By Frank Donatoni
Three hundred and ninety-nine Ferraris rolled out of the company's Maranello's factory in Italy recently—all the cars manufactured by Ferrari that year. For a brand that is synonymous with engineering perfection and style, that might seem like an awfully small number. However, a smart business strategy is at work behind it.
Businesses generally price products based on value and volume. Customers are ready to pay premium prices for products that are low in volume but high in their perceived value. Ferrari fits the premium brand perfectly. The Ferrari brand has prestige, heritage, and class associated with it. Buying a Ferrari confers a part of that prestige and heritage on its owner. With its high pricing, the brand is exclusively targeted toward the upper strata of society.
However, cash alone is not enough to buy a Ferrari. Customers have to jump through several hoops to own or maintain the luxury car. For example, potential buyers have to apply to buy certain limited editions. Perks such as factory tours are immediately withdrawn if the customer fails to adhere to restrictions outlined in the application. Similarly, certain limited editions are not available for outright sale. Instead, the car can only be leased from the company. Because of this combination of pricing, quality, and exclusivity, Ferrari Limited Editions are a winner for the company.
About the author:
Frank Donatoni is a Ferrari enthusiast and member of the Ferrari Club of America.
Three hundred and ninety-nine Ferraris rolled out of the company's Maranello's factory in Italy recently—all the cars manufactured by Ferrari that year. For a brand that is synonymous with engineering perfection and style, that might seem like an awfully small number. However, a smart business strategy is at work behind it.
Businesses generally price products based on value and volume. Customers are ready to pay premium prices for products that are low in volume but high in their perceived value. Ferrari fits the premium brand perfectly. The Ferrari brand has prestige, heritage, and class associated with it. Buying a Ferrari confers a part of that prestige and heritage on its owner. With its high pricing, the brand is exclusively targeted toward the upper strata of society.
However, cash alone is not enough to buy a Ferrari. Customers have to jump through several hoops to own or maintain the luxury car. For example, potential buyers have to apply to buy certain limited editions. Perks such as factory tours are immediately withdrawn if the customer fails to adhere to restrictions outlined in the application. Similarly, certain limited editions are not available for outright sale. Instead, the car can only be leased from the company. Because of this combination of pricing, quality, and exclusivity, Ferrari Limited Editions are a winner for the company.
About the author:
Frank Donatoni is a Ferrari enthusiast and member of the Ferrari Club of America.
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