A Case Study of Mercedes-Benz

In association with this, it can be effectively mentioned that, luxury brands often price accordingly in order to ensure that their brand name remains high and that their popularity does not decrease. In association with this, it can be effectively mentioned that, luxury brands often price accordingly in order to ensure that their brand name remains high and that their popularity does not decrease.

Topic: IMPACT OF BRAND EQUITY ON PRICING (A Case Study of Mercedes-Benz.)
Introduction
The pricing has a relevant role to play in the domain of business. In consideration of this, it can be deemed essential that the pricing is carried
out in a manner such that it helps in creating an identity (Ahn 2015). Moreover, a sound pricing strategy also leads to a better placement in the
market and ensures successive selling opportunities to the enterprise. In consideration with this, it is critical to state that very often the brand
equity also tends to have a critical influence on the pricing. In association with this, it can be effectively mentioned that, luxury brands often
price accordingly in order to ensure that their brand name remains high and that their popularity does not decrease. In consideration of this, the
rand equity and importance influences the pricing decisions accordingly (Çifci et al. 2016). The various type of pricing strategies which are
available for the different enterprises can be understood to be the cost based pricing, premium pricing, discounted pricing or the penetration
pricing.
The study is essentially focused on the domain of Mercedes Benz and how the company sets its pricing based on the Brand Equity. In addition
to this, the Qualitative research area has been chosen which shall thereby assist in ensuring that, the problem and the research question in hand
is being discussed critically (Ding and Tseng 2015). The aim of the research is to understand how the Mercedes Benz as an enterprise engages
in adequate pricing techniques.
Background to the research (context):
The reason why choosing the topic related to the Brand Equity and Pricing can be considered to be largely effective is because, marketers all
around the world aim to ensure that their business is being able to price their products accordingly. Hence, the luxury market domain is a
popular research domain and the pricing of luxury cars along with the factors surrounding it are popularly studied regularly (Dwivedi, Johnson
and McDonald 2015). The findings of the proposed study shall essentially contribute towards understanding the different ways in which the
Mercedes Benz as a car brand and product prices its products accordingly and what influence does the Brand Equity place on the Pricing.
Crucial discussions and learning for the other studies shall also be made.
Figures 1 and 2: The Luxury Car Industry
(Source: Mordorintelligence.com 2020)
The global luxury car market can be understood to be growing at a CAGR about 5.83% which lasts from a period of 2019 to 2024. In
association with this, there exists a considerate rise in the tangible luxury offerings in vehicles, shifting consumer preferences from the sedan
cars to the SUVs which can be contributed to the fact that the income of the different individuals has been increasing to a great extent.
Moreover, the increase in the import tariffs act as a hindrance in the growth of the industry (Lu et al. 2015). The BMW and related car
manufacturers might probably face a 35% import duty for the cars which have not been built in the United States.
In addition to this, the luxury cars also have the overall capability to provide the highest comfort and the ultimate safety features to the
customers and this tends to provide adequate opportunity to the marketers and helps them to assist in adequate comfort and status symbol.
Moreover, there exists considerable number of options such as the Mercedes Benz, BMW, Lexus, Volvo, Audi and the Tesla
(Mordorintelligence.com 2020). The Mercedes Benz as an enterprise has been dominating the luxury car industry with a market share of 16%
and this is followed by the BMW. Other players comprise of Ferrari, Lamborghini and Porsche amongst others.
All these brands have been able to develop considerate brand equity in the market and this has a critical influence on the pricing of the products
as well. Hence, this is the reason, why the study has been undertaken in order to understand the manner in which Mercedes Benz has
maintained a competitive yet premium pricing strategy due to its brand equity (Gutsatz and Heine 2018)
Problem statement
Research aim and objectives:
The aim of the research is to outline the manner in which the Brand equity has a considerate influence on the pricing of
the Mercedes Benz and in association of this, how does the firm maintain a competitive pricing strategy irrespective of
the different companies as present in the market.
The objectives which have been set for the study can be mentioned to be as follows:
• To understand the concept of Brand Equity
• To understand the concept of the Pricing
• To gain an idea about the manner in which the Brand Equity has an influence on the Pricing
• To define an association between the Brand Equity and the Pricing in case of the Mercedes Benz
• To provide recommendations based on which the firm will be able to engage in adequate strategies and engage in
initiatives accordingly.
Literature review
Brand equity
The brand equity can be defined as an additional value which the customer received from the enterprise by making use of their overall
product offerings. The Brand equity is often known as a high level of brand awareness which is generally experienced by the different
customers when they engage in considerable purchases of the products being offered (Keller and Brexendorf 2019). In association with
this, the brand equity can be known as the difference in the prices that a consumers generally pay when they engage in the purchasing of a
brand`s product over a generic version of a similar product. The customer loyalties have a key role to play in the domain of the marketing
and the brand equity. In line with this, the Brand equity can be described as a competitive advantage which generally results in higher sales
of the firm, lower costs and associated higher revenues (Lin 2015).
When an enterprise comprises of adequate brand equity, then in such a scenario, the company shall differentiate itself from the competitors
accordingly (Gong, Greenwood and Song 2017). These differentiated offerings can be agreed to be the product quality, the excellent
customer service, effective marketing campaigns as well as associated recognition and respect received accordingly. According to Han,
Nguyen and Lee ( 2015), the establishment of the brand equity has considerate advantages for the enterprise and the brands with such an
advantage enjoy better advantages and thereby pay more for their products as compared to others. In association with this, it is effective to
state that, very often customers are willing to pay higher prices for better products as they can engage in considerate loyalty.
The solid brand equity which is portrayed by the different firms helps them in coming up with better products, with better pricings and
offerings so as to ensure that hassle free services can be provided accordingly.
Pricing
The pricing can be described as a procedure whereby an enterprise generally tends to set the price of a product in a manner such that he is
being able to engage in the sales of the products accordingly. In association with this, it can be considered effective to mention that, the
pricing as a factor is influenced by a number of factors which generally tend to have an adverse influence on the overall operations of the
firm (Godey et al. 2016).
The pricing of the product can be described as a fundamental aspect of the modelling procedure and in consideration of this; it can be
mentioned to be critical that, the Price is the revenue generating element which has to be decided upon critically before undertaking any
decisions.
The various factors influencing the pricing decision of the enterprise can be agreed to be the demand by the customers, the costs involved
of the different products, the brand image, the overall entrepreneurial initiatives and the profit orientation of the enterprise.
The pricing can be stated to be the procedure of simply pricing the particular product and deciding upon the pricing strategies which have
to be followed adequately (Hennigs and Klarmann 2015). In consideration with this, it becomes critical to mention that, the pricing as a
concept is essential for entrepreneurial success as it helps in engaging in overall workplace effectiveness and better operations (Keller
2016).
Brand
Equity Pricing
Revenue
Capabilitie
s
Product
demand
Research Methodology
Research philosophy
The research philosophy can be rightfully described as the manner I which the author of the study takes
certain assumptions (Flick 2015). As the aim of the research is to find the influence of the Brand Equity
on the pricing of the Mercedes Benz, the research philosophy which has been aimed to be adopted in the
study can be mentioned to be the Positivist research philosophy whereby the goal of the author shall
remain limited to the data collection and data analysis.
Research Approach
The research approach can be essentially described as the manner in which the study is undertaken. In
consideration with this, it can be mentioned effective to state that, the research approach assists in
deciding the way in which, the study is operated. For this purpose, for this study the research approach
which has been selected is the Deductive research approach whereby relevant data for the study shall be
undertaken and be followed by the analysis by deducing relevant information out of it (Ledford and Gast
2018).
Research strategy
The research strategy may be essentially defined as the manner in which the overall research is perceived.
For the purpose of the study and to meet with the research aim which is to find the influence of the Bran
Equity on the Pricing of luxury cars, the research strategy which has been adopted is the Primary
Quantitative research strategy. In this research strategy, the primary method of data collection will be
adopted for the study whereby the responses shall be collected from various survey participants and they
will be asked about their viewpoint on the topic (Mackey and Gass 2015). This shall be collected by the
discussion on the results by making use of the statistical tools which comes under the quantitative
analysis. Here using the statistical tools of Regression and Correlation, the impact of the Brand equity on
the Pricing of the luxury car will be discussed critically. The research tool has been selected as the survey
questionnaire.
Issues
Issues and Ethics
The following research problems may be faced by the author:
• Collection of authentic data for the study
• Maintaining the privacy of the participants
• Management of the responses.
Ethical considerations
In order to ensure that all ethical aspects are being followed by the study, the Ethical approval form will be
passed with the University. Additionally, the viewpoint of the different participants shall be collected
accordingly along with understanding their privacy issues. The applicants shall be contacted vu ate social
media. A total of 200 participants will be used. The participant information shall be protected by the
author by not asking any personal questions.
Limitations
The limitations can be described as the overall manner in which the study may not be able to fulfill its
objectives. In consideration of this, the limitations are as follows:
The study has just used Primary method of data collection for the study which may be limited.
The study has used the secondary method of analysis which might not be useful in carrying out the
different aspects in a successful manner (Schivinski and Dabrowski 2015).
Activity Months
M Mar M April M May M June M July M Aug M
Sept
Finalization of the topic 
Collection of the data from secondary sources  
Formulation of a layout of the research work 
Conducting the Literature review   
Formation of the research plan  
Selection of the appropriate research methodologies  
Collection of the data from primary sources  
Analysis of collected data sets  
Interpretation of collected data sets 
Concluding the Study 
Designing a rough draft  
Submitting the Final Work  
References
Ahn, S., 2015. THE EFFECT OF LUXURY PRODUCT PRICING ON CONSUMERS'PERCEPTIONS ABOUT CSR ACTIVITIES. Academy of
Marketing Studies Journal, 19(3), p.1.
Çifci, S., Ekinci, Y., Whyatt, G., Japutra, A., Molinillo, S. and Siala, H., 2016. A cross validation of Consumer-Based Brand Equity models: Driving
customer equity in retail brands. Journal of Business Research, 69(9), pp.3740-3747.
Ding, C.G. and Tseng, T.H., 2015. On the relationships among brand experience, hedonic emotions, and brand equity. European Journal of Marketing.
Dwivedi, A., Johnson, L.W. and McDonald, R.E., 2015. Celebrity endorsement, self-brand connection and consumer-based brand equity. Journal of
Product & Brand Management.
Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research project. Sage.
Godey, B., Manthiou, A., Pederzoli, D., Rokka, J., Aiello, G., Donvito, R. and Singh, R., 2016. Social media marketing efforts of luxury brands:
Influence on brand equity and consumer behavior. Journal of business research, 69(12), pp.5833-5841.
Gong, J., Greenwood, B.N. and Song, Y., 2017. Uber might buy me a Mercedes Benz: An empirical investigation of the sharing economy and durable
goods purchase. Available at SSRN 2971072.
Gutsatz, M. and Heine, K., 2018. Is luxury expensive?. Journal of Brand Management, 25(5), pp.411-423.
Han, S.H., Nguyen, B. and Lee, T.J., 2015. Consumer-based chain restaurant brand equity, brand reputation, and brand trust. International Journal of
Hospitality Management, 50, pp.84-93.
Hennigs, N. and Klarmann, C., 2015. Luxury marketing. Wiley Encyclopedia of Management, pp.1-1.
Keller, K.L. and Brexendorf, T.O., 2019. Measuring brand equity. In Handbuch Markenführung (pp. 1409-1439). Springer Gabler, Wiesbaden.
Keller, K.L., 2016. Reflections on customer-based brand equity: perspectives, progress, and priorities. AMS review, 6(1-2), pp.1-16.
Ledford, J.R. and Gast, D.L., 2018. Single case research methodology: Applications in special education and behavioral sciences. Routledge.
Lin, Y.H., 2015. Innovative brand experience's influence on brand equity and brand satisfaction. Journal of Business Research, 68(11), pp.2254-2259.
Lu, A.C.C., Gursoy, D. and Lu, C.Y., 2015. Authenticity perceptions, brand equity and brand choice intention: The case of ethnic
restaurants. International Journal of Hospitality Management, 50, pp.36-45.
Mackey, A. and Gass, S.M., 2015. Second language research: Methodology and design. Routledge.
Mordorintelligence.com 2020. Luxury car industry [online]. Available at: https://www.mordorintelligence.com/industry-reports/luxury-car-market
(Retrieved on: 25 Mar. 2020).
Schivinski, B. and Dabrowski, D., 2015. The impact of brand communication on brand equity through Facebook. Journal of Research in Interactive
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The influence of brand equity on pricing