Question

Ferrari Targets Successful Consumers

Kevin Crowder walked onto the famed Monza, Italy, race track, climbed into a Ferrari F2000 racer, and
circled the course with a Grand Prix champion. Mr. Crowder, a Texas businessman who earned millions
when he sold a software company he cofounded, isn’t himself a professional driver. He’s a customer of
one of Ferrari’s marketing programs: the F-1 Clienti program, under which Ferrari resurrects old race
cars that would otherwise be headed for the scrap heap. Instead, it sells them for $1 million or more,
along with the chance to drive them with a professional pit crew’s help.

Ferrari has long built its business around exclusivity. It limits production to around 4,500 to 5,000 cars a
year at around $180,000 and up. Some customers pay additional money to race these street cars against
fellow owners at company-sponsored Ferrari Challenge events. The F-1 Clienti program adds a superpremium
service by giving people a chance to drive the same Ferraris used in Formula One, a series of
auto races that are especially popular among Europeans.

The program gives customers “an experience they can’t get elsewhere,” says Ferrari CEO Dieter
Knechtel. Mr. Knechtel says that the “brand experience is very much related to the ownership
experience: It’s about driving and the experience of the car while doing it in a community of like-minded
people. This is why, we organise track days and tours in Italy with road tours in different countries, we
can organise almost any experience with the car—what we offer to our customers is often a ‘money can’t
buy’ experience.”

Critical Thinking Questions
1. For Mr. Crowder, the Ferrari is a specialty good. What kind of product would it be for you? Why?
2. Do you think that Ferrari has done a good job of building brand loyalty? Could Ford do the same
thing?

ANSWER BOTH QUESTIONS AND INCLUDE RESOURCES.DON'T LEAVE A QUESTION HANGING AROUND

Answer 1

1)For me, Ferrari would be a luxurious product as owning one would certainly be a luxury. Even experiencing a ride in a Ferrari will be a luxury which needs lots of money to get fulfilled. Ferrari is a brand and experiencing a well-known brand is a once in a lifetime opportunity which anyone will want to experience. But such opportunities are rare and this is what creates the brand equity for Ferrari. The rareness of the event and the feeling of adrenaline is what makes this experience unique which only a few companies like Ferrari can deliver.

2)Ferrari has done a good job of building brand equity riding on its success in car racing events and races. The fact that it is associated with racing has created an impression of speed in the minds of people. Even the logo of the prancing horse delivers that message, The association with speed. More than that, the quality of the vehicles is also top-notch and the design quality all creates an attraction to its vehicles. People who own Ferrari will not trade it for any other vehicles. The red colour in racing is synonymous with Ferrari and people can identify the vehicle by its colour and logo. Also since the production is very limited, it creates a unique ownership club where only a few people own it. Therefore, this creates a special feeling in the owners of a Ferrari. This creates a brand loyalty which is not transferred easily.

Brand loyalty is created when you give the customers much more than your competitors. If ford can manage to deliver a good product at a better price than its competitors and provide a good enough service, then people will stick to ford. Brand loyalty is all about retaining customers and this is done only by providing them with exceptional service.