Marketing_Analysis_of_Mercedes_Benz_Company

Marketing Analysis of Mercedes Benz Company By Heba al- shehri Under the Guidance of Dr. Jacob Cherian (M.Com., M.S.W., M.Phil., Ph.D.) MARKETING DEPARTMENT, COLLEGE OF BUSINESS ADMINISTRATION, ABU DHABI UNIVERSITY, UAE Table of Content Methodology ……………………………………………………….….. 3 History of Mercedes ……………………………………………….……. 4 Business description ……………………………………………….…….4 Background ……………………………………………………….…….. 5 Position and purpose …. ………………………………………….……..5 Vision ……………………………………………………………..……...6 Mission………………………………………………………………...….6 Mercedes Benz commercial vehicles department ………………………6 Position withing DCME ……………………………………………….... 6 Contribution to DCME …………………………………………………...6 Product or services ……………………………………………………….7 Customers ……………………………………………………………...... 8 Marketing plan …………………………………………………………...8 Objective fulfillment ………………………………………………….. .10 Advertising …………………………………………………………….. 11 Media …………………………………………………………………….11 Pricing and profitability ……………………………………………….. 12 System evaluation (SWOT analysis) ……………………………….…. 12 Competition factors ……………………………………………………. 17 Business analysis ……………………………………………………… 18 Marketing four Ps …………………………………………………….. …20 Overall focus area of company’s problem……………………………. 22 Conclusion and recommendations …………………………………......23 References ……………………………………………………………… 24 METHODOLOGY Primary Sources: Survey among target population through:  Questionnaire through mail & fax  Questionnaire Mercedes Benz customers  Discussion with all employees of Mercedes Benz Companey Secondary Sources: • Sales Record • Subscription Record • Profit and loss Account • Balance sheets and other financial statements • Salesmen’s Record • International Agencies sources • Private Sources History of Mercedes: Mercedes is famous Germany brand provides Luxury European classy cars to their customers. Mercedes is the second famous brand in the world after Coca-cola. In Dec/22/1900 Daimler-Motoren-Gesellschaft (DMG) produced their first car. Mercedes is a brand of Daimler Motoren Gesellschaft (DMG) whish started to develop inrcede1900.Mercedes Jellink was the daughters of Emill Jellinek who was working with Gottlieb Damiler in racing car production. Mercedes is a Spanish girl name which means Grace. Business Description: The main target the establishers of Mercedes Benz Company focus is to present high quality product. As Globule Company they focus on targeting larger scale of local emirates customers, Arab region country customers and respectable percentages for exportation. They try to meets all the consumers’ demands and aspirations whether locally, regionally or even internationally. We are well-appointed with all necessities of achievement we are also aiming at opening new markets in the eastern part of Asia, northern Africa and South America. Background DaimlerChrysler Middle East is a regional office of DaimlerChrysler playing the role of a median between the mother company and the different general distributors (GD) in the Middle East region. Position and purpose The purpose of the regional office is to be closer to customers, enhance market intelligence and sensitivity, and support operative business thus contributing to a more profitable and competitive performance. The central position of DCME helps in fulfilling its purpose by being a median that develops a combining vision for both the manufacturer and general distributors. The below diagram visualizes DCME's role as a regional office: Vision To be the most respected automotive sales organization in the Middle East with the most valuable & best managed brands. Mission To provide infrastructures, expertise & services in order to develop & steer the most valuable Sales/After Sales organization for DCAA. Mercedes Benz Commercial Vehicles Department (MBCV) An operating unit under the German wing of DCME. Its workforce counts up to 15 persons spread around a product range of Trucks, Vans, Buses, and Special Vehicles. Position within DCME Understanding the organization's structure helps in understanding the needs as well as the reporting requirements within DCME. shows the position of Commercial Vehicles Department within the organization. Contribution to DCME The Commercial Vehicles department is responsible for 13% of DCME sales, as well as 16% of total revenues and 6% of group contribution targeted for 2006. 2008 Objectives Product or services: Customers needs over time better than the competition by offering a high-variety product line. More selection in a product line can make it more likely that each consumer finds exactly the option he or she desires (customization strategy). As will as, more selection in a product line can allow each consumer to take pleasure in a variety of options over time (variety-seeking strategy). Other idea, such as profitability, cost considerations, how much variety to offer and where in the delivery chain to offer it, and when too much variety cause confusion does or overload are discussed. Customers: Most of our customers are coming from different nationality and different cultures. Those are how likes these Mercedes Benz because it’s luxury. Most of their segments are mature customers. Mercedes Benz C-Class Customer Segment and Product Line-up Marketing plan: Marketing will be subdivided into there main branches, locally, regionally and internationally. The system of marketing has been put since the establishing of the Company as it is a factor that guarantees the success of our plant. Regionally: Our high quality controlled products would be exported to many Arab Countries in the Saudi Arabian lands, Jordan, Palestine, Yemen, Oman, Qatar, Bahrain, A lot of exportation contracts have already been issued in all these countries Worldwide exportation: since the establishment of Company, many researches on marketing and distribution have been carried out and conducted to check the availability or monopolizing the market. Some contracts with eastern parts of Asia like India, China, Bangladesh, Pakistan and Russia have already been issued with agreement of supply for one year. Public Relations: since public relations are always thought of before starting a project so there they are the motivators behind the success of our project, we give it priority. All efforts of management will be dedicated to providing support to distributors for the company products. Thus by the above these marketing, Distributing and Exportation systems whether locally, regionally or internationally together with good public relations, our management is quite confident of achieving good reputation by our high quality products. We hope within a year our products would be prevailing international markets of Europe and America all our efforts are dedicated for achieving this goal. The position of DCME (thus MBCV) has made a two way flow of information that helps achieve its objectives as follows: Objectives fulfillment Advertising: Advertising is promoting of products, services, companies and ideas, usually by an identified sponsor. Advertising also means any place an "identified" sponsor pays to deliver their message through a medium. Advertisement has other very important roles. The same advertising techniques used to promote commercial goods and services can be used to: Inform or Educate and motivate the public about non-commercial issues, such as AIDS, political ideology, energy conservation, religious recruitment, and deforestation the advertisement of our product will be through. Media:  The TV commercial is generally considered the most effective mass-market advertising format and this is reflected by the high prices TV networks charge for commercial airtime during popular TV events.  Increasingly, other mediums are overtaking television such as the following:  Advertising on the World Wide Web is a recent phenomenon. Prices of Web-based publicity space are dependent on the "relevance" of the surrounding web content and the traffic that the website receives.  E-mail advertising is another recent phenomenon (spam) Pricing and profitability: The prices of the company's products will be determined first and fore most by the competitive. Pricing for similar products in our marketing area, the company will depend on the management of Company and its distributor’s network to determine fair pricing. It is projected that the net profit per case will be minimal for the first tow years while the company pays back the line of credit. System Evaluation SWOT Analysis The following analysis studies the different aspects of both Afab Interface and MaRS: 1. Strengths: The main strengths of the company are: - Repetition: Delmar Mercedes Benz Company was established since 1962 with a reputation for luxury, prestige cars, reliable and high manufacture quality. That becomes worldwide brand name company. - High quality and Superior manufactured products It becomes high assets to the company since they develop high quality cars for the premium segment of customers. - concerning on high safety: Safety is the second element of Maslow’s hierarchy of needs, Mercedes Benz attempt to diversify this way from competitors because they know that customers worry about their physical safety. - Efficient Channel of distribution: Mercedes Benz has loyal costumers in UAE, GCC and other countries. Dealers of Mercedes Benz are distributed in all over UAE In order to give satisfactory services which help them controlling their distribution channel. - After-Sales Services: Benz recognized the need for improved quality and customer care after purchasing decisions. So they try to create customer loyalty by including maintenance for the product after sale also by providing three years warranty without mileages concerning. Moreover they set up a lot of dealers within one country. - Innovation: Mercedes Benz Company understands that cars need improvement and support always. So they try all the time to create new shapes and model such as the new round front light. They try to attract customers by modern looks and different styles. 2. Weaknesses The main weaknesses of the company are: - High prices those are not affordable by all income classes. - Narrow Market Segment: Mercedes Benz customers are the segments which are able to afford for their Luxury product. Due to high prices it’s hard to attract more customers to enlarge the market share. - High selling prices: - High Production Costs: Cars are the product which needs technology support, company always needs improvement to differentiate there products from other brands so they focus on their fixed assets which is improving the technology machinery and hiring skilled technicians which is considered as a variable assets for the company. - high selling prices: Customers compare between BMW cars and Mercedes Benz cars prices as major competitors of Benz Company. BMW prices are much lower than Benz prices within the same category, model, and horses’ power. - Less fashionable compared to BMW: If we compare between BMW and Mercedes Benz, Mercedes s are considered as maturity car so there segment are considered as low among of young people. BMW is considered more fashionable and trendier than Mercedes Benz so it is very popular among young people. 3. Opportunities - Advanced technology: Currently, computers add more benefits’ to automobile industry. Computers programs helps inventing automate machines to support in manufacturing purpose and creating system that add more financial value to the product. Therefore cars are more safety, automatic rather than manual which is easies to drive. Programs also helped Mercedes Benz to improve their quality. - Government policy support: UAE is a free zone area; a lot of brands increase their economic scale when they import foreign cars because of the low tax rate. - Low interest rate: Banks in UAE offer low interest rate to individual or company car loans to increase the purchasing power. Therefore customers who would like to buy luxury cars like Mercedes Benz cars can have loans and spend it purchasing their fantasy cars. - Family oriented Now a day, consumers are more aware about their safety so when they decide to purchase car they want to be sure that they purchase their safety with it. Customer required safety for their social needs and the people the care about (children’s). So it is big opportunity for Mercedes Benz to satisfy the customer safety needs. - Benz has new great opportunity if they design special models for ladies. - It also has great opportunity with the young age customers who prefer sporty looking and avoid the mature looking and big size cars. 5. Threats - Growing strength of the Euro: The growing strength of the Euro poses a risk to Mercedes dollar-denominated earnings. - oil price: Fuel prices are one of the factors that affect the customer buying decision; when the price of oil increase customers prefers to purchase cars with low fuel consumption. There for sales volume will be affected. - Competitors: Like any other consumer- oriented product, competition for sales requires dedicated focus and resources, the Mercedes Benz company products are highly competing with all the famous Mercedes Benz Company worldwide. Japanese industry tries to expand their market share by lunching new luxury models such as Lexus which is considered as the main competitors of Benz. By concentrating on targeting higher segment Lexus achieved the same variety of Mercedes. So it affects Mercedes Benz sales volume as luxury competitor brand. Brands in the American Luxury Car Market (Note: Based on sales. Units:Number of vehicles sold) Competition factors: A Capital resources: our well-capitalized company is a le to withstand and any financial difficulty so then long duration in competition would be there. B Technological advances our fully automated computerized, high-speed manufacturing with also help us to cut costs and produce high quality products able to compete international products. C Distribution methods: with Company's strategy of marketing and distribution whether internally or externally, load with trucks and other modern means of exportation, we can also compete for long. D Consumer acceptability: the majority of the consumers will purchase good new products that are will advertised for carry good labels, confidence and eye catching designs so we expect a good large of consumers . Business analysis: Mercedes Company has involved essential elements such as consumer demand, competition, new product development, production costs, marketing costs and profitability for their products. 1-Consumer demand: Consumers are more aware about what they need and want so they seek the best alternative in the market such as reasonably priced products, reliable cars, comfortable and stylish cars. Some customers are concern about environmental friendly cars. 2-Competition: Mercedes cars are facing more market competition each day from the Japanese brands such as Toyota, and Lexus which takes advantage from Mercedes market share . Comparison of Toyota and Mercedes Benz Luxury Cars 3-New Product Development: Mercedes research and development department develops new models each year and modify the current models by updating the inertial engine, style, and by producing new lines such as the SLR Class the super sport car in 2004. Mercedes-Benz has increased its sales in July 2008 to 11.6% (20,733 vehicles, compared to 18,586 vehicles in July 2007). Sales of the C-class models has increased 45.4% to 6,241 units, from 4,291 units in July 2007.Sales of the E-class has increased 53% to 4,938 units in July 2008, compared to 3,227 units in Jul2007. Overview of Sales by Mercedes-Benz Cars July 2008 % change Jan.-July 2008 % change Mercedes-Benz 92,700 -1.1 691,900 +3.4 smart* 12,400 +25.5 81,300 +56.7 Mercedes-Benz Cars 105,100 +1.4 773,200 +7.2 Western Europe 60,300 -8.1 457,800 +2.9 - of which Germany 27,900 +0.9 196,600 +4.6 NAFTA 26,100 +26.9 172,400 +13.9 - of which U.S. 23,300 +25.3 154,000 +12.5 Asia/Pacific 11,600 +10.6 89.100 +15.5 - of which Japan 2,700 -12.6 23,000 -6.1 Marketing four P's: Which is known as marketing Mix (Products, Place, Promotion and Price) by these factors, mangers’ have the power to target their customers and control the market. 1-Products: Mercedes Benz products are very high luxury cars with wide variety such as B-Class, C-Class, S-Class, E-Class, SLK Class, SL Class, CLK Class, R-Class, G-Class, Vans, MPV, Camper Vans and Trucks. They produce big cars, maturity looking cars and sporty young looking cars as new line. 2-Places: Emirates Motor Company, the official Mercedes-Benz distributor in Abu Dhabi and Al-Ain the member of Al Fahim Group, has available wide number of show rooms in all countries. In addition Mercedes cars are found every where in the world. 3-Promotion: Even though Mercedes Company is the second famous brand in the world they do promotions, advertisement, public relation and personal selling in order to make a wider customer range. 4-Price: Mercedes Benz was known as the most expensive luxury car that middle class and low class couldn’t afford, but recently they expanded these customers’ concern to have middle class cars for customers. Mercedes produce lower cost luxury cars in the market. Mercedes Benz price range between £13,892 and £332,500 there are a lot of factors that can influence the car price such as the shape of the model, engine horse power and type of fuel used. Mercedes Benz A-Class Price Range: £13,892 - £21,777 Body Style: Fuel: / Mercedes Benz B-Class - Price Range: £17,442 - £23,387 Body Style: Fuel: / Mercedes Benz C-Class - Price Range: £22,937 - £52,570 Body Styles: Fuel: / / Mercedes Benz CLC-Class - Price Range: £19,920 - £27,240 Body Style: Fuel: / Mercedes Benz C-Class Sports Coupe - Price Range: £19,672 - £26,887 Body Style: Fuel: / Mercedes Benz SLK-Class - Price Range: £28,762 - £51,592 Body Style: Fuel: / Mercedes Benz CLK-Class Coupe - Price Range: £30,525 - £66,805 Body Style: Fuel: / / Mercedes Benz CLK-Class Cabriolet - Price Range: £34,125 - £70,405 Body Style: Fuel: / Mercedes Benz E-Class - Price Range: £27,802 - £69,097 Body Styles: Fuel: / / Mercedes Benz M-Class - Price Range: £36,167 - £75,147 Body Style: Fuel: / / Mercedes Benz R-Class - Price Range: £36,420 - £53,370 Body Style: Fuel: / Mercedes Benz CLS-Class - Price Range: £43,957 - £73,997 Body Style: Fuel: / / Mercedes Benz CL-Class Coupe - Price Range: £79,652 - £149,565 Body Style: Fuel: / Mercedes Benz S-Class - Price Range: £55,022 - £147,965 Body Style: Fuel: / / Mercedes Benz SL-Class - Price Range: £63,782 - £150,079 Body Style: Fuel: / Mercedes Benz GL-Class - Price Range: £52,472 - £66,522 Body Style: Fuel: / Mercedes Benz SLR - Price Range: £317,700 - £331,500 Body Styles: Fuel: Mercedes Benz Viano - Price Range: £24,002 - £35,832 Body Style: Fuel: / Body Style: - Saloon - Estate - Hatchback - MPV / People Carrier - SUV / 4x4 / Four Wheel Drive - Coupe - Convertible Fuel: - Super Unleaded Petrol - Unleaded Petrol - Diesel Overall Focus Area of Company's Problem: The main problem Mercedes Benz Company is facing competition with other automobile company such as Lexus and BMW. In some countries consumer encourage domestic product so instead of purchasing Mercedes car the purchase domestic product. Customers prefer to purchase Japanese car because it’s known as reliable car with good performance and low cost of maintenance. Japanese company tries to gain more customers by manufacturing cars with new models and designed styles in the market. Moreover, domestic cars are considered strong competitors to Mercedes Benz cars because some countries add the minimum tax to encourage domestic products. These companies attract consumer to purchase it which affect the Mercedes car market. These companies may affect Mercedes sales volume significantly. Another factor affect Mercedes Benz sallies volume the customer attitudes. Customers change their attitude from buying luxury cars in dynamic way. Now a days consumers prefer to save there money instead of spending it on expensive luxury cars. Middle income classes do not consider buying Mercedes an option when they decide to purchase car. As will as Mercedes lost apart of there share compare to the earlier time. Conclusion & Recommendations Mercedes Benz is known as symbol of high class luxury consumer. Middle class customers feels wealthy when the buy Mercedes Benz cars. Some consumers avoid purchasing Mercedes because of the high price, heavy iron body and the maturity looking. Consumers considered price before taking the decision of purchasing car. Although Mercedes Company are trying to offer promotion and trying to change the prices but that seems no enough to increase the customer market share. They should give more attention to the 4 P’s (product, promotion, place and price) in their marketing mission. Mercedes should conduct questioners predict the customers taste and attitudes while purchasing decision. Mercedes should lower their maintenance spare part to be affordable so customers will not avoid purchasing it because of the high costly services in there warehouse. In my personal opinion Mercedes problems can be Easley solved by applying the right strategies. References: 1. Drucker, Peter F(2003), the new realities, 2nd edition, Transaction publisher 2. Management information systems, C.S.V. Murthy, Introduction to MIS, P2 3. Wilson M. (1997), the information Edge: Success Management using Information Technology, Pitman publishing 4. Morris , S. Meed, J and Svensen, N. (1996), The knowledge Manager: Adding Value in the information age, Pitman publishing 5. Harry, M. (1997) Information Systems in Business, Pitman publishing 6. Cambridge International Diploma in Management, Information System Management. 7. Kotler, P. (2000), Millennium Edition, Marketing Management, Prentice Hall 8. Daft, R. (2000), Fifth Edition, Marketing Management, Dryden Press 9. 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