Marketing Essentials: A Comparative Analysis of Mercedes Benz and BMW and a Marketing Plan for Mercedes Benz

This report delves into the marketing essentials by comparing the marketing mix strategies of two prominent luxury automotive brands, Mercedes Benz and BMW. It analyzes their product offerings, pricing strategies, distribution channels, promotional campaigns, and customer service approaches. The report further develops a comprehensive marketing plan for Mercedes Benz, encompassing SWOT and PESTEL analyses, target market identification, and a detailed budget breakdown. The plan outlines strategies for leveraging Mercedes Benz's strengths, addressing weaknesses, and capitalizing on market opportunities while mitigating potential threats. The report concludes by emphasizing the importance of a well-defined marketing plan in achieving organizational goals and maintaining a competitive edge in the dynamic automotive industry.

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Table of Contents
INTRODUCTION................................................................................................................................4
PART A..............................................................................................................................................5
LO2...................................................................................................................................................5
P3 COMPARISON OF MARKETING MIX OF MERCEDES BENZ AND BMW....................................5
PART B..............................................................................................................................................9
LO3...................................................................................................................................................9
P4 PRODUCE AND EVALUATE A BASIC MARKETING PLAN FOR MERCEDES BENZ..........................9
CONCLUSION.................................................................................................................................21
REFERENCES...................................................................................................................................22
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INTRODUCTION
The marketing department of a multinational organization in the market carries out the
appropriate procedure of market research so as to identify the needs and demands of the
customers in the market. After analyzing the existing trends and conditions of the market, the
members from the marketing team of an organization develops marketing plans and strategies
to successfully achieve all the aims and goals of the company. The role of marketing is
imperative for the development of an organization and thus, this following report effectively
discuss about that imperative role of marketing for the development of an organization. The
multinational organization that has been chosen for this assignment on marketing essentials is
“Mercedes Benz”.
The following assignment is divided into two parts; that is Part A and Part B. Part A depicts the
comparison of two organizations from the same industry; i.e. Mercedes Benz and BMW on the
basis of 7P’s of marketing mix, whereas Part B of this assignment portrays the basic marketing
plan of Mercedes Benz. Both the organizations, i.e. BMW and Mercedes Benz operate in the
field of automobile industry and serve their respective group of targeted customers with the
high quality and luxurious vehicles. Being from the same industry, both of these organizations
give tough competition to each other in the market, and thus their comparison on the basis of
marketing mix has been discussed in the further section of this report.
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PART A
LO2
P3 COMPARISON OF MARKETING MIX OF MERCEDES BENZ AND BMW
The marketing mix procedure of marketing planning is carried out by the marketing department
of an organization in the market to analyze the existing needs and demands of the segmented
customers (Huang, et al. 2014). The marketing team analyzes these needs and demands of the
consumers on the basis of an assortment of different factors that could lead them to get an
exact view of the outlines that are needed to be made by the organization, so as to successfully
draft the marketing plan. Every organization develops new products or services in order to gain
competitive advantages in the local as well as in the international market. Consequently, in
order to predict the success rate of launching those products or services in the market, the
process of marketing mix has to be carried out effectively.
Figure: 1. Marketing Mix
[Source: https://www.managementstudyguide.com/marketing-mix.htm]
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In this following section of the assignment the comparison of Mercedes Benz and BMW on the
basis of 7P’s of marketing mix has been carried out effectively.The elements of marketing mix
on the basis of which the comparison has been carried out include; price, product, place,
promotion, physical evidence, people, and process. The comparison of Mercedes Benz and
BMW on the basis of these elements is as follows;
PRODUCT
Out of the seven different elements of the marketing mix, the element of product is one of the
most essential ones. The organizations like Mercedes Benz and BMW concentrates highly on
the development of new products as per the requirement of their respective targeted
customers in the market. Mercedes Benz is well known brand in the world known for the
development of its premium cars, and thus the organization’s products are one of its strongest
points. As a part of the marketing mix product strategy, Mercedes Benz produces and sells a
wide range of passenger vehicles, light as well as heavy commercial equipment vehicles in the
market. Out of all these product segments, the major product portfolio that is well known in
the international market includes; SUV’s, Sedans, Sports cars, etc. Mercedes Benz also has
different vehicles such as; GLE, GLS, GLA, and GLC in the product portfolio of its SUV sector
along with a wide range of roadsters and cabriolets in the heavy vehicle segments (Kotler,
2015).
BMW on the other hand also offers a wide range of premium cars and bikes to the consumers
in the international market. The products of BMW are sold under the three brands known as;
BMW, MINI, and Rolls Royce. There are about 13 research and development centers of BMW
located in around five countries of the world. The cars and bikes that are produced by the BMW
are highly efficient and reliable. Also these products are incorporated with the advanced set of
capabilities and features. The products of BMW are also integrated with the latest technologies
and digitalization.
PRICE
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Another important element of the marketing mix on the basis of which the comparison of
Mercedes Benz and BMW is done is Price. Here the price depicts the cost of products or
services that are offered by the organization to the consumers in the market. Mercedes Benz is
well known brand in the world that is recognized for its premium luxury cars, and thus the
targeted segment of this organization is those customers who prefer quality above the price of
the products. Thus, the prices of these cars are always at the higher end. Due to its premium
features and competition, the average price range of the cars of Mercedes Benz lies between
$40,000 and $100000 in the overseas market.
BMW also offers a variety of luxury vehicles in the market that consists of premium features,
and thus the price range of the products offered by the BMW is also on the higher end. Along
with the brand itself, the associated brands of the BMW such as; Rolls Royce and Mini Cooper
also carry out the same price range of their respective products (Kotabe, et al. 2014). Along
with the price range of BMW products, the pricing of vehicles’ spares as well as the servicing
costs of the automobiles are also comparatively higher than the competitors.
PLACE
Being a multinational organization, Mercedes Benz operates with its dealerships and service
stations in various countries of the world. On the basis of sales and profit generation, the major
international markets of the Mercedes Benz include; Asia pacific, North America, China,
Germany, Europe, etc.
On the other hand, BMW also operates in a wide range of nations all across the world.The
dealership as well as manufacturing facilities of theBMW has been spread inmore than 10
countries of the world. The first and major headquarter of the organization is set up in Bavaria,
Munich.
PROMOTION
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It is one of the most essential elements of the marketing mix strategy.The marketing manager
along with the other team members of the Mercedes Benz’s marketing department develops
different strategies for the promotion of organization’s products or services in the market.For
the promotion of its products, Mercedes Benz utilizes different mediums such as; social media,
online websites, TV, printed media, etc.
BMW also exploits an assortment of different media channels for the promotion of its products
and services in the international market. These different promotional media tools include;
printed media, online sources, TV, billboards, etc. The marketing committee of the BMW also
organizes an event on 1st April of every year as a part of the promotional strategy.
PEOPLE
People here refer to the valuable human resources of the organization that serves the company
to achieve all the aims and objectives of the business. Mercedes Benz provides an assortment
of services to satisfy the needs and requirements of the organization’s key peoples. As a result,
it enhances the level of motivation within the people associated with the company, and
consequently the organization can achieve all of its organizational goals effectively.
There are approximately around 100000 employees working at the different branches of the
BMW in all across the globe (Shalender, et al. 2015). According to the several well-known
market researchers, it is very important for an organization like BMW to have right people
within the workplace so as to drive the business forward successfully.
PROCESS
Process is one of the significant elements of the service marketing mix. It refers to the method
that has been used by the various departments of an organization to carry out their respective
operations successfully and effectively. The production department of Mercedes Benz utilizes
the process of lean production within its workplace, whereas the organization such as BMW
exploits the just-in-time procedure within its workplace. The different processes that are used
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by the organizations like Mercedes Benz and BMW can help them to successfully enhance the
quality of their products and services, and as a result could attract more and more customers
towards their association.
PHYSICAL EVIDENCE
In today’s world, the importance of physical evidence of the products or services of an
organization is very high. All the cars that are developed by the Mercedes Benz are of highly
attractive looks and are available in a variety of different color options (Babin, et al. 2015).
The cars and bikes developed by the BMW attract different segments of customers from the
market on the basis of attractiveness of the vehicles that are produced and served by the
company.
Thus, the above mentioned was the comparison of Mercedes Benz and BMW on the basis of
7P’s of marketing mix.
PART B
LO3
P4 PRODUCE AND EVALUATE A BASIC MARKETING PLAN FOR MERCEDES
BENZ
EXECUTIVE SUMMARY
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Mercedes Benz is a German auto car maker and a leader in luxury cars. Here, an analysis is done
on vision and objective of the company and the political, legal, environmental, social and
technological factors which make an impact on the global operations and strategic planning of
the company (Vigneron and Johnson, 2017). An overview of the marketing strategies of the
company is presented which includes segmenting, targeting and positioning of the company,
budget involved in the marketing activities.
COMPANY OVERVIEW
Mercedes Benz is a Luxury car maker based in Germany. The company is operating globally in
30 countries of Europe, Asia, Africa, North American and South America. Mercedes Benz is
known for its quality and innovation and has set many benchmarks in security and technology
in the automotive industry. Mercedes Benz is a popular brand name all over the world and is
included in the list of most recognizable brands in the world. The company has recently
launched its AMG models which have better handling, stability and design.
Figure 2: Mercedes Benz logo
[Source:
https://upload.wikimedia.org/wikipedia/commons/b/b9/Mercedes_Benz_Logo_11.jpg]
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CURRENT MARKETING SITUATION ANALYSIS
The current marketing situation analysis can be done with the help of tools like SWOT and
PESTEL analysis these tools helps in analysing the external and internal environment of the
company. By the help of these tools, the company can analyse the current market position of
the company and the market worth of the rival companies (Chen, et al. 2013). Based on these
observations the management can design a better marketing plan to achieve the long-term
goals of the company.
SWOT ANALYSIS
The SWOT analysis is an effective tool to analyse the internal strength and weakness of an
organisation, including the opportunities for the company in the market. The tool also
highlights the threats for the company at present and in near future (Ayub, et al. 2013). With
the help of these inputs, the company can design an effective strategic and marketing plan. The
strength, Weakness, opportunities and threats for Mercedes Benz are discussed below:
STRENGTHS
 A strong brand awareness worldwide
 Strong focus on safety and precision in
the cars
 High spending on research and
development activities
WEAKNESSES
 Mercedes cars are not much fuel efficient.
 Mostly serving in the niche market and
not making any low-cost car models.
 Safety issues in some of its models which
have caused negative branding of the
company.
OPPORTUNITIES
 The tremendous growth in the
automobile sector in the emerging
economies of the world.
THREATS
 New luxury car models launched by
competitors such as Porsche, Genesis,
Audi and BMW.
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 Opportunities to expand operations in
Asian economies such as China and India
 New opportunities in the electric car
making sector.
 Low disposable income due to turbulence
in global economies
 Customer focus on sustainable practices
in manufacturing
PESTEL ANALYSIS
The PESTEL analysis is a tool which is used to understand the external factors which make an
impact on the strategic decision making of the company (Zalenger, et al. 2013). Mercedes Benz
is operating internationally and these factors play a deciding role in the profit-making capability
of the company.
Political Factors
The political issues for the automobile companies working globally are complex. There are
many trade barriers and tax rules for doing business in a foreign land. Many countries demand
to establish a manufacturing plant in their countries. European Union has started imposing VAT
on the vehicles which are imported from Germany. Many other such taxes are imposed after
the BREXIT which has increased the overall cost of the company. However, there are many
opportunities in the emerging markets of BRICS countries like China and India. These countries
welcome European companies to do business in their country as it increases the economic
activity in the country and also provides employment on a large scale.
Economic Factors
The recession in the US and many other European countries have increased the price of raw
materials like steel, rubber, iron, copper and computer chips which are widely used in car
manufacturing, increase in prices of these products increases the overall cost of manufacturing.
The penalties and fines imposed on the company for not following the legislation affect the
economy of the company. One such example was the fine imposed by US government for not
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following average fuel economy laws. Adherence to the environmental sustainability requires
many technological changes which also affects the overall economy of the company (Minefield,
2012).
Social Factors
Consumer preferences are changing with changing lifestyle. The people now prefer car models
which ensure safety and are produced in a sustainable way. To satisfy this demand the
companies are focusing more on the safety features of the cars. Technologies like airbags, fire
control and emergency braking systems are installed in the modern cars. The company has
initiated many CSR activities which include organising cultural and community events and the
events to nurture art and music. The company has started school programs to involve young
students in the cultural activities like dance and music.
Technological Factors
Apart from making a technological change regarding better performance, fuel efficiency and
safety arrangements the car makers have to make many technological changes in the
advertising and marketing activities. A survey concluded that around 70 percent of people visit
the website of the company before making a purchasing decision. Many blogs compare the
performances and prices of different car makers, these inputs play an important role in making
a buying decision. Therefore companies have increased the expenses in digital marketing of the
products. Mercedes Benz has done many changes in the design of its website and developed a
dedicated mobile app for the Smartphone users.
Environmental Factors
There has been an increased concern by the governments to decrease the carbon footprint and
adopt sustainable ways of production so that the manufacturing activities have minimum
impact on the environment. Installation of effluent treatment plants in the industry and using
energy efficient practices in the company premises are few such practices. The company has
launched new B-class models which have many energy saving functions such as automatic
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engine start-stop at traffic signals, due to these energy saving measures the carbon emission of
B 160 and B180 models have been reduced by 11%. The company has also introduced water-
based paints which consume 20% less paint.
Legal Factors
The company was fined with US$30.66 million in 2009 for not following the average fuel
economy regulations. These fines and penalties increase the overall expenses of the company
and create a negative branding of the company. The legislation regarding labour rights ensure
equality in the workplace and providing minimum stipulated salaries for the duties performed.
OBJECTIVES OF MERCEDES BENZ
 To establish Mercedes Benz as the top car manufacturing brand
 Strengthen the brand value by providing best solutions for the customers and retailers
 Increasing profits
 To retain the customer loyalty by innovative products and premium services.
 Increasing CSR activities
 Customer services which are designed according to the needs of the customers
 To create the best environment for skilled people by giving equal opportunities and
treating in an honest and friendly way
MARKETING STRATEGY AT MERCEDES BENZ
The marketing strategies are the long-term goals which need to be achieved by an organisation
in order to maintain a competitive advantage in the market (Khan, 2014). To make a strong
marketing strategy the 7 P’s of marketing mix needs to be analysed which are discussed below:
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Product
The company produces luxury cars, buses, trucks and its manufacturing centres are situated all
over the world. Mercedes Benz operates in different verticals including passenger vehicles, light
and heavy commercial vehicles, sport utility vehicles GLC class and GLE class.The company has a
strong presence in the luxury car segment consisting Sedans. The recent additions are in A-
class, B-class and c-class models. The S-class models are the luxury car models.
Price
Mercedes deals primarily in the luxury car segment and these cars have premium pricing. These
cars have superior feature and latest technological editions and are built to serve a niche
market. The company applies the differentiated pricing strategy in which higher pricing is done
for premium facilities such as bigger engine, better interiors and sports versions.
Place
Mercedes Benz cars are sold all over the world and it has its manufacturing centres in 30
countries. The main markets of the company are in Europe, Germany, China, India and US. The
company manages a strong dealership network in many countries and also provides online
facilities to choose from its wide range of its models. The company also manages a strong
system of logistics to transport cars from one country to another via, roads, ships or planes
(Gordon, 2012).
Promotion
Mercedes Benz is using various channels for promotion such Print media, TV, Internet, and
Billboard. The primary focus of advertising is on the technology and features of the cars. The
company also sponsors sports tournaments like International Amateur golf tournament, such
promotional activities increase the brand awareness of the company. The company also
promotes its products via social media platforms like Facebook, Twitter, and Instagram.
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People
Mercedes Benz has strong recruitment system for employing the best talent in the industry.
The company also runs training and educational programmes for the employees so that they
can learn new skills and improve their existing skills. The company also provides bonus and
rewards for the good performance of the employees which helps in retaining and motivating
the employees.
Process
Mercedes Benz tries to use the latest technology in the manufacturing process and has
developed systems to ensure the safety and security at the workplace. At the factory lines of
Mercedes Benz special attention is placed on the standardisation of the products and the
products are manufactured according to the international standards. The standardisation of the
parts is necessary because the company operates in various countries and standardisation helps
in maintain the same standards of production in various manufacturing centres.
Physical evidence
Ali the manufacturing units of Mercedes Benz are constructed according to the international
standards and ensure adequate space in the factory premises for the movement of goods and
people. The company also regulates the noise levels, air quality and temperature at the
workplace which helps in maintaining a healthy work environment for the employees.The
outlets of Mercedes Benz maintain a neat and clean ambience and customer service managers
are given special training to attend the customers in a friendly way.
SEGMENTATION, TARGETING AND POSITIONING (STP)
The STP process is an analytical tool used to decide the target market for the marketing
activities it helps in establishing a link between the market situation and the marketing goals of
the company.
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Figure 3: STP Process
[Source: http://prezentr.com/product/stp-marketing-powerpoint-template/]
Segmentation
The marketing team at Mercedes Benz does the segmentation of target customers by splitting a
market on the basis of region, country, ethnicity, demographics, gender and income (Riefler, et
al. 2012).As the company operates in diverse markets and the customer preference are
different for different kind of markets, the segmentation helps in deciding the right marketing
strategy based on the customer choices. Identifying the target market helps the company
understand the customer needs. For instance, the target market for Mercedes Benz luxury car
models can be the age group of 40-50 years.
Targeting
After segmentation, the management has to decide the target market based on the inputs from
the segmentation process. The targeting process helps the company divert all the marketing
efforts and resource in a particular area in order to gain maximum profits. Mercedes Benz
mainly produces luxury cars; therefore the target market for the company is the middle aged
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population with high income. The company has its focus on Young people from age 25 to 30
who are making a decent income and can afford comparatively low priced model of the
company like GLA- class.
Positioning
This is the last step in the STP marketing plan. Positioning is based on the perceived value of a
product by the customer. For proper positioning of a product, the marketing activities should
focus on highlighting the unique features of the company which puts the company apart from
the competitors.Mercedes-Benz can position itself as a classy company with high technology
and safety. The marketing plan should focus on highlighting these aspects of the company in
the promotional activities. This type of positioning can help the company get a competitive
advantage from the rival companies (Venter, et al. 2015).
TACTICS & ACTION
After deciding the target market, the next step is to decide the tactics and the action plan to be
followed for implementing the strategies. The tactics for increasing the market and staying one
step ahead of the competitors will include designing an effective marketing plan. This plan will
be based on the inputs from the marketing mix and STP process. The company must focus on
the strengths of the company which is quality, safety and brand recognition. These features in
the products must be highlighted in all the advertising campaigns so that the unique aspects of
the company products can be marketed in the various markets. The target market must also be
focused extensively because, in luxury car market, the perceived value of the customer plays a
very important role in making a buying decision.
BUDGET
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Drafting a budget plan can help in tracking the cash in hand, working capital requirements and
profit margins (Hope, et al. 2013). Proper budget planning will help in making proactive efforts
in deciding the budget for a particular activity and prioritizing the tasks which need immediate
capital requirements. The annual budget figures also help the company to analyse the current
performance of the company and the areas in which a stronger focus is required.
ACTIVITIES COST (£)
MARKET ANALYSIS £23000
PLAN DEVELOPMENT £28000
HRM £20000
TRAINING AND DEVELOPMENT £13000
TECHNICAL UPGRADATION COST £19000
DIGITAL MARKETING COST £13000
PLAN IMPLEMENTATION COST £22000
TOTAL COST £140000
CONTROL
After the implementation of the marketing plan the monitoring and analysing the result is very
important, this helps the company to respond effectively to the changes in the market
conditions. The control process includes the sales analysis, market share analysis, efficiency
ratio analysis and cost profitability analysis. These analyses give useful insights on the current
performance of the company and the market share grabbed by the company with respect to
the rival companies. The overall profit ratio figures of the company will help in taking strategic
decisions regarding increasing the sales.
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CONCLUSION
A marketing plan is a systematic process to identify the current market position of the company
and deciding the target market for the promotion of its products. The current report discussed
the Marketing plan of Mercedes Benz which is one of the best luxury car manufacturers in the
world. This marketing plan included the identification of internal strength and weakness of the
company with the help of SWOT analysis. The report also discussed the mission and objectives
of the company. Identifying the objectives of the company helps in taking better strategic
decisions according to the long-term goals of the company. The market plan also includes the
STP process which helps in analysing the offering by the company and the way in which the
unique aspects of these offerings will be communicated to a specific group of people called
target market.
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CONCLUSION
From this assignment on the marketing essentials it can be concluded that the roles and
responsibilities of the marketing department of an organization such as Mercedes Benz is highly
vital for the successful achievement of company’s aims and objectives. The different strategies
that are developed for attracting customers towards the organization must be effectively
developed by considering all the aspects of the market such as; internal analysis, situational
analysis, STP of the organization, market segmentation, external analysis, etc.
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