One of the things I love about this site is the consistent welcome we all have to disagree with founding father, Robert Farago. He knows the truth about cars doesn’t come from pronouncements, but from productive exchange. Which is my slightly weasly way of saying: What’s with all this focus on brand dilution? Is it really the cancer of the car industry? Or, is it as misunderstood as Paris Hilton’s state of celebrity?
Robert’s contention-– shared like a bottle of Boone’s Farm with every market manager under the bridge-– is that a company’s brand is precious. Luxury car makers shouldn’t build dump trucks; sports car makers shouldn’t make minivans. That type of thing.
And it’s almost true. As Paris Hilton will tell you, the brand is the thing. She doesn’t sing or act or speak well enough to be famous for anything other than being famous. That’s her schtick and she schticks to it. Her branding-– as a famous, naughty party girl-– is so powerful she needs nothing else.
Cadillac used to be that way. Now it illustrates the danger in brand devolution. If people think you’re one thing-– a fat, luxurious car-– and you turn out to be another-– a thin sports sedan car with lots of extra leather-– you quickly become nothing. Jaguar’s spilling down-market gave us the X-Type: an OK sedan in a sea of OK sedans. Very un-Jaguar. Volkswagen’s Phaeton tried the reverse, backed out the door and left everyone asking ‘where’s the people’s car?’
Porsche teeters at a precarious point in its history. The Cayenne is simply not a sports car; it has no business sharing a bunkhouse with 911s. The more un-sporty things Porsche builds, the more it runs the risk of losing its premier sports car mantle. If that’s the brand. I think the Porsche brand is more slippery than a 962.
Porsche, the brand, is built with superb engineering. In fact, that is what it is. Superb design and execution that happens to result in some really cool cars. It also happens to result in a really cool SUV, probably a cool sedan, soon. If Porsche decided to start making tractors again, I bet they’d be cool too. Because that’s what they do – make cool things, mostly sports cars.
Porsche Design Group (a majority held subsidiary of Porsche AG) comes close to proving the point. They’ve designed, among other things, faucets, hard-drives, forklifts and subway trains. Very unsporting. The forklift should be about as far from a Carrera as you can get, except it’s not. Their forklift is cool and clever, so the whole brand earns a pass.
Honda is in the same personal watercraft. They make line trimmers and the S2000. Seriously, if Weedwacker built a $30,000 sports car could you ever be persuaded to open you checkbook? Moving from tractors to pumps to Formula One cars is quite an accomplishment, and probably couldn’t be done if Honda was known for any one of those things. They are known for competent engineering, regardless of what they engineer.
The design-engineering brand is more valuable than a manufacture’s brand. It keeps a company from being a one-trick pony carmaker. If the market for muscular rear-wheelers fades, the engineering-designer can race off in a different direction. SUVs replace eco-boxes, eco-boxes replace SUVs.
So why doesn’t every company that makes things try to position themselves as engineering-design gurus?
That won’t work for everyone, according to Wendi R W McGowan of Wendistry, branding and marketing consultants. “A brand is a believable connection with the consumer.” It is not as simple as a crusty stamp on the side of a cow. A brand is an emotional attachment between company and customer. Porsche and Honda have found one way of forging that bond. Other marks have found other ways. For example, no one buys a Ferrari because they expect it to be the most reliable car for the money.
Brand dilution, then, is not so much a disease as a vector. McGowan states. “Chevy’s not building on what they have.”
As a rusty example of old Detroit, she singles out Chevrolet. The company has the Corvette and a popular line of trucks, but fails to build on the spirit, excitement and loyalty those products have produced. Once those emotional attachments have been made, a company needs to reinforce them. Let them grow. Detroit has a tendency to push products and marketing schemes down, as opposed to letting ideas develop from grassroots.
As long as a brand maintains its connection with you, it will be healthy. A good brand isn’t selling you a product, it’s taking an invitation into your life. Kind of like this site. It wouldn’t bother me one bit if Farago added The Truth About Dryers. I’d come up with a couple of stories.
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Great article.
Very interesting. I’m sold.
Excellent points. My father was so impressed with a 1988 Accord LXi (parents first Japanese car), he bought a Honda riding mower a year later. The car made its way down the family, and finally a 4th owner at around 250,000 miles with a lot of rust but only a few timing belt changes and struts. 13 horsepower, TWO cylinders, water-cooled. 1 acre every 6 days during the season. It survived me banging it off trees in my early teens. He still has it. Just batteries, blades, oil changes, a couple flat tires. Original coolant (20 years old!), plugs. Runs perfect, and I bet it’ll last another 10 years.
They stopped selling lawn tractors in the US I think in the mid 90’s (they were $4000 for what was the equivalent $900 Craftsman), but he’s always been loyal to their outdoor equipment, even though it normally cost a lot more, and sometimes more than Stihl.
Having driven (but never owned, yet) Porsches, I always keep my eye open for a restored/unrestored Porsche diesel tractor. Not because they’re reliable, good tractors (they are), but because I like Porsche.
If I had need and money for a premium SUV, the Cayenne would be on my short list, along with the X5 because I like driving BMW’s, too.
Agreed!
Keith Ferrazzi, CEO of Ferrazzi Greenlight, recently said:
“As CMO at Deloitte and then Starwood, I hated it when other marketers measured themselves by the size of their budgets. When you’re running a business, take your marketing budget and push that money back where it belongs – in operations, into the hands of anyone who can make a difference to the customer. Throwing a lot of money at marketing alone will not get people to emotionally connect with your brand. To be successful, above all, you’ve got to create a generous solution. Keep focusing on making people feel so grateful and thankful for what you’ve given them. It’s not just the widget, it’s the emotion, the intimacy you wrap it in. Then you’ve got a home run.”
Brand-development is product based, above all else, sez he. It’s similar to the “build from grass-roots” referenced above.
However, I can’t say that The Truth About Driers would be very grass-rootish…
Why do people slate the X-Type? What has it done to people?
The X-Type is Jaguar’s entry level car, just like BMW’s horrible 3 series is, Mercedes’ A-Class is and Audi’s A2 (Soon to be A1, too).
I suspect the reason why people don’t like the X-Type is because “it’s taking Jaguar’s brand down-market”, but as I stated before, why does no-one look at the A2, 3 series and A-Class with the same derision? In fact, Porsche are more guilty of this than anyone! What the hell is the Boxster about? The only statement you make when buying a Boxster is “I can’t afford a 911″. The Boxster is just an entry level Porsche, but no-one says that it’s diluting Porsche’s brand.
The X-Type has a great ride quality and great luxury for an entry level car; core values to Jaguar’s brand.
A brand can have several different versions of its product, as long as its core values are adhered to; case in point, Toyota. Reliability and quality are fundamentals in all Toyota cars, from the Aygo to the Tundra. If you start having one brand for sports cars, one for cars, one for SUV’s etc, you end up with the mess at GM.
I’ve said it before and I’ll say it again, the X-Type handles brilliantly, has a great fit and finish, comes with more toys than most German brands and is very reliable. When you take everything into account, not just performance, but everything, the X-type is a sensational car….!
Now, over to the Porsche Cayenne. The Porsche Cayenne is the automotive equivalent of Joseph “The Elephant Man” Merrick. Underneath is a gorgeous soul, a passion, a beauty and a brilliant technical ability…..but on the surface, bloody hell, is it ugly!!!!!!!!!
Incidentally, I think expanding the “The truth about…” as a brand is worth exploring. You could have it as a franchise where someone with a bee in their bonnet about the government, say, could set up a website called the “The truth about government” in a Michael Moore style. As long as the core values of Mr Farago’s “The Truth About” brand is held, it should work! Much like Richard Branson does with his “Virgin” brand.
Sorry, but I’m not sold.
While brands CAN extend in all sorts of ways– I love my Porsche design kitchen knife and a handsome IWC Porsche watch– the sheer volume of marketing messages assaulting the average America/European/Canadian/etc. consumer severely limits their ability to think laterally. The tighter the brand, the more powerful it is. For example, Febreeze has just hooked-up with Swiffer. It’s a logical connection, but it weakens both brands. (Ask Proctor & Gamble how it should be done.)
But don’t take my word for it. Play word association with your favorite non-pistonhead. Ferrari. Sports cars. Honda. Quality engineering? Lawn mowers? Even if it IS true, is it a good thing? As a carmaker, wouldn’t you want your name instantly associated with… cars? We had a chance to buy The Truth About Trucks. (Ford nabbed it.) It's a logical brand extension– that would have detracted from my efforts here at TTAC. And yes, "The Truth About" would make an excellent series of sites. But, as GM has yet to learn, focusing resources matters.
And I hate to say this Katie, but I drove a few X-Types and they were all horrible. The [petrol] engine whined. The diesel wasn't much better. There were sharp edges everywhere. And it looked EXACTLY like a knock-off XJ (which also looked like a knock-off XJ, only bigger). The concept of an "entry level" Jag was fine. The execution was excreable. If they'd built a relatively inexpensive F-Type, everything would have been different.
Mr Farago,
Then I can only conclude that Jaguar are selling different versions in the United States to the one sold in the UK. Because my X-Type is brilliant! BMW’s, Mercedes and Audis all look boring in comparision.
Maybe there was some overlap between Volvo and Jaguar during their PAG days and Jaguar had to “dumb down” their product so as not to tread on Volvo’s toes (Which Ford valued more than Jaguar)?
Now that Tata own Jaguar, this will be reversed and Jaguar can sell the better cars in the United States. After all, if you were an Indian company trying to get a foothold in the biggest market in the world, wouldn’t you leverage an established brand you own……?
Porsche error here is not that they made “a truck”. I’m sure they knew that most porsche households had “a truck” and they thought they could provide it.
No, Porsche should have made a competitor for the BMW 3 series. The size of that car is perfect for worldwide sales, large for poor countries, and a touch small here in the oversized USA. Porsche could have “out BMW’ed BMW”, while M-B flails around with the C class and Audi saves the Juice for the S and RS models. Price it between the 335i and the M class and you would have had a winner. It would have broken the “four door porsche” barrier without making a rarity like the Maserati Quattroporte.
A practical daily driver would have made more money than a “truck”. Enthusiasts would have detoured from the Bavarian Car Store. Porsche would be able to expand the parts basis and realize lower costs.
A 3 sized four door car would have been a much better call and much less vulnerable to high gas prices.
Robert,
Actually, I think continued marketing assaults consumers is exactly why branding is both valuable and scalable. If I see a Chou lawnmower in the store, I’ve got to do more work. I’ve got to learn if it’s any good. If I see a Honda, I’m fairly certain it’s a solid machine.
I think Honda is in business to make money, not cars. Cars happen to result in money at the moment. It’s not a very romantic or car-centric way of looking at the company. It’s also why I don’t think it bothers them one bit to have “car” chosen first in a word association game.
Katie,
I don’t hate the X. It’s very pretty. Driving it was a bit of a disappointment, and that is not a feeling that makes one want to pull out the check book.
The Boxster, on the other hand, makes me wonder why people shell out for the 911. On American roads – not the track – it’s superior and half the price.
KatiePuckrik–
Sorry, but you can’t tell me the X-Type “handles brilliantly” and then tell me that there’s no point to the Boxster.
The Boxster is all about handling. Mid-engine, RWD, balance. Don’t confuse handling and grip.
For example, Febreeze has just hooked-up with Swiffer. It’s a logical connection, but it weakens both brands. (Ask Proctor & Gamble how it should be done.)
How do you figure? You’ve said some out there stuff before, but this just takes the biscuit.
Katie:
It’s just that some people don’t realize that you can change who you are fundamentally, and that it could be a good thing. A bad brand isn’t better than no brand at all. I still don’t get how anyone could slate the Cadillac CTS for being an actual modern car and not a V-8 powered parade float other than the same, tired “it’s not what I think it should be” argument. Focus is a good thing. Too much focus is an awful thing, because it makes you a one-trick pony. Just ask Volvo.
NICKNICK,
You missed the point of my post. I never said the Boxster was a bad or pointless car, it just has no place in Porsche’s brand image of luxurious sports cars if I adhere to the principles of why people say the X-Type is hurting Jaguar’s brand (i.e devaluing the brand).
However, if we go with the principles of what I think a brand should be (i.e a core set of values, like the Toyota example I gave earlier) then the Boxster DOES have a place in Porsche’s line up (like you said, RWD, mid engined and good handling) as an entry level car, just like the X-Type does in Jaguar’s line up (the car holds to Jaguar’s values of luxury and an excellent ride quality).
If we have a brand for SUV’s, another for sports cars, another car etc, we end up with GM’s mess. Whereas, having a core set of values and building cars to those standards can expand, even add value to a brand. Like Carshark says, focus is great, but too much focus restricts you and your brand.
Volvo is an excellent example. For years, they were the kings of safety. Now (no coincidence under Ford’s regime) they lost their crown to the new boys of Renault. Now Renault are the Kings of safety and Volvo are a distant second. Unless Volvo reclaim that title back, what does their brand stand for? They concentrated so much on safety, the Volvo brand didn’t stand for anything else. Now, had they expanded the brand into having a few more values (i.e quirky styling, proper luxury, etc), then they would still have some brand equity left, on which to sell cars whilst they tried to reclaim their “safety kings” title back.
speedlaw :
Amen! A Porsche 3 series fighter would be awesome. I could imagine a lighter vehicle with that boxer engine nestled low and very near to the CG with great handling and elegant styling. I would buy that in an instant.
As for the Cayenne, well reference my nomination of it for ugliest car of all time. It is a detraction from the brand, IMHO.
I think you can stay faithful to your brand without being pigeonholed. I see it like the show Iron Chef. The food they make ranges wildly in style, texture, look, and even flavor while always keeping one ingredient front and center.
The X-Type is Jaguar’s entry level car, just like BMW’s horrible 3 series is, Mercedes’ A-Class is and Audi’s A2 (Soon to be A1, too).
Horrible 3-series? I know some people think it’s ugly (I don’t, I like BMW’s current look), but I have never heard it described as “horrible”. I think the 3 series line is wonderful. They are comfortable, everyday cars that happen to handle very well and they have good, smooth power.
You could have it as a franchise where someone with a bee in their bonnet about the government, say, could set up a website called the “The truth about government” in a Michael Moore style.
When you say “Michael Moore style”, do you mean that in the confrontational, no holds barred way or in the “I’ll use information that isn’t true as long as it helps me sell my ‘documentaries’” way.
Michael,
Brilliant article. Brands can and SHOULD grow. The marketplace it too competitive not to. If you’re not growing you’re losing ground. But doing so is dicey. I think there are a couple of rules for a company to do so successfully.
First, the company and brand must be healthy. Porsche could make the Cayenne because they were healthy and their brand securely established. Chevy should not because their corporate offices are in crisis and their public image blemished. Damaged companies and/or brands should contract to their core and execute to that until their regain strength.
Second, the execution must be deliberate, strategic and flawless. If a company is going to take their customers someplace new and strive to draw new associations with their brand, nothing less than perfection will do. If the Cayenne was a sub-par SUV, Porsche would have been eviscerated by the court of public opinion.
TexasAg03,
BMW’s have absolutely nasty interiors and you get next door to naff all for your money. If you want toys on your 3 series you have to pay through the nose for it (this applies to Audi, too). Whereas, on the Jaguar X-type, buy an SE or higher model and you get a DVD Sat-Nav as standard.
BMW’s ride quality is OK, but that’s the problem, it’s OK. BMW is using its brand equity to rip customers off one only has to look at the 1 series for evidence of that…..
As for Michael Moore (and I really don’t want the rest of this thread to be taken up by this, for the record!), he used to have a competition (I don’t know whether it’s still running or not) with a prize of $10K for anyone who can prove that any fact he’s used in any of his films is untrue. So far, no-one has claimed this prize……
Honda is about quality and efficiency and good driving dynamics. And if I wanted a lawn tractor, I’d buy one from them. But Porsche is not about trucks. And the Cayenne is an aesthetic abomination. I drove one recently, and it was an abomination in that department, too. The FX35 I drove was FAR superior. I agree with the suggestion that if they wanted to expand they could have competed against the 3 series. I love Porsches, and you can see my menorah made of porsche valves on my website, motorlegends.com. But they lost me with the spice truck.
I think it would be cool if Ford started building airplanes.
Didn’t this Porsche debate already take place 30-some odd years ago with the 928? Wasn’t the 928 a total “sell-out” to the American public? A very un-germanlike V8, front-engine luxury-touring abboration from Porsche?
Same story, different year.
Just like I’m glad no one listened to Rolling Stone when they declared the Led trash, I’m glad people like Ferruccio Lamborghini didn’t have to listen to arguments about “sticking with your brand image.”
BMW’s have absolutely nasty interiors and you get next door to naff all for your money.
Once again, your opinion. I happen to like the current (and past) 3 series, inside and out.
BMW’s ride quality is OK, but that’s the problem, it’s OK. BMW is using its brand equity to rip customers off one only has to look at the 1 series for evidence of that…..
I think the ride quality is fine. I prefer more of a handling bias.
As for Michael Moore (and I really don’t want the rest of this thread to be taken up by this, for the record!), he used to have a competition (I don’t know whether it’s still running or not) with a prize of $10K for anyone who can prove that any fact he’s used in any of his films is untrue. So far, no-one has claimed this prize……
That’s the first I’ve ever heard of this contest. Where can I find information about this? I did a Google search and found some forum and blog comments about this “contest”, but I can’t find anything official. In fact, in many of the places I found the reference, people asked for a link but no one could provide it.
It appears that there is no such “contest”.
Correct me if I am wrong but isn’t the Cayenne an excellent off-road vehicle, that also handles very well on road? The last I have seen and heard the Cayenne (when properly equiped) is just as capable in the rough as a RR, landCruiser, G-Wagon, Forerunner, Hummer H3, etc.
In all farness it can be stated that Porsche on its first attempt built an excellent off-road, AWD vehicle that also happens to be pretty fast, handle very well on the road, is fairly roomy yet not too big, reasonable luxurious, and very well built. It also looks like a Porsche.
Call it ugly if you will but it is a off-road vehicle, ugly tends to look good in a strange way on these types of vehicles.
Actually the Cayenne is not a bad fit for the Porsche brand. It is like Addidas making an excellent pair of hiking boots. Hiking boots are still solidly in the world of “sport”. BTW Addidas does make some excellent combat boots that are considered to be some of the best in the world. What would not fit would be a Prosche “Fleetwood Brougham” or a pair of Addidas tuxedo loafers.
IMO the Cayenne is an excellent compliment to a 911 or Boxster parking in the garage. Unlike say a BMW 5 series you do not look stupid with a trailer hanging off the back of your Cayenne. You Cayenne still looks good when it is dirty. Drive it on to the sand at the beach, its OK. Plow through 7″ of snow with alomp, go right ahead.
All of this speaks of a sporting nature: Porsche.
To me, Honda’s big branding mistake is the new porker of an Accord.
I can understand Porsche attempting to branch out, but wonder whether building an SUV was true to the origin of Porsche, and to the perspicacity with which they’ve stuck with their original design ethos.
The Cayenne is a mistake (as is the Touareg cross-platform synergies of that); and the Panamera is a mistake. But sometimes mistakes have to be made, apparently.
Whether Porsche manages to turn this into fortunate mistakes is another matter – they’re looking into the future and probably realize that though suing Livingstone in London may give them a stay, they have to change their cars in order to meet increasingly prohibitive operating conditions for supercars.
I don’t think Mullaly was sad to saddle Tata with the Jag and LR congestion charge hogs, for instance – as he turns Ford to meeting new requirements for cars.
Here’s a mysogynist angle on Porsche, as the brand was once “explained” to me: “Porsches are supposed to be so difficult to drive that you’ll rarely see a woman behind the wheel.”
This point was raised when the Cayenne concept was touted – and judging by some of the reactions to the Cayenne, there were quite a few mysogynist Porsche owners and enthusiasts around.
The fact that Porsche can co-engineer a Touaeyenne doesn’t mean it’s good for the brand to have done so — but then at least they brought their Porsche dedication and acumen to the task, and made certain it belongs under the brand umbrella. (Consider what GM has done to Saab as a guide to the don’ts of that.)
The editorial raises an interesting issue. For Porsche, it’s one of ensuring that their vehicles meet regulatory requirements in the future, and of reaching out to potential new customer groups. I think one measure of the limits to that, is the fact that they’re spending their extra capital on VW, rather than branching something unique into a casserole of autos.
I agree with the suggestion that if they wanted to expand they could have competed against the 3 series.
What exactly would a 3 series porsche be? How could it or would it be superior to the BMW product? How much would they sell it for? And who would by it?
How long before the those guys from Asia take the concept and turn it into something that tiny little Porsche will be unable to compete with?
Witness there is no entry level Porsche in the 30grand range because there is nothing Porsche can offer in this price range that cant be beat at a lower price by MANY other automakers. Quite simply Porsche CAN NOT built enough vehicles to compete in the mainstream.
Mr. Farago is 100% correct that a brand should be focused, and that it should be possible to summarize a brand value in just a few words. If it takes more than ten words to describe your brand, you haven’t got one.
However, I think that there are some who misconstrue this concept by confusing “brand” with “niche.” A brand does not necessarily have to be so narrow that it limits itself to a few products or that it can’t have varying products within the same brand.
For example, Toyota has a great brand, at least in the United States, where customers associate it with reliability and durability. This brand allows them to sell everything from the lowly Yaris to the costly Land Cruiser, and a whole lot in between. Toyota is in a position to introduce vehicles with a variety of price points and configurations.
Not everyone has such a flexible brand. GM’s US operations have had the most problems with this because they have too many brands to the point that they blur together. Their branding ladder worked when each badge had a couple of cars each, but expanding each division’s lineup to create abundant overlap just confused the customers and drove them away.
The Cayenne was a risk and in hindsight, I think that it paid off. Personally, I thought that it was a horrible idea before the fact, but sales suggest that I was wrong. The Cayenne has brought in new customers while maintaining the loyalty of Porsche’s other buyers and the integrity of the brand, so it provides benefit just so long as it makes money. (On the other hand, if it is going to be a loser in the brave new world of the New Economy, they can cut it in a heartbeat and not hurt themselves at all.)
Porsche’s identity is centered firmly around the 911. The Cayenne doesn’t change this one whit. But if there comes a day when they can’t evolve a modern 911 that can appeal to the market without looking archaic or stale beyond repair, then they are dead meat. Its design is so distinctive and specific that it’s one of those things that is either going to work or fail. It works now and it has for a long time, but I wonder whether it can work into perpetuity.
Stein X Leikanger:
How can you declare the Panamera a mistake when no one’s driven it yet? Because it’s designed to be a sleek, powerful sedan that handles well instead of a sleek, powerful coupe or convertible that handles well? This is exactly what I mean by “too much focus”. Porsche has made themselves synonymous with handling and performance, and I don’t see how a sedan hurts that image.
I see what you mean by the “design engineering” point, and even agree that it is generally on target. A company that has a well-deserved reputation for solid engineering has significant leeway on what it engineers, as long as the high standard of engineering is maintained.
However, from a _marketing_ perspective, especially in the sub-prime, mortgage-brokering, craptastic-fantastic market in America, most (not all, present company excluded) Porsche’s are sold to blighters who don’t give a rip about engineering. They are buying it because they perceive some kind of penis-extending or midlife-delaying quality. The engineering and race-bred reputation is a fig-leaf for these guys – the real draw is that other people know that (a) it costs a lot and (b) it is a “sports car”.
Monkeying around with a soccer-mom car – greatly engineered though it may be – scores a direct hit on this demographic. Other peddlers of automotive chest-wigs, such as the new, improved Maserati are waiting in the shadows to welcome them.
@CarShark
You did read my next sentence? Stating mistakes sometimes have to be made?
This is from a Porsche brochure – and also a very memorable commercial with Ferdinand himself:
Because of this no committee has ever created, or will ever create, a Porsche. Committees are, by nature, timid. They lead to creations which have no soul. No clear identity. They respond to momentary pressures or marketing trends. No Porsche has ever been created or altered based on fleeting whims
My post dealt with the fact that Porsche has to adapt – they should have built the Tesla, instead they are going for sedans and SUVs.
You did read my next sentence? Stating mistakes sometimes have to be made?
You did read my first sentence, where I asked you why you made such a bold declaration with absolutely no evidence whatsoever?
The rest of what you said reads familiar. It’s not what you want, so it must be wrong. There’s nothing wrong with making high-performance sedans and SUVs, and using the Tesla as an example was a poor choice. And who’s to say that if the Panamera succeeds that the money won’t lead to a Porsche Tesla with better, more liveable battery technology or a better gearbox? People tend to forget that all that Cayenne money from “soccer moms” had to have added something to the next 911’s R&D budget.
I just gotta say, I agree with the editorial whole-heartedly. And reading through all the comments just makes me agree more. The Cayenne, IMO, is and has been a success because it’s the Porsche take on an SUV. As long as Porsche continues to release the Porsche take on , then they’re adhering to their brand. And the Cayenne is inarguably a Porsche. If you looked at it and drove it and were like, “Is this the new Land Rover or something?” then Porsche would have failed.
Automakers with strong brands — Toyota (the reliable take on X), Honda (the efficiently engineered take on X), Hummer/Jeep (the unbreakable take on X) — can produce whatever they like as long as it adheres to the brand’s core competencies. Hell, Jeep sells baby strollers… brand weakening, or the unbreakable, go anywhere take on baby strollers? You decide, but I see tons of them out there. The struggling brands have no identity, nothing to fill in the blank in (the _____ take on X). RF wants GM to focus its brands, but I don’t think they need to do it in the way he thinks. Chevrolet (the affordable take on X), Pontiac (the performance take on X), Buick (the comfortable take on X) just screams of badge engineering, and we haven’t even started talking about cars yet. But that’s the logical outcome of that strategy, where Chevy builds the cheap version of the Epsilon platform, Pontiac builds the fast version of the Epsilon platform, etc.
Here a question that needs to be answered before we go to far with this branding matter:
Exactly how much enjoyment are you getting out of your sports car today?
Today ALL the roads around the NYC Metro area are considerable more crwoded than they were a mere 10 to 15 years ago. Back in the late 1980s and early 1990s I could actually find nice quite places to really drive. TOday that is not the case anymore. Areas that used to be lightly populated with light traffic are now all developed. I addition to the crowding on our roads the quality of them has gone down quite a bit. Today not only NYC, but parts of Northern NJ, Westchester, and Nassau are all pothole city.
My understanding is that the rest of the world is not any better. Europe, Japan, Asia are all crowded with no room for fun on the roads.
With that said just how far can Porsche push its sportcar hertiage into the future. In reality automotive technology and the worlds population are on a collison course. While some automakers are making stupid 600hp cars. the others are producing MILLIONS of little commute buggies to fill up every remianing gap in traffic.
In all honesty a 911 Turbo and a Cayenne Turbo look just as silly sitting in a traffic jam. The difference is the Cayenne is a bit more comfortable.
Any automaker with a bit of sense needs to take the changing nature of our driving habits into consideration when planning for the future. In today’s world Porsche’s 911s and Boxsters really cant get any better in a USEFUL sense. Porsche can bump up the HP to over 500hp but so fucking what! You still cant use it anywhere but on a racetrack. At the rate we are going with automotive design and engineering we will soon see cars that will routinely pull over 1.0gs, blast to 60 in under 3 seconds, and top out at over 200mph. Until someone builds us a “SuperHighway” (which will never happen) we will never be able to use this performance to good effect.
Now with that said were does Porsche go in the future, if not branching out into other products. I guess Motorcycles could be a good plan to maintain the performance hertiage.
@CarShark
I have this watch:
http://www.yorktime.com/watch/sku/289/images/6263.jpg
They’re also making this watch:
http://graph.bidz.com/graphics/85/77/20.jpg
I wish they didn’t.
:-)
Let’s not forget that Honda made only motorcycles for decades before that horrendous “brand extension/dillution” into cars.
Wiedekin at Porsche made the Cayenne for one reason only: VW needed an SUV, and it would be cheap (and highly ptofitable) to make a Porsche version. It was too tempting, and has made a ton of money.
If the Cayenne (which I hate) is so bad for Porsche (I’m looking at Farago), why is Porsche making record profits, whith which it is swallowing VW? Wiedekin is fucking brilliant, selling Porsches with outragous mark-ups for options ($1500 for color-keyed vent outlets, or something like that) and tarted-up Tuaregs.
Last time I checked, they’re in the business of making money, and they certainly have succeeded. If Wiedekin read this article (as well as some of the branding-neurosis comments), he’d be chuckling all the way to the bank.
Porsche’s “brand” is luxury goods, some of which happen to work well as sports cars in the right hands, which isn’t all that often.
I said earlier that Michael Martineck sold me over to his side. I’ve almost been bought back.
Anyways, a 3 series sized Porsche? Are you out of your minds?! Porsche is all about being upscale. Now they’ve brought in the Cayman and Boxster which brought them downmarket a bit, but not too much. A 3-series Porsche would bring them way too far down. Sure, they probably shouldn’t have made the Cayenne but at least it’s upscale and therefore somewhat conforms to their image. Same with the Panamera thingy. Porsche should NOT move further downmarket.
And how can a 3-series sized vehicle make more money than the Cayenne? The higher the price of a car, generally, the higher the profit margin. Porsche would have to sell a lot of small sedans, which would be difficult because that market is already hugely saturated with BMWs, Audis, and so on, in order to make as much money as they do on the Cayenne.
FYI:
Porsche used to be a sportcar company. This whole upscale luxury car image thing is rather new to them and only came about after the mid 1990s.
Please remember such cars as the 912, 914, 924, 924 Turbo, 944, 944s, 944 Turbo (s) and 968 (I’m stretching it with thias one). These used to be the entry level Porsches and they were reasonable affordable in their day. They were priced in the BMW 3 series range.
Porsche used to make a shit load of money in this segment until the dollar began to fall. In all honesty Porsche got beat out of this market in the 1990s by some excellent Japanese cars that were offer 911 performance at 944 prices.
Great editorial, there’s valid points on both sides of the debate.
My observation is that as long as a design-engineering firm is profitable or financially-independent, they’ll branch out, expand their design portfolio, acquire manufacturing might, and the like.
Porsche is selling themselves as design brand. They can afford to perilize their sports-car image because they’re flush with cash, and besides, they must be profiting from harddrives, kitchen knives, wristwatches, and the like.
Once these companies become so diversified they’re bloated, profits eventually decrease and it’s relatively painless to spin-off non-core operations (at least at first). This often attracts new investors while maintaining cashflow for a back-to-basics regime (one would hope).
Where Honda is today is where GM was in its heyday. GM made Frigidaire appliances, procured EMD locomotives, absorbed Fisher Auto Body, owned Allison and Detroit Diesel, etc. GM continues to divest profitable operations to keep its core business afloat (GMAC and their Medium-Duty trucks more recently), backing themselves into a corner with each big sale.
Will Honda and and Porsche suffer the same fate? Not if brand matters. A notable difference here is that Honda and Porsche qualify as brands, their marque is stamped on everything they make (save for Acura). GM isn’t a brand -Chevy, Buick, Pontiac and Saab are brands -GM is just a front for investors. So when people have a good experience with a Honda lawnmower or a Porsche wristwatch, if the brand relationship is strong then that good reputation extends onto their automotive products, at least in theory. I’m sure customers are satisfied with their Allison Transmissions or EMD Locomotives, but that didn’t necessarily translate into loyalty towards GM as a whole.
While Michael makes some valid points, I do think the V6 Cayenne was and is a big mistake. Why would anyone want a slow Porsche? Why a V6? Price? I don’t think a cheap Porsche is good for the Porsche’s brand either. I am also sure that if Porsche wanted to make a pickup truck that it would be impeccably designed and superbly engineered but I don’t think that is a good idea either.
Sorry Katie I also have to agree with RF on the X-Type. It looks like a shrunk-in-the-wash Taiwanese copy of an XJ and drives like a portly but well appointed last generation Ford Focus. The entry level 2.1 V6 FWD model they sold in some markets was enough to make me cry.
Ferrari came very close to building this four-door sedan:
http://ferrari.vintage.free.fr/Images/Cars/Ferrari_Pinin.jpg
Why would anyone want a slow Porsche? Why a V6? Price? I don’t think a cheap Porsche is good for the Porsche’s brand either.
If you actually purchased a Cayenne to use as intended a V6 equiped with a manual transmission would fit the bill just fine. For bad road, bad weather, and off-road travel a big powerful v8 is not important and the extra fuel consumption is not very helpful. Since the v6 Cayenne is lighter it will perform a bit better in the rough. BTW it will still handle as well (or better) than a v8 on the street. 280hp and a 0 to 60 in 8 seconds is not bad or slow for a 5000lb vehicle.
Would a Porsche Pickup also work? Yes! Would it still be a real porsche? Yes! Do anyone remember the 959 porsche entered (and won IIRC) into the Paris- Darkar rally serveral years back?
Trust me if Porsche made a “ridgeline” type vehicle I’m am sure would be very successful in many market thoughout the world. There is so much more to motorsport than just race/sports car on a track.
The Truth About Dryers? I know you’re just being hypothetical, but I’m already rolling my eyes. My interest in this site would begin its decline the very second I heard of its existence.
Diverse branding works best at the extremes. Porsche and Honda get their reputation for solid engineering predominantly in upscale markets. So does Swiss Army. On the contrary, something like the fill-in-the-blank for Dummies book series is successful because it appeals to the lowest common denominator of intelligence. Same with Walmart’s low pricing strategy on everything from clothes to electronics.
TTAC would not succeed in other areas like dryers or computers unless it targeted the educated, critical consumer. It would not work as a The Truth About ____ for Dummies. It would have to be something like the Consumer Reports online without the subscription.
Also, people aren’t passionate enough about dryers, or printers, or pants to keep partaking in a dialogue after the purchase. People do that with cars.
The homepage would have to be The Truth About… (www.tta.com) and then be a portal to all other topics, of which cars, computers, and household appliances would have to be the main boldfaces. Kind of like http://www.yelp.com.
re: “What the hell is the Boxster about? The only statement you make when buying a Boxster is ‘I can’t afford a 911.’″
KatiePuckrik: April 1st, 2008 at 7:54 am
spoken like one who has never bought a boxster – and most likely never will – but that erroneous sentiment has been so frequently expressed and so successfully refuted, ad nauseam, that i won’t even attempt to do so again, here.
What, Porsche makes sports cars ? I only ever see Cayennes ferrying middle-manager execs to lunch around here. I’m not spending $100k on a sports car from a company that caters to that sort of people, everyone will think I’m a stiff in a suit.
I used to lust after Jaguars; I said if I ever made my fortune there’d be an XJ for the Mrs. and an XK for the mistress. But now with every yahoo driving an x-type and realtors in s-types, I’ll take my fantasy web surfing to http://www.maserati.com.
Here is the thing about SUV’s and sports cars. The target audiences have insanely large overlap. There are certainly lots of people who would never cross from one to the other and back, but there are a LOT of us that want anything but a boring car. Ask car salesmen and insurance guys about this, I think they will agree.
So, a Porsche SUV that is high performance, fast on and off road, and ready to race in either place isn’t a stretch IMO. Had they made an SUV that was more of a suburban or Range Rover then there would be no room to gripe. OTOH, the Cayenne seems to be a great soft road sports car.
I was just thinking the same thing about Hondas. Honda makes anything with an engine. Could it be that our perception of the brand is not the same as the company’s (reference the IS-F discussion). In the case of Lexus we assume that they intended the brand to be boring reliable, luxurious transportation, with a side order of positive dealer experience. Boring is a quality we associate with the brand, but not necessarily a brand value.
By that same token, Honda makes well engineered ________. We associate them with cars. This emotional connection and gut recognition are the results of a focused brand. Any brand extension should not shock or distract from the brand values. I agree with the prior poster that a brand must be healthy to attempt an extension. However, the extension should highlight the brand values and stick to them. Whether those should be the defined values or the perceived values is another discussion.
PS- I also like Dr. Strangelove.
Wow. Where to begin.
I’m with RF and pch101 on this. Brands need to be tighty focused.
As pch points out, this doesn’t mean – necessarily- that a brand can’t extend to many products. Honda for example stands for quality and durability (e.g the same thing Toyota stands for). Honda makes excellent small engines for power equipment, they make excellent motorcycles, excellent outboard motors, excellent cars, and when they get their HondaJet plant up and running (if they havn’t already) I have no doubt they’ll make excellent business jets.
But Honda isn’t a luxury brand. It can’t extend itself into one. It’s Accura brand has done poorly because no one really sees it as a separate brand, they see it as an overpriced Honda. Argue with me all you like about platforms and engineering differences, but I’m telling you that the average consumer thinks of Accura as an overpriced Honda. Accura offers durable, reliable engineering, at a higher price. Not suprisingly, people get their needs met by the cheaper Honda branded cars and avoid Accura.
Toyota has been more successful with their Lexus brand. Part of the appeal is that buyers know they’ll get a reliable Toyota engineered car, but somehow they’ve been able to differentiate the product.
Toyota could also get into lawnmowers and snowblowers, etc. And no sensible person would have any qualms about flying on a ToyotaJet business jet, if they chose to make one.
But not all automakers have a brand that can be extended so far as Toyota and Honda can. For one thing, luxury makers can’t go down market w/o destroying the brand. Part of luxury is exclusivity, and you don’t get exclusivity at $30K. Cadillac and Lexus are going to find that out.
Porsche’s brand, at least in the US, is seriously fast, seriously competent sports cars. Germans may be well aware that Porsche made tractors, but the average Yank 911 buyer doesn’t really want the Ag tradition mixed in with his sports car.
The Cayenne is a horrible branding mistake because it’s not a seriously fast, seriously competent sports car. It doesn’t really matter if it’s making oodles of money – branding mistakes sometimes do make money in the short run, even while sowing the seeds of brand dillution.
I disagree with the notion that Cayenne is Porsche’s “take” on the SUV. I don’t want to see Porsche’s take on SUVs, or dump trucks, or anything else. Maybe in the European market they could get away with it, but those “takes” aren’t consistant with the brand in the US.
By the same token, I’m not really interested in Cadillac’s “take” on an econobox (Cimmaron) or pickup trucks, or SUVs. Go ahead and tell me how much money they are making on the Escalade – I’m still unconvinced that it’s a good brand move for Caddy.
Likewise I’m not anxious to see Tata’s interpretation of a classic English touring car. So they’d better keep the Tata name far far away from their newly aquired milstone.
Katie,
A brand can have several different versions of its product, as long as its core values are adhered to; case in point, Toyota. Reliability and quality are fundamentals in all Toyota cars, from the Aygo to the Tundra. If you start having one brand for sports cars, one for cars, one for SUV’s etc, you end up with the mess at GM.
I think you fundamentally misunderstand the branding problem at GM. It’s not that they have a brand for sports cars, a brand for pickups, a brand for econoboxes, etc., but precisely the opposite. All of their lines have almost everything available. At least 3 division sell pickups. At least 3 sell sports cars. I’m not sure but I think all divisions have a CUV/SUV. Their problem is that they can’t make any one division stand for any one type of vehicle or any one market niche. The mess at GM should convince any reasonable person that brand extension is dangerous. All their divisions sell things in several market niches. IOW, none of their divisions stands for anything.
Oh, and while “The Truth About” makes a nice title for any website, it’s not a good idea for RF to extend his brand to say The Truth About Motor Scooters, or The Truth About Genetically Engineered Crops”.
Based upon what has worked and hasn’t worked thus far, I think that you can make these generalizations about car branding, at least in the US:
-Exotics (top, top end cars ala Ferrari and Aston Martin) are in their own class, completely separate and apart from everyone else. No mixing allowed, period.
-It is possible to use a standard car brand (i.e. Toyota, Ford) to sell a variety of trucks at all price levels, as well as low- to medium-tiered cars. But near-luxury and luxury cars require their own separate branding if they wish to fetch a price premium.
-Luxury car brands cannot sell pickups without harming their brands, BUT it is possible to sell SUV’s and some specialty off-road vehicles within the confines of the luxury brand without harming the brand. However, the brand emphasis and styling cues need to remain founded on the cars in order for the branding to remain effective, and the SUV’s probably won’t help the branding. So it can be done, but the impact on branding will be negative or neutral, not positive.
-Luxury brands that try to move downmarket are certain to kill their branding. Mainstream brands that attempt to move upward into the luxury category probably won’t harm their branding, but the luxury products are likely to fail.