Ferrari is among the world’s leading luxury brands focused on the design, engineering, production, and sale of the world’s most recognizable luxury performance sports cars. The brand symbolizes exclusivity, innovation, state-of-the-art sporting performance, and Italian design, craftsmanship, and engineering heritage. Ferrari’s name and history and the image enjoyed by its cars are closely associated with the Formula 1 racing team, Scuderia Ferrari, the most successful team in Formula 1 history. From the inaugural year of Formula 1 in 1950 through the present, Scuderia Ferrari has won 238 Grand Prix races, 16 Constructor World titles, and 15 Drivers’ World titles.
The history of excellence, technological innovation, and defining style of Ferrari transcends the automotive industry and is the foundation of the Ferrari brand and image. It designs, engineers, and produces the cars in Maranello, Italy, and sells them in over 60 markets worldwide through a network of 166 authorized dealers operating 187 points of sale as of the end of 2019.
Ferrari’s cars are the epitome of performance, luxury, and styling. The product offering comprises four main pillars: the sports range, the GT range, special series, and Icona, a line of modern cars inspired by its iconic cars of the past.
The current product range (including cars presented in 2019, for which shipments commenced in 2020) is comprised of five sports cars (SF90 Stradale, F8 Tributo, F8 Spider, 812 Superfast, and 812 GTS), four GT cars (Ferrari Roma, Ferrari Portofino, GTC4Lusso and GTC4Lusso T) and two special series cars (488 Pista and 488 Pista Spider), as well as two versions of its first Icona car, the Ferrari Monza SP1 and the Ferrari Monza SP2.
Ferrari also produces limited edition hypercars, fuori serie, and one-off cars. The most recent hypercar, the LaFerrari Aperta, was launched in 2016 to celebrate the company’s 70th Anniversary and finished its limited series run in 2018. In 2019, it unveiled the SF90 Stradale (the first series production Plug-in Hybrid Electric Vehicle (PHEV)), the F8 Tributo, the F8 Spider, the 812 GTS, and the Ferrari Roma, with shipments of the F8 Tributo commencing in the fourth quarter of 2019 and shipments of the other cars commenced in 2020.
Whilst broadening the product portfolio to target a larger customer base, the company continues to pursue a low-volume production strategy in order to maintain a reputation for exclusivity and scarcity among purchasers of the cars and it carefully manages its production volumes and delivery waiting lists to promote this reputation. Ferrari divides its regional markets into EMEA, Americas, Mainland China, Hong Kong and Taiwan, and the Rest of APAC, representing respectively 48.3 percent, 28.6 percent, 8.3 percent, and 14.8 percent of units shipped in 2019.
It focuses its marketing and promotion efforts on the investments it makes in its racing activities and in particular, Scuderia Ferrari’s participation in the Formula 1 World Championship, which is one of the most-watched annual sports series in the world, with approximately 405.5 million unique television viewers in 2019 in the top 20 markets.
Although its most recent Formula 1 world title was in 2008, Ferrari continuously enhances its focus on Formula 1 activities with the goal of improving racing results and restoring its historical position as the premier racing team in Formula 1.
The Ferrari Line-up
Our product offering comprises four main strategic pillars:
- the sports range
- the GT range
- special series
- Icona.
The current product range includes five sports cars, four GT cars, and two special series cars, as well as the Icona cars, introduced in September 2018 with the Ferrari Monza SP1 and SP2.
The company targets end clients seeking high-performance cars with distinctive design and state of the art technology. The broad model range is designed to fulfill the strategy of “Different Ferrari for different Ferraristi, different Ferrari for different moments”, which means being able to offer a highly differentiated product line-up that can meet the varying needs of new customer segments (in terms of sportiness, comfort, on-board space, design) and that can allow its existing clients to use a Ferrari in every moment of their lives.
The diversified product offering includes different architectures (such as front-engine and mid-rear engine), engine sizes (V8 and V12), technologies (atmospheric, turbo-charged, hybrid, electric), body styles (such as coupes and spiders), and seats (2 seaters, 2+2 seaters, and 4 seaters).
Ferrari actively engaged in after-sales activities driven, among other things, by the objective of preserving and extending the market value of the cars it sells. Ferrari cars’ performance in terms of value preservation after a period of ownership significantly exceeds that of any other brand in the luxury car segment. High residual value is important to the primary market because clients when purchasing Ferrari cars, take into account the expected resale value of the car in assessing the overall cost of ownership. Furthermore, a higher residual value potentially lowers the cost for the owner to switch to a new model thereby supporting client loyalty and promoting repeat purchases.
Why is Ferrari so successful?
Personalization
All Ferrari models feature highly customizable interior and exterior options, which are included in its personalization catalog. Some of these options include performance contents like carbon fibre parts, carbon fibre wheels, titanium exhaust systems, alternative brake caliper colors, parking cameras, MagneRide dual-mode suspension, panoramic roof option, various door panel configurations, steerin wheel inserts, and state-of-the-art custom high fidelity sound systems. Commencing with the SF90 Stradale, it has also introduced the “Assetto Fiorano” configuration, which provides numerous exclusive features for those who seek radical performance and design.
With its “Special Equipment” program, the company offers clients additional customization choices for their cars. Ferrari specialists are able to guide clients in creating a very customized car through a wide catalog of special items such as different types of rare leathers, custom stitching, special paints, special carbon fiber, and personalized luggage sets designed to match the car’s interior.
The “Tailor Made” program provides an additional level of personalization in accordance with the expectations of the clients. A dedicated Ferrari designer assists clients in selecting and applying virtually any specific design element chosen by the client. The clients benefit from a large selection of finishes and accessories in an array of different materials (ranging from cashmere to denim), treatments, and hues. To assist the clients’ choice, Ferrari also offers three collections inspired by Ferrari’s own tradition: Scuderia (taking its lead from our sporting history), Classica (bringing a modern twist to the styling cues of our signature GT models), and Inedita (showcasing more experimental and innovation-led personalization).
The “One-off” program is the maximum level of personalization and exclusivity.
Formula 1 Activities
Participation in the Formula 1 World Championship with Scuderia Ferrari is the core element of the company’s marketing effort and an important source of technological innovation for the engineering, development, and production of its sports, GT, and special series cars. The Formula 1 World Championship is the pinnacle of motorsports with a total global TV cumulative audience of 1.922 billion in 2019, the highest number since 2012, which represents an increase of 9% compared to 2018. In terms of unique television viewers, during 2019 the sport remained stable in the top 20 markets at approximately 405.5 million.
In 2019 the number of users across Formula 1’s social media platforms again grew significantly, with the total number of followers on Facebook, Twitter, Instagram, and YouTube reaching 24.9m (+32.9 percent compared to 2018). Again in 2019, Formula 1’s social media channels were the fastest-growing of all major sports leagues in the world.
Scuderia Ferrari has been racing in the Formula 1 World Championship since the series was launched in 1950, and won its first Grand Prix in 1951. It is the only team that has competed in each season since launch and the oldest and most successful in the history of Formula 1, with 238 Grand Prix wins. Throughout Ferrari’s racing history, it has won 15 Drivers’ Championships and 16 Constructors’ Championships, more than any other team. Many of the best-known drivers in the sport’s history have raced in Scuderia Ferrari’s distinctive red cars including Alberto Ascari, Juan-Manuel Fangio, Mike Hawthorn, Phil Hill, John Surtees, Niki Lauda, Jody Scheckter, Gilles Villeneuve, Michael Schumacher, and Kimi Raikkonen. The drivers’ line-up in 2019 comprised four-time World Champion Sebastian Vettel, who joined Ferrari at the beginning of 2015, and Charles Leclerc, the first graduate of the Ferrari Driver Academy training scheme to race for our Formula 1 race team.
Participation in the Formula 1 World Championship is regulated by bilateral Team Agreements entered
into between Formula 1 World Championship Limited (FOWC), Formula 1’s commercial rights holder, and each competing Formula 1 racing team (including Scuderia Ferrari) and by regulations issued by the Federation Internationale de l’Automobile (FIA), the motorsport’s governing body.
Also Read: MG Motors – A Brand Creating Unparalleled Motoring Experience Since 1924
Branding Strategies and Activities
Ferrari is one of the world’s leading luxury brands. It engages in brand development and protection activities through licensing contracts with selected partners, retail activities through a chain of franchised or directly managed stores, licensed theme parks, and the development of a line of apparel and accessories sold exclusively in its monobrand stores and on the website www.store.ferrari.com.
Ferrari owns and manages two museums, one in Maranello and one in Modena, which attracted more than 600,000 visitors in 2019.
Licensing, Entertainment, and Theme Parks: Ferrari enters into license agreements with a number of licensees for the design, development, and production of Ferrari branded products. It carefully selects its licensees through a rigorous process and contractually seeks to ensure that the brand and intellectual property are protected and that the products which will eventually bear the brand are of adequate quality, appearance, and market positioning.
Ferrari branded products include consumer electronics, sportswear, toys, video games, watches, and other accessories, as well as theme parks. In 2019, it commenced its participation in eSports (i.e., electronic sports) with the launch of an entertainment platform and the selection of a team that took part in two of the main world championships: F1 Pro Series 2019 and SRO E-Sport GT Series, which Ferrari’s team won.
A significant portion of the company’s revenues from licensing activities consists of royalties it receives in connection with Ferrari World, the theme park in Abu Dhabi. Ferrari World opened on Yas Island, on the North East side of Abu Dhabi’s mainland, in 2010. Ferrari World’s iconic sleek red roof is directly inspired by the classic double curve side profile of the Ferrari GT body, spanning 200,000 square meters and carrying the largest Ferrari logo ever created. Ferrari World Abu Dhabi offers an all-around Ferrari experience to children and adults alike.
The second theme park, Ferrari Land Portaventura, opened in April 2017 near Barcelona, and includes Red Force, the tallest and fastest roller-coaster in Europe. In the long-term, it aims to open one theme park in each of the main geographic areas where we operate, including North America and Asia.
Retail
Through the network of stores (franchised or directly managed), it offers a wide range of Scuderia Ferrari branded products, including a line of apparel and accessories exclusively sold in its stores and on the website. All products sold in the stores and on the website are either directly sourced from Ferrari’s selected network of suppliers or manufactured by the licensees.
As of December 31, 2019, there were a total of 44 retail Ferrari stores, including those in Maranello, Milan, Rome, Macau, Miami, Los Angeles, Johannesburg, Dubai, and Abu Dhabi, of which 24 are franchised stores (including 15 Ferrari Store Junior) and 20 stores owned and operated by Ferrari.
It requires all franchisees to operate the mono-brand stores according to its standards. Stores are designed, decorated, furnished, and stocked according to the directions and specifications.
Ferrari uses multiple criteria to select the franchisees, including know-how, financial condition, sales network, and market access. Generally, it requires that applicants meet certain minimum working capital requirements and have the requisite business facilities and resources. It typically enters into a standard franchising agreement with the franchisees. Pursuant to this agreement, the franchisee is authorized to sell the brand’s products at a suggested retail price. In exchange, Ferrari provides them with its products, the benefit of a marketing platform, and association with corporate identity.
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