Category: Porsche

Situation Analysis

Porsche Panamera is one of the car models that have been developed by Porsche in the recent past, having been developed in 2009 (Challen, 8).

The model was developed to boost the companys sales through its innovative design that would ensure better performance, comfort, and safety of the users (Challen, 8). The increasing customer needs witnessed in the automobile industry include user safety, comfort, and fuel consumption and the model has managed to meet some of these needs.

Market Summary

Porsche Panamera has a thorough understanding of the market trends and the changing needs of the clients in the automobile industry.

The management of the company believes that its research center, Weissach, is equipped with all the necessary knowledge and technology to develop models that are needed in the market (Challen, 9). The company will make use of this asset to have a better understanding of the market trends as well as how to communicate to their clients.

Market Demographics

The company focuses on luxury and comfort. As such, the clients of this company are among those with the highest hold income. In 2007, the Porsche brand had the highest household income with an average of $187,705 (Anon, para.1). About four fifths of the clients are males and the average age is about 40 (Anon, para.3). These trends hold in the current market.

Market Needs

The industry is characterized by a number of customer needs that form the basis for competition. Clients opt for brands that are fast (efficient engines), fuel-efficient (less fuel consumption), cheap, and yet provides high level of comfort. The safety of the users in terms of the vehicles stability during use is another important need of the clients.

Market Trends

The automotive industry has been regaining momentum after the 2008-2009 crises and significant increase in sales was witnessed in 2010 (about 6.9 million units sold globally) compared to 2009 (TransitList, para.1). It has also been forecasted that the sales for 2011 will be hire and the trend is likely to continue due to production of electric vehicles (TransitList, para.1).

Market Growth

The sales at Porsche saw a significant decline between 2009 and 2010 for its earlier models. Most of the models that the company had developed by 2009 had significant decrease in sales in 2010 in the European and the US markets.

In the Western Europe, the sales for 911 decreased by 20% in the second quarter of 2010 compared to a year before, Cayenne sales reduced by 22%, Boxster reduced by 16% while Cayman reduced by 18% (European Autos Data Book, 84).

In the United States, the sales for Cayenne reduced by 50%, 911 reduced by 15% while the sales of Boxster and Cayman increased by 28% (European Autos Data Book, 84). In this second quarter, the sales of Panamera model was about 1487 in Western Europe and 2000 in the United States (European Autos Data Book, 84).

SWOT Analysis

Strengths

Porsche has high quality brands and strong brand names. According to the management of the company, great innovative research was put in this model more than the efforts that had been put in the earlier designs (Challen, 8). The model was designed to deliver a high level of comfort for this category of vehicles, with four-door four-seater design.

As the company aspired to be the innovative leader in this segment, the management settled on low and wide car that could be luxurious (Challen, 8). The company is also highly flexible in its operations and has effective risk management mechanisms (Dietz, 11).

Weaknesses

Despite the research efforts that have been witnessed, the company has small innovative capacity (Dietz, 11). The research department relies on innovative ideas that have been developed by other companies in the industry. Besides, the company has too much focus on the luxury segment. The company has also not gone global in its sales; it is mainly concentrated in the United States and Western European market.

Opportunities

There are emerging markets in the developing nations offering more opportunities for business expansion. Besides, clients opt for cheap and more efficient vehicles in terms of fuel consumption.

Environmental agencies also impose policies that advocate for reduced emission of toxic gases by automobiles. The company has the ability to continue research and innovation to create more models that meet these criteria in order to capture a wider market.

Threats

A number of threats still stand on the way of the prosperity of sales of Porsche Panamera. Even though there seems to be an effective resumption from the economic crisis witnessed in the last decade, there possibility of the same scenario being encountered. Similarly, there are also competing models some of which are relatively cheaper and provides similar quality (Peterson, para.18).

Competition

Just like in many other industries, the automotive industry is characterized by high levels of competition. Porsche Panamera receives competition from other models that provide similar quality at competitive prices. One competitor is BMW 740i powered by V6 engine (Peterson, para.18).

The model is five-seater, is sporty, and relatively cheaper than Panamera, the starting price being $71,525. The other competitor is Audi A8 that has the same fuel consumption as Panamera but starts at $1000 less (Peterson, para.18).

Product Offering

Porsche Panamera has been providing luxurious and price-competitive automobiles in the European and US market. Through different brands and pricing for the Panamera models, the company targets a wide range of clients in these markets.

For the year 2012, the company has scheduled to introduce a new model into the market. The Porsche Panamera S hybrid, which has a relatively high starting price, appeals to the clients due its fuel-efficiency, comfort, and speed.

Keys to Success

The keys to success of the company include marketing the automobiles to its clients. This is achieved through market and marketing strategy. The company has to engage in market research as well as research and development so that they produce models that are in current demands in the market. Continued cooperation between the top management and the research department is another key factor for success.

Critical Issues

Some of the critical issues the company faces in the industry is compliance with environmental and trade policies that may also vary across countries.

The company has to abide by the provisions by environmental management agencies on emissions from the transport industry. It is also necessary that the company explore the emerging markets to quantify the opportunities that may be available, an initiative that may have high overhead costs.

Marketing Strategy

The Porsche Panamera S hybrid is an improvement of the previous models and has higher starting prices. It is then inappropriate to introduce this brand in the emerging markets in the Asian or African countries. Thus, the company will first introduce the model into the European and US market.

An extensive advertisement will be employed to appeal to the clients on the quality of the new model that positions it above the other models in existence in the market. After achieving a good reputation of the brand, the company will then move on to emerging markets. Advertisement will still be done for the older models as well.

Marketing Objectives

The main objective of introducing the model is to increase the sales of the company in 2012 by about 15% from the sales of 2011. This increase in sales has often been achieved by an introduction of new model as was witnessed in 2009. The company also aims at penetrating more into the developed as well as the developing markets.

Financial Objective

The company aims at cutting down its operating costs like transportation and warehousing by 5% each quarter of 2012. This will be achieved through effective supply chain management to determine what quantity of products is needed in the different markets at a given market.

The company also aims at building strong relationships with the clients in the emerging market in the first encounter in order to cut down the successive costs of client acquisition.

Target Markets

The market for the product is in the developed countries and some developing nations. Porsches models are in the sporty luxury segment of the industry and the potential clients are individuals with relatively high household incomes.

However, the company has also brands that are a little relatively cheaper that targets individuals with lower household incomes. The individuals interested in luxurious and sporting activities are the main targets for the new and older models.

Positioning

In order to attract more clients, the company will appeal to the clients that its brands are worthy in providing the necessary comfort while maintaining vehicle efficiency. The customers will have to be convinced that the product is developed in line with their needs and that the specifications of the model conform to the legal provisions in environment and trade policies.

Strategy Pyramids

The company aims at enhancing customer awareness of this new model as well as the older models and building a strong relationship with the clients. The information will be passed to the clients through advertisements.

The adverts will involve a description of the modern features of the models like engine capacity/efficiency, speed, fuel consumption, and the expected emissions be given mileage. This will not only appeal to the clients but also to the law enforcers.

Marketing Mix

Porsche Panamera, just like the other products in of the company, has price differentiation. The company produces cars of this model at different prices depending on the needs and financial abilities of the clients in order to capture a larger market. The Panamera S was the first car of this brand and its starting price was $90,775 (Peterson, para.3).

The company then introduced base Panamera in 2010 with a starting price of $75,375 for a rear-wheel drive and $79,875 for an all-wheel drive (Peterson, para.3). The new model to be introduced in 2012 will have a starting price of $95,975 (AutoWeek). The company has various distribution centers located in the European and US markets.

Much effort is in place to expand the distribution centers to emerging markets. The company also has online store from where the clients can shop over the internet. The company shall advertise its products through the local newspapers and television channels in the different market regions. It will also use internet to reach some of the clients as this communication medium is increasingly being adopted globally.

Marketing Research

The company has a market research department that collects information on the market trends and customer needs in the market. The development of this brand was originally initiated by the market research department of the organization (Challen, 8). The department identified that there was a potential and promising market for sports-like four door cars that drove on fore wheels.

Financials

The above marketing strategy has a connection to an analysis for the different prices, the sales forecast, and the expenses that are like to be incurred.

Sales Forecast

Within two years after the introduction of the first type in 2009, Porsche has sold out about 30000 Panameras worldwide (Car Pages, para.2). This is an average of 15000 per month and about 1250 per month. The company has purposed to introduce Porsche Panamera S hybrid in 2012, a move that may see the company realize increased sales due to the vehicles features like fuel consumption and speed (AutoWeek).

The model is destined to have a starting price of $95,975 (AutoWeek). With the introduction of new model and extensive advertisement, the company expects increased global sales as depicted in the following graph. The company expects global sales of 21,000 Panameras by the end of the year (2012). With an average price of $85,000, the global sales forecast for Panamera in 2012 is $1.785 billion.

Fig.1 Sales Forecast for Panamera in 2012

Expense Forecast

The marketing expense will only be high in the initial quarter when the company embarks on extensive advertisement and promotion. In the first quarter, the company will spend an average of $360,000 on marketing research, advertisements, and sales promotion.

This figure will be reduced to $300,000 in the second quarter and to $200000 in the third and fourth quarters. This translates to $3,180,000 for the total marketing expenses for the year 2012.

Controls

The market plan gives a guide on the implementation procedures that the management of the organization has to follow in order to achieve the marketing objectives.

In order to evaluate the effectiveness of the program during the execution, the monthly revenue from each market, the total expenses month as well as the level of customer satisfaction will be monitored for each of the early months. Necessary reinforcements can be made if significant fluctuation is recorded.

Implementation

The key steps that are to be used in the marketing are indicated in the following table. The promotions and evaluations will be necessary throughout the entire period.

Table.1. Implementation schedule for the marketing plan

Marketing Organization

The marketing process will be carried out with marketing department under the Manager (sales and marketing) in conjunction with other departments like research and development.

Contingency Planning

The company has purposed to penetrate into the emerging markets while maintaining its position in the developed market as well. This ensures that it develops a good coverage for its clients. The research and development team is working continuously to develop competitive models in order to absorb the economic fluctuations that may be experienced in the future.

Works Cited

Anon. Forbes does a comparison of luxury brand demographics. 2007. Web.

Auto Week. 2012. Porsche Panamera S Hybrid. AutoWeek 61.11.

Challen, J. Porsche Panamera. Automotive Engineer, 2009.

Carpages. Porsche Panamera Review. 2011. Web.

Dietz, C. Porsche: Porsches success in the automobile sector and its involvement in VW. 2006. Web.

European Autos Data Book. White Book  European Autos Data Book  2Q:10: The Cyclical Recovery Potential Is Clear&But the Timing Remains Uncertain. NY: Bernstein Global Wealth Management, 2010.

Peterson, T. Review: 2011 Porsche Panamera. Web.

TransitList. Trends in the Automotive Industry 2010-2011. 2011. Web.

Introduction

The advertisement under study is a Porsche commercial, aired in May 2006 on TV. The commercial starts with portraying a child in a classroom who loses his attention to the teacher as he sights Porsche 911 car passing by outside the window. He is entirely absorbed by the sight of a smart sports car. He is soon distracted by the teacher, but the car does not vanish from his mind and then and there he draws a picture of the car he has fallen in love with on first sight. The boy runs to the Porsche showroom nearby after the school. There he has a sit-in experience and asks for the business card of showroom manager telling him that he would be back in 20 years.

Main body

The ad’s target audience is, unlike a usual sport and luxury cars’ commercials that are for a specific class and niche, very general and universal. Although one might argue that such an ad is only for car lovers, but even not-a-great sports car lover feels a touching inspiration from this ad. The commercial was first aired in Britain and Ireland, where people have a taste for small and smart sized cars. But the emotional appeal in the ad makes it universal as it depicts a child who dreams for it. A 10 year old is not mature enough to be enriched with a culture and mindset where people like small or large cars.

Secondly, this commercial definitely appeals to people who are not very rich currently, who cannot afford a famous sports car, but can dream about it. The commercial does not draw a line between its viewers. It attracts every car lover whether rich or poor. This is vital to note that a foremost audience of this ad is the same man or woman who passes by a Porsche showroom every evening, and dreams to own one. It touches the heart of a person who can only dream about sports cars and his place is filled with such posters on the walls. The ad tells them that there is a considerable time between the moment you want and the moment you own a Porsche.

This is vital to note that the ad does not specifically, unlike usual car ads, portray too much the car, its shiny surface, speedometer and its interior etc. Rather it focuses more on message that is delivered very calmly. The ad lacks the usual rush and speedy sounds of sports cars, their skidding scenes and a rich driving dude. The purpose of the car is definitely to appeal to the charm of Porsche, but behind the scenes a message is intentionally conveyed.

It forces to audience to think that “I can have what I dream”. There are many who dream about something to achieve in life, but for the reason that they cannot have that, they start losing the dream until one day they feel indifferent about it. The ad hits the very audience that is under such trance. The ad tells them that to dream is not unrealistic, and even 20 years is time worth waiting for it to come true.

The commercial relies heavily on emotions. It appeals to emotions, inspires through emotions and influences the thoughts of audience through emotions. Depicting a child conveys a slight sense of innocence, undisturbed passion and simplicity. As the child enters big Porsche showroom one expects that he would be treated with non serious skeptical attitude by the manager. But there it also portrays a very humane and considerate person who asks him to sit inside the car, and then gives him his business card. Behind the scenes there are several messages. The very modest showroom manager on one side where the ad tries to capture the favor for the product alone and a passionate child on the other where ad tries to portray a very appealing beauty of the car.

Although the ad uses emotional appeal heavily, one cannot miss out the logical appeal it has. Children are attracted by beautiful and expensive things they have no idea they can have or not. They dream big and are not shy to hide them. They express their dreams and are very extrovert in that respect. They chase their dreams and want to get they dream. They are not mature enough to think what their effort would result in or how people would perceive their passion. They are not ready to accept that something is unreachable. In parallel, the ad ends on a note that very often there is a considerable time between the moment of dreaming and owning a Porsche. The message is very realistic.

Conclusion

The commercial leaves a longer than usual effect. It forces the viewer to think. There are many commercials, most of them appeal to humorous side of things and they just try to leave an impression about the product. This commercial certainly sticks to a serious tone and engages the viewer like a movie does. But the obvious and underlying message may not be viewed very acceptingly by all the audience.

There may be some skeptical ones will not like this ad due to several reasons. There is always a group of people that is against the idea of casting children in advertisement commercials. According to them children are not mature to make a right decision about products, and portraying them as liking or disliking some product is exploiting their innocence. Secondly, the 20 year time gap may be perceived by some audience as too long for a serious consideration of buying a car.

The ad may only seem to them as mere advertisement in which Porsche is portrayed, then a very trendy and humane employee of the company as showroom manager, and in the end a few statements that are a little exaggerated. But in any way, the ad does help the cause, the purpose behind it; it forces to think, whether positively or critically. And for those against child-casting, the ad depicts very natural thing about children, their love for cars, and their passion to run after dreams.

Situation Analysis

Porsche Panamera is one of the car models that have been developed by Porsche in the recent past, having been developed in 2009 (Challen, 8).

The model was developed to boost the company’s sales through its innovative design that would ensure better performance, comfort, and safety of the users (Challen, 8). The increasing customer needs witnessed in the automobile industry include user safety, comfort, and fuel consumption and the model has managed to meet some of these needs.

Market Summary

Porsche Panamera has a thorough understanding of the market trends and the changing needs of the clients in the automobile industry.

The management of the company believes that its research center, Weissach, is equipped with all the necessary knowledge and technology to develop models that are needed in the market (Challen, 9). The company will make use of this asset to have a better understanding of the market trends as well as how to communicate to their clients.

Market Demographics

The company focuses on luxury and comfort. As such, the clients of this company are among those with the highest hold income. In 2007, the Porsche brand had the highest household income with an average of $187,705 (Anon, para.1). About four fifths of the clients are males and the average age is about 40 (Anon, para.3). These trends hold in the current market.

Market Needs

The industry is characterized by a number of customer needs that form the basis for competition. Clients opt for brands that are fast (efficient engines), fuel-efficient (less fuel consumption), cheap, and yet provides high level of comfort. The safety of the users in terms of the vehicle’s stability during use is another important need of the clients.

Market Trends

The automotive industry has been regaining momentum after the 2008-2009 crises and significant increase in sales was witnessed in 2010 (about 6.9 million units sold globally) compared to 2009 (TransitList, para.1). It has also been forecasted that the sales for 2011 will be hire and the trend is likely to continue due to production of electric vehicles (TransitList, para.1).

Market Growth

The sales at Porsche saw a significant decline between 2009 and 2010 for its earlier models. Most of the models that the company had developed by 2009 had significant decrease in sales in 2010 in the European and the US markets.

In the Western Europe, the sales for 911 decreased by 20% in the second quarter of 2010 compared to a year before, Cayenne sales reduced by 22%, Boxster reduced by 16% while Cayman reduced by 18% (European Autos Data Book, 84).

In the United States, the sales for Cayenne reduced by 50%, 911 reduced by 15% while the sales of Boxster and Cayman increased by 28% (European Autos Data Book, 84). In this second quarter, the sales of Panamera model was about 1487 in Western Europe and 2000 in the United States (European Autos Data Book, 84).

SWOT Analysis

Strengths

Porsche has high quality brands and strong brand names. According to the management of the company, great innovative research was put in this model more than the efforts that had been put in the earlier designs (Challen, 8). The model was designed to deliver a high level of comfort for this category of vehicles, with four-door four-seater design.

As the company aspired to be the innovative leader in this segment, the management settled on low and wide car that could be luxurious (Challen, 8). The company is also highly flexible in its operations and has effective risk management mechanisms (Dietz, 11).

Weaknesses

Despite the research efforts that have been witnessed, the company has small innovative capacity (Dietz, 11). The research department relies on innovative ideas that have been developed by other companies in the industry. Besides, the company has too much focus on the luxury segment. The company has also not gone global in its sales; it is mainly concentrated in the United States and Western European market.

Opportunities

There are emerging markets in the developing nations offering more opportunities for business expansion. Besides, clients opt for cheap and more efficient vehicles in terms of fuel consumption.

Environmental agencies also impose policies that advocate for reduced emission of toxic gases by automobiles. The company has the ability to continue research and innovation to create more models that meet these criteria in order to capture a wider market.

Threats

A number of threats still stand on the way of the prosperity of sales of Porsche Panamera. Even though there seems to be an effective resumption from the economic crisis witnessed in the last decade, there possibility of the same scenario being encountered. Similarly, there are also competing models some of which are relatively cheaper and provides similar quality (Peterson, para.18).

Competition

Just like in many other industries, the automotive industry is characterized by high levels of competition. Porsche Panamera receives competition from other models that provide similar quality at competitive prices. One competitor is BMW 740i powered by V6 engine (Peterson, para.18).

The model is five-seater, is sporty, and relatively cheaper than Panamera, the starting price being $71,525. The other competitor is Audi A8 that has the same fuel consumption as Panamera but starts at $1000 less (Peterson, para.18).

Product Offering

Porsche Panamera has been providing luxurious and price-competitive automobiles in the European and US market. Through different brands and pricing for the Panamera models, the company targets a wide range of clients in these markets.

For the year 2012, the company has scheduled to introduce a new model into the market. The Porsche Panamera S hybrid, which has a relatively high starting price, appeals to the clients due its fuel-efficiency, comfort, and speed.

Keys to Success

The keys to success of the company include marketing the automobiles to its clients. This is achieved through market and marketing strategy. The company has to engage in market research as well as research and development so that they produce models that are in current demands in the market. Continued cooperation between the top management and the research department is another key factor for success.

Critical Issues

Some of the critical issues the company faces in the industry is compliance with environmental and trade policies that may also vary across countries.

The company has to abide by the provisions by environmental management agencies on emissions from the transport industry. It is also necessary that the company explore the emerging markets to quantify the opportunities that may be available, an initiative that may have high overhead costs.

Marketing Strategy

The Porsche Panamera S hybrid is an improvement of the previous models and has higher starting prices. It is then inappropriate to introduce this brand in the emerging markets in the Asian or African countries. Thus, the company will first introduce the model into the European and US market.

An extensive advertisement will be employed to appeal to the clients on the quality of the new model that positions it above the other models in existence in the market. After achieving a good reputation of the brand, the company will then move on to emerging markets. Advertisement will still be done for the older models as well.

Marketing Objectives

The main objective of introducing the model is to increase the sales of the company in 2012 by about 15% from the sales of 2011. This increase in sales has often been achieved by an introduction of new model as was witnessed in 2009. The company also aims at penetrating more into the developed as well as the developing markets.

Financial Objective

The company aims at cutting down its operating costs like transportation and warehousing by 5% each quarter of 2012. This will be achieved through effective supply chain management to determine what quantity of products is needed in the different markets at a given market.

The company also aims at building strong relationships with the clients in the emerging market in the first encounter in order to cut down the successive costs of client acquisition.

Target Markets

The market for the product is in the developed countries and some developing nations. Porsche’s models are in the sporty luxury segment of the industry and the potential clients are individuals with relatively high household incomes.

However, the company has also brands that are a little relatively cheaper that targets individuals with lower household incomes. The individuals interested in luxurious and sporting activities are the main targets for the new and older models.

Positioning

In order to attract more clients, the company will appeal to the clients that its brands are worthy in providing the necessary comfort while maintaining vehicle efficiency. The customers will have to be convinced that the product is developed in line with their needs and that the specifications of the model conform to the legal provisions in environment and trade policies.

Strategy Pyramids

The company aims at enhancing customer awareness of this new model as well as the older models and building a strong relationship with the clients. The information will be passed to the clients through advertisements.

The adverts will involve a description of the modern features of the models like engine capacity/efficiency, speed, fuel consumption, and the expected emissions be given mileage. This will not only appeal to the clients but also to the law enforcers.

Marketing Mix

Porsche Panamera, just like the other products in of the company, has price differentiation. The company produces cars of this model at different prices depending on the needs and financial abilities of the clients in order to capture a larger market. The Panamera S was the first car of this brand and its starting price was $90,775 (Peterson, para.3).

The company then introduced base Panamera in 2010 with a starting price of $75,375 for a rear-wheel drive and $79,875 for an all-wheel drive (Peterson, para.3). The new model to be introduced in 2012 will have a starting price of $95,975 (AutoWeek). The company has various distribution centers located in the European and US markets.

Much effort is in place to expand the distribution centers to emerging markets. The company also has online store from where the clients can shop over the internet. The company shall advertise its products through the local newspapers and television channels in the different market regions. It will also use internet to reach some of the clients as this communication medium is increasingly being adopted globally.

Marketing Research

The company has a market research department that collects information on the market trends and customer needs in the market. The development of this brand was originally initiated by the market research department of the organization (Challen, 8). The department identified that there was a potential and promising market for sports-like four door cars that drove on fore wheels.

Financials

The above marketing strategy has a connection to an analysis for the different prices, the sales forecast, and the expenses that are like to be incurred.

Sales Forecast

Within two years after the introduction of the first type in 2009, Porsche has sold out about 30000 Panameras worldwide (Car Pages, para.2). This is an average of 15000 per month and about 1250 per month. The company has purposed to introduce Porsche Panamera S hybrid in 2012, a move that may see the company realize increased sales due to the vehicle’s features like fuel consumption and speed (AutoWeek).

The model is destined to have a starting price of $95,975 (AutoWeek). With the introduction of new model and extensive advertisement, the company expects increased global sales as depicted in the following graph. The company expects global sales of 21,000 Panameras by the end of the year (2012). With an average price of $85,000, the global sales forecast for Panamera in 2012 is $1.785 billion.

Fig.1 Sales Forecast for Panamera in 2012

Expense Forecast

The marketing expense will only be high in the initial quarter when the company embarks on extensive advertisement and promotion. In the first quarter, the company will spend an average of $360,000 on marketing research, advertisements, and sales promotion.

This figure will be reduced to $300,000 in the second quarter and to $200000 in the third and fourth quarters. This translates to $3,180,000 for the total marketing expenses for the year 2012.

Controls

The market plan gives a guide on the implementation procedures that the management of the organization has to follow in order to achieve the marketing objectives.

In order to evaluate the effectiveness of the program during the execution, the monthly revenue from each market, the total expenses month as well as the level of customer satisfaction will be monitored for each of the early months. Necessary reinforcements can be made if significant fluctuation is recorded.

Implementation

The key steps that are to be used in the marketing are indicated in the following table. The promotions and evaluations will be necessary throughout the entire period.

Table.1. Implementation schedule for the marketing plan

Marketing Organization

The marketing process will be carried out with marketing department under the Manager (sales and marketing) in conjunction with other departments like research and development.

Contingency Planning

The company has purposed to penetrate into the emerging markets while maintaining its position in the developed market as well. This ensures that it develops a good coverage for its clients. The research and development team is working continuously to develop competitive models in order to absorb the economic fluctuations that may be experienced in the future.

Works Cited

Anon. Forbes does a comparison of luxury brand demographics. 2007. Web.

Auto Week. 2012. “Porsche Panamera S Hybrid.” AutoWeek 61.11.

Challen, J. “Porsche Panamera.” Automotive Engineer, 2009.

Carpages. Porsche Panamera Review. 2011. Web.

Dietz, C. Porsche: Porsche’s success in the automobile sector and its involvement in VW. 2006. Web.

European Autos Data Book. White Book – European Autos Data Book – 2Q:10: The Cyclical Recovery Potential Is Clear…But the Timing Remains Uncertain. NY: Bernstein Global Wealth Management, 2010.

Peterson, T. “Review: 2011 Porsche Panamera.” Web.

TransitList. Trends in the Automotive Industry 2010-2011. 2011. Web.

Problems

Currently, Porsche faces several types of problems. In particular, many customers of this company have become much more price-sensitive since they were affected by the global economic recession that began in 2008. Additionally, it should be kept in mind that the maintenance of sports cars is very expensive. Therefore, even many well-to-do clients may be reluctant to use the car models developed by Porsche.

This is one of the challenges that should not be disregarded. Secondly, the buyers are more willing to purchase fuel-efficient cars while the vehicles manufactured by Porsche consume higher amounts of gasoline. This issue is important because the governments of different states raise environmental performance standards that should be reached by automobile companies. These are the main issues that should be taken into account.

Identification of alternatives and their evaluation

The management of this company can take several steps. First of all, they can continue to position themselves as a manufacturer of luxury or prestige sports cars. This approach has been adopted by Porsche for a long time. In this way, they can retain the loyalty of clients who are committed to their products.

Nevertheless, this strategy has limitations because the revenue of this organization can eventually diminish because it is not clear when the effects of global recession can be fully overcome. This is the main drawback that should not be disregarded.

The second alternative is to develop a set of vehicles that may be purchased by people who represent various income levels. The main advantage of this strategy is that a company can attract a great number of potential clients. Furthermore, the profitability of this organization can increase.

However, there are some weaknesses of this strategy. In particular, Porsche can lose its reputation of a produce that offers only high-quality vehicles. This is one of the pitfalls that should be avoided because it can endanger the long-term sustainability of the company.

Proposed actions

Under these circumstances, Porsche can take several steps. First of all, they need to increase the production of cross-over cars such as Cayenne since these models enjoy significant demand among prosperous clients. Secondly, they should launch the manufacturing of business class vehicles. Such an offering can appeal to various prosperous clients.

Finally, they should increase the fuel-efficiency of their models since it is critical for the competiveness of the organization. These are the main steps that should be taken. In this way, the company can better respond to current challenges which can be attributed to economic or political environment as well as increased within the industry.

The consequences of the propose actions

The main advantage of the recommended strategy is that Porsche will be able to attract well-to-do clients who are not willing to purchase sports cars. In this way, a company can retain the reputation of a luxury brand and increase their customer base.

This is one of the main issues that can be made. Moreover, the management of Porsche should remember that clients usually pay more attention to the environmental performance of vehicles. This is why they need to focus more on the fuel efficiency of their cars. Moreover, this strategy is critical for meeting the requirements set by the governments of various countries. These are the main aspects that should be taken into account.

The Cayenne Changing the Meaning of the Porsche Brand

To understand the impact of the Cayenne on the Porsche brand, it is first important to note what the brand represents in terms of what it is projecting to consumers. When people think of Porsche, they usually connote the ownership of such a vehicle with a certain level of exclusivity and luxury wherein it is meant to denote that an individual is part of the upper class or is relatively well off.

There are certain parallels of this type of brand representation in the fashion industry where luxury brands such as Louis Vuitton, Dolce and Gabanna as well as Hermes also focus their brand management efforts on connoting that ownership of their items is meant only for a certain “type” of individual (i.e. those who are rich).

From the perspective of Kapferer and Bastien (2009) who utilized the theory of consumer behavior and its impact on luxury brands, it is the exclusivity associated with a luxury brand that acts as the prime selling point. Kapferer and Bastien (2009) stated that for some consumers in the upper income ranges with disposable income, their total utility for a particular product is often connected to how “special” such a product makes them feel (Kapferer and Bastien 311).

This feeling of being “special” is connected to how friends, family members or even the general public perceive them through the items that they wear. This type of consumer buys exclusive luxury products based on how others would perceive their ownership of such an item with their marginal utility often being connected to the annual changes in fashion with new designs being released resulting in them eschewing the products they already bought in favor of these new items (Kapferer and Bastien 314).

From this example, it can be seen that the concept of exclusivity, the feeling of belonging to a special group of “elite” individuals by virtue of owning a particular item, is at the heart of luxury brand management. Now, in the case of the Cayenne, the exclusivity that was once connoted to the Porsche brand has been eschewed in favor greater mass appeal. This adversely impacts the current brand perception associated with Porsche and could lead to lower sales for its other car lineups.

Value of the Rennalist Online Brand Community

The value of the Rennalist community is that it enables Porsche to know what its current consumers like about the brand, what aspects would result in better car development and how they can better appeal to their consumers by examining the various experiences that the members of the community have undergone whether it comes to purchasing their Porsche cars, issues when it comes to finding adequate places to have repairs made or what factors influence their purchasing behaviors in the first place.

Rennalist in effect acts as an easily accessible and above all free way for Porsche to get into the mind of its consumers. However, what must be understood is that the current members of Rennalist do not reflect all possible consumer markets that Porsche can appeal to. While it is true that a company should list to its customers, the fact remains that the reason that Porsche even developed the Cayenne in the first place was to attempt to penetrate new markets in order to survive.

It is with this in mind that while the CEO of Porsche should take the opinions of the members of Rennalist into consideration, he should not listen to them since they do not reflect the rest of the manufacturer’s potential market.

Impact of Rennalist on Porsche Ownership Experience

Based on the negative responses and outright hostility experienced by Cayenne owners on the Rennalist community, it is likely that this has marred their experience of owning a Porsche. One aspect of human nature is the desire to feel that they “belong” so to speak, whether it applies to being part of a particular group or a type of community. People in general are social creatures and we derive a certain sense of fulfillment by being part of something bigger than ourselves.

In the case of the Rennalist brand community, being ostracized, negative responses and outright hostility they level towards Cayenne owners as not being “true” Porsche owners makes it so that it is unlikely that they would continue to endorse the community in the future. This actually reflects badly on the Porsche brand since it makes future customer hesitant towards buying new iterations of the Porsche brand due to the potential hostility or even outright derision they may experience.

Lessons from the Cayenne launch

From the experience that Porsche gained from the release of the Cayenne, there are several aspects learned that make the launch of the Macan easier. The first is that Porsche has learned to focus on showcasing the exclusivity and luxury of the Macan. This is based on the original selling point of the Porsche brand and should help in gaining sufficient traction among its older consumer.

The next point is Porsche has now learned that it should also focus on better advertising initiatives to its traditional clients by showcasing how its new products are not a departure from the characteristics and quality that defined Porsche in the past.

The one aspect that makes the Macan launch more difficult because of the Cayenne is due to the negative response that former Porsche owners have had regarding the Macan which may make future buyers reluctant due to the negative attitudes traditional Porsche owners have to their new counterparts.

Works Cited

Kapferer, Jean-Noël, and Vincent Bastien. “The Specificity Of Luxury Management: Turning Marketing Upside Down.” Journal Of Brand Management 16.5/6 (2009): 311-322. Print

Porsche’s strategy and brief financial assessment

Car manufacturing industry is one of the most competitive industries in the world. Besides the large amount of capital investment required, the industry is also characterized by high level of engineering expertise.

Therefore, car manufacturing companies have to incorporate lots of technology to compete favorably in the industry. Regulations also pose some challenges to car manufacturers. To survive in this industry, Porsche uses a number of strategies.

Some of the approaches used by Porsche include: diversification to global markets, manufacturing top brand cars, innovation, creating strategic companions, divergence and loyalty.

Porsche sought to expand to international markets through exportation which is perceived to be a cost effective method compared to establishing branches.

Effective expansion to transnational markets is believed to result not only to greater economy of scale but it also intensifies market penetration. Rather than modifying its brand in the international markets as other manufacturers do, Porsche provides the same brand throughout the world.

This can be viewed as a low risk trade-off strategy that is helpful in preventing intercontinental product dilution and allows it to remain steady in terms of costs.

Producing high quality sports car is also an important Porsche strategy. Porsche manufactures high performance cars that provides long term dependability compared to any other brand.

To produce high quality cars, Porsche applies innovation and technology advancement generated from its racing programs. Even though they continue to produce high quality cars, they have kept their car cost comparatively cheaper to capture many customers.

Another useful strategy employed by Porsche is the development of strategic partners. The corporation forms alliances with other companies in a bid to acquire modern technologies in car manufacturing.

For instance, in 1999 Porsche acquired 49% of Miseschke Hoffman and Partner (MHP), which served to improve the information technology services and Porsche’s process Engineering. Porsche is also keen in forming associations that do not require equity capital.

Porsche has continued to diversify its brands to meet the changing demands of its clients. For example, when the customer preference to SUV hit the market in 90s, Porsche decided to diversity its production to include SUV.

This move became so lucrative that it fueled Porsche’s developments in many years that followed. Finally, loyalty to production of top brand quality remains the commitment of Porsche.

Therefore, customers also remain devoted to Porsche because they provide whatever the needs of their customers.

Analysis of the financial statements of Porsche indicates a continued economic growth. For instance, in the 2008/2009 financial year Porsche made a net profit of 8 million Euros while net profit for the period 2009/2010 was 4,496 million euros.

Analysis of the balance sheet also indicates an increment from 7,993 million Euros in financial year ended July 2009 to 16,977 million euros in July 2010. This economic growth could have been contributed by expansion to international markets and continued customer preference to Porsche.

Internal and External Issues

Even though Porsche strives to excel in the industry, it is faced by both internal and external influences. One of the major external issues is stiff competition offered by other car manufacturing companies.

As with the nature of car manufacturing industry, continued changes in customer preference, technology and industry dynamics pose a serious challenge to Porsche. Some of the competitors of Porsche include BMW, Mercedes Benz and Volkswagen.

Another significant issue affecting Porsche is government regulations. The U.S government set a higher minimum mpg rating requirements for cars. The government also imposes higher fines on cars that do not meet the minimum mpg requirement.

Even though Porsche is committed to manufacturing fuel efficient cars, higher mpg rating and the higher fines set poses a serious challenge in the U.S, where most of its car sales take place.

Internally, Porsche is also faced by a number of issues. One of the major internal issues affecting Porsche is poor management.

When the corporation became a victim of financial meltdown in the year 2008, it could not be able to secure the resources required to gain control of the VW Auto Group. In contrast, VW group were able to acquire Porsche during the 2010 reverse takeover.

The VW group management consequently transferred the top management of Porsche to other brands under its umbrella to use Porsche’s expertise.

Again, Porsche has not been able to produce cars with high mpg rating to meet the minimum requirement set by the U.S government. This indicates an internal weakness in technological design and management.

Recommendations

To remain at the top in the car manufacturing industry, Porsche need to make improvements especially in management and technological advancement. Management restructuring is important because it will help in the development of the corporation with regard to capital base and customers.

Porsche should improve in their car manufacturing technology to meet the minimum mpg rating required by the regulations.

This will increase their sales in the U.S and avoid high amount of penalties imposed on their cars. Definitely, this will result into an increment in revenue for the company.

Background

The success of any business depends on how the marketers popularise its goods or services to attract customers. Most investors believe that it is necessary to invest in a robust, reliable and efficient marketing strategy regardless of how it will cost their businesses. The automobile industry has gained popularity in the last three decades due to the massive population seeking to own vehicles (Coyle, 2010).

Companies like Toyota, Nissan, Peugeot, Mitsubishi, and Isuzu, have enjoyed an undisturbed supply of their products to the market. However, there is a unique market of sophisticated vehicles manufactured for leisure and are commonly used by wealthy people in the society. Maserati and Porsche are very expensive cars that cost owners a lot of money yet they cannot be used to generate income (Flichy, 2009). This discussion examines how Maserati and Porsche employ different marketing strategies to attract customers and control markets.

Business Orientation

Maserati has a unique business orientation marketing strategy that focuses on market orientation. The company does not have plans to influence all car lovers to buy its products. Its marketing strategy aims at ensuring only those who can afford this automobile buy it. This means that the company knows it has a limited market and the majority of the population cannot afford it (Goolsbee, 2013). The price of its vehicles is high, and only the lucky and richest in the society can afford them. On the other hand, Porsche is a luxury car but not as expensive as Maserati. This company knows that not all people can afford expensive luxury vehicles, and that is why its business orientation strategy is sales oriented.

Utilisation of the Environment

Porsche has taken advantage of the high demand for luxury vehicles by the middle class. Therefore, its automobiles are cheaper and affordable, even though, this does not mean that every person can afford them (Thompson, 2014). On the other hand, Maserati has not paid attention to the existing environment. Most people cannot afford Maseratis unless they are super-rich like celebrities or politicians. The marketing strategy used by this company does not consider the market environment.

Customer and Consumer Awareness

The marketing strategy employed by Maserati does not address the needs of consumers. This company targets the rich people in the society. However, these are very few and isolated, and this means that this company spends a lot of money in manufacturing expensive vehicles that reach a small niche. On the other hand, Porsche has a friendly and affordable marketing strategy that targets a higher number of customers compared to Maserati.

Market and Marketing Research

Economists argue that Maserati did not conduct an effective market and marketing research to identify effective ways of promoting its products. This company operates on the assumption that its automobiles are high class and thus must attract people. However, Porsche does not waste any opportunity of reaching out to the market and promoting the popularity of its products. It has the most expensive vehicles, but the average income earners can also get a good car at a cheaper price.

STP Practices and Marketing Mix

The marketing practices of Maserati show there was a weak segmentation, targeting and positioning model. Most of its products are durable and not replaced easily. In addition, they attract the richest population in the world, and this means that these cars are rarely replaced (Mackey, 2011). On the other hand, Porsche identified a market segment that had money but not enough to buy the most expensive vehicles. Therefore, it designed cheaper Porsches to enable the middle class to enjoy the fun of high-class vehicles at a cheaper price.

Product Strategy, Pricing, Promotion, and Distribution

Maserati targeted the wealthy population that is located in developed countries, especially those living in the United States, United Kingdom, and UAE regions. In addition, the marketing strategy employed targeted a small population that cannot be influenced to buy a product. Most rich people are conservertists and prefer traditional practices to new ones. The pricing of Maseratis discourages ordinary people from buying or planning to own one in the future. These vehicles are distributed mostly in developed nations with a few pockets in other regions. Porsche is a car meant for all people that earn good salaries and want a cheaper luxury vehicle (Frank, 2008). This marketing strategy employed by Porsche ensures its products are evenly distributed in most regions.

Service Performance

The services offered by these two vehicle companies are similar. Both are luxury cars that cost people a fortune to own them. Their manufacturers wanted to introduce luxury vehicles that can be used away from the busy daily activities of the office and urban centres. The marketing strategies employed by these companies ensure their clients get maximum satisfaction, safety and happiness (Chomka, 2012). Most owners of high-end vehicles prefer those that offer comfort, security and happiness as they relax and tour other parts away from their businesses and normal environment.

Penetration into International Markets

It is not easy to penetrate into an international market that is already saturated with similar products. Porsche and Maserati use different marketing strategies to attract international clients. For instance, Porsche focuses on offering luxury vehicles that are cheaper compared to others that cannot be afforded by most people (Falcone, 2013). On the other hand, Maserati offers durable and uniquely designed luxury vehicles. Therefore, individuals who prefer stylish and classy vehicles will buy Maseratis while those who want cheaper yet high class will go for Porsche. However, these two companies use celebrity endorsement marketing strategies to promote the popularity of their products in international markets.

Implications

The marketing strategy employed by Maserati limits its abilities to explore new markets and attract middle-income earners (Levitt, 2005). In addition, these approaches deny this company the opportunities to explore other models that are cheaper and which will attract more customers. Therefore, Maserati may experience resistance when expanding its market into new regions like Asia and Africa. On the other hand, Porsche’s marketing strategy was a success because it focused on the middle-income earners (Spyker, 2013). However, its vehicles are still expensive, and only a handful of people can afford them.

Recommendations

Maserati should stop focusing only on the wealthy population and start manufacturing cheaper vehicles. In addition, it should focus on other regions apart from the United Kingdom and United States. On the other hand, Porsche should expand its market by manufacturing cheaper vehicles that ordinary people can afford. These companies should conduct market research to identify the needs of the population. In addition, they have poor market segmentation strategies that limit their focus. Maserati should invest in publicity campaigns to promote its products and dispel fears that it concentrates on making the rich happy and ignoring other people. Porsche should intensify its marketing efforts to maintain its existing markets and create new ones.

References

Chomka, S 2012, Business Profile: Understanding the Automobile World, McGraw-Hill, New York.

Coyle, D 2010, The Soulful Science: What Economists Really Do and Why It Matters, Princeton University Press, New Jersey.

Falcone, P 2013, The Performance Appraisal Tool Kit: Redesigning Your Performance Review Template to Drive Individual and Organizational Change, Prentice Hall, New Jersey.

Flichy, P 2009, Dynamics of Modern Marketing: The Shaping and Impact of New Communication Technologies, Sage Publishing, New York.

Frank, R 2008, The Economic Naturalist: Why Economics Explains Almost Everything, Virgin Books, New York.

Goolsbee, C 2013, Microeconomics, Worth/Macmillan, New York.

Levitt, S 2005, Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, Allen Lane, London.

Mackey, K 2011, Technology in Automobiles: The Impact of Science on Technological Development and Modern Battle, Simon and Schuster, New York.

Spyker, S 2013, Technology and Marketing: How the Information Revolution Affects Our Lives, Skylight Paths Publishing, New York.

Thompson, R 2014, Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases, McGraw-Hill, New York.

Introduction

Porsche, a German-based automotive car manufacturer, began its operations in 1948 when it first produced its flagship model, the Porsche 356. The company focused on designing high-end sports cars, with the designs varying slightly over the years. However, in 2003, Porsche decided to diversify its products by launching a sports utility vehicle, the Cayenne. Consequently, the decision to position the new brand, while protecting the company’s parent brand, became a challenge. Predicting the extent to which the Cayenne would change Porsche’s image brand and identity posed significant challenges. This paper focuses on the role of customer opinion in deciphering Porsches brand and meaning.

Effects of Consumers’ opinion on Porsche’s Brand Equity

Porsche’s new Cayenne was set to face significant competition in an already crowded SUV market. Categories ranging from high-end Range Rovers to small jeeps, and light trucks characterized the SUV market. The introduction of the Cayenne was, therefore, expected to brood a class of consumers that only wanted to identify with the Porsche brand without appreciating the real heritage of Porsche as a sports car.

Porsche’s annual forecast of 20,000 SUV units annually already felt threatened by the move by other motor companies like Infinity, Lexus, BMW, Audi,and Cadillac, which were looking into developing luxury SUVs as well. The company planned to outdo the market by producing a faster and more comfortable SUV that sports car lovers would like. Its competitors were producing practical vehicles, which were mainly meant for off-roadpurposes (Mulligan 43).

Cultural critics took center stage in criticizing SUV’s in 1997, with Keith Bradsher, a renowned New York Times reporter, spending four years writing scathing critiques of SUVs. This led to a cold reception of SUVs globally. Bradsher questioned the safety of The SUVs, adding that they significantly contributed to global warming. He further presented SUV buyers as insecure and vain, as well as deficient in driving skills. Further claims were that SUV owners bought them for their functionality, despite the fact that most of them did not actually need the vehicles(Deighton et al. 5). Consumers began to question the long-term efficiency of SUVs with many opting for smaller, energy efficient cars.

Consequently, hostility towards the launch of Cayenne was intense in online forums such as the Rennlist. The critics sent posts portraying Porsche as an ego-expressive brand and a masculine identity marker. Rennlist was significantly used to vent displeasure to Porsche’s diversification in design, engineering and marketing decisions, with some Porsche owners indicating that they were leaving for rival companies like Maserati and Ferrari. Porsche’s brand equity suffered significantly, but the company was resilient and it continued producing more models.

Why Consumers’ Voice Matters

Honest consumer opinion and criticism are an important element of the performance of any company because it helps the manufacturers focus areas that need improvements to foster efficiency in future production processes. However, some of the opinions are dishonest and destructive, which can adversely affect the market value of the associated brands. The Cayenne debate was characterized by the presence of many consumers who did not have the appreciation for the model’s features and performance. Consumers felt that Porsche had failed as a brand by venturing into the SUV market because it had already established itself as a sports car manufacturing company (Mulligan 87).

Ultimately, Porsches resolve to effect changes in its production outweighed the consumers’ voice mainly because it hindered its future goals and projections. Based on the negative response witnessed by Porsche in sales, it is apparent that consumers’ voice matters in business.

Balancing the control of the brand and customer opinions

Branding is about manufacturing unique products that customers can identify with, while carving out new niches in search of new customer bases. Brand control is one way that companies keep up with the constantly changing markets. Porsche had identified a growing demand for the production of SUVs as revealed by the fact that most of its rival companies were planning to roll out SUV models(Jacobs 104). While the move was not received well by Porsche enthusiasts, the company was headed in the right direction, based on the prevailing market trends.

Since branding entails producing new series by enhancing performance and introducing new features that were previously not available, the only way that Porsche would have satisfied both the current enthusiasts and potential customers was by maintaining high quality and performance in the Cayenne. Sales were initially low, but the Cayenne would later capture a substantial market share. Half of Porsches profits came from its sales, lighting the fact that the Cayenne was not a failure after all. This experience is a revelation that companies need to balance brand control and customer opinions.

Conclusion

The business environment in the modern world requires companies to find new market niches for competitive. Porsche’s case brings out the need for companies to strive to keep their production going by finding new niches without compromising brand quality. While building the cayenne seemed like a mistake initially, the SUV was eventually a success. The senior management shrugged off negative criticism and planned to launch a new model; the Porsche Panamera. It is, therefore,clear that companies can still emerge successful by focusing on brand control more than customer’s opinions.

Works Cited

Deighton, John et al. “Porsche: The Cayenne launch.”Harvard Business School. 2012, pp. 1–23.

Jacobs, A. J. “Passenger Car Plants Before and After the Former East Germany.” Automotive FDI in Emerging Europe. Palgrave Macmillan, London, 2017, pp. 103-146.

Mulligan, Simon. Porsche. PowerKids Press, 2013.

Introduction

The two advertisements selected for the paper are print ads for Porsche from chapter 4 and Visa credit card from chapter 5 (Belch & Belch, 2011). The Porsche advertisement shows a minimalist print ad with a photograph of a Porsche 911 and a tagline stating “Pity you have nothing left to wish for.” The second print advertisement is that of Visa credit card, which shows the picture of a firefighter and the writings show various levels of security that Visa provides to secure financial transactions.

Main Body

Porsche is a high-end luxury car that targets people with high income. Porsche’s advertisement targets the self-actualization of the audience, appealing to the instinct of viewers that appeals to the attainment of the ultimate desire. Porsche is a luxury car and hence, cannot be achieved or bought instinctively. On the contrary, it requires a lot of investment and hence, incites a sense of pride and loftiness that is exemplified through the ad.

On the other hand, the credit card ad by Visa reinforces the various security levels associated with the product that will ensure safe transactions targets an audience who are conscious of their money and spending and want to ensure nothing is wasted. The difference in the target audience for the two ads is apparent as the first targets those who have affluent while the second targets those who are well off but not affluent.

The target customers for Porsche are high-income professionals who are more likely to read magazines like Times or Wall Street journal. These people are more likely to visit expensive boutiques or malls. These people are usually successful in life and have a need to satisfy their self-actualization need for recognition. The ad aims to attain congruency of the product and self-image of the targeted consumers (Sirgy, 2015). Visa credit card targets at mid-income to high-income individuals or families that aim at optimal utilization of their resources. To these families security is important; hence, the ad reinforces their need for security.

The print ad of Porsche should be placed in lifestyle and automobile magazines, business newspapers, certain social networking websites, and billboards near high-end shopping malls. These three channels will help in targeting the right customer groups. Further, it will increase the visibility of the product for customers who are most likely to purchase the product. The advertisement for Visa credit cards can be given in magazines and newspapers, billboards near banks and offices, and social networking websites like LinkedIn. The ad for Visa credit card will do well in these mediums because they will reach the target audience directly.

Conclusion

Social status is an important element that Porsche targets. Porsche targets the consumers who aim to derive a social status through their purchase of automobiles in this advertisement. Following Maslow’s hierarchy theory, self-actualization is attained when all other needs i.e. need for food, shelter, safety, luxury is attained (Toncar & Munch, 2001). Therefore, Porsche associates its product with the last need of humans, i.e. self-actualization.

This need becomes apparent among people who have attained everything that a man needs or desires. The last need, i.e. self-actualization according to Maslow’s hierarchy of needs, is the need that goes beyond all other humane needs or requirements. The tagline on the Porsche ad confirms this desire of man – “Pity you have nothing left to wish for”. On the other hand, the Visa ad aims at the security need of man. Security is required when the man has attained his need for food and shelter. Security is required to make man’s life simpler and well rounded. Man aims to reduce risk and enhance stability (Phillips & McQuarrie, 2004). The visa advertisement targets those consumers who have attained that state and seek security.

Table 1: Comparison Matrix.

References

Belch, G. E., & Belch, M. A. (2011). Advertising and Promotion. London: McGraw-Hill Higher Education.

Phillips, B. J., & McQuarrie, E. F. (2004). Beyond visual metaphor: A new typology of visual rhetoric in advertising. Marketing theory , 4 (1-2), 113-136.

Sirgy, J.M. (2015). Self-image/product-Image congruity and advertising strategy. Proceedings of the 1982 Academy of Marketing Science (AMS) Annual Conference (pp. 129-133). Las Vegas: Springer International Publishing.

Toncar, M., & Munch, J. (2001). Consumer responses to tropes in print advertising. Journal of Advertising , 30 (1), 55-65.

The three most important concepts learned from the article

First, one of the most important concepts learned from this article is shareholder value. From the article, it is evident that shareholders of a company or business organization are critical entities that cannot be ignored by managers. For example, shareholders provide the much-needed capital to start and expand the business operations of a firm (Losbichler, Mahmoodi, and Rothboeck 85). Shareholder value also ensures effective and uninterrupted management practices, accountability, and transparency in an organization. In any case, there are several cases when shareholders have to be consulted before major investment decisions can be executed. Through shareholders, a business organization is also in a position to remain afloat owing to effective management practices and the provision of surplus resources. In addition, shareholder wealth maximization accelerates the growth of a business entity bearing in mind that the profits generated are usually plowed back into the company.

Second, stakeholder capitalism is another fundamental concept learned from the article. Equity demands long-term returns. The concept of stakeholder capitalism embraces the fact as much as shareholders are prudent in the growth and development of a business organization, the capitalistic nature of stakeholders is equally crucial. Some of the key stakeholders pointed out in the article include regional entities, governments, labor unions, and creditors. The author argues that most Anglo-American markets are less powerful than labor unions that usually agitate for workers’ rights.

Third, agency theory is another crucial term used in the article to describe the roles played by shareholders in motivating managers. The latter is supposed to enhance the generation of wealth for shareholders. For instance, shareholders and management teams should think along the same line when it comes to shareholders’ wealth maximization. If the targets set by shareholders are not attained, boards of directors may be obliged to replace the concerned management teams.

Application of the article’s concepts to an employer

Agency theory can be applied in a number of ways in my present workplace environment. For example, the structure of the organization relies on the set goals and objectives that ought to be achieved within a given time. In fact, agency theory assists in addressing issues emanating from conflicts of interest. It is a common occurrence at my workplace to witness creditors, managers, and stockholders engaging in malpractices that may jeopardize the wellbeing of the firm (Walker and Geyfman 112). Through this theory, risk-bearing in the organization, separation of management, and residual claims can be analyzed in the most effective manner. Risk-sharing trade-offs may also be avoided if agency theory is put into practice. In addition, contractual provisions at my current place of work can be analyzed using this theory. In most instances, stockholders and claim holders encounter numerous conflicts of interest that tend to interfere with the core operations of the organization.

The most surprising in the article

The most surprising aspect of the article is that even though shareholders are valued entities in a firm, they cannot surpass the roles played by customers or the targeted market. In the given case study, Porsche excelled quite well in the automotive industry without prioritizing the value of shareholders. As much as consumers’ needs, tastes, and preferences are met consistently, a business organization is guaranteed success. In fact, the above automotive firm maximized its revenue base without necessarily concentrating on shareholder value. I initially thought that the most successful organizations place shareholder value at the top of their priority list (Moffett 5).

Concepts in the article to disagree with

The “management of two minds” concept adopted by Porsche was an unhealthy practice because it failed to synchronize production and management processes at the firm. This concept could not highlight the nature of the value proposition is adopted. Although the company embraced it for a long, the concept led to major operational failures.

Works Cited

Moffett, Michael. Porsche Changes Tack. 2007. Web.

Losbichler, Heimo, Farzad Mahmoodi, and Markus Rothboeck. “Creating Greater Shareholder Value From Supply Chain Initiatives.” Supply Chain Forum: International Journal 9.1(2008): 82-91. Print.

Walker, John, and Victoria Geyfman. “Is Community Bank Creating Value For Shareholders?” Journal of Accounting & Finance 13.4 (2013): 107-123. Print.