Porsche Segmentation Strategy - Essay Example

Marketing Planning Marketing Planning Introduction Market segmentation plays a key role inthe success of the organization’s business policies and revenue generation mechanism. An organization would not be successful in the marketplace if it fails to identify the group of customers who possess the potential to purchase the products. In this manner, organizations divide the population of the target market into different segments based on their particular behavior. This research paper would look into the market segmentation strategy Porsche Automobile Holding SE and would present recommendations for the company, to focus on a particular segment to increase its revenues. Porsche is a German automobile brand founded by Ferdinand Porsche in 1931. The organization’s headquarter is in Stuttgart, Germany. However, it is equally popular in all parts of the world for its futuristic car designs and superior performance on-track (Porsche Automobile Holding, 2014). Porsche Segmentation Strategy Porsche is popular all around the world and has established a statue of luxury sporting car. The major reason behind massive demand for Porsche is its car designs, luxury, comfort and prestige attached with those who are driving a Porsche. Customers of Porsche do not belong only to the elite class, but it is equally popular among sports car lovers of all age. Porsche major segmentation strategy is explained as following: 1. Top Guns: ambition, power and control 2. Bon Vivants: Excitement and adventure 3. Elitists: Welathy, rich and treat car as a car, not a luxury 4. Fantasists: Form of escape 5. Proud Patrons: You earn good, you treat yourself good (Warren, 2009). Porsche Affluent Materialists: Top Guns This segment of Porsche Automobile generates around 27% of the company’s revenue. The consumers of Porsche belonging to this segment prefer a car with superior performance on the track, which motivates them to work even harder to achieve the best and allows complete control on the transmission and drive. Top Guns are also self-obsessed, and they want to show-off so that people can notice them which support the assertion that these customers are status conscious. Top Guns are proud of their success and tell their success stories to everyone so that they can be appreciated (Huffman, Rayess, Habib, & Mitchell, 2012). Porsche Disaffected Survivors: Bon Vivants These are the customers who are passionate about owning the world’s best sports car and are intrinsically motivated towards experiencing new adventures in their lives. For this reason, they select a car which thrills them with its speed and power. Bon Vivant segment is currently generating 17% of Porsche’s total revenues and is considered as being a lucrative segment in the near future. These customers mostly live in urban areas and have the tendency to influence attitudes and behaviors of people in their surrounding (Richardson, 2004). Porsche Comfortable Belongers: Elitists Elitists segment of Porsche Automobile generates 24% of the total revenues and ranks second in revenue generation segment ranking. Porsche created this segment for wealthy customers, who do not consider a sport car as a luxury or status symbol. They would treat a Porsche car as an ordinary car and would easily purchase a new Porsche if their car is stolen or damaged. These are the customers, who look for superior performance and comfort but do not pay attention towards the car’s design and its popularity in the world. Elitists consider their family as their core responsibility (Lamb, 2004). Porsche Successful Idealists: Fantasists These are the customers who would buy an expensive car but feel guilty that they should have invested the money spent on buying a Porsche car on helping those who need money. These customers are careful spender of money and do not aim to impress others or become a center of attention by buying an expensive Porsche car. Fantasists are successful in their personal and professional lives and humbly assume their responsibilities towards the society in which they live. This is the most complex segment that Porsche serve in the global marketplace because these customers possess a very conservative attitude towards buying sports cars. Fantasists segment of Porsche target market only 9% to the total revenue of Porsche Automobile (Vasudeva, 2006). Porsche Successful Idealists: Proud Patrons Proud Pattorns are those customers who think that buying an expensive Porsche pays off their hard work. These customers do not like to be noticed or become the center of attraction. They would purchase a Porsche sports car just to please themselves and remain motivated to achieve even higher in their lives. The Proud Patrons segment of Porsche’s target market contributes 23% to Porsche’s total revenues and is ranked third in the revenue generation ranking of the company. This is the second car that has been offered to the successful idealists which delivers superior satisfaction to the buyer pertaining to their personal and professional lives (Hawkins, Mothersbaugh, & Mookerjee, 2010). From the discussion of Porsche’s segments in the global automobile marketplace, it has been identified that the company identifies segments on the basis of psychographic attributes of the target customers. Psychographic segmentation requires Porsche to design their cars and adopt a pricing strategy after evaluating the attitudes, values and lifestyle of the target customers. By evaluating these attributes of the target audience, Porsche uses the resulting information to tailor the car design, interior of the car and performance systems of the car. In this manner, Porsche’s marketing strategy has always been found as a successful strategy as it pleases the preferences and desires of the identified potential buyers of a Porsche car (Lamb C. W., 2009). Recommendations Considering the environment of Indian automobile marketplace, the management of Porsche is recommended to focus more on the Elitists. The reason for selecting India as a target market for this segmentation strategy is that, 32% consumption of luxury cars in India is committed by the self-made emerging middle class whereas, professional account for 35% consumption and people inheriting wealth account for 31% of consumption (Sen, 2013). In this sense, adopting the recommended segmentation strategy can target the self-made middle class. This segment of Porsche’s target market is expanding on a rapid pace in India, because; people’s power to spend lavishly on purchasing a factory-customized sports car is increasing in the country. As the distribution of wealth in India is shifting, i.e. from concentrating on distribution of wealth into few hands to distribution of money equally, it is eminent that the global sports car leader would face exceeding demands in the country. Moreover, as Indian youth is gaining access to sources of information pertaining to sports cars, this component of Elitists segment would increase its spending on the purchase of sports car. Based on the information retrieved to understand the segmentation strategy of Porsche Automobile, it is eminent that the primary target market of Porsche is the Elitists segment in India, as the customers in this segment are mostly in their twenties and have enough financial resources to buy a Porsche car to please them. The reason behind this assertion is that, wealthy people would always want to spend money on buying a car, no matter if they buy a sports car or a sedan. They are ambitious in their careers and would want a car that does not disappoint them with its performance. Car design is the secondary concern for Elitists and the interior design also does not have enough influence over the decision-making processes of the customers who are aiming to buy a Porsche car. Conclusion In this research paper, different market segments served by Porsche were identified and discussed along with the attitude and behavioral traits of customers belonging to each segment. Additionally, introduction to the organization is also presented which helps the readers to understand the history of Porsche Automobile. In the end, recommended segmentation strategy is presented which would make the readers, particularly the decision makers, understand what type of sports car they would want to have. To conclude the essay, it has been observed that Porsche’s segmentation strategies are based on the psychographic attributes of the target market, which helps in offering sports cars that are trendy and satisfies the social requirements of the buyer. Reference List Hawkins, D. I., Mothersbaugh, D. L., & Mookerjee, A. (2010). Consumer Behavior. New Delhi: Tata McGraw-Hill. Huffman, J., Rayess, C., Habib, R., & Mitchell, D. (2012). www.slideshare.net. Retrieved February 10\, 2014, from Porsche: http://www.slideshare.net/derekmitchell562/porsche-strategic-marketing-analysis-17225184 Lamb, C. W. (2004). Marketing. Cambridge: Oxford University Press. Lamb, C. W. (2009). Marketing. NY: Cengage. Porsche Automobile Holding . (2014). Company Profile. Retrieved February 10, 2014, from www.porsche.com: http://www.porsche.com/international/aboutporsche/overview/strategy2018/ Richardson, J. E. (2004). Annual Editions: Marketing 05/06. NY: McGraw-Hill. Sen, S. (2013, September 1). Wheels of Fortune: More Indians than ever before are splurging on their dream machines. Sunny Sen drives into the world of super-luxury cars to meet the buyers and sellers. Retrieved February 11, 2014, from businesstoday.intoday.in: http://businesstoday.intoday.in/story/prized-luxury-cars-in-india/1/197548.html Vasudeva, P. K. (2006). International Marketing. New Delhi: Excel Books India. Warren, K. J. (2009). Global Marketing. New Delhi: Pearson Education India. Appendix-I: Selected Article Read More