Category: Porsche

Introduction

A brand community refers to the non-geographical community ties that build on social relations regarding the brand values. Although brand communities are based on geographical concentration, in some instances, the general depiction presents their existence in the entire non-geographic internet space. Brand communities portray distinct complex cultures, traditions, behavior codes, and rituals. This situation depicts the brand members having unique elements that drive their identification and participation in the particular communities. Through the progression, these communities ensure influential perspectives on other members. There are several brand communities, including Apple Newton, Porsche Owners Club, play-station, a girl, figment, and Starbucks idea. This paper examines the Porsche Owners Club brand community characteristics, emphasizing rituals and symbols that bind community members with the encompassing advantages and disadvantages of brand communities for marketers.

Characteristics of Porsche Owners Club Brand Community

Porsche Owners is an American club brand community that encompasses numerous enthusiastic members and business developers. The community consts of several well-structured clubs based in different geographic locations in Canada and United States. Additionally, the community operations involve the regional clubs maintaining separate websites for their activity and content sharing (Imrie, 2018). It also engages in social and tracks events, driving instructions, club meetings, and dinners. The brand community maintains a consistent connection with the Porsche management despite the organization’s lack of formal affiliation. The company is legendary in sports car manufacturing with an encompassing tradition in high-performance racing. It maintains many years of performance in the automobile manufacturing industry as a private entity.

The Symbol at Porsche Owners’ Club Community

The Porsche brand community symbol depicts a value system that accommodates each member. Apart from caring for the car production, it creates a valuable and cultural system for the members and is less likely to lose people’s membership. It celebrates the best results in life and aspires to support good friends and conversations that realize the world’s finest automobiles. The brand community ensures members’ racing competition, including showcasing prized possessions and knowledge dissemination regarding technical issues in the car industry (Imrie, 2018). The brand community’s efforts focus on creating value for the members and improving consumer experience and skills. The brand community has a wonderful experience in the identity group due to the monthly magazine production, the Porsche Panorama, which focuses on informing the company’s progression.

The community’s value system contributes to its existence over a long period constituting extensive member maturity. The solid membership establishment that consists of the company members creates a long-lasting experience for the community. Additionally, the brand community allows for personal interaction during generated events and activities, ensuring bonding and identification moments portraying the exclusivity progression from non-members (Imrie, 2018). Its outstanding values and culture contribute to community stability and business enhancement, basing on the long-lasting relationship among the members. Additionally, the community symbol is critical in creating a sense of belonging and identity in brand loyalty.

Rituals at Porsche Owners’ Club Community

The Porsche Club brand community’s rituals aim to help the members enjoy and experience the wonderful expeditions in their racing cars. Through the events, members stand a better chance of stating feedback regarding the racing car values and indicate informative suggestions concerning better adoptions that improve brand service performance. The group constitutes several types of rituals, including civic, cultural, and family generations based on the activity and event associations (Andéhn et al., 2020). These rituals convey a special message concerning the brand members, such as identifying exclusive clubs and consumer loyalty and emotions. They create a valuable and significant sensation to the public allowing for positive brand evaluation.

Additionally, the Porsche American Club membership constitutes numerous rituals, including autocross, driving experience, rally, club racing, and parade. Autocross refers to a short closed-course driving activity that focuses on achieving a safe completion. The event allows the participating members to utilize the shortest time possible in completing the course safely. The community ensures consumer retention in the best and quality services for the course requirements through the activity.

Through driver education, the Porsche community brand allows for regional driving programs to gain essential skills. The learning progression allows the members to understand car driving in various circumstances. The activity motive focuses on skill improvement in the driving ventures and high performance (Imrie, 2018). Additionally, the activity equips the consumer community with the right skills in the driving arena that ensures identity and loyalty to the company’s brands. Another ritual example is rallying, which focuses on disseminating fundamental knowledge to the members. The rally ritual follows a course particularly on public roads ensuring precise detail specification regarding the rule application. Through the ritual, the members learn to adhere to public road rules and regulations and improve the racing capabilities, which are vital in the competitive business world (Andéhn et al., 2020). These activities ensure a positive progression regarding the manufacturing company to the consumer influence and high identification level.

The community also participates in the Concours exhibitions that contribute to its shinning advancement. The exhibition is a judged event that requires car preparation and presentation in the best condition. It aims at point denotation basing on the maximum values in terms of cleanliness and condition (Imrie, 2018). This activity allows the members to present the cars’ prized possessions, encouraging an operation that gives value to the consumers who are likely to associate with the best commodities. Lastly, the Porsche parade is vital in the brand community to attract a global gathering, and the event venues change each year.

Membership and Consumer Loyalty in the Porsche Brand Community

Membership loyalty in the Porsche club community entails cultural observance and characteristics upholding. The loyal members identify with the community’s explicit characteristics, such as exclusivity, prestige, and mystique identification of legendary sports cars. Members enthusiastically participate in the company event provisions as they engage their vehicles in experiential operations to their advantage. The brand members depict successful and performance-oriented characteristics in their activity progression (L’Espoir Decosta & Andéhn, 2018). Additionally, they are independent individuals portraying a passionate and value expression in their vehicles. For instance, individuals engage in debates regarding the best methods of washing a Porsche, indicating the brand connection’s value systems. The brand community rests in the great social aspects contributing to the successful advancement in advertising and promotional capacities. The encompassing meeting blended with track events forms a fundamental basis for aspects in community building. The bonding events include monthly dinner meetings that allow the members to share information and ideas that build the community.

Additionally, the bonding aspect involves the monthly newsletters that disseminate similar information to the members. The community provides national magazines to the members and allows for occasional visitations in different regions. The community’s activity advancements ensure information sharing and connection through current internet social modes, such as email. Through the several activities and meetings that the organization promotes, the brand community depicts its loyalty and identification in the bonding moments. The members can freely suggest improvement requirements while supporting the best practices (L’Espoir Decosta & Andéhn, 2018). As the consumer feels the community’s value through the bonding activities and the encompassing magazines and newsletters, they strengthen their identification and loyalty levels influencing other customers in the regions. Loyalty to the Porsche brand depicts the consumers’ contribution towards its wellbeing. The company has been in operation over the last 60 years and still works to the competitive advantage.

Advantages of Brand Communities for Marketers

Marketers gain a lot from brand communities due to numerous advantages, such as customer loyalty and evangelization, feedback and new ideas dissemination, content publications and SEO, and PR opportunities. Due to customers’ provisions for expression, they are more likely to portray loyalty towards the brand. The platform allows for the interaction of new clients and brand loyalties, creating a positive impression for the marketers (Andéhn et al., 2020). The platform’s top contributors are brand evangelists by informing others on the organizational progression due to the values gained. The community attachment to the brand entails positive implications where they indicate loyalty that bars them from shopping in different markets. Through the progression, the loyal consumers strive to purchase the particular brands even when they entail high prices and other inconveniences. This progression is advantageous as the brand communities promote customer retention while improving the organizational reputation of marketers. Additionally, the brand communities escalate the marketers’ ability to stand out by differentiating them from competitors.

On loyalty, the brand community creates a moral responsibility to each other and the product. The community’s devotional nature also entails recruiting new participants and the encouragement of new brand users. This situation improves the competitive markets’ business position as customers and supporters increase (Andéhn et al., 2020). The community, in its capacity, acts as fellow owners of the brand as they oblige to new members’ recruitment. Businesses gain through the community members’ advocacy to consumer involvement in the brand use. The brand communal activities involve rendering moral and support to fellow users and new consumers. Community participation reinforces brand reality and uses advocacy that works to the business advantage.

Brand communities are also vital in generating feedback, new ideas, and information. The society response is essential since it will help the organization to understand the needs of the customers. Marketers benefit from these communities by learning new information and feedback from customers. Through conversations, marketers learn their products’ strengths and weaknesses and improve where necessary while building on the positives (Imrie, 2018). Marketers gain new ideas that enhance their advancement suggestions which aim at better results. The industry’s brand communities’ fundamental values entail creating profitable products and maintaining value to the users.

Another advantage entails brand communities’ enhancing marketing strategies through content generations and SEO. As the community creates content regarding the brand and venture into interaction with each other, the progression improves the marketers’ SEO. When communities share publications that move around the network, they create a better search engine position. The process takes a gradual progression and is advantageous for marketers as the search engine results implicate relevance in the content (Rademaker et al., 2020). The situation attracts numerous customers as individuals with similar questions or challenges regarding the content are more likely to understand new ideas. The marketers have better chances of ranking higher as their domains serve as discussions in the social media advancements and email.

The brand communities play an essential role for marketers through ensuring PR opportunities. The communities enhance these opportunities’ availability depending on the content publication influence (Andéhn et al., 2020). Through article publications, brand communities can create PR opportunities by volunteering for charitable causes or ensuring marketing campaigns. This advancement enhances the marketers’ ability to popularize their brands in extensive ways. Marketers can also ensure personality in their brands through the community utilizing value and ethics demonstration. The brand users identify with the marketers through their identity in the working area. Due to the community enlargement, organizations realize brand visibility which attracts more people in the discussion out of curiosity and desire for new ideas. Marketers utilize such opportunities in gaining new clients and potential connections.

Disadvantages of Brand Communities for Marketers

Brand communities enhance loyalty to the specific product over several provisions of different competitors in the market. The loyal customers in specific brands will ensure to purchase the products irrespective of the prices and under inconvenient circumstances (Imrie, 2018). Despite the numerous advantages for businesses emanating from brand communities, several disadvantages encompass the situation. As the brand communities ensure loyalty by spreading positive information regarding particular products, they can also create negative sentiments to potential customers through anti-brand comments. Some loyal dissatisfied customers can spread negative information about particular brands, either through word of mouth, on social media, or directly to the business site affecting the evangelization advancements.

Moderating a community is difficult, and it can publish negative content regarding a particular brand relating to a business that goes round to other potential customers. As marketers attempt to ensure more strict measures, the community views the operation as biased (Andéhn et al., 2020). Through lenient moderation, it creates a family-friendly progression resulting in the loss of business focus. Additionally, establishing a brand community is difficult for growing businesses that require to venture more in investment to realize a competitive advantage. The marketers have to ensure a lot of finance and resources to achieve product visibility through the brand community.

Through brand community, the businesses operate with numerous distractions implying their inability to participate in the events successfully. This situation indicates that, for a company to gain from community loyalty, it should establish a mutual relationship with the consumers through the inspiration of nurturing the brand development (Rademaker et al., 2020). The marketers have to invent various aspects that could motivate the community in the active participation that depicts loyalty and advocacy. This circumstance involves feedback and suggestions on better ways of improvement.

The theoretical implication depicts brand communities participating in trash talks and stereotyping aspects for the in-groups and outsiders. These brand communities can create a rivalry in the inter-group relations, ensuring a hostility between companies producing the same products (L’Espoir Decosta & Andéhn, 2018). For instance, as brand communities in dominant businesses generate individualistic views of their innovative and creative progression in the market products, they ensure rivalry with small and upcoming businesses, especially when the operation involves negative sentiments regarding the different groups. This situation is so as the small business’s individualistic information lacks expertise in production and low-quality brands. Despite the brand communities ensuring a market for the favorable and flourishing businesses, it establishes hostility in the competing companies and the inability for the small ones to find their way up the marketing spectrum.

In conclusion, brand communities depict distinctive characteristics that implicate their attachment to specific company products. There are numerous brand communities in the business spectrum portraying substantive traditions, rituals, symbols, and cultural activities that are different from others. Focusing on the Porsche Club community entails unique characteristics that bind the members, including the symbol and ritual activities. The business’ symbol operation constitutes the value it ensures for ball members and its ability to produce the Porsche Panorama newsletter informing individuals on the activity progression. It allows for members’ participation in various rituals, such as autocross, driving experience, rally, club racing, and parade, enhancing their enjoyment and experience with new cars. Through the advancement, the members ensure their loyalty to the brand by participating in the given activities and events, including dinner meetings and regional visitations. Brand communities play a significant role in the marketing strategies depicting the advantageous and disadvantageous categories. The community advantages include the loyalty and evangelization capabilities that ensure a moral responsibility to the members’ support and encouragement of new consumers to the brand purchase. It also contributes through content publication, SOE, and PR opportunities, ensuring brand visibility in the marketing world. Nevertheless, brand community identification creates a challenge in the market industry when it engages in negative sentiments on in-group dissatisfaction and other competitor’s brands. Marketers need to venture into brand communities’ support for business growth and marketing strategies.

References

Andéhn, M., Hietanen, J., & Lucarelli, A. (2020). Performing place promotion—On implaced identity in marketized geographies. Marketing Theory, 20(3), 321−342.

Imrie, J. (2018). Seeking to understand Subaru’s turbocharged appeal: A study of brand communities, product utility, and corporate promotion [Master’s thesis, Bryant University]. Web.

L’Espoir Decosta, J. N. P., & Andéhn, M. (2018). Looking for authenticity in product geography. In Authenticity & tourism (pp. 15−31). Emerald Publishing.

Rademaker, C. A., Stafford, M. R., & Andéhn, M. (2020). Managerial–consumer eco-harmful media perceptions and eco-conscious attitudes: Understanding the context within green media. Journal of Advertising Research, 60(3), 290−304.

Introduction

Branding is an inherent part of marketing because it helps companies to shape their identities in the minds of their customers. For a long time, companies have managed to shape brand identities using traditional media sources, such as television, radio, and magazines (Sharma and Jain, 2019). However, the digital age has led to a shift in this strategy as more firms look to use digital and virtual platforms, such as social media, to communicate with their loyal customers (Eryandra, Sjabadhyni and Mustika, 2018). This change has led to the growth in online brand communities where customers congregate and share insights regarding specific brand attributes to improve their utility value (Sharma and Jain, 2019). Others simply take part in such discussions to stay in touch with like-minded buyers and to be abreast with current events happening in the market.

The important role played by digital platforms in moderating the stream of communications between companies and their customers have influenced decision-making processes relating to the formulation of branding strategies. The main challenge associated with this plan is sustaining online communities in the digital age. In this paper, it is argued that the main challenge associated with the sustenance of such brand communities is the lack of moderated discussions in these communities, low levels of trust among different cadres of members, declining quality of discussions, and user rankings. Porsche is used as a case study based on its launch of the Cayenne Sports Utility Vehicle (SUV) brand, which was poorly received by loyalists in the company’s online community platform (Global Brands Publications, 2022). Key sections of this paper will use this case study to demonstrate the difficulty of sustaining brand communities in the digital age. Evidence will be obtained from customer views expressed by Porsche owners on the Rennlist online community platform where views about the product launch were exchanged. This discussion follows two main theoretical areas under review, which are community longevity and member support.

Literature Review

Member Support

The process of developing digital brand communities can be a problematic task because of the openness to abuse that members are exposed to. Indeed, the digital era has given people the tools to broadcast their views to many people without a moderating agency (Golf-Papez and Veer, 2022). This liberty has exposed some members to open abuse from people, whose identities cannot be verified, thereby discouraging them from actively participating in online discussions (Golf-Papez and Veer, 2022). The digital age has allowed users to give their opinions on various product attributes. These exchanges have allowed members to discover more about their products than they would have previously done had they not been members of these communities and to obtain assistance when need be (Ilhan, Kübler and Pauwels, 2018). However, this freedom has made online communities prone to divisions at various levels of engagement.

Several reasons have been advanced to explain the failure of companies to nurture their online brand communities. Some researchers have attributed divisions observed among community members to participation inequality, which is commonly seen among diverse teams (Leclercq, Hammedi and Poncin, 2018; Chen, Song and Yao, 2020). It stems from a commonly held belief that 90% of members in digital brand communities lurk around, while 9% of them actively participate in group discussions (Global Brands Publications, 2022). A further 1% of this population is assumed to undertake most of the creative work within these social setups (Sabia, Bell and Bozward, 2022). Subject to this principle, a core group of people, who share history, commonly dominates the activities of many large online communities (Global Brands Publications, 2022). They often suck up the attention of other members and tend to be recognized for most of the work that the group takes part in (Harkin et al., 2020). This situation is associated with social stagnation because the majority of the group members will be discouraged from participating in the group activities knowing that they would not get the same recognition as the 9% who participate and the 1% that create do. Thus, a low level of member support in online communities undermines their sustenance.

Community Longevity

The environment that defines brand community engagement often dictates how long the group will last. Typically, members are expected to interact in a productive environment, characterized by healthy discussions about various brand attributes (Molinillo, Ekinci and Japutra, 2019). However, the digital age has brought an uncontrolled environment where all views are accommodated. This type of setting has led to the emergence of negative attributes, such as bullying, trolling, and abuse of people who openly share their problems or give their opinions (Akar and Mardikyan, 2018). The common purpose and passion that community members share are often eroded by this behavior because it becomes difficult to control trolls, while, at the same time, maintaining healthy and productive discussions (Hungara and Nobre, 2022). This situation undermines the longevity of online communities and discussion forums.

Trust is an important element in the development of vibrant brand communities. It refers to the assumption that members of a brand community share common values and beliefs towards a product or service, and, by extension, one another (Kasimba and Lujala, 2021). Researchers opine that small brand communities have the highest level of trust compared to larger ones (Caliandro and Anselmi, 2021). This outcome is possible because people tend to know one another in small communities. However, in large ones, they may not recognize one another, thereby resulting in a decline of trust. This decline in trust is likely to affect the productivity of the brand community by preventing people from sharing knowledge, which is a key component of the sustenance of successful brand communities (Batat, 2019). Therefore, when trust is broken, community members are unlikely to maintain group cohesion because they will be protecting themselves from abusers and trolls.

Some members may choose to exit these communities to save their dignity by staying away from people they do not trust. Researchers indicate that this problem is associated with big brand communities because there will always be someone ready to provoke members to get a reaction (Divakaran et al., 2017; Rehman and Al-Ghazali, 2022). Thus, the nature of discussions that go on in digital communities exposes members to abuse and trolls. Indeed, given that ideas and experiences are exchanged on these platforms, there are opportunities for members to disagree and for conflict to foster. These factors undermine the longevity of such groups because disagreements without a moderator would naturally lead to a collapse of these group setups.

Declining Quality of Discussions

An important element of successful brand communities is the quality of discussions that happen within them. Members who are passionate and devoted to the success of a brand often start and maintain high-quality discussions (de Almeida et al., 2018). However, as new entrants emerge, some of them do not show the same level of enthusiasm towards a product, thereby leading to a decline in the quality of debates that occur in such forums (Shin and Perdue, 2022). Researchers have observed that when such new entrants dominate discussion forums, they may retreat to having private discussions with people who are interested in hearing their genuine views, or exiting the group altogether (Al-Tit, Omri and Hadj, 2020; Wallace, Costello and Devine, 2018). The discontentment with the platform leaves online communities with a majority of less enthusiastic members who cause a further decline in the quality of discussions, thereby creating room for a different party to form a rival group (Ruiz-Mafe et al., 2018). These insights show that the digital age has made it difficult to maintain brand communities because of a decline in the quality of discussions.

A decline in the quality of discussions within online communities means that the relevance of such groups may decline because it takes time to identify valuable information from a list of commentaries. Some researchers have attributed the decline in quality of discussions to the difficulty in distinguishing the views of expert and non-expert views (Erz and Heeris Christensen, 2018). Indeed, the increase in the number of users has made it difficult to determine the views of those who have expert knowledge and those who are merely giving an opinion (Buzeta, De Pelsmacker and Dens, 2020). At the same time, it has become difficult to verify the credentials of those who claim to be experts because no process guarantees such outcomes (Kim and Peterson, 2017). Users simply state that they are experts and proceed to give their opinions without further verification. This situation has made it further difficult to distinguish expert and non-expert views. Thus, some analysts have argued for the categorization of customer views based on quality (Zhu, Guan and Donovan, 2020). The failure to do so can force some members to exit groups because they will not believe that their opinions are appreciated. Stated differently, they will be drowned by the abundance of views expressed by all kinds of people who have a nudge to share ideas.

Issues and Problems under Scrutiny

Traditionally, people have known Porsche as a sports car company targeting buyers who love speed and performance. This background has been supported by the perception that Porsche cars are made from hand-made parts. Furthermore, their production processes are devoid of short-cuts, which often compromise quality (Wu et al., 2019). Supporting this view is the commonly held view that German engineering was central to the performance heritage of the Porsche sports brand (Dempsey, 2018). In 2003, Porsche decided to expand its product division and venture into the SUV market with the launch of a new car – the Porsche Cayenne (Global Brands Publications, 2022). This move was informed by the growing market for SUVs around the world and the rise in demand for reliable cars among frequent automobile users (Wu et al., 2019). Therefore, in a bid to address these concerns, Porsche announced that it was developing the Cayenne SUV.

Porsche’s shift in production strategy marked a departure from the commonly known brand identity of performance and luxury. Instead, it started to embody values of efficiency, reliability, and mass appeal, which did not augur well with the core customer base (Global Brands Publications, 2022). Furthermore, the adoption of an automated production process meant that the company had to lose its authentic production system that was built on years of perfecting hand-made skills and artisanship, especially in the production of car accessories (Smith, 2021). The loss of these attributes led many Porsche owners to believe that the automated production system was “soulless” (Dempsey, 2018). Broadly, the shift in production strategy meant that the Porsche brand would no longer be associated with luxury, speed, and performance, but with reliability and robustness. The sudden change in brand values led many brand loyalists to criticize the company on its online community for radically shifting from its essence of sleekness and luxury to the less celebrated mass-market appeal (Derval, 2018). Additionally, it was argued that the shift from the use of hand-made to automated product detailing eroded its niche appeal because it made it seem that the brand was another mass-market product in the industry (Streather, 2019).

Despite the existence of negative views about the launch of the Cayenne SUV on the Porsche online community platform, a division emerged among members because a group of owners welcomed the addition of the Cayenne SUV into the “family” because they did not believe it was an inferior brand to others (Global Brands Publications, 2022). This split in opinion morphed into a gender divide among members of the community with one side holding the view that the Porsche brand should not represent feminine values. They said that Porsche is a uniquely male-dominated brand with its roots embedded in extreme sports performance (Smith, 2021). Naturally, this philosophical inclination led many customers to associate the Porsche brand with the development of supercars and it meant that men were the majority of members of the online communities.

The launch of the Cayenne SUV challenged the male-dominated setup of the Porsche online community because the car was deemed to have feminine values. Some of the online community users even referred to the vehicle as an ideal representation of a “soccer mum’s” mode of transport (Global Brands Publications, 2022). These views suggested that the launch of the Cayenne misrepresented the spirit of the Porsche brand. However, female Porsche owners did not hold the same position and argued that the brand still represented the authentic identity of performance and luxury despite its venture into new markets (Global Brands Publications, 2022).

Porsche’s covert representation of the brand as being predominantly male eroded the trust that female buyers had in the brand. They held this negative view because the representation of feminist attributes on the Cayenne SUV was met with hostility from members of the online community who believed that the brand should remain uniquely masculine (Global Brands Publications, 2022). This division created disunity among members because male Porsche owners clashed with their female counterparts about the future essence of the Porsche brand and its representation as a masculine brand (Cole, 2020). Again, while female Porsche owners did not see a problem making the brand gender-neutral, ardent followers believed that doing so would erode its value. To their displeasure, they argued that the Cayenne was moving the brand away from its masculine roots and they no longer trusted it to represent their identity.

The clash between the genders emerged as an after-effect of the admission of members from different gender persuasions in the Porsche brand community. The open membership format used on Porsche’s online engagement platform is a threat to the brand’s identity because it may fail to maintain the characteristics of the original followers (Global Brands Publications, 2022). This weakness has led to a lack of trust between the company and its followers because ardent Porsche owners are unsure of their future in the brand (Global Brands Publications, 2022). Differences in views between original and new members of the online community formed the second basis of division in Porsche’s online community.

Notably, there was a division between car buyers who deemed themselves “real loyalists” and those who were generating new interest in the brand. This split manifested itself in the support and disapproval of the Cayenne SUV brand (Global Brands Publications, 2022). In other words, loyalists excluded those who owned the Cayenne from the core group, which was comprised of authentic brand enthusiasts, mostly made up of those who had the Porsche 911 (Cole, 2020). From this behavior, it can be deduced that the core community was comprised of 911 owners and the Cayenne buyers were outliers. This segmented structure of the brand community created division among members by forming a class system that discriminates against people based on their brand preferences.

This Porsche case study provides evidence of the difficulty of sustaining brand communities in the digital age. The gist of the company’s failure to secure support from its core customer group stems from the misrepresentation of the brand identity by the launch of the Cayenne SUV. Overall, the findings of this investigation show that different groups of customers treated each other differently based on the kind of Porsche they drove. Based on this assessment, two issues that emerge in the investigation are member support and community longevity.

Conclusion and Recommendations

Conclusion

From the onset of this study, challenges affecting the sustenance of brand communities have been explored to identify strategies that could be adopted to promote group sustenance. Key elements of this investigation have been drawn from the automobile industry, using Porsche as a case study. The division that the launch of the Cayenne caused in the brand’s online community shows that the digital age brings with it new freedoms to brand discussions that could erode the authenticity and quality of discussions that happen on the forum. Given that these challenges mostly affect major brands, such as Porsche, the emergence of factions within the wider online community demonstrates that the longer a community exists, the higher the likelihood that there will be a divide created between original and new members. Thus, managing the evolution of a brand’s identity between the two competing interests fronted by different groups of customers describes the challenge that companies experience in sustaining their online brand communities.

Overall, the findings of this investigation show that online brand communities can help companies to build a loyal customer base, as Porsche has done with its customers. This process has given them a free platform for sampling market views in preparation for making modifications for improvement. Online communities also give prospective customers an insight into the brand attributes of a company before they make purchases. This way, they learn about the strengths and flaws of a product based on the quality of discussions happening in these communities. Overall, virtual communities are fair in composition and content because there is no guarantee that the statements made on the platform are factual. However, given that companies do not moderate discussions that occur on these platforms, it can be assumed that the views expressed are unbiased and honest.

Recommendations

For purposes of this investigation, the recommendations listed below are relevant to the development of short-term and long-term strategies for sustaining Porsche’s brand community. In the long term, the company should align its product development strategy with its vision and goals because a firm’s brand identity should stem from its vision. Therefore, managers need to formulate a clear vision of how they would like people to perceive the Porsche brand. Therefore, the findings of this paper have shown that a company’s brand identity should reflect its goals and vision.

In the short term, Porsche should improve the quality of relationships between the business and its customers. This move is critical because misunderstandings are likely to emerge from the misfit between what customers perceive the brand to be and how the company is operationalizing it. This gap explains the backlash that Porsche received after launching the Cayenne SUV brand. Stated differently, the car did not communicate the essence of the brand’s identity, which is luxury, sleekness, speed, and performance. Therefore, there is a need to improve the relationship between the customers and the company by filing expectation gaps that exist today.

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Introduction

Porsche Automobile Holding SE is a German company that holds most of its investments in automobile industry. Ferdinand Porsche founded the company in 1931 by the name of “Dr. Ing. h. c. F. Porsche GmbH.” It is headquartered in Zuffenhausen, Stuttgart, in Germany.

The company from its inception in 1931 was owned by Dr. Ing h.c. F. Porsche AG. In 2007, it became a holding company with 50.1 percent stake in Porsche Zwischenholding GnbH. In 2009, Porsche Ag became a joint venture between Volkswagen AG and Porsche SE. the present ownership model is presented in the figure below (see Figure 1).

Porsche belongs to the automobile sector. More specifically, it concentrates in the luxury automobile industry. The global automobile industry has been undergoing recession in 2010-11. However, in 2012 the industry has experienced increase in demand that varied with regions. The demand of automobile in Europe and China has been weakening and is expected to reduce even in 2013.

Further, with rising fuel prices and depleting natural gas resources, there has been increasing pressure on automobile companies for making fuel-efficient vehicles. The automobile industry faced an auto sales growth of 4.4 percent in 2012 and is expected to decline to 2.9 percent in 2013. In such a sluggishly growing market, Porsche ahs a niche position in the luxury automobile market.

Presently, Porsche makes cars in four distinct categories. First are the consumer models that are directly targeted for sale. The second type is the racing cars, and the third are the prototype or concept cars and the fourth are tractors. Porsche also makes hybrid cars and engines for aircrafts. According to the company website, Porsche makes the following models of cars – 911, Boxter/Caman, Cayenne, and Panamera.

In the following report, we will further discuss the business and growth of Porsche. We will study the business growth and try to capture financial overview of the company. The in the end the paper will try to gather information regarding the demand for products sold by Porsche.

Business Growth

The company has been undergoing tremendous growth. Though the sales figures for early years are not available, the sales figures of Porsche cars since 1987 are available and are presented below.

Figure 2: Growth statistics of Porsche

Figure 2 shows the growth statistics of Porsche from 2002 through 2010. The data demonstrates that the revenue and profit has undergone negative growth in 2009 and 2010 when the production, sales, and revenue fell drastically. This was due to the sluggish demand of luxury cars in the developed countries. As sales fell, the revenue as well as the profit also reduced substantially.

In Northern America, the sales of Porsche cars is available from 1987 through 2011, which is shown in, figure 3.

Figure 3 shows the sales growth rate in North America for Porsche. This shows that the sales figures have been declining in 1988 and have remained negative in 1987 through 1992. The reason for such a decline in sales in late 1980s was sue to the devaluation of dollar against deutsche that increased the prices of Porsche and therefore reduced demand.

In the 1990s, a recession hit sales. In 1992 the company had faced losses of $150 million. This resulted in change in the CEO of the organization in 1992. The focus of the company was shifted from consumer orientation to a purely sports car company. With the restructuring brought forth by Wendelin Wiedeking the pre-tax profit kept on rising for the company and it can be observed in figure 3 that there was always positive sales growth post 1992.

In 2002, there was again a minor restructuring of the company with Porsche going into a joint venture with Volkswagen and began its sports/utility car segment. This move was beneficial for the company as the sales growth was in double digits and the pre-tax profit increased by 22 percent.

In 2009, Porsche increased its stake in Volkswagen by 50.76 percent. There were talks of possible merger between the two companies. However, in the process of uncertainty in 2007 when the takeover bid was initially triggered under German law, there was a decline in the sales.

In 2009, the two companies agreed to create a merged entity wherein Volkswagen will initially take a stake of 49.9 percent in Porsche and buy it back at a later date. Since 2008, the sales growth of the company has been negative. The pre-tax profit growth had initially declined and then splurged into negative growth in 2009 and 2010 only recovering in 2011. In 2012, Volkswagen declared to take total control over Porsche.

Financial Overview

Figure 4: Consolidated Financial Performance of Porsche

Figure 4 presents the consolidated financial performance of Porsche since 2005. The figure shows that the financial performance of Porsche has been changing from moderately good in 2005 to very high increase in earnings per share (EPS) in 2006 to €23.6. However, since 2007 EPS has declined considerably and have been negative in 2008 and 2009.

It has started recovering since 2010 through 2011. The net income of Porsche has increased from 2005 through 2007, however, has declined to negative value in 2008 and 2009. The reason for such bad performance for Porsche in these two years was due to the merger and acquisition between Volkswagen and Porsche. The gross margin has declined from 54.04% in 2005 to 40.82% in 2008.

Operating margin of the company too has declined from 25.72% in 2005 to -6.4% in 2008. In terms of financial health the total current assets as a percentage of total assets has decreased from 45.56% in 2005 to 2.14% in 2011. Total liabilities of the company have gone down from 2005 to 2011. The quick ratio of the company has increased from 0.95 in 2005 to 1.61 in 2011 indicating that the company has greater liquidity.

Demand for product

Figure 5: Demand for Porsche

Figure 5 presents a sales and production analysis of the Porsche products that actually indicates the demand for the Porsche products. This provides a segregation of the product wise production and sales of the company. Porsche makes four products – 911, Boxter/Cayman, Cayenna, and Panamera. The sales and production figures of each brand are provided in figure 4.

The figure shows that overall; in 2010, there was higher demand for the product than supply by 909 units. However, in 2011, the demand for the product fell and there was greater supply of the product creating an excess supply of more than ten thousand products. In 2011, the demand for all the products declined substantially that resulted in the huge excess supply of Porsche cars in the market.

The demand for Cayenne is high, for which the production of the SUV had been increased in 2011 as demonstrated in the figure. However, due to the recession, the overall global demand for automobiles has been low. Demand for sports car and Cayenne has been high in the USA with increase in demand by 15%. The sale of 911 and Boxter/Cayman showed a sale of 9166 in the US.

In the UK, the demand showed a spurt with changes in the model design of Boxter/Cayman. Demand in Asian countries like Japan and China has been encouraging despite difficult economic conditions. Demand in Middle East and Africa continued to grow with 7945 Porsches selling in the area. In Asia-Pacific, the company posted a sales figure of 3930 in 2011 showing a growing demand.

Reference List

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Vettraino, J. P., Porsche at 60: The little sports-car company that could, Autoweek. Web.

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.

Buyer decision process of a typical Porsche buyer: analysis

Typical buyers of Porsche are realized to have been influenced by identity that has been associated with the car model. This identity is first of all realized in the features that the car was given and that were realized to be outstanding.

The uniqueness that was for instance realized with the adoption air cooled cylinders in the automobile models to an exclusive feeling on the vehicle owners. The identity concept is also realized with the relatively fewer number of users that the brand registered.

While its outstanding feature of the incorporated cylinders attracted the owners who personalized the car model, the feature at the same time drove away people because it made vehicle hard to drive. Consequently, the brand remained with just few customers that were deeply rooted into the car model.

The brand is at the same time associated with a financially successful class who associates with the model due to identity. Owners of the brand are also reported to be buying it because of the utility that they derive from driving the car model as opposed to other models.

Consumer behavior with respect to the Porsche model is also realized on the ground that when the company infiltrated the model with a variety of other brands, it lost its customers until it resumed its limitation to the number of models being produced.

Though the consumer behavior of the typical users of the Porsche model looked a bit odd with the factors that the use of the brand was characterized with some level of difficulties such as driving difficulty as well as costs, consideration of buyer behavior still illustrate consistency, to some level, in the choice that the individuals made over other vehicle brands. An individual’s life style is for example expected to affect decision making of a buyer into self identity with commodities.

Such was the personalized association that was realized with the typical users. They wanted the brand for social identity with their lifestyle status. Perception of exclusivity that was created by scarce production of the brands together with its subsequent attitude was also factors to the consumer behavior.

This identity driven purchase illustrates priority on the need recognition in the decision making process with disregard to other factors such as “information search and evaluation of alternatives” (Lamb, 2009, p. 329). The company thus used brand identity to manipulate the decision making process of typical buyers (Lamb, 2009)

Decision making process of the traditional Porsche customer and that of Cayenne or Panamera customer

Contrary to the initial influence that the company derived from its brand identity that was basically characterized by class and the fact that the brand was specifically made in scarcity to strengthen the identity, the later brands that the company released in the form of Cayenne and Panamera were equipped with features that were meant to influence consumers through the whole decision making process.

The cayenne for instance was equipped with the capacity to faster acceleration and high speed that could match other car manufacturer’s models. The development of the larger model in the form of Panamera was also identified with improved features that influence consumers in the line of decision making. Increased luxury that was developed in terms of an extra door in the brand together with its higher speed and acceleration thus formed the basis.

The Cayenne and the Panamera customers thus had their decision making process pass through the “information search” process and the comparison of available alternatives in the market. This actually allowed the company to increase its sales from collapse due to its introduced competitive features (Lamb, 2009)

Concept behind the high sales of lower priced models in the 1970s and the 1980s

The concept that the company employed to improve on its sales in the period was the marketing concept. This is because the introduction of the new brands which were at the same time cheaper were aimed at capturing individuals who could not fit into the initial class of Porsche due to high prices that the initial brand was associated with.

The company’s focus was not based on growing to large scale to increase its revenue but on the contrary using its identified weakness to capture more customers for a stronger base. This motive thus distinguish the concept as marketing whose main consideration was identification of customer’s need of lower priced brands (Kotler & Amstrong, 2011).

Developments of Consumer Attitudes

The study of the Porsche Company reveals the impacts of consumer attitudes on a product brand. Positive attitude increase sales while negative attitudes decrease sales. One of the ways to positively changing consumer attitude is the production of brands that are attractive to consumers. A contrary move would negatively affect attitude (Kurtz et al., 2009).

Role of the Porsche brand in the self concept of its buyers

Porsche brand played an important role in the self concept of its buyers. By inducing an identity of the buyers with the vehicle brand, Porsche created control in the market portion that it desired.

References

Kotler, P & Amstrong, G. (2011). Principles of marketing. New Jersey, NJ: Prentice Hall.

Kurtz et al. (2009). Contemporary Marketing. New York, NY: Cengage Learning.

Lamb, C. (2009). MKTG. Ontario, Canada: Cengage Learning.