What’s red, Italian and goes from 0mph to 60mph in three-and-a-half seconds?
The answer is the Ferrari Enzo. It’s the highest specification Ferrari ever manufactured for the road and features a mid-mounted six-liter V12 engine, which makes 660 horsepower at 7800rpm and 485 pound-feet of torque at 5500rpm. While I don’t actually know what anything in that previous sentence means, it certainly sounds impressive.
In contrast, when it comes to the marketing of the Enzo I am able to appreciate the efforts of these Italian maestros, because aside from technical expertise, Ferrari also understands how to go to market.
Ferrari’s targeting strategy offers an excellent example of its expertise.
Not just anyone can buy an Enzo. In fact, unless you are invited by Ferrari, you will not be able to get your hands on one. Ferrari knows one of the biggest secrets of marketing: nobody ever made money trying to sell to everyone.
The secret of profitability is not to sell a lot, but rather to sell a specific offering to a specific group and, crucially, not to waste time or resources on customers who fall outside the target group.
Granted, Ferrari’s invitation-only approach is at the extreme end of the spectrum. But too many organizations believe that mass marketing offers them the biggest potential market and thus the maximum possible sales.
These organizations discover that without a specific target market to design their products around they are poorly positioned and vulnerable to competitors that adopt a more targeted niche approach.
Ferrari’s pricing strategy also offers a marketing masterclass. If you are invited to buy an Enzo it can be yours for £430,000. This is, by anyone’s standards, a ludicrous amount of money. But by targeting the world’s most opulent customers and limiting production to 399 cars, Ferrari must ensure that its pricing is contiguous with its overall marketing strategy.
Ferrari also understands the hidden dimensions of pricing. Prices are not just the means of generating revenues. They also signal the quality and exclusivity of the product and the corporate brand responsible for that product. Enzo will turn a handsome profit. The total production line has already sold out. But the PR around the price tag will ensure that Ferrari’s brand is reinvigorated and reinforced with new associations of exclusivity essential to the marque’s long-term health.
In truth, the value of the Enzo should not be measured in fiscal terms, but rather in the impact it will have on the brand equity of all the vehicles marketed by Ferrari. Most of Ferrari’s revenues are generated by far more attainable models such as the 355 GTS – a snip at £75,000.
Very few of us will ever market a product as luxurious or exclusive as a Ferrari Enzo. The idea of inviting only a select bunch of households to buy our yoghurt or watch our ad is patently ridiculous. But too often we jump to the other extreme, the mass market. Somewhere in the middle between the Enzo and the mass market lies a very happy medium.
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