The Introduction To Mercedes Benz Marketing Essay
Mercedes-Benz is a German automotive company ranked 12th on 'best-global-brands 2011" same rank it got the previous year 2010, with current brand value of 27,445million dollars.
This company is a multinational division of the German manufacturer Daimler AG, and the brand is used for luxury automobiles, buses, coaches, and trucks. With its headquarter in Stuttgart, Baden-Württemberg, Germany. The name first appeared in 1926 under Daimler-Benz but traces its origins to Daimler's 1901 Mercedes and to Karl Benz's 1886 Benz Patent Motorwagen, widely regarded as the first automobile. (http://en.wikipedia.org)
Mercedes-Benz firmly staked out its territory atop the premium automobile category with its new tagline, "The Best or Nothing," successfully tying its long heritage of excellence in engineering, performance, styling, and safety to its 125th birthday. Mercedes outranks all other automotive brands in terms of customer loyalty and satisfaction. With its new model rollout, Mercedes has responded to a market that is quickly evolving in favor of green technologies. Half of the product line is available with its Blue Efficiency package, and it's Daimler "Car2Go" car-sharing mobility concept recently launched. Mercedes-Benz also continues to partner with Tesla on lithium-ion battery packs, and it received a 2010 German Sustainability Award for its Atego Blue Tec Hybrid truck. (http://interbrand.com).
Mercedes-Benz is a brand that is well recognized around the world and it was rated among the top ten most recognizable brands in the world by "Business Week Magazine"
Mercedes-Benz was purely into domestic production and exporting out for sales until the early 1990s when it started international production and now for the last decade it has successfully established it self in a lot of international production due to the increase in demand and in the attempt to reduce cost and that has improved the sales of Mercedes-Benz with 1,279,100 units of Mercedes-Benz passenger cars up to 9% worldwide with China increasing by +35%, Brazil +41%, USA +14%, Russia +47%, Japan +4%, South, Korea +27%, India +28%, Germany -1%, Taiwan +34 %, Western Europe(without G.) -1%, Canada +3% in their major markets.
For any successful marketing a company has to have a good mix of its marketing strategy known as the 4P's which includes
The right Product
Selling it at the right Price
Targeting the right Place
Making the best and effective Promotion
For all the marketing mix listed above to work well you have to meet up with the following conditions
You have to make all the right features available on your product.
Price must be worth the good they are paying for
Availability of the product when and where it's needed it's important to make it easy to reach at a low cost.
Awareness is a key factor of marketing, letting the public know about your product and its feature is very important, That way they might be convinced into giving the product a chance.
When you hear the word "Product" what comes to mind are the packages that makes it a product like the physical, service and symbol of that particular thing you want. With these we can say a product strategy includes the design, trademarks, guarantees, warrantees, product image and brand name and all this helps prove superiority over competitor rivals, Mercedes-Benz is known for its innovation, advanced technology and constant research to keep its product as number one for what its known for, which are its Luxury, Safety and powerful engine, Already known for its class Mercedes has introduced "Blue Efficiency" to cut down the emissions of CO2 and to keep up with its rival company that has a low consumption of fuel or diesel at the same time giving its customers an efficient Mobility.
Mercedes has a high resale value and it's the first automobile manufacturer to introduce the Automatic Breaking System (ABS), Airbag and pre-tensioning devices on its vehicles. All these are what make its product brand unique from the rest. Mercedes-Benz are known for its durability to last very long and still drive very well, Which is a good attribute in the auto world.
This is the amount a customer is willing to pay for a product because it's worth it. Every customer wants to make sure whatever product they are getting is worth what they are paying for it. That's why Mercedes has taken its time to make its product of the finest quality like the use of Alloy steel and Aluminum, which is why Mercedes-Benz is seen as a prestige or class for the rich in the society, this explains why Mercedes have targeted the rich in its business strategy. When pricing a good its good not to over value it to the customer and not undervalue it to avoid loss to the company, That's why a good marketing strategy is needed to keep the balance. Mercedes makes sure its products are worth the value and prices by meeting up with the needs of its customers. Its an expensive product and all its parts are expensive as well which makes it affordable by the rich, which is why its simply known as Class.
The availability of a product is good for customers, not just being available online customers need to feel, touch and even test the product they want to buy before paying for it. Mercedes has provided show rooms for its products in almost all the developing countries, Importation of vehicles use to cost a lot on Mercedes that's why they have decided to make its products available in countries by now manufacturing them in different countries, like what is happening in India right now, this will help reduce cost and taxes. Mercedes has concentrated on its major markets and doing everything to meet up with the demands there and working on getting the middle class and middle aged of the society by providing cars that better suit them, Talking about style and luxury mixed together, Providing all the features a young mind will be thrilled about while still maintenaining its standard,
Is your ability to communicate and convince the customers by giving them reasons to buy your product, Mercedes does not need much here has its name already speaks volumes and is well recognize over the world, Already using the slogan "The Best or nothing" in its adverts gives all the impression you want as a customer, Knowing that the product you buying is the best gives you that extra drive to go for it. This explains why companies spend so much on adverts. Good warranty policy like being able to extend your warranty after the original one expires.
Sponsorship like the deals with Formula 1 race, Polo matches, creating apps for new technology like iPhone and Samsung, Fashion shows and other promotional activities.
Mercedes has made evolution strategy one of its strongest point, These explains why in the past decades Mercedes has expanded its range of vehicles in sizes and shapes with the introduction of the M-Class, A-class and most recently the B-Class and the acceptance of this strategy by its customers has been seen all over the world by the number of sales already made in the market.
Mercedes-Benz has been around for over a 100years and it still maintains its niche in all the aspects its been known for right from the start which stands for Luxury, Safety, Comfort and Class in the society like no other brand, Its still the number one choice for the old, middle aged and young that reflects in the sales and constant demand for it in developing countries. Using the marketing mix above we can conclude that Mercedes has taken the right approach in its International marketing strategy mix with the constant increase in sales and a new record sales last year already been surpassed by the first quarter sales this year.
Its Introduction of newer models has been really encouraging with good turn over, Its diversification in buses, trucks and coaches has increased its customer base like in china a lot of the chauffeurs there are Mercedes Benz along with the buses which serve as commercial cars in the developed countries and these products are usually bought in bulk cause they are meant for commercial transportation means which is the target market. Already known for its durability and now adding the blue efficiency to its new cars it will be hard for people to choose other brand ahead of Mercedes. All this factors will sure help increase its presence and demand in the automobile industry.
Its pricing is really high and I think that strategy has paid off for Mercedes as it helps keep the cliché its known for, generally in life the rich loves being unique and outstanding among everyone else by their appearance and having a Mercedes makes that easy. That's the same reason people go to expensive bars to get a class of champagne for a 100usd when they can get that same glass for 10usd somewhere else but they opt for the latter cause of their status and comfort to make people know they are that rich and comfortable, So I will say that's a good strategy in the world today, everyone doing well today either has a Mercedes or is saving to get one just so they can have a better reception when they arrive for an occasion or a business meeting.
Another aspect of its strategy that Mercedes has worked on is its local production idea, for the past decade Mercedes has moved into producing its products in countries where they have the biggest customer base, this is a very good idea to cut cost of transportation from Germany to other countries and to help reduce taxes and other cost imposed on imported cars, now with local production they will be avoiding all the policy placed on imported cars and will be able to meet up with the demands of the people, Having showrooms makes it easy for people to come and test drive what they want to buy before paying for it, and it attracts more people to your product as they have this internal feeling that they are close to the company and it won't be difficult to fix a problem with the car should there be the need for it.
Internationalization Process Theory
Porters Diamond Internalization process best describes the theory Mercedes-Benz has undertaken, Porters diamond process characterized the reasons why some industries in some countries are more competitive on global scales than their rivals. It argues that some countries provide some specific home advantages which will prove an edge over its rivals on global scale.
The four determinants of these porters' models are
Related and supporting Industries
Firm Strategy, Structure and Rivalry
This factors are normally not noticed at the initial process but with time its that factor that gives the competitive edge to a nation. This is because it's the reputation built by companies in a country that grows to be an advantage as time goes on. This includes factors like the workforce which can heighten a company's tolerance on defects and focus on automation other factor conditions include
Availability of raw materials
Highly skilled workforce
This is what has given the niche to Germany when it comes to automobile, and got it the nick name "German Engineering" and Mercedes has gained from this recognition as well as contributed to making the country known for it, Known for its skilled work force, German cars are now synonymous with class, Prestige, Safety and luxury because of the local competition amongst the local companies to be the best in that department which has now given the company the global competitive edge.
A demanding market calls for improvement to meet up with customer needs and taste through innovation and quality this will increase the competition among local exporting companies on a global scale. This home pressure makes them strive for more improvement.
The demand for Mercedes-Benz and constant request from customers for improvement has increased the innovative ideas of Mercedes, Leading to the introduction of different shapes of cars and expanding its customer target, By now introducing cars that suit not just the elderly people but also the young and middle class of the society and not shifting from its class and all the things its known for, This constant demand has lead to the introduction of B-class, A-class and the ML-class which is its strongest selling point now.
Mercedes looks at the market where its most needed and concentrate on doing everything to make the supplies meet with the demand, With its biggest market now in India and China Mercedes has moved into local production just so they can meet with the demand and save cost, Introducing coaches and mini cars into china all in other to satisfy the demand for the use of Mercedes. This strategy has worked very well for Mercedes which is why its profits increases with every year that pass with 2011 being its highest profit of all time and already surpassing that record with the quarter of the year sales of 2012. This proves that the demand for Mercedes and its strategic plans to meet with it has been working very well.
Related Supporting industries
When all local companies are competitive strong and creative, they tend to learn from their respective ideas, This is why some countries are known to be the best in a particular product than the other countries, because the share knowledge and experience revolves round them to give them that national symbol for that particular goods.
Mercedes, Volkswagen, BMW and Porsche are all synonymous with good engineering work, Innovation, technology and expensive to own because of its fine and quality finishing. Their competitive battle makes them strive for more and always trying to go one better than the other, so whatever technology that is introduced by one the others try to give a better technology.
Competition can be affected by the structure of the management system of firms in the country, German industries are known for their niche in Engineering which has resulted to their advantage in the world engineering innovative competition. Which is why porter said the key factors of production are created and not inherited, Specialized factors of production are skilled labor, infrastructure and capital, Non key factors such as natural materials, unskilled labor is obtainable by any company and for that reason can't be seen as a competitive advantage but the specialized factors like heavy sustained investment cannot be duplicated easily, That's why they are the competitive advantage since other firms can not duplicate them easy, It can be called valuable.
Mercedes quality and highly skilled labor force is a known factor which is why people accept the price tagged with the cars because its what the pay, Mercedes invest so much in their automobiles and having already invested that fact to give nothing but the best its customers have given them the support by purchasing the cars, Unlike other automobile brands that comes at cheaper prices because of the quality of its finish with companies like that they cannot switch into making expensive cars because the customers already have a fixed rating on the car manufacturing cost. This gives a good competitive advantage to Mercedes because cliché like this cannot be over turned easily and that is a reputation it has worked on from the very start and that's what keeps it there as the number one automobile today in our society.
Effect of Country of Origin on Mercedes-Benz
The effect of country of origin on a product or brand can either be positive or negative in the mind of the customers and how the products are rated generally. Germany one of the greatest country in the world and a world power in terms of economy and politically, A member of the G8. Its economy is among the 5 largest in the world, Germany is the world number one exporter of goods and third exporter of services, not withstanding that it only represents 1.5% of the world population. Fourth largest producer of automobiles. (GERMANY AND GLOBALIZATION)
Germany is generally known for its engineering, which is niche. "Made in Germany" is a worldwide symbol for reliability, quality and innovative engineering. The effect and assumption of consumers on products based on their country of origin has been an increasing stereotyping and has called more concentration from the managers on how it affects their sales and now manufacturers are not just interested in where they can find cheap labor anymore but are now worried on the label of where it's made from that it comes with.
In this case Germans are generally known for luxury cars and big engines, with the 4 major automobile company in Germany (Mercedes-Benz, Porsche, BMW, Volkswagen) known for their durability, safety, innovation and luxury this has given them the nick name "German Engineering", Their similarity in engine power and technology feature makes them unique from other cars. This is a positive image that has given them a vital edge over their rivals for their quality finish. Germany is the first country to build a modern car with internal-combustion engine (SECRET HISTORY) also known for its innovation and discoveries made by Germans, The stable political state there has also been good on its automobile industry.
The product image can be very important when customers are looking to acquire a product, that's where Mercedes has done well, its brand is already a selling brand, and the image gives the impression of class, quality, safety and luxury so this image alone could make it stand out from its Country of origin. Germany is a tourist country which attracts a lot of foreigners and getting there they get to have a firsthand access to what the country is like and its achievement in engineering, When people want to buy cars they tend to look out for different things, When you think of economy cars and cars that are cheap to maintain you go for the Japanese technology because that's the image the country has labeled itself with, But when you going to the market with the hope to get a car for its luxury, engine ability, safety, Class, technology, performance, well recognized and respected the first thing that comes to mind is the German car. That is the kind of image its tag with now and it's a positive advantage for Mercedes-Benz as its cars are made to target the top class and middle class of the society. German cars are no working on making their cars more efficiency, which explains why Mercedes-Benz has introduced its blue efficiency to help reduce its consumption rate at the same time increasing the engine power.
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