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					PORSCHE
Marketing Success Story
Group 9
                    Agenda

• Introduction
• Is Porsche a Success?
• Implementation of
  Success
• Future Challenges
• Key Lessons
Introduction
           Porsche – The Story
• 1931 established as a design and
  engineering specialist
• 1948 Manufactured first car (356 Roadster)
• 1980s Yuppie era
• 1993 practically bankrupt
               Porsche – The Story
•   1993 Mr Wiedeking appointed as CEO
•   2005 Acquired 20% stake in VW


                             1993         2004
         Sales              870 m€       6,359 m€

     Net Income            -123 m€       612 m€
        Profit
                            -14.1%        16.1%
        Margin
       Vehicles
                            21,124        76,827
         Sold
                                  Customer Value &
                                 Economic Turnaround

                                             Profitability Percentages FY1992 - FY2004
20,0%

15,0%

10,0%

 5,0%
                                                                                                                                                                      Net Income %
 0,0%
                                                                                                                                                                      Profit Margin (%)
-5,0%
         1991/1992

                     1992/1993

                                 1993/1994

                                              1994/1995

                                                          1995/1996

                                                                      1996/1997

                                                                                  1997/1998

                                                                                              1998/1999

                                                                                                          1999/2000

                                                                                                                      2000/2001

                                                                                                                                  2001/2002

                                                                                                                                              2002/2003

                                                                                                                                                          2003/2004
-10,0%

-15,0%

-20,0%

                                                                            Fiscal Ye ar
               Customer Value
                Key Profit Margins against competitors


60


50


40


30


20


10


0
     Porsche        BMW                DaimlerChrysler   Volkswagen

                           GPM OPM NPM                          Source: Hoovers.com
Is Porsche a Success ?
          Is Porsche a Success ?
Our criteria of success:
   1. Superior customer value
      1. Highest margin of the industry
      2. Premium pricing
   2. Economic turnaround through marketing strategy
   3. Famous brand
   4. Success despite minimal advertising budget



   As a result of Market-driven Strategy !
                                Is Porsche a Success ?

                                             Advertising Budget

                         100
Amount (Million Euros)




                         80
                                                                           Audi
                         60                                                BMW
                         40                                                Mercedes
                                                                           Porsche
                         20

                          0
                               1998   1999    2000   2001    2002   2003
                                                  Year
         Indicators of Success
• German Marketing Prize 2004
• No. 1 on European Business Week 50
  ranking (2005)
Implementation of Success
      “Key Drivers”
      Implementation of Success
• Porsche success resulted from Mr
  Wiedeking‟s strategy
• Mr. Wiedeking „took the wheel‟ in 1993
• He set the conditions for Porsche to follow the
  strategic marketing pathway
• And then led them along it
• The Boxster is the model that led to success
        Implementation of Success
          Setting the conditions
First Porsche entered a textbook period of
organisational change
  – Vertical disaggregation and downsizing
  – Key Process organisation
         Implementation of Success

                The Strategic Pathway
Customer Focus
      &
Market Sensing Market Choices/
                Segmentation
                                   Value
                                 Proposition
                                                   Key
                                               Relationships
         Implementation of Success

                The Strategic Pathway
Customer Focus
      &
Market Sensing Market Choices/
                Segmentation
                                   Value
                                 Proposition
                                                   Key
                                               Relationships
 Customer Focus & Market Sensing
Porsche‟s Philosophy:

  “At the beginning of every thought and every
  deal, there is the customer.”
                             Customer Focus
                               Knowing the Customer

 Porsche 911 customers have a worldwide homogeneous profile

        Top Guns                                                  Proud Patrons

     Driving experience                                     Possession experience

                               • 45 years old
Socio-demographic
                               • 91% male
                               • 75% married
                               • 300-400 k€ gross income

Motivation                Design - Performance - Brand Affinity

Function            Third or fourth car / Boxster often second car

Prior cars        Mercedes-Benz / BMW / Italian Manufacturers
    Customer Focus and Market sensing
               Determine Key Capabilities
• Core business of combining
  – first class engineering
  – innovative design
• 42 years of 911
  – Continuity
  – Consistency
  – Credibility
• Porsche Design Group
         Implementation of Success

                The Strategic Pathway
Customer Focus
      &
Market Sensing Market Choices/
                Segmentation
                                   Value
                                 Proposition
                                                   Key
                                               Relationships
              Market Choices & Segmentation

            Producer   Producer                                     The Porsche Brand
                of        of       Porsche    The Multi-  Porsche      Philosophy
 Construc- racing cars  racing        =       Sports car     =
 tion buro/ with MOT   capable       911     Manufacturer   911   The Porsche Package
Manufacture approval sports cars


 1948          1958     1968        1978        1988               1996        2002...

 • 356 Nr.1    • 356     • 911       • 911      • 911      • 911   • 911       • Cayenne
 Roadster      • 550     • 912      •(924)      • 944              • Boxster
                                    •(928)      • 924              •
                                                • 928
                                                • 959




                Technology Driven                          Customer Driven
Innovation & Diversification -
   Passing on the Genes
  911                   Boxster




Cayenne




                       Cayman
PICTURE OF PANAMERA
          Consumer Perception Map
                  Expensive


                                                  Porsche
                                       Mercedes
                                                  Boxter
                                       SLK

                                Nissan       Honda
                                350Z         S2000          High
Low
                        Lotus
                                                            quality
Quality
                        Elise                Toyota
                                             MR2
                                 Mazda
                                 Miata




                 Inexpensive
          Consumer Perception Map
                  Expensive

                                             Porsche
                                             Cayenne
                                          Mercedes
                                VW        M Class
                                Touareg


                                                       High
Low                                        Toyota
                                Subaru     Rav 4       quality
Quality
                                Outback
                       Suzuki
                       Vitara




                 Inexpensive
         Implementation of Success

                The Strategic Pathway
Customer Focus
      &
Market Sensing Market Choices/
                Segmentation
                                   Value
                                 Proposition
                                                   Key
                                               Relationships
            Value Proposition
           Strategic Brand Management

Core Brand Values:
• Tradition & Innovation
• Performance & Practicality
• Design & Functionality
• Exclusivity & Social Acceptance



  They lead to the competitive advantage !
                        Value Proposition
                         Competitive Advantage

                        Tradition          Innovation
                                10




Social Acceptance                                    Performance

                                     0




          Exclusivity                                Practicality



Porsche           Functionality             Design
Ferrari
          Consumer Perception Map
                      Expensive


                                                          Rolls Royce
                                             Ferrari
                                                         Porsche
                                                  Mercedes
                              Jaguar

                      Alfa Romeo                                        High
Low
                                                       Toyota
                                                                        quality
Quality
                                   Renault
                  Skoda      Hyundai
           Lada




                    Inexpensive
       Leverage key capabilities
• Unexploited Market segment for sports
  roadster
• Porsche key capablilty of design and
  engineering
• Porsche design a sports roadster
• The BOXTER
         Unique Value Proposition
• The Porsche Package
  –   Exclusive Dealerships
  –   Highly-trained Sales Consultants
  –   Ownership Clubs
  –   Racing Clubs
  –   Exclusive Factory Visit
  –   Personalised Tequipment
  –   Customised production




       Makes a 50 year-old feel 25 again !
         Implementation of Success

                The Strategic Pathway
Customer Focus
      &
Market Sensing Market Choices/
                Segmentation
                                   Value
                                 Proposition
                                                   Key
                                               Relationships
                Key Relationships

•   Customer relationships
•   Distribution channel relations
•   Internal partnering
•   Enduser/customer relations
•   Strategic alliances
    – Boxster
    – VW
                                                   Which leads to…

                                             Profitability Percentages FY1992 - FY2004
20,0%

15,0%

10,0%

 5,0%
                                                                                                                                                                      Net Income %
 0,0%
                                                                                                                                                                      Profit Margin (%)
-5,0%
         1991/1992

                     1992/1993

                                 1993/1994

                                              1994/1995

                                                          1995/1996

                                                                      1996/1997

                                                                                  1997/1998

                                                                                              1998/1999

                                                                                                          1999/2000

                                                                                                                      2000/2001

                                                                                                                                  2001/2002

                                                                                                                                              2002/2003

                                                                                                                                                          2003/2004
-10,0%

-15,0%

-20,0%

                                                                            Fiscal Ye ar
    How did Porsche become a success?
•   Mr. Wiedeking central to the whole process
•   Textbook reorganisation of the company
•   Textbook following of strategic pathway
•   Led to the Boxster
Future Challenges
            Future challenges
• Outsourcing
  – Loss of fundamental value
  – Loss of Control
  – Quality issues
• Stretching the Brand
• Hiding behind Brand
• VW deal has shown cracks in the business
  model
• Danger of „genetic similarity‟
Innovation & Diversification -
   Passing on the Genes
Key Lessons
                     Key Lessons
1. Fundamental Processes
   •   Organisational redesign
   •   Strategic pathway
2. Unique Porsche capabilities
   •   Incredible brand strength
   •   Amazing heritage and quality of design
   •   Crucial family backing
   •   NOT the same for all companies
3. Wiedeking
   •   Hands on
   •   Visionary
   •   Bold leader
4. Drastic situation, drastic measures…
Questions ?
                   TO DO
• Drinking water on the stand
                 Sources
• http://www.porsche.com
• German Marketing Association - press
  release
• Porsche presentation “German Marketing
  Prize 2004”
• Porsche annual report 2003/04

				
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posted:11/8/2011
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