Porsche New Marketing Stratergy - Overheard
05-05-2005, 09:00 PM
#16
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Originally Posted by aj02996tt
Buying Turbos and/or GT2s is not even remotely a stretch for me, but I don't think I'm rich.
05-05-2005, 09:42 PM
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Defining rich versus wealth!!
A porsche is marketed to at a minimum rich people. I think we can all agree on this.
Now, to define rich people versus wealthy people I will quote the comedian Chris Rock.
Shaq the basketball player is rich, the man who pays Shaq is wealthy.
My Point being, the spectrum of "rich" is wide and relevant to one's views.
Now, to define rich people versus wealthy people I will quote the comedian Chris Rock.
Shaq the basketball player is rich, the man who pays Shaq is wealthy.
My Point being, the spectrum of "rich" is wide and relevant to one's views.
05-05-2005, 10:23 PM
#18
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The answer to the "mass market" issue...
I was just reading through the May '03 issue of R&T, and noticed the Porsche advertisement that month. It has a picture of a 996 Cab, and the first line (the attention getting step, in bold as is normal) says...The demands of the mass market have been noted and ignored.
Porsche must not consider the 996 a "mass market" sports car...
Porsche must not consider the 996 a "mass market" sports car...
05-05-2005, 10:30 PM
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Maybe, I do not get It.....
If "the demands of the mass market have been noted and ignored" this to me says the 996 is the answer to the mass market. This car does not ignore the mass market, in essence it is the answer to the mass market.
I now see where there could be another thought.... This car ignores the mass market, so it is not mass market. But, this still makes the point. Porsche has in it's advertising made an analogy to the mass market. Hence, that is the target market to which they are positioning the car.
If "the demands of the mass market have been noted and ignored" this to me says the 996 is the answer to the mass market. This car does not ignore the mass market, in essence it is the answer to the mass market.
I now see where there could be another thought.... This car ignores the mass market, so it is not mass market. But, this still makes the point. Porsche has in it's advertising made an analogy to the mass market. Hence, that is the target market to which they are positioning the car.
Last edited by Bashy; 05-05-2005 at 11:02 PM.
05-05-2005, 11:10 PM
#20
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It's pretty simple...the "demands", i.e. "needs" of the mass market have been ignored. So it's not *for* the masses.
Porsche built just over 2000 Turbos for North America in 2002. Hard to satisify the masses with those numbers.
Porsche built just over 2000 Turbos for North America in 2002. Hard to satisify the masses with those numbers.
05-05-2005, 11:14 PM
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Well, I beg to differ. There could be this... as to price the demands of the mass market is noted [met] as to how mass market cars behave[perform] the demands have been ignored.
The number made is only for those [of the mass market] who agree with this philosophy. In what marketing people call a market "niche."
The number made is only for those [of the mass market] who agree with this philosophy. In what marketing people call a market "niche."
05-05-2005, 11:29 PM
#22
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The demand for a German sports car with good performance, *and* with a mass market price have been ignored.
Mass market sports car? Answer...The vette. The Mustang.
As a matter of fact, just look at the Z06 Forum. The guys there are going ape over the potential price of the C6Z being over 60K. They opine that the +60k price will put the car out of reach of the normal Joe out there...and it will. They consider the Vette to be a sports car that should be available to most Americans with a decent job, not to just rich/wealthy Americans. Those guys don't consider the 911 to be a car for the masses, based on price... and I don't either.
Mass market sports car? Answer...The vette. The Mustang.
As a matter of fact, just look at the Z06 Forum. The guys there are going ape over the potential price of the C6Z being over 60K. They opine that the +60k price will put the car out of reach of the normal Joe out there...and it will. They consider the Vette to be a sports car that should be available to most Americans with a decent job, not to just rich/wealthy Americans. Those guys don't consider the 911 to be a car for the masses, based on price... and I don't either.
05-06-2005, 08:58 AM
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Okay, maybe I came off as an elitist, but that wasn't my intent. What I'm talking about is branding and market placement.
As an example of poor market placement, look at the Ford GT. Ford chose to keep the car very exclusive. How many Ford enthusiasts can afford the car? As a good example of market placement, look at the Corvette Z06 and the Porsche lineup. All of these cars, with the exception of the CGT, come in with features and at price points that keep the brand loyalists in the showrooms.
Go to your average PCA get-together. Sure there will be rich and wealthy people there, but there will also be middle-class people who found it in their budget to enjoy Porsche ownership. You can go to the Porsche dealership and find a new or pre-owned car that is in the price range of a Chevy Suburban or Corvette. Porsche has always been a "semi-exotic", and has usually offered a car that was affordable to the middle class- 912E, 914, 924, 944, Boxster. . .and a base 911 has been available at a cost maybe 20-50% higher.
If Porsche puts the 911 at a price point closer to Ferrari, we'll see Ferrari, Aston Martin, Lamborghini et al with record sales, because few will be in the market for a $200K 911 Turbo, as was evident in the 993 Turbo S and GT2. I really hope this was a rumor started by a disgruntled janitor at the factory.
As an example of poor market placement, look at the Ford GT. Ford chose to keep the car very exclusive. How many Ford enthusiasts can afford the car? As a good example of market placement, look at the Corvette Z06 and the Porsche lineup. All of these cars, with the exception of the CGT, come in with features and at price points that keep the brand loyalists in the showrooms.
Go to your average PCA get-together. Sure there will be rich and wealthy people there, but there will also be middle-class people who found it in their budget to enjoy Porsche ownership. You can go to the Porsche dealership and find a new or pre-owned car that is in the price range of a Chevy Suburban or Corvette. Porsche has always been a "semi-exotic", and has usually offered a car that was affordable to the middle class- 912E, 914, 924, 944, Boxster. . .and a base 911 has been available at a cost maybe 20-50% higher.
If Porsche puts the 911 at a price point closer to Ferrari, we'll see Ferrari, Aston Martin, Lamborghini et al with record sales, because few will be in the market for a $200K 911 Turbo, as was evident in the 993 Turbo S and GT2. I really hope this was a rumor started by a disgruntled janitor at the factory.
05-06-2005, 10:54 AM
#26
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The future of the euro exchange rate is a key element. I'm not a trader, but I recall that not too long ago, the euro was less than a dollar. Today, it is about $1.30. Since Porsche pays its labor force in euros, it must recapture the dollar value in the U.S., its largest market.
To me that means Porsche must raise U.S. prices substantially (something like 20-30%) to preserve its margin on its low volume cars.
If people are used to a 997 at $70,000-90,000 (and I haven't priced them, so I'm not sure), a $20,000-$30,000 increase will be shocking. Porsche must do something to enhance "intangible value", because right now they are challenging the margins of economic value.
Interpretation of the leading post suggests they will sacrafice margin for volume on the mass produced Toureg and Boxster derivatives (The Toureg is easily acquired for 36K and is no less expensive to build than a Cayanne). At this point,I suspect the Boxster is relatively cheap to build as well. A sedan will also sell in much larger volumes than our tt's.
So, if Porsche can hit it's profit and volume numbers with higher volume cars (those that are more likely to appeal to more people, but never most people), it is logical that they will try to move the rear-engined cars up-market by raising price and trying to make "exclusivity" the virtue.
Overall, I think that's a response to the euro, and is not only necessary but is one of only 2 options. The other is lower price on 997"s and make its appeal broader. That says "aufwiedersehn" to margin.
I believe Dock's interpretation of the 03 ad is correct. For it's then-produced cars, Porsche was saying "we don't care about seating for 5, soft rides, and low prices, so if that's what you want, go elsewhere" I think the future message for the rear-engined cars will be similar. Rolex not Timex. That's not bad for us, unless you had your heart set on a 997tt. AS
To me that means Porsche must raise U.S. prices substantially (something like 20-30%) to preserve its margin on its low volume cars.
If people are used to a 997 at $70,000-90,000 (and I haven't priced them, so I'm not sure), a $20,000-$30,000 increase will be shocking. Porsche must do something to enhance "intangible value", because right now they are challenging the margins of economic value.
Interpretation of the leading post suggests they will sacrafice margin for volume on the mass produced Toureg and Boxster derivatives (The Toureg is easily acquired for 36K and is no less expensive to build than a Cayanne). At this point,I suspect the Boxster is relatively cheap to build as well. A sedan will also sell in much larger volumes than our tt's.
So, if Porsche can hit it's profit and volume numbers with higher volume cars (those that are more likely to appeal to more people, but never most people), it is logical that they will try to move the rear-engined cars up-market by raising price and trying to make "exclusivity" the virtue.
Overall, I think that's a response to the euro, and is not only necessary but is one of only 2 options. The other is lower price on 997"s and make its appeal broader. That says "aufwiedersehn" to margin.
I believe Dock's interpretation of the 03 ad is correct. For it's then-produced cars, Porsche was saying "we don't care about seating for 5, soft rides, and low prices, so if that's what you want, go elsewhere" I think the future message for the rear-engined cars will be similar. Rolex not Timex. That's not bad for us, unless you had your heart set on a 997tt. AS
05-06-2005, 01:33 PM
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A.S., you bring up some good points. However, with the volatility of FOREX, one can only guess as to what the future holds. Short-term price adjustments that reflect currency exchanges are far different from re-defining a company. Porsche AG has enjoyed fantastic margins on their cars, and you're right, currency exchange rates at present cut into those margins.
With growing competition, buyers have alternatives to Porsche products that are virtually identical from VW/Audi, and the rest of the world's automakers have learned to build high-quality cars with with outstanding performance. Market factors dictate that Porsche cannot drastically raise prices or gamble on reinventing the 911 as a Ferrari/Aston Martin/Lamborghini market competitor. A large chunk of 911 buyers, say I a majority, simply cannot afford the cars at such a price point, and those that can usually do not consider the car to be worth such a premium. Historically, the 911 NEVER represented this market segment. Porsche would be foolish to overvalue the 911 and take the hit that MB took when Lexus/Infiniti/Acura came to town. Yes, Porsches are great cars, but a base 911 is not a $150+K machine.
While this is nice to discuss, I personally think such a strategy would be financial suicide for Porsche and an answer to the prayers of the folks at BMW and Toyota.
With growing competition, buyers have alternatives to Porsche products that are virtually identical from VW/Audi, and the rest of the world's automakers have learned to build high-quality cars with with outstanding performance. Market factors dictate that Porsche cannot drastically raise prices or gamble on reinventing the 911 as a Ferrari/Aston Martin/Lamborghini market competitor. A large chunk of 911 buyers, say I a majority, simply cannot afford the cars at such a price point, and those that can usually do not consider the car to be worth such a premium. Historically, the 911 NEVER represented this market segment. Porsche would be foolish to overvalue the 911 and take the hit that MB took when Lexus/Infiniti/Acura came to town. Yes, Porsches are great cars, but a base 911 is not a $150+K machine.
While this is nice to discuss, I personally think such a strategy would be financial suicide for Porsche and an answer to the prayers of the folks at BMW and Toyota.
05-07-2005, 12:55 AM
#28
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I don't think the base 997 will approach 150, but it wouldn't surprise me if the new tt with DSG is 140-150, base. My 02X50 had a 144,000 sticker which wasn't far off a 360 invoice price (though the car commanded a premium at that time). If the new tt looks like the version in Excellence with the CGT-style side intakes, they may create enough visual similarity with the CGT to convince buyers the tt is worth substantially more than current cars. AS
05-20-2005, 08:59 PM
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The news about pricing for the Panemera
The recent article in AOL auto news about the rear wheel drive Panemera base model at $120 plus and the Turbo charged four wheel drive version at $170K and up [will or will not] affect the pricing and positioning in the market place of the Twin Turbo. I suspect the Twin Turbo will be priced close to the turbo charged four wheel drive version of the Panemera at $170k and up for the Twin Turbo.
05-21-2005, 12:39 AM
#30
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If that proce prediction is correct, then everyone who lamented the "overproduction" of tt's will get their wish. There will be far fewer sold.
I don't think the base tt will go to 170. A bump of 30% would bring it to the 150 range. I don't think the current level of US prosperity (or lack therof) will support sales at a number higher than that. AS
I don't think the base tt will go to 170. A bump of 30% would bring it to the 150 range. I don't think the current level of US prosperity (or lack therof) will support sales at a number higher than that. AS
