The naysayers (me included) were wrong. The Cayenne has gone on to be the brand’s biggest seller and I think it’s fair to say that the 911 just keeps cruising along as one of the world’s premier sports cars. One of the reasons that the Cayenne did not damage the Porsche brand was that Stuttgart was incredibly clear that the Cayenne would be the “Porsche of SUVs,” in other words, a high performance SUV. Jeff Zwart (a Porsche factory driver as well as commercial director) directed, participated in and produced this Cayenne introductory video for Porsche:

Road to Cayenne

Obviously, the sole purpose of this video was to establish the Cayenne’s performance credentials and lineage.  Porsche successfully expanded volume by introducing a product true to the brand’s core values and marketed it successfully based on those values.  In fact you could argue that Porsche is doing exactly the same thing with the Panamera (introducing the “Porsche of four door sedans”).  We could debate whether the world needs another high performance sedan given Audi’s S models, BMW’s M series and Mercedes-Benz AMG models, but so far Porsche Panamera sales indicate that from a product point of view, Porsche judged the market well.

Porsche has successfully proven that it can expand volume by carefully developing line extensions that reflect the brand’s core value of performance.

So why, would they allow their latest marketing campaign to go so far afield?  What would possess them to feature the iconic 911 and the very successful  Cayman in communications designed to demonstrate that they are not “just” high performance sports cars, rather they are excellent everyday drivers:

[youtube]O-Lq3mHgNOI[/youtube]

Do the marketing folks at Porsche really think that a perception of a lack of everyday utility is holding back sales of 911s? Really?

Sounds like research run amok.

I hate to clue the marketing guys in, but the 911 and Cayman are not good everyday drivers. They’re not great in the snow, they don’t offer much room for luggage or bags of cement, nor do I envy that child that had to get in the back seat of the “school bus.” I will give them “getaway car,” after a long day at the office driving home in a Porsche would be sweet.

Seems to me that the designers and the engineers have done a very good job of defining the 911 and the Cayman. To quote an old BMW headline, the 911 and the Cayman are “The epitome of truth in packaging.”  They are not particuallry utile but they are great looking and big fun to drive.

The essence of clear positioning is knowing not only what you “are” but knowing what you “are not.”  The 911 and the Cayman “are not” good everyday drivers and they are not particularly utile.  They “are” however, high performance machines that offer a very special driving experience.

I do recognize that a lack of utility prevents people from buying 911s and Caymans, but that’s the way it should be and marketing shouldn’t be trying to change it.

In the never-ending quest for volume, they may squeeze a few more units out of the 911 and the Cayman.  The real question is, will it be worth it?

Press release from Porsche:

Contact:

Dave Engelman                                                                                                Andy Schupack

Product Communications Manager                                                            PCNA Motorsport PR

(770) 290-3617                                                                                                (401) 741-6980

Porsche 911 GT3 Cup to Makes its Debut at Pikes Peak Hillclimb; Six-Time Champion Jeff Zwart Takes Purpose-built Race Car to the “Hill” For the First Time

Colorado Springs – June 21, 2010 – For the first time since Porsche began production of the 911 GT3 Cup race car in 1989, the car will contest a major international hillclimb including more than five miles of gravel.

Jeff Zwart, a commercial film director from Woody Creek Colorado, and six-time class winner at the Pikes Peak Hillclimb, will challenge the 2WD Time Attack class with his specially-prepared Luminox Watch Porsche 911 GT3 Cup race car.

With technical support from Porsche Motorsport North America (PMNA) and Pirelli Tires, Zwart will be contesting the 88^th running of the hillclimb classic, the second oldest race in America (behind the Indy 500).  Zwart said that running a 2WD, normally aspirated, purpose-built race car up the “Mountain” will be a new experience for him despite his nine starts at Pikes Peak.

“In previous years, I have always taken a street Porsche Turbo and converted it into a race car, but this time, with the help of Porsche and Pirelli, we have taken a race car and modified it for Pikes peak unique half tarmac-half gravel course.  I practiced in the car last week, and was very surprised at the balance, power, and braking the car provided.  The low-ratio sequential gear box keeps me busy through the 156 turns, but it makes the car very quick,” said Zwart.

Porsche Motorsport started with a 2007 Cup car, updated it to 2010 specifications, and installed a new 450 horsepower 3.8-liter engine currently in use in the Patron GT3 Challenge, American Le Mans Series Challenge Class, and the Porsche Supercup series.  The engine management mapping was modified to perform well in high altitude as the race starts at 9,390 feet and finishes at the summit, 14,110 feet above sea level, and ride height was increased for the gravel sections of the course.  The underbody was also modified to protect the car from gravel and stones similar to rally competition.  Pirelli has provided road racing-style rain tires which worked very well both on paved and gravel surfaces during last week’s test.

“This event should show the real versatility of our Cup racer,” said Paul Ritchie, president of Porsche Motorsport North America, Inc.

“With the variety of surfaces and altitude changes, the car was a handful to set up, but, between our  PMNA engineers, Porsche Motorsport engineering consultant Roland Kussmaul – a rally veteran – and great help from Pirelli, we think we have given Jeff a car which will provide his best chance for a win,” said Ritchie.

“I can slide the car across the dirt and grab gears without even lifting,” Zwart added.  “Add to that the car’s behavior on the tarmac – the surface for which the car was built, and we should have a great chance to win.”

Zwart has won his class at Pikes Peak – all in Porsche Turbo street cars – in 1994, 1995, 1996, 1997, 1998, and 2002, setting new class records three times.  Most recently, he co-drove a Porsche Cayenne with Pikes Peak veteran Paul Dallenbach at the challenging TransSyberia Rally (Moscow to Mongolia) in 2007.  He also has an SCCA PRO Rally Championship (1990) and a SCORE Baja 1000 class win (2004) to his credit.

The Porsche 911 GT3 Cup car, built on the same assembly line in Stuttgart as the street-legal Porsche 911s, is raced all over the world in the Porsche Supercup series as well as various Porsche Carrera Cup and Challenge Cups. New last year was the additional of the American Le Mans Series Challenge class, where the Porsche Cup cars contest the full endurance series run by the Le Mans racers.

The 88^th running of Pikes Peak will start official practice on Wednesday, June 23, with Zwart scheduled to run the bottom third of the 12.42-mile course.  The Porsche will run the middle part of the course during Thursday practice, and the top part of the course on Friday. Friday is also Fan Fest in Colorado Springs, and the race Sunday begins at 9:00 AM MDT.  Results will be posted on the official Pikes Peak web site – www.ppihc.com.

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A high resolution photo of Zwart putting the Porsche 911 GT3 Cup car through its paces during Pikes Peak testing – the first photo ever of the car on gravel since its debut in 1989 – can be downloaded at the following link:

http://www.sportssystems.com/hosting/display.cfm?key=101438

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After an incredibly tough 2009, consumers seem to be coming back.  For the first time in recent memory, Americans’ perception of domestic automobiles seems to be on the mend (Business Week 4/23).  Ford’s bet that Americans will buy smaller, fully featured automobiles looks like it may pay off.  GM’s product plan created by soon-to-retire Bob Lutz is leading a resurgence for the General.  Hyundai and Kia, supported my excellent product quality, have taken advantage of recessionary sensibilities and grown share of market.  Audi , Subaru and Mini have come out of the recession on a tear.

On the other side of the ledger, Toyota continues to struggle with recalls and concerns about quality.  This has led to unprecedented incentives by Toyota and the predictable response by competitors to match them.  So a good number of consumers who had been sitting on sidelines during the recession have come back to dealerships looking to for a good deal.  After 2009, it’s a relief to see traffic in the stores but at the same time if the incentives continue that will not be good for the industry long term.  In 2009, some progress had been made at reducing the use of incentives, but the moment Toyota jumped in to defend its franchise, that opened the floodgates again.

So the good news is that customers are returning to the stores, but are they coming back for the right reasons?

Coming out of a deep recession, it makes sense that price point will be critical.  But eventually, consumer confidence will return and what, other than price, do we want consumers to consider?  What will create preference and support higher margins?  This seems a good time to step back and evaluate the current state of our automotive brands and evaluate them against a new generation of potential prospects.   Our industry’s brands are not what they once were.

Many once great automotive brands have been allowed to slip into an amorphous state.  In the 90’s as manufacturers chased volume and sought a bigger share of the then expanding pie, it was no longer enough to stand for one thing, they needed to be more things to more people.  This led to communications that were less clear, less defined and the process of weakening great brands began.

If you doubt the veracity of this statement, look at the luxury segment of the category, Volvo, Mercedes Benz, BMW, Jaguar, SAAB were once clearly positioned brands that stood for something.  Many among us can still rattle off these brands’ core values.

• Volvo—safety
• Mercedes Benz—engineering
• BMW—performance
• Jaguar—design and performance
• SAAB—individuality
• Porsche—performance sports cars

For a long time the majority of consumers gave these brands credit for these values despite product and communications that seemed to go in other directions.  But now the problem has come to roost, there’s a whole generation of prospective customers that don’t know what these brands stand for, they weren’t alive when the seminal advertising that positioned these brands was running.

What to do?  Here’s a suggestion, form a small team of senior level marketing folks (independent consultants, agency partners) who are talented, understand brand building and the automobile business.  Make sure they are willing to commit themselves to genuinely understanding your brand in all its glorious detail and let them loose.  Tell them you want ideas that will clearly position your brand to a new generation of car purchasers who are a blank canvas.  Ask them to execute the idea across all media channels.  Ask for ways to use social media to create communities around your brand that take advantage of the enthusiasts who understand your brand so that their knowledge can educate the new generation.

Consumers are coming back into the stores, but most are coming back to get a good deal.  Manufacturers and their agencies need to re-build their brands.  With younger customers, they need to build them for the first time.  Incentives train people to buy based on the deal and consider the products commodity-like.

In a category where it is now difficult to buy a “bad” vehicle, the threat of commoditization is very real.  A strong desirable brand is the only thing standing between a manufacturer of differentiated products and a supplier of generic transportation.

Please let me know what you think.

In New York last week I saw the new Mini crossover, the Countryman, for the first time in person.  All the Mini design cues are present in the Countryman and I think you’d be hard pressed to say that it wasn’t part of the Mini family.  But I was struck by how “big” it seemed, it didn’t seem small and taut the way all the other models do.  Part of the difference was that the Countryman’s ground clearance is higher, so its stance is really quite different than the other Minis.

This got me thinking, at what point does a marque go too far and begin to lose its essential character?  Has Mini gone too far with the Countryman?

I suspect this is a little like losing your hair.  Little by little your hair recedes, almost imperceptibly, you make little adjustments as you go, thinking no one will notice, until one day you end up with comb-over and people are snickering behind your back. Little by little automotive brands seem to lose their way.

I suppose this is the ultimate judgment call in the automotive branding business.  All manufacturers feel the relentless pressure to grow their business and increase volume.  One way to do that is to create products that enable you to enter new segments.  Sometimes companies get this right and other times not.

Porsche, the archetypal sports car company, introduces the Cayenne to howls of protest from the “purists,” sells a ton of them and for a number of years could claim to be the most profitable manufacturer in the world.  Clearly a good business decision and it seems not to have diminished the brand.  One of the reasons that I think the Cayenne did not hurt the Porsche brand is because at the time it was introduced, no one was making a high performance SUV.  With the Cayenne, Porsche filled an unmet need…some folks wanted an SUV that offered real performance creds and Porsche led the industry from its traditional strength.

I think the Panamera will be a different story.  I don’t think the world is waiting for a Porsche 4-door sedan.  There are already terrific high performance sedans,  Audi RS6 & S8, Mercedes-Benz AMG models, BMW’s M5 & Alpina B7.  Porsche is following a well-worn path with the Panamera and it will be just another performance sedan.

VW and its much-maligned Routan is a good example of a product that stretched a brand the wrong way.  VW wanted to add a people mover to its line-up.  The wonderful VW Microbus Concept proved too expensive to produce so VW struck a deal with Chrysler and the Routan is the result.  A perfectly serviceable vehicle I’m sure, but very little VW character:

Had VW been able to produce the Microbus it would have been more distinctive and reflective of the Volkswagen brand.  Instead the Routan competes with every other plain vanilla Japanese entrant and is struggling.

BMW, inarguably the best-defined brand in the automobile business has just announced that it will develop a front wheel drive platform and market front wheel drive cars.  Again, howls of protest from the enthusiast circles that rightly point out that the Ultimate Driving Machine has been based on several principles not the least of which was rear wheel driven handling and perfect 50/50 weight distribution front to back.  But there are good reasons to have a FWD in your product portfolio, particularly when you need to develop smaller more fuel-efficient models to meet CAFE standards.

Here’s the tough thing about having a well-developed brand, you can’t be all things to all people.  Some things fit and others don’t. When you do things that conflict with your brand’s core values or principles it diminishes your brand.

Is the Mini Countryman going to weaken the Mini brand?  Probably not, but what about the next variant?

Porsche Cayenne OK?  What about Panamera?  Feels like the Porsche brand doesn’t have that much elasticity.

Volkswagen Routan?  VW’s stated company goal is to become more “mainstream”  and increase US volumes dramatically. I guess Routan is mainstream, but I’m not sure that “mainstream” and strong brand go together.  It will be fascinating to see the new sedan built in the Chattanooga factory, will it still have essential VW character or will it be “mainstream?”

BMW and front wheel drive?  Maybe most people won’t know or care that the car is front wheel drive, but the legions of people who bought into BMW’s rear wheel drive rationale will be wondering what it means for the Ultimate Driving Machine.

It seems like growth is the enemy of automotive brands.  Little by little, the never-ending pursuit of volume forces companies into segments and compromises that make their brands less distinct, less clear.  Without question you can sell a few more cars, but is it worth it?  Would you be better off creating a new brand?  It’s a good question to ask as you consider each new segment and new product. If you take the question seriously and really consider the strength of the brand an important consideration then you can avoid becoming a comb-over brand.  A brand that has rationale for what’s doing…but it isn’t fooling anybody.

Please comment, I’d be interested in your thoughts.

As an industry we’ve lost sight of our great brands.  In some cases companies have gone bankrupt or been acquired and a brand disappeared, in others a world war got in the way.  Studebaker, Cord, Horch, MG, Triumph and countless others have evaporated for a variety of reasons.

Today, as Detroit goes through an unprecedented upheaval, there will be more brands lost.  Saturn, a once very special brand, will go away.  So will Pontiac and Hummer.  We can only wonder what will happen to brands like Jeep.  Brands that stood for something, had a point of view, and marketed products that reflected a certain perspective.  Brands that developed a loyal following because they stood for something!  They weren’t for everybody, and that was OK.

As discouraging as it is to see a great brand go away because of a structural change in a company, it’s worse to see brands die of neglect by the very people charged with protecting and building them.  Over the last 20 years we have watched a number of great automotive brands that automotive marketers worked very hard to create, begin to whither away.  The aforementioned Jeep is one, Volvo another.  Mercedes Benz, Jaguar, Land Rover, SAAB,  Lexus and even mighty BMW feel somehow “less” than they did even ten years ago.

What’s happened?  Expansion happened.  Chasing volume happened.  Brands that meant something specific and clear found themselves needing to be “more.”

For example, it wasn’t enough for Volvo to stand for safety.  They thought they couldn’t sell 200,000 units in the US based on safety alone, they needed to be more exciting, they needed performance added to their brand positioning.  I’ll bet if we asked someone at Volvo today, they’d love to be a 150,000 unit “safety” brand.

Mercedes Benz, while incredibly successful in the US, was once “Engineered Like No Other Car In the World.”  That wasn’t enough either, it always irritated Mercedes Benz that Volvo had grabbed the “safety” positioning when Mercedes Benz automobiles were at the time considered safer.  So they made sure that “safety” played a big role in communications for a period of time.  Oh, and then Lexus came along and engineered an exceptional car, so the long standing Mercedes Benz tag line wasn’t supportable any longer.  And as Lexus‘ sales grew at a meteoric pace in the early 90’s it was clear that Mercedes Benz could and must sell many more cars too.

All these brands saw an opportunity to expand volume and felt that their well defined positionings from the ‘70s and the ‘80s were “limiting.”  So they expanded their positionings and forever weakened their brands.  Consumers were once convinced that if they bought a Volvo, it would keep them safe.  They knew for certain that if they bought a Mercedes Benz they were buying the best engineered car in the world.  If you bought a Land Rover you bought a vehicle capable of going anywhere with an unparalleled level of luxury and utility.

BMW, while it has been the best of the bunch at sticking with their fundamental positioning of “The Ultimate Driving Machine,” has expanded so dramatically over the last ten years that it’s difficult to say it has kept its well honed differentiated competitive edge.

Here’s the truth about all of these brands.  They all make terrific products that offer fabulous engineering, safety, performance, luxury and prestige.  Historically, what differentiated these brands was where these brands started the conversation with consumers.  Mercedes Benz always spoke from an engineering point of view, Volvo from safety, BMW from performance.  As a owner you got a well engineered, high performing, luxurious and safe car but all of that within the brand’s differentiating perspective.  Unfortunately, today the differences in brand perspective are less identifiable.

So, where does this leave us?  It leaves us with a bunch of homogenized brands.  Brands that are not as leverageable as they once were.  Brands that are weaker.  The good news is that the baby boomers grew up when these great brands were established in the ‘70s and ‘80s, they still understand the fundamental positionings and keep them in the public consciousness.  The bad news, the baby boomers, who have fueled the expansion of these brands, are entering the phase of their lives where they won’t be buying as many cars.

Which finally leads to my real question, who will teach the next generation of automotive buyers what these great brands stand for?  Are we going to let these great automotive brands slide into a homogenized future where every car is a good car and they’re more alike than different?

There’s a whole new generation of automobile buyers entering the market and they don’t understand these great brands because the marketing over the last fifteen years hasn’t differentiated them.  Auto marketers and their agencies would do well to teach this generation what their parents already know….that there are differences between these automotive brands and that’s what makes them desirable.