The Battle of the Brands: Ferrari vs Virgin
February 28, 2010
You can tell a lot about a brand by its history and there is a fascinating contrast between new entrant Virgin and the team who were founded before F1 arrived in 1950 – Ferrari.
Both Ferrari and Virgin are global brands, both are inherently linked to a charismatic individual – Enzo Ferrari and Richard Branson – whose main focus in life has been to promote and stand up for the values of their brands. As is the case with Walt Disney, Henry Ford and even Steve Jobs, the individual and the brand are inseparable.
Both brands have strong national ties, Ferrari epitomise everything that is Italian, going back to the days when F1 cars were colour coded according to their home nation – the Ferrari red has therefore always been synonymous with Italy, it is their national F1 team and always will be. But beyond Italy the prancing horse is recognised globally to represent performance and aspiration, it is certainly more globally recognised than Formula 1 itself, particularly in North America. Similarly Virgin, although operating at a global level, have strong British, or specifically English, roots. Sir Richard Branson’s epic challenges in boats and balloons made him a national hero in the UK, he is portrayed as the archetypal British Entrepreneur, someone who could get things done and addresses problems in a practical no-nonsense way. When British Airways famously lost its way on branding and decided to remove the Union Jack from its tail fins, it was Virgin Atlantic who stepped in with the British flag featured on their new designs. When British building society Northern Rock got into trouble, Virgin were quickly on the scene with a proposed (and subsequently rejected) rescue bid.
But there are also some interesting differences. The Ferrari brand has always been linked to a very specific product range – luxury performance cars and motor racing, yes they have dabbled in merchandising perfumes, pens and laptops in a similar way to the brand leverage approach of Harley Davidson, and no doubt generate a reasonable return through licensing, but a Ferrari is a car, nothing less, nothing more. In contrast the raison d’être of the Virgin brand is to support new ventures and create innovative new business models. It is in effect branded venture capital. Virgin seek to make a return from using their brand to start up new concepts and then bring in new investors to take the business forward. They are not interested in stability or maturity, or any particular kind of product; they focus on dynamism and change. Whereas Ferrari epitmise tradition and stability (former Ferrari Technical Director Mauro Forghieri once told me that Ferrari had been slow to imitate ground effect aerodynamics as Enzo had refused to allow his cars to be fitted with ‘skirts’!), the Virgin brand has always worked best when up against the establishment. It is the cheeky newcomer which challenges the rules of the game and transforms an industry. Whether it’s taking on the big music retailers, the major record labels, transforming the concept of the recording studio, taking on British Airways in transatlantic air travel and the US airlines on the home territory, or even providing accessible space travel for the not-quite-so-mega rich. The Virgin brand works best when it has competition and it thrives on adversaries who are well established and the dominant player in their industry, in F1 this can only mean one team: Ferrari.
It therefore comes as little surprise to hear Sir Richard Branson responding to the comments made by Ferrari (see previous post) in traditional Virgin style; we may not be beating you today or even this year, but we will prove that we can be at least as good as you using a fraction of the budget and a different approach that will bring change to the industry over the next two or three years. Let battle commence.