Question

To answer the next three questions, refer to the following example. In 2003, Porsche unveiled its new sports utility vehicle (SUV), the Cayenne. With a price tag of over $40,000, the Cayenne goes from zero to 62 mph in 8.5 seconds. Porsche’s decision to enter the SUV market was in response to the runaway success of other high-priced SUVs such as the Mercedes-Benz M class. Vehicles in this class had generated years of very high profits. The Cayenne certainly spiced up the market, and, in 2006, Porsche introduced the Cayenne Turbo S, which goes from zero to 60 mph in 4.8 seconds and has a top speed of 168 mph. The base price for the Cayenne Turbo in 2018?Almost $125,000

Answer 1

Answer:

The question is incomplete:

The analysts were concerned because not only was Porsche a late entry into the market, but also the introduction of the Cayenne might damage Porsche's reputation as a maker of high-performance automobile. In evaluating the Cayenne, would you consider the possible damage to Porsche's reputation as erosion?

In marketing, brand erosion means that customers will value the brand less and their perceived value will decrease. Luckily for Porsche, they did not listen to them. The Cayenne is by far Porsche's largest source of revenue and profits.

Porsche is a brand that most people associate with luxury sports car, and their most famous model, the 911, has barely been modified during the last 50 years. But as the SUV market increased in size, their profits profits started to shrink. Many Porsche purists despise Cayennes and Macans, but the fact is that they increased the total number of units sold way beyond anyone's expectations.

Nowadays, more people view Porsche as a luxury car manufacturer and more people want to buy their products. A small number of consumers felt disappointed, but a vast majority were pleased.