Porsche Cayenne Case Study

Topics: Porsche, Luxury vehicle, Four-wheel drive Pages: 5 (1656 words) Published: February 6, 2013
Porsche: The Cayenne Launch –

During the more then 60 years that Porsche has been producing automobiles they have implemented a variety of design changes and launched many new models -- some drastic, others small. These changes have all been based on the brand’s firm ideals of high performance, fine craftsmanship and a high level of engineering, With the launch of the Cayenne SUV, Porsche experienced an immense challenge in connecting its brand image and identity with the new offering, while maintaining brand legacy. As with any well-established brand there was an entrenched community of customers who participated in ongoing conversations about Porsche and the brand’s meaning. These online communities of loyal customers, such as www.Rennlist.com offered valuable insights into brand change reactions, particularly related to the new Cayenne.

Porsche began as a design firm in the mid-1930’s in Germany, and were responsible for designing the first Volkswagen. The company designed some military vehicles during WWII, but by 1948 had launched their first Porsche branded automobile, the 356. In the early 1950’s the company introduced its first racecar and in 1964 unveiled the iconic and brand defining 911, which soon became a “design landmark.”

Through the next few decades Porsche successfully built its brand image and garnered an extremely loyal customer base. The company introduced various new models, based on the popular 911, but in 1987 was in dire economic straights due to the U.S. stock market crash – sales volume drastically decreased through the early 1990’s.

Under the direction of Porsche’s new CEO Wendelin Wiedeking, the company drastically changed directions. In response to rapidly declining sales volume, Porsche launched an array of new cars at lower price points, than what was typically associated with the brand. This brand diversification meant Porsche was able to compete in new market segments. As design and production changes continued the company was able to avoid bankruptcy through cost cutting, product line simplifications, implementing Japanese manufacturing processes and global expansion.

Beginning in 1996 Porsche launched its second model series the Boxster, a two-seater entry-level sports car line. Following in the steps of the Boxster and 911, the company announced that it was planning to develop a third model series, an SUV – the Cayenne.

The Cayenne was envisioned as a combination of traditional Porsche styling and performance with 4-wheel drive capability and plenty of storage space – but emphasizing “sport” over “utility.” While the SUV was new territory for Porsche the core strengths of performance, design and the chassis that defined the brand were retained. Above all else the Cayenne had to be a Porsche, but be able to “accommodate family, outdoor and transport activities.” Based on the research they conducted the company saw that a typical Porsche driver owned a sedan, an SUV and Porsche sports car. As well, the surveys they conducted told them that a significant proportion of their customers were interested in a Porsche SUV.

The genesis of the Cayenne was routed in the burgeoning SUV market of the 1990’s and early 2000’s, in the United States. Beginning in the late 1980’s with the Ford Explorer, SUV’s offered an alternative to minivans and station wagons, with sporty and aggressive designs that appealed to a wide range of drivers including young professionals, working women and stay-at-home mothers. As the demand for SUV’s grew, a variety of manufacturers entered the marketplace and soon began offering premium models. These luxury models were headlined by successful selling vehicles such as the Mercedes M-Class and Lexus LX 450.

As the sales in the luxury SUV market continued to expand Porsche understood that the introduction of the Cayenne would give them the ability to leverage their premium brand identity and capture incremental growth as they entered a growing market....
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