To:
Professor Dana Alden, Professor at Shidler College of Business
From:
Team 7, BUS 312
Re:
Porsche: Guarding the Old While Bringing in the New
After analyzing Porsche’s case, we have come up with some answers to your presented questions. Porsche’s traditional customers value the exclusivity and high-end luxury of the brand. When analyzing their buying decision it is given that they have some need or strong want for a new car. It is very likely that someone who is interested in Porsche is looking specifically for an extravagant, first-class vehicle, in which case they would fall under the “complex buying behavior” since there is high involvement when investing in a car, but many exclusive car brands have unique aspects (ex. Jaguar, Ferrari, Mercedes), such as Porsche’s distinctive motors. The consumer would then research the differences among the brands that interest them, taking into account commercial, public, experiential, and personal (strongest) sources. The buyer would then weigh the alternative vehicles, using scales, pros and cons, or any other methods to eliminate choices. Then they would move to purchasing a brand (possibly being swayed by others or their environment), but ultimately choosing to go with the Porsche. After the purchase, it is possible that they experience second thoughts or regret since a car is a big venture. When debating between the traditional Porsche, the Cayenne, or the Panamera, consumers would move from the “complex buying behavior” to the “dissonance-reducing buying behavior.” This is because a high-end purchase would still require high involvement, but instead of choosing between multiple brands, the consumer has already chosen Porsche. Instead of following the original buyer decision process, the consumer might go through the buyer decision process for new products since the Cayenne and Panamera are new to the Porsche market. They would become aware of the new buying options, become interested and pursue research, decide whether they like the new products, and then possibly try it out. Afterwards they would adopt the new product. Porsche sold so many lower-priced models in the 1970s-1980s for many reasons. One may be social class. Traditional Porsches could only be afforded by the upper-middle class to upper class, which accounts for only fifteen percent of America’s population. When new affordable models were presented, the middle class and possibly the upper-working class could then afford to buy the luxurious brand (an additional thirty-two to forty percent to the current fifteen percent). Another concept which may have applied is the adoption process as described in the previous paragraph. Consumers who were aware of the Porsche brand, but never considered the vehicles due to high prices or inefficient models may have been newly interested in the innovative designs, evaluated it, maybe tried the car on the lot, and then ultimately adopted the new product. Porsche is the type of company where they can either have it one way, or the other, but not both ways, ultimately upsetting one market despite what they choose. When seen as the elite brand, traditional buyers of Porsche have positive attitudes towards the exclusivity, but the general population who cannot afford the brand have negative feelings towards the high prices. When Porsche tried to expand their product line to appeal to more niches of the market, their original customers were outraged at the brand for making the vehicles affordable to the masses. However, Porsche was gaining positive feedback from those who would not normally be able to buy the costly brand. In order to change consumer attitudes Porsche has tried to create luxury SUVs and sedans which maintain the brand’s exclusivity, but can appeal to a broader market niche. I’m not sure any more can be done without losing their upper class customer base. They must choose whether or not to remain a high-end vehicle, or become an every-day car. A way to appease the