

The company still considers the US and Canada the main markets, which collectively accounted for 26% of sales in 2010.

Philippe Tardivel

Formula One

The Scuderia Ferrari team is the only team to have competed in every season of the F1 since the inception of the sport in 1950. Considered by many as the pinnacle of motorsports, F1 also serves as a unique platform for Ferrari to market its brand.

“Our participation in F1 has helped. It (F1) is one of the most prominent ways of communicating your brand,” Tardivel says.

“Ferrari is the only team to have participated in F1 since the beginning, making it the most renowned car brand in the world,” he says, adding that F1 also allows the Italy-based car manufacturer to showcase its latest technology.

Tardivel says technology that's developed for the F1 team is also developed and directly transferred to its road cars, such as its Grand Turismo (or GT) vehicles.

“The positioning of Ferrari in the high technology segment (such as F1) is important (to showcase the brand) and that is why we continue to maintain our participation (in the sport).”

However, the best way Ferrari communicates its brand (in F1) is through its various sponsors, whose names are strategically planted on the Scuderia Ferrari team's racing cars for the world to see.

Some of the team's sponsors include Philip Morris International (the producer of the Marlboro brand), global oil and gas company Shell, computer systems and hardware company, Acer, anti-virus software developer Kaspersky and Santander, one of the biggest banks in the world by market capitalisation.

“When Marlboro, for instance, organises one of its communications activities, it creates a snowball effect for Ferrari (which rides on the activities of its sponsors),” says Tardivel.

He adds that many of its sponsors are global brands, and this, in effect, helps to catapult Ferrari's brand awareness in the respective countries.

“With our portfolio of brands, Ferrari is present all over the world,” says Tardivel.

Given that Ferrari is a household name, does that mean that the car company will only select equally prominent names as its sponsors? Tardivel explains: “We look at brand value. We see if the (brand) mission of our potential partners matches the (brand) values of our company.

“Our sponsors are usually established global brands or are looking to become a global brand and wish to achieve that by leveraging off the Ferrari brand.”

Tardivel cites the example of Taiwan-based Acer, which, in launching a product in Europe, “uses” Ferrari, which is already a household name (in Europe), as a platform to fast track its presence in a new continent.

“It is a good example of a Taiwanese company wanting to penetrate the Western market and one of the ways to do it is to leverage off the Ferrari brand.”

Alternatively, the opposite also holds true for Ferrari through its global sponsors, Ferrari is able to fast track its position into new markets.

F1, since its inception in the fifties, had been growing from strength to strength. According to reports, the sport's worldwide television audience reached 527 million viewers in the 2010 season, with over 16,000 hours of coverage broadcast to 187 countries.

The event has also been growing geographically, with this year's season hitting an all-time high of 20 races and the number is steadily growing. Set to join the fray will be the US (Texas) in 2012 and Russia in 2014.

Tardivel reckons more companies would be eager to hop onto the F1 sponsorship bandwagon as the sport increases its reach throughout the globe.

“The growth in the geographical locations in F1 is a help,” he says, adding that Ferrari can already promote its brand years ahead of the inaugural Russia Grand Prix in 2014 through its Russian sponsor, Kaspersky.

On another note, Tardivel says that in recent years, there has been a shift in expectations from its sponsors in tying up with an F1 team like Scuderia Ferrari.

“Until three of four years ago, everything was geared towards having a prominent logo on the (F1) car so that it could be seen clearly. That was the priority then.

“Today, it's still as important but our partners (sponsors) are looking at Ferrari (and F1) to provide direct returns to their businesses.”

He notes that having a long established brand name is imperative in attracting sponsors and in being able to continue racing in F1.

Other renowned car companies, such as Toyota and Honda, were in F1 but eventually pulled out due to financial constraints. So how has Ferrari, a company that prides itself in not openly advertising its brand, sustained for so long?

“It's because racing is in the DNA of Ferrari. Enzo Ferrari created the (Ferrari) cars for racing,” says Tardivel. “Racing is the soul of Ferrari,” he adds.

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