Ferrari Create Premium Eco-Car? Ferrari

¶ … Ferrari Create Premium Eco-Car?

Ferrari Eco-Car Independent Research Proposal

An essential element or component of any luxury vehicles' branding is linked to the nationality of the manufacturer, the manufacturers' long-term investments in messaging and brand image, the performance safety of their vehicles, and the relative effectiveness of its dealer channel. Of all these factors, Dr. Kotler and Gertners' research on branding indicate national identity plays the most significant factor of all in defining brand expectations and resulting user experiences (Kotler, Gertner, 2002). As celebrities embrace hybrid and electric vehicles to make statements about their concern for the environment while enhancing their own personal brands (Voelcker, 2006), there is a much more fundamental shift occurring in the vehicle market beyond just utilitarianism (Sangkapichai, Saphores, 2009). The shift to eco-friendly vehicles is beyond purely economic or tax-driven adoption (Chupp, Myles, Stephenson, 2010). Studies suggest that eco-friendly luxury vehicles are seen as a means to differentiate a person's identity through the second-largest purchase the majority of people make (Hartmann, Ibanez, Sainz, 2005). The intent of this research proposal is to evaluate the potential for Ferrari to move into the luxury hybrid car market, and in so doing, determine the critical success factors to adoption of an eco-friendly Ferrari.

2-Consultant's Brief

The Ferrari brand exemplifies the Italian auto industry's ability to integrate engineering excellence and exceptional design into a high performance vehicle often worth hundreds of thousands of dollars. The Ferrari brand, and its auto competitors based in Italy, serves to define the auto industry brand for this nation, creating a unique brand identity as Dr. Kotler's research shows as being a foundational element of a successful global industry (Kotler, Gertner, 2002). As consumers shift from their definition of luxury over time, both nations and the auto industries that are tightly intertwined with their identities need to stay in synchronization with customer needs (Bourassa, Cunningham, Handelman, 2007). One of the leading indicators of the shift in luxury car purchasing is the perceptions and purchase intentions of luxury hybrid autos across regions and nations of the world (Oliver, Lee, 2010). This proposed research looks to understand the key buying criteria and define successful research strategies for gaining insights into how and why they are changing. The result of this research is to determine if Ferrari ought to enter the hybrid or eco-friendly high performance car market or not.

3-Aim and Objectives

3.1 Aim

The aim of this research proposal is to evaluate the potential for Ferrari to produce and sell a high-performance, eco-friendly vehicle aimed at its target market of high net worth customers.

3.2 Objectives

The following are the key objectives of this research proposal:

1. To determine if an eco-friendly vehicle can be produced by Ferrari while maintaining or increasing its brand value over time.

2. To determine how the purchasing preferences of loyal Ferrari customers are changing over time and to what extent this presents opportunities and risks for the auto maker in the long-term.

3. To determine the market dynamics of the high-performance eco-friendly vehicle segment and if there is an opportunity for Ferrari to compete in it.

4-Literature Review

From the celebrity endorsements of hybrid vehicles (Voelcker, 2006) to the tax incentives (Chupp, Myles, Stephenson, 2010) and the development of a hybrid high-end Mercedes (Voelcker, 2008) the market for high performance eco-friendly cars is substantial and growing. The factors contributing to the growth of this market include greater levels of environmental social responsibility (ESR) on the part of high-end consumers in Asian countries, the U.S. And Europe (Hartmann, Ibanez, Sainz, 2005). There is however a major difference across cultures in the purchasing criteria for a high-performance hybrid or eco-friendly car. In the U.S. And Europe the focus is on how to attain uniqueness and differentiation through the purchase of a socially responsible yet stylish and sleek car (Oliver, Lee, 2010). In the Asian nations, the motivation is more focused on the collective good over the individual need for image or self-branding (Oliver, Lee, 2010). Tesla, by far the most successful high-performance eco-friendly car produced to date with performance that can surpass a Chevrolet Corvette (Naughton, 2007) certainly understands how brand affects the perception of the consumer. Tesla has over a five-year waiting list for its high-end performance coupe, which runs entirely on electricity and has a supply chain comprised of state-of-the-art vendors in battery and electrical system technologies (Naughton, 2007). Tesla has also been able to create a balance between social responsibility and the need for a unique vehicle experience that differentiates or sets the purchaser apart from others (Ewing, 2008). The market for high-performance, expense eco-friendly cars certainly exists, it is up to Ferrari to determine how best to penetrate it with its existing technologies.

5-Research Methodology

5.1-Philosophical Approach

Deductive reasoning is used as the foundation of this research methodology, specifically looking at how to define the total available market for a very high-performance eco-friendly car and understand the unique buying attributes associated with them. The deductive reasoning process that will be used takes into account previously published research in addition to use of the Delphi Technique of forecasting for gaining insights from experts.

5.2-Data Collection Strategy

The secondary data collections strategy concentrates on using EBSCO Host, Emerald, ProQuest and other online databases to gain access to secondary research. The focus of this secondary research is on key buying criteria and perceptions of high-performance environmentally friendly vehicles. The second phase of the analysis will consist of interviews with key industry analysts and thought leaders in the area of high performance automobiles and hybrid vehicles. Using virtual conferencing techniques, these sessions will provide insights into the market factors that are fueling the growth of this category.

5.3- Reliability and Validity

Using a series of validity and reliability checks on the secondary data, a market model will be define and tested through the use of the data analysis tools mentioned in the next section of this proposal. The Delphi Technique will provide insights into the future of the market based on observations and views of industry experts. They will also be asked to assess the impact of a high performance eco-friend car on the Ferrari brand and the companies' manufacturing ability as well.

5.4-Data Analysis Strategy

5.5-Results, Findings and Discussion

Relying on qualitative research techniques to analyse the data from the standpoint of how accurate user perceptions are relative to claims of competing brands, an index of "greenwashing" in the market will be determined (Ewing, 2008). This is critically important because it is an assessment of the relative level of truth in the product messaging and branding of competitors, and has a major impact on the credibility of the market arena as a while. This greenwashing index will also determine the level of potential market growth by indexing user expectations as well (Prothero, McDonagh, Dobscha, 2010). The overall value of the high-performance environmentally-friendly car market will be determined from existing requirements and future needs. The assessment of any future high performance vehicle market has to take into account alternative scenarios for energy consumption (Wolcott, 2005). As a result, the product plans generated from the analysis will support multiple scenarios of pure hydrogen-based vehicles, the development of hybrid gasoline and battery-based and purely electrical models as well.

6-References

Maureen A. Bourassa, Peggy H. Cunningham, & Jay M. Handelman. (2007). How Philip Kotler has helped to shape the field of marketing. European Business Review, 19(2), 174-192.

Chupp, B., Myles, K., & Stephenson, E.. (2010). The Incidence of Hybrid Automobile Tax Preferences. Public Finance Review, 38(1), 120.