Shree Chanakya Education Society’s

Indira Institute of Management, Pune

Assignment

Name of the Student : Shubham Goraksha Shelke

Roll No. 47 Division: A
Program Name: MBA
Semester II Batch: 2019-2021
Course Name & Code: Product Management

Signature of Student: ________________

Date of Submission: 18/04/2020

Submitted to: D.K.Sakore

 Executive Summary
Porsche AG which is also known as Dr Ing. h.c. F. Porsche AG is a Germany based automobile
manufacturing company that is specialized in making very high speed vehicles such as SUVs,
sedan and sport cars. Porsche AG is owned by Volkswagen AG where they have 50% stake in it.
But, by the end of 2018, they have aim of acquiring 74% stake in it. It was founded in the year
1931 by Ferdinand Porsche and has services spread across the globe. It’s headquarter is Stuttgart,
Germany. They have employee strength of 25,000 and are increasing exponentially for past few
years. Their line-up includes Porsche Cayenne, Panamera, Porsche 911, Boxster and Macan. They
also provide services such as engineering services, investment management and automotive
financial services. But, their large chunk of revenues comes from selling of cars. Porsche cars are
sold worldwide and it has been seen that their sales remain unaffected even during recession. This
shows the customer loyalty towards the brand Porsche.

Porsche Panamera has a thorough understanding of the market trends and the changing needs of
the clients in the automobile industry.

The management of the company believes that its research center, Weissach, is equipped with all
the necessary knowledge and technology to develop models that are needed in the market. The
company will make use of this asset to have a better understanding of the market trends as well as
how to communicate to their clients.
 Current Marketing Situation

Porsche Panamera is one of the car models that have been developed by Porsche in
the recent past, having been developed in 2009.The model was developed to boost
the company’s sales through its innovative design that would ensure better
performance, comfort, and safety of the users. The increasing customer needs
witnessed in the automobile industry include user safety, comfort, and fuel
consumption and the model has managed to meet some of these needs.
 SWOT Analysis
Strengths:

Porsche has high quality brands and strong brand names. According to the
management of the company, great innovative research was put in this model more
than the efforts that had been put in the earlier designs. The model was designed to
deliver a high level of comfort for this category of vehicles, with four-door four-
seater design.

As the company aspired to be the innovative leader in this segment, the management
settled on low and wide car that could be luxurious. The company is also highly
flexible in its operations and has effective risk management mechanisms.

Weaknesses:

Despite the research efforts that have been witnessed, the company has small
innovative capacity. The research department relies on innovative ideas that have
been developed by other companies in the industry. Besides, the company has too
much focus on the luxury segment. The company has also not gone global in its
sales; it is mainly concentrated in the United States and Western European market.

Opportunities:

There are emerging markets in the developing nations offering more opportunities
for business expansion. Besides, clients opt for cheap and more efficient vehicles in
terms of fuel consumption.

Environmental agencies also impose policies that advocate for reduced emission of
toxic gases by automobiles. The company has the ability to continue research and
innovation to create more models that meet these criteria in order to capture a wider
market.

Threats:

A number of threats still stand on the way of the prosperity of sales of Porsche
Panamera. Even though there seems to be an effective resumption from the
economic crisis witnessed in the last decade, there possibility of the same scenario
being encountered. Similarly, there are also competing models some of which are
relatively cheaper and provides similar quality.
 Objective
Marketing Objectives:

The main objective of introducing the model is to increase the sales of the company
in 2012 by about 15% from the sales of 2011. This increase in sales has often been
achieved by an introduction of new model as was witnessed in 2009. The company
also aims at penetrating more into the developed as well as the developing markets.

Financial Objective:

The company aims at cutting down its operating costs like transportation and
warehousing by 5% each quarter of 2012. This will be achieved through effective
supply chain management to determine what quantity of products is needed in the
different markets at a given market.

The company also aims at building strong relationships with the clients in the
emerging market in the first encounter in order to cut down the successive costs of
client acquisition.
 Issues

Some of the critical issues the company faces in the industry is compliance with
environmental and trade policies that may also vary across countries.

The company has to abide by the provisions by environmental management agencies

on emissions from the transport industry. It is also necessary that the company
explore the emerging markets to quantify the opportunities that may be available, an
initiative that may have high overhead costs.
 Marketing Strategy
The Porsche Panamera S hybrid is an improvement of the previous models and has
higher starting prices. It is then inappropriate to introduce this brand in the emerging
markets in the Asian or African countries. Thus, the company will first introduce the
model into the European and US market.

An extensive advertisement will be employed to appeal to the clients on the quality

of the new model that positions it above the other models in existence in the market.
After achieving a good reputation of the brand, the company will then move on to
emerging markets. Advertisement will still be done for the older models as well.

Marketing Mix:

Porsche Panamera, just like the other products in of the company, has price
differentiation. The company produces cars of this model at different prices
depending on the needs and financial abilities of the clients in order to capture a
larger market. The Panamera S was the first car of this brand and its starting price
was $90,775 (Peterson, para.3).

The company then introduced base Panamera in 2010 with a starting price of
$75,375 for a rear-wheel drive and $79,875 for an all-wheel drive (Peterson, para.3).
The new model to be introduced in 2012 will have a starting price of $95,975. The
company has various distribution centers located in the European and US markets.

Much effort is in place to expand the distribution centres to emerging markets. The
company also has online store from where the clients can shop over the internet. The
company shall advertise its products through the local newspapers and television
channels in the different market regions. It will also use internet to reach some of the
clients as this communication medium is increasingly being adopted globally.
 Action Programs

The company has a market research department that collects information on the
market trends and customer needs in the market. The development of this brand was
originally initiated by the market research department of the organization. The
department identified that there was a potential and promising market for sports-like
four door cars that drove on fore wheels.

Budget & Financial Projections

The above marketing strategy has a connection to an analysis for the different prices,
the sales forecast, and the expenses that are like to be incurred.

Sales Forecast:

Within two years after the introduction of the first type in 2009, Porsche has sold out
about 30000 Panameras worldwide. This is an average of 15000 per month and about
1250 per month. The company has purposed to introduce Porsche Panamera S hybrid
in 2012, a move that may see the company realize increased sales due to the vehicle’s
features like fuel consumption and speed.

The model is destined to have a starting price of $95,975. With the introduction of
new model and extensive advertisement, the company expects increased global sales
as depicted in the following graph. The company expects global sales of 21,000
Panameras by the end of the year. With an average price of $85,000, the global sales
forecast for Panamera in 2012 is $1.785 billion.
 Fig.1 Sales Forecast for Panamera in 2012

Expense Forecast:

The marketing expense will only be high in the initial quarter when the company
embarks on extensive advertisement and promotion. In the first quarter, the company
will spend an average of $360,000 on marketing research, advertisements, and sales
promotion.

This figure will be reduced to $300,000 in the second quarter and to $200000 in the
third and fourth quarters. This translates to $3,180,000 for the total marketing
expenses for the year 2012.
 Implementation Control

Activity Start End date Cost Responsible Department

date (US$) personnel

Marketing 1/1/2012 31/3/2012 340,000 Marketing Sales and

research manager marketing
alongside
R&D
departments

Advertising1 1/1/2012 31/3/2012 540,000 Marketing Sales & Mkt

manager

Advertising2 1/4/2012 30/6/2012 600,000 Marketing Sales & Mkt

manager

Adevrtisning3 1/7/2012 31/12/2012 840,000 Marketing Sales & Mkt

manager

Product 1/1/2012 31/12/2012 86,0000 Marketing Sales & Mkt

promotion manager

Total 3,180,000

Controls:

The market plan gives a guide on the implementation procedures that the
management of the organization has to follow in order to achieve the marketing
objectives.In order to evaluate the effectiveness of the program during the execution,
the monthly revenue from each market, the total expenses month as well as the level
of customer satisfaction will be monitored for each of the early months. Necessary
reinforcements can be made if significant fluctuation is recorded.
 Contingency Plan

The company has purposed to penetrate into the emerging markets while
maintaining its position in the developed market as well. This ensures that it
develops a good coverage for its clients. The research and development team is
working continuously to develop competitive models in order to absorb the
economic fluctuations that may be experienced in the future.