International Market Environment Analysis of Mercedes

This report provides an analysis of the international market environment of Mercedes, including a macro environment analysis using PEST model, target customer profile, and analysis of targeting and positioning strategy.

International Market
Environment analysis
of Mercedes

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Introduction to company.........................................................................................................1
Macro Environment Analysis.................................................................................................1
Target Customer Profile.........................................................................................................2
Analysis of targeting and positioning strategy.......................................................................3
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................6
Books and Journals.................................................................................................................6

INTRODUCTION
International market is a place or a geographical region in which an organisation conduct
a business operations which is considered to be outside the territorial region of the native country
of the organisation (Rabe, Streimikiene and Bilan, 2019). With the growing digitalization and
globalisation businesses are more likely to adopt international business in the different
international market to uplift their market opportunities and to develop themselves at large scale.
Therefore international market analysis is necessary to understand the external market scenario
in concern to current and future market size and existence. The present report is the internal
market analysis report of Mercedes- a top class automotive brand. The report will discuss Macro
Environment analysis using pest model and target customer profile and analysis of targeting and
positioning strategy.
TASK 1
Introduction to company
Mercedes is the German brand and also has its international market in UK. The company is top
among the top car brands that manufactures and delivers the high quality premium luxury cars
and other vehicles (Lojacono, Misani and Tallman, 2017). The Company focus is all over the
modernism and innovation with technology in their vehicles thereby maintain the safety of
customers and also meeting their demands. In UK company is famous for its high reputation in
regards to the usage of current innovative technology and also maintaining full safety features.
The company is highly competitive in UK market id forging forward with driverless vehicles
with hybrid and electric vehicles. Design , technology and innovation is underpinned with the
operations of Mercedes-Benz.
Macro Environment Analysis
PEST analysis
Political factors: Government and politicians of the UK are paying huge attention and concern
to the environment. Therefore, UK government has announced the ban of diesel and petrol
vehicles from 2040 this exploit the opportunity for the Mercedes while operating in automotive
industry to use the advanced technology and move ahead by developing the wholly powered
electric and hybrid cars, vans, sports cars, and other vehicles (Ganski and et. al., 2020). The
government of UK also has put strict safety rules for the automotive companies for the safety of
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customers. Therefore any failure in the car functioning which can cause harm to customer will
lead to legal actions. This is threat to company as it makes it essential for company to check the
vehicles many times before launch.
Economic factors: The economic stability is essential for the business of Mercedes as company
operate in the luxury segment with high price products (Anim and et. al., 2018). The Covid-19
situation has badly affected the sales of vehicles in UK as the consumers spending limit over the
luxury cars has decreased. The economic slow-down in UK has made the auto mobile company
like Mercedes to suffer as the people who where on the edge of the affordability of buying the
Mercedes- Benz vehicle now are out of the market due to affected savings and low financial
options.
Social factors: In relation to the automotive industry the income of the customers is the social
aspect. In UK the luxurious cars are purchased by the people with good earning and stable
financial condition to spend their income over leisure as high priced cars are the symbol of high
class and wealth in society (Laskowska, 2018). Mercedes cars and others vehicles are all in the
category of high pricing Therefore, due to low budget friendly brand and increasing fuel prices
the customers may shift to other brands for social class. This is threat for Mercedes in targeting
the audience.
Technological factors: Technology is always a opportunity for the organisations like Mercedes
working in auto mobile sector (Liu and et. al., 2018). The advanced technology not only enable
the company to save cost of manufacturing and increase the percentage of profits. Mercedes is
known for exploiting the opportunities using technology and innovation together. Customers of
Mercedes use different digital communication channel to communicate with the brand and also
it helps the company in interacting with customers through digital marketing and promotions.
Target Customer Profile
Market segmentation is the framework used to create the target customer profile of the
organisation as in this the company divides the customers into market segment on specific basis
so that their marketing efforts are more aligned towards specific target audience.
Customer target profile for Mercedes luxury class
Demographic- As in UK the citizens start earning at the age of 18 years. Therefore, for luxury
class the company is more attempting for young generation. The lifestyle of the people who are
socialized and party freak and has tendency of show-off in society (Pedada, Arunachalam and
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Dass, 2019). The Mercedes primary audience are young boys to appeal to broader audience. For
luxury class the company target IT professionals, property dealers, fashion designers and other
sectors that has more leverage working life.
Geographic- For the luxury class the geographical cover covered by Mercedes in the UK is more
urban and modern geographical area with high income class people.
Psycho graphic- for luxury class cars and vehicles the target audience will be with the
personality of tech -savvy, social media users, cars lover. The audience who has the behaviour to
perceive Mercedes as the Premium brand and matter of status in the society. The customers
brand name reflects the image in their social culture.
Behavioural- The customers that has a behaviour of searching online for informations related to
new cars, the customers with more into cars and replacing them in every 3-4 years. The
customers that has brand loyalty and always try to leverage new advanced technology features of
car (Rabe, Streimikiene and Bilan, 2019).
Analysis of targeting and positioning strategy
For targeting the target customer profile the Mercedes use different targeting strategies that are
discussed below:
Undifferentiated targeting: The undifferentiated targeting strategy of Mercedes is useful during
the period of compact class cars in which company opt to use their marketing strategy for all the
customers despite of any segmentation. The advantage of this strategy to the Mercedes is
reaching broad customer base at one time and thereby reduction of cost of marketing. But it also
has its own disadvantage that overshadow its advantage that is due to this competitors may move
ahead as they delight small segments.
Differentiated targeting: The targeting strategy in which the Mercedes target the customers as
per the segmentation they has done in the prior stage of marketing process. Differentiated
targeting is the process of targeting a specific customer segment with customized marketing
message and channel to attract customers. This strategy is useful in netting the demands of
particular segment which creates brand loyalty and competitiveness. Mercedes target different
customer segment for luxury cars, sports cars etc (Lojacono, Misani and Tallman, 2017). The
disadvantage of this strategy to Mercedes is increased cost for advertising and promotions.
Concentrated targeting: This marketing strategy is all about directing the resources, labour and
efforts of the brand towards the development and commercialization of product for a specific
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segment of customers. The strategy is good for Mercedes when company wants to create a good
position in the new international market segment. This strategy provides the opportunity to
Mercedes to understand the needs of specific segment. The disadvantage of this strategy is risk
of failure and high dependence on particular segment may decrease the profits (Laskowska,
2018).
Mercedes-Benz UK has adopted the differentiated targeting strategy because companies product
are developed as per the particular segment for example: The sports cars of the company are
specially designed and manufactured with different features for the racers and other sports
persons. The luxury class cars have other differentiated features to meet specific target customer
demands. Therefore, company has justified use of this strategy (Ganski and et. al., 2020).
Positioning
Positioning is the way to stand out successfully in the market among the other similar product
and services. It is competitive way for survival for which company's like Mercedes invest high
amount in the advertising and develop unique selling proposition to stay in minds of customers.
The electric first strategy of the Mercedes is the most effective strategy company is currently
using for the new electric and hybrid cars. This new strategy of the company help the company
in raising product portfolio and mix. Mercedes confirms the electrification of all its vehicle,
products and segments for profitable growth in luxury segment (Pedada, Arunachalam and Dass,
2019).
Perceptual map
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The positioning mapping of the Mercedes to analyse it competition is highlighted above.
As per the above mapping the Volvo and Honda are two automotive brands that are high in
financial effectiveness but low in prestigious to own. Opposite to this jaguar, Toyota and Ford
are the brands that are high in prestigious to own but low in financial effectiveness. On the other
hand brands like Audi and Porsche are low in both prestigious to own and financial effectiveness
(Liu and et. al., 2018). Just opposite to this brands like Mercedes, BMW and Mitsubishi motors
are high in both.
CONCLUSION
From the above report it is concluded that for Mercedes-Benz as a global organisation
must conduct regular international market environment analysis in order to recognise the current
and future market trends and the factors that are impacting business operation of the company.
Pest analysis is the strong tool for the company to analyse its macro environment as it includes
technological factors which is highly important for the company being in a automotive sector.
Also to effectively plan targeting and positioning strategy the Mercedes should use Marketing
mix tool for effective planning and implementation.
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References:
Books and Journals
Anim, P.A. and et. al., 2018. Market orientation, innovation and business performance: insight
from womenpreneurs in the fashion industry in Ghana. Journal of Creativity and
Business Innovation. 4.
Ganski, U. and et. al., 2020. Development of a methodology for managing of service packages
supply differentiation in the modern tourist market. Business: Theory and
Practice. 21(2). pp.477-482.
Laskowska, A., 2018. Conditions for the development of the green bond market
development. Finanse. 11(1).
Liu, S. and et. al., 2018, September. Complementary Operation Analysis of Hydro and Wind
Power in Yunnan Electricity Market. In 2018 China International Conference on
Electricity Distribution (CICED) (pp. 2137-2142). IEEE.
Lojacono, G., Misani, N. and Tallman, S., 2017. Offshoring, local market entry, and the strategic
context of cross-border alliances: The impact on the governance mode. International
Business Review. 26(3). pp.435-447.
Pedada, K., Arunachalam, S. and Dass, M., 2019. A theoretical model of the formation and
dissolution of emerging market international marketing alliances. Journal of the
Academy of Marketing Science, pp.1-22.
Rabe, M., Streimikiene, D. and Bilan, Y., 2019. EU carbon emissions market development and
its impact on penetration of renewables in the power sector. Energies. 12(15). p.2961.
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