1 Introduction and Learning Objectives
Please read this entire document before starting the assignment. The purpose
of the assignment is to assess your knowledge and understanding of the
materials covered in the module and your ability to apply relevant theories and
concepts to a consumer behavior case.
2 The Assessment
Your task is to critically examine the appended case study (at the end of this
document) using appropriate consumer behavior theory and concepts, and
to answer the following FIVE compulsory questions. Each question carries
equal weighting (20 marks for each question). Feel free to use the questions as subheadings.
- Analyse the buyer decision process of a traditional Porsche 911
customer.
- Contrast the traditional Porsche buyer decision process to that for a
Cayenne or Panamera customer.
- Which marketing concepts/theories can help explain why Porsche sold
so many lower-priced models in the 1970s and 1980s? How did
traditional Porsche buyers feel about this?
- Explain how both positive and negative attitudes towards a brand like
Porsche develop. How might Porsche change consumer attitudes
towards the brand?
- What role does the Porsche brand play in the self-concept of its
buyers?
You should restrict your analysis to the material provided in the case study.
Whilst additional reading about the company is a good thing, the inclusion in
your analysis of further research into the company beyond the material
presented in the case is not compulsory.
3 Word count requirements
The word count for this assignment is 2,000 words.
You must state on the front of your assignment the number of words used and
this will be checked.
The main text for this assignment must be word-processed in Arial, font 12,
double spacing, minimum 2cm margins all around.
You must observe the word count specified in this assignment brief. The School has a policy of accepting variations to the recommended word count of plus or minus 10%.
What does this mean for you?
Markers will mark your work up to the word count maximum plus 10% and
then will stop marking; therefore all words which are in excess of the word
count plus 10% will not be marked.
Where your word count is more than 10% below that specified, it is likely that
this will result in a lack of analytical depth or relevant content which will be
reflected in the mark assigned.
What is in the word count?
The word count includes:
– the main text, including in-text reference citations (e.g., Smith et al.,
2020) and quotations.
The word count does not include:
– the cover page,
– tables and diagrams
– the reference list.
– appendices. These may be used to include supporting data which
may be too detailed or complex to include as a Table. They are not a
device to incorporate material which would otherwise cause you to
exceed the word limit.
CASE STUDY ON NEXT PAGE
Case Study
Porsche is a unique company. It has always been a niche brand that makes
cares for a small and distinctive segment of automotive buyers. Last year,
Porsche sold only 29,023 cars in the five models it sell in the United States.
Honda sold about five times that many Accords along. But Porsche owners
are as rare as their vehicles. For that reason, top managers at Porsche spend
a great deal of time thinking about customers. They want to know who their
customers are, what they think, and how they feel. They want to know why
they buy a Porsche rather than a Jaguar, or a Ferrari, or a big Mercedes
coupe. These are challenging questions – even Porsche owners themselves
don’t know exactly what motivates their buying. But given Porsche’s low
volume and the increasingly fragmented auto market, it is imperative that
management understand its customers and what gets their motors running.
Profile of a Porsche Owner
Porsche was founded in 1931 by Ferdinand Porsche, the man credited with
designing the original Volkswagen Beetle, Adolf Hitler’s “people’s car” and one
of the most successful car designs of all times. For most of the first two
decades, the company built Volkswagen Beetles for German citizens and
tanks and Beetles for the military. As Porsche AG began to sell cars under its
own nameplate in the 1950s and 1960s, a few constraints developed. The
company sold very few models, creating an image of exclusivity. Those early
models had a rounded, bubble shape that had its roots in the original Beetle,
but design evolved into something more Porsche-like with the world famous
356 and 911 models. Finally, Porsche’s automobiles featured air-cooled fourand six-cylinder “boxer” motors (cylinders in an opposed configuration) in the
rear of the car. This gave the cars a unique and often dangerous
characteristic – a tendency for the rear-end to swing out when cornering hard.
That’s one of the reasons that Porsche owners were drawn to them. They
were challenging to drive and that kept most people away, making the car
even more exclusive.
Since its early days, Porsche has appealed to a very narrow segment of
financially successful people. These are achievers who see themselves as
entrepreneurial, even if they work for a corporation. They set very high goals
for themselves and then work doggedly to meet them. And they expect no
less from the clothes they wear, the restaurants they go to, or the cars they
drive. These individuals see themselves not as part of the regular world, but
as exceptions to it. They buy Porsche because the car mirrors their self-image
– it stands for the things owners like to see in themselves and in their lives.
Most of us buy what Porsche executives call utility vehicles. That is, we
buy cars to go to work, to deliver the kids, and to run errands. Because we
have to use our cars to accomplish these daily tasks, we base buying
decisions on features such as price, size, fuel economy, and other practical
considerations. But a Porsche is more than a utility car. Its owners see it as a
car to be enjoyed, not just used. Most Porsche buyers are not moved by
information, but by feelings. A Porsche is like a piece of clothing, something
the owner “wears” and is seen in. they develop a personal relationship with
their cars, one that has more to do with the way the car sounds, vibrates and
feels than with how many cup holders it has or how much cargo it can tote.
They admire their Porsches as machines that perform without being flashy or
phony.
People buy Porsches because they enjoy driving. If all they needed was
something to get from point A to point B, they could find something much less
expensive. And whereas many Porsche owners are car enthusiasts, some of
them are not. One successful businesswoman and owner of a high-end
Porsche sad, “When I drive this car to the high school to pick up my daughter,
I end up with five youngsters in the car. If I drive any other car, I can’t even
find her; she doesn’t want to come home.”
From Niche to Numerous
For the first few decades, Porsche AG lived by the philosophy of Ferry
Porsche, Ferdinand’s on. Ferry created the Porsche 356 because no one else
made a car like the one he wanted. “We did not do market research, we had
no sales forecasts, no return-on-investment calculations. None of that, I very
simply built my dream car and figures that there would be other people who
share that dream.” So really, Porsche AG from the beginning was very much
like its customers: an achiever that set out to make the very best.
But as the years rolled on, Porsche management became concerned
with a significant issue: Where there enough Porsche buyers to keep the
company afloat? Granted, the company never had illusions of churning out the
numbers of Chevrolet or Toyota. But to fund innovation, even a niche
manufacturer has to grow a little. And Porsche began to worry that quirky
nature of the people who buy Porsches might just run out on them.
This led Porsche to extend its brand outside the box. In the early 1970s,
Porsche introduced the 914, a square-ish, mid-engine two-seater that was
much cheaper than the 911. This meant that a different class of people could
afford a Porsche. It was no surprise that the 914 became Porsche’s top-selling
model. By the late 1970s, Porsche replaced the 914 with a hatchback coupe
that had something no other regular Porsche model had ever had: an engine
in the front. At less than $20,000, more than $10,000 less than the 911, the
924 and later 944 models were once again Porsche’s pitch to affordability. At
one point, Porsche increased its sales goal by nearly 50 percent to 60,000
cars a year.
Although these cars were in many respects sales successes, the
Porsche faithful cried foul. They considered these entry-level models to be
cheap and underperforming. Most loyalists never really accepted these
models as “real” Porsches. In fact, they were not at all happy to share their
brand with a customer who didn’t fit the Porsche-owner profile. They were
turned off by what they saw as a corporate strategy that had focused on mass
over class marketing. This tarnished image was compounded by the fact that
Nissan, Toyota, BMW, and other car makers had ramped up high-end sports
car offerings, creating some fierce competition. In fact, both the Datsun 280-
ZX and the Toyota Supra were not only cheaper than Porsche’s 944, they
were faster. A struggling economy threw more sand in Porsche’s tank. By
1990, Porsche sales had plummeted and the company flirted with bankruptcy.
Return to Its Roots?
But Porsche wasn’t going down without a fight. It quickly recognized the error
of its ways and halted production of entry-level models. It rebuilt its damaged
image by revamping its higher-end model lines with more race-bred
technology. In an effort to regain rapport with customers, Porsche once again
targeted the high end of the market in both price and performance. It set
modest sales goals and decided that moderate growth with higher margins
would be more profitable in the long term. The company set out to make one
less Porsche than the public demanded. According to one executive, “We’re
not looking for volume, we’re searching for exclusivity.”
Porsche’s efforts had the desired effect. By the late 1990s, the brand
was once again favoured by the same types of achievers who had so deeply
loved the care for decades. The cars were once again exclusive. And the
company was once again profitable. But by the early 2000s, Porsche
management was asking itself a familiar question. To have a sustainable
future, could Porsche rely on only the Porsche faithful? According to then
CEO Wendelin Wiedeking, “For Porsche to remain independent, it can’t be
dependent on the most fickle segment in the market. We don’t want to
become just a marketing department of some giant. We have to make sure
we’re profitable enough to pay for future developments ourselves.”
Sin in 2002, Porsche did the unthinkable. It became one of the last
companies to jump into the insatiable SUV market. At roughly 5,000 pounds,
the Porsche Cayenne was heavier than anything that Porsche had ever made
with the exception of some prototype military tanks it made during WWII.
Once again, the new model featured an engine up front. Ant it was the first
Porsche to ever be equipped with seat belt for five. As news spread about the
car’s development, howls of distress could be heard from Porsche’s customer
base.
But this time, Porsche did not seem too concerned that the loyalists
would be put off. Could it be that the company had already forgotten what
happened the last time it deviated from the mould? Apparently not. After
driving one of the first Cayennes off the assembly line, one journalist stated,
“A day at the wheel of the 444 horsepower Cayenne Turbo leaves two
overwhelming impressions. First, the Cayenne doesn’t behave or feel like an
SUV, and second, it drives like a Porsche.” This was no entry-level car,
Porsche had created a two-and-a-half ton beast that could accelerate to 60
miles per hours in just over five seconds, corner like it was on rails, and hit
165 miles per hour, all while coddling five adults in sumptuous leather seats
with almost no wind noise from the outside world. On top of that, it could keep
up with a Land Rover when the pavement ended. Indeed, Porsche had
created the Porsche of SUVs.
Recently, Porsche upped the ante on more time. It unveiled another
large vehicle. But this time, it was a low-slung, five-door luxury sedan. The
Porsche faithful and the automotive press again gasped in disbelief. But by
the time the Panamera hit the pavement, Porsche had proven once again that
Porsche customers could have their cake and eat it too. The Panamera is
almost as big as the Cayenne but can move four adults down the road at
speeds of up to 190 miles per hour, accelerate from a standstill to 60 miles
per hour in 3.6 seconds, and still wring 23 miles out of a gallon of gasoline.
Although some Porsche traditionalists would never be caught dead
driving a front-engine Porsche that has more than two doors, Porsche insists
that two trends will sustain these new models. First, a category of Porsche
buyers has moved into life stages that have them facing inescapable needs –
they need to haul more people and stuff. This not only applies to certain
regular Porsche buyers, but Porsche is again seeing buyers enter its
dealership who otherwise wouldn’t have. Only this time, the price points of the
new vehicles are drawing only the well-heeled, allowing Porsche to maintain
its exclusivity. These buyers also seem to fit the achiever profile of regular
Porsche buyers.
The second trend is the growth of emerging economies. Whereas the
United States has long been the world’s biggest consumer of Porsches, the
company expects China to become its biggest customer before long. Twenty
years ago, the United States accounted for about 50 percent of Porsche’s
worldwide sales. Now, it accounts for less than 25 percent. In China, many
people who can afford to buy a car as expensive as a Porsche also hire a
chauffeur. The Cayenne and the Panamera are perfect for those who want to
be driven around in style but who may also want to make a quick getaway if
necessary.
The most recent economic downturn brought down the sales of just
about every maker of premium automobiles. When times are tough, buying a
car like a Porsche is the ultimate postponable purchase. But as this downturn
turns back up, Porsche is better than ever to meet the needs of its customer
base. In fact, its global unit sales are up by 21 percent to a company record
118,867 vehicles. Porsche is also better in shape than ever to maintain its
brand image with the Porsche faithful, and with others as well. Understanding
Porsche buyers is still a difficult task. But one form chief executive of Porsche
summed it up this way: “If you really want to understand our customers, you
have to understand the phrase, ‘If I were going to be care, I’d be a Porsche.’”
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