University Assignment: Consumer Behavior of Mercedes Benz Luxury Cars

This report provides a comprehensive analysis of consumer behavior concerning Mercedes Benz. It begins with a situation analysis of the company, including its background, vision, mission, and market share. The report then delves into the target market description, detailing demographic, psychographic, behavioral, and geographical segmentations. It further examines the target market decision-making process, outlining problem recognition, information gathering, decision-making, and evaluation. The study also explores social, psychological, and personal influences on buying behavior, followed by marketing strategy recommendations for product, pricing, place, and promotion. The report uses the analysis to suggest marketing strategies to enhance market position. The report offers insights into consumer behavior, market segmentation, and strategic marketing approaches within the luxury automobile industry. The report is a detailed analysis of consumer behavior, market segmentation, and strategic marketing approaches within the luxury automobile industry.

Running head: CONSUMER BEHAVIOR OF MERCEDES BENZ
Consumer Behavior of Mercedes Benz
Name of the Student:
Name of the University:
Author Note:

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CONSUMER BEHAVIOR OF MERCEDES BENZ
Table of Contents
Introduction:....................................................................................................................................1
1. Situation analysis of the company:..............................................................................................1
1.1a. Company background:............................................................................................................1
1.1b. Vision statement:................................................................................................................2
1.1c. Mission statement:..............................................................................................................2
1.1d. Market situation/market share:...........................................................................................2
2. Target market description:...........................................................................................................3
2.1a. Demographic:......................................................................................................................3
2.1b. Psychographic:........................................................................................................................6
2.1c. Behavioral:..........................................................................................................................6
2.1d. Geographical:......................................................................................................................7
3. Target market decision making process:.....................................................................................8
3.1. Problem/Need Recognition:..................................................................................................8
3.1a. Identification of goal:..........................................................................................................9
3.1b. Gathering of information to take decisions:.......................................................................9
3.1c. Consideration of consequences:..........................................................................................9
3.1d. Making the decisions:.........................................................................................................9
3.1e. Evaluation of the purchase decisions:...............................................................................10
4. Two social influence on buying behavior:.................................................................................10

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4.1. Legal factors:......................................................................................................................10
4.2. Changes in fuel prices:........................................................................................................10
4.3. Customer reviews:..............................................................................................................10
5. Two psychological influences on buying behavior:..................................................................11
6. Two personal influences on buying behavior:...........................................................................11
7. Four marketing strategy recommendations:..............................................................................11
Product:......................................................................................................................................11
Pricing:.......................................................................................................................................11
Place:..........................................................................................................................................11
Promote:.....................................................................................................................................12
Conclusion:....................................................................................................................................12
References:....................................................................................................................................13

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Introduction:
Multinational companies view positive consumer behavior as one of the most significant
parameter showing their performances. The analysis of the consumer behavior enable companies
to recognize the issues pertaining to consumer behavioral issues which are likely to have
negative impacts on the revenue generation of the companies. The aspect of consumer behavior
issues has gained have become so important to the companies that managers holding positions as
high as the managing directors directly supervise the solving of the issues. The aim of the
research would be delving into consumer behavior issues which multinational companies face.
The company which would form the base of the study would be none other than Mercedes Benz,
the international marketer of brands of luxury cars and trucks based in Germany (Mercedes-
benz.com, 2019). Mercedes is a subsidiary to Daimler AG, which is listed on the Frankfurt Stock
Exchange (Daimler.com.en, 2019). The report would be divided into seven main divisions. The
study would open with a brief situation analysis of Mercedes followed by its target market
description. The third section of the paper would deal with the target market decision making
process followed by an analysis of two social factors influencing consumer behavior. The fifth
section would deal with two psychological factors influencing buying behavior. The seventh
section would shed light on the two personal criteria impacting buying behavior. The eight
section would draw from the previous sections to recommend four marketing strategies. Finally
the discussion would be summed up in the concluding section.

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1. Situation analysis of the company:
1.1a. Company background:
Mercedes is a German automobile marque and owned by Daimler Ag, which is situated
in Germany. The company manufactures luxury cars, buses, coaches and trucks. Mercedes Benz
is a flagship products and division owned by Daimler and has emerged as one of the most
prestigious brands in the luxury automobile industry. The company was founded in 1926 by Karl
Benz and Gottlieb Daimler. Mercedes Benz at present functions under the leadership of Ola
Kallenius.
1.1b. Vision statement:
The vision statement of Mercedes is to create an environment to empower workers, carry
out continuous innovation and foster strong relationship. The vision statement of the
multinational luxury automobile manufacturer then goes on to point that it aims to gain customer
confidence and trust by marketing premium cars. The vision statement of the company then goes
on to mention that it would also provide superior after sales services to customers (Mercedes-
benz.com, 2019). Thus, it can be pointed out that the vision of Mercedes Benz standards on the
three main pillars. They are strong relationship with stakeholders (including customers),
innovation and customer value creation.
1.1c. Mission statement:
The mission statement of Mercedes Benz mentions that the company aims to create a
more positive work place which would encourage employees to excel at work. The company also
mentions in its mission statement that it seeks to streamline the operations in ways which would
enable employees to provide individualized attention to customers.

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CONSUMER BEHAVIOR OF MERCEDES BENZ
1.1d. Market situation/market share:
Mercedes Benz is of the most sought after luxury car brands in the world. The market of
the luxury cars has expanded due to economic development taking place in Asia and South
America. The main markets of the luxury cars can be divided into two categories namely, the
traditional markets and the newly emerging markets. The main traditional market of luxury cars
are the USA and Europe. The main emerging markets of luxury cars are India, China and the
Middle East. The global luxury car market is led by German car companies like Mercedes Benz
boasting as much as 80 percent of the market (Prnewswire.com, 2018) The Economic Times in a
recent article mentions that Mercedes Benz has a succeeded in pushing up its sales to 1.4 percent
in India in 2018 (Economictimes.indiatimes.com, 2019). Thus, analysis of these two articles
show that Mercedes Benz does hold high market share. However, there have been news of the
products by the company attracting customer resentment owing to quality issues. The Indian
Express reports that Mercedes Benz had to compensate a consumer a huge compensation under
the order to State Consumer Disputes Redressal Commsion, Government of Maharashtra, India
(Modak, 2017). This shows that the luxury automobile manufacturer though high position in the
global market, is facing customer issues owing to low quality and manufacturing defects.
2. Target market description:
Mercedes Benz segments its market on several bases in order to ensure it is able to offer
its luxury car products to appropriate consumers. Adam (2016) mentions in this respect that
appropriate segmentation plays a very important role in ensuring that luxury car manufacturing
and marketing companies are able to market their cars to customers having high disposable
income and the lifestyle to purchase luxury cars. This appropriate market segmentation ensures
that the company is able to create satisfaction to customers and obtain an immense base of loyal

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CONSUMER BEHAVIOR OF MERCEDES BENZ
consumers. It also ensures that the company is able to earn huge revenue and retain its high
market position.
2.1a. Demographic:
The first category of market segmentation which Mercedes Benz carries out is
demographic segmentation. The main variables which Mercedes Benz uses to segment its
consumer base on terms of demography are occupation, socio-economic status and income.
Zhuang, Wu and Gao (2018) mention that the demographic segmentation ensures that luxury car
manufacturing companies target appropriate consumer segments in order to secure large volume
of orders for the luxury vehicle models. As far as Mercedes Benz is concerned, the company
categories its markets on the basis of geographical locations. The main markers of the company
are North America, Europe, South America, Australia, Middle East and Asia. The following
table would show that main demographic segmentations of Mercedes Benz.
Basis of
demographic
segmentation
Variables Description
Occupation Salaried person, professionals The main target segments of Mercedes
Benz are salaried persons and professionals
Socio-
economic
status
Upper class and upper middle
class
The company targets mainly upper class
and upper middle class consumers who
have sufficient disposable income to afford
luxury cars like Mercedes Benz.
Income Disposable income Mercedes Benz targets consumers with high

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disposable income
Figure 1. Graph showing top ten markets of Mercedes Benz in 2018
(Source: Daimler.com.en, 2019)
The graph above shows that top ten markets of Mercedes Benz in 2018. It can be inferred
from the graph that the company segments its markets strategically on the basis economic
factors. This can be pointed out from the facts of all the above shown market experience high per
capita income which means they are able to provide the company with immense consumer base.
Further, it can also be pointed out that Mercedes Benz in order to render of these market
sustainability has set up offices and manufacturing plants catering to the individual needs of the
markets. Thus, it can be inferred from the analysis that the segmentation strategy of Mercedes

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CONSUMER BEHAVIOR OF MERCEDES BENZ
Benz is not limited to selling luxury vehicles includes other aspects like manufacturing. This
shows that the company segments its markets on the basis of demography in order cater to the
needs of the high net worth income customers are met more appropriately in order to ensure
customer satisfaction to the latter.
2.1b. Psychographic:
The psychographic segmentation takes into account the three variables namely, activities,
interests and opinions or AIO. Higgins, Mohamed and Ferguson (2017) mentions that
psychographic segmentation of the market ensures that companies are able to get access to
appropriate customers segments who are interested in consuming their products. It can be
pointed out that luxury car manufacturers have to invest immense amount of capital to
manufacture their high-end luxury cars. Thus, they have to ensure that they are able to accede to
the appropriate customer segments not having the disposable income but also have interest in
luxury cars. This would lead to generation of high revenue for these companies. As far as
Mercedes Benz is the company takes into account the lifestyle and interests of the consumers.
The company usually prefers selling its products to customers to enjoy possessing and riding in
luxury cars.
2.1c. Behavioral:
Behavioral segmentation ensures that the companies are able to approach appropriate
customers who have the appropriate behavior to contribute towards their revenue generation. The
main variable which Mercedes Benz takes into account while segmenting its market on the terms
of behavior are purchase occasion, loyalty, buyer’s intention to buy products and attitude
towards the product namely, luxury vehicles. The following table would illuminate the
behavioral segmentation strategy of Mercedes Benz:

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CONSUMER BEHAVIOR OF MERCEDES BENZ
Basis of
Behavioral
segmentation
Variables Description
purchase
occasion
Regularly, occasionally, rarely The main target consumers of Mercedes
Benz are consumers who buy Mercedes
Benz on every occasion they seek to buy
luxury cars. This ensures that the company
is able to generate repeat business by
catering to these customers.
loyalty Loyal, switcher and disloyal The company targets mainly consumers
who would remain loyal to Mercedes Benz.
buyer’s
intention to
buy products
Unaware, highly aware,
indifferent
Mercedes is a high involvement product.
The company seeks consumers who are
aware about luxury cars and enjoy riding in
them.
attitude
towards the
product
Enthusiast, hostile, quality
concerned, indifferent
The company seeks to market its luxury car
models before consumers who are
enthusiastic about luxury cars and are
concerned about quality.
2.1d. Geographical:
Appropriate segmentation strategy on the basis of geography enables companies to enter
markets where they would be able to market their products profitably (Dvir & Strasser, 2018).

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This fact holds even more applicable for high involvement goods like luxury cars. Mercedes
Benz segments like market on the bases of country, region, population and urbanization level.
As far as the market segmentation on the basis of country is concerned, Mercedes Benz segments
its market into developed and emerging economies. The main develop economies which the
company targets are the US and the EU nations. The emerging markets consists of mainly Asian
markets like India and China. The company targets mainly regions with high density of upper
class customers like metropolitan cities. As far as the market segmentation in the line of
population is concerned, the company targets markets with high density of population. Zhechev
and Stanimiro (2017) point out that markets with high population enable multinational
companies to accede to a larger population of appropriate consumers. It can be pointed out that
this fact holds very true for Mercedes Benz because the company caters to high income
consumer base. It can also be pointed out that the most of the present markets of the company
like the US and the EU nations have extremely high population which increases the probability
of the company to reach HNI customers in higher numbers. The company prefers to market its
products in cities where the people have interests in riding in high end luxury cars.
3. Target market decision making process:
Mercedes Benz at the management levels form strategies to market its high-end cars in
the target markets like the USA and China. The management conducts extensive macroeconomic
analysis to collect sufficient market data on the variables to take decisions regarding the
following: