Porsche: Company History, Strategy and Future

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Table of Contents

Introduction
Situation Analysis
Marketing Objectives
Marketing Strategy
Implementation and Control
Conclusion
References

Introduction

Porsche is one of the most popular car manufacturers in the world. Its cars are unique in design and performance, and some of the models are iconic within car enthusiast communities. Despite selling only a small number of vehicles each year, Porsche produces the most profitable cars. This paper presents an exploration of a marketing strategy behind Porsche’s success in the world of competition and innovation.

Situation Analysis

The company is primarily focused on expensive and high-performing cars. From the very beginning, the model lineup was short, despite some attempts to add cheaper models. The capabilities were limited because Porsche operated as a division of a larger conglomerate (Kotler & Armstrong, 2012). To obtain enough funds for running its own research and development, Porsche needed more sales (Kotler & Armstrong, 2012). Therefore, it introduced several cheap models, but competitors’ cars were offering better performance at the same price. Porsche decided to concentrate on its original customer segment, which loves cars not because of their practicality, but the driving experience. Today, Porsche serves a broader range of models, but they are all expensive and high-end machines.

Marketing Objectives

Porsche had different marketing objectives throughout its history – the 356 model was developed with no market analysis and no forecasts, and the process was somewhat chaotic. Their goal was to sell around 45,000 cars per year, but because of sustainability thoughts, Porsche increased its sales goal by 50% in the 1970s, to 60,000 vehicles per year, and added several models to their lineup (Kotler & Armstrong, 2012). Despite meeting these goals for several years, sales eventually went down because the cheap models did not provide the same experience Porsche had been loved for (Kotler & Armstrong, 2012). Porsche’s objective is to reach a low but high-margin increase in sales every year.

Marketing Strategy

Porsche’s long-term plan is to reach emerging markets while retaining its original values and philosophy. The company’s customers are financially successful people who buy Porsches because of a unique experience when driving. Because the United States has been the biggest economy in the world, Porsche primarily targeted the American market (Kotler & Armstrong, 2012). However, the company expects that China will account for the most significant percentage of buyers in the coming years (Kotler & Armstrong, 2012). Therefore, the manufacturer is developing new models that different markets while positioning itself as exclusive.

For instance, SUVs like Cayenne and sedans like Panamera are suitable for wealthy Chinese that often hire chauffeurs because of the cars’ elegance, high price tag, and the capability to accommodate more than two people.

Implementation and Control

To adequately plan and implement the marketing strategy, Porsche managers continuously look to their customers, analyze their current needs and wants, and examine their feedback. High sales volume and market share were rarely the primary control indicators for the company’s management. Instead, Porsche relied on profit margins and customer satisfaction and feedback (Kotler & Armstrong, 2012). This approach can be seen in the time in Porsche’s history when the company had to eliminate lower-end pricing segments to meet the needs of traditionalists. As these established owners of Porsches age, their list of necessities increase. The company is coping with the changes by offering new models with more seats and doors, and more space in the trunk while retaining the original image of Porsche cars.

Conclusion

Despite its attempts to reach a broader range of consumer markets, Porsche stays true to its original values. By concentrating on high-margin sales and listening to its customers, the company was able to ensure its long-term growth. This paper evaluated some of the marketing tactics that Porsche uses to secure its sustainable development. The company started as a manufacturer of exclusive cars and continues to resemble this image today.

References

Kotler, P., & Armstrong, G. (2012). Principles of marketing (14th ed.). Cranbury, NJ: Pearson Education.

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