Ducati Cuts Marketing Department, Increases Sales

Ducati seems to defy the laws of marketing physics. The Bologna, Italy-based company is increasing its sales in North America, while having decreased its traditional media exposure.

The company, which saw sales increase 16% in North America--including a 50% spike in Canada--last year, has done so while all but eliminating its internal marketing department and focusing on communications, events, PR and relationships with dozens of independent clubs of "Ducatisti" or Ducati owners.

Ducati set sales records last year in North America at 8,100 bikes, led by the company's Monster nameplate. By contrast, in 2003--when Michael Lock took over as CEO--the company had sold only 4,618 bikes in North America.

Leveraging the Ducatisti in marketing efforts, as well as product design and event planning, is part of Lock's three-year ambition to expand North American market share by redefining the brand. Ducati had been seen as an elite motorcycle and something of a novelty bike for the wealthy.

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"We have attempted to modify that perception that we are unapproachable, arrogant, superior. The central goal has been to make Ducati more approachable and more human," he says. "Internally, we drew a comparison between Porsche and Ferrari: that Ferraris are toys for very rich people [while Porsches are attainable.] We positioned ourselves as premium but not unattainable."

He says the company killed glossy print ads in non-related publications like upscale lifestyle magazines, where Ducati's financially proscribed small buy "was a drop in the ocean." Instead, Lock moved efforts toward event-based marketing, "where we get out and meet people and let them experience our products. The cost of marketing goes up for each person you communicate with, but you communicate with them in a more effective way." He says Ducati does only tactical print advertising now.

For example, Ducati had a huge owner and lifestyle presence at the Red Bull U.S. Grand Prix Moto GP race last summer at Mazda Raceway at Laguna Seca, Calif. "Ducati Island"--which Lock says cost $500,000 to set up and has been Ducati's single-largest event--included hospitality offers, gear check, and parking privileges throughout the weekend for Ducati owners. For owners as well as visitors, Ducati had vendors, Team Ducati Corse autograph sessions and other products and events.

At this week's AMA Championship series opener during Bike Week in Daytona Beach, Fla., which draws thousands of motorcyclists each year, the company is creating a "Ducati Village" at the Daytona International Speedway. It will offers Ducati-only parking, hospitality areas for owners, a lineup of bikes, live TV feeds and accessories.

To develop an event program for Daytona, the company worked with an online community of Ducati owners, Ducati.net to create a series of events taking place tomorrow called Ducati Day Daytona. Among the offerings will be a fashion show, a Ducati-only concorso and product demos.

Lock says one-to-one marketing at 30-40 corporate and dozens of club-sponsored events allows the company to correct consumer misconceptions about the brand: that Ducati sells only $20,000-plus motorcycles (the Monster 695 starts at $7,795), that since the brand is small parts are hard to find and that the bikes are prone to problems. "We haven't lowered marketing spend, but we have lowered it as a percentage of our income. We have actually increased spend over the last three years," says Lock.

The company also engages owners in product and marketing decisions. It runs a yearly Ducati club presidents meeting at its headquarters, a week-long confab in which club presidents from around the world meet at the factory to discuss promotions, marketing, events, future products and other issues with corporate brass. Lock says Ducati North America also holds an annual club presidents meeting in the U.S.

He says the factory response has been a cultural shift from a company that never made motorcycles for the North American market to one that now has a portfolio of eight nameplates aimed at expanding U.S. market share with a broader line of more affordable bikes. Last year, the company introduced its first super-sport bike, and in 2004, the Multistrada, an on/off-road bike.

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