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This article analyses the strategic branding decision and positioning of Mercedes-Benz.
A well positioned brand for any fine engineered product is likely to receive positive sales response while the bad ones just the opposite. Brand Management Concept by (Keller K. , 2008), highlights that
“Good brand positioning helps to guide marketing strategy by clarifying what a brand a all about, how it is unique and how it is similar to competitive brands, and why consumers should purchase and use it” (p.98)
The automotive industry is highly competitive, thus precise branding decision and positioning would be required for Mercedes-Benz to out-manoeuvre her contender.
Mercedes-Benz, one of Daimler AG’s automotive division was found by Gottlieb Daimler and Carl Benz in Germany. Mercedes-Benz invented the first high-speed engine in 1884 and by 1890s, Mercedes-Benz had her first automobile mass production. (Mercedes-Benz, 2018)
The three pointed star trademark symbolises Mercedes-Benz’s engine usage over land, sea and air (Daimler, 2018). Registered in 1909, it’s adorned at the front and back of all Mercedes-Benz vehicles. This trademark is used presently and is accompanied by the slogan “The Best or Nothing” (Mercedes-Benz, 2018).
Mercedes-Benz’s positioning statement “The Best or Nothing” emphasise perfection in engineering, safety and luxury at the highest level. This philosophy projects elitism and intrigues consumers who share the same ideology.
Brand positioning begins with market segmentation. There’s no absolute answer to address market segmentation. Different variables would be implemented, in solitary or blended, marketer will have to navigate for the best solution to comprehend the market. (Kotler & Armstrong, 2008)
Mercedes-Benz demonstrated the above, utilising and mixing different variables to fit the market. And the 4 Cs of Mercedes-Benz, clarity, consistency, credibility and competitiveness laid strong foundation to her branding success.
With reference to “3.1 Geographic Segmentation” on Chinese market, Mercedes-Benz exceeded 600 000 unit sales for year 2017 (gbtimes, 2018) and Daimler’s Financial Report ranked China first place for markets sales (Daimler, 2018).
Geographical segmentation is established by utilising geographical variables such as local population and urbanised location (Elliott, Rundle-Thiele, & Waller, 2012). BRIC Market (Brazil, Russia, India and China) was discussed in the 2012 Mercedes-Benz’s Sales & Marketing Proposal with strong emphasis on China.
Mercedes-Benz is expecting China to became the most important market due to the sheer population, impressive economical growth and urbanisation. (Daimler, 2012)
Variables such as age, gender, occupation, income, marital status and family size are crucial input for demographical segmentation (Elliott, Rundle-Thiele, & Waller, 2012).
The advertisement on Mercedes-Benz B-Class is labelled as “Safest Car Around For Young Families” (Mercedes-Benz, 2012). Campaign “She’s Mercedes” in 2017 targets at female drivers (NOWNESS, 2017) & (Mercedes-Benz, 2018). And recent launching of the new Mercedes-Benz E-Class foresees the requirement of business professional and is marketed as “The Most Intelligent Saloon in the Business Class” (Mercedes-Benz, 2018).
Lastly demographic variables on income. It’s useless to make offerings when no one can afford. The cheapest Mercedes-Benz costs around $138 000 while average annual income of Singaporean was $55 016 (Ministry of Manpower Singapore, 2017).
“The lifestyle” was the chosen theme for Mercedes-Benz. This decision matches the theory of establishing differentiation in lifestyle and/or psychological traits (Elliott, Rundle-Thiele, & Waller, 2012). Advertisement and campaigns set focus on mature professionals from upper middle or higher classes with certain desirable personal lifestyle.
(Mercedes-Benz, 2018) champion her campaigns as,
“Your Mercedes-Benz isn’t just a vehicle, it’s part of your life, and an expression of your style.”
This segmentation is established on the buying behaviour of specific item which variables includes; benefit expectations, loyalty, pricing…etc (Elliott, Rundle-Thiele, & Waller, 2012).
Purchasers would be expecting a long product lifespan from this German made engineering marvel. For some, buying a Mercedes-Benz is always her fashionable appearances or the smooth handling and engine performance. Above all, the price on a Mercedes-Benz indicates ownership only to the prestige.
Mercedes-Benz has also created her very own “Mercedes-Benz Brand Club” which provides benefits such as loyalty rewards or purchase discounts to members. (Mercedes-Benz, 2018).
The invention and patented “Lateral Protection System” (Mercedes-Benz, 2018) and “V8 M176” engine (Mercedes-Benz, 2018) are examples of engineering/design innovation focused differentiation strategy (Farhana & Bimenyimana, 2015). With innovation, price differentiation and symbolic promotional mix, Mercedes-Benz cast unique selling points into the minds of targeted consumers.
Mercedes-Benz offers a wide variety of car type. These offerings allows consumer to have more options, hence differentiate herself from other manufacturers with limited variations.
Sales potential, competitive situation and cost structure is to be evaluated before the development of the market mix (Elliott, Rundle-Thiele, & Waller, 2012). Reference to 3.1, Chinese GDP exceeded $8 Trillion in 2012 and this growth encouraged 13.4 million unit of passenger vehicles being purchased within that year.
With massive urbanisation project driven by the Chinese government, strong purchasing power and low car density, Mercedes-Benz makes plan for her Dealer Network Expansions over major metropolitan area in China. (Daimler, 2013)
As for competitors, Mercedes-Benz had plans to put up a tough contest. (Forbes, 2014)
Lastly, Mercedes had her manufacturing plant commissioned in china on the 18th Nov 2013 to gain cost effectiveness. (Daimler, 2013)
(Ghodeswar, 2008) states that;
“A brand essentially is intended to identify the goods or service of either a group of sellers or a seller through differentiating its goods/services from those of competitors.” (p. 4-12)
Business article originally published by Booz & Company, Fall 2003 Issue 32, illustrated the footing of Mercedes-Benz in the following perceptual mapping (Booz & Company, 2003).
4 Brand Equity
Illustration on Mercedes-Benz’s brand equity using (Keller, Aperia, & Georgson, 2012) Brand Equity Pyramid Model as follows:
(Johansson & Carlson, 2014) illustrates:
Following will analyze how Mercedes-Benz stays in tune with the above illustration.
Much of Mercedes-Benz’s identity had already been mentioned in Section 2. However, this paragraph would like to emphasise that Mercedes-Benz had been identified as “the best car of the world” by winning 3 “World Car Award” in 2015 (Mercedes-Benz, 2015).
(Keller K. , 2008) had highlighted, “Sources of Brand Equity are Brand Awareness & Image.” (p. 50-51). Mercedes-Benz leverage on her easy remembered trademark, superior engineering, unequal product quality and reliability to support her branding identity.
With the aid of marketing campaign and social media, brand awareness elevated. Study from ADWEEK found Mercedes-Benz’s advertisement outperforms all her competitors (ADWEEK, 2014).
Moreover, Mercedes-Benz’s involvement in Formula 1 competition such as financing the Formula One race team “Mercedes-AMG PETRONAS Motorsport” (Mercedes AMG F1, 2018) further boost her brand awareness. Besides motor-sports, Mercedes-Benz also sponsors sporting activities such as equitation, golf, football, tennis…etc (Daimler, 2018).
Year 2017, Mercedes-Benz launched project, “Grow Up.” This campaign focused on young professional millennial who has aspiration. This campaign aims to create awareness to younger consumer. (ADWEEK, 2017)
With all these current strategic measures in place, brand salience is considerably high for Mercedes-Benz.
The slogan “The Best or Nothing” and the vision of “Dedicated to Customers, Driven by Excellence” (Mercedes-Benz, 2018) represent total perfection of Mercedes-Benz’s offerings in every aspects.
This is achieved by taking advantage of her rich automotive manufacturing history, heritage, product performance, after-sales services, advertisement and campaign as well as professional automobile critics and magazine reviews.
For example, Car Magazine UK had reviewed Mercedes-Benz S Class as a high performance car with ultimate luxury (Carmagazine UK, 2018) and AutoCar Magazine ranked Mercedes-Benz S Class as number one best luxury car in 2018 (Autocar UK, 2018).
Mercedes-Benz had also crafted herself a name for innovation on vehicle safety with “Lateral Protection System” (Mercedes-Benz, 2018).
Over the years, Mercedes-Benz has also enhances her image by involving in communities projects such as “Mercedes-Benz and Laureus”. This global sport related project helps youth on employment and lessen criminal conducts. (Mercedes-Benz, 2018). Mercedes-Benz also takes effort in worldwide environmental protection on resources conservation and carbon reduction. (Daimler, 2016).
Although Mercedes-Benz suffers from setbacks such as vehicle recall, overall brand value still remain positive (Daimler, 2017), (interbrand, 2017) & (Statista, 2018).
Mercedes-Benz has portrays herself as being competence and sophisticated. This is linked to her reliable, high performance engine and fashionable car design. Mercedes-Benz had published her positive customers’ reviews (Mercedes-Benz, 2018) and in accordance to www.cars.com 2017, customers rated Mercedes-Benz 4.9 stars out of 5 (cars.com, 2017).
Consumers have developed behavioural loyalty and attitudinal attachment by joining Mercedes-Benz Enthusiast Club (SG Merc, 2018) or “Mercedes-Benz Owners Singapore” on social media such as facebook (Mercedes-Benz Owners Singapore, 2018)…etc
This provides platform for Mercedes-Benz’s owner a sense of community belonging and also opportunity to engage in any of Mercedes-Benz related activities.
Mercedes-Benz profiles all her makings as a luxury with vehicle category ranging from Saloons, Tourers, Coupé, Cabriolets, Roadsters to SUV. (Mercedes-Benz, 2018)
Product warranty, after sales services, safety factors, brand name and company image are also part of a product, not limited to its physical form. (McDaniel, Lamb, & Hair, 2009)
Indeed, the most crucial branding promise by Mercedes-Benz “The Best or Nothing” is reinforced by the customer support centre which operating 24 hours worldwide. Should any technical fault to occur and couldn’t be resolved on the spot, vehicle shall to be pulled into the nearest Mercedes-Benz Repair-Shop immediately. On top of that, temporary replacement vehicle will also be provided till repair completion. (Mercedes-Benz, 2018)
Apart from premium after-sales services, car safety innovation has also been injected. Deployment of protective airbags to minimize or eliminate casualty rate had already been adopted by many car makers.
However, Mercedes-Benz escalate this engineering concept to another level with the invention of “Lateral Protection System” and seat belt air-bag integration. These systems shield and protect passengers more effectively from crash impact. (Mercedes-Benz, 2018)
The price tag on a new Mercedes-Benz ranges from $138 000 to $798 000. Low tier Mercedes-Benz would costs approximately 33% higher than any economical car. No drastic prices variation reflected in 2015 as compared to 2017. (Cycle & Carriage, 2015) & (Cycle & Carriage, 2017)
The location of sales, distribution and technical support is a contributing factor on how, where and when customer/s could purchase the product. (McDaniel, Lamb, & Hair, 2009)
Mercedes-Benz aligned this theory by setting up manufacturing site, sales and service centre worldwide. Currently Mercedes-Benz has manufacturing plants and sales offices in
Europe, Asia, North & South America and Africa. (Daimler, 2018)
Cycle & Carriage Pte Ltd is the approved sales distribution and repair agent in Singapore.
It’s luxurious showroom sits near city-town. (Cycle & Carriage, 2018)
Sales promotion, advertisement, public relations, sponsorship and events all fall under the spectrum of promotion. Purpose is to notify, inculcate, remind and even convince the targeted market audience about the benefit of the product. (McDaniel, Lamb, & Hair, 2009)
Over the years, advertisement are published or broadcasted through the media. These promotion convey the vehicles’ specification, handling and driving experience to the targeted audience. Most importantly, delivering the message the unequal luxury driving one.
Daimler AG also provides information for journalist in her “Press & Media Service” webpage. This acts as a platform for the company’s public relationship. (Daimler, 2018)
For Sales Promotion, Mercedes-Benz Singapore attract potential client/s on appealing price adjustment, COE bidding and trade-in bonuses. (Mercedes-Benz, 2018)
Lastly, the sponsorship in movies and TV shows creates window/s for Mercedes-Benz to showcase her latest product.
The positioning of Mercedes-Benz has been well executed, not just on a par with academicals branding hypothesis but also fits the dynamics of the ever changing market.
With constant branding exposure and continuation of fulfilling what her marketing campaign and advertisement promise, current branding status should be maintainable.
However, marketers for Mercedes-Benz might be hitting the bottle-neck when it comes to Brexit (Express UK, 2017), US Car Tariffs (Financial Times, 2018) and Chinese Retaliation Tariffs (CNCB NEWS, 2018) issues.
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