Marketing Strategies for Mercedes-Benz

This assignment focuses on the marketing strategies of Mercedes-Benz, including a situational analysis, evaluation of competitive advantage, and recommendations for marketing objectives and strategies.

MARKETING
STRATEGIES

EXECUTIVE SUMMARY
This assignment had focused upon marketing audit of external and internal environments
of Mercedes- Benz, Current position of company as compared to other industry members,
evaluation of organization’s competitive edge, customer segment focused upon by company,
clear marketing objectives to increase brand awareness and marketing strategies on the basis of
applications of marketing mix.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Situational Analysis.....................................................................................................................1
Evaluation of threat of epidemic or Brexit on Mercedes Benz...................................................2
Analysis of competitive advantage..............................................................................................3
Evaluation of current marketing strategy....................................................................................4
PART 2............................................................................................................................................4
Market segmentation, targeting and positioning.........................................................................4
Recommended objectives and goals for Mercedes- Benz...........................................................5
Recommend marketing strategies, based on the application of the marketing mix to Mercedes
Benz.............................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Marketing is one of the most essential part of a company that helps business in achieving
both long- term and short- term goals. For successful marketing of company’s products and
services they need to develop effective marketing strategies. Marketing strategies can be defined
as a long- term approach that can be achieved by organizations for achieving organizational
goals and competitive advantage. This assignment will focus upon marketing strategies of
Mercedes- Benz. It is a German automotive company that manufactures luxury vehicles and
commercial vehicles. It was founded in 1926 whose headquarter is in Stuttgart, Baden-
Württemberg (About Mercedez-Benz, 2020). In past 2 years, Mercedes- Benz has also started
manufacturing of Electric Vehicles as well.
PART 1
Situational Analysis
There are various analysis methods that can be used or analysing current situation of
Mercedes-Bens. There are two types of factors that can impact an organization both positively
and negatively: internal and external. Impact of external factors upon organization can be
analysed with the help of PESTLE analysis.
Political factors: Political uncertainty in UK is impacting overall business of Mercedes- Benz.
Not only this, political system related to automobile industry is quite complicated
(Chodakowska, 2018). Due to this it can become difficult for organization gain stability within
UK market. Government has taken some stances in order to bring improvement within
manufacturing of electric vehicles because of which business of Mercedes- Benz can postiviely
impact the company.
Economic factors: Sales of electric cars is increasing year by year but due to crises in economic
condition due to current pandemic sales of electric vehicles of Mercedes- Benz has been
impacted. Not only this, difference between exchange rates of countries on the basis of their
economy also impacts overall sales of Electric vehicles of Mercedes- Benz.
Social factors: Slowly focus of people is shifting from gas vehicles to electric vehicles as they
are environment and budget friendly as well as helps in eliminating requirement of gas or fuel.
Not only this, electric vehicles manufactured by Mercedes- Benz are also environmentally
sustainable. Other than this, vehicles manufactured by company are highly luxurious ad because
of this its demand is also increasing.
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Technological factors: Mercedes- Benz focuses upon development innovation so that vehicles
manufactured by them can perform in an excellent manner. In order to maintain competitive
edge, Mercedes- Benz has focused upon adopting new and advance technology for continuous
improvement within their vehicles (Manivannan and Bhuvaneswari, 2020). They have also
focused upon implanting digital and artificial intelligence technology within their electric
vehicles in order to provide more comfort and easiness to their customers.
Legal Factors: Mercedes- Benz has faced a law suit for their electric vehicle in which customers
have claimed that they were misled and were given less information for the electric vehicle
purchased by them. Another legal case faced by them because of their negligence on their
customers safety because in this case a customer meet with an accident and despite of the impact,
air bags did not open. These legal cases directly impacted their reputation and trust of their
customers on their electric vehicles manufactured by them.
Environmental factors: Reducing carbon footprint of the company is one of the primary
corporate goal of the company. Recently they have brought some technological changes within
their B- class vehicles so that CO2 emission and fuel consumption in these vehicles can be
reduced. They have recently adopted a BlueEFFECIENT model that has helped them to cut 11
percent fuel consumption, 11 g/km CO2 reduction. This has helped them in gaining competitive
advantage and attract a greater number of customers who prefer green or environment friendly
vehicles.
Evaluation of threat of epidemic or Brexit on Mercedes Benz
Evaluation of threat of epidemic or Brexit on Mercedes- Benz can be analysed with the help of
SWOT analysis.
Strengths: One of the main strengths of Mercedes- Benz is their brand recognition. It is one of
the well-known brands that has high recognition and high popularity. It is especially known for
its highly comfortable and luxurious cars (Oussama, 2020). Its expanding presence in electric
vehicle with its new EQ brand has become its another main strength. This has further helped the
company in reducing drastic impact of pandemic on their sales and profitability.
Weaknesses: One of the main weakness of Mercedes- Benz is its high or expensive model cost
and maintenance cost. This current epidemic has impact people globally in both financial and
social manner. It has directly impacted disposable income of people and Mercedes- Benz has not
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reduced price of any of their vehicles. Due to this their sales have been impacted especially sales
of luxurious cars that hare highly expensive and has high maintenance cost.
Opportunities: They can focus upon introducing electric vehicles that are cost and eco-friendly
as well as has high performance as well. Increasing demand of eco- friendly or electrical vehicles
is an opportunity for Mercedes- Benz for enchaining their sales and profitability (Kowalska-
Pyzalska, Kott and Kott, 2020). Demand of electric vehicles in Asian market is increasing
drastically, Mercedes- Benz should focus upon grabbing this opportunity and introduce high
performance and lower cost electric vehicles in Asian market as well.
Threats: Competition in automobile industry has increased in a drastic manner. More and more
number of automobile companies are focusing upon manufacturing and introducing electric
vehicles at lower cost and maximum number of features. It is one of the major threats for
Mercedes- Benz that can impact their overall business in a drastic manner.
Analysis of competitive advantage
Unique selling proposition is an important marketing concept that helps a business in
highlighting unique benefits that their products and services offer to their customers. Main USP
of Mercedes- Benz is that they provide variant range of vehicle from executive price range to
ultra- premium version.
Competitive advantage of Mercedes-Benz can be explained with the help of Porters five
force model:
Threat of new entrant: threat of new entrant for this company is low. This is majorly because
entry barrier to this industry is quite high. Mercedes-Benz has developed high brand equity over
years. Other than this, there are many other barriers which makes it difficult for new entrants to
entry into this market such as: initial investments, advertising cost, extensive marketing,
economies of scale and strict government regulations.
Bargaining power of suppliers: Threat of this factor is also low for company because there are
various number of suppliers in automotive industry and most of them are of small size. Due to
this, suppliers are in no position to margin with Mercedes-Benz as there are various number of
suppliers who are willing to provide raw materials of high quality at low price to the company.
Bargaining power of customers: threat of this factor is high for Mercedes-Benz because there
are large number of manufacturers who manufacture luxurious vehicles in different categories.
Due to these customers have large number of brands to choose vehicles that are of high quality,
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have excellent performance, provide various features required by customers and is within their
budget.
Threat of substitute product: Threat of this factor is moderate because organizations that
manufacture luxurious vehicle, they do not manufacture vehicles as a source of transport. In fact,
there are a status symbol and self- perception of achievement and success. They are quite a
smaller number of substitute products. But however, there are various number of automobile
companies that also manufacture premium luxurious vehicle that increases threat of this factor
for Mercedes-Benz.
Rivalry against existing competitors: Threat of this factor is high because Mercedes-Benz
faces tough competition with brands like Audi, BMW, jaguar, Porsche, Lexus and many other.
As vehicles manufactured by company are of premium price so they need to focus upon
marketing of their products and services and establish strong relationship with the company so
that they can establish a positive perception about the organization and its products and services
in front of their customers. This factor is impacting Mercedes-Benz due to current epidemic
situation as due to tough competition they sales is getting impacted.
Evaluation of current marketing strategy
Currently Mercedes- Benz has adopted outstanding digital marketing strategy that has
helped them in enhancing their market growth, sales trends and profitability. Its marketing
strategy has always focused upon safety, luxury, and precision engineering of its cars, but due to
increasing competition in luxurious car manufacturing companies Mercedes- Benz has brought
some changes within its marketing strategy (Niu and Wang, 2016). They are currently using
digital technology and focusing upon bringing improvement within their safety and
communication with its drivers. This new strategy has helped them to attract a greater number of
customers and their need of safety.
PART 2
Market segmentation, targeting and positioning
Marketing Team of Mercedes Benz highlights the precise segmentation, positioning and
targeting process in order to channelize the firm's promotion. However, it is essential for
company to target specific audience so that they can gain competitive advantage in auto sector.
Moreover, the sub brands of company are cars that is S and E class. Thus, for sub brand of
Mercedes Benz is high class car series (ADIGÜZEL, 2018).
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Segmentation, targeting and positioning is considered as a familiar approach within the
Modern Marketing. In this approach the main goal is not only attract the consumer but also at the
same time getting the right consumer who will be more interested within the product of the firm.
Segmentation- First there is required to divide the group within segments and after that will
target that segment hat who will be more interested within the product. Geographical
segmentation focused on by company is mainly metropolitan cities. Whereas, demographical
segmentation focused upon by company are young or middle aged people with high income level
who wants to maintain high class and status in the society.
Targeting: Firm allows to target the niche market for all its promotional as well as marketing
activities. As the goods are also offer through Mercedes Benz are possess high cost so that the
firms require to be target only specified consumers that can afford the goods offered through
entity. Firm only target rich people or people with high income level all over the world. The
targeting strategy enables the firm to channelize all of its resources within more particular
manner. It also plays a vital role for the firm as it provides direction of marketing campaign
within such manner that aids to provide the huge success for promotional as well as marketing
activities. in this high income level people will be targeted for it (Astuti, Saudi, and Sinaga,
2020).
Positioning: Firm positions all its products over digital networks over all the social media as
well as other promotional channel. Firms also uses its holdings to all its goods such as slogans,
advertisements are used in order to positions the products that can be offered through firm.
Positioning is also considered as vital with respect to the growth as well as success of the goods
offered through firm. If the firm is looking for the success of its goods than it has the position its
products within the right direction so that the buying decisions of the consumers can attracted
through firms. Mercedes Benz also offers its various attractive offers such as bonus, discounts as
well as other offers in order to attract the costumers within marketplace. The firm will position
its product through high class design, quality, etc. besides that, effective marketing will be used
to position product and attract people.
Recommended objectives and goals for Mercedes- Benz
Here, it is necessary for company to set some SMART objectives so that they are able to
sustain in market for long term. Besides that, Mercedes Benz will be able to expand in industry
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and gain competitive advantage. Moreover, objectives will provide a strategic direction to them.
Thus, the goals formed are as follows
Goal- To gain 20% market share in high class segment within 2 years.
Specific – the goal of firm is specific as they want to expand and growth in high class segment.
Thus, they want to accomplish 20% growth in high class and also want to gain experience of
those customers. it will enable in retaining them and increasing customer base of Mercedes Benz.
hence, objective is clear as it focuses on high class customers (Kartikasari 2017).
Measurable- here, goal of company is to measure it with help of revenue generated from this
segment of 2 years. This will be done by comparing sales of car done with previous year sales.
Achievable- Mercedes Benz want to attain 20% growth in high class segment which is
attainable. They have set this target to attain it in effective way.
Realistic- It is a realistic objective as with help of effective marketing and enhancing customer
experience Mercedes Benz can achieve this goal. The objective is realistic in nature.
Time bound- here, Mercedes Benz have set target of accomplishing this goal within 2 years. So,
it is time bound goal.
So, this is the major goal of company which they want to accomplish. It will enable them
to attract more customers and increase market share in high class segment.
Recommend marketing strategies, based on the application of the marketing mix to Mercedes
Benz
Marketing mix consist of four main elements that are: product price, place and promotion.
It is one of the best tools that can be used by companies for recommending marketing strategies
that can be adopted by them for gaining competitive advantage and achieving pre-defined goals
and objectives. It can also help Mercedes- Benz in enhancing interaction between company and
their customers in an appropriate manner.
 Product: Currently Mercedes- Benz sell different class of products as per the needs and
requirements of their customers (Asava-Anan, 2017). They can focus upon providing
additional benefits to their customers for purchasing their products like after sales service,
credit service etc. They should also focus upon introducing widened product portfolio within
new product line, new features as per customers needs and current trend.
 Price: Current pricing strategy adopted by Mercedes- Benz is competitive pricing strategy in
which prices of their executive to ultra- premium products is fixed. They do not provide any
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kind of offer or discounts. They can introduce discount offers upon their products for a short
period of time in order to attract a greater number of customers (Steenkamp, 2017).
 Place: They either sell their products directly to their customers or though online websites.
They can also focus upon other digital media platforms like social media websites where they
can post their new products, offers on them on social media n order to attract more
customers.
 Promotion: they currently use multiple media channels for promotion of their products like
television, radio, advertisement on websites etc. They can focus upon hiring influencers on
social media for promotion of their products and services. They can also organize advertising
campaign in which awareness about their new products, new features, new pricing strategy
can be increased.
CONCLUSION
From the above assignment it has been summarized that there are various kinds of
internal and external factors that can impact overall performance, revenue and profitability of an
organization both positively and negatively. It is important for an organization to conduct a
situation analysis in order to understand impact of external factors that can impact their overall
business globally. It can also help an organization to identify their main strength, weakness,
opportunities and threats so that they can bring improvement within their main marketing
strategy. It has also been identified that USP analysis can help an organization identifying their
main unique selling points that can help them in attracting a greater number of customers.
Companies can focus upon conducting STP analysis in order to understand their target market
segment upon which they need to focus on so that they can develop SMART objectives for
future marketing strategies that can not only help them in attracting a greater number of
customers but will also help them in enhancing their overall sales, revenue and profitability.
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REFERENCES
Books and Journals
ADIGÜZEL, S.,2018. Market and Brand Positioning and Sustainability Strategies in
International Marketing.
Asava-Anan, P., 2017. The true culprits of excessive intrabrand price competition among
authorised Mercedes-Benz dealers in Thailand. International Journal of Automotive
Technology and Management. 17(4). pp.409-429.
Astuti, M., Saudi, M.H.M. and Sinaga, O., 2020. Marketing strategy planning based on
positioning to improve the number of students. International Journal of Psychosocial
Rehabilitation. 24(2).
Boldizsár, A. and Kővári, B., 2020. SWOT Analysis of the Air Transport Fleet in the Hungarian
Defence Forces. Periodica Polytechnica Transportation Engineering. 48(3). pp.290-
295.
Chodakowska, A., 2018. The mobility revolution in the automobile industry. Electric cars and
battery management.
Kartikasari, D.D., 2017, September. Market Segmentation of Industry-Education Partnership
Classes. In 3rd International Conference on Education and Training (ICET 2017).
Atlantis Press.
Kowalska-Pyzalska, A., Kott, J. and Kott, M., 2020. Why Polish market of alternative fuel
vehicles (AFVs) is the smallest in Europe? SWOT analysis of opportunities and
threats. Renewable and Sustainable Energy Reviews. 133, p.110076.
Manivannan, M. and Bhuvaneswari, K.,2020. PEST Factors Affecting SMEs automobile
Industry in India.
Niu, Y. and Wang, C.L., 2016. Revised unique selling proposition: scale development,
validation, and application. Journal of promotion management. 22(6). pp.874-896.
Oussama, S., 2020. Strategic Analysis of EVs electrical energy storage using PEST analysis and
Analytical Network Process for Technology Adoption. International Journal of
Engineering and Applied Sciences. 5(2).
Steenkamp, J.B., 2017. Global marketing mix decisions: global integration, not
standardization. In Global Brand Strategy (pp. 75-109). Palgrave Macmillan, London.
Online
About Mercedez-Benz. 2020. [Online]. Available
through:<https://www.mercedes-benz.com/en/company/>
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