GROUP 8B

Porsche Marketing Report

Segments and 4Ps
Shubnit Aurora, Kudzanayi Goromonzi, Kristie Nicol, Heather Streeton, Mehdi Mehrabani November 23, 2009

MKTG 317 L08 Janus Barzilay

Table of Contents

Part A - Product Strategy Through a diverse set of products, Porsche has successfully built a strong brand in the global automotive industry (Brandz 2009). While originally opening as an engineering and consulting firm in 1931, Ferdinand Porsche has since built an automotive empire with just twenty four models as of 2009 (Porsche 2009e). The table provided in the Appendix C illustrates Porsches product mix, focusing specifically on the three product lines that we feel best represent the Porsche brand. These three product lines are sport utility vehicles (SUVs), sports cars, and sedans. This product mix represents how Porsche is following a limited line strategy whereby they are targeting a market niche interested in sporty luxurious high-class vehicles (See Appendix D for Porsche Perceptual Map). This has allowed Porsche to focus on small segments, directing their efforts towards specific consumers that are interested in the features that Porsche vehicles offer (Charlebois et al. 2009a; Dietz 2007). However, in 2002 Porsche used a diversification strategy to enter a new sector in the automotive industry by coming out with their SUV line: the Porsche Cayenne (Barzilay 2009a; Scott 2002). This line currently offers six different models that differ mainly in engine capabilities and a few interior design changes: engine size, speed, leather, and colour (See Appendix C for Porsche Product Mix) (Porsche 2009b). The Porsche Panamera is the newest addition to the product mix. With a front engine and a rear wheel drive, the four-door four-seat luxury Panamera sedan was introduced to the North American market on October 17th, 2009 (Kurylko 2007; Porsche 2009k). The Panamera line combines the speed and capabilities shared 3

amongst Porsches sports car line with the size and space of a traditional sedan (Elliott 2009). With introduction of the Panamera, Porsche has diversified their product mix to hedge risk in the current economic environment and to keep up with the changing trends that the Porsche culture demands (Barzilay 2009a; Kiley 2009). The sports car line has and always will be the hallmark product for Porsche. This line can be further broken down into three unique vehicles types: Porsche 911, Porsche Boxster, and the Porsche Cayman. The Porsche 911 line has been one of the most influential and profitable vehicles in the product mix since its introduction in 1964 (Frere 1992; Porsche 2009e). These models are offered with two types of carriages (Coup, Cabrio), two types of engines (rear end/4-wheel drive) and four performance variation (Carrera, Carrera S, Turbo, Turbo S) (Dietz 2007). Furthermore, in 1996 Porsche extended their sports car line with the introduction of the Boxster in order to reach a wider segment in the automobile industry (Porsche 2009e). With a lower price tag, the Boxster became a more affordable Porsche vehicle in the Porsche automobile market without sacrificing the features and the performance associated with the other models. Interestingly, the 911 model has 36% of parts in common with the Boxster allowing Porsche to benefit from economies of scale (Choi 1994). In 2006, Porsche introduced the derivative model of the Boxster in the form of a coupe: the Porsche Cayman (Dietz 2007). The remainder of this report will focus on the Porsche 911 Turbo. We have chosen this model due to the importance it has had to the Porsche brand since its introduction in 1974 (Porsche 2009e). It is said that the Porsche 911 Turbo is part of the core business and an important representation of the Porsche soul (Choi 4

1994). This model can be purchased in both coupe and convertible versions (James 2009). For comparison reasons, we have decided to use the coupe version of the 911 Turbo. Consumers deciding to purchase a 911 Turbo understand that the high price is justified by the quality and technical features of the vehicle. More importantly, the large price tag is said to be offset by the feeling one gets each time they step on the throttle (Callaway 2008). In addition, the 911 Turbo has proven to be stable even during an economic crisis. After the stock price was cut almost in half after the 9-11 attacks, Porsche 911 sales grew by 23% from the year earlier, followed by a corresponding increase in stock price (Meredith 2002). The Porsche 911 Turbos high price tag and limited production has established it as a specialty product. Since its introduction thirty-five years ago, there has been only seven generations of this model (Youtube 2009). With only twelve Porsche dealerships within the Canadian borders, customers have to search extensively to find a potential dealership that will carry the new 2010 Porsche Turbo (See Appendix E for Porsche Dealerships in Canada). The limited quantity of the 911 Turbo in Canada adds to the status of the model perceived by consumers (Okonkwo 2009). Even though there is low supply of the 911 Turbo in Canada, consumers of this model are reluctant to accept any substitutes. This is a common characteristic of a specialty product (Lamb et al. 2009b). The 911 Turbo has undergone some modifications over the past years that have affected its quality, functionality and style. In regards to its quality, the latest 911 Turbo models durability have improved, as seen by its longer-lasting oil-change intervals, self-adjusting valves and belts, and longer periods between required 5

vehicle servicing (Porsche 2009g). Furthermore, the added aluminium doors on the model has lightened its overall weight; enhancing its quality (Porsche 2009h). Along with the above modifications, there has been an increase in horsepower than the earlier model as well as improvements in functionality through convenient gearshift paddles in the steering wheel (James 2009; PR Newswire 2009). Environmentally, the new model is considered one of the cleanest types in its class. This has been achieved through lower fuel consumption and lower CO2 emissions of 18% compared to its predecessors (PR Newswire 2009). The physical attributes of the 911 Turbo have not changed significantly in its thirty-five year history. However, some features have been improved to keep in tune with changing times and consumer preferences. For instance, the titanium painted slats for the air intake has added to the sophisticated look of the vehicle (Porsche 2009j). The LED daytime running lights as part of a lightly revised front

bumper and new LED tail-lights have added to the exotic look of the 911 Turbo (James 2009).
Part B Pricing Traditionally Porsche has used the prestige pricing approach to the general automotive industry. This has been done in order to convey an impression of high quality and prestige with the associated vehicle (Pass et al. 2005). The underlying assumption is that products with low prices are inferior to competitive products that are sold at higher prices (Encyclopedia 2006). Alternatively, higher priced products are perceived to have superior brand quality, which is reflected in the upscale 6

Porsche performance vehicle (Charlebois et al. 2009b) However, Porsche used a different approach for the 2010 911 Turbo. They have followed a penetration pricing strategy by setting the 2010 911 Turbo price lower than comparable sports vehicles (see Appendix F for 2010 Porsche 911 Turbo Specifics vs. Competitors). Given the maturity of the 911 Turbo, Porsche is not using penetration pricing as a means of launching a new product against an established rival as is sometimes considered traditional (Wilson 2005). Instead, this pricing strategy is likely being used to gain a larger market share, boost sales, and increase brand recognition in the automotive industry. Consumers are able to acquire the 911 Turbo, which is similar in functionality and brand equity to competitors while spending considerably less. In addition, penetration pricing does not mean lower profit per unit, however to reach the break-even point, it requires a high volume of sales (Lamb et al. 2009i). This strategy is a great way for Porsche to attract additional buyers to the market and tends to discourage competition (Lamb et al. 2009i). The penetration pricing strategy is risky to implement and could prove disastrous for a prestige brand like Porsche. With the adoption of a penetration pricing strategy, Porsche can involuntarily destroy the 911 Turbos image by making it seem inferior relative to its higher-priced competitors. This may offset the relationships with their current upscale buyers (Lamb et al. 2009i). The choice of competitors of the Porsche 911 Turbo is based on functionality, brand recognition, and price range. Characteristics of vehicle functionality were selected based on engine size, horsepower, and 0-100km/h times. Engine size of the 7

comparable vehicles needed to be in the range of 3.8 to 5.5 liters and with more than 450 horsepower. Porsche AG has been chosen as the third most valuable automotive brand of 2009 (Brandz 2009). This title has allowed Porsche AG to compete in the luxury automotive sector, and still be recognized as valuable brand in the broad automotive industry. Therefore, comparable vehicles need to closely parallel the sporty, luxurious perception that is associated with the Porsche brand. Lastly, competing vehicles need to be within the range of $150,000 to $210,000. Based on the above criterion, there are three main competitors to the 911 Turbo. This includes the 2010 Lamborghini Gallardo LP560, 2010 Aston Martin DB9 Coupe, and Audi R8 (Csere 2009). By referring to Appendix F, the functionality criteria needed for comparison were met by all selected competitors. Furthermore, all three competitors are well established and are well known brands (MSN Autos 2009). After analyzing the price of the selected vehicle, it appears as though Porsche has responded to their main competitors with lower pricing. The Porsche 911 Turbo has an MSRP of $165,300 CAD, which is $30,000 cheaper than the average price of our selected competitors, $195,331 (see Appendix F for Porsche 911 Turbo Specifics vs. Competitors). In fact, the Porsche 911 Turbo is the least expensive in relation to the selected competitors. The lower pricing might be because Porsche Cars Canada Ltd. decided to reduce their vehicle pricing by almost 12% (Swanson 2007). Porsche expresses in its 911 Turbo promotional video how this model provides more for less, and therefore optimizes the relationship between cost and benefit (Porsche 2009j).

Part C Place (make references to figure 1.1 for distribution channels) Canadian Automotive Distribution Channels The three main distribution channels that occur within the Canadian automotive industry: (1) Business-to-Consumers (2) Business-to-Business (3) and Business-toGovernment. However, the retailer distribution channel is the most commonly used method within the Canadian automotive industry (Lamb et al. 2009c). All the distribution channels start with car part manufacturers, who are normally located near automakers assembly plants to ensure that the process of producing vehicle is as efficient and productive as possible (Autos & Auto Parts 2009). Since automakers do not carry all the parts required for their motor vehicle, they require reliable suppliers and transporters to guarantee that deliveries will arrive on schedule. Transportation methods such as rail carriers play a major role in these supply chains. This is because they facilitate the just-in-time deliveries and additional services such as quality inspection and installation of optional equipment that car manufacturers favour due to the associated reduced costs (Service Industries and Capital Projects Branch 2000). When the vehicles are completely assembled, they are sold and shipped to franchised dealerships, government bodies or private customers within Canada. The dealerships are independent businesses that are free to set their own vehicle prices. However, they must assume all the risks of reselling the vehicles they buy (Autos & Auto Parts 2009). These dealerships act as retailers, primarily responsible for the sales and distribution channel for automobiles in Canada (First Research 2009). Once the car is assembled, they can be distributed through various channels. Most 9

vehicles are manufactured, sold to dealerships, who then sell them to final customers. The Internet has become a popular shopping venue used by many automotive dealers. Search engines such as Autotrader.com, personal selling, and used car dealerships allow consumers to simplify their purchases by allowing them to pick up their pre-determined vehicles from the dealerships (First Research 2009). In other instances, vehicles are sold as businesses products to firms that use them in their business process. For example, when company cars are bought to be used as rentals. The distribution models illustrated on page 8 shows numerous outlets consumers have for purchasing automobiles. The Porsche Dealership All the Porsches sold in Canada are produced in Stuttgart, Germany, with the exception of the Porsche Cayenne and Panamera, which are produced in Leipzig, Germany. Therefore, dealerships have to import vehicles from Germany when they restock their inventory. The Porsche Cars Canada Ltd. has 12 dealerships across Canada that have been placed in well-populated cities such as Calgary, Toronto, and Vancouver (Porsche 2009l). The locations of the dealerships are beneficial due to their host cities continual economic growth, and larger percentages of individuals with high socioeconomic status (Statistics Canada 2009a). They are often located in busy commercialized areas because of the high traffic flow and the tendency to draw in customers with a higher socioeconomic status (Muller 2006). Moreover, these dealerships are destination stores since potential consumers purposely seek out their products. However, because Porsche dealerships are located in densely populated areas, it is typical for them to be surrounded by a large amount of 10

automobile competition (Muller 2006). The dealerships have addressed this drawback by using freestanding locations, which imply that they are located in separate detached buildings (Lamb et al. 2009e). Calgarys Porsche dealership is located on MacLeod Trail as a freestanding structure; this gives the dealership the advantage of having superior visibility and accessibility in comparison to a strip mall surrounding. Each Porsche dealership is a franchise, which means that the individual dealerships have been granted the right to sell Porsche products (Autos & Auto Parts 2009). All of the Porsche dealerships across Canada are trying to differentiate themselves from their competitors by offering a larger product line. Porsche offers a selection of 30 different kinds of automobiles within their product line, giving customers the range from two-seater sports cars to five-seat passenger SUVs. Calgary Porsche Dealership Assessment A stores image is key to any retailers success (Steenkamp 1991). The main element of a stores image is based on the atmosphere and the overall impression conveyed by the store (Lamb et al. 2009e). When visiting the Calgary Porsche dealership, we found its size to be unexpectedly small in comparison to other car dealerships; however, the stores visual factors quickly caught our interest. Despite its size, they managed to have five automobiles on display. The dealership itself created a mood of warmth with the abundance of daylight from their floor to ceiling windows. Their white and silver interior created a sense of cleanliness, and the smell of new leather gave an overwhelming feeling of luxury. The luxurious surrounding helped maintain the prestigious brand name and image Porsche is trying to achieve. 11

The fixtures had a consistent modern theme with chrome lighting and a matching mantelpiece with desks made of light coloured wood. Model characteristics can help target a market according to their income, age, and sex (First Research 2009). Porsche uses their modern characteristics to their advantage by using them to attract their target market of male baby boomers. Our interaction with a Porsche employee was brief, however, during our encounter we noticed he was a generation X male, had a professional appearance, and was very knowledgeable about the Porsche market and products. The sales personnel allow their customers to sit in and test any of the models they want, in order to fulfill a fantasy. The salespeople are playing on the customers fantasy adventure by allowing them to get a small piece of what they desire, homing in on the current trend stating that with age the roads untaken become more desirable (Popcorn 2009b). All of these elements contributed to the overall impression of the Porsche dealership, which we believe conveyed an overall luxuriant yet, welcoming atmosphere.

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Part D Promotion Integrated Communications Plan

Target Audience The Deep Pocket Boomers are white collared male adults aged 45 to 60. Over the years, they have attained a high status within their working environment and have become workaholics. Specific to Calgary, their work locations are therefore, within the core downtown area. With the core downtown as the main area of work, position titles held by the DPBs would be executive positions in firms such as EnCana Corporation and Deloitte & Touch LLP. In view of their professional nature of their jobs, they have located themselves in the wealthy neighborhoods such as Upper Mount Royal (Prizm 2009c). With over 25 years of working hard and long hours in the labour force, the DPB have obtained annual family income of greater than $242,000 (Prizm 2009c). The many years spent saving and working hard have lead to substantial savings for the DPB. In addition, they have recently entered the empty nest stage allowing for more quality time spent for themselves and with their significant other (Euromonitor International 2009a). With age and physical features becoming a concern, healthy living and taking part in outdoor physical activities have become priority in staving off age for this target audience (Euromonitor International 2009a). As mentioned earlier, the DPB have had to work hard which had resulted in giving up majority of their youth to obtain their current status. Therefore, the DPB value a sports car that will provide convenience, quality and greater service. Thus, the DPB can regain some of the lost youth years by benefiting from the thrill, luxury 13

and status of a high-end sports car. In context to the current economic condition, the buying rate for the DPB has been prolonged, however the usage rate 23,000 km per year for vehicle weighing less than 4.5 tonnes (Statistics Canada 2009b).

Communication Objectives Since its origins in 1931, Porsche has developed a reputation for producing highquality vehicles and providing exceptional customer service, while maintaining a luxurious image. Our integrated marketing communications (IMC) plan is designed to draw attention to these aspects of Porsche, in relation to our targeted audience-- the DPBs. In order to reach the DPB, it is imperative that we recognize that most of the Porsche models have reached their maturity stage within their product life cycles. Therefore, the appropriate objective of this IMC plan is to remind our target audience of the benefits of driving a Porsche vehicle. A reminding approach assumes that the target market has already been persuaded of the advantages of driving Porsche vehicles. Therefore, it places emphasis on the need to keep the Porsche brand in the minds of the DPB (Charlebois et al. 200c) and helps to encourage those who have already formed a preference for their cars to buy one. This objective will facilitate Porsches focus on increasing their market share within the competitive Canadian automotive industry. In addition, by reminding the target segment of Porsches attributes, potential buyers will be motivated to switch from a competing brand (Charlebois et al. 2009c). We hope that our IMC plan will encourage test drives, which will in turn remind the DPB of the 14

excitement that is associated with driving a luxury sports car. Lastly, this approach will aim to build customer loyalty among existing owners of Porsche vehicles, convincing them to remain with the brand when replacing their current Porsche. Communication with existing Porsche drivers would have to be maintained on an ongoing basis to reinforce the attachment they have to their cars (Charlebois et al. 2009c). By reminding the DPB of the quality, customer service, and luxury provided by Porsche, we hope to increase market share, while maintaining the loyalty of their existing customers.

Communication Strategy Our group has opted for the asymmetric strategy approach, which entails only promoting the positive characteristics of the 911 Turbo model. The highly competitive nature of the automotive industry allows little room for negative publicity to be associated with a car brand. Any indication of the shortcomings to buying a luxury vehicle could significantly harm brand equity, which is what luxury car manufacturers such as Porsche rely heavily on to promote their vehicles. Therefore, we cannot take the risk of using the symmetric strategy whereby we would highlight both the positive and negative aspects of the Porsche 911 Turbo model. Furthermore, in an effort to create demand for Porsche vehicles, we have also decided that a pull strategy should be utilized to communicate effectively with the DPB. Porsche Cars Canada Ltd. (PCL) who would use various promotional techniques 15

to attract customers to their local dealerships will instigate our communication strategy. In relation to Porsche, the demand would move up the distribution channel and result in the following process: (1) Consumers would demand vehicles from their local Porsche dealerships (2) The dealerships would then demand vehicles from Porsche Cars Canada Ltd. (3) Lastly, PCL would order the vehicles on behalf of the dealerships from the headquarters in Germany We have chosen a pull marketing strategy because it would allow PCL to ensure that the message promoted to the DPB is consistent. The promotional methods used for this purpose will be outlined in the following sections of this report. In order to create the means for receiving feedback about the Porsche 911 Turbo, we also recommend utilizing a two-way strategy. Since the target market is relatively small, it would be easier for Porsche to keep track of their potential customers. Porsche can make use of an online website specifically tailored to the marketing campaign. We recommend a website with the name www.drivefastfeelyoung.com that will allow Porsche to keep track of visitors and monitor the interest visitors (see Appendix I for Creative Execution).

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Communication Tactics One of the goals of our IMC is to promote the fun and pleasure of driving a Porsche 911 Turbo (Lamb et al 2009g). We want to give them a sense of reclaiming their youth by driving a 911 Turbo. The most appropriate way of doing so would be to appeal to the DPBs sense of adventure; playing on their drive for excitement and satisfaction. We also want to appeal to their vanity and egotism by encouraging a sense of pride and ownership in owning a car of quality, style and prestige (Lamb et al 2009g). The Porsche 911 Turbo is a car of pure luxury, which is something we dont want our target segment to forget. By playing to the DPBs ego and highlighting the prestige of the car, we hope to encourage those driven by selfimage to purchase the 911 Turbo. We want the DPBs to start believing that if they want to buy luxury, they should buy a Porsche 911 Turbo. By doing so, we will also be able to enhance and maintain the prestige of the Porsche brand. We would like to fuse two execution styles to promote the Porsche 911 Turbo. The first style would focus on how well the 911 Turbo fits the lifestyle of the DPB (Lamb et al 2009 h). The 911 Turbo would be shown as a car meant for a man no longer constrained by the demands of his family, and as a car that could cater to DPBs freedom to go wherever he would like and do whatever he would want. The second execution style would focus on creating a fantasy for the DPBs that would be built around the use of the 911 Turbo (Lamb et al 2009h). The style would let the DPBs fantasize about the thrill and freedom the 911 Turbo, allowing them feel as if they could travel anywhere, from inner city streets to long country roads with unadulterated speeds. The emphasis would be placed on the speed, luxury, 17

excitement and quality of the Porsche 911 Turbo. Communication Mix Our proposed IMC will combine various aspects of the promotional mix in order to best market the 911 Turbo to the DPB market. This promotional mix will emphasize the importance of personal selling, and will include advertising and sales promotion. While various mediums are utilized in the IMC, all will consistently reflect the superior quality, reliability, and luxury that the Porsche 911 Turbo offers to its customers. Due to the expensive nature of the 911 Turbo, the decision-making process entails a higher involvement from Porsches potential clients. These clients will need to be assured that the high price paid for the 911 Turbo is a true reflection of the quality, reliability and luxury of the model. Therefore, personal selling will become a key factor, as it would allow Porsche to provide its potential clients with extensive information through the interaction with Porsches knowledgeable sales personnel. Moreover, clients associate social risks when buying a luxury vehicle. This adds to the importance of personal selling in the purchasing process as it guides client in making the right decisions. The stage in the product life cycle (PLC) is another factor considered in the commercial mix. As this is Porsches seventh generation of the 911 Turbo, we can assume that this model is in the maturity stage of its PLC. At this stage, it is best to develop an advertising campaign that will focus on reminding consumers of the key aspects of the 911 Turbo: quality, reliability, and luxury. We intend to integrate these highlighted aspects into a new marketing campaign designed to reach the 18

DPBs using a new slogan: Drive Fast. Feel Young. In addition, Porsche should focus on using sales promotions to increase their market share in the luxury automotive industry. We propose a sales promotion that would entail a roundtrip flight to Stuttgart, Germany. Details of this promotion will be provided in the creative execution. The final factor affecting the Porsches commercial mix is the funds available for promotional efforts. Through the recent acquisition by Volkswagen, Porsche has gained access to a larger pool of funds that in turn will allow Porsche to optimize various promotional elements outlined in this report (Associated Press 2009). Although this is the case, it is recommended that Porsche should initially use less expensive promotional elements such as advertising to draw in customers. The promotional elements with higher cost per contact will then be used at a later stage to produce sales. These expensive elements include personal selling and sales promotion. Creative Execution We have used the AIDA model as a basis to accomplish four communication objectives; attention, interest, desires and action. As mentioned in the communications mix, we recommend that Porsche uses three elements to promote the 2010 911 Turbo; advertising, sales promotion and personal selling (see Appendix I for Creative Execution Timeline). We propose that Porsche issue out a press release prior to the execution of these elements (see Appendix J for Press Release). Advertising The initial element of our marketing campaign is aimed to promote the Porsche 19

911 Turbo towards the DBPs and consists of two types of advertising mediums: printed mediums and internet advertising. More specifically, the mediums selected are newspapers, magazines, and Internet advertising. These mediums will be used to draw attention and create interest within the DPBs segment by drawing attention towards the 2010 911 Turbo. Printed Mediums In order to reach the DPBs, our group is proposing an illustration that would be presented in a static format. In the image, the original 1974 Porsche 911 Turbo is seen entering a mountainside tunnel at a high speed and exiting as a 2010 Porsche 911 Turbo. The image will mainly consist of a high definition greyscale colour scheme, with the exception of the new model, which would be a dark green representing freshness and wealth (Color Wheel Pro 2008). Below the original and new model, the captions Drive Fast and Feel Young would be printed respectively. The described image would be used throughout the different printed mediums. We intend to place advertisements of the 911 Turbo in the financial sections of the newspapers. These newspapers would be national publications such as Global Mail and National Post. The reason behind advertising the 911 Turbo in the financial sections is that it would allow Porsche to differentiate itself from its competitors that are usually found within the automotives sections of newspapers. We would also recommend a similar approach for magazines whereby Porsche would promote the 911 Turbo in magazines such as Macleans and Forbes. Placing advertisements in these types of magazines would again work to differentiate the Porsche brand from 20

other car manufacturers. Internet Advertising This age of the Internet has provided marketers with another opportunity to reach customers in innovative ways. In regards to consumption time, the Internet ranks third highest among the various media channels in Canada, only falling behind television and radio (Charlebois et al 2009d). Our group intends to use a 30-second video commercial, such as the one we have created, as an introduction to the Porsche 911 Turbo webpage with an option to skip the video. This commercial would also be available on Porsches YouTube page, which currently hosts over 4,000 subscribers with videos of reviews and advertisements (YouTube 2008). This gives Porsche more influence in its representation of its brand online by being able to monitor the videos posted about its cars. Sales Promotion As a sales promotion, we recommend that Porsche gives away two round trip tickets to Stuttgart, Germany upon a sale of a 2010 Porsche 911 Turbo. These will be designated British Airways Premium Economy flight tickets, which will take the clients from their closest international airport to Stuttgart. In Germany, the customers will receive a complimentary tour of the Porsche manufacturing plant, and the Porsche museum. They will also have the opportunity to view their brand new 911 Turbo directly from the factory. In addition, this would allow them to have a chance to personalize some aspects of their vehicle. For example, they could have their family name engraved into their steering wheel. This promotional offer would specifically attract the DPB, as members of this segment are coming into a higher 21

level of disposable income, which allows them to pursue their interest in traveling. This sales promotion is supportive of personal selling because it gives the sales personnel one more tactic to entice the consumer to purchase a 911 Turbo. Personal Selling Personal selling is most effective when the number of potential customers is relatively small, because the seller can cater to the psychographics of each individual. By understanding the mindset of the DPBs, Porsches sales team will be able to create a more relationship-based approach to reaching this target market. The relationship-based approach would be a preferred method when compared to the traditional persuasive personal selling methods in the luxury automotive category (Lamb et al. 2009f). In pursuing the personal selling approach, our team recommends that the sales personnel of Canadian Porsche dealerships should strongly encourage their visitors to test-drive the 911 Turbo to create interest in that specific model. Furthermore, the employees should also provide their customers with comparisons between the 911 Turbo and its competitors. When they do this, they should highlight the reasons why their customers should purchase the 911 Turbo rather than a competing luxury sport car; creating a preference for the Porsche brand. When it is evident that the client is showing interest in purchasing the 911 Turbo, the Porsche salesperson could then inform them that there is a sales promotion that is directly associated with the purchase of a 911 Turbo. As mentioned earlier, this promotion consists of a round trip to Stuttgart, Germany, to visit the Porsche facilities. Should this these techniques prove to be successful it could lead clients to feel as though they are a 22

part of Porsches legendary, thereby increasing brand loyalty.

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Overview of Existing Porsche 911 Turbo Video Commercial One of the vital forms of communicating to the consumer market for Porsche is through its promotional videos for its cars. These videos can be found on the companys website, and also, on the companys official channel on YouTube (Youtube 2008). One of the videos on Porsches YouTube channel is labeled 911 Turbo Personality. This video captures and focuses on the various features of the Porsche 911 Turbo, which include the new qualities that have been added to the triumphant pre-existing traits. In the confines of a three minute and forty-two second period, this video, with the aid of a variety of camera shots from different angles, is successful in triggering pizzazz in the minds of the viewers to drive this car. The video adds a unique persona to the vehicle, which would attract a potential consumer. Porsche, through this video, is targeting males in their forties, who are pocketing a high level of income. This is evident through the footage of a man depicting the aforementioned characteristics driving the Porsche 911 Turbo in the video. Furthermore, these men have to be technology savvy, as the video demonstrates an inbuilt Global Positioning System (GPS) and convenient outlets for devices such as iPods and other mp3 players. The communication objective of this video is to inform its viewers about the characteristics of the Porsche 911 Turbo, as mentioned above. It also reminds previous owners of the sports car about the standard of quality and design that Porsche boasts by mentioning the features the vehicle has maintained from past models. 24

Regarding the evaluation element of advertising, Porsche is able to track responses to this video through their YouTube channel. Subscribed viewers can write comments, provide ratings, and add the video to their favourites. Therefore, through these measures, Porsche can assess the success of their advertising.

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Modern World Marketing Co. 30-second video The 30 second promotional video for the Porsche 911 Turbo that we have created is focused on our target audience using a mixture of elegant and action snapshots of the vehicle (Porsche 2009a). The background music chosen begins with a light melody and compliments the still shots of the vehicle. The music then picks up to become more exhilarating and the pictures follow this same premise. In between some of the snapshots are enticing quotes found from reviews on the 911 turbo and the Porsche brand itself. These quotes add to the overall feeling of the commercial and follow the theme we have been trying to portray to our target audience. In conclusion, the commercial was made to look elegant, professional, and simple to attract the deep pocket boomers.

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Appendix C Porsche Product Mix Table

Product Line Width

Sport SUVs Cayenne Cayenne S Transsyberia Cayenne GTS Cayenne GTS PD Edition 3 Cayenne Turbo Cayenne Turbo S Sport Cars 911 Carrera S 911 Carrera Cabriolet 911 Carrera S Cabriolet 911 Carrera 4S 911 Carrera 4 Cabriolet 911 4S Cabriolet 911 Targa 4 911 Targa 4S 911 Turbo Boxster Boxster S Boxster Spyder Cayman Cayman S Sedans Panamera S Panamera 4S Panamera Turbo

Product Line Depth

Source: Porsche 2009d Appendix D Porsche Perceptual Mapping

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Source: Dietz 2007 Appendix E - Porsche Dealerships in Canada

Provinces Alberta

Cities

Address 17820 Stony Plain Road 5512 Macleod Trail South 1718 West 3rd Avenue 3329 Douglas Street 660 Pembina Highway 3367 Kempt Road 265 Front Street East 101 Auto Park Circle 611 Montreal Road 2455 Boulevard Chomedy 3535 Ch De La Cote-DeLiesse 7777 Boul. Henri Bourassa

Edmonton Calgary British Columbia Vancouver Victoria Manitoba Winnipeg Nova Scotia Halifax Ontario Toronto Woodbridge Ottawa Quebec Laval Saint-Laurent Charlesbourg Source: Porsche 2009c

Appendix F 2010 Porsche 911 Turbo Specifics vs. Competitors 2010 Audi R8 5.2
Yahoo Auto 2010 MSRP Engine Horsepower Max Speed $184,500 5.2 liter V10 525 hp 316 km/h The Globe and Mail MSRP Engine Horsepower Max Speed $184,500 Automobile Magazine MSRP Engine Horsepower Max Speed $184,500

Source: Yahoo! Canada Co. 2009c; The Globe and Mail 2009c; Audi 2009c 28

2010 Aston Martin DB9 Coupe

Yahoo Auto 2010 MSRP Engine Horsepower Max Speed $203,495 5.9 liter V12 470 hp 306 km/h The Globe and Mail MSRP Engine Horsepower Max Speed $203,495 Automobile Magazine MSRP Engine Horsepower Max Speed $187,070

Source: Yahoo! Canada Co. 2009b; The Globe and Mail 2009b; Automobile Magazine 2009b 2010 Lamborghini Gallardo LP560-4
Yahoo Auto 2010 MSRP Engine Horsepower Max Speed $198,000 5.2 liter V10 560 hp 323 km/h The Globe and Mail MSRP Engine Horsepower Max Speed $198,000 Automobile Magazine MSRP Engine Horsepower Max Speed $198,000

Source: Yahoo! Canada Co. 2009a; The Globe and Mail 2009c; Automobile Magazine 2009a 2010 Porsche Turbo Coupe
Yahoo Auto MSRP Engine Horsepower Max Speed $165,300 3.8 liter Twin Turbo 500 hp 312 kph The Globe and Mail MSRP Engine Horsepower Max Speed $165,300 Dealership MSRP Engine Horsepower Max Speed $165,300

Source: Yahoo! Canada Co. 2009d; The Globe and Mail 2009d; Porsche 2009d 2010 Competitors Brand Name Vehicle Name Lamborghini Gallardo LP560 Aston Martin DB9 Coupe Audi R8 Average

Price (MSRP) $ 198,000 $ 203,495 $ 184,500 $ 195,331 29

Max Min Porsche

$ $

203,495 184,500

911 Turbo $ $165,300 Comparable competitor vehicles chosen based on functionality, brand recognition and price similarity to the Porsche 911 Turbo Source: Yahoo! Canada Co. 2009a; Yahoo! Canada Co. 2009b; Yahoo! Canada Co. 2009c; Yahoo!

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Appendix G - Transactional and Logistical Functions

Description Types of Function Transactional Function

Logistical Functions

Contacting and promoting contacting potential customers, promoting products, and soliciting orders Negotiating Determining how many G&S to buy and sell, type of transportation to use, when to deliver, and method and timing of payment Risk Taking Assuming the risk of owning inventory Physically distributing Transporting and sorting goods to overcome temporal and spatial discrepancies Storing Maintaining inventories and protecting goods Sorting Overcoming Sorting out Breaking down a discrepancies of quantity heterogeneous supply into homogenous stocks and assortment by Accumulating Combining similar stocks into a larger homogenous supply Allocating Breaking a homogenous supply into smaller and smaller lots (Breaking Bulks) Assorting Combining products into collections or assortments that buyers want available at one place Researching Gathering information about other channel members and consumers Financing Extending credit and other financial services to facilitate the flow of goods through the channel to the final consumer

Facilitating Function

Source: Lamb et al. 2009f Appendix H: Population of Census Metropolitan Areas (CMAs) Provinces Alberta British Columbia Ontario Quebec Cities Edmonton Calgary Vancouver Toronto Ottawa Montreal Population 1,182,400 1,124,200 2,271,200 5,531,300 1,198,700 3,750,500

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Source: Statistics Canada 2009d Appendix I: Creative Execution Timeline Media Costs:

Month/Date
December 1 , 2009 December 9th, 2009
st

Type
Press Release

Description

Benefits

December 15th, 2009

December 24th, 2009 and other week

April September (6 months)

2010 911 Turbo, Launch date of Model, Price Launch of Website: Presents commercial www.drivefastfeelyoung. for the first time and com outlines up to date information on the 2010 911 Turbo Model. Allows visitors to comment on the website Macleans & Forbes The initial release of Canada weekly the 2010 911 Turbo magazine marketing image. Will also describe the free flight promotion upon purchase of the vehicle Calgary Global & Mail Periodically posting and National Post the marketing image in the Financial section in Newspapers. Will describe the free flight promotion upon purchase of the vehicle Personal Selling These months will be the high season for the purchase of sports cars. During these months, Porsche Dealership Personnel need to create an image of Quality, Luxury and Reliability in the mindset of potential Porsche Clients. Sales personnel will use the Flight promotion to create sales.

This advertising medium will allow Porsche to gauge the interest of the DPBs segment

Will focus on targeting the DPBs and visually expressed the meaning of Drive Fast. Feel Young slogans Will allow the Porsche communication mix to attract the DPBs that have not been introduced to the marketing image.

Can result in high sales and greater revenue. Increase in brand loyalty

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1. Macleans weekly magazine (one time) = $32 600.00 2. The Globe and Mail (National one time) page, Black + 1-Colour = $8204.00 Source: Charlebois et al. 2009d

Appendix J Press Release MARKETING 317 L08

Marketing 317 L08 Haskayne School of Business University of Calgary Modern World Marketing Co Phone (403) 220-2120 Fax (403) 220-2121

Contact: Modern World Marketing Co Phone: (403) 220-2120

FOR IMMEDIATE RELEASE 4 P.M. EDT, November 23, 2009

New Porsche 2010 911 Turbo coming to Canada

PORSCHE CANADA IS GETTING READY TO LAUNCH ITS NATIONAL MARKETING CAMPAIGN FOR THE 2010 911 TURBO CALGARY, AB, NOVEMBER 23, 2009: ---Porsche Canada Ltd. will debut its 2010 911 Turbo in all dealerships across Canada on January, 2009. The seventh-generation of the 911 Turbo comes more advanced, sleek and more horsepower driven than ever before. With new titanium coated slats, leather trimmed seats and many other improvements; the new 911 Turbo has so much more to offer Porsche lovers. Porsche is scheduled to launch a website on December 1, 2009 that will present the new 911 Turbo slogan, Drive Fast. Feel Young. The corporation will introduce the remainder of its marketing campaign beginning in the middle of December. This will include a giveaway of two Premium Economy roundtrip tickets to Stuttgart, Germany, when a person buys the 911 Turbo. The new generation offers a 3.8L twin-turbo engine with 500 horsepower. In addition, with new technological advancements in the automotive industry and the 33

ever-growing environmental trend, Porsche has worked to release a sports luxury vehicle that meets consumers demands. The 911 Turbo uses significantly less fuel and, when compared to its competitors, it has reduced its CO2 emissions by 18 percent. The 911 Turbo model allows drivers to experience the latest technologies. Some of these innovations include the optional three-spoke steering wheel with gearshift paddles, which provide users with a convenient alternative to the traditional way of driving. With a new variable torque distribution technology, the 911 Turbo allocates its power between the rear wheels, allowing drivers to be more accurate and responsive when taking their Turbo for a ride. The new 911 Turbo is the thrilling yet elegant escape. Whether it is a trip to the countryside or a night on the town, the 911 Turbo is the ultimate adventure. Drive Fast. Feel Young. Pricing for the new 2010 Porsche 911 Turbo starts $165,300 CDN. Please see your local Porsche dealership for more details.

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