Ducati Ducati is a professional motorcycle manufacturer, especially in producing sport motorcycles. Ducati had been transformed from a company on the verge of bankruptcy into one of the most profitable motorcycle manufacturer by Federico Minoli. At the end of April, 2001, Ducati had gained a market share of 7% in the sport bike segment while Industry analysts agreed the company had an excellent growth potential in the following years. However, by ensuring the company’s profitable double-digit growth in the future, Minoli wanted the company to attack Harley-Davidson’s market by producing cruiser and reach a goal of 10% market share.
If Ducati want to enter the cruiser market, the weakness is total quality control since Ducati is currently focused on producing sport-style motorcycle, they have no experience about the market of cruiser. They even don’t know how the customer want the cruiser be. Although Ducati will invest largely to research and produce cruiser, the lack of production experience will be a high barrier for them to produce a great cruiser. For the challenges, Ducati has to attract the customers in touring market since this kind of customers has a great interest about the cruiser motorcycle.
According to Exhibit 10, the average age of Ducati customer ranged between 25 and 35 years old with an interest on the sporting motorcycles while the median age for Harley-Davidson customer in 2000 was 45. 6 with an interest on cruiser, touring and naked motorcycles. This data shows it’s difficult for Ducati to attract the customer in a different segment. Moreover, according to Exhibit 4, the knee down riders and fast riders want a motorcycle with a multiple function and a high performance while weekend cruisers want their motorcycles to be medium degree of complex function and medium degree of comfort.
It is difficult for Ducati change their product features to afford the weekend cruisers. In order to overcome the weakness and challenges, there is a recommendation for Ducati: for the production weakness, Ducati can offer a significantly higher wage and a more flexible work rules than Harley-Davidson in order to attract the talented engineers and designers in Harley-Davidson and other competitors. Since engineers and designers are soul of a successful company, it is worth to invest some money on human resource.
Moreover, Ducati can use its successful website to spread the information that Ducati will produce cruisers to its loyal customers. At the same time, Ducati can ask its customers how they want the cruiser be. Therefore, Ducati can collect the specific suggestion through internet. It is an extremely effective way to market its new product. As a result, Ducati can save a large number of money on marketing and invest more on designing and improving the quality of their new product. Thirdly, Ducati is expertized in its desmodromic L-twin engine; therefore, Ducati can fit its engine in the cruiser.
It also has an effective supplier network which can ensure the low cost of production process. As a result, Ducati’s cruiser has the ability to compete with Harley-Davidson and gain a large market share in Europe. As soon as Ducati is ready to sell its new cruisers, it can use the World of Ducati to attract new customers and increase its customer loyalty for its new product. For example, Ducati can spread the unique features about its cruiser from the specialized magazine since the specialized magazine can always target the specific segment customers.
Advertising through the specialized magazine is much more effective than the traditional advertisement. Ducati can also exhibit the features about its new product in the Ducati’s museum; therefore, Ducati can attract new customers and enhance the experience of the visiting fans. Moreover, Ducati can hold some special events to introduce the cruisers and increase customer loyalty. By implementing the above recommendation, Ducati can effectively compete with Harley-Davidson and gain a large market share in cruiser segment.
Finally, Minoli can ensure the Ducati’s profitable double-digit growth in the next decade. Although there are plenty of recommendation for Ducati to reach the goal, the above suggestion is the most effective way to attack Harley-Davidson’s market and continue Ducati’s profitable double-digit growth in the next decade. However, there are some risks by implementing the recommendation. According to Exhibit 15, the major elements of Ducati’s brand is sport oriented, which means most customers think Ducati is professional in producing sport motorcycles.
If Ducati is failed to change customer’s mind that they are also professional in cruiser in the early time after introduce the new product, they will lose a large market share and it is difficult to recover in the later time. The customer will think Ducati has only the ability to produce sport-style motorcycles, and this sense will be spread to the loyalty customers in Ducati’s traditional market, which will hurt the traditional market. In order to avoid this problem, Ducati must invest a lot o do the marketing research and advertise the cruiser’s feature to its fans and new customers before Ducati begin to sell the cruiser. Just like Apple, they always spread the new product’s features before them actually selling the new product; therefore, they can get a high interest from its loyalty customers. When they actually selling the product, the customer will not pay more attention on the quality since they have waited so long, the only thing they want to know is the features.