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What Mercedes could do to target the middle class customer....
By: Muhammad Fahad Ali Mirza
ID # 121103
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
To be the Number 1 in Quality, Image and Profitability in the Automotive Sector
To delight our customers in everything we are doing.
To continually improve the effectiveness of our Quality Management System and our
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.
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-
Interesting & Amazing Information on Origin & Background of
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
owners. At present, the range of Mercedes cars range from passenger and light commercial to
heavy commercial equipment.
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
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
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.
Most respected and admired company.
We deliver outstanding automotive products and services to our customers, and enrich our
community, partners and environment.
Our four core values
Respect for people
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,
obey the law
be honest in word and deed
respect community values
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.
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.
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
Work with business partners in research and creation to achieve stable long-
term growth and mutual benefits, while keeping ourselves open to new
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
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
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
among the top sellers. Honda would be there biggest competitors and they seem to take the
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
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.
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.
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.
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.
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.
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
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
AnalysisBefore Toyota MRS
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.
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.
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.
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
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.
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
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