Magazine article Marketing

Brand Health Check: Ducati

Magazine article Marketing

Brand Health Check: Ducati

Article excerpt

Fortunes are on the slide at the premium motorbike brand, to the point where its major shareholder is considering selling up. Claire Murphy asks how to get it back on track.

Ducati has a serious premium positioning in the motorcycle market, aided by its past success on the racing bike circuit. But the brand has experienced mixed fortunes over the past few years and it is now rumoured that its major shareholder, Texas Pacific, is hoping to sell it.

The brand has already gone through one relaunch. In the mid-90s its fortunes slumped, dragged down by the poor reputation of Italian technology, and it held less than 2% of the world sports bike market. But in 1996, new management brought some spark to the brand, launching new models and making it fashionable via celebrity endorsements and branded clothing. A link with DKNY saw Ducati create co-branded clothing with the design group.

It also struck deals with Harrods, MAC cosmetics and shoe designer Roberto Cavalli.

The company helped to create a sense of community among Ducati owners, whom it dubbed 'the Ducatisti', by organising events such as the annual World Ducati Weekend and developing a website. Yet despite all this activity, Ducati has stalled. When Texas Pacific bought the company in 1996, it aimed to raise its share of the superbike market from 2% to 10%. So far, it has only reached 6%.

Although revenues quadrupled in the period between 1996 and 2001, they are now stuck around the EUR400m (pounds 274.5m) mark. The share price has slumped from a high of EUR2.90 at the 1999 IPO to 90cent (62p). The company just broke even in 2003, but management has warned that 2004's results may slip into losses. So why does a brand with such an apparently enviable upmarket image find itself for sale? We asked a pair of motorcycle enthusiasts - Harley-Davidson rider Tod Norman, planning partner at Watson Phillips Norman, and Yamaha owner Rob Shimmin, managing director, EMEA, at Ogilvy PR - whether Ducati needs fixing.

DIAGNOSIS 1 - Tod Norman, Planning partner, Watson Phillips Norman

If brands were gunslingers in an Old West saloon, few if any would 'call out' Harley-Davidson - and fewer still would survive. Harley is a byword for passionate, loyal owners and followers.

There is, however, a hot-blooded Latin hanging around. They call him 'Duke'. And on the home page of the GB Ducati Owners Club, the challenge is clear: 'If God rides a Harley ... the Devil rides a Duke'. Brave words indeed, but it is Harley that is in a healthier state than Ducati. …

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