What would Ferrari be like without F1?

From racing team to the world’s most powerful and valuable brand, Scuderia Ferrari’s history of Formula 1 success and persistent focus on racing innovation and technology have made Ferrari what it is today: the world’s most powerful brand. Although Ferrari’s DNA is embedded in F1, the Italian sports car manufacturer is working very hard today to maintain its popular mission statement to "win on both road and track," despite their weaknesses in terms of performance in the latest Grand Prix. Formula 1 serves as the most important way of communicating and marketing the brand. The value of a Ferrari rises and falls with its communication.

Ferrari is present all over the world, despite the fact that it does not spend a dollar on advertising. At least the main types of advertising: newspapers, magazines, radio, TV, and billboards. Instead of spending millions of dollars on marketing and advertising by using traditional paid mass media communication with the specific intent of building Ferrari’s brand image in its market, Ferrari did the opposite. They used F1 as the main marketing platform to advertise their road cars indirectly and drive sales by showcasing their latest technological innovation, which is used in Ferrari’s road cars that are sold to customers and clients by persuading them.

Thanks to the exceptional skill of their engineers, Ferrari developed engine technologies, aerodynamic designs, and mandated the use of turbocharged hybrid V6 powertrains. This allows the Italy-based company to update their models on a yearly basis and offer a selection of exclusive and limited models compared to the standard sports car, completely responsive to changes in technology and market demand, which entices Ferrari’s clients into buying the next new model. This rapid product refresh rate strategy and keeping its scarcity premium are enough for Ferrari to be powerful in its market.

However, to communicate Ferrari’s values, be perceived by consumers, and sell in F1, Ferrari uses sponsorship, a form of marketing that is different from advertising. A company pays to support a specific event that their customers care about. One of the team's sponsors is Philip Morris International (the producer of the Marlboro brand). Ferrari’s brand awareness increases in countries through its global sponsors, or those who are looking to become global brands and wish to achieve that by leveraging off the Ferrari brand, and vice versa! Ferrari can position itself in new markets thanks to its sponsors. They look at brand value. They see if the mission of our potential partners matches the values of our company.

In a nutshell, founder Enzo Ferrari told Car's Keith Botsford in 1977, "The racing cars are our most effective way of making the Ferrari way known and selling what we produce." Without F1, Ferrari wouldn’t have the allure that comes from 61 years of success at the pinnacle of motorsport and would probably not be the most powerful brand in the world, as it was named by Brand Finance in 2013. Having raced in every Formula 1 season since 1950, Ferrari has committed to remaining in F1 by signing the new Concorde Agreement, the commercial agreement that outlines the terms under which Formula 1 teams will compete in the championship up until 2025. It’s because racing is in their DNA.