In 2006, Ducati launched brand extension, the company collaborated with other well-known apparel brands, Like Oakley, Dainese and Suomy , to produce Ducati-branded Apparel, like suits, jacets, gloves and boots etc. Also Ducati licensed its logo and name for a wide-range of products including other apparel, umbrellas, video game, toys, model replicas and publishing.Ducati participated in the Moto Grand Prix to widen the appeal. during the business decline from 2002-2005, Ducati had experienced growth in apparel sales. ” Ducati had a number of marketing initiatives, but Only placed ads in Select motorcycle publications rather than general public advertizing.
They supported enthusiasts' club , established events and racing, offered formal motorcycle training and Ducati’s museum and factory tour. Ducati called this idea as Tribal Advertising, and stated that they can reach the target market directly with frequency and cost-efficiency.And Ducati had several websites, in which there are complete information on model specifications and online available bikes, you can have a virtual tour of Ducati’s world headquarters in Bologna. The company had 10 million unique visitors and 200,000Ducati riders’ database They used its database to Contact riders through email, forums or Minoli’s personal “Desmoblog” To carry out questionnaires on new product developments and user satisfaction.They had four major distribution channels, which are Multi-franchise distribution points Independent mono-franchise Dutati retail stores, Independent dealers And Wholly owned subsidiaries ( wholesale distribution) , they thought there are several advantages with this channel, where you can contact with the end consumers, have more control over marketing initiatives and more flexibility to redirect products throughout various distribution points.
With regard to the production, the factory Located outside of Bologna, Italy, consisted of 360,000 square meters, and had 1,000 employees. The factory Primarily responsible for engine and motorcycle assembly and the machining of crank cases and cylinder heads. The Production facility followed the Toyato Production System. In 2005, they finished 35,000 bikes, the daily output was from 120-160 Many components could be sourced from multiple suppliers, but Ducati aimed to have two suppliers for each component and only relied on one supplier for hi-tech parts.Labor and R;D accounted for 7% of total goods’ cost, the rest of that were parts and components.
As mentioned before, Ducati North America’s head office moved from the east coast to the west coast, then they lost 100 percent of employees , had to change It system, and basically did not invoice for four months. Actually, this kind of disaster could be avoided/avoidable if Ducati had clear strategic plan and took proper steps.Also, when it come to chasing the magic into the future, “Some had even predicted Ducati in its current form would be an attractive takeover target for companies in sectors outside of the motorcycle industry, like Bombardier or Red Bull ----it seems that some don’t know what they want. ” It seems that they did not know what they want, to sell the company or run the company, have no clear goal, not mention stategic plan. So, we suggest that Ducati shoud Set up dynamic strategic plan based on internal, external,dynamic factors’ analysis.Also suggest them to hire a 3Party consultant if necessary.
2. Ducati Only relied on one supplier for hi-tech parts That means the Hi-tech parts supplier had high bargaining power,you can imagine what is gonna happen if the supplier stop to supply parts,or has potential forward-integrating to produce Ducati’s products, or ask high price premium. So, it is risky, suggest that Ducati to Increase supplier’s number , License hi-tech parts in order to protect patent. And Extend outsourcing ratio, cut cost and adjust cost structure, like increasing R&D expence.
When it comes to the market share,in North America and main European market, “ accessories are twice as profitable as motorcycles on basis of margin and owners would upgrade purchased a new motorcycle within the first six months. ” So we suggest that Ducati reduce motorcycle price Properly, so that Ducati can get bigger market share, then get more business and profit form accessories. For some emerging market, like China & India, where the GDP per capita is relatively low, people have lower discrethinary income, and majority of motorcycle riders use it as traffic tools rather than entertainments.So we Suggest that 1. Design new products, which is satisfied local consumers’ needs 2.
Relative low price, make it affordable 3. More fuel-efficient 4. select genaral public advertising in some market Ducati had intensive competitors in existing market. In order to achieve a sustainable competitive advantage, and growth, Ducati should launch Blue ocean strategy, that is ‘Value Innovation' , a combination of differentiation and low cost . X and Y are going to dig out the problems Ducati faced further.
