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What Mercedes could do to target the middle class customer....

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Mercedes being an elite brand. what possible it could do to capture the Middle Class customers

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What Mercedes could do to target the middle class customer....

  1. 1. Mercedes Marketing Management By: Muhammad Fahad Ali Mirza ID # 121103
  2. 2. 1 MERCEDES IS ONE OF THE WORLD’S MOST RENOWNED BRANDSIN “CAR QUALITY”, HOWEVER, SURVEY INDICATES THAT MERCEDES IS OUT OF REACH OF MOST CUSTOMERS. HOW CAN MERCEDES ADDRESS MASS MARKET WITHOUT COMPROMISING OVERALL ELITE IMAGE? Mercedes  Our Vision To be the Number 1 in Quality, Image and Profitability in the Automotive Sector  Our Mission To delight our customers in everything we are doing. To continually improve the effectiveness of our Quality Management System and our business processes. To continually improve the quality of our products and services. To have a team-oriented and open minded corporate culture involving employees through leadership and individual acceptance of delegated responsibility To be aware of our environment. To have a professional relationship with our business partners.  Introduction The name Mercedes is synonymous with wealth, quality, comfort and reliability. It is a dream automobile for many people across the globe. Now known as Mercedes-Benz, the company is known among the top car manufacturers of the world. It has its own unique style and personal touch, when it comes to luxury cars and no other company can compare to all that Mercedes has accomplished till date. The car dates back to over hundred years and has a very fascinating history. Gottlieb Daimler and Carl Benz are responsible for the early developments and the formation of the Mercedes Benz Company. This article dwells at length on the origin and background of Mercedes. Read on to know its fascinating and awe- inspiring history.
  3. 3. 2  Interesting & Amazing Information on Origin & Background of Mercedes Two men, Gottlieb Daimler and Carl Benz, are credited with the invention of one of the finest car brands of all times. Daimler was born on March 17, 1834 and Carl Benz on November 25, 1844. Both these men grew up with something in common; machines fascinated them from an early age and they were determined to make their mark in the automobile industry. Gottlieb Daimler was the first one to meet with success in this field, when he installed a combustion engine into a road vehicle. Daimler was the first recognized internal combustion vehicle and the first to incorporate a practical transmission system. In 1890, a corporation “Daimler MotorenGesellschaft” was formed to meet the increasing demand for Daimler‟s engine. On the other hand, Benz formed another corporation, Benz & company, at Mannheim, with several associates. There was a motor race conducted by the Petit-Journal of Paris in 1894, which attracted 46 entries. This race was looked forward to by everyone, as it was a test of the steamer and electric versus the gas burners. The first three winning cars in this race were powered by Daimler built engines. Emil Jelinek, a wealthy banker-sportsman was quiet impressed with the performance of Daimler‟s motor in the race. He purchased controlling stock interest in Daimler in the early 1890‟s. He also supported and encouraged Daimler in his idea to create the most powerful car of those days, a 35 hp monster. In 1900, the 4-cylinder Daimler was completed and the car was baptized in honor of Emil Jelinek‟s beautiful daughter, Mercedes. This new car created a sensation in the motor field. Right from its flaring front fenders, rakish rearward sloping steering column to the T-head type cylinder and twin carburetors, Mercedes was a real beauty and did justice to its brand name.Daimler died in 1990. In 1903, Benz took out a competitor to Mercedes, by the name „Parsifil‟. Jelinek, the controller of the Daimler plant, was obsessed with high-speed automobiles. His interest made him control exclusive rights to the bulk of the Mercedes production and carefully limit the sale of the cars to individuals of known influence. This step placed the car with an upper-bracket clientele, which gave Mercedes its reputation as a quality and high performance product. With the commencement of the World War I, the production of the vehicle suffered a great blow, with the factories getting destroyed. However, it took only three years for the owners, O.Hoppe, W.haspel and other coordinators to rebuild the factory and regain the reputation Mercedes rightly deserved. This was also the time when Dalmier and Benz signed an „Agreement of Mutual Interest‟, whereby both the companies merged. In the year 1930, Mercedes-Benz launched the biggest and the most prestigious of their cars. The 770 Grosser, made for the wealthy people of the world, was powered by an 8 cylinder, 7.6 liter engine. In the 1930‟s, Mercedes also manufactured great racing cars, such as the W25 racer. The Mercedes-Benz 170V was yet another classic addition to the Mercedes-Benz portfolio. In the recent years, Mercedes has launched many SUV‟s sedan and roadsters to woo the customer, with phenomenal success and redefined the meaning of „luxury‟ for car
  4. 4. 3 owners. At present, the range of Mercedes cars range from passenger and light commercial to heavy commercial equipment.  SWOT Analysis  Brand expansion and integrated marketing In recent years, with a view to attracting new target groups as part of the compact car initiative, Mercedes-Benz has already modernized its brand image and directed its customer
  5. 5. 4 approach very specifically at the relevant customer target groups. For example, the launch campaign for the new Mercedes-Benz A-Class was mainly directed at new, younger target groups. To this end the brand ran an extremely progressive marketing campaign with a greater emphasis on online activities. The online activities for the new A-Class alone reached more than eight million interested people.  Differentiated sales formats for individual customer contact at the retail level The brand is also moving physically closer to customers, and addressing them directly in their day-to-day environment. This involves the use of both temporary and stationary formats. For the launch of the A-Class, Mercedes-Benz toured through 90 large European cities with pavilions for a period of three months. In this way alone, around 25,000 customers were able to test drive the new model. Currently Mercedes-Benz is presenting itself at the fairs in various townships of Hamburg with a mobile pop-up store in the form of a sea-container. This pavilion combines catering with an informal presentation of information relating to the brand and its products, and also offers the opportunity for a test drive. With such presentations the company is facilitating access to the brand and attracting prospective customers who previously had no contact with Mercedes-Benz. At these fairs in Hamburg, for example, it becomes apparent that more than 70 percent of the visitors do not drive a Mercedes-Benz, and that more than half have had no contact with a salesperson from the brand in the last five years. Due to the positive customer feedback, Mercedes-Benz will continuously expand these formats in the future. Mercedes-Benz is also gradually expanding the existing, stationary inner-city formats. Today around 20 inner-city outlets in e.g. Berlin, Paris, Milan, Brussels, New York, Beijing or Tokyo are thrilling their visitors. Tokyo is one example of how successful they are: since it opened in July 2011, around one million people have visited the inner-city format "Mercedes- Benz Connection" in Tokyo. The resulting sales show a capture rate of almost 70 percent, so more than two thirds of these customers come from brands other than Mercedes-Benz. By 2020 the number of Mercedes-Benz Connection outlets worldwide will more than double.
  6. 6. 5 Toyota  Our vision Most respected and admired company.  Our mission We deliver outstanding automotive products and services to our customers, and enrich our community, partners and environment.  Our four core values Customer first Respect for people International focus Continuous improvement and innovation.  Code of ethics The Toyota name has earned a reputation for quality and integrity, as well as a commitment to responsible management and environmental practices. Ethical behavior extends beyond legal requirements. It means honesty, equity, social responsibility and integrity in everything we say or do. Our goal is to uphold our corporate reputation at all times. To achieve this all employees, contractors obey the law be honest in word and deed respect community values be responsible perform their duties consistent with our Code of Conduct Use good judgment and avoid action that could create a conflict between personal, company and community interests.
  7. 7. 6  Diversity Toyota is very proud of the dynamic mix of cultures, ages, sex, religions and beliefs that make up the melting pot of its 4683 employees. Just to give you some idea of our rich and impressive mix consider this: We have more than 70 nationalities Our youngest employee is 18 and our oldest over 80 13 percent of our workforce is female and 87 percent male The average length of service is 11 years and the average age is 43 years old. It is this diversity of our workplace that we should be taking advantage of by recognizing and respecting both our similarities and differences. In this way, Toyota will continue to maintain a skilled, capable and enthusiastic workforce drawn from a wide range of backgrounds, views and experiences.  Guiding principles The Toyota business is guided by seven principles: Honors the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities Create and develop advanced technologies and provide outstanding products and services that fulfil the needs of customers worldwide Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust and respect between labor and management Pursue growth in harmony with the global community through innovative management Work with business partners in research and creation to achieve stable long- term growth and mutual benefits, while keeping ourselves open to new partnerships
  8. 8. 7  SWOT Analysis  Marketing Strategies On some levels Toyota takes a slightly different approach to marketing compared to their competitors. They have a more „sit back and let the product speak for itself‟ approach. This is not to say that they are not aggressive marketers but it means they want to give off a certain persona. Think about it in terms of a boy chasing a girl. The boy goes through great lengths to be attractive to girls, but what persona does he show the public. The boy wants to seem calm, collected and smooth. He seems to be indifferent if the girl notices him or not. Inside it is all a ploy to actually get attention. The opposite would be if the boy were actively seeking the girl, constantly calling, approaching and courting the girl. This comes off as desperate and actually produces unwanted results. The same thing happens in the car market. One of the most important buying factors is status and prestige, so why would someone want to buy from a desperate car manufacturer? Knowing Your Demographic and Creating Status One of the most obvious pieces of evidence that this is at work is the price of Toyota‟s cars. Toyota vehicles are actually one of the most expensive in their market, but yet they are
  9. 9. 8 among the top sellers. Honda would be there biggest competitors and they seem to take the other road. This would suggest they want to market to the masses. Honda on the other hand tries to show a more prestigious persona. While they still have reliability and fuel economy they also have a touch of luxury and powerful engines. Put a larger price tag on this package and all of a sudden the guy who bought the Honda Accord is snubbing his nose at the guy driving a Toyota Camry. This marketing technique is used in every market, you must decide what road to take and stick with it. Another huge example of this is the fact that no Toyota vehicles are used as Public Utility Vehicles (PUV‟s). This is another factor in establishing status. Some people do not want to drive the same car that all the city cabs are made out of. Toyota chooses to not take this road in exchange of more overall sales. It is all about what you want your brand to be.  Strategy to be adopted by Mercedes As Mercedes is well known Brand all over the world with its Elite Image, yet Expensive: not affordable for many of the people around the world, the following strategies can be adopted to capture masses without compromising on Mercedes‟s Elite Image. If Mercedes collaborate with an International Brand like “Toyota” who has a big market share around the world and serving a large chunk of medium class of consumers, and then provide these medium class consumers with a higher quality but affordable cars and name this brand, for example „Toyota MRS‟ or „Toyota& Mercedes‟, this strategy will capture a considerable percentage of market share without losing existing Upper class of Consumers.Medium class consumer will buy the cars by this new collaboration brand „Toyota MRS‟ or „Toyota& Mercedes‟, they will perceive better quality and image. The existing Upper Class will keep buying their existing Mercedescars and will not care about the new collaboration between Mercedes and Toyota as it will give them same level of quality, image, comfort and satisfaction. They will only consider their own high class car models. 4 P’s With respect to Toyota MRS When Toyota and Mercedes will be combined and producing quality cars there business dynamics will definitely changes. Their market share and value will have an impact on both the companies. It‟s the win will situation for the both companies.  Product When both the companies will be in the collaboration the product they will be producing will be of certain brand. The product will have certain qualities that can satisfy the medium class market and consumer. Middle class consumer doesn‟t want anything out of the box.
  10. 10. 9 Toyota being the company which hold the major share of middle class car and Mercedes the Elite class car. Toyota deals with the Economy of the car and Mercedes Deals with the highQuality and comfort of the car. The product will be of good quality but within the economic requirements of the General People. Production of the car can‟t be that much challenging because Toyota have a Flexible and Diverse Manufacturing Plants all over the World. In a single manufacturing unit they can produce different types of the car.  Price When it comes to the pricing, Toyota is an Economic car which an average middle class person can adopt easily but on the other hand Mercedes is the Elite car which can‟t be afforded by the average person. Mercedes have a very specific market and its customers are willing to pay whatever price company holds of the product. Toyota MRS should not be of High price. As Toyota follows the LEAN Concept, the Mercedes will also have to accommodate with it and can take advantage from the Lean Concept of the Toyota Manufacturing. The Lean Concept is basically known as the Common Sense. Basic Toyota in Pakistan cost around 2 Million Rupees. Toyota MRS should not go above the 3 Million in order to capture the Middle class the major crunch of the market.  Place Toyota and Mercedes both the International companies. The company‟s major focus should be the Developing economies or we can say that Asian countries should be there major target. Asian people will be willing to pay the money if the car is Toyota MRS. The quality and Economy comes in the single shot. Secondly when it comes to the production as well the labor cost in Asia is very cheap. So the cost of the car will also decrease. Toyota MRS Focus should be the Asia as more than 50% of the world‟s population lives in the Asia. And the Elite Status of Mercedes will not be affected as well. And the Toyota Economic Status will also be maintained but the Quality status will help the Toyota and Economy Status will help the Mercedes.  Promotion Mercedes promotes its Elite class status and Toyota Promotes its Economic and Lean Concept. When the best of the both will be combined the Promotion strategy will be formed automatically as there focus should be the developing economies. Biggest advantage in the Promotion will be the two brand name under the one Roof. Both will be striving to maintain the status and to provide something extra in it. They should show that they are producing quality car in the limited budget by utilizing the ever single resource they have.
  11. 11. 10 Under the mind of the middle class customer the status of Mercedes will help a lot. There thinking process will think that 3 Million and a Mercedes is ours. They can use the different electronic means the Promote there new concept car. And sometimes Hype of anything can also help in developing the market. And the economic and durability concept of Toyota will also help them. Both the companies don‟t have to strive much for their Promotion as the WOM (Word of Mouth) of both the companies is quite positive in the market as well as in the minds of the customer. AnalysisBefore Toyota MRS Customer Analysis Once the market in which the company wants to operate has been identified, we analyze the specific end users of the product or service. Precise data collection and customer segmentation allow companies to better understand consumer needs, tastes and behavior. We then analyze the data in order to develop a specific marketing campaign to successfully reach the target market and to better forecast demand in the short- and long- term. Product Development With rapid advancements in materials and technologies, the product life cycle is getting shorter and shorter. In order to keep up and remain a top player in the market, a company needs to constantly improve existing products and develop new ones. For small companies, it can be especially difficult to invest in R&D. Global Business Union offers professional technical consulting on how to improve products and services in order to continuously satisfy existing customers and attract new ones. Pricing Global Business Union assists its clients by setting an optimal price for their products and services. Pricing is one of the most important elements of the marketing mix and it is often seen as an indicator of the quality of the product. Basing the pricing decision on industry benchmarks and revenue expectations, we help the client find the right pricing strategy to attract customers and at the same time maximize the sales margin. Branding Especially for a start-up company that is looking to enter a new market, it is essential to build and develop a strong brand. The brand will become the link between the values of the company and the customers. A strong brand image means brand recognition, an emotional connection with the user, customer loyalty, and lower costs of customer retention. Global Business Union assists its clients in developing a step-by-step branding strategy to achieve these results.
  12. 12. 11 Sales and Distribution A good brand and product are not enough if you cannot reach the customers. Developing an extensive network of sales representatives, agents, distributors, wholesalers and dealers can be a tough task, especially for small companies and start-ups. Even if you need to export your product, Global Business Union is able to assist you by creating an efficient sales network and managing your distribution channels with the aim of increasing the market share and improving the overall service offered. Recommendations for Toyota MRS o Clarify what is driven globally and what is managed locally. o Understand local market needs and develop a collaborative approach. o Develop and socialize a global marketing plan early (seek feedback). o Manage campaigns like an army operation – plan ruthlessly. o Make sure you track and adjust in real time. o Consolidate and share insight. o Over-communicate. Reap of Benefits Most obviously, it ensures your marketing strategy is applied consistently (but smartly) across territories and it allows you to operate more efficiently through economies of scale. Beyond this, one of the biggest benefits of operating globally with a local presence is the opportunity it provides to develop a deeper understanding of the markets in which your company operates and their potential. It enables you to priorities and optimize your efforts and budgets effectively. And last but not least, it gives you as many territories to test and learn from. For each campaign or activity you run, you will gather feedback and suggestions from a range of markets. This is invaluable insight you can leverage by developing a repository of best practice and ideas which will help drive your long term success Conclusion Company has the strong brand and excellent technology performance and meets the objective it has good relationship with the customer it has strong market share value. Following the above suggested strategy will allow Mercedes Benz to capture medium level consumers and will increase their Market share without losing the existing upper class consumers.
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