Porsche

Submitted by:
Vikram Mohite
Roll no-43
PGDM
 Porsche is a global market leader in the premium segment of the automotive industry currently
the most profitable automotive brand in the world.

The company was founded in 1931 by Professor Ferdinand Porsche in Stuttgart, Germany
building motors, designing vehicles, and consulting. Porsche designs, manufactures, and
markets sports cars, crossover utility vehicles, and automobile parts worldwide. Porsche also
offers services through its operating divisions and subsidiaries, including Porsche Design Group,
Porsche Engineering, and Porsche Consulting.

Marketing Mix of Porsche

Product

Porsche was founded in 1931, since they started the business has not stopped growing, 70% of
all the cars ever built are still in the road, this demonstrates the quality of this cars.

1. 911 in the midsize premium sporty car segment

2. Boxster in the compact premium sporty car segment
3. Cayman in the premium sport coupe segment
4. Cayenne in the midsize crossover utility vehicle (CUV) segment
5. Macan (latest addition) in the compact CUV segment
6. 918 Spyder (latest addition) in the open-top super sport car segment

Price

Porsche is a well-known company which sells quality cars worldwide. However, 40% of their
sales are in the United States. Their profits are currently increasing and they have cash $ 1.76
million dollars.

When Porsche Panamera S was introduced to the market it had a price of $132,997 but then,
through time, came down to $120,997.

Porsche first used skimming as a strategy. They slashed their prices in 2013 to boost sales, so
they made their high prices in 2013 to boost sales, so they made their high prices, become
cheap. Prices were dropped by 5.1% and 12.9% which translated to dollars it is between $5500
up to $36300. It is clear that this pricing strategy was used as prices started high and then
lowered.

Porsche, very cleverly, also used psychological pricing when discussing a price for its Panamera.
The cars value was $129,997 so customers were trying to be tricked by thinking that $129,997
is cheaper than $130,000.

This company has Pride Inelastic Demand, so a price change will result in a smaller or no change
in demand as they are very exclusive cars which only some people are able to afford.

Their competitors are exclusive cars such as Bentley, Ferrari or Aston Martin and after a
comparacent we could say that Porsche does not approach competition based pricing. Ferrari
charges $243,090 for a Ferrari 458 and Bentley charges $228,725 for a Continental GT V8 S.

Place

Porsche offers their products all over their products all over the world, with USA (42323 sales).
China (31205 sales) and Germany (20638 sales) being the top country buyers.

Porsche Distribution channel Porsche has a direct distribution channel, were the customer
goes to the licensee and the product is explained to him before buying it. Therefore the selling
of the product is done very quickly.

Promotion

Porsche target customers are not normal people with a right economical status. Their
customers are medium-high class people. Based on age, they target 2 types of customers.
Young 20-25 year olds and mid-30 to 40s business man. However, different models with
different prices have been created to suit all customers with a fair amount of money.

By 2018 they want to be market leaders, to increase customer enthusiasm and to sale over
200,000 cars.

Porsche advertises using media such as the TV therefore it uses Above-the-line promotion. They
also promote their Porsche Panamera S in magazines and by direct mail, so, they also use below
the line promotion.

Porsche doesnt need to incentive customers, as the ones it has are loyal already, however they
have intended to use money off deals by decreasing their Porsche Panamera 4S by 15% in
2014. Although they did this, sales stayed as predicted.

They are known for donating $2.5 mill to the Japan Earthquake in 2011. This improved their
image and it was a way of promoting its business by having a better reputation.

Segmentation, Targeting and Positioning of Porsche

Segmentation

The price of a Porsche ranges from approximately $50,000 to $845,000 with segmented price
points based on the model selected.

The basis of market segmentation for Porsche involves dividing a market according to defined
smaller easily defined group of consumers with the same wants and needs.

Porsche identifies segments to target using two variables including, descriptive elements and
behavioral elements.

Descriptive elements include demographic, psychographic, and geographic.

Behavioral elements include individual responses to brands, usage, and benefits.

Porsche segments markets based on five critical elements required to evaluate a segment.
These elements include ensuring a market segment is measurable, accessible, substantial,
differentiable, and actionable.
Demographic

Demographic segmentation is a form of market segmentation involving dividing a market on

the basis of descriptive elements. Demographic data provides Porsche with a distinguishable
way to measure variables of a market estimating the market size and the media to use to reach
the market segment. Demographic segmentation is based primarily on income, age, gender,
education, occupation, and social class.

The demographic of the Porsche owner, includes a college graduate, household income over
$100,000, 85% male, and 15% female. The typical Porsche owner is 40 years old and up with
Porsche targeting the 25-54 age demographic seeking a slightly younger audience with the
Engineered for magic, every day campaign.

Targeting a Younger Audience and Females

The age demographic rose from an average age of 48 in 2007 to an average age of 51 in 2012.
Porsches targeted marketing efforts focus on reducing the average age of the Porsche owner
and increasing the number of female owners.

Porsche provides an example of an automotive icon focusing on demographics using age and
gender. The Engineered for magic, every day campaign, in part, targets women with an image
of a mother in a Porsche 911 in front of a school with the text reading school bus.

Additionally, Porsche uses tennis star Maria Sharapova as a spokesperson to engage a younger
female audience. The results in the last two years indicate a growth from 8% to 15% in female
purchasing the Cayenne CUV and Panamera four-door sport sedan primarily.

Psychographic

Psychographic segmentation uses psychology to increase understanding of consumers wants

and needs. Porsche uses a psychographic segmentation approach dividing the segment based
on behavioral elements, such as psychology, lifestyle, personality traits, and values to gain
deeper insight of the consumer. The same demographic can possess different behavioral
elements.
 Customizing Messages to Specific Psychographic Profiles

Psychographic profiling provides Porsche with the ability to customize the messaging to target
the specific psychographic profiles developed by Porsche.

The top gun profile consists of an ambitious and driven individual who cares about power and
control expecting to be noticed.
The elitist profile, includes an individual from old money (blue blood), has the attitude a car is
just a vehicle and not an expression of a persons personality.
The proud patrons owner profile sees a Porsche as a trophy considering it a reward for hard
work with ownership as the main goal not being noticed.
The bon vivants profile consists of thrill seekers and jet setters with the Porsche as a means of
excitement.
The fantasist profile sees the Porsche as a form of escape and does not care about impressing
others.

Porsche has added another profile consisting of individuals enjoying a sporty vehicle for daily
use by women and younger drivers with the latest marketing campaign, Engineered for magic,
every day.

Geographic

Porsche uses a traditional geographic segmentation approach grouping markets based on

countries, continents, regions, states similar to other worldwide automotive brands. Porsche is
a global brand with dealerships located on every continent in major cities.

In the United States dealerships are located in major cities with the manufacturer dividing the
market into four regions (north, south, southwest, northwest).

Porsche varies the product mix offered by dealerships within each region. As an example, the
dealers in the warmer south and southwest regions offer a higher percentage of convertibles in
the product mix versus the north and northwest regions in the United States with marketing
following suit.
Creating New Segments

In 2003, Porsche launched the Cayenne creating the first sport utility vehicle with luxury
and high performance. Porsches introduction of the Cayenne created a new market
segment in an attempt to expand the brand. The introduction of the Cayenne has resulted
in a vehicle that accounts for half of Porsches profits.

In 2009, Porsche launched the 2010 Panamera a four-door sport coupe based on the market
research department identifying a need for a sporty four-door that drives like a sport car. The
Panamera is the first of its kind creating a new segment of the four-door luxury sport car.

Porsches effort to move outside of the sport car niche with the Cayenne and Panamera
product launches have stimulated demand resulting in increased sales for the brand. The
Panamera and Cayenne have proved to be effective brand extensions appealing to a wider
audience by offering unique product offerings.

Market Targeting

Market targeting involves Porsche evaluating the viability of each market segment and deciding
which segment or segments to pursue (target). Porsche uses a hybrid market targeting strategy
focused on a large share of the premium sport car and sport CUV segment using a finely tuned
marketing mix based on marketing messages tailored to Porsches psychographic
segmentation.

Porsche with the Engineered for magic, every day campaign uses a niche concentrated
marketing approach tailored to change position slightly. Porsche is trying to change the
perception that a Porsche is an everyday vehicle appealing to a larger audience to increase
sales. Porsche targets consumers at differing performance and price levels in the premium
sport car and CUV market segment.
Positioning

Porsche offers products of the highest quality for a premium price with various price points for
the products in the Porsche lineup. The Porsche brand is a lifestyle brand because of its
legendary status and attributes associated with their products.

Porsche achieves the ultimate goal of locating a brand in the consumers mind differentiating it
in terms of attributes or benefits, quality, price, and use or user to maximize the brand. Porsche
positions itself as a high priced, high quality, exclusive sport car.

Porsche focuses on the premium (luxury) segment with sport cars (five segments) and
crossover utility vehicles (two segments) providing the consumer with a frame of reference for
the company. Porsche offers a distinct product in each vehicle segment. The Boxster, 911,
Cayman, and 918 Spyder provide the vehicles traditionally associated with Porsche.