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PORSCHE: THE CAYENNE LAUNCH CASE STUDY

September 30, 2012

Word count: 1200

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Table of Contents

Meaning of the Cayenne ................................................................................................................. 3

Rennlist and Its Impact ................................................................................................................... 4

Conclusion ...................................................................................................................................... 6

Bibliography ................................................................................................................................... 8

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Introduction

This paper will focus on two main issues that surround the launch of Porsche Cayenne.

The first issue is connected with the meaning of the new Cayenne to Porsche in terms of its

image and consumers’ comprehension of the brand at the market. The second issue is connected

with Porsche consumers and their influence on the company’s development. Namely, it will be

discussed how the brand community relates to the launch of new Porsche products and what are

the implications of this for the company.

Meaning of the Cayenne

The launch of the Cayenne marked a new chapter in the history of Porsche brand. The

new SUV was too different from other Porsche cars in many ways and it had completely

different concept. The initial idea was that Cayenne will represent a new car, which will be a

Porsche car, but will also have other features, which were previously unavailable.1 In reality it

turned out that Cayenne became more than simply one more Porsche car with new

characteristics. It became a car, which modified the comprehension of Porsche brand in general.

Before the Cayenne launch Porsche brand produced and, therefore, was associated with

sport racing cars. Porsche cars were traditionally constructed in a way that would make them as

much fast and maneuvering as possible.2 Traditional Porsche car would be a speedy two-seater

with lots of features that are integral to sport racing car but would not be used by an ordinary

driver.

The idea of Cayenne was really innovative in comparison with other cars from Porsche

family. It was planned to acquire an off-road driving capability, more space to become a family

car or a car for active lifestyle generally and keep high performance and design of classic

1 Kimberly D. Elsbach, Organizational Perception Management (New Jersey: Routledge, 2006), 130. 2 Charles Lamb, Joseph Hair, and Carl McDaniel, Essentials of Marketing (Mason: South Western Cengage

Learning, 2009), 473.

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Porsche cars at the same time. It should be noticed that new Porsche consumers, who would buy

Cayenne when it was introduced, valued all these features. This, however, did not happen to old

Porsche consumers. They did not share views of the company’s management and considered the

new product to be everything but not the true car belonging to Porsche family.

This was the point where the meaning of the Porsche brand was changed. From this

perspective it can be even concluded that the meaning of the Porsche brand was changed by its

consumers, not by a company itself.

Rennlist and Its Impact

The Rennlist online brand community, like any other consumer community, has its

advantages and disadvantages. From the buyer perspective, the existence of strong online

community represents an additional value. In fact, after buying the Porsche car you receive the

admission to the club of Porsche owners, who can help you with piece of advice, while you can

reap the benefits of fraternity. However, if for some reason, the car that you prefer is not to liking

of the community members, you will feel the disapproval and even aggression from their side.

This means that such communities have the positive impact on new customers only in case if the

company is not changing their brand strategy, product line etc.3

Every brand community is conservative in its nature. Simply put, people like the certain

brand image, and dislike any change that occur with it. From this perspective, the existence of

such communities will hamper company’s attempts to slightly broaden the marketing focus by

introducing new products. Since any successful company needs to implement changes and

innovate in order to remain successful, the conflict is inevitable. The newly introduced product

3Frank Günnemann, “The effectiveness of product placement for the automobile industry and its impact on

consumer behavior: A cross-cultural perspective” (Master thesis, GRIN Verlag, 2008).

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needs to be successful in order to attract new customers who will form their new communities

and silence the disapproval buzz.

The majority of Rennlist brand community members represent a typical ultra-loyal group

of consumers who are very sensitive to any changes of brand strategy. Certainly, taking into

account the opinion of such consumer groups is reasonable. However, the primary concern of the

company and the primary concern of these customers are slightly different. Company tries to

maximize profit, while these customers are trying to keep receiving the same product with the

same image. Therefore, when designing the brand strategy, the company management should

acknowledge many other factors that are more important than the desire of ultra-loyal

conservative consumers, which even do not constitute the vast majority of the consumer base.

Consequently, if Wiedeking listened to the Rennlist brand community, the company

would very unlikely increase its revenue with the help of Cayenne. The latter has become one of

the main profits generating model in the Porsche family.4 In this situation, the conflict with

conservative group of consumers was basically unavoidable. When the brand image changes

such dramatically there will be always group of conservative consumers who will be dissatisfied

with any changes. This noise will pass only with time, the amount of which depends on the

successfulness of the changes introduced.

Therefore, Wiedeking has successfully bet on the customer base expanding. Cayenne

owners will find Rennlist reaction very aggressive and will probably form their own

communication groups. The lack of respect from the Rennlist brand community towards new

Cayenne owners shows the unsustainable nature of such consumer communities and their

negative influence on new developments. Will such attitude stop people from buying Cayenne?

4 John Deighton, Jill Avery, and Jeffrey Fear, “Porsche: The Cayenne Launch” (Case, Harvard Business School,

2011): 8.

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Very unlikely, it will just make new Cayenne owners avoid communication with this

conservative group.

When a company considers a launch of a new product or brand, it is important to take

into account a range of factors and conduct a thorough research beforehand. As Luan and Sudhir

suggest, forecasting responsiveness to various levels of marketing-mix variables is one of the

essential tools to determine effectiveness of a new product.5 The challenge accompanying a new

product is that the actual sales data that can be analyzed do not exist. This challenge is even more

complicated and vivid in case of Cayenne launch. It shows that it is important to consider both

the responsiveness from the new customers and old customers in relation to a new product.

Another important issue is the choice of strategy, which a company is going to apply at

the market. A research conducted by Bryce and Dyer suggest that there are three most successful

strategies for entering existing markets with new products. Moreover, they point out that the

most effective approach would include the combination of at least two of these strategies.6 One

of the described strategies, which is also relevant to the Cayenne case, implies cooperation with a

partner in order to reduce entry barriers. At the same time there is one more strategy, which aims

at adding new features to a product, so it can attract new customers to its segment and distinguish

itself from already existing products at the same time. Thus, stemming from the initial Cayenne

launch, i.e. cooperation with Volkswagen and general idea of the CUV, which would combine

sport and utility, it can be concluded that Cayenne launch combined both of these strategies.

Conclusion

Therefore, the launch of Porsche Cayenne has become indeed a contradictory and

complicated issue. On the one hand, it opened a new market for the brand and attracted many

5 Jackie Luan and K. Sudhir, “Forecasting Marketing-Mix Responsiveness for New Products,” Journal of Marketing

Research XLVII (2010): 454. 6 David Bryce and Jeffrey Dyer, “Strategies to crack well-guarded markets,” Harvard Business Review (2007): 87.

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new consumers. On the other hand, it disappointed already existing Porsche consumers and

weakened a brand in front of its traditional competitors.

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Bibliography

Bryce, David, and Jeffrey Dyer, “Strategies to crack well-guarded markets,” Harvard Business

Review (2007): 84-92.

Deighton, John, Jill Avery, and Jeffrey Fear, “Porsche: The Cayenne Launch.” Case, Harvard

Business School, 2011.

Elsbach, Kimberly. Organizational Perception Management. New Jersey: Routledge, 2006.

Günnemann, Frank, “The effectiveness of product placement for the automobile industry and its

impact on consumer behavior: A cross-cultural perspective.” Master thesis, GRIN

Verlag, 2008.

Lamb, Charles, Joseph Hair, and Carl McDaniel. Essentials of Marketing. Mason: South Western

Cengage Learning, 2009.

Luan, Jackie and K. Sudhir, “Forecasting Marketing-Mix Responsiveness for New Products,”

Journal of Marketing Research XLVII (2010): 447-457.