Porsche: Guarding the Old While Bringing in the New
Synopsis
This case presents a very interesting story about a luxury carmaker, Porsche. Like many marketers of luxury goods, Porsche has had to wrestle with the challenge of serving its core of loyal customers while also making products that appeal to a less traditional, but growing, segment of customers. The case describes the Porsche faithful who like their Porsches only one-way: 2 doors, six cylinders in the rear, and lots of pure sports car performance. The problem that Porsche has faced at various times throughout its existence is that being confined to one kind of customer with one kind of car inevitably results in maturation and stagnation. Sales flatten out, then decline, and so do profits.
This case describes recent efforts by Porsche to broaden its product line and appeal to multiple segments of customers. Most notably, Porsche now makes an SUV (the Cayenne) and a four-door sedan (the Panamera). Both of these efforts are designed to appeal to a different kind of customer than the ones who typically buy 911s. But these vehicles are not soft around the edges. They perform like, well, the Porsche of SUVs (and sedans). Porsche has identified two types of customers that are sustaining these vehicles and keeping the company on a growth trend. These are Porsche customers who grew up and have practical needs of hauling people and stuff, and the emergence of wealthy people in China, India, and other parts of the world who have more interest in a daily driver.
As the economy recovers, Porsche is poised to serve various customer types with a portfolio of outstanding vehicles.
