Piaggio USA, Inc.

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Piaggio USA, Inc.

140 E. 45th St., 17th Fl.
New York, New York
USA
Telephone: (212) 380-4400
Fax: (212) 380-4459
Web site: www.piaggiousa.com

VESPA REINTRODUCTION CAMPAIGN

OVERVIEW

The Vespa motor scooter gained worldwide fame when one was ridden by actress Audrey Hepburn in the 1950s film Roman Holiday. Manufactured by Italian company Piaggio & C. SpA, the Vespa became an international cultural icon, known primarily for its style. By the mid-1980s, however, the scooter had failed to keep up with engine design and failed to meet more stringent U.S. emissions standards. Rather than update the engine, Piaggio simply pulled out of the market. Fifteen years later Vespa was able to meet emissions levels and once again eyed the United States, where scooters were enjoying a resurgence. In 2000 the scooter was brought back to the United States, and Piaggio USA launched a marketing campaign to reintroduce Vespa to the country.

The Vespa reintroduction was a free-form effort in many ways. Dealers were allowed to develop their own ads and sell to whatever market looked most promising to them. The first advertisements began running in 2002. Regardless of region, however, the ads were often sexual in nature, playing off of the scooter's Italian image. At the national level Piaggio mostly worked cross-marketing deals with other companies and succeeded in placing the Vespa in many of these companies' advertisements. There was no announced budget for the campaign, much of which was funded locally with contributions from Piaggio.

The reintroduction of Vespa came to a close at the end of 2004, when Piaggio began seeking an advertising agency to implement a national branding strategy. Vespa had staked out its claim in the marketplace, distinguishing itself from the competition on the grounds that it was more than a scooter and instead represented a lifestyle that many people found appealing. Some of the ads also received recognition from the advertising industry. The newspaper ads that Mullen Advertising created for the campaign won a bronze at the 2003 One Show awards, hosted by the One Club in New York City.

HISTORICAL CONTEXT

Launched in Italy shortly after World War II by Piaggio, the stylish Vespa motor scooter soon became a cultural icon. It was immortalized in the 1950s when Audrey Hepburn rode one in the film Roman Holiday, and its stylish reputation spread when it appeared in the Italian movie La Dolce Vita (1960) and was taken up by the Mods in Britain in the 1960s. An entire subculture developed around the Vespa in Europe and North America. In the mid-1980s, however, the Vespa faced new, more stringent air-emissions standards in the United States. While always a fashion leader, the Vespa still relied on 30-year-old technology: a two-stroke engine that spewed liberal amounts of pollutants into the air. Rather than reengineer the bike and refit its Italian factories, Piaggio opted to abandon the North American market and to continue to sell its high-emission scooters in Europe and Asia.

Piaggio's strategy worked well for about a decade, but eventually other countries began tightening their emissions standards as well, and Piaggio was forced to install a cleaner, modern engine in the Vespa. As the century came to a close, there was no longer a reason to avoid the U.S. market. In fact, America presented an excellent opportunity for Piaggio, as scooters were regaining favor in that market. According to the Motorcycle Industry Council, about 12,000 scooters were sold in the United States in 1997, but that number had begun to grow at a 20 percent clip each year. In addition, the successful launch of the new Volkswagen Beetle in the late 1990s—as well as general nostalgia for the 1960s—bode well for the Vespa's return to the United States. Piaggio also discovered that the Vespa had been anything but forgotten. "In the mid- to late-1990s, when the Internet exploded, the most amazing thing happened," wrote Doug Sarti in Vancouver's weekly newspaper Georgia Straight. "Scooterists reconnected, and it became clear that although Vespa culture had gone underground in North America, it was alive and well."

In 2000 Piaggio began exporting new Vespas to the United States, after which Piaggio USA began a long-term marketing campaign to reintroduce the Vespa to America. It relied a great deal on the initiative of dealers but also included the use of national promotional tie-ins with other companies' products.

TARGET MARKET

According to Christopher Montgomery of the Dayton Daily News, Piaggio sought to market Vespas to two main demographic groups: "twenty-somethings that want to zip around college campuses and big cities; and middle-aged consumers nostalgic for the scooter heyday of the 1950s and '60s." Hence, the age demographic ranged from 16 to 70.

But there were other potential customers aside from students and retirees. Given the high costs of automobiles and the rising price of gasoline, many people began to consider the scooter an economical mode of basic transportation. Wealthier people, on the other hand, viewed the Vespa as a weekend toy. Unlike motorcycles, which were overwhelmingly marketed to men almost to the exclusion of women, scooters—especially style-conscious ones like Vespa—found a receptive market among women. Almost 40 percent of the new scooter buyers were women, and they were more likely than men to pay extra to personalize and accessorize their scooters. Because this meant extra profits for Piaggio, the company catered to the female customer. There was one other market for scooters, one that was less interested in fashion and that Vespa did not aggressively pursue: people who had lost their driver's license after a DUI (driving under the influence) conviction. In some states residents did not have to register a scooter that had a 50cc engine, nor did they need to possess a license to drive one. In such circumstances a scooter became known as a "liquorcycle."

COMPETITION

As Americans' interest in scooters was rekindled, so too was competition between scooter manufacturers. Piaggio had an Italian rival in Aprilia Group, the second-largest seller of scooters in Europe behind Piaggio. During the course of the Vespa reintroduction campaign, that threat was removed in 2004, when Piaggio acquired Aprilia.

THE WASP TAKES WING

The company that manufactured the Vespa, Piaggio & C. SpA, started out in the 1880s outfitting ocean liners. Over the years it became involved in trains and cars, but prior to World War II the family business made the mistake of adding passenger airplanes and bombers to its expertise. Because it manufactured planes for the Axis war effort, Allied forces bombed its factories, eventually destroying them completely. After the war the founder's son, Enrico Piaggio, revitalized the company by looking to serve the transportation needs of everyday Italians. The result of the company's engineering efforts was a scooter that relied on airplane technology. It featured a front fork reminiscent of an airplane's landing gear and a sleek steel chassis. When Piaggio saw the prototype, he exclaimed, "Sembra una vespa!" (It looks like a wasp). The name "Vespa" stuck, and a cultural icon was born.

Vespa's most serious challengers in the U.S. market were three Japanese companies: Honda, Yamaha, and Suzuki. Until the mid-1980s Vespa, along with another Italian scooter, the Lanbretta, had dominated the world scooter market. Then Honda introduced the Elite, and Yamaha created the Riva; these plastic upstarts offended the sensibilities of scooter purists but were reliable and inexpensive and found a mass audience. Once Piaggio left the U.S. market, the Japanese were able to build up their dealer networks and dominate the scooter business. Honda became the dominant force, because it was able to leverage its 1,200 dealerships to control the U.S. scooter market. In cases where the company believed dealership sales would not be adversely impacted, Honda also sold its scooters through multiline scooter shops. Yamaha, the second largest in terms of U.S. market share, carved out its own niche primarily based on price. Yamaha would also attempt to take on Vespa directly by introducing its Vino Classic, a bike that not only mimicked Vespa's look but also was positioned as having Italian flair with the slogan "Can you say ciao bella?"

Heading the list of secondary competitors was Suzuki, which branched into scooters in 2003 and found its own niche by focusing on the increasingly popular category of maxi-scooters, which offered greater comfort and a more powerful engine. There was also a pair of Taiwanese-made scooters with which to contend: Kymco, a former Honda licensee, and MZ, an offshoot of Germany's MZ Motorcycle Company. China offered the TN'G, establishing a beachhead in the U.S. market through a distribution deal with the warehouse-club chain Costco and later setting up its own dealer network. A pair of scooter manufacturers in India, LML and Bajaj, also offered competition. In addition Vespa was anticipating the entrance into the U.S. scooter market of two French rivals, Peugeot and MBK.

MARKETING STRATEGY

Shortly after Vespa was reintroduced to the United States in November 2000, Piaggio's president, Giancarlo Fantappie, told BusinessWeek, "We're selling a lifestyle, not just a scooter." The Vespa mystique alone was able to generate sales; a seven-month wait for the bikes soon developed. Hence, at this stage there no need to push sales aggressively, and marketing was kept low-key. Vespas were awarded to the winners of the New York City Marathon, but no major media blitz ensued. According to BusinessWeek, Piaggio was content to "sell its 'recreational toys' through the Neiman Marcus Christmas catalogue, as well as in 'Vespa boutiques' in trendy spots like East Hampton, [New York], and Palm Beach, [Florida]." More than 40 more of the boutiques, which also sold Vespa clothing and accessories such as helmets and riding gloves, were slated to be opened within the next year.

Piaggio gave the dealer groups a great deal of latitude in handling Vespa's marketing, and the first wave of advertising began appearing in 2002. Wenham, Massachusetts-based Mullen Advertising produced a series of three newspaper ads. An example of the shop's humorous take was the headline used in one ad: "A hog for you temporary-tattoo types." The agency Kirshenbaum Bond + Partners created three billboards in San Francisco employing a sexy approach to promoting the Vespa. Each execution showed a woman grasping a male driver, either with her hands, arms, or legs. In Denver in 2002 the first TV spot was aired for the Vespa. Created by the agency Viewpoint Studios (later renamed Viewpoint Creative), it combined humor and sex to make its point. A young man apparently addressed a woman reclining in a lawn chair. In an Italian accent, he praised her curves and figure, saying, "Your petite but powerful body will purr with excitement when we are together." As he said, "I will mount you now," the camera panned to reveal that he was talking to a Vespa scooter.

Writing for Dealernews, Shay Moftakhar explained Piaggio's national marketing strategy; it devised "an ingenious marketing program that incorporates 'viral' advertising in many major campaigns. Scooters are seen in ads for products ranging from Washington State apples to cell phones to laptop computers, all serving to ingrain scooters in the consumer subconscious." Moftakhar also pointed out that Piaggio had increased Vespa awareness in retail venues through cross-promotions with Target and the Sharper Image. In addition, Piaggio succeeded in placing Vespa in ads for the likes of American Express, McDonald's, Starbucks, and JetBlue Airways. Hearkening back to its motion-picture heritage, Vespa was featured in a remake of Alfie, starring Jude Law. The Vespa had also appeared in the original 1966 film.

In 2003 Piaggio introduced a more powerful scooter, the Vespa Grand Turismo, and to help with the launch the company hired R.C. Auletta & Company to handle national public-relations responsibilities for what was to be Vespa's top-of-the-line model and an important money maker. National coordination began to take on greater importance, because Vespa seemed to be marketed to a different audience depending on the region. Amanda Schupak wrote in Forbes, "In Denver the gay crowd has embraced the brand. In Boston Vespa is coveted by coeds. Celebs and hipsters ride the scooters in Los Angeles and New York. And in San Francisco Vespa dealer Walter Dawydiak is pushing the fashionable bikes, which get 70 miles to the gallon and run up to 70 miles per hour, on the San Francisco Police Department." The reintroduction of Vespa had succeeded by the end of 2004, at which point Piaggio began searching for an advertising agency to develop a national branding strategy and take Vespa to the next level.

OUTCOME

Although uncoordinated in many ways, the marketing campaign to reintroduce Vespa to the United States succeeded. Sales in 2004 reached $25 million, an 80 percent increase over the previous year that was largely a result of sales of the Grand Turismo. The brand also reconnected with its legions of fans after a 15-year absence from the U.S. market, and in addition to selling scooters, Piaggio succeeded in selling Vespa apparel and other items; as of May 2003 there were 62 Vespa boutiques in the United States. Rising gas prices made scooters appealing to an even wider market, and Vespa's winning lifestyle image, which made it stand out from the competition, promised to attract a new and broader set of customers.

What little advertising that was done in support of Vespa was also well received. In 2003 the newspaper ads created by Mullen Advertising won a bronze at the One Show, the annual advertising awards sponsored by the One Club, a New York-based nonprofit organization established to promote excellence in advertising.