Porsche Marketing Strategy

International Marketing with Cases, Julian Baumann

Marketing Strategy

Name: Julian BaumannMatriculation Number: 2323530Semester: Fall Semester 2013/2014Professor: Prof. Dr. Kai Uwe Wellner

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List of ContentsList of Figures 3

List of Tables 3

1. Introduction 3

2. The Company – Porsche 42.2. General Facts about the Company 52.2. History and product development of Porsche 52.3. Porsche Model Overview 72.4. Business Development in 2012 82.5. Porsche in Motorsport 10

2.4.1. Porsche’s History in Motorsports 102.5.2. The 24 Hours of Le Mans 112.5.3. Meaning of motorsports for Porsche 122.5.4. Innovations from Motorsport 13

3. Strategic and Operative Marketing Analysis 133.1. Strategic Marketing Analysis 13

3.1.1. Pricing Strategy 133.1.2. Positioning and Target Groups 15

3.2. Market Analysis 153.2.1. Economic Situation 153.2.2. Main Competitor’s for the Porsche 911 16

3.3. Branding 193.3.1. Interbrand Ranking 193.3.2. Porsche’s Interbrand Ranking 19

3.4. Communication 213.4.1. Porsche Homepage 213.4.2. Porsche on Facebook 223.4.3. Social Media 23

4. Key strenghts and weaknesses of Porsche 244.1. Porsche’s unique selling propositions – USP 244.2. SWOT - Analysis

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5. Predictions for the Future 285.1. Strategy for 2018 285.2. Comeback - 24 Hours of Le Mans 29

6. Conclusion 31

List of References 32

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List of Figures

Figure 1: Flyline Silhouette and Porsche 911 4Figure 2: Timeline – History of Porsche 6Figure 3: Model variations of the Porsche 911 Carrera 8Figure 4: Porsche’s History in Motorsports 11Figure 5: Le Mans: Forget Reminiscing 12Figure 6: Porsche’s Motorsport Principles 13Figure 7: Interbrand Ranking 2013 21Figure 8: Porsche Homepage 22Figure 9: Porsche’s Marketing in Facebook 24Figure 10: Porsche Twitter 25Figure 11: Porsche Youtube Channel 25Figure 12: Strategy for 2018 29Figure 13: Ferry and F.A. Porsche 31

List of Tables

Table 1: History of Sales and Profits since 1993 5Table 2: Porsche Model Overview 7Table 3: Car Sales 2012 per Region 8Table 4: Porsche’s growth in regions 9Table 5: Porsche Sales per Model – Comparison 2011 and 2012 9Table 6: Comparison – average price, profit margin 14Table 7: Interbrand – Automotive Brands in 2013 16Table 8: Porsche’s main Competitors 17Table 9: Main competitors by Luxury, Performance and Price 18Table 10: Comparison – Facebook likes 22Table 11: Comparison – Facebook articles in November – December 2013 22

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1. Introduction

On the front cover of my paper you can see two things typical for the spirit of Porsche

car manufacturing.

1. The Flyline – a typical feature of every Porsche car. 1 The streamline shape was

initially developed and designed for racing, but it soon became a genuine trademark

for every single sports car produced by Porsche. All the seven editions of the famous

911 have only had slight modifications and all have the shape in common that is

faithful to the first edition of the 911, which was produced in 1963.

The shape of the silhouette goes back to the very first model designed by Ferdinand

Porsche: The Volkswagen, which was originally ordered by Adolf Hitler in 1934.

2. Porsche 911 Porsche Sports Car - Designed for racing but perfectly suitable for

daily-use/life. With certain features from racing, to unleash the power and real

potential of a Porsche whenever it is wanted, but on the other hand a car appropriate

for normal streets and easy to handle for everyone. Moreover, the early founders of

Porsche were utterly convinced that driving is not just about arriving at your

destination, but also about how to arrive there.

1 Screenshots taken from www.porsche.com

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Figure 1: Flyline Silhouette and Porsche 911


2. The Company – Porsche

2.2. General Facts about the Company

70 % of all Porsche vehicles ever built are still on the road

18,4% - The highest profit margin in the industry

More than 30.000 race victories in different classes

6:57 – fastest lap time of a production car on the Nürburgring-Nordschleife

by Porsche Spyder 918

7000 world-wide patents, proof of engineering artistry

Porsche – A brand that has shaped the evolution of automobiles like nobody else. A

brand that is synonymous with race sports and most of all a brand that creates

fascination. Porsche is responsible for plenty of childhood dreams and has been

drawing the attention of observers for more than 50 years.

In my paper I want to observe the company’s marketing strategies and its current

development. Moreover, I want to give an insight into what makes Porsche so

exciting and different from all comparable cars – even raise the question if there are

comparable cars.

2.2. History and product development of Porsche

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

-4

-2

0

2

4

6

8

10

12

14

16

Sales in Billion € ProfitTable 1: History of Sales and Profits since 19932

2 Numbers taken from http://en.wikipedia.org/wiki/Porsche , 27. December 2013

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In 1993 Wendelin Wiedeking has taken over Porsche as CEO and has shaped the

nearer future of the brand. His efforts to consolidate the brand, not only saved it from

bankruptcy but brought it back on track with the introduction of new successful

models, for instance the Porsche Cayenne, who has turned out to be the best-selling

car these days. After the failed takeover of Volkswagen and heavy losses in 2008,

Porsche experienced an astonishing transition and can now be regarded as the most

profitable car manufacturer in the world.

The story of success started back in 1947 after the 2nd WW when Ferry Porsche,

Ferdinand’s son took over the company. In 1948 Ferry built the first sports car named

Porsche, the 356 was a worthy predecessor of the famous Porsche Carrera 911, who

was first presented to the public in the Frankfurt Motorshow in 1963 as more

comfortable replacement of the 356. In 2013 the Porsche 911 celebrated its 50 th

years anniversary with a specially designed edition.

In the meantime five other models were introduced and are now part of the Porsche

sports car family.

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1947Ferry Porsche

2010

2000

1990

1980

1970

1960

1948Porsche 356

1975911 Turbo

1963Porsche 911

1996 Boxster

2002Cayenne

2005Cayman

2013 Macan

2009Panamera

1993 – 2009Wendelin Wiedeking

1972 - Dr. Ing. h.c. F. Porsche AG

2009 Volkswagen AG

Figure 2: Timeline – History of Porsche


2.3. Porsche Model Overview3

The following table is revealing Porsche’s current portfolio. Most of the models can

be purchased in different options:

i.E. Cayenne – Cayenne Diesel – Cayenne S – Cayenne Turbo

Porsche 911 Boxster Cayenne Cayman Panamera Macan

90.417 € 49.243 € 59.358 € 51.385 € 83.277 € 57.930 €

1963 - 1996 - 2002 - 2005 - 2009 - 2013 -

Table 2: Porsche Model Overview

As for the Porsche Carrera 911 there is a variety of different options to choose from.

For more than 50 years the Porsche 911 has shaped the evolution of sports cars. As

a story of big success Porsche remains faithful to the traditional design and the

famous “Flyline” – the shape of the 911. Porsche itself calls the 911 “The

Benchmark” in performance combined with everyday practicability.

The price structure goes from roughly 90.000 € for the basic version of the 911 to

more than 207.000 € for the Porsche Turbo S Cabriolet.4

Figure 3: Model variations of the Porsche 911 Carrera

3 Screenshots taken from www.porsche.com , 17 December 20134 Porsche, 2014, Models – 911, http://www.porsche.com/germany/models/911/ 05 January 2014

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2.4. Business Development in 2012

With 143.096 cars delivered to customers in the fiscal year 2012, Porsche achieved

its most successful year in the entire history.

The most important markets for Porsche deliveries are the USA, China and

Germany. With around 25% of total sales and 35.043 units sold the USA has once

again justified its role as the leading global market. The 911 had a considerable

increase in sales of 40% in the United States. Porsche was able to continue the

growth in all main markets. There was also positive impetus from the BRIC countries.

Porsche has overcome the struggle in its home markets in Europa, where many

countries are still negatively affected by the financial crisis. The number of delivered

vehicles in Germany rose by 17% to 17.487, despite the tough situations on the

market.

27%

23%

33%

16%

Car Sales 2012 per regionNorth America China Europe Rest of the World

Table 3: Car Sales 2012 per Region

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USA – 36.170

China – 33.590Germany – 16.090

Europe – 47.184

Rest of the World – 23.130


The following table indicates Porsche’s increase in sales for every single market. The

two main drivers of Porsche’s growth were once again the USA and China. 5

Region Change to 2011Europe 47.184 + 11%

(Incl. Germany) 16.090 + 16%USA 36.170 + 33%China 33.590 + 32%Rest of the World 23.130 + 19%Table 4: Porsche’s growth in regions

After the USA China is the other main market for the delivery of Porsche cars. It is

the biggest sales market for the Cayenne as well as for the Panamera model.

In general, Porsche’s main players are the Cayenne, the 911 and the Panamera. In

particular the Porsche Cayenne can be seen as a symbol for the positive trend in the

last years with 74.763 units sold.Porsche claims to have increased its deliveries to

customers by 84% of the last 3 years. This is a remarkable development for the

company, which was in heavy losses back in 2008.

Porsche 911

Boxster/Cayman

Cayenne

Panamera

Combined Sales

17607

11280

59873

28218

116978

26203

11740

77822

27331

143096

Porsche Sales 2011 - 20122012 2011

Table 5: Porsche Sales per Model – Comparison 2011 and 20126

5 Dr. Ing. h.c. F. Porsche AG. Annual Report 2012, p. 286Porsche, 2014, Data and Facts, http://www.porsche.com/international/aboutporsche/overview/dataandfacts 10 January 2014

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2.5. Porsche in Motorsport

Ferry Porsche in 1970:

"We drive races firstly because it’s part of our history and secondly because you can

gain a lot of experiences in races also because our engineers can learn a lot.“

Racing has always been a significant part in the history of Porsche. Over the years

Porsche achieved more than 30.000 victories in races completely different from each

other:

Figure 4: Porsche’s History in Motorsports

2.5.1. Porsche’s History in Motorsports

Porsche regards racing as a part of the on-going engineering development. Targa

Florio is the oldest open road race in the world, with the first race held in 1906. After

11 race victories the brand Porsche became synonymous with this racing classic.

Ever since then you cannot imagine Porsche without motorsports, building

lightweight and efficient race cars.

In 1970 Porsche finally claims the victory of the 24 Hour Race of Le Mans for the first

time. Ferry Porsche and Ferdinand Piech were the leading engineers in motorsports

and the Porsche 917 the guarantee to success. Porsche’s policy was to introduce

new cars in races to receive publicity, which was later followed by the introducing of

the new serial cars on the market. In the 80s Porsche dominates Le Mans and claims

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Targa FlorioRally Paris - DakarFormula 1 24h of Le Mans


7 victories in a row for the cars from Zuffenhausen.

In 1984 Niki Lauda wins the Formula 1, Porsche engines were the driving

force of two more Formula 1 wins.

In 1986 the Prosche 911 4x4 wins the Paris Dakar dessert race with an all-

wheel-drive car.

Until today Porsche’s last appearance in Le Mans was in 1998: in celebration of

Porsche’s 50th anniversary the 911 GT1 is developed and wins double overall victory

in Le Mans.

2.5.2. The 24 Hours of Le Mans

"The most famous endurance race in the world, marked by sportsmanship and quest

for performance, has told an heroic chapter of automobile history since 1923.“7

Porsche’s successful racing tradition is inextricably linked with the legendary race of

Le Mans. With its 16th overall victory in 1998 Porsche set a milestone and is still the

reigning record holder of Le Mans.

NOW Porsche has stated a mission. After years of absence, the race company wants

get back into the fight for the prestigious title in this most famous of all endurance

races.

Porsche starts with great ambitions and wants to win the title. For the product

development they can rely on the determination of their engineers, which never

stands still.

"To use the past, our tradition, as a source of inspiration for creating innovation."8

7 24h Le Mans, 2013, La Legende, http://www.24h-lemans.com/fr/la-course/la-legende_2_1_1710.html , 27 December 2013

8Porsche, 2014, Mission 2014 – Le Mans, http://www.porsche.com/microsite/mission2014-resettozero/international.aspx , 01 January 2014

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Figure 5: Le Mans: Forget Reminiscing

2.5.3. Meaning of motorsports for Porsche

Decades have seen Porsche's engagement in motorsports. Countless victories in

Targa Floria and Le Mans, have not only proved Porsche's ability for innovation but

have been leading the way in the development of new technologies, in pioneering

and shaping the history of the automobile itself, always striving for peak performance.

When developing a new car the engineers always start at zero, question every single

detail and leave the past behind.

"Sports car or Race car? - To Porsche there is no difference"

What is experienced on the race track influences the development of the standard-

production vehicles. Racing embodies Porsche's principles. Porsche set out 3

principles that shape both the engangement in motorsport, as well as every single

standard-car going through Porsche's production:

Figure 6: Porsche’s Motorsport Principles

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Motorsport

Spirit

Vision

Principle


2.5.4. Innovations from Motorsport

Porsche’s identity is on the race track. As a consequence, the experiences from

racing are directly applied on the road. Thus, many major changes in cars have been

implemented in racing first:

Porsche Doppelkupplung (PDK): shifting without interruption of traction

Introduced in motorsport in 1984 for the Porsche 956

In 2008 first introduced for the Porsche 911: 60% faster than automatic gear

box

Turbo charger: turbine driven forced induction device for higher performance

and efficiency.9

Introduced in 1970 in the Porsche 917, winning the 24h Le Mans

In 1974 the Porsche Turbo is published as the first serial car with turbo

charger10

Ceramic Brakes: higher performance and reduced weight

The 911 GT2 in 2001 is the first serial car to be equipped with Porsche

Ceramic Composite Brake (PCCB)

In 1991 Porsche became the first car manufacturer in Germany to equip all

production models with airbags for driver and front passenger as standard.

3. Strategic and Operative Marketing Analysis

3.1. Strategic Marketing Analysis

3.1.1. Pricing Strategy

A recent interview with Porsche CEO Matthias Müller give insight into Porsche’s

pricing strategy.

He mentioned that it is a sensitive balance between luxury and sports cars, whereas

driving pleasure and performance should always be the priority.11 Porsche

9 Orel/Brümmer. (2009) Generation Porsche, Kempen: teNeues Publishing Group.10 Kubiak, Achim. (2005). Faszination 911,Delius Klasing Verlag, Bielefeld, p.8911Manager Magazin, 25.03.2013, Interview Porsche Chef, http://www.manager-magazin.de/unternehmen/autoindustrie/a-889808-2.html, 09 January 2014

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understands itself as a premium car manufacturer with high brand value, which

means that creating cheaper models can be a negatively perceived by existing

customer’s, who are in fear of losing the exclusivity that they purchased along with a

Porsche.

50.000 € is the magic number. A Porsche car should not be below this level in order

to preserve Porsche’s brand image.

An average Porsche is sold for more than 90.000 €, this is extraordinary high

regarding the sales numbers of 143.000 units in 2012. Porsche can command a high

premium for the products. This is one of the reasons why it has been the most

profitable car manufacturer for several years.12

Brand Average price in € Profit Margin per car Profit margin in %

90.064 16.590 18,4 %

126.429 15.000 11,9 %

36.465 3.821 10,5 %

35.715 3.495 9,8 %

40.796 2.012 4,9 %

Table 6: Comparison – average price, profit margin

12 Wirtschaftswoche, 07.08.2013, Was die Autokonzerne an ihren Autos verdienen, http://www.wiwo.de/unternehmen/auto/gewinnmargen-was-die-autokonzerne-an-ihren-autos-verdienen/8606442.html#image, 12 January 2013

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3.1.2. Positioning and Target Groups

The positioning of a product refers to the way it is perceived by the customers.

In this context I want to apply the definition of the two pioneers in this field of studies:

“But positioning is not what you do to a product. Positioning is what you do to the

mind of the prospects.”13

There must be a reason for Porsche being received as “the world’s best small sports

car”, a Volvo as “the safest car” and a BMW as “the ultimate driving machine”.14

Trout and Ries describe the positioning of a product as the ultimate competitive

advantage on the market. In today’s glutted market with more information than any

customer could handle, people won’t compare every single product with each other,

they are driven by their opinion and emotions about the product.

That is why marketers must focus to win the hearts and mind of the consumer in an

over communicated market.

As indicated Porsche belongs to the segment of high-class sports car manufacturing:

potential clients are between 40-50 years, male and with a high disposable income.

In general, they are luxury sports car enthusiasts that want to live the freedom and

independence that is linked with a Porsche.

3.2. Market Analysis

3.2.1. Economic Situation

The growth rate of the global economy decreased by 2.6 % in 2012. One of the

reasons for this is sure to be the continuing debt crisis in Europe. In contrast to many

other European countries Germany experience a modest growth of 0.9 %, as it was

capable of benefitting from the growth in the BRIC countries and in China.

After years of recession the automobile market is now growing significantly. Despite

the problems in the Euro Zone the automobile market grew by 7.2 %. With an

increase of 12.4 % the Chinese automobile market was contributing in a high degree.

13 Trout/ Ries, 1981, Positioning: The Battle for your Mind, McGraw-Hill, New York14 Kotler, 2003, Marketing Insights from A to Z, John Wiley & Sons, New Jersey, p.135

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Let’s put some scrutiny on the growth rates of the big automobile brands:15

Rank Brand Name Brand Value ($m) Change in Brand Value10 Toyota 35,346 17%

11 Mercedes-Benz 31,904 6%

12 BMW 31,839 10%

20 Honda 18,490 7%

34 Volkswagen 11,120 20%

42 Ford 9,181 15%

43 Hyundai 9,004 20%

51 Audi 7,767 8%

64 Porsche 6,471 26%

65 Nissan 6,203 25%

83 Kia 4,708 15%

89 Chevrolet 4,578 0%

96 Harley-Davidson 4,230 10%

98 Ferrari 4,013 6%

Table 7: Interbrand – Automotive Brands in 2013

It can be seen that Porsche had the biggest growth in brand value. The expansion of

the portfolio can therefore be regarded as a wise step that has further contributed to

the reputation of the brand Porsche.

3.2.2. Main Competitor’s for the Porsche 911

15 Interbrand, 2013, Best Automotive Brands: http://www.interbrand.com/de/best-global-brands/2013/sector-overviews/auto-2013.aspx 12 January 2014

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Although there seem to be a variety of models fighting for market share alongside

Porsche, there are just a couple of models that compete intentionally with the 911, or

respectively with the Porsche 911 Turbo.

Brand/Model Retail Price

Differentiation Strategy

Porsche 911 90.417 € Superior Handling and driving

experience suitable for daily-use

Porsche 911 Turbo 162.000 € “The Benchmark.”16

Audi R8 V10 142.000 € Audi Quattro – 4 wheel drive innovator (new entrant on market) focused on performance

BMW M6 124.000 € High performance, good

reputation:sheer driving pleasure

Nissan GTR 95.000 € excellent times on race track good performance/price ratio targeting directly at 911 Turbo

Ferrari F458 - Italia 197.000 € High brand value (Formula 1

image) targeting Lamborghini, to some degree also the 911 Turbo

Lamborghini Gallardo 168.000 € more exclusive and expensive

targeting Ferrari, to some degree also the 911 Turbo

Aston Martin V8 Vantage 109.021 € High Brand value, brand Image: style and luxury targeting directly on 911

Jaguar XKR 106.200 € Luxurious Different brand image (less sports) Targeting Aston Martin

Mercedes SL 94.962 € different brand image (luxury) not targeting on 911

Table 8: Porsche’s main Competitors

16Porsche, 2014, 911 Turbo, http://www.porsche.com/usa/models/911/911-turbo/ 14 December 2013

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Super Sports Cars

Sports Cars

Luxury and Exclusivity


The following table shows that Lamborghini and Ferrari are targeting a completely

different customer group. Ferrari is more exclusive and more prestigious and also far

above Porsche’s price range with starting prices close to 200.000 €. Porsche sports

cars, with the Boxster as the cheapest model, are accessible from 50.000 € to about

150.000.

Porsche, with more than 26.000 Porsche 911 units sold in 2012 show Porsche as the

clear market leader in this segment.

As for instance the Nissan GTR is a high performance sports car with the price of a

911 and the power race profile of a Porsche 911 Turbo. It is indeed a very good race

car with an excellent feeling on the road. However, it is still a Nissan and therefore

only slightly connected with emotional links. For 100.000 € the brand value does play

a big role in car decisions. Due to history and outstanding reputation customers are

willing to pay a premium for Porsche cars. That is why Porsche dominates its chosen

niche: the sports car market ranging from 60.000 – 130.000 €.

Price in €

100.000 €Luxury Performance

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Porsche 911

911 - Turbo

Mercedes SL

Nissan GTR

BMW M6

Audi R8 V10

Lamborghini Gallardo

Ferrari F458

Aston Martin V8 Vantage

Jaguar XKR

162.000 €


200.000 €

Table 9: Main competitors by Luxury, Performance and Price

3.3. Branding

A brand can be an important asset for a company and contribute to success to a

considerable extent. In the book “The Brand Gap” the author explains the importance

of a brand:

“A brand is not a logo. A brand is not an identity. A brand is not a product.

A brand is a person’s gut feeling about a product, service or organization.”17

There different definitions of brand value. I want to imply the acknowledged

“Interbrand Ranking of Brand Value”, which is creating rankings for the value of the

top 100 brands on a yearly basis.

3.3.1. Interbrand Ranking

Brands are living business assets to create identification, differentiation and value to

customers and shareholders.18 Interbrand measures the contribution of the brand to

business results. It creates a brand value by analysing several factors:

brands financial performance

influence on customer choice

strength of the brand relative to competition

The combination of these factors result in the brand value

3.3.2. Porsche’s Interbrand Ranking

Porsche’s brand value has constantly grown over the last years. In 2013 Porsche

was the automotive brand with the highest rise in percentage compared to the

competition.

17 Neumaier, Marty, 2005, The Brand Gap – How to bridge the distance between Business Strategy and Design, Berkeley/USA, New Riders18 Interbrand, 2014, Best Global Brands – Our Methodologyhttp://www.interbrand.com/de/best-global-brands/2013/best-global-brands-methodology.aspx , 24 December 2013

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Super Sports Cars


In the 2013 ranking Porsche takes an astonishing place 64. Even though it is only a

small car company it has an excellent reputation and is admired for the purity of its

design and the performance of its racing machines.

Only five other brands in the Top100 have had a higher increase in value considering

the last period: Apple, Google, Amazon, Facebook and Prada.

The high brand value allows Porsche to command a premium for its products and

create passionate customer loyalty.

In terms of the future Porsche can be certified a positive trend:

"With the debut of the new 911 at the 2013 Frankfurt auto show, the upcoming

launch of the 918 supercar hybrid, the rebirth of Porsche prototype racing, and an

ever-widening product line, Porsche is still top in automotive performance, true to its

core, and always evolving."19

19 Interbrand, 2014, Interbrand Ranking 2013 – Porschehttp://www.interbrand.com/de/best-global-brands/2013/Porsche, 19 December 2013

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Figure 7: Interbrand Ranking 2013

3.4. Communication

3.4.1. Porsche Homepage

The Porsche homepage has a very clear design and nice usability. On the homepage

Porsche is offering the latest products, providing information about the history, the

company itself and current events, such as the 24h of Le Mans.

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Figure 7: Porsche Homepage20

Along with many specifics about every single car there is also the possibility to “Build

your own” Porsche.

Everything can be chosen from design, over extras to the engine.

When finished with the customization the car can be saved and a link to a dealer is

created who will then advance in a personal meeting with the further negotiations.

Porsche Homepage Build Your Own 911 Customization Configuration sent

to the dealer of your choice

3.4.2. Porsche on Facebook

Even though the other brands have a higher number of likes, Porsche’s Facebook

page looks very professional and my opinion provides the best customer experience.

Brand

20 Screenshot taken from www.porsche.com, 23 December 2013

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Facebook Likes

Table 10: Comparison – Facebook likes

What is remarkable about Porsche’s Facebook appearance is the high quantity of

videos that are used in the articles to promote new cars and to present marketing

highlights. The multimedia is used in a very simple but effective way.

Brand

Number of Facebook Articles 27 26 62 20

Numberof Videos 14 4 4 0

Ratio Videos/Articles 51,85 % 15.39 % 6,45 % 0,00 %

Table 11: Comparison – Facebook articles in November – December 201321

It is also quite obvious that Porsche tries to attract people with an environmental

awareness. Almost every advertisement about a new car is underlined with the

subscription “Combined Fuel Consumption 9,6l”. It is a fact that Porsche is building

light-weight sports cars with compared to other manufacturers relatively low fuel

consumption in relation to the car’s performance. This can be seen as a main

competitive advantage.

21 Information taken from the different Facebook Fan Pages

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Figure 8: Porsche’s Marketing in Facebook 22

3.4.3. Social Media

Apart from Facebook Porsche is also communicating on several other social media platforms such as Twitter and Youtube. The content is similar to Facebook and helps to underline a harmonious overall image of Porsche’s media presence.

22 Screenshot taken from https://www.facebook.com/porsche, 12 January 2014

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Figure 9: Porsche Twitter23

Figure 10: Porsche Youtube Channel24

4. Key strenghts and weaknesses of Porsche

Even though Porsche is currently experiencing an all-time high and has plans for

further expansions, there are several facts not to be neglected.

23 Screenshot taken from https://twitter.com/Porsche 09 January 201424 Screenshot taken from http://www.youtube.com/user/Porsche, 11 January 2014

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A point that must be taken into debate is the further introduction of new models. Is it

the right way or is there a high danger of losing of losing momentum in Porsche’s

traditional core segment: Sports Cars.

4.1. Porsche’s unique selling propositions – USP

Porsche means looking at the world from a different angle. Unlike in other cars, the

ignition switch is located to the left of the steering wheel.25 This is one out of many

indications that Porsche is a company very different from all the others.

The Porsche brand itself is capable of creating fascination and delivering values to its

customers every bit as to every observer. Porsche is the cause of numerous

childhood dreams for its simple but unmistakable design. The identity of the 911 has

never changed over the years: “911 is an extremely sporty car. It’s technically

innovative, but it’s never showy or pompous. Everybody would like to have on,

precisely because a 911 is status-neutral.”26

Let’s employ again the comparison with the Nissan GTR, a very good car but no

personal links, no emotions and not admired by other people when passing by on the

street. Simple as that it is the name „Porsche“ that is a Unique Selling Proposition.

This selling proposition is what Porsche tried to expand into other segments, such as

the sports utility vehicle, when they entered this market back in 2003 with the

Cayenne. Even though the voices of the critics were harsh this move proved to be

very successful with 75.000 units sold in 2012. The Panamera and the Macan are

just the next steps on Porsche’s way to a bigger car manufacturer that uses his name

and the emotions and fascinations going along with it to market and succeed in other

niches.

Porsche is famous for its race history and the reputation for building great sports cars

that are well worth the money spent on them. In fact, many older Porsche models are

valuable collector’s pieces and growing in value.

25 Orel/Brümmer, 2009, Generation Porsche, teNeues Publishing Group, Kempen, p. 326Dr. Ing. h.c. F. Porsche AG. Annual Report 2012, p. 75

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Another unique selling proposition is the low consumption for a sports car. Porsche is

building sustainable light-weight cars with consumption well below average regarding

their performance.

The excellent configuration of the rear engine in combination with Porsche Stability

Management, which “maintains stability even at the limits of dynamic driving.” ,27

creates a driving pleasure that is as sportive and as secure as never seen before.

Moreover, “Turbo”, “Carrera” and “911” are trademarks that are synonymous for

racing and these trademarks create emotions. Indeed they are strongly marked

features that have developed over time and create value. Porsche has built up a very

strong communication language, with every name knowingly expressing a specific

core message:

“Turbo is Porsche’s top model and therefore the best sports car there is.”28

4.2. SWOT - Analysis

Strengths:

Brand’s History:

Porsche is a trrusted brand for supreme style with sports feature with excellent brand

presence across the globe. The engagement in motorsports is the driving force for

new innovations and proof of Porsche’s engineering artistry.

Financial support by VW:

The ability to make use of new technologies and shared forces in the facilities can

make Porsche an even more profitable and successful manufacturer.

Biggest Company specialised in Sports Cars:

Porsche can benefit from years of experience in sports car manufacturing. The 911 is

a proof for the identity and the development of the brand. The fascination for the

27 Porsche AG, 2014, Porsche Stability Managementhttp://www.porsche.com/international/models/911/911-carrera/safety/porsche-stability-management-psm/ 11 January 201428 Vann, Peter, 2004, Porsche Turbo – The Full History, Motorbooks, St. Paul/USA p.126

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brand and its models has been created over time and therefore very persistent and in

the mind of many people

Weaknesses:

Dilution of the brand:

Since the image of Porsche is one of its biggest asset, there is also a potential

danger of losing it. A recent example of defocusing by brand extension is the

Cayenne. Porsche has entered completely new terrain and „betrayed“ its reputation

as a maker of classic sports cars. They maintain that the Cayenne is an example

of Porsche innovation, but Porsche fans will say it’s a grab for profits in a tired

market. Naturally, the new car will sell. It’s got the revered Porsche styling and

engineering, the question is, what does Porsche now stand for?29 It’s therefore a

question of identity, which Porsche might be about to lose by introducing even more

new models. The more Porsche you see on the road the less exclusive is the

experience for every single customer.

Opportunities:

Internationalization:

In emerging markets, especially the BRIC countries Porsche is already present and

thoroughly expanding and improving its dealership structure. Porsche is only having

small sales so far, consequently there is big potential left for improvement.

Building environmentally – friendly cars:

The demand for environmentally-friendly cars seems to be growing with big potential.

The construction of low-weight and perfectly balanced cars has long been part of

Porsche’s excellence. The company should further employ new technologies provide

the ideal ratio of performance and consumption.

Hybrid Powered Sports cars:

Until now this technology is only used in the Cayenne. However, the hybrid engine

has the potential to further promote and boost the sports car market, as seen with the 29 Neumaier, Marty, 2005, The Brand Gap – How to bridge the distance between Business Strategy and Design, Berkeley/USA, New Riders p.65

28


Tesla Roadster. The new Porsche Spyder 918 is a perfect example for what is

achievable with this kind of engines.

Innovations in general are the biggest opportunities for Porsche. Therefore the step

back to prototype racing can be very beneficial and raise awareness for new

upcoming technologies and innovations.

Threats:

Economic Slowdown:

The European economy has not recovered from the debt crisis and it is hard to

predict if the consumption driven market in the USA will keep flourishing for Porsche.

The luxury market has a very strong flexibility in demand, which means that a

recession is directly affecting the number of sales due to the high price sensitivity.

Moreover, there is a very high dependency on certain markets: USA and China with

sales more than 50% of overall deliveries.

Government policies:

In some countries regulations can harm sales and make it tougher to distribute

sports cars. This can be in the form of regulations on emissions as seen in the USA

or in the form of higher taxation according to horsepower.

5. Predictions for the Future

In order to sustain growth Porsche has developed a strategic plan for 2018. At this

precise moment the brand is indeed going through major changes, with new models

to be introduced. On the other hand Porsche is true to its identity – the Porsche

Carrera 911, a car with reputation like no other.

5.1. Strategy for 2018

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In the middle of Porsche’s strategy for 2018 is value-creating growth.30

Porsche also ascribes importance to be an excellent employer and business partner

to attract the talents needed for further expansion.

By 2018 Porsche wants to reach sales of 200.000 units in one year. In 2012 sales

were 143.000, however with a continuous growth and the planned introduction of one

new model each year, this target seems likely to be achieved.

With the introduction of new models Porsche is responding to the opportunities of

emerging markets as well as distributing the share of risk. Being a pure luxury sports

car manufacturer can be a gamble in times of economic trouble. If Porsche can

maintain its brand image by delivering excellent quality with superior durability, the

extension of the portfolio can be a very valuable approach.

30 Porsche, 2014, Strategy, http://www.porsche.com/usa/aboutporsche/overview/strategy2018/ 03 January 2014

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Figure 11: Strategy for 2018

5.2. Comeback - 24 Hours of Le Mans

With the comeback at the 24 Hours of Le Mans Porsche goes back to its legacy.

The firm’s success comes from the vision to build a racing car that is suitable for

every-day use and daily life. Racing can be a crucial competitive advantage in

discovering new technologies. Nowhere else is the engineer more driven by the

desire for success and new inventions than in racing.

We can be curious about Porsche’s ultimate comeback in motorsports and can

expect an appropriate performance. The German engineering combined with

valuable history and experience in racing could very well proof to be a formula for

success.

In my opinion the move to get back into prototype racing, respectively Le Mans, is the

perfect way to counteract the negative effects that might occur by introducing new

models. Porsche goes back to the roots. Moreover the new Spider 918 is a perfect

proof for the quality and excellence in engineering that can be delivered from

Porsche.

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6. Conclusion

In my eyes a Porsche 911 has the most beautiful car design in the world and the

fascination and appeal of the brand give Porsche a unique position in car

manufacturing.

The takeover from Volkswagen provides Porsche with financial power for

investments and will further contribute to success. New models and an assigned

strategy for 2018 are defining the way of Porsche in the next years, as well as the

comeback to Porsche’s race sports origins.

We can be curious about new car models, as well as new innovations and sports car

improvements.

It is very hard to predict in which ways the brand will develop, even though plans are

clear, future will prove Porsche right or wrong. Porsche can happen to be an even

more desirable and attractive brand due to its growth, on the other hand there could

occur a dilution of the former brand values, since Porsche is expanding to market

segments that formerly weren’t part of the founder’s ideas.

To finish off we can use the words of Ferdinand Alexander Porsche:

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“A Porsche will always look like a Porsche.”

Figure 13: Ferry and F.A. Porsche

List of References:

Company Reports:

Dr. Ing. h.c. F. Porsche AG, Annual Report 2012.

Books:

Kubiak, Achim. (2005). Faszination 911, Bielefeld: Delius Klasing Verlag.

Neumaier, Marty. (2005) The Brand Gap – How to bridge the distance between Business Strategy and Design, Berkeley/USA: New Riders

Orel/Brümmer. (2009) Generation Porsche, Kempen: teNeues Publishing Group.

Ries, Al, Trout, Jack. (1981) Positioning: The Battle for your Mind. New York: Mc-Graw-Hill.

Vann, Peter. (2004). Porsche Turbo, The Full History, St. Paul/USA: Motorbooks.

Online Bibliography:

Interbrand (2014) Interbrand Ranking 2013 – Porsche. retrieved 19 December 2013 fromhttp://www.interbrand.com/de/best-global-brands/2013/Porsche

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Interbrand. (2013) Best Global Brands – Our Methodology. retrieved 24 December 2013 fromhttp://www.interbrand.com/de/best-global-brands/2013/best-global-brands-methodology.aspx

Manager Magazin. (2013, March 25). Interview Porsche Chef, retrieved 09 January 2014 from http://www.manager-magazin.de/unternehmen/autoindustrie/a-889808-2.html

Porsche AG, (2014). Strategy. Retrieved 03 January 2014 fromhttp://www.porsche.com/usa/aboutporsche/overview/strategy2018/

Porsche AG. (2014). Porsche Stability Managementhttp://www.porsche.com/international/models/911/911-carrera/safety/porsche-stability-management-psm/ 11 January 2014

Porsche AG. (2013). 911 Turbo. retrieved 14 December 2013 from http://www.porsche.com/usa/models/911/911-turbo/

Wirtschaftswoche.(2013, August 07). Was die Autokonzerne an ihren Autos verdienen. retrieved 12 January 2013 from http://www.wiwo.de/unternehmen/auto/gewinnmargen-was-die-autokonzerne-an-ihren-autos-verdienen/8606442.html#image

24h Le Mans. (2013). La Legende. retrieved 27 December 2013 from http://www.24h-lemans.com/fr/la-course/la-legende_2_1_1710.html

Porsche AG. (2014) Mission 2014 – Le Mans. retrieved 01 January 2014 from http://www.porsche.com/microsite/mission2014-resettozero/international.aspx

Porsche AG. (2014). Models – 911. retrieved 05 January 2014 from http://www.porsche.com/germany/models/911/

Porsche AG. (2014). Data and Facts. retrieved 10 January 2014 from http://www.porsche.com/international/aboutporsche/overview/dataandfacts

Social Media:

Facebook Porsche (2014). retrieved 12 January 2014 from https://www.facebook.com/porsche

Twitter Porsche (2014). retrieved 09 January 2014 from https://twitter.com/Porsche

Youtube Channel Porsche (2014). retrieved 11 January from http://www.youtube.com/user/Porsche

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Documents

Porsche Marketing Strategy