Market Development Plan: Mercedes-Benz's Strategy for North America

This comprehensive report outlines a market development plan for Mercedes-Benz, focusing on its expansion into the North American market. The report begins with an executive summary, followed by an introduction that defines market development and cultivation, and their application to the case of Mercedes-Benz. It then provides a detailed discussion, starting with Daimler AG's expansion into North America and an analysis of the German automobile market. The report delves into the transition from Germany to North America, followed by an analysis of the North American automobile industry, including PESTEL and Porter's Five Forces analyses. A SWOT analysis of the company is also included. Furthermore, the report details the marketing and sales strategies of Mercedes-Benz in North America, including target market, market segmentation, marketing objectives, and the marketing mix. The sales strategy and an actionable plan are also specified to maximize the results of the market cultivation plan. The report concludes with a summary of the findings and references.

Running head: MARKET DEVELOPMENT PLAN FOR MERCEDES – BENZ
Market development plan for Mercedes – Benz
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1MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
Executive summary
The aim of this paper is to devise a market development plan or a market cultivation plan for
the world renowned German automobile company, Mercedes – Benz, belonging to the
Daimer AG group. Mercedes, a company based in Germany, is one of the leading and most
trusted automobile brands, manufacturing more than a million SUVs, sedans and luxury cars
on an annual basis. True to its German origins, the brand emphasizes on quality, speed and
performance in order to appeal to customers who are car enthusiasts. However, the company
is planning to expand its horizons, with its vision set on North America. For generations, the
US and Northern America have been the target for international automobile brands; as a
result, Mercedes, along with a few other German brands intend to step foot into the market.
However, in order to do so, the company would have to understand the market trends and the
various factors that affect the customers’ perception of the brand. In the paper, an in depth
analysis has been carried out of the German and North American automobile market, and the
transition of Mercedes from its home country to the host country. Also, a PESTEL analysis,
along with Porter’s model, has been used, to throw light on the factors affecting the
automobile industry in North America. The paper also lists the sales strategy of Mercedes in
North America; the marketing strategy, consisting of marketing objectives, market
segmentation and the marketing mix has been provided. Finally, an action plan has also been
specified for Mercedes in order to maximize results of the market cultivation plan.

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Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................4
Daimler AG’s expansion into the North American market...................................................4
Analysis of the German automobile market...........................................................................5
Developing into the North American market from Germany................................................6
Analysis of the automobile industry in North America.........................................................7
PESTEL analysis of the automobile market in North America.........................................8
Porter’s Five Forces.........................................................................................................12
S.W.O.T analysis of the company........................................................................................14
Marketing and sales strategy of Mercedes - Benz in North America..................................17
Target market and market segmentation..........................................................................17
Marketing objectives........................................................................................................17
Marketing mix for Mercedes - Benz Benz in North America..........................................18
Sales strategy of Mercedes - Benz in North America......................................................20
Action plan...........................................................................................................................20
Conclusion:..............................................................................................................................22
References:...............................................................................................................................24

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4MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
Introduction:
Market development may be defined as the process in which a company takes the
strategic step of developing and enhancing a particular market; it may also involve the
process of entering a new market altogether, where the company would have to target a
different segment of buyers and consequently adopt an innovative, new marketing strategy to
increase sales (Malysheva et al. 2016). Market cultivation may be defined as the method
employed by a company while it conducts international business. Market development and
market cultivation, which are often used interchangeably, involve processes that are twofold
– it would begin with extensive research into the market the company is planning to
penetrate; this stage would include segmentation analysis and target market analysis
(McDaniel and Gates 2013). The purpose of such research is to gather sufficient information
on the unexplored market, assess the risks associated, study the geographical and
demographic conditions and finally make an informed decision in the second step (Baker
2014). In the next phase, the company would be endowed with the responsibility of creating a
robust promotional and marketing campaign that would help the company make a mark in the
market (Urde, Baumgarth and Merrilees 2013). To study market development, the following
report takes into account the case of Mercedes - Benz, a German luxury automobile company.
Mercedes, founded in 1926, is a subsidiary of the multinational company, Daimler
AG. Established in Stuttgart, Germanny, Mercedes - Benz today is one of the leading names
in luxury cars, trucks, buses and coaches. With the slogan, “the best or nothing”, the origins
of Mercedes as we know it can be traced back to 1886, when the first ever gasoline
automobile was introduced (Mercedes - Benz-benz.com 2018). In the early 1900s, Daimler
Motoren Gesellschaft was entrusted with the responsibility for Mercedes - Benz marketing.
However, since then, Mercedes has introduced several new technological advancements and

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innovations related to safety which have set the benchmarks in the automotive industry. Apart
from the fact that Mercedes is one of the oldest automobile brands in the world, it is also
important to remember that it is today one of the most popular luxury car brands around the
globe. Daimler AG, the parent company of Mercedes - Benz, is engaged in the development,
management, manufacture and distribution of a wide array of automotive products. At
present, the company carries out operations globally and occupies a significant portion of the
market in Germany, United States, Asia Pacific and Western Europe. For generations,
Mercedes - Benz, with more than 350,000 people employed under the banner, has been one
of the leading manufacturers of top quality cars. One of the main reasons for that could be the
culture prevalent in the company’s homeland – Germany. With regards to this, it must be
asserted that the culture of a country plays a crucial role in determining its marketing strategy
and its performance level as well. German organizations, typically, are characterized by high
efficiency levels; the fact that Germany has a speed limit that is unlimited, it is important for
the car manufacturers to develop vehicles that can perform at optimum speeds without
hindrances like internal noise or strains. This factor has provided Mercedes with a
competitive edge in international markets as well.
Discussion:
Daimler AG’s expansion into the North American market
In 1945, Daimler AG began to promote its export strategy because it was assumed
that the export of automobiles would help it in securing a strong position in the international
market. It was assumed that the automobile market in Germany would be too small for the
long term plans that Daimler had for Mercedes - Benz (Caiazza and Nueno 2014). Moreover,
as far as luxury cars were concerned, only a specific niche market was found in Germany and
it was deemed highly insufficient. The automobile industry had begun to expand after the

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war, however, mass motorization had gained momentum only in the 1950s; thus, it was
estimated that to allow the company to grow, Daimler would have to penetrate international
markets, especially that of North America (Meinel 2014). Moreover, the fact that there were
several other German automobile companies which were competing with Mercedes - Benz, it
was important to make mark in the international market to gain a competitive advantage.
Additionally, by expanding to international markets, namely North America, it was possible
for Daimler to abide by its moderate and stable pricing strategy (Watzenig and Horn 2016).
Analysis of the German automobile market
Before understanding how Mercedes - Benz, under Daimler group, managed to enter
the North American market, it would be beneficial to analyze the German automobile market
and the prevalent trends in the industry. Since Germany has always been the hub for luxury
car manufacturers, the market is highly segmented. Firstly, the market is product oriented;
this means that Mercedes - Benz, with its upper price ranges and high technological
innovations, ranks high in the market (Wesseling et al. 2015). Secondly, the market is also
segmented on the basis of the customer’s demographics, their behavioral and buying patterns
(Hunke and Prause 2014). The market in Germany is dominated by a number of automobile
brands like Mercedes - Benz, Volkswagen or Opel which are fundamentally defined through
innovative abilities and marketing communications; along with that, these companies have a
strong position both in the home markets and in the global context (Timmer et al. 2015).
However, according to the executive committee at Daimler AG, Mercedes would be able to
dominate the international market only by entering the market of US, specifically North
America. Moreover, the economic crisis in Europe in 2008 and 2009 proved to be detrimental
for the industrial sector, and the automotive manufacturing industry was no exception; as a
result, a large number of automotive companies, including Mercedes - Benz, were forced to
shift their focus to international markets (Pavlinek 2015).

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Developing into the North American market from Germany
The main purpose behind expanding into the North American market was to pave the
way for low risk, cost effective and quick reconstruction of the company’s international
operations abroad (Cabigiosu, Zirpoli and Camuffo 2013). Since Daimler was spreading its
branches far and wide, the chances of risk were distributed and thus relatively less. Before
entering the North American market, it was important for Mercedes - Benz to set up a cost
effective sales organization and partner up with other companies. It established a brand image
of being a company that guaranteed exemplary customer service and top quality products
(Bloomfield 2017). The policy in mind before entering the new market was quality and
market oriented, and it was called “Americanization” of the German automobile company.
There were quite a few factors which fuelled Daimler’s decision to introduce
Mercedes - Benz to the North American market. The US market was one of interest for most
German automobile companies because this market was already well developed and broader
as far as the context of automobiles was concerned (Schmitt and Van Biesebroeck 2013). The
three reasons why Mercedes - Benz targeted this particular market were:
 The vast size of the market. In the early 2000s, the automobile market in the US and
Northern America was only booming and the number of people looking to purchase
passenger and luxury cars was massive (Gopal et al. 2013).
 Mass motorization was already underway all over United States, with Henry Ford
establishing the roots for the Ford Motor Company. As a result, a number of laws and
regulations pertaining to sales and car prices were introduced all of which catered to
the general population, enabling them to buy cars. This was further made possible by
the low prices of gasoline, tires and oil; this made it more favorable for automobile
companies to carry out operations in America than Europe, specifically in Germany.

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Germany, when compared to America, had sky high manufacturing costs, which
adversely affected the sustainability of the Daimler organization (Wells 2013).
Moreover, in Northern and other parts of America, owning a car was deemed as a
kind of status symbol; as a matter of fact, in Germany and America, having a car
symbolized freedom from the hegemony of power structures in the post war era, and
this had a profound impact on the sales of cars. Mercedes - Benz penetrated the
American market at the right time, when the customers were open to the idea of
purchasing cars and were looking for best possible options. In addition, a large
number of banks in America were offering car loans, enabling more number of people
to buy their own first hand cars.
 At the time when Daimler decided to export their automobiles to North America, the
buying power of Americans was soaring; this was largely an effect of the Korean War
of 1951 and the Second World War. These political and social conditions catered
favorable circumstances for Mercedes - Benz to enter the market.
The company strategy, as Mercedes - Benz prepared to enter the new market, was to
use the most advanced sales and marketing system so as to build a strong, loyal and satisfied
customer base for long term relationships. With the number of competitors increasing in
Europe, Daimler AG realized the importance of tapping into the North American market
which boasted of relatively low operating and running costs; gradually, Mercedes - Benz
emerged as the top premium brand for luxury cars across the United States.
Analysis of the automobile industry in North America
The automotive industry in the United States happens to be one that is worth more
than hundreds of billions of dollars; it has its roots in the industrial revolution, and today a
large part of the economy of North America is determined by the automobile industry

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because of the large amount of revenue it generates (Law 2017). However, since the industry
is massive in terms of scope, there are a large number of political, social, economic,
environmental, legal and technological factors that affect its growth and the generation of
revenue. As a matter of fact, the recent economic crisis took a toll on the automobile industry
of North America, but post recession, the industry is back to business with a majority of the
population relying on cars for travel and transport (Schulze, Paul MacDuffie and Täube
2015). Moreover, the sales and marketing industry for automobiles is also on the rise; as of
the twenty first century, innovation and technology have become the two most important
factors that determine the performance of a brand in the market (Guajardo, Cohen and
Netessine 2015). Before devising a market cultivation plan for Mercedes - Benz in the United
States, it would be beneficial to carry out a PESTEL analysis of the US automobile industry,
with special reference to North America to understand the prevailing factors. The Porter’s
Five Forces Model has also been applied in this case, in the following sections.
PESTEL analysis of the automobile market in North America
In order to understand the various factors affecting the entry and market development
plan of Mercedes - Benz while it targets the North American market, an external analysis of
the macro environment of the automobile industry will have to be analyzed to gain a
comprehensive understanding (Jurevicius 2013).
Political factors
Political factors of the country would play a crucial role in determining the
profitability of the automobile industry. There are several government laws and policies
which regulate the manufacture, production and sale of vehicles in North America (Allcott
and Wozny 2014). For example, there is currently a pressure from the government to
manufacture vehicles which cause less emissions; this has been done keeping in mind the

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environmental toll of increasing population of cars and consequent rise of traffic in North
America. In addition, the North American government is taking measures to impose taxes on
luxury vehicles and fuel, to reduce the number of cars on the road. Following the models of
some countries, the government is also planning to introduce a new policy of subsidy for
owners of low emission vehicles. Regulations like these are bound to have an impact on the
sales rates of vehicles and of course, on the revenue generated as well (Lampón and Lago-
Peñas 2013). There is thus an increasing need for car manufacturing companies like
Mercedes - Benz to use technology that produces lesser emissions and is also fuel efficient.
More importantly, for foreign car brands carrying out trade in North America, the import
rates would vary depending on the location; similarly, changes in the government regimes
and instable political regulation in the automobile market must also be taken into account
(Diaz-Cope, Lombard and Miller-Stevens 2013). Thus, for a brand like Mercedes - Benz, it
would be important to keep an eye on wage related policies and regulations (the more lenient,
the better) and also manage the operational costs while simultaneously adhering to political
factors.
Economic factors
There are several economic factors which must be taken into account while chalking
out the market cultivation plan. For example, the United States was recently hit by an
economic crisis of epic proportions; as a result, the sales of automobiles, especially luxury
cars, suffered (Castells 2014). Additionally, there are usually high taxes imposed on the
manufacture and production of luxury cars in developed countries, in this case North
America, as compared to the under developed or developing countries. In more developed
markets, the buying power of the customers is higher and such customers would be more
receptive to the idea of purchasing luxury vehicles; that automatically hints at the fact that the
sales of cars belonging to the upper price ranges would be higher (Feng and Figliozzi 2013).

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However, during economic crises, even the buying power of these customers is bound to
decline; that is probably why a large number of local car brands in the US are coming up with
low price cars which would appeal to all customer segments. These are some of the economic
conditions which Mercedes - Benz would have to keep in mind while determining the
profitability of their operations in North America.
Social factors
According to research, the customer base in North America is steeped in a
consumerist attitude, where owning a luxury car is considered to be one of the most important
status symbols, reserved only for the rich and the famous. Over the years, there have been a
large number of changes in the preferences and trends of the automobile industry, with
changes in the attitudes of the customer (Akamatsu, Green and Bengler 2013). In such an
unstable social and cultural environment, it can be difficult for the vehicle manufacturers to
keep up with the changes. Every year, there are a plethora of new models being released
which pique the interests of car enthusiasts. Moreover, different customer segments have
different vehicle preferences. For example, a younger customer would prefer something fast
and flashy like a convertible while an older customer with a family would probably prefer a
sedan (Shende 2014). Thus, for Mercedes - Benz, age distributions would play an important
role in determining the target audience and the marketing strategy (Krishna 2013). It would
be beneficial for Mercedes - Benz to release vehicles which appeal to the target customer,
based on their individual preferences and styles. It is the company’s responsibility to
understand that while some vehicles would sit well with some customers and cultures, it
might not attract others.
Technological factors

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In the automobile industry, one of the most important factors that determine a
company’s success or failure would be the technology they use or their innovative
capabilities; automobile companies, more than any other industry, tend to rely heavily on
innovation. The more technologically advanced a company is the higher market share it has.
Mercedes - Benz, and other German brands are known for incorporating such innovations in
their manufacturing processes, in order to satisfy the high European standards (Aydalot and
Keeble 2018). Thus, the onus is on the car companies to devise innovative new technologies
that are environment friendly and enhance the overall performance of the vehicle. Customers
today are looking for vehicles which not only offer a high mileage but also are fuel efficient
(Calabrese 2016). Mercedes - Benz, the premium choice in luxury vehicles, has garnered
international attention for manufacturing and marketing technologically advanced vehicles.
All the vehicles introduced by the brand either incorporate new technologies or improve on
existing ones.
Environmental and ecological factors
In the United States, and in North America, a number of laws have been passed by the
government so as to reduce vehicle emissions and the air, water and noise pollution caused by
cars (Diabat, Khodaverdi and Olfat 2013). With the growing consciousness about
environment friendliness, carbon emissions, emissions and vehicular exhaust, there is a rising
concern about the way vehicles can adversely affect the environment (Bergek and Berggren
2014). Naturally, automobile companies around the world are being forced to abide by
stringent laws and policies which promote low emission cars and subsidies on fuel
consumption; additionally, there are pollution tests which must be passed by the vehicle
companies before they launch a new product into the market.
Legal factors

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There are also a number of legal factors which would affect the manufacture and
production of vehicles in Northern America. The country has numerous laws regarding safety
measures and quality standards; apart from that, there are pollution laws which must be taken
into account (Hwang et al. 2013). Vehicles that would be exported from Germany in the case
of Mercedes - Benz would be required to pass the strict controls on emission; moreover, it is
important to ensure that the safety laws related to vehicles in a particular country have been
adhered to. With the rise in deaths caused by road accidents in North America, the
government has imposed strict regulations on safety which Mercedes - Benz would have to
incorporate in the business strategy.
Porter’s Five Forces
In order to understand the structure of the market that Mercedes - Benz would be
encountering, the Porter’s Five Forces theory has been applied.
Rivalry amongst competitors
In North America, Mercedes - Benz would be competing with a number of rivals in
the same field like BMW, Toyota, Volkswagen, Nissan, Ford Motor and General Motors. All
of the competitors of the company are ambitious, powerful and aggressive; moreover, they all
engage in order to constantly improve on existing strategies and technologies to gain a
competitive advantage. As a matter of fact, the automobile industry in North America has
become saturated to the point that customers have a plethora of options to choose from. Thus,
to emerge as the clear winner, an automobile company like Mercedes - Benz would either
have to add some value to the product or work on their unique selling proposition or reduce
the selling price (Su et al. 2014).
Bargaining powers of the suppliers

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Automobile manufacturers like Mercedes - Benz would be requiring a stable supply
of raw materials, like hardware parts. This increases the bargaining power of these suppliers.
Since there are a large number of competitors competing for the same raw materials in the
market, there is a greater demand for raw materials; with fewer suppliers than manufacturers,
the power resides with the former.
Bargaining power of the buyers
This technically refers to the number of factors that determine the buying habits or
purchasing powers of the customers. It refers to the reasons behind customers choosing one
brand over another (Rawlinson and Wells 2016). It is often observed, that individual
customers of the automobile industry have some influence against car dealers, which is
almost negligible in the case of car manufacturers. Yet, it would be wrong to assume that the
buying power of an individual customer would have no impact on a company’s overall
performance in the market. Thus, if Mercedes - Benz was to assume that buying preferences
of individual customers are insignificant in context of the bigger picture, they would be
adversely affecting their own profitability. The management at Mercedes - Benz would have
to remember that customers are instrumental in determining the value and the pricing
associated with a particular product. This is all the more poignant in an era where customers
can simply go online and compare prices of similar models of vehicles belonging to different
brands (Reza and Valeecha 2013).
Threat from substitute products
While speaking of Mercedes - Benz’ position in the market, one has to take into
account the threat emerging from the public transportation. With growing concern about
vehicular emissions, more and more people in North America are resorting to public
transportation in their daily lives. Moreover, the transportation services in North America are

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well connected and extremely efficient; thus, people would willingly forego the hassle
associated with private transport and instead travel in a bus or the subway (Redman et al.
2013). Other factors that could push people towards public transportation would include
increasing prices of batteries, tires and gasoline.
Threats of new entries
The entry of a new automobile company after Mercedes - Benz establishes its roots in
the North American market could potentially uproot the company and reduce its profit
margins. However, it must be mentioned that the threat from new entries is comparatively
low in this industry. This is due to a few factors. For one, it would require high capital
investments to replace the premium brands like Volkswagen or Mercedes - Benz; and
secondly, the competition being fierce in this sector, such brands would completely obliterate
potential new entries.
S.W.O.T analysis of the company
Before devising a market development plan for Mercedes - Benz, it would be
beneficial to study the strengths, weaknesses, opportunities and threats associated with the
company (Phadermrod, Crowder and Wills 2016).
Strengths
 Quality, durability and reliability
 Precision and safe engineering capabilities
 Respectable and internationally acclaimed
 Strong financial capability
 Has established itself as a forerunner in global economies
 Well defined corporate culture

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Weaknesses
 Mercedes - Benz was one of the last companies to introduce cars that are fuel efficient
 Has a specific niche market it caters to, which narrows down its target market
 Japanese cars are today gaining immense popularity, which poses a threat to German
cars like Mercedes - Benz.
Opportunities
 The brand value is enough to grab attention in foreign markets. The company would
be able to take advantage of its international repute in North America.
 The company is well known for its technological and engineering capabilities, which
would enable it to spearhead the ongoing revolution in the automobile industry.
 The company boasts of a strong and efficient corporate culture, which would ease its
transition into the new market. Owing to its strong foundation, the company would be
able to carry out strategic changes effectively.
 In North America, the company would be conducting a number of outsourcing and
other operational activities which would help it make the most of the new market.
Threats
 A growing consciousness about the impacts of vehicular emissions on the
environment has led to a worldwide decline in the sales of Mercedes - Benz
automobiles.
 The financial and the economic conditions around the world and in North America is
turbulent at present.
 The company faces severe competition from several other enterprises which are just
as ambitious and innovative as Mercedes - Benz.

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 The consumer preferences and buying preferences are constantly changing, which the
marketing team at Mercedes - Benz would have to keep in mind.
 In some parts of North America, the government has imposed some protectionalism
measures which would have to be considered by the company.
From the S.W.O.T analysis, it can be assumed that Mercedes - Benz is certainly one
of the top brands in the automobile industry with a number of powerful and attractive assets.
More than the product sold by the brand, it is the existing corporate culture coupled with
brand name that forms its main asset (Mercedes - Benz 2014). The core competencies of the
company, which would enable it to target its niche market ad instantly grab the attention of
potential customers in North America are as follows:
 The company, Mercedes - Benz, is internationally renowned for its aptitude for
innovation. The company has implemented a number of changes in its models since
the first vehicle was launched in 1886 – which include float carburetors, four wheels
comprising four brakes, the safety cell, an ESO (Electronic Stability Programme) and
so on (Liu et al. 2017).
 Mercedes - Benz has also been successfully able to maintain its reputation for
producing high quality and durable products.
 Most importantly, Mercedes - Benz has mastered the art of branding and marketing; it
conducts a thorough analysis of the market to have an idea of what the customer
demands or expects from the brand. It customizes its product based on such market
analysis (Brunello 2015).

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Marketing and sales strategy of Mercedes - Benz in North America
Target market and market segmentation
Market segmentation may be defined as the process of dividing the market into a
number of homogenous sub categories consisting of a specific group of customers, where any
of these sub categories might be conceived as the target market of a definite marketing mix in
a marketing strategy (Cross, Belich and Rudelius 2013). While entering a new market, any
organization would have to pay due attention to the audience they would be targeting their
marketing strategy at and the way the market is segmented, so as to gain better insight into
what the customers really want (Solomon et al. 2014). In the case of Mercedes - Benz, the
market in North America would be segmented based on psychographic, demographic and
other behavioral factors. The target audience for Mercedes - Benz is North America would be
customers, both male and female, ranging from ages twenty to forty, which includes
potentially 75 million customers. In North America, the company would be exploring the
previously untapped market of millennials and the Generation X. Target customers would
also include upper class individuals who are inclined towards vehicles with state of the art
technology, safety features, exquisite style and enhanced efficiency. The purpose of carrying
out market segmentation is to find out how Mercedes - Benz could appeal to the younger
demographics. As a result, the Generation Benz which comprised people ranging between
ages twenty to thirty. These people belonging to an online community acted as consultants
for the marketing team so as to educate them about the preferences and buying habits of the
millennial generation.
Marketing objectives
The purpose of listing marketing objectives is to establish the long term and short
term goals that the organization would like to achieve within a given time frame in a specific

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location (Burns, Bush and Sinha 2014). The objectives for Mercedes - Benz in North
America are as follows:
 To establish the brand as the premium name in vehicle manufacturing, especially
luxury vehicles, and enhance vehicle connectivity, digital mobility, transport services,
electric mobility and autonomous driving (Propfe et al. 2013).
 To safeguard its position as the finest in the core global business.
 To gain a competitive edge over Volkswagen and Opel, which have already
established themselves as frontrunners in North America.
 To increase their sales by at least fifteen per cent in the upcoming fiscal year.
Marketing mix for Mercedes - Benz Benz in North America
The purpose of the 4 P’s of marketing, namely product, price, promotion and place,
refer to the four integral components of a marketing strategy (Huang and Sarigöllü 2014).
Before entering a new market, it is important to understand the marketing mix for Mercedes -
Benz, so as to understand the foundations of its market cultivation plan:
Product
In the marketing mix for Mercedes - Benz, the strongest component in its favor would
be the product itself. It has been established earlier on that the company is indeed a leading
premium vehicle brand. It boasts of a wide array of passenger vehicles, luxury cars and both
heavy and light automobile equipment. However, Mercedes - Benz would largely be focusing
on its passenger cars, which include SUVs, sedans and also sports cars. Recently, the brand
has launched the A Class, CLA and the B Class segments, targeted at newer generations
(Londhe 2014). As a matter of fact, Mercedes - Benz also markets roadsters and cabriolets,
along with trucks. The company uses a BlueTEC and the 4matic technology in most of its
cars, which has been tried and tested over generations. Thus, as far as the product of

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Mercedes - Benz is concerned, the brand ensures both quality and technology to the
customers.
Price
Mercedes - Benz is mainly a luxury car brand, which manufactures and sells cars with
premium prices. It has already been mentioned that the car caters to specific niche segments
of the market – thus referring to customers who are willing to pay any price, as long as they
are assured of the quality (Raj, Sasikumar and Sriram 2013). This means that the company
would be following the same high priced strategy that it was following in Germany. In North
America, it is estimated that the prices would range from 30,000 dollars to about 100000
dollars. The pricing strategy of Mercedes - Benz is based on the features and the competition
from other brands.
Promotion
To explore the previously unexplored market, Mercedes - Benz would have to follow
an aggressive promotional strategy. The promotional campaigns of Mercedes - Benz
essentially tend to focus on the precision of safety engineering and the luxury aspect.
However, while entering a new market, they would have to adjust their marketing strategy
according to the evolving attitudes of the customers (Shalender and Singh 2015). Mercedes -
Benz would thus attempt to focus on their approachable, more fun loving and energetic side.
Mercedes - Benz would attempt to advertise their products and services through multi media
channels which include social media, online advertising, billboards, television and so on.
More emphasis would be laid on online advertising than traditional methods (Stead and
Hastings 2018). To promote the brand in North America, several customer oriented activities
will also be implemented.

21MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
Place
All promotional and manufacturing activities would be carried out of North America.
The company is planning to target customers in North America, and thus the strategies would
have to be adjusted according to the traditions, culture and customer perceptions prevalent in
the area. There are numerous Mercedes - Benz dealerships located all over North America,
along with factories to support manufacture.
Sales strategy of Mercedes - Benz in North America
The sales strategy of the vehicles manufactured by Mercedes - Benz in North America
would include the aforementioned 4 P’s of marketing – this takes into account the products
marketed by the brand and also the services to be provided to customers. Apart from that, it is
also important to determine the customer service organization, which is associated with the
system of distribution. This forms the distribution mix, which refers to the various
distribution channels that would be used to ensure that the products are delivered in a timely
manner at an optimal cost. The sales strategy would also include the communication mix,
which in marketing refers to the way information is consciously designed in order to target a
specific market. The purpose of this is to ensure that the strategy in question positively
impacts the behavior and buying patterns of both new and existing customers. The sales
strategy to be followed by the company would include a goal oriented and customer centric
approach which would optimize the company’s performance in the new market.
Action plan
The action plan to execute the market cultivation plan would be as follows:
 It would be beneficial on the company’s par to get an insight into the prevalent market
trends and that of the foreseeable future in order to chalk out a definite strategy. Also,
an in depth market analysis would be recommended so as to understand the customer

22MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
demands, their preferences, buying patterns and factors that determine their decision
to purchase a vehicle.
 In order to appeal to a younger and more dynamic generation, the company could
include certain environmental concerns into their operations. For example, more
advanced technology could be utilized while developing fuel efficient cars. This is all
the more poignant given the fact that the prices of gasoline and petrol are expected to
increase in the upcoming years.
 It would do well to remember that though Mercedes - Benz is one of the leading
brands as far as luxury cars are concerned, it faces tough competition from other
German brands like Volkswagen, who have already made a mark in the market. Thus,
a robust marketing strategy would have to be devised accordingly, so as to give it a
competitive edge.
Timeline for the market development plan:
ACTIVITIES TO BE EXECUTED MONTHLY COST
SOCIAL MEDIA MARKETING $ 40,000
TRADITIONAL MODES OF ADVERTISING $ 35,000
PUBLIC EVENTS (CUSTOMER CENTRIC ACTIVITIES) $ 50,000
CLIENT EVENTS $ 30,000
ONLINE MARKETING $ 30,000
BROCHURES, NEWSLETTERS ET CETERA. $ 25,000
TOTAL MONTHLY EXPENSES: $ 210,000
(Figure: Time plan)

23MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
(Source: Author)
Conclusion:
To conclude, it can be said that market development plan of any organization would
refer to the strategies adopted by the said organization to step foot into a previously
unexplored market. The purpose of a market development plan is to gain insight into the new
market, and devise a strong business strategy accordingly, so as to ensure that profitability of
the organization is maximized. Mercedes - Benz is the most renowned and trusted brand, as
far as luxury automobile brands are concerned. Having been established as a forerunner in the
industry in the mid 1900s, the brand has received respect and love in all the countries it has
expanded into. Being a German brand, the business strategy of Mercedes - Benz is largely
based on the policies, principles, values and tradition of its home country. However, while
expanding its horizons to different countries like North America, the company would have to
make adjustments to its marketing and business strategy according to the traditions, culture
and conventions prevalent in the host country. It must be asserted that the customer
expectations in Germany would be vastly different from that in North America; in the above
paper, the various social, technological, political, economic, environmental and legal factors
that would affect the sales and profits of Mercedes - Benz have been discussed. Moreover, it
is equally important to understand the buying preferences of the customer in the host country,
and the factors affecting it. That is why it is important for the marketing team at Mercedes to
first understand the customer behavior and carry out market segmentation based on
psychographics and demographics. Mercedes - Benz has grabbed attention across the globe
for having manufactured and produced premium luxury cars, which are highly regarded not
just in terms of quality but also technology. It is for this very reason that Mercedes maintains
a high pricing strategy; the purpose of such a marketing strategy is to cater to customers who

24MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
are willing to spend more if it means getting assurance on the quality. Additionally, over the
years, Mercedes has also introduced a number of technologies which are well developed and
give it a competitive edge over other brands; as a matter of fact, the team at Mercedes strives
to incorporate newer and more advanced technologies which can further improve the
performance level of the vehicles manufactured by the company. Such endeavors succeed in
setting the company head and shoulders above the rest, like Volkswagen, BMW, Audi or
Opel. Therefore, in order to optimize results of the market cultivation plan, efforts would
have to be made first by the management and marketing team at Mercedes to grasp the key
features that characterize the automobile industry and the luxury car market in North
America; failure to take the above into account would lead to ineffectual marketing strategies
that do not strike a chord with the North American customers.

25MARKET DEVELOPMENT PLAN FOR MERCEDES - BENZ
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