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