Marketing Strategy for Mercedes Benz

This report discusses the marketing strategy of Mercedes Benz, including PESTLE analysis, SWOT analysis, competitive advantages, and current market strategy.

MARKETING
STRATEGY

EXECUTIVE SUMMERY
This report is carried out for marketing strategy of Mercedes Benz. In which marketing
strategies holds various tool such as PESTLE, SWOT, STP, marketing mix etc. Each and every
organisation are continuously strengthening their business process, brand position and
management in order to help the company for achieving growth and success. This has develop a
necessity for constant need to innovate, strength update and recalibrate. Brand position creates a
particular place at marketplace for a specific brand. It help in reaching certain number of
consumers and provides benefits that meets the needs of various potential consumers or end user.
It is very important for the firm to focuses on marking mix while making marketing strategy.

Table of content
INTRODUCTION...........................................................................................................................4
PART 1............................................................................................................................................4
Situational analysis......................................................................................................................4
Evolution of threat of epidemic or Brexit of choose organisation..............................................6
Evaluate competitive advantages................................................................................................7
Assessment of current market strategy.......................................................................................8
PART 2............................................................................................................................................9
Determine market Segmentation, Targeting & Positioning........................................................9
Objective and goal of chosen organisation...............................................................................11
Marketing strategies based on application of marketing mix...................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Marketing strategy is a process of planning business objectives that organisations want to
achieve. For that it is necessary to select well specific actions to consolidate the image of product
and service or for enhancing the sales of firm at marketplace. Proper utilization of opportunity is
important to identify target market and to reach potential consumers for making them loyal
towards organisations so that positioning of firm get stronger at marketplace (Berman and
Thelen, 2018). The choose organisation in this report is Mercedes Benz, which is known for
producing luxury vehicle and commercial vehicle. This company was founded by Kari Benz in
year 1926. The operate their business across globally with over 173,0000 employees. They are
more focused towards development, production and sales of passenger cars, van and service.
This report will cover various topic such as PESTEL analysis, SWOT analysis for identifying
internal and external forces which affects business of company. Furthermore, it covers analysis
of competitive advantage as well as evolution of market strategy. At the end this assignment will
discuss STP and SMART in context of chosen firm. Along with it marketing plan of selected
firm is carried out on the basis of marketing mix.
PART 1
Situational analysis
Pestle Analysis:
It is a framework that is used by a company in order to evaluate the impact of external
factors on its operations as well as functions. To make an efficient utilization of available
resources and sustain at market place for a longer period of time, it is essential to undertake this
analysis. In the present report, Mercedes Benz is caring out this analysis to examine the influence
of external factors on its business activities. Various factors of Pestle analysis are outline below:
 Political Factors: it refers various factors such as political instability, tax rates, tariffs
imposed by the governments of different countries. Mercedes Benz is highly affected by
these forces as it is operating its business globally. It is affected by tariff, foreign trade
policies formulated by legislations of various nations. The government of UK imposed
higher taxes on the cars that will increase cost and eventually influence the profits of
company (Chen and et.al., 2018).

 Economic factors: Sales of Mercedes are depending upon the various economic forces
such as currency rates, market condition of UK. It is affected by the fluctuation in the
exchange rates of UK currency. Due to this prices of cars are increasing rapidly that is
minimizing profits of company. Apart from this, because of current recession
employment opportunities in UK market is reducing that is putting adverse impact on
purchasing power of consumers.
 Social Factors: it refers to culture, rituals, personality, attitude, behavior of potential
buyers. It has been analyzed that brand (Mercedes Benz) identify by consumers of UK as
a status symbol. They give preference to advance, new as well as modern technology
rather than price. Due to this kind of social environment it is easy for the company to
sales its cars in higher income group of country. But they are still not able to acquire the
other segments such as middle and lower income groups of society.
 Technological Factors: As Marketing Mangers of Mercedes Benz are efficient enough
to analyze the current market trend. As per prevailing trend in the market of UK,
organization is focusing to produce cars with higher, innovative, new and advance
technologies. They are working on producing driverless cars as per requirement of UK
market to get competitive advantage at global market place.
 Legal Factors: It includes various rules such as foreign trade, business laws and many
more formulated by the central, state government and local authorities. In relation of
selected company, they keep a check on numerous laws formed by UK government that
affect their business functions. They follow the rule of safety and environmental
protection in order to create a positive brand value.
 Environmental factors: These forces of Pestle analysis are important and put a
substantial impact on operations of an organization. Mercedes Benz focuses to provide
environmental friendly services and products. As per the environment of UK they have
adopted a practice of eco-technology to protect environment. They are continuously
engage in extensive research and development function in order to provide hybrid cars to
potential buyers for the wellbeing of society as well as nature (Ibrahim and Harrison,
2020).

Evolution of threat of epidemic or Brexit of choose organisation.
SWOT analysis is a strategic planning tool, used for determining Strength, Weakness,
Opportunity and Threat of a firm. In context of Mercedes Benz, strength and weakness are
internal factors whereas as opportunity and threat are external factors. SWOT analysis is a
recognized management frame work which enables brand to benchmark their business and
performance as compared to competitive advantage. The below table discuss the SWOT analysis
of Mercedes Benz:
Strength Weakness
 Mercedes is a well-established brand &
is part of Germany Big 3 as well as
Audi and BMW.
 Mercedes possess strong product
portfolio fluctuating from sedan to
SUV which is aiding them to compete
with other competitors at market place.
 They has always been known for their
innovative and creative products at
market place.
 Mercedes operates its business across 6
continents and in 26 countries for both
passenger car and buses which aid them
to maintain their operational cost low in
order to increase their profit.
 Servicing cost of Mercedes is higher
compare to other brand and due to this
it become weakness of this brand.
 Although Mercedes can expand
vigorously, however, it is found to have
increased as it keeps the distribution of
its vehicle much more exclusive, which
affects its supply and hence its brand
equity.
 Huge impact of Brexit scenario on
export volume passenger car from
Germany to UK.
 Need more investment for new
technology and R&D for fast growing
competitors in industry.
 Financial planning of company is not
strong and effectively as current asset
ratio and liquid assets ratio suggest that
company can use cash more effectively
than what is doing at present.
Opportunity Threat
 Low rate of inflation that brings more
stability at marketplace, permits credit
 Unemployment, recession and
macroeconomic are the economic

at lower rate of interest to customers of
Mercedes Benz.
 New taxation policy affects business of
competitors & that brings opportunity
for Mercedes Benz to increase
profitability (Jaworski, 2018).
 Due to increase demand of premium
vehicle like Audi, BMW that brings
opportunity to Mercedes for betting
high and targeting the developing
nation.
factors which will intimidate
automobile industry for a long period
of time.
 Due to fluctuation of fuel prices and
government regulation for use of
alternative fuel affects the inventories
of Mercedes Benz and that become
threat for this company.
 As behaviour of consumer is changing
for online channel could become threat
to existing physical infrastructure
driven supply chain model.
Evaluate competitive advantages
Competitive advantage provides benefits to company over competitors by offering
valuable product either in terms of lower price or by providing high benefits that justifies high
price. In which USP aids which refers to what makes business unique and valuable to target
market. The words USP holds unique selling preposition. For that Porter’s five forces help to
analyse competitive advantage which is a strategic management tool. In context of Mercedes it is
described below:
Threat of new entrants – Entry barrier of automotive industry is very high and that is just
because of brand equity that existing brand have developed over time. There are various Asian
brands that tried to compete with existing firms but failed to grasp a major market share. Hence
Mercedes become developed and symbol of prestige in which consumers are not willing to go
for other brand. To get entry in new market company requires huge initial investment,
promotional cost for advertising, they have to face government rules and regulation, and have to
maintain economic scale. All these factors makes threats of new entrant low for Mercedes
(Mothersbaugh and Hawkins, 2016).
Bargaining power of suppliers- There are ample numbers of suppliers in automobile
industry for automotive parts in which most of them are small in size but manufacturer of theses
pats are at large scale and due to this they don’t have any chances to barging for influencing

price. Manufacturer set high quality and standard specification of their product and then supply
to those who are willing to comply these requirements. The suppliers of Mercedes Benz involves
makers of leather product, wood designer and car interior electronic device providers. Switching
cost of theses manufacturer is not low thus bargaining power of supplier is low.
Bargaining power of consumers- There are large number of producers of luxury vehicles
and each provides different product in which consumers have option to switch for other brands.
The vehicle is differentiated on the basis of features, quality, appearance performance and price.
Some brands like Roll Royce offers buyers the choice of customizing their vehicle. However,
brand loyalty is much higher in luxury vehicles. Barging power of consumers is high against
Mercedes as consumers are willing to pay extra for a particular brand.
Threat of substitution- Luxury and premium brand do not assist simply the aim of
transportation. They are the symbol of status and self-perception of success and achievement.
Substitute of this brand are low budget cars and other mean of transportation like bus and train.
Threat of substitute is medium for Mercedes Benz because they are more focused towards luxury
vehicles.
Competitive Rivalry – Competition in luxury and premium manufacturer is very high.
Competitors of Mercedes Benz includes BMW, Audi, Lexus, Jaguar etc. all these vehicles are
different in design, features, and other technical aspects. For premium manufacturer, it is
important to generate a perception status ambition, achievements, and success related with
owning of luxury premium vehicles. Exit barrier is very high due to high initial investments.
Hence competitive rivalry is high for Mercedes Benz (Mowat, 2018).
Assessment of current market strategy
Marketing strategy refers to a business plan for accomplishment of organisational goal and
objective in order to fulfil needs and demands of customers. For this it is important to identify
the preferences and trends of consumers. Which can be done by using market strategy. Due to
increase in competition between luxury and premium manufacturer of vehicle and switching
behaviour of consumers Mercedes Benz has changed their marketing strategy. Currently market
strategy of chosen firm is towards life style and they are more focused on presenting more fun
loving, approachable and energetic side of vehicles. And for all new SUV all electric vehicles,
Mercedes Benz is targeting a young audiences with a campaign to promote its electric SUV.
Along with it they are using digital marketing strategy for achieving various goal of company.

Digital marketing is a process of marketing product and service that involves electronic
devices it can be done both online and offline. In which it holds some tools and technique
namely, SEO (search engine optimization), SEM (search engine marketing), PPC (pay-per-click
advertising), email marketing etc.
Mercedes is also using social media marketing as it is focused with attainment of all the
long as well as short term goals of the organisation. With the help of this strategy it tries to reach
maximum number of clients so that they can get aware of all the details of cars and other
vehicles that are engineered by the organisation. Apart from this, pay per click strategy is also
used by it which helps it to be on the top of the pages n search engines such as Google (Perreault,
2018).
From the above discussion it has been analysed that Mercedes is using different
approaches of digital marketing which is facilitating it to spread awareness about all the vehicles.
Additionally it also facilitate it to make sure that it establishes a positive market image and
portray a good brand image in mind of customers.
PART 2
Determine market Segmentation, Targeting & Positioning
STP analysis is a strategy planning tool that can be used by organizations for the purpose of
making a detailed situation analysis. It is a very useful technique for mapping out the present
strategic positioning of the organisation along with a particular strategic plan can be adopted and
objective can be set (Phadermrod, Crowder and Wills, 2019). The available opportunities for
enhancing the market position can be turn into the long run objective and that have to be
minimised by analysing the STP analysis. In present scenario there is discussion of STP analysis
of Mercedes Benz and the way these factors affect the organisation functioning
Segmentation: It is a technique where there is dividing of the target market in smaller
segments to enhance the customer reach process in case of Mercedes there are different types of
segmentation techniques that have been used by the organisation some of the segmentation are
mentioned below:
 Geographic Segmentation: Geographic segmentation is according to the location of
customer Mercedes is focusing on major Metropolitan cities.

 Demographic Segmentation: Demographic segmentation is according to the factors like
age occupation class of the society. Mercedes is focusing on young and the middle age
group of people who belong to the higher income level grow as they are not having cost
leadership position and they are according to the luxury they offer in their product.
 Psychographic segmentation: Mercedes is having a brand image that is contributing
towards the high class image that depicts its customers who purchase Mercedes (Guangul
and Chala, 2019).
 Niche market: Mercedes is targeting the high class income group of the society and this
contributes to the smallest segment of society and is called in niche market.
Targeting: Mercedes is generally targeting the upper class customers our society who are
able to purchase and afford this high luxurious brand. They are having focus on the age group of
25-45 years. Mercedes has combined the idea of being a luxurious brand image for their
customers. People who are retired and are willing to live a stressful life are also the major target
segment for Mercedes a as they are looking for investment and it is a great source for having a
luxurious investment that can provide them a influential image in society and is a status symbol.
Positioning: Mercedes has been able to create a differentiation position in the market
because of the attribute searches perfection fascination and responsibility possessed by this
brand. Mercedes has been clearly able to put themselves at a competitive position in the luxury
car brands and compared with the other competitors like BMW, Audi (Sarsby, 2016). The
positioning statement of Mercedes Benz is based on the best or nothing. They are emphasising
on perfection in Safety Engineering and luxury at highest level. It is the philosophy that is
introduced consumers and ideology them to share a similar ideology (Rana and et.al., 2020). The
above-mentioned STP analysis can be adopted for the purpose of understanding the president
position of Mercedes and use it as a strategy for the purpose of achievement of some specific laid
down objective.
Objective and goal of chosen organisation
SMART objectives could be defined as Specific, Measurable, Achievable, Realistic and
Time bound. It is very important for all the entities to formulate their goals according to all
these elements the SMART objective for Mercedes is as follows:

 Specific: Main aim of Mercedes is to become the market leader in the automotive sector
so that higher market share could be attained by it.
 Measureable: The objective could be measured by the achieved market share of the
entity and it has captured almost 45% of the market at global level which is a very huge
percentage (Saif, 2016).
 Achievable: In order to achieve the predetermined objectives the senior executives
within the organisation formulate effective marketing strategies by paying attention
towards key aspects such as marketing mix.
 Realistic: The reality of attainment of the objectives could be analysed with the help of
global sales and profits of the entity.
 Time bound or duration: The time duration which is required by the entity to enhance
its market in future will be around 2 to 3 years. It will be possible if it will launch a new
and innovative car focused with electricity.
Marketing strategies based on application of marketing mix
Marketing mix is a set of action or tool that a firm used for promoting their brand, product or
service in order to build market image at marketplace. It aids to make sure that company is
offering right product to right consumer at right place for right price or not. The 4P’s make up a
marketing mix namely, Price, Product, Place, Promotion, and People. In context of Mercedes
Benz, it is discussed below for recommending market strategy:
Product – It tend to item that a company manufacture or sold for gaining profit. In context
of Mercedes Benz, they produces wide range of luxury products such as trucks, coaches, cars,
buses etc. and manufacturing facilities across whole World. They need to introduce some
innovation and creative products for grasping the attention of consumers to make more profit.
For instance by launching electric car they can generate huge amount of revenue.
Promotion – This includes all activities that is conducted to make consumers aware of
product and service. In relation with Mercedes Benz, they are more focused towards luxury,
safety and precision engineering of their cars and for that they are promoting their products
through advertising. In order to increase communication with targeted market, they need to
maintained accessibility to consumers through various activities such as social media, TV
advertising, print media, and offer warranty under excellent condition.

Place – It refers to area that a company sell their production. Mercedes Benz distributes
their goods across a broad network of dealer throughout the world. Company needs to change
their perception about consumers that they buy a car and can go from here to there. They actually
need to make car that enables them easily sell the idea about car at marketplace (Solberg, 2017).
Price – It refers to value of product that it holds.it depends on cost of production, segmented
targeted etc. Mercedes Benz produces different types of products and then set price according to
model and cost price of product. The strategy that company needs to focus for pricing is low cost
competitive or premium cost.
People: All the individuals who are working within the organisation or part of the company
from any media are considered as the part of this element. Mercedes is highly focused with
productive workforce. All the sale persons that are hired by the entity trained properly so that
they can interact with the clients in systematic manner and fulfil their demand. The strategy
which is focused for people in the entity is training and development.
Process: In the businesses the procedure which is used to execute all the operational
activities are known as business process. In Mercedes the management teams make sure that all
the cars are produced with effective processes by maintaining quality. The strategy which is
focused by the entity for same purpose is planning and budgeting which helps it to meet all the
business goals.
Physical evidence: The key element of business that provides evidence to all its service and
the business activities is known as physical evidence. In order to maintain it Mercedes provide
proper bill and details of the vehicles that are provided to clients which help to satisfied their
needs and retain them for long run. The strategy which is used by the entity for this element is
proper alignment with the vehicle details (Wymer, 2017).
CONCLUSION
From above report it has been concluded that marketing strategies plays a vital role in every
organisation for identifying the needs and demands of consumers in order to achieve
organisational goal. In this report PESTLE analysis is carried out to determine the external
factors which affects the marketing strategies of company as well as SWOT analysis for
identifying the strength, weakness, opportunity and threat of firm. It is very important for
company to make proper marking strategy for achieving success and growth.in order to reach all

potential consumers market is segment on the basis of geographic, behavioural, demographic and
physiographic and then target on these segment and maintain the position at market place.
Furthermore, any organisation run or operate their business for a particular goal or objective and
that is set in context of selected firm. At the end, marketing mix is done to promote brand and
establish it in marketplace.

REFERENCES
Books and Journals
Berman, B. and Thelen, S., 2018. Planning and implementing an effective omnichannel
marketing program. International Journal of Retail & Distribution Management.
Chen, S., and et.al., 2018. Teaching design thinking in marketing: Linking product design and
marketing strategy in a product development class. Journal of Marketing
Education. 40(3). pp. 176-187.
Guangul, F. M. and Chala, G. T., 2019, January. SWOT analysis of wind energy as a promising
conventional fuels substitute. In 2019 4th MEC International Conference on Big Data
and Smart City (ICBDSC) (pp. 1-6). IEEE.
Ibrahim, E. B. and Harrison, T., 2020. The impact of internal, external, and competitor factors on
marketing strategy performance. Journal of Strategic Marketing. 28(7). pp.639-658.
Jaworski, B. J., 2018. Commentary: advancing marketing strategy in the marketing discipline
and beyond. Journal of Marketing Management. 34(1-2). pp.63-70.
Mothersbaugh, D. L. and Hawkins, D. I., 2016. Consumer behavior: Building marketing
strategy. McGraw-Hill Education,
Mowat, J., 2018. Video marketing strategy: harness the power of online video to drive brand
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Perreault, W. D., 2018. Essentials of marketing. New York: Mc Graw Hill.
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Rana, S., and et.al., 2020. Determinants of international marketing strategy for emerging market
multinationals. International Journal of Emerging Markets.
Saif, N. M. A., 2016. Exploring the value and process of marketing strategy: Review of
literature. International Journal of Management Science and Business
Administration. 2(2). pp.7-18.
Sarsby, A., 2016. SWOT analysis. Lulu. com.
Solberg, C. A., 2017. International Marketing: Strategy development and implementation.
Routledge.
Wymer, W., 2017. Social marketing strategy and industry involvement. Journal of Social
Marketing.