Mercedes Benz Brand Performance - Essay Example

?Introduction The ability to create a strong brand image is one which can alter the way in which a company functions and the overall success which ithas. As a brand creates the right perception to customers there is the ability to grow and enhance the products which are used. An example of a strong brand image which alters the way in which a company is looked at is the Mercedes Benz. This particular car is noted for its characteristics based on luxury and compatibility for driving. The growth of this particular car has not only altered the popularity and mechanics of the car. It has also enabled the identity of the company and the brand to build a stronger reputation and to create the necessary components to creating the ideal car for a specific social group. The result is the brand image being able to enhance the growth and strengths of the company while attracting a specific type of consumer to the car. This paper will examine the brand performance of the car as well as how it is continuing to affect the performance of the company. Overview of Mercedes Benz The Mercedes Benz is often referred to as a luxury car and is noted as an international car that carries style and class. The manufacturer is based in Germany and is noted for making cars, buses, coaches and trucks. The primary company is Daimler AG with the Mercedes Benz being a division of the company, specifically because of the style and make of the car. The first car was built in 1926 by Karl Benz but links back to 1886 with Kent Benz’s first introduction of the automobile. This particular model was combined with the Mercedes, created in 1901 by Wilhelm Maybach, both which were combined and patented in 1926 for the Mercedes Benz model. The first features which were noted included the approach to safety with the model as well as the approach of using the latest technology for the vehicle. The introductions which were initially created have led to the automobile becoming one of the most popular and distinguished vehicles as well as the oldest model that is still made and upgraded with cars today (Mercedes Benz, 2011). The Mercedes Benz is not only noted for the different components with the history but has also developed a strong reputation which has led to growth within the branch of the company. There are currently three divisions of the Mercedes Benz, including the AMG, McLaren and Studebaker – Packard. The difference between each of these is based on the car production which is offered as well as the designs which are used. The main company is the AMG, which consists of the older make and model. The McLaren expanded this into the luxury vehicles that are based on sports cars and specialized engines which can be used for racing. The third branch, Studebaker – Packard, was in existence until 1986 and consisted of the US division of the company and car models which were used. Each division is noted for the high – quality materials which are used with factories being placed in over 10 regions throughout the world, all which lead to the cars being rated above average and five star quality. The innovations that are combined with this include upgrades to engines, fuel efficiency, safety cell construction, traction control, electronic stability programs and power engines. This has allowed the Mercedes Benz to keep a strong reputation with innovation and safety as the main features that are associated with the car (Mercedes Benz, 2011). Competitors The competitors that are associated with the Mercedes Benz have the same approach to innovation, safety and a high – quality, luxury car that is used. BMW, Audi, the Porsche, Cadillac and Lexus are the top five competitors that Mercedes Benz is known to compete with. Currently, the BMW and Mercedes Benz are fighting for the top award in luxury vehicles at an international level. However, the Porsche and Audi are well – known through various social circles as being of luxury and containing specific features that are able to compete with the high – quality and technological components of the car. Despite the competition which is associated with this, Mercedes Benz is continuing to lead sales and revenue with the sales of the car, making other competitors second to the sales of the car. It is suspected that this particular lead in the competition comes from the several classes of cars that are offered by Mercedes Benz, specifically with the new innovation of the S class, which is able to add in more high end alternatives for those using the car. The continuous increase in sales and reputation which Mercedes Benz carries is then able to continue to remain ahead of the luxury cars that are competing against the main vehicle (Automotive Intelligence, 2011). Brand Performance The brand performance that is a part of the Mercedes Benz is another area which continues to develop and offer more with the vehicle. The social reputation of the Mercedes Benz, innovative features and the ideology as a luxury vehicle is one of the ways which has caused the brand performance to increase. It has been found that the all time sales of the vehicle have led to a continuous 3% increase in the past 10 years. This has included sales by 2006 of 1,148,500 units of cars internationally as well as increased sales in various regions of the globe. Figure 1 shows the increases that have continued to emerge from 1998 to 2006 with the Mercedes Benz. Figure 1: Mercedes Car Group Sales This particular set of sales is combined with the performance of different car groups that are allowing for stability and growth of the car group. The most popular sales are coming from the A and B class with sales at 26% and the C class with sales at 28%. The E class of cars follows this with sales of 21%. These percentages of sales from 2006 are an 11% increase from the year 2005, showing the popularity in the specific units as a main implementation of the company, as seen in figure 2. Figure 2: Mercedes Product Sales These particular concepts show that the Mercedes Benz not only is able to provide high – quality and innovative vehicles but also has continued to expand the sales and brand performance with the reputation that is held (Automotive Intelligence, 2011). The brand performance that is associated with the Mercedes Benz holds this particular concept because of the approach which is taken with the vehicles. The first way in which the brand performance has been able to build is from the long standing history of the Mercedes Benz, specifically with the claim as being the first automobile to work from Germany. This reputation is one which immediately allowed the company to gain the reputation of being innovative and carrying forward with the structures that would help in offering technology. This particular brand performance is combined with the continuous icons and images that are a part of the brand performance. The link to sports cars is continuously used to show the innovations and the appeal of the car. This is combined with the social reputation that is based on the innovation and luxury car that is defined within the arena and which allows each individual to have a particular ideology based on the car. The design icons, technology and claims are able to add into this. The Mercedes Benz cars add in extra features such as outside gloss, symbols from the vehicle and extra features in the interior, such as stitched car seating. The extra designs and technology are the small areas which allow the performance of the car to continue to move forward and remain ahead of the competition (Mercedes Benz, 2011). Marketing Mix The different images that are associated with the Mercedes Benz further with the marketing mix that is used with the images, including the price, place, promotion and product. Each of these are analyzed with the reputation that Mercedes Benz continues to carry and add into with the growth of the product. Price: The price of the Mercedes Benz is higher than other cars. For most, this would be a weakness of the company. However, it is the higher price that allows the Mercedes Benz to keep the reputation of being a luxury car and offering the innovation which is required. The higher pricing in the market is able to show that there is more technology, higher levels of innovation and top quality products that are offered through the company. More important, the brand image has expanded into different models, such as the A, B, C and S model. This has allowed for expansion and diversity with the price for different makes and models. The technology features, designs and innovations are what determine the models as well as the pricing features which they should have. This offers strength with the diversity that is available with the company as well as expectations which consumers have with getting a high quality car (Knox, 2004). Place: The second component which is able to work as a strength for the Mercedes Benz is the place which is incorporated into the car. The main area which is used as headquarters is Germany, specifically which holds a strong reputation for the first cars being invented and for carrying high quality technology. However, the Mercedes Benz is noted worldwide and has office and manufacturing locations in over 12 countries. The promotional areas and place is combined with this, all which offer placement of the vehicle into even more regions, giving an international reputation with the car. The only weakness that is associated with this comes from the different regions that do not have as strong of an image of the Mercedes Benz and which do not provide as many sales as other countries. This is based on the economic structure and external environment as well as the image which is in the country about cars and other needs. Developed countries and those interested in the luxury cars through the promotions of media and other images have a stronger reputation of the Mercedes Benz then other areas that are not as interested in the luxury image (Car Shows, 2011). Promotion: Another strength with the Mercedes Benz that adds into the brand reputation is the promotion which is used. The development of promotions is based on focusing on the luxury item. This is done first with the sports cars that have innovations with the engines and other features for efficiency and speed. This immediately attracts a specific group of individuals that are interested in the vehicle. The promotions are combined with the focus on luxury and new innovations which are offered to individuals interested in high – end cars. As seen in Figure 3, there are specific promotions based on luxury and innovation that set the car apart. Figure 3: Mercedes Benz Promotions Each of these images shows how the promotion of the car is based on luxury and high – end innovations. Each image uses an open space where there can be no comparison to others. This is combined with images such as the gods and goddesses, giving a promotional concept of being only of the best quality and being fit for the gods. This is combined with the last two images, both which contain celebrities that are interested in the car, such as Lara Stone and Julia Stagner. This helps to show the promotion as being one fit for only the elite and high society while giving an image of luxury. All the images further this by combining the promotions not only with the elite but also with the idea of fantasy. The gods and goddesses and the robe which is worn by Julia Stagner emphasize this most, giving the communication that this is a fantasy car given to others. The idea of the elite and only having best quality is then presented in the promotions, allowing the Mercedes Benz to continue with the reputation required for this specific class of individuals. Even when the car is not based on the sports features, the same components are used to draw this desire from others. Product: The product is another component which is able to add into the image and figures which are used. The Mercedes Benz begins this with the brand image of the triangle on two sides that is placed in front of each of the vehicles and which immediately draws in the identity of the car. This is furthered with the social presentation of the luxury car which allows one to be a part of the fantasy. The extension into sports cars and the electronic innovations which are added in offer another strength to the vehicle and the way in which it is maintained. The strength is based on making the brand elastic. The product always carries the Mercedes Benz symbol and idea of luxury and fantasy. Even when the cars extend into other products, there is still the recognition by this one brand image and the message which is carried into other areas. The concept with the brand expansion then is able to lead back to the main message of the vehicle and the social stigma which it holds as an overall product (Monga, 2010). Segmentation, Targeting, Positioning The concepts used with the mixed marketing approach further with the segmentation, targeting and positioning that is used with Mercedes Benz. The segmentation is based on the elite class of individuals and those interested in sports cars. The approach is to offer the new innovations and luxury class to individuals which are interested in spending more on a car that will last. The idea of having a luxury car is then able to move into the class of individuals that have a higher amount of income or want to make a statement with the car that they have through the idea of luxury. The stigma that is surrounding the segmentation is based specifically on the ideas of economy and wealth as well as living out a fantasy with the car that one drives. This is based on the emotional impact of the car and the concept of creating desire with the vehicle, specifically with the communication used based on luxury, value, innovation and a car which is based specifically on the segment of high class innovations (Niyogi, 2012). The target and position that is associated with this is able to continue with the ideas of luxury and fantasy while focusing on those of a specific income level. The demographic target is approached by those with higher income or fanatics of cars. It further interests those who have a liking of vehicles as a hobby. This comes from the sports car segment that is used by Mercedes Benz and which is able to create a different approach and position to the cars. The position that is used is based on combining both of the branches of the Mercedes Benz, one based on innovation and safety and the other based on the sports segment. With this, there is the ability to expand into the market by those who have a high interest for cars and which are interested in the higher pricing because of the image which the Mercedes Benz carries. This particular strategy allows the car company to continue with the higher pricing while allowing those who are working with the luxury, value and innovation to create a stronger approach to the images which are used. The communication and knowledge which is used about the Mercedes Benz continues with this same reputation and strong message while highlighting the cutting edge features that target those interested in the newest innovations of vehicles (Cumberford, 2012). Brand Illustration The brand illustration that is a part of the specific approach of the Mercedes Benz is one which allows for the company to continue to attract the market and to stay ahead of competitors. The illustration is one which begins with luxury and fantasy with a car. This immediately allows the car to be available to the elite and to those who are interested in the latest technologies with cars. The brand furthers with building the idea of being a premium make and of holding higher quality than others. The products available are defined by the extra components that are used, such as stitching the car seats. This moves into the mechanics of the car with the high – end engines patented by the company and which allow the vehicles to continue with the different reputations. The different classes of cars, while holding different features, continue with the same brand image. When there is a noticed symbol of the Mercedes Benz, one immediately is attracted to the features and thinks of the message of luxury, exclusivity and high – end technology which is available. The ads, communication and the approaches taken with the technology of each car all add into this continuous image and illustration of the car (Strach, 2006). Evaluation The concepts which are used with Mercedes Benz have allowed it to become one of the most recognized and noticed cars that are available on the market. The strategy which has been used has been to communicate a strong message about luxury, high – end quality and innovation that is a part of the company. The strategy is one which was used specifically with the company’s ability to create an image based on the first invention of the car in Germany and the reputation which this holds. The continuous innovations, attention to detail and the highlights of the car then add into the continuous communication which is used with the company. More important, the brand image is able to expand with other lines while allowing the market of those interested in cars and different pieces of reputation with the company to be associated with the brand name. Each of these perspectives has allowed the Mercedes Benz to attract those interested in ideas of luxury cars and interests in the particular brand name (Vigneron, 2004). Strengths and Weaknesses The strengths which are associated with the Mercedes Benz come with the strong communication and image which is carried. The first part of this is based on the symbol of the Mercedes Benz which is easily recognized and used on all classes of cars. For those interested in cars, this immediately leads to the communication of luxury, high – end details and a car that is able to remain ahead of the market. This allows those interested in cars and which want to present a specific image of class and economy to be attracted to the vehicle. This continues with the specific classes of cars, all which carry the same image but which move into areas such as sports vehicles and those used for the elite. The strengths of the marketing mix continue with this. The Mercedes Benz has strategically placed higher prices to show that the car is of the highest quality. They have continued with the promotion, all which is focused on the fantasy vehicle that every individual, including celebrities, want to drive in. The aspects of these lead to the understanding that the product is only for those who want high quality, innovative materials with an attention to detail. The approach which is used by Mercedes Benz, while creating a strong target market, also holds some weaknesses. If one is not in the necessary economic bracket that is a part of the target market, then there is an immediate question of pricing and affordability. This limits the target market into a specific segment of sold vehicles. At the same time, the classes of vehicles have expanded to include different economic classes. However, the strength of the brand reputation of being one of luxury may continue to carry the image to the other classes of vehicles. This limits the amount of expansion which is available to the products available as well as the segmented target markets that are interested in the Mercedes Benz. The changes in the external environment at this time continue with this specific reputation and the limitations which this may hold in different regions or by specific segments of markets. Brand Value The brand value that is a part of the Mercedes Benz is noticed as the top luxury car currently in the market. While there are other competitors, there is little to no approach that is able to overtake the amount of revenue and number of units sold with the Mercedes Benz. This is based on the sports vehicle division and the second division of the car that is continuing to be a part of the name. The brand value continues with the history of the vehicle and the strong amount of communication which is given with the vehicle. Each of the elements with the products add together to create a strong amount of brand value. It is expected that this will continue to grow within the next few years, specifically as the economic fluctuations lead to many wanting to have a luxury vehicle or to be a part of the class of those who have the newest innovations in cars through the Mercedes Benz. Conclusion and Recommendations The concept of brand identity as a part of a product and company is one which can develop into the complete growth of the company. When looking at the Mercedes Benz, it is noted that the brand identity has allowed the product to flourish. The strategy which has been taken is to allow each of the separate elements of the vehicles to be based on luxury, high quality vehicles and new innovations. The elements of pricing, promotion and the place have all led into the understanding of the Mercedes Benz as the luxury vehicle. This is one which does not compare to other vehicles and which allows for the expansion of the vehicle. When examining the separate strategic options of this particular brand, it is noted that the communication remains consistent with creating a brand identity based on luxury, fantasy and high – end value. While the Mercedes Benz holds a variety of strengths, there are also recommendations which can be added in for the luxury product. To continue with the line of cars is also the need to look at the external environment and fluctuations which are taking place. Alterations with environmental concerns from cars as well as the economic downfalls which are occurring also mean that there needs to be an expansion of the position and target of the Mercedes Benz. To do this, the brand image needs to have a second branch or should alter with different classes that are able to offer more with the product and the identity which it holds. This one weakness is one which needs to be approached with strategies that show the luxury and value are not taken away while allowing the market to expand into the quality for other economic demographics and needs. However, the growth of the Mercedes Benz and movement into the international market is one which is expected to continue to expand with the luxury value and approach which has been taken. References Automotive Intelligence. (2011). “Mercedes Car Group: Sales and Production Figures.” Retrieved January 4, 2012 from: http://www.autointell.com/nao_companies/daimlerchrysler/dc-business-figures/mercedes-benz-sales/merc-pass-car-sales-01.htm. Car Shows. (2011). “Round Up of 2011: The Benz Patent Motor Car.” 3d Car Shows. Cumberford, Robert. (2012). “German Icons: 2013 Mercedes Benz SL.” Automobile Magazine (February). Knox, S. (2004). “Positioning and Branding Your Organization.” Journal of Product and Brand Management31 (2). Mercedes Benz. (2011). About Mercedes Benz International Retrieved January 4, 2012 from: http://www3.mercedes-benz.com/mbcom_v4/xx/en.html. Mercedes Benz. (2011). “New Mercedes Benz Enhances Brand Reputation as a Design Icon”. Retrieved January 4, 2012 from: http://news.mercedes-benz.co.uk/?p=8849. Monga, AB. (2010). “What Makes Brand Elastic? The Influence of Brand Concept and Styles of Thinking on Brand Extension Evaluation.” Journal of Marketing31 (2). Niyogi, Subhro. (2012). “Merc Eyes 1000% Growth by 2020.” The New York Times (January). Strach, P. (2006). “Brand Corrosion: Mass Marketing’s Threat to Luxury Automobile Brands After Merger and Acquisition.” Journal of Product and Brand Recognition 13 (2). Vigneron, F. (2004). “Measuring Perceptions of Brand Luxury.” The Journal of Brand Management 42 (3). Read More