2:22 3 Porsche Case Porsche: Guarding the Old While Bringing in the New but by feelings. A For the owner wears an tanio with their cars car sounds, Vibrates Porsche (pronounced Porshuis a unique company It has always holders it has or how been a ridhe brand that makes cars for a small and distinctive seg admire ther Porsche mert ot automobile buyers in 2009. Porsche old only 27.717 can chine without being in the five models itsekin the United States Honda sol about People buy Porsche 10 times that many Accords aloneBut Porsche owners are as tareas needed was something the vehicles for that reason, 100 managers at Porsche Sondagat could find something teal of time thinking about customers. They want to know who their Porsche owners customers are what they think and how they feel. They want to wuccessful busineswar know why they buy a Foshe rather then alagara Ferrari orang "When I drive this car Mercedes coupe. These are challenging questions to awer, even end up with five you Porsche owners themselves don't know eactly what motivates the can't even find her, she bung Hut geen Porsche low volume and the increasingly frag FROM NICHE TO mented to market imperative that management understands For its first few decade its customers and what gets her motor Ferry Porsche, Ferdina Cause no one ebe made THE PROFILE OF A PORSCHE OWNER research, we had no Porsche was founded in 1931 by Ferdinand Porsche, the man cred culations. None of the led for designing the original Volcwagen Beetle-Adolf Hitler's ured that there would "peoples and one of the most successful car designs of a really, Porsche AG from time. For most of its first two decades, the company buit Volks tomers an achieve the wagen Beetles for German cities and tanks and Beetles for the But as the years roll mintary As Porsche AG began to sell as under its nameplate und with an in the 1950s and 1960s, a few constants developed. The company ers to keep the compa sold very few models, creating an image of exclusivity. Those mod ilusions of churning had a rounded, bubble shape that had its roots in the original Butto fundation Beetle but evolved into something more Porsche-like with the little And Porsche bed world famous 356 and 911 model Finally, Porsches automobiles people who buy Ford featured ar-cooled out and sonder bower motors in This led Porsche to ders in an opposed configuration in the rear of the car. This gave 1970s, Porsche intro the cas a unique and alten dangerous characteristi-tendency Two-seater that was for the rear end 10 wing out when coming hard. That's one of a different class of pe the reasons that Porsche owners were drawn to them. They were proe that the 914 bed challenging to die. which kept most people away 1970. Porsche replace Since its early days, Porsche has appealed to a very noweg something ro other ment of financially successful people. These are achievers who see gine the front. At themselves asentrepreneurial even if they work for corporation thin the 911, the 92 They set very high goals for themselves and then work doggedly Porsches pitch to atto to meet them and they expect no less from the clothes they went Sales goal by nearly 50 the restaurants they 90 10. or the cars they drive These individu Although these can als see themselves not as a part of the regular world but as excep Possche taithful cried ic tions to it. They buy Porsches because the car mirrors their to be cheap and und self-magrit stands for the things ownershike to see in themselves coated these models as and their lives happy that they had Most of us buy what Porsche executives call utlity vehides didnt the Porsche That is, we buy cars pomarly to go to work, transport calde they saw as a carporate and run errands. Because we use our cats to accomplish these marketing. This is tely tasks we base buying decisions on features such as price. Nest, Toyota BMW. se, fuel economy and other practical considerations, but Porsche high-end sports car of is more than a utitty car. its owners see it as a car to be enjoyed Lact both the Datsun not just used. Most Porsche buyers are not moved by information cheaper than Porsche thew more and in Porsche tank By 1990, Porsche sales had Although some plummeted, and the company fired with bankruptcy dead driving a front 2:22 Porsche Case RETURN TO ITS ROOTS? a category of Porsd But Porsche wasn't going down without a light. It quickly recog. them facing inesca nued the error of ways and halted production of the entry-level and stuif. This not models trebuit its damaged mage by mamping in higher-end but Porsche again model lines with more race red technology. In an effort to regain erwise wouldn't hau vehicles are drawn rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales maintain is exclusiv goals and decided that moderate growth with higher margins profile of regular would be more profitable in the long term Thus, the company set The second te cut to make one less Porsche than the public demanded. Accord Whereas the United ing to one executive. "We're not looking for volume, we're wer of Porsche arching for exclusivity biggest customer Porsche's efforts had the desired effect. By the late 1990s, the States accounted brand was once again favored by the same type of achiever who sales. Now, it accou had so deeply loved the car for decades. The cars were once again people who can at exclusive. And the company was once again profitable But by the hire a chauffeur Th early 2000s Porsche management was again asking itself a fai those who want to want to make a que la question to have a sustainable future could Porsche rely on only the Porsche faithful According to the CEO Wendelin Wiedeking The most recent "For Porsche to remain independent, it can't be dependent on the sales of about most fiole segment in the market. We don't want to become just times are tough a marketing department of some gant. We have to make sure ferrable purchase we're profitable enough to say for future development ourselves better pored than So in 2002, Porsche did the unthinkable it became one of the comer bases Last car companies to jump into the insatiable sport Utlity vehide brand image with CUN) market. At roughly 5,000 pounds, the new Poriche Sute, understanding Cayenne was heavier than anything that Porsche had ever made former CEO of Pors to understand our with the exception of some prototype sanksit made during WWII Once again, the new model featured an engine up front. And it were going to was the first Porsche toever be guided with seatbelts for five As news spread about the cars development hows heard from Porsche customer base But this time, Porsche did not seem to concerned the forgotten what happened the last time it devoted from 1. What are th After driving one of the first Cayennes of the assembly journalist stated "A day at the wheel of the 444 he weaknesses Cayenne Turbo leaves two overwhelming impressions Cayenne doesn't behave or feel like an SUV, and second like a Porsche." This was no entry level car Porsche had two and a half to best that could accelerate to co 2 Analyze the hour in just over five seconds, conet like it was on tasand hit process of a leather seats with almost no wind nose from the outside world On top of that. It could keep up with a Land Rover when the pave customer? (2 mentended. Indeed, Porsche had created the Porsche of SUV another lange vehicle but this time a mes rower Discuss briefly luxury sedan. The Porsche faithful and the automotive press again micro envi: gasped in disbelief Bus by the time the Panamera hit the pave! ment, Porsche had prowen once again that Porsche customer company (25 could have their cake and eat it to The Panamera is almost as big of up to 188 mies per hour and accelerate from a state Identify the ch 60 miles per hour in four seconds flat Porsche own brand? (25 pc 1 2:22 Porsche Case was always actives 7.717 old about = are dat whother y want to norabi wer, even vates the ingly frag nderstand man cred olf Hitlers of a u Vok les for the ameplate company ose mod se original with the tomobiles cors cyli This gave tendency t's one of They were but by feelings A Porsche like a piece of dothing--something the owner wears and is seen in. They develop a personal rela tonship with their cars, one that has more to do with the way the car sounds, brates and feels, rather than the row many cup holders it has or how much cargo it can hold in the trunk. They admire ter Porsche because a competent performance ma- chine without being fasty or phony People buy Porsches because they enjoy driving of all they needed was something to get them from point to point, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not One successful businesswoman and owner of a high-end Porsche sad "When I drive this car to the high school to pick up my daughter I end up with five your gaters in the car. I drive any other car can't even find her she doesn't want to come home FROM NICHE TO NUMEROUS To its fest few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand's son party created the Porsche 356 be cause no one else made a car like he wanted. "We did no market research, we had no sales forecasts, no return-on-nvestment culations. None of that. I very simply built wydream car and fig ured that there would be other people who share that dreams. real Porsche AG Hom the beginning was very much like its cus- tomers an achieve that set out to make the very best But the years oled on, Porsche management became con cerned with a significant issue were there enough Porsche buy ers to keep the company atat? Granted, the company ever had llusions of churning out the numbers of a Chevrolet or a Toyota Butto fund innovation ever a niche manufacturer has to grow a ittle And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them This led Porsche to extend its brand outside the box in the early 1970 Porsche introduced the 914 a square midengine, two-seater that was much cheaper than the 911 This meant that adent class of people could afford a Porsche It was now prise that the 914 became Forsches top selling model. By the late 1970s, Porsche replaced the 91 with a hatchback coupe that had something no other regular Porsche modelad we had an en gire in the front. A less than $20,000, more than $10,000 less than the 911, the 924 and loter 94 models were once again Porsche's aitch to attordability. At one point, Porsche increased its sales goal ty nearly 50 percent to 60.000 cars a year. Ahrough these were in many respects sales successes the Porsche fa cred foul. They considered these entry level model to be cheap and underperforming Most loyalts never really ac cepted these models asal Porsches In fact, they were not at al happy that they had to than the band with a customer who didn't fit the Porsche owner profile They were turned off by what they was a corporategy that had focused on mass over marketing Tha tarnished image was compounded by the fact that Nissan Toyota BMW. and other contacturers had tamped up who see poration doggedly they wet individ as on their themselves vehicles children olish these nice. 2:22 Porsche Case ingly derstands acred gns of all il vous es for the ameste company ose mod e original with the tomobiles ors in This gave tendency at's one of They were weg who see poration doggedly hey wear individu as ONCE on the FROM NICHE TO NUMEROUS For its first few decades, Porsche Alived by the philosophy of Ferry Porsche, Ferdinand's son. Ferty created the Ponche 356 be cause no one else made a car like he wanted. "We did no market research, we had no sales forecasts, no return on investment al culations. None of that I very samely built my dream car and tig ured that there would be other people who share that creams, realy Porsche AG from the beginning was very much like it us- tomers an achieve that set out to make the very best But as the years old on, Porsche management became con- cerned with a significant issue were there enough Porsche buy ers to keep the company atat? Cranted the company never had lors of churring out the numbers of Chevrolet or a Toyota But to fund innovation even a niche manufacturer has to grow a Ittle And Porsche began to worry that the quirky nature of the people who do Porsches might just run out on them Thaled Porsche to extend its brand outside the box in the early 1970 Porsche introduced the 914, a squaresh mid-engine, two-seater that was much cheaper than the 911. This meant that ad class of people could afford a Porsche. It was now prise that the 914 became Porsche top selling model. By the late 1970sPorsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had an en gire in the front. At less than $20,000, more than $10,000 less than the 911, the 24 de 946 models were once again Porsche's pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60.000 cars a year Although these ans were in many respects sales successes the Porsche faithful cried fool. They considered these entry level models to be cheap and underperforming. Most loyalists never really ac cepted these models as real Porsche In taxt, they were not at al happy that they had to share the brand with a customer who didn't fit ve Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on must overclass marketing. This tamnished image was compounded by the fact that Nissan Toyota, BMW, and other car manufacturers had tamped up high-end sports car offerings. Creating some fierce competition fact, both the Datsun 280-2X and the Toyota Supra were not only cheaper than Porsche 944 but also faster. A struggling economy Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doon Porsche insists that two trends wil sustain these new models. First a Category of Porsche buyers has moved into life stages that have them facing nescapable needs, they need to hau more people and stult This not only apples to curtain feguar Porsche buyers but Porsche is again seeing buyers enter its dealershies that oth erwise wouldn't have only this time, the price points of the new vehicles are drawing only the wel heeled, allowing Porsche to maintain its exclusivity These buyers also seem to fit the achiever profile of regular Porsche buyers The second tiend is the groth of emerging economies Whereas the United States has long been the world's biggest.com some of Porsches the company expects China to become biggest customer before too long Twenty years ago, the United States accounted for about 50 percent of Porsche's worldwide sales. Now, accounts for only about 26 percent. In China, many vehicles children wish these as price ut Porsche e enjoyed ormation sales hud y recog entry level higher end otto regain the high end modest sales er margins company set ed Accord me, we're - 1990, the Chiever who 2:22 TUS, the hiever who once again But by the sell alami rely on only Wieder dert on the becomes - make Porsche Case sales. Now, it accounts for only about 24 percent. In China, many people who can afford to buy a cantas expensive as a Porsche also hure a chauffeur The Cayenne and the Panamera are perfect for those who want to be driven atound in style but who may also want to make a quick getaway if necessary The most recent economic downturn has brought down the sales of just about every maker of premium automobles When times are tough buying a car like a Porsche is the ultimate de ferable purchase. But as this downturn turn backup Porsche is better posed that has ever been to meet the needs of its cus tomer base. It is also better shape than ever to maintains brand image with the Porsche faithful and with others as well Sure, understanding Porsche buyers is still a difficult task. But a forme CEO of Porsche summed up the way if you really want to understand our customers, you have to understand the phrase were going to be a cat. I'd be a Porsche one of the tilty vehicle w Porsche vermude, uning WWI ront. And ets for five thi bly he an ad QUESTIONS: 1. What are the strengths and weaknesses of the Porsche brand? (25 points) ones eAnalyze the buyer decision sumptuou process of a traditional Porsche en trepave customer? (25 points) 9. Discuss briefly the macro and the Prestimicro environment of the company (25 points) A Identify the characteristics of the Porsche owners as consumers. Do you suggest a new segment to be targeted? (25 points) hit the e customer almost as big cadat sce 1 2:22 X Porsche Case cheiden, elish these asi ut Forsche cenjoyed formation sales had deco entry level higher end orto regain the high end odest Sales er margins ompany set ed. Accord they was a corporate strategy that had focused on mass overless marketing The tashed image was compounded by the fact that Nissan Toyota, BMW, and other car manufacturers had camped un high-end sports car offerings, creating some fierce competion fact, both the Datsun 280-2x and the Toyota Supra were not only cheaper than Porsches but so faster. A struggling economy Although some Porsche traditionalists would never be caught deaddriving a front engine Porsche that has more than two door Porsche insists that two trends wit sustain these new models. First a category of Porsche buyers has moved into life stages that have them facing nescapable needs they need to had more people and stuff. This not only applies to certain regular Porsche buyers but Porsche is again seeing buyers enter its dealerships that oth erwise wouldn't have only this time, the price points of the new vehicles are drawing only the wel heeled. ailowing Porsche to mantain itseadusivity. These buyers also seem to fit the achieve profile of regular Porsche buyers The second trend is the gros of emerging economies Whereas the United States has long been the world's biggest con sumer of Porsches, the company expects China to becomes biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche's worldwide sales. Now it accounts for only about 26 percent in China, many people who can afford to buy a car as expensive as a Poriche also here a chauffeur The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary The most recent economic downturn has brought down the sales of just about every maker of premium automobiles When times are tough, buying a car like a Porsche is the ultimate de ferrable purchase. But as this downturn turns back up Porsche is better poised that has ever been to meet the needs of its cul tomer base. It also better shape than ever to maintain its brand image with the Porsche faithful and with others as well Sure, understanding Porsche buyers la difficultas Buta former CEO of Porsche summedit this way. If you really want to understand our customers, you have to understand the phrase were going to be a cat'd be a Porsche - 19901, the chiever who once again Hut by the self a fami rely on only Wedeking dent on the become just make sure Ourves one of the tity vehicle w Porsche ever made uring WWE ront Anda ots for five ws thi he bly he QUESTIONS: 1. What are the strengths and weaknesses of the Porsche brand? (25 points) onges peAnalyze the buyer decision umptuous process of a traditional Porsche een the peve customer? (25 points) ant of SUV --------.. 1 121. 2:22 3 Porsche Case Porsche: Guarding the Old While Bringing in the New but by feelings. A For the owner wears an tanio with their cars car sounds, Vibrates Porsche (pronounced Porshuis a unique company It has always holders it has or how been a ridhe brand that makes cars for a small and distinctive seg admire ther Porsche mert ot automobile buyers in 2009. Porsche old only 27.717 can chine without being in the five models itsekin the United States Honda sol about People buy Porsche 10 times that many Accords aloneBut Porsche owners are as tareas needed was something the vehicles for that reason, 100 managers at Porsche Sondagat could find something teal of time thinking about customers. They want to know who their Porsche owners customers are what they think and how they feel. They want to wuccessful busineswar know why they buy a Foshe rather then alagara Ferrari orang "When I drive this car Mercedes coupe. These are challenging questions to awer, even end up with five you Porsche owners themselves don't know eactly what motivates the can't even find her, she bung Hut geen Porsche low volume and the increasingly frag FROM NICHE TO mented to market imperative that management understands For its first few decade its customers and what gets her motor Ferry Porsche, Ferdina Cause no one ebe made THE PROFILE OF A PORSCHE OWNER research, we had no Porsche was founded in 1931 by Ferdinand Porsche, the man cred culations. None of the led for designing the original Volcwagen Beetle-Adolf Hitler's ured that there would "peoples and one of the most successful car designs of a really, Porsche AG from time. For most of its first two decades, the company buit Volks tomers an achieve the wagen Beetles for German cities and tanks and Beetles for the But as the years roll mintary As Porsche AG began to sell as under its nameplate und with an in the 1950s and 1960s, a few constants developed. The company ers to keep the compa sold very few models, creating an image of exclusivity. Those mod ilusions of churning had a rounded, bubble shape that had its roots in the original Butto fundation Beetle but evolved into something more Porsche-like with the little And Porsche bed world famous 356 and 911 model Finally, Porsches automobiles people who buy Ford featured ar-cooled out and sonder bower motors in This led Porsche to ders in an opposed configuration in the rear of the car. This gave 1970s, Porsche intro the cas a unique and alten dangerous characteristi-tendency Two-seater that was for the rear end 10 wing out when coming hard. That's one of a different class of pe the reasons that Porsche owners were drawn to them. They were proe that the 914 bed challenging to die. which kept most people away 1970. Porsche replace Since its early days, Porsche has appealed to a very noweg something ro other ment of financially successful people. These are achievers who see gine the front. At themselves asentrepreneurial even if they work for corporation thin the 911, the 92 They set very high goals for themselves and then work doggedly Porsches pitch to atto to meet them and they expect no less from the clothes they went Sales goal by nearly 50 the restaurants they 90 10. or the cars they drive These individu Although these can als see themselves not as a part of the regular world but as excep Possche taithful cried ic tions to it. They buy Porsches because the car mirrors their to be cheap and und self-magrit stands for the things ownershike to see in themselves coated these models as and their lives happy that they had Most of us buy what Porsche executives call utlity vehides didnt the Porsche That is, we buy cars pomarly to go to work, transport calde they saw as a carporate and run errands. Because we use our cats to accomplish these marketing. This is tely tasks we base buying decisions on features such as price. Nest, Toyota BMW. se, fuel economy and other practical considerations, but Porsche high-end sports car of is more than a utitty car. its owners see it as a car to be enjoyed Lact both the Datsun not just used. Most Porsche buyers are not moved by information cheaper than Porsche thew more and in Porsche tank By 1990, Porsche sales had Although some plummeted, and the company fired with bankruptcy dead driving a front 2:22 Porsche Case RETURN TO ITS ROOTS? a category of Porsd But Porsche wasn't going down without a light. It quickly recog. them facing inesca nued the error of ways and halted production of the entry-level and stuif. This not models trebuit its damaged mage by mamping in higher-end but Porsche again model lines with more race red technology. In an effort to regain erwise wouldn't hau vehicles are drawn rapport with customers, Porsche once again targeted the high end of the market in both price and performance. It set modest sales maintain is exclusiv goals and decided that moderate growth with higher margins profile of regular would be more profitable in the long term Thus, the company set The second te cut to make one less Porsche than the public demanded. Accord Whereas the United ing to one executive. "We're not looking for volume, we're wer of Porsche arching for exclusivity biggest customer Porsche's efforts had the desired effect. By the late 1990s, the States accounted brand was once again favored by the same type of achiever who sales. Now, it accou had so deeply loved the car for decades. The cars were once again people who can at exclusive. And the company was once again profitable But by the hire a chauffeur Th early 2000s Porsche management was again asking itself a fai those who want to want to make a que la question to have a sustainable future could Porsche rely on only the Porsche faithful According to the CEO Wendelin Wiedeking The most recent "For Porsche to remain independent, it can't be dependent on the sales of about most fiole segment in the market. We don't want to become just times are tough a marketing department of some gant. We have to make sure ferrable purchase we're profitable enough to say for future development ourselves better pored than So in 2002, Porsche did the unthinkable it became one of the comer bases Last car companies to jump into the insatiable sport Utlity vehide brand image with CUN) market. At roughly 5,000 pounds, the new Poriche Sute, understanding Cayenne was heavier than anything that Porsche had ever made former CEO of Pors to understand our with the exception of some prototype sanksit made during WWII Once again, the new model featured an engine up front. And it were going to was the first Porsche toever be guided with seatbelts for five As news spread about the cars development hows heard from Porsche customer base But this time, Porsche did not seem to concerned the forgotten what happened the last time it devoted from 1. What are th After driving one of the first Cayennes of the assembly journalist stated "A day at the wheel of the 444 he weaknesses Cayenne Turbo leaves two overwhelming impressions Cayenne doesn't behave or feel like an SUV, and second like a Porsche." This was no entry level car Porsche had two and a half to best that could accelerate to co 2 Analyze the hour in just over five seconds, conet like it was on tasand hit process of a leather seats with almost no wind nose from the outside world On top of that. It could keep up with a Land Rover when the pave customer? (2 mentended. Indeed, Porsche had created the Porsche of SUV another lange vehicle but this time a mes rower Discuss briefly luxury sedan. The Porsche faithful and the automotive press again micro envi: gasped in disbelief Bus by the time the Panamera hit the pave! ment, Porsche had prowen once again that Porsche customer company (25 could have their cake and eat it to The Panamera is almost as big of up to 188 mies per hour and accelerate from a state Identify the ch 60 miles per hour in four seconds flat Porsche own brand? (25 pc 1 2:22 Porsche Case was always actives 7.717 old about = are dat whother y want to norabi wer, even vates the ingly frag nderstand man cred olf Hitlers of a u Vok les for the ameplate company ose mod se original with the tomobiles cors cyli This gave tendency t's one of They were but by feelings A Porsche like a piece of dothing--something the owner wears and is seen in. They develop a personal rela tonship with their cars, one that has more to do with the way the car sounds, brates and feels, rather than the row many cup holders it has or how much cargo it can hold in the trunk. They admire ter Porsche because a competent performance ma- chine without being fasty or phony People buy Porsches because they enjoy driving of all they needed was something to get them from point to point, they could find something much less expensive. And while many Porsche owners are car enthusiasts, some of them are not One successful businesswoman and owner of a high-end Porsche sad "When I drive this car to the high school to pick up my daughter I end up with five your gaters in the car. I drive any other car can't even find her she doesn't want to come home FROM NICHE TO NUMEROUS To its fest few decades, Porsche AG lived by the philosophy of Ferry Porsche, Ferdinand's son party created the Porsche 356 be cause no one else made a car like he wanted. "We did no market research, we had no sales forecasts, no return-on-nvestment culations. None of that. I very simply built wydream car and fig ured that there would be other people who share that dreams. real Porsche AG Hom the beginning was very much like its cus- tomers an achieve that set out to make the very best But the years oled on, Porsche management became con cerned with a significant issue were there enough Porsche buy ers to keep the company atat? Granted, the company ever had llusions of churning out the numbers of a Chevrolet or a Toyota Butto fund innovation ever a niche manufacturer has to grow a ittle And Porsche began to worry that the quirky nature of the people who buy Porsches might just run out on them This led Porsche to extend its brand outside the box in the early 1970 Porsche introduced the 914 a square midengine, two-seater that was much cheaper than the 911 This meant that adent class of people could afford a Porsche It was now prise that the 914 became Forsches top selling model. By the late 1970s, Porsche replaced the 91 with a hatchback coupe that had something no other regular Porsche modelad we had an en gire in the front. A less than $20,000, more than $10,000 less than the 911, the 924 and loter 94 models were once again Porsche's aitch to attordability. At one point, Porsche increased its sales goal ty nearly 50 percent to 60.000 cars a year. Ahrough these were in many respects sales successes the Porsche fa cred foul. They considered these entry level model to be cheap and underperforming Most loyalts never really ac cepted these models asal Porsches In fact, they were not at al happy that they had to than the band with a customer who didn't fit the Porsche owner profile They were turned off by what they was a corporategy that had focused on mass over marketing Tha tarnished image was compounded by the fact that Nissan Toyota BMW. and other contacturers had tamped up who see poration doggedly they wet individ as on their themselves vehicles children olish these nice. 2:22 Porsche Case ingly derstands acred gns of all il vous es for the ameste company ose mod e original with the tomobiles ors in This gave tendency at's one of They were weg who see poration doggedly hey wear individu as ONCE on the FROM NICHE TO NUMEROUS For its first few decades, Porsche Alived by the philosophy of Ferry Porsche, Ferdinand's son. Ferty created the Ponche 356 be cause no one else made a car like he wanted. "We did no market research, we had no sales forecasts, no return on investment al culations. None of that I very samely built my dream car and tig ured that there would be other people who share that creams, realy Porsche AG from the beginning was very much like it us- tomers an achieve that set out to make the very best But as the years old on, Porsche management became con- cerned with a significant issue were there enough Porsche buy ers to keep the company atat? Cranted the company never had lors of churring out the numbers of Chevrolet or a Toyota But to fund innovation even a niche manufacturer has to grow a Ittle And Porsche began to worry that the quirky nature of the people who do Porsches might just run out on them Thaled Porsche to extend its brand outside the box in the early 1970 Porsche introduced the 914, a squaresh mid-engine, two-seater that was much cheaper than the 911. This meant that ad class of people could afford a Porsche. It was now prise that the 914 became Porsche top selling model. By the late 1970sPorsche replaced the 914 with a hatchback coupe that had something no other regular Porsche model had ever had an en gire in the front. At less than $20,000, more than $10,000 less than the 911, the 24 de 946 models were once again Porsche's pitch to affordability. At one point, Porsche increased its sales goal by nearly 50 percent to 60.000 cars a year Although these ans were in many respects sales successes the Porsche faithful cried fool. They considered these entry level models to be cheap and underperforming. Most loyalists never really ac cepted these models as real Porsche In taxt, they were not at al happy that they had to share the brand with a customer who didn't fit ve Porsche owner profile. They were turned off by what they saw as a corporate strategy that had focused on must overclass marketing. This tamnished image was compounded by the fact that Nissan Toyota, BMW, and other car manufacturers had tamped up high-end sports car offerings. Creating some fierce competition fact, both the Datsun 280-2X and the Toyota Supra were not only cheaper than Porsche 944 but also faster. A struggling economy Although some Porsche traditionalists would never be caught dead driving a front engine Porsche that has more than two doon Porsche insists that two trends wil sustain these new models. First a Category of Porsche buyers has moved into life stages that have them facing nescapable needs, they need to hau more people and stult This not only apples to curtain feguar Porsche buyers but Porsche is again seeing buyers enter its dealershies that oth erwise wouldn't have only this time, the price points of the new vehicles are drawing only the wel heeled, allowing Porsche to maintain its exclusivity These buyers also seem to fit the achiever profile of regular Porsche buyers The second tiend is the groth of emerging economies Whereas the United States has long been the world's biggest.com some of Porsches the company expects China to become biggest customer before too long Twenty years ago, the United States accounted for about 50 percent of Porsche's worldwide sales. Now, accounts for only about 26 percent. In China, many vehicles children wish these as price ut Porsche e enjoyed ormation sales hud y recog entry level higher end otto regain the high end modest sales er margins company set ed Accord me, we're - 1990, the Chiever who 2:22 TUS, the hiever who once again But by the sell alami rely on only Wieder dert on the becomes - make Porsche Case sales. Now, it accounts for only about 24 percent. In China, many people who can afford to buy a cantas expensive as a Porsche also hure a chauffeur The Cayenne and the Panamera are perfect for those who want to be driven atound in style but who may also want to make a quick getaway if necessary The most recent economic downturn has brought down the sales of just about every maker of premium automobles When times are tough buying a car like a Porsche is the ultimate de ferable purchase. But as this downturn turn backup Porsche is better posed that has ever been to meet the needs of its cus tomer base. It is also better shape than ever to maintains brand image with the Porsche faithful and with others as well Sure, understanding Porsche buyers is still a difficult task. But a forme CEO of Porsche summed up the way if you really want to understand our customers, you have to understand the phrase were going to be a cat. I'd be a Porsche one of the tilty vehicle w Porsche vermude, uning WWI ront. And ets for five thi bly he an ad QUESTIONS: 1. What are the strengths and weaknesses of the Porsche brand? (25 points) ones eAnalyze the buyer decision sumptuou process of a traditional Porsche en trepave customer? (25 points) 9. Discuss briefly the macro and the Prestimicro environment of the company (25 points) A Identify the characteristics of the Porsche owners as consumers. Do you suggest a new segment to be targeted? (25 points) hit the e customer almost as big cadat sce 1 2:22 X Porsche Case cheiden, elish these asi ut Forsche cenjoyed formation sales had deco entry level higher end orto regain the high end odest Sales er margins ompany set ed. Accord they was a corporate strategy that had focused on mass overless marketing The tashed image was compounded by the fact that Nissan Toyota, BMW, and other car manufacturers had camped un high-end sports car offerings, creating some fierce competion fact, both the Datsun 280-2x and the Toyota Supra were not only cheaper than Porsches but so faster. A struggling economy Although some Porsche traditionalists would never be caught deaddriving a front engine Porsche that has more than two door Porsche insists that two trends wit sustain these new models. First a category of Porsche buyers has moved into life stages that have them facing nescapable needs they need to had more people and stuff. This not only applies to certain regular Porsche buyers but Porsche is again seeing buyers enter its dealerships that oth erwise wouldn't have only this time, the price points of the new vehicles are drawing only the wel heeled. ailowing Porsche to mantain itseadusivity. These buyers also seem to fit the achieve profile of regular Porsche buyers The second trend is the gros of emerging economies Whereas the United States has long been the world's biggest con sumer of Porsches, the company expects China to becomes biggest customer before too long. Twenty years ago, the United States accounted for about 50 percent of Porsche's worldwide sales. Now it accounts for only about 26 percent in China, many people who can afford to buy a car as expensive as a Poriche also here a chauffeur The Cayenne and the Panamera are perfect for those who want to be driven around in style but who may also want to make a quick getaway if necessary The most recent economic downturn has brought down the sales of just about every maker of premium automobiles When times are tough, buying a car like a Porsche is the ultimate de ferrable purchase. But as this downturn turns back up Porsche is better poised that has ever been to meet the needs of its cul tomer base. It also better shape than ever to maintain its brand image with the Porsche faithful and with others as well Sure, understanding Porsche buyers la difficultas Buta former CEO of Porsche summedit this way. If you really want to understand our customers, you have to understand the phrase were going to be a cat'd be a Porsche - 19901, the chiever who once again Hut by the self a fami rely on only Wedeking dent on the become just make sure Ourves one of the tity vehicle w Porsche ever made uring WWE ront Anda ots for five ws thi he bly he QUESTIONS: 1. What are the strengths and weaknesses of the Porsche brand? (25 points) onges peAnalyze the buyer decision umptuous process of a traditional Porsche een the peve customer? (25 points) ant of SUV --------.. 1 121