Porsche Case Analysis
The intent of this case analysis is to evaluate the buyer decision process the typical Porsche customer undertakes when searching for a new high-performance sports car. The Porsche sports car enthusiasts’ decision process is significantly different than that of the Cayenne and Panamera customers, and these differences will be discussed. The factors that contributed to Porsche selling significantly more lower-priced models in the 1970s and 1980s is also analyzed. An explanation of the positive and negative attitudes towards brands like Porsche is provided, in addition to the role the Porsche brand plays in the self-concept of buyers.
Analyzing the Decision Process of the Porsche Customer
The core customer base of Porsche has a self-concept of being exceptional in every area of their lives, from their ability to set and surpass very challenging objectives, to their ability to earn above-average incomes and have exceptional lifestyles as a result. This self-concept revolves around their automobile being a symbol of their level of achievement (Rosecky, King, 1996, pp, 223, 224). The reliance on the auto as the primary means of communicating one’s achievements and status in the world become more prevalent the higher the competitive intensity of industries customers are part of (Thanasuta, Patoomsuwan, Chaimahawong, Chiaravutthi, 2009). Not only is the Porsche a symbol of achievement, it is also one of overcoming challenging in competitive, turbulent industries (Thanasuta, Patoomsuwan, Chaimahawong, Chiaravutthi, 2009, pp. 369-372). The decision process for the traditional Porsche buyer puts the attributes of high performance, exceptional agility, strength and affluence at the center of their decision making process. The selection of a Porsche is predicated on these values, combined with the opportunity customize the vehicle to their unique requirements (Cooper, Inoue, 1996, p. 294).
Contrasting Decision Making Processes with Cayenne and Panamera Customers
Where the traditional Porsche buyer is more concerned with the engineering excellence of their vehicle (Petroff, Petroff,1987, p. 44) and what it says about them from an achievement standpoint (Thanasuta, Patoomsuwan, Chaimahawong, Chiaravutthi, 2009, pp. 358, 359), the Cayenne and Panamera customers are looking for the Porsche qualities in a more practical vehicle. From a marketing segmentation and psychographic standpoint, these latter buyers want the Porsche experience yet need the extra room to accommodate where they are in their lifecycles as consumers (Ulrich, 2010, pp. 31, 32). What has made the Cayenne and Panamera so successful is the emphasis both vehicle designs place on the experience of owning a Porsche without the sacrifice of space (Gilmore, Pine, 2002, p. 7).
The decision making processes of the Cayenne and Panamera customers are significantly different than those of the traditional customer base. The focus on speed, agility and engineering excellence are still evident in their decision making criteria, yet they are balanced with the practical needs of families primarily, and second, with those who use their cars to entertain and transport larger groups of people (Ulrich, 2010, pp. 31). The original concept of the Porsche SUV was in fact defined through the customization business the company originally created nearly a decade before the first mass-produced SUV was ever sold (Murphy, 1999). While Porsche has a level of engineering excellence that few car companies do (Petroff, Petroff,1987, pp. 43, 44) their approach to selling SUVs was one of “no comprise” meaning customers could get the same experience and still meet their needs for practicality in a vehicle (Ulrich, 2010, p. 7). Sharing the value of engineering excellence in the vehicles they purchases, both the traditional Porsche customer and new SUV customer varied significantly on the type of experience they wanted. For the latter, the experience was one of luxury, comfort and freedom that more room in a vehicle provides (Ulrich, 2010, pp. 5, 6). Porsche was successful with this strategy because they stayed true to their values of engineering excellence and precision engineering, all contained within a luxurious experience.
Why Porsche Was Successful with Lower-Priced Models during the 1970s and 80s
The aspirational attributes of the Porsche brand are very strong, and led many of the original customer base to purchase one of their vehicles, even if they could not initially afford it. The strength of the Porsche brand is in their reputation for extreme engineering excellence and accuracy (Petroff, Petroff, 1987, 44) which are values many high performance luxury car buyers seek in their vehicles (Lesser, Hughes, 1986, 19). The lower price models did not do well because of their low price; they excelled in spite of that pricing strategy. A low price connotes lower quality in many markets, and in the luxury auto market, the price itself is an aspiration factor that potential customers also like to indirectly communicate via purchase they can afford (Rosecky, King, 1996, p. 224). In other words, a higher price acts as an incentive in brand-aspirational segments, where potential new customers want the distinction of being seen as able to afford the more expensive brand (Thanasuta, Patoomsuwan, Chaimahawong, Chiaravutthi, 2009, pp. 238-239). Due to all of these factors, Porsche succeeded with the lower-priced models because aspirational customers who could not afford the higher-end more exclusive models could still own a Porsche and enjoy the referent value of being seen as affluent enough to afford the brand. In reality, Porsche could have kept the prices ten percent or more higher and still accomplished its objective, earning more profit in the process.
Analyzing the Positive and Negative Consumer Attitudes Towards Porsche
For any highly affluent brand, there will be strong emotions, both positive and negative. The aspirational value and the brand and its implications for buyers of its vehicles is a strong positive, as within that perception are the values of engineering excellence, agility, speed and luxury, all contained in a single product. What is also a strong positive factor is the experience of driving a Porsche itself, which for many of the traditional customers, is the most valued attribute of the vehicle. The most loyal customers to a brand are more loyal to the experience and how the product or service makes them feel, not so much to just the product itself (Gilmore, Pine, 2002, pp. 4, 5). The experience and control over a very powerful, well-engineered vehicle and the ability to consistently define ones’ uniqueness is also part of the Porsche brand from a positive standpoint. From a negative perspective, Porsche has often been associated with arrogance, avarice, and given off an impression of its owners being above or thinking themselves better than everyone else. They do for the most part. This is a challenge for Porsche marketing to overcome. Porsche has in the past been plagued with confusion over their product strategies (Gumpert, 1986, p. 98) and willingness to attempt to be all things to all people in the luxury segment (Rosecky, King, 1996, p. 228). As a result, the Porsche brand has been significantly diluted in the minds of luxury car buyers (Thanasuta, Patoomsuwan, Chaimahawong, Chiaravutthi, 2009, p. 342). Fortunately for Porsche, the experience of driving one of their vehicles is so unique; the shortcomings of their brand are often overcome by the engineering excellence of the product itself (Gilmore, Pine, 2002, p. 10). This is why Porsche invites its customers to visit their manufacturing facilities in Germany and drive their newly-purchased vehicles through Europe before having them shipped home (German Business Review, 2008, p. 8). Porsche has found that this program gives their customer greater trust in their brand sand reinforces their purchasing decision.
The Role Porsche Plays in the Self-Concept of it Buyers
The Porsche brand has become synonymous with engineering excellence and precision, two of the core attributes of German auto engineering (Thanasuta, Patoomsuwan, Chaimahawong, Chiaravutthi, 2009, p. 362). It has also become synonymous with high performance luxury, connoting the customer can afford a premium, very high end vehicle (Rosecky, King, 1996, p. 225). The Porsche brand therefore acts as a reinforcement of the self-concept of high achievers who are able to set challenging objectives and surpass them. For these individuals who also happen to have a high net worth, they are seeking a vehicle that immediately communicates their achievement, status and financial gains in the world.
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Gumpert, David E.. (1986, March). Porsche on Nichemanship. Harvard Business Review, 64(2), 98.
Lesser, J., & Hughes, M.. (1986). The Generalizability of Psychographic Market Segments across Geographic Locations. Journal of Marketing, 50(1), 18-27.
Morgan Murphy. (1999, March). The chop shop in Stuttgart. Forbes, 163(6), 172.
Petroff, Jim, & Petroff, Marie. (1987, September). “Porsche Quality” in Application Design. Systems 3X World, 15(9), 42.
Rosecky, Richard B, & King, Algin B. (1996). Perceptual differences among owners of luxury cars: Strategic marketing implications. The Mid – Atlantic Journal of Business, 32(3), 221-240
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