Ch. 8 - Segmenting and Targeting Markets

Like most companies, Porsche uses a hybrid of strategies for segmenting and targeting their desired markets. Porsche and other, rather progressive, companies don’t rely on ridged or inflexible rules to adhere by. Porsche may approach these strategies unconventionally but certainly are using a conventional base for segmenting and targeting markets.

Porsche, being a niche/specialty company within a bigger industry, recognizes that having criteria for successfully segmenting and targeting a market is imperative. Their strategy for creating a segmentation scheme has four simple but crucial basic criteria.

Substantiality:  A segment must be large enough to warrant developing and maintaining a special marketing mix. This criterion does not mean that a segment must have many potential customers.  Marketers of Porsche develop marketing programs that can be tailored to each potential customer’s needs.  

Identifiability and measurability: Segments must be identifiable and their size measurable. Data about the population within geographic boundaries, the number of people in various age categories, and other social and demographic characteristics are often easy to get, and they provide fairly concrete measures of segment size. This is where Porsche excels. They are great at measuring how many of the consumers are willing, indifferent or unwilling purchase their cars. With their “data” they are able to tweak sales and promotional campaigns.

Accessibility:  The firm must be able to reach members of targeted segments with customized marketing mixes. This aspect may be hard for most companies, but not for Porsche. Porsche is able to speak a language that is ubiquitous and has molded the company, within the car industry, as a globalized one. This makes Porsche that must easier to be reached and understood.

Responsiveness: Markets can be segmented using any criteria that seem logical. Unless one market segment responds to a marketing mix differently than other segments, however, that segment need not be treated separately. Porsche understands that the responsiveness on a new product they have or one being developed (the Maccan) is a great assessment as to whether, improve that product’s depth, or move on to a newer project. 

Testing the 2012 Porsche Carrera 911

Ch. 11 – Developing and Managing Products

Diffusion of Innovation...

Innovation is a product perceived as new by a potential adopter. It really doesn't matter whether the product is "new to the world" or some other category of new product. If it is new to a potential adopter, it is an innovation, which Porsche is not short of. 

Innovation is crucial to product development. Porsche didn't developed products that did not exist before (well they did make the first hybrid, but that's another post). The Cayman wasn't the first coupe sports car, the Cayenne wasn't the first sports based truck, and the Panamera wasn't the first sports sedan! With that said, what makes Porsche so called “innovative?”  

In this context, Porsche is in the front of the pack as far as innovation is concerned. As I mentioned earlier it’s a "product perceived as new by a potential adopter." An excellent example of this is currently happening now at Porsche is new Cayenne diesel that’s been debuted under, of course, the Cayenne product line. For Porsche it was only natural to expect something new for one the models, but in the span of two years they have taking innovation to a whole new level from the Cayenne S Hybrid, Panamera Turbo S, Cayenne Diesel and with much anticipation the soon to be Porsche Macan.

Managers for Porsche have been efficient in successfully marketing products this way. They are tending to needs whether it performance or efficiency and understand that development and management with their products can always improve. Porsche managers also understand how important it is for the consumers to learn and adopt the products they are designing and enhancing.    

The Cayenne Diesel

Performance
The Cayenne Diesel is powered by a new 3.0-liter V6 turbo-diesel engine. Its turbocharger features Variable Turbine Geometry. The incoming exhaust gases drive a set of electronically variable turbine blades whose angle is continuously adjusted to ensure optimum performance under all engine loads. This results in an output of 240 hp and maximum torque of 406 lb-ft. The car accelerates from 0 to 160 mph in 7.2 seconds. Maximum torque is available between 1,750 and 2,500 rpm. Top track speed is 135 mph, while fuel consumption has been lowered.

Porsche Traction Management (PTM)

The Cayenne Diesel features a permanent all-wheel-drive system. During normal driving, it splits torque 60 percent to the rear wheels and 40 percent to the front. If one of the wheels is about to lose grip, the self-locking center differential transmits the torque to the axle offering the highest level of traction.Cayenne Diesel can also vary the distribution of engine torque to the rear wheels to help enhance steering precision and driving dynamic

Common Rail
On the Cayenne Diesel, direct fuel injection comes courtesy of a common-rail injection system. The fuel is injected at extremely high pressure so as to help distribute the air/fuel mixture for greater performance. And absent is the knocking noise typical of the diesels of the past. Knock is caused by abrupt combustion.

Tiptronic S

The outstanding feature of the new eight-speed Tiptronic S is a particularly wide ratio spread. First gear is designed for optimum acceleration when pulling away and greater performance when tackling ascents and towing loads on or off the road. Top speed is reached in 6th gear. The remaining upper gears are used to lower the revs at high speed, thereby enhancing fuel economy and occupant comfort. On the motorway in particular, driving at low revs will significantly reduce the noise level inside the vehicle.

In automatic mode, the driver can influence gearshifts on the Tiptronic S using the throttle and brakes alone. Tiptronic S automatically adapts the gearshift points for performance driving – equally, if a more defensive driving style is detected, the system selects a gearshift point that offers maximum fuel economy. Under heavy braking, Tiptronic S shifts down to maxi mise engine braking.

An electric pump is used to maintain the required pressure of the transmission fluid, e.g. to transmit high levels of torque at lower engine speeds.

The standard sports steering wheel in conjunction with Tiptronic S has two ergonomic switches for manual gear changes. One press forward with the thumb and Tiptronic S shifts up. One pull backwards with the index finger and Tiptronic S shifts down. Either the right or left-hand switch can be used.

Naturally, you can also change gear using the gear selector lever on the centre console.

Standard on the Cayenne S, Cayenne S Hybrid and Cayenne Turbo. Optional for the Cayenne.

Variable Turbine Geometry (VTG) 
The turbocharger in the Cayenne Diesel features Variable Turbine Geometry (VTG) which significantly increases the power and torque. The way it works is remarkable: The vanes of the turbine can adjust their angle electronically. To achieve optimal performance, the vanes that guide exhaust gases flowing from the engine automatically alter their angle depending on how fast the turbine is spinning and how much exhaust air is flowing.


Character
 Boasting outstanding performance and efficiency, the Cayenne Diesel is ideal for longer journeys – offering high levels of torque, while fuel consumption remains low.

Its new 3.0-liter V6 turbo-diesel engine is now more powerful and refined.The unit generates 240 hp and maximum torque of 406.lb-ft. The sprint to 60 mph requires just 7.2 seconds. Top track speed is 135 mph.

Direct fuel injection comes courtesy of a common rail direct injection system. The fuel is injected at extremely high pressure so as to help distribute the air/fuel mixture for greater performance.

The new turbocharger on the Cayenne Diesel features Variable Turbine Geometry. Combined with optimized channelling of the intake air, it enhances the charging effect, thereby generating a higher output and impressive torque, even at low engine speeds.

The standard eight-speed Tiptronic S includes gearshift controls on the steering wheel. Transmitting the high torque of the Cayenne Diesel smoothly and effectively, the eight gears are designed to facilitate both economical driving with low fuel consumption and performance driving with emphatic acceleration.

Porsche Traction Management (PTM) permanent all-wheel drive with self-locking center differential transmits the car’s power to all four wheels with optimum precision and control.

Ch. 16 – Integrated Marketing Communications Product

 No matter how well developed, priced, or distributed a product is its ability to exist in the marketplace will suffer without effective promotion. To achieve the ultimate goal of promotion you must get the consumer to purchase your goods or services, or in the case of Porsche, buy their cars. The classic Model that helps companies reach these goals is called the ADIA concept. This acronym is defined as attention, interest, desire and action. Most Buyers involved in high-involvement purchase situations pass through the four stages. 

Attention- The marketer or advertiser must gain the attention of the targeted market. This is crucial when a company’s target market does not know the goods or services exist, therefore the company cannot sell. Porsche creates attention mostly through their ads on the television, in magazines and on the internet.

Interest- "Simple Awareness of a brand seldom leads to a sale" so Porsche must create interest in the product. The most effective way for Porsche to do this is by performing demonstrations and target messages to create interest in their cars.  The show "Top Gear" tests many luxury and sports cars, like Porsche. The cast tests these cars on performance, their aesthetic design and any other aspect that has the potential of creating a deeper sense of interest. 

Desire- Potential customers for Porsche may like the concept of the Porsche Cayman for example, but they may not feel the car is necessarily better or practical for everyday use. So Porsche must now create brand preference that adds practicality to its already premium performance and look. Specifically, Porsche created the  "Everyday Magic" campaign to combat the idea that their cars weren't practical.  This campaign was very effective and served as the best solution to enhance the consumer's desire for the cars. 

(Desire) Iconic Porsche commercials

Action- Some of the customers in Porsche's target market may have decided to get a Porsche but have not made the actual purchase. As further motivation to make the buy, Porsche would advertise features and benefits like price discounts on parts, free deliver, or extended a warranty.

   

   

Ch. 10 – Product Concept

A product as you know it is defined as everything, both favorable and unfavorable, that a person receives on exchange. In the world of business, the product can vary from an idea to a service and most commonly, a tangible good.  Most companies who are truly successful market a blend of all three, whether they know it or not.

Porsche products are considered shopping products because “consumers usually buy only after comparing several brands or stores on style, practicality, price and lifestyle compatibility”. While shopping products are clearly defined, Porsche can be further associated with one of the two types of shopping products, heterogeneous and homogeneous. When products, such as cars, are the product it’s assumed to be heterogeneous because the “prices, quality and features [of cars] vary so much”.

 Porsche also falls into the specialty product category. These are products that consumers will search for expansively and aren’t willing to settle for substitutes. Specialty products, especially Porsche, frequently use advertising that is a blend of more than just marketing a product but an idea or service. These status-conscious advertisements are aimed to maintain a product’s exclusive image. Porsche’s high price, premium quality and rich history all have the aspects of service, product and idea. Once a consumer becomes an owner of a Porsche it’s out the question to own a car from a different brand. What’s more, which is very interesting, is Porsche seems to be the advocate of advertising is a way that is truly unique. Porsche is feeds into the status-conscious marketing that evokes feelings and emotions associated with the company which is why Porsche still serves as one of the only car manufacturers that make ads and don’t touch on how great the specs are but instead touch on the history and sensation of owning one. 

*A great example of Porsche using status- conscious advertisements