Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 1

Introduction to Porsche Lizenz- und Handelsgesellschaft mbh & Co. KG

Porsche Acceleration IVCosta Rica, June 15th, 2004

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 2

Agenda

• Introduction to PORSCHE Lizenz- und Handelsgesellschaft mbH & Co. KG– Company Structure– Objectives

• PORSCHE DESIGN vs. PORSCHE DESIGN Driver's Selection Strategy– Brand Strategy – Marketing Strategy

• Product • Price• Distribution/POS• Communication

• Product Highlights MY05

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 3

Company Structure

PORSCHEVerwaltungs GmbH

PD GmbH, Zell am See(Design Studio)

PDoA Inc.

PORSCHE Lizenz- und Handels-Gesellschaft mbH & Co. KG (PLHG)

PORSCHE AG

F.A. H.P.

PD PVGmbH

50% 50%

35%

35%

65%

65%

100%100%

• PORSCHE DESIGN and Selection have been merged to form one company of which PAG holds 65% and the Porsche family 35% of the stakes

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 4

Objectives

Reduce consumer confusion about the different brands

Streamline brand management outside the automotive sector

Maintain the brand values

Strengthen the Porsche brand presentation

Generate synergy effects in product and sales management

Realize sales and profit potentials

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Brand Strategy

• Three brands will be transformed into one brand with a sub-brand

DRAFT

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Brand Strategy

• PORSCHE DESIGN will be positioned into the luxury market, whereas Driver's Selection will act as a sub-brand in the bridge market

Louis Vuitton, Dior, Hermès, Armani, Cartier, Prada, Patek Philippe, Donna Karan, IWC

Mont Blanc, Baume&Mercier, Ralph Lauren, Hugo Boss, Calvin Klein

Hugo, Emporio Armani, DKNY, ck

H&M, Marks&Spencer,

Esprit, Eddie Bauer, Swatch, Zara, GAP

Luxury

Premium

Bridge

Mass

Discount

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PORSCHE DESIGN Brand Strategy

• There is a lack of genuine mens’ brands with a credible technical background in the luxury segment

multi segment focus

single segment focus

fashionemotion

technicalfunctional

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 8

modern/sexy

traditional

masculinefeminine

PORSCHE DESIGN Brand Strategy

• Porsche Design is a truly masculine brand with a high aspirational factor

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Brand Strategy

• PORSCHE DESIGN is able to hold a unique position in the market:

Masculine with high emotional aspiration

Modern, yet classical

Technical functionality

Credibility for a broad range of products

Multi-segment luxury brand

True design competence

Perfection

Passion

Performance

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 10

(price) high end

(price) low end

modern/lifestyletraditional

PORSCHE DESIGN Driver's Selection Brand Strategy • PORSCHE DESIGN Driver's Selection owns a

modern lifestyle, high-end position within the competitors’ field of car merchandising brands

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 11

PORSCHE DESIGN Driver's Selection Brand Strategy • PORSCHE DESIGN Driver's Selection is able to own

a unique position in the market:

Mainly car-related products for Porsche owners, their family and fans

Technical functionality, but also modern, maybe even trendy lifestyle products

Sportiness

Credibility for a unique product range related to the Porsche car

multi-segment bridge brand

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Marketing Strategy

Product

Price

Distribution

Communication

• PORSCHE DESIGN versus PORSCHE DESIGN Driver's Selection

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Product Strategy

• There are exclusive product groups for PORSCHE DESIGN and PORSCHE DESIGN Driver's Selection, but there is also a product overlap

•Clothing•Watches•Luggage/Leather•Writing instruments

•Golf equipment•Sunglasses•Lifestyle•Sporting goods

•Fragrance•Electronic equipment (mobile phones, etc.)

•Pocket knives•Shoes

•Giveaways•Calendars•Kid's products•Model cars

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Product Strategy

• Differentiation of products: watchesPORSCHE Design watches will have mainly mechanical movements, while the PORSCHE DESIGN Driver’s Selection watches will have quartz movements

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Product Strategy

• Differentiation of products: clothingPorsche Design will be a rather clean and minimal collection in comparison to the sporty and casual look of Driver’s Selection

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Marketing Strategy

Product

Price

Distribution

Communication

• PORSCHE DESIGN versus PORSCHE DESIGN Driver's Selection

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Price Strategy• PORSCHE DESIGN Driver's Selection will mainly

offer products up to € 500 MSRP

MSRP price range [EUR]

Giveaways

Calendars/Books

Watches

Sunglasses

Lifestyle

Luggage

Small leather goods

Model cars

Kid's products

Writing instruments

Sporting goods

Clothing

975

149

200

50

60

250

66,000

300+

2.000+

500+

500+

2.500+

––

––

–

–

––

–

–

––

––

–

–

––

1

25

350

100

10

15

35

20

20

20

20

10

20

40

500

200

300

1.400

400

350

600

100

550

800

–

–

–

–

–

–

–

–

–

–

–

–

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Marketing Strategy

Product

Price

Distribution

Communication

• PORSCHE DESIGN versus PORSCHE DESIGN Driver's Selection

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• Porsche dealers worldwide

• Online shops

• B2B key accounts (e.g. Lufthansa)

Distribution Strategy

• Strict separation of distribution channels for PORSCHE DESIGN and PORSCHE DESIGN Driver's Selection

• Exclusive retail stores

• Franchise stores

• Shop-in-shops at up-market department stores

• Up-market specialist stores

• Porsche dealers, if requirements are met

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PORSCHE DESIGN Distribution Strategy

MunichLos Angeles

Hong Kong Taiwan/TaipehDubai

Salzburg

Frankfurt

• Current POS for PORSCHE DESIGN

PORSCHE DESIGN Stores

Franchise Shops

Shop-in-Shop

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PORSCHE DESIGN Distribution Strategy

PORSCHE DESIGN Stores

Franchise Shops

Shop-in-Shop

Planned PORSCHE DESIGN Stores:Hamburg, Berlin, Düsseldorf, Frankfurt, Vienna, Zürich, Milan, Paris, London, Barcelona, MoscowNew York, San Francisco, Los Angeles, Chicago, Boston

EuropeUSA

Planned Franchise Stores:Stockholm, Lyon, Bordeaux, Warsaw, Göteborg, Manchester, Glasgow, Dublin, RomeHong Kong, Singapore, Shanghai, Seoul, Kuala Lumpur, Tokyo

Europe

Asia

30 PORSCHE DESIGN Stores, 25 Franchise Stores, 50 Shop-in-Shops

• Future retail expansion of PORSCHE DESIGN

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 22

PORSCHE DESIGN Distribution Strategy

• Retail presentation is crucial for the success of a lifestyle luxury brand: the success of Louis Vuitton and Mont Blanc is built on an exclusive, selective POS-strategy

Selective retail presence ensures pure, eye-catching branding

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Distribution Strategy

• Both PORSCHE DESIGN and PORSCHE DESIGN Driver’s Selection are in the process of developing new shop systems

• Professional store designers will create a modular, flexible shop-in-shop system, that meets with the Porsche dealer requirements

• First prototype to be set up beginning MY 05

• Matteo Thun (architect) will create the PORSCHE DESIGN retail presence in own shops, shop-in-shops and franchises

• First shop opening planned for autumn 2004 in Munich, Milan, Hamburg and Paris

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PORSCHE DESIGN Driver's Selection Distribution Strategy

Shop-in-shop concept5m² (Draft)

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Shop-in-shop concept5m² (Draft)

PORSCHE DESIGN Driver's SelectionDistribution Strategy

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Shop-in-shop concept10m² (Draft)

PORSCHE DESIGN Driver's SelectionDistribution Strategy

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Shop-in-shop concept20m² (Draft)

PORSCHE DESIGN Driver's SelectionDistribution Strategy

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PORSCHE DESIGN Driver's SelectionDistribution Strategy

• Shop-in-shop concept adapts perfectly to the Porsche architecture (Draft)

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PORSCHE DESIGN Driver's SelectionDistribution Strategy

Next steps:

• Develop first draft for an easy-to-handle shop-in-shop system

• Set up a prototype at a PORSCHE dealership to improve and fine-tune the system

• Prepare a sensitive roll-out of the new shop-in-shop system considering the dealer investments made in the markets

• Focus on main markets

• The Tequipment and Exclusive fitting lounge will remain unchanged (updates for new models are planned, missing display elements e.g. a plasma screen stand will be added)

Introduction to Porsche Lizenz- und Handelsgesellschaft mbH & Co. KG 30

Land MY 99 MY 00 MY 01 MY 02 MY 03 MY 04 Feb-04

Argentinien 21,910 € 9,260 € 1,520 € 350 € 371 € 0 €

Barbados 100 € 9,760 € 24,740 € 990 € 2,995 € 0 €

Brasilien 910 € 2,190 € 640 € 4,800 € 3,289 € 2,000 €

Chile 6,480 € 2,080 € 5,170 € 880 € 2,183 € 0 €

Columbia 0 € 0 € 0 € 0 € 1,360 € 0 €

Dom.Republik 0 € 0 € 0 € 0 € 0 € 0 €

Ecuador 0 € 0 € 1,130 € 0 € 740 € 0 €

Guatemala 1,490 € 1,130 € 1,740 € 2,180 € 7,559 € 7,000 €

Mexico 0 € 0 € 50,610 € 126,160 € 22,530 € 6,000 €

Panama 2,700 € 2,060 € 3,590 € 980 € 2,529 € 1,000 €

Paraguay 0 € 1,160 € 400 € 0 € 0 € 0 €

Peru 70 € 180 € 0 € 30 € 0 € 0 €

Puerto Rico 0 € 0 € 0 € 800 € 2,197 € 6,000 €

Uruguay 3,130 € 0 € 0 € 0 € 0 € 0 €

Venezuela 2,210 € 2,960 € 880 € 800 € 1,453 € 0 €

PLA 0 € 0 € 0 € 0 € 20,789 € 27,000 €

PLA Total 39,000 € 30,780 € 90,420 € 137,970 € 67,995 € 49,000 €

PORSCHE DESIGN Driver's SelectionSituation Latinamerica

March

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PORSCHE DESIGN Driver's SelectionSituation Latinamerica

Next steps:

• Make basic range of Selection available at PoS (e.g. T-shirts, Caps, Pins, Pens, etc.)

• Try out kids’ articles (remote control cars, kid’s car, dingy boat)

• Use Selection articles in Marketing events like Golf tournaments (golf bag, putter, Porsche golf balls …), Driving events (sell model cars, T-shirts, key chains)