SuperBikePlanet.com Interview: Ducati's Dominique Cheraki
by jim mcdermott and susan haas
Monday, February 06, 2012
Q Could you tell me a little bit about yourself, and your arrival at Ducati in this new role?
Q So in the '90s, the early '90s when Ducati had its first renaissance, when the Castiglionis were running the company, it was 100% based on racing, really. And the 916, but it was down to people like Doug Polen and Ferracci and Carl Fogarty having success, and that's really what drove the brand. Right now, you guys have had this tremendous growth, at a time when in MotoGP--you won the World Superbike Championship with Carlos Checa, congratulations--but in MotoGP, you've had some difficulties. What do you think about in America, because you're not racing AMA, really--where does racing fit into the growth of the brand in the United States? Or does it, any more? Does it matter?
A Okay, let me give you a short feedback. I start with Ducati in 1998. Already a few years now. I set up the subsidiary in France, the branch in France. I was coming from the IT environment, so was a big jump. But I always - I think I got my motorcycle license, was in 1978, I would say. Yes. First motorcycle was in 1978. So.
Q What kind of motorcycle was that?
A Well, the first one was - I don't know if you have this bike here. It was a Yamaha DTMX. That at this time was the most sold, most successful bike. This was a 125cc, because we were, in France, the regulation make you able to ride a 125 starting at 16 years old, so you get my age now if you do a short calculation. And then so, I arrive in Ducati in 1998. In France, I started the subsidiary, and then in 2006, I took over some other country, and we built and created Ducati West Europe. And last year, I came here in the US, which is another big jump, because it's really ...
Q It's your number one market.
A Number one market since few months now, so it's really a very exciting experience. I've been lucky to arrive, to come, exactly in this time. It was the perfect time to arrive, since the result, as you probably know, are quite, quite good.
Q Something like 43%?
A What is interesting in those results is, first, we made it on each market that we are covering, meaning in Canada we are a very good result, +32%, in US +41. In Mexico, which is a new market for us, we started two years ago, and so it's completely open market for us, but last year, we sold 170 bikes, and this year almost 400 bikes. So it's really good result, but it's not only on the three markets that we grow, it's also very interesting to see that all the product made very good result. We had fantastic result with the Multistrada, for the second year, which is quite exciting, and as you know, the Multistrada won the Pikes Peak again, and went to La Carrera Panamericana, which was also a new adventure for the bike, a new adventure for us. So the Multistrada did very, very well. The Monster family is remain the iconic bike in our range, and still attract a lot of, I would say, new customer, beginners, with the 696. We have the new Monster 1100 coming, with a good success. The 848 did very great results. It's the single most sold bike in US for us. It's very close to the Multistrada numbers, but it's the number one.
Q Much more so than the Monsters?
A If you combine all the Monsters, the Monsters all together are doing more. But individual, single model, it's the 848 which is number one, which is quite interesting. And then, the Diavel, which was, we came with the Diavel on a new segment. It was like to discover a new environment, because it's really a new product for us, a new family. And it's very interesting to see the approach and the success of the bike. The bikes have been very well accepted. I think that the bike is really impressive, when many people were concerned, looking at the bike, by the size, by Ducati having lost its mind somewhere. And then when you try the bike, I don't know if you have had the chance to try it, to test it ... but it's just change your mind, because the handling is really, it's almost an easy bike, especially because it's a low seat, it's a very powerful engine. The Diavel have been very well accepted. You know that. We got some nice awards from some nice magazines. It's for us we are very proud about this success, but it's also very encouraging, because coming on the new segment and having this success, it's very, very encouraging.
Q In comparison to, I guess, 1998, or prior to that, with Ducati, I remember when the Monster was first launched. There was a lot of excitement about that bike, but the purists of Ducati, who looked at Ducati purely as an Italian racing marque, thought that it was kind of a controversial step, a new direction. But you have a much more diverse product line in terms of motorcycles now than you did in 1998. You have the Hypermotard, the Multistrada, the Diavel, the Superbikes, the Monsters ...
A We already started to enlarge and to push the limit of the boundary. We already started. Which was probably a little bit - which was different, in 1993 when we launched the Monster.
Q You essentially had the Supersport, air-cooled motorcycle, a Superbike, and the Monster, and that was it. But essentially mostly, the Monster would be the softest motorcycle that you had back then. But now you've got a bike like the Diavel, which can appeal to someone who might like a Yamaha V-Max, or a Harley or something like that. How much of the growth of Ducati over the past few years do you attribute to the diversification of your model line? Do you think you're reaching more customers because you're not so hardcore, only Superbikes?
A Absolutely. We really make these decisions with the bike again. A bike like the Multistrada was, for us - the bike was really, again, a way to attract new customers, because with this bike, we attracted some touring, adventure customers, which this, up to the launch of the Multistrada, those guys were not interested in the brand. Because was not their aspiration. And with the Multistrada, we gave them the opportunity to enter in the family, what I call the family, the Ducati family; and in the same time, keep their desire alive, because it's exactly what they want, but in the same time, give them an opportunity to go for more technology, for the bike with all the spec of the bike. So I think we started with the Multistrada, and with good success, and the Diavel is just another good success. So yes, definitively, the growth is coming from the fact that we decided to open and to push the boundary. But what is interesting is the engineer have been involved to do the this exercise on both bikes, keeping the Ducati basic element. That's really interesting. Because if you ride a Diavel, if you test a Diavel, you'll see that you keep the sensation from the engine. You still have a bike with a very, very easy handling. You still have a very powerful brakes. You have all the technology with the traction control, the ABS, which is safe, but also give you the possibility to have a quite sportive driving mode. So they did a good job in this way, really.
Q In the past few years, obviously, with the difficulty in the economy globally, and especially in the United States, difficulty with people getting loans to buy motorcycles. How much of your growth in the United States do you think has been due to the difficult part of putting people on bikes, which is getting them loans, or encouraging them to come in and spend the money? In other words, the financing of the bikes--your sales programs, and actually helping people get loans. Has that factored into your growth at all over the past couple of years?
A It's part of the exercise, for sure, because it's necessary. But I think that with the ... what we always try to do in order to help those people to come and join us, is more a question of creating this nice environment, which is a complete environment, which is not just "you buy a bike and then you leave by yourself." It's, you enter in the family, and here, you're going to get more than just a bike. You're going to get all the environment, all the related products, you're going to get all the events. So I think ... I cannot tell you how much we gained through the sales ... you know that we are not playing with promotion, sales promotion. It's more a question of supporting the sales, than promoting the sales with aggressive commercials. That is not all our job. It's not our positioning.
Q This new retail environment that you're launching. It's interesting, as someone who has owned many Ducatis and I've been a Ducati rider for 20 years, almost, it's interesting to see how polished everything is, because in the old days, a Ducati shop was a place that usually had a lot of oil on the floors, and it was (owned by) some guy with a lot of character, and it was very independent. And now, it seems like you're having an approach of more of a unified corporate identity in your stores, or at least a unified retail environment.
A What we want is, first, you said that it is quite a polished environment. It's absolutely true. And there is a reason for that. The main reason is, the product should be the star of the show. And not the environment, okay? Having a polished and quite modern and clean environment, give the possibility to really demonstrate the bike, to really show the bikes. And again, motorcycle are, they need to be the show, yes, the show. They are the real star of the show. One thing that we wanted to do also was to create a complete environment. It's not just a showroom. It's the showroom, but it's also the service area, where we want something which is really clean, clear, demonstrate the quality of the service, the quality of the job done by the technicians in the dealer. Because all customers, they are really appreciate, and they need, and they like their bikes, and they want to be sure that the quality of the service is going to be at the level that they expect. And so it was very important for us to give them a clean environment, but also easy to circulate, easy to understand how it works, with all the proper welcoming, and really, an easy way of shopping, but also an easy way of getting the service. So this is what we wanted to achieve with this retail program.
Q So, for a company like Apple, who probably does the best job of a unified approach when you go in for service and customer experience, it's easy for them to accomplish that, because they own all the retail environments. For you guys who have franchises, it's compliance ...
A It's training, training, training, training.
Q Getting that compliance is really hard, right? Because there's also, I would imagine, some investment required on behalf of these dealerships, to make sure that if they have a shop that doesn't look good, and you guys come in and say, "You need to make this look nicer," how do you insure that your dealers comply with your philosophy?
A I think first, we've been very, very happy to see how much, how easily, they jump in the program. They really are. Because I think it's quite obvious that the level and the request from the customer is growing. The request for an easy way of shopping, with nice service. It's more here than anywhere else in the world, it's obvious. So I think our dealers really understood the value of this program, because again, it's to enrich and to improve the customer experience. And they understand that, their customer when they come and buy a Ducati, they want to leave a nice customer experience. So the second point that I would like to mention also, is since we had some quite relevant good result in the past years, all dealer are profitable, and when they are profitable, they understand how to - they participate in the program, but also they understood where to go. That's a nice direction. So I think that one of the reasons why they've been very positive when we introduced these concepts a few months ago. We had a very good level of participation.
Q Looking around a little bit myself, I saw a lot of interesting and very high quality apparel and cologne and children's toys and all sorts of things. I'm curious, do you see those kind of ancillary products that are in these environments, becoming a large part of the sales percentage that you do in the United States?
A Yes, yes. Definitively. It's part of the game. Because again, it's requested by our customer, they like to accessorize their bike, they like to look Ducati, okay. It's part of the game. So yes, definitively. And I think that again, it's a lifestyle. Okay, I know this word is used always, but in many different ways. But when they buy a Ducati, they enter in the family, and then they like to be part of the family. So yes, the accessories, the apparel, are really part of the business. It's growing. This year we grow by 50% this part of the business. So exactly in line with the bike, which mean that yes, it's going with the bikes. It's part of the deal, in fact.
Q Another European brand that has had explosive growth, tremendous increase in value of its shares and value of the company over the past few years, has been Leica, the German camera manufacturer. I'm curious if you guys look at other great European brands and how they've transcended ... it isn't just a camera, the Leica; it's got this whole mystique behind it. And Ducati has a bit of that. I'm curious if you look at a company like Leica and say, with that mystique, we will create hopefully incredible value for our shareholders, by building that kind of mystique. Does Ducati talk about other great European brands?
A Not so often, but we cannot say that we are not looking around. It would not be correct not to look around and try to understand what's happening in our world. Because all customers, if they buy a motorcycle every 24 months, in the same time they buy also cameras, they buy a lot of things. So if they get a very nice experience somewhere, and then when they buy a $20,000 bike they don't have a nice experience, that can easily make the difference.
A I told you the best product this year, the most sold product, was the 848. And we won Daytona. So, somewhere. I don't know if we won Daytona, if we sold more 848 than any other bike because of Daytona. There is a lot of good reason to buy an 848, above the fact that we won Daytona. But yes, racing is part, again, is part of the story.
Q How much of your marketing, do you think, in the years to come in the US, is going to be dedicated to conveying that image of racing, vs. the luxury side of it?
A You know, the two main events - it's a little bit technical, but the two main investments we're going to make this year in marketing, if I look at my marketing budget in DNA, are Laguna Seca and Indianapolis. So it's a different way of approaching the racing, but it's also part of the brand. Together, people in a location get, enjoy the week - you know the Ducati Island? It's a way of just get, make our customer part of the story, of the family, but also enjoy good reason to ride their bike. So it's, the marketing is, a different way of doing marketing with the racing activities, just not only having bikes and riders. It's something that from DNA, we don't manage, we don't have - you know that this year we'll be very happy to see Carlos Checa again on a Ducati and some other nice riders on Ducati, and we all expect that MotoGP will be successful. We are all - I know that the company is really behind all the engineers, and behind the riders to make it happen. But there is other way of using the racing, the race, to enjoy our customers, and one of them, again, one of the main budget we will have this year will be to gather our customers. Is it right when I say "to gather?"
Q So much has changed in terms of product marketing in the United States and globally because of social media. Facebook, Twitter, product marketing being more virally oriented. The appetite for social media globally is huge, but in the United States it's especially huge, and maybe more than Europe. Are you managing your own social media strategy in the United States, or is it being driven corporately? Because I think traditionally, maybe some of that appears to have been driven by Europe, and it didn't seem as aggressive, maybe, as it could have been, as a result. What are your thoughts on social media, and are you managing Ducati US's social media strategy in the US, or is it being managed in Italy?
A It's managed in the US, and we are in a learning process of this fantastic tool. And so we try to be on board. It's not as aggressive that we could be. We are not aggressively or dedicated or focusing all our energy on this media, but it's part of our strategy.
Q On some levels, you could say, because print is declining so much, the users are talking to themselves about the bikes, and reviewing the bikes between themselves, so in a sense it's more important than ever for a company to have a direct relationship with their customers, because the customers aren't necessarily going to other places, to magazines, to find out whether a bike is good; they're talking to each other.
A Yeah, absolutely.
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