The Marketing Mix on Mercedes Benz - Essay Example

? Mercedes Benz is one of the most prestigious automobile makers in the world. The company has its corporate headquarters in Stuttgart, Germany. The organization is a global firm that has a market presence in 93 countries worldwide including production facilities in 17 countries scattered across five continents. The firm has over 273,000 employees worldwide. The organization is currently looking for market opportunities to achieve further global expansion in the Chinese market. The country the firm is targeting is the emerging economy of China and the growth of the lower-middle and middle class families. China is a member of the prestigious BRCIS organization which represents the five biggest emerging economies across the world. The purpose of this paper is to describe the marketing mix of the company with an emphasis on its social corporate responsibility efforts. The four Ps of the marketing mix are place, product, price, and promotion. The place the firm is evaluating for further product distribution is China. China is one of the best economic success stories of the past few decades. Its economy has been growing at an approximate rate of 9% during the past 30 years. The current gross domestic product per capita of China is $7,600 (CultureGrams, 2011). The People’s Republic of China is the most populated country in the world with an estimated population of 1.3 billion inhabitants. There is a fast growing middle class in China due to the rising economy of the country, especially in the larger mega industrialized cities such Beijing and Shanghai as well as up and coming cities where major manufacturing centers are located or are being developed. China is the world’s top exporter of goods and the Chinese economy continues to grow exponentially since it has become the hub of manufacturing in the world due to their low wages, lower material costs, an abundance of highly educated professionals, fully developed infrastructure in all the major industrialized cities, favorable governmental foreign investment policies, and lax environmental laws (Mudwig). The country is an excellent location to establish a manufacturing location due to the before mentioned factors, as well as having one of the strongest emerging economies and a fast growing middle class. The heavy industrialization of China led to growing concerns regarding pollution. The Chinese people, like many global citizens are starting to educate themselves more about the importance of safeguarding the environment and how their level of industrial growth has caused China to become one of the most polluted countries in the world, with 20 of 30 most polluted cities in the world (Worldbank). Mercedes Benz has been importing its luxury vehicles in North-East Asia region since 1986. The Mercedes Benz brand has been building some of its vehicles in China since 2006 through Beijing Benz, a joint venture between Daimler Chrysler and Beiki who is the fifth largest automaker in China. Although Mercedes Benz sales of its luxury vehicles have grown tremendously during the last few years, with sales for 2011 exceeding the sales figures of 2010 within the first 10 months, by September 2011 sales have started to slow down compared with previous year sales (4-traders, 2011).The company is concerned that the level of sales growth that the company has achieved so far is starting to get affected by the global economic downturn. The Chinese economy is starting to feel the effect of decreased global demand for exported goods. The products that Mercedes Benz have been distributing and manufacturing in China have been mainly its E-Class and C-Class models of its luxury auto line. Currently both the long wheelbase C and E-class luxury automobiles are built in the Beijing Benz plant through a joint venture. Mercedes Benz vehicles are highly regarded in the Chinese market and with one of the fastest growing middle classes in the world the company has enjoyed great sales growth for the last 5 years. Due to a faltering economy the company’s sales growth seems to be slowing down. In order to maintain a healthy growth margin in the future the company must look for ways to further expand their market share and re-invent themselves. The global recession of the last two years is starting to affect the economic growth of the Chinese economy as a whole, so demand for luxury items as a whole is declining so consequently Mercedes is starting to face decreasing demand for their luxury vehicles. Mercedes Benz needs to look for ways to expand their market share and expand their product offerings to penetrate the fastest growing market segment in China, the lower-middle and middle class. Although wages in rural areas are still very low, in large cities even an entry level factory worker can make over $12,000 with average wage of around $30,000. Mercedes Benz must take advantage of the brand reputation and goodwill that has been cultivated in the Chinese market and create a lower cost alternative ($9000 to 10,000) to their large luxury vehicle line while keeping in line with making their new factories and vehicles “green” or environmentally conscious. Their new vehicle design should be centered around making a small and chic, high quality four-five passenger urban car, utilizing the latest “green” technologies from Mercedes Benz to make the car as efficient as possible and best in class. Mercedes can utilize a lot of their “green” technologies to propel their new affordable design into the 21st century, such as designing a small diesel engine (1-1.5 liter) featuring their BlueTec technology which utilizes a special catalytic process to decrease NOx emissions from diesel engines 80-85%,while maintaining the same level of efficiency and power (Mbusa, 2011). The small, diesel powered lightweight urban car should be extremely fuel efficient, easy achieving more than 35 km per liter, which should put it at a the lead of fuel efficiency in its class, while providing a level of luxury, safety and quality not provided by any competitors in its class. The design should incorporate the latest safety technologies including airbags, safety cage, and crumple zones along with all the amenities such as A/C, power windows and locks and premium sound system standard in order to meet the demands and expectations of the Chinese consumer as well as meeting international safety standards. Chinese buyers expect a high quality, well designed and equipped vehicle from Mercedes Benz, so the company must deliver the best in class technologies and equipment to be readily accepted, possibly under a new brand name, just like Toyota and Honda have done with their Scion and Prius brands. The company must use their legendary engineering and technological prowess to design a new urban car concept that fits the needs of as many buyers possible, while keeping the levels of quality and safety customers have come to expect from Mercedes Benz. The company can partner with Beijing Benz in order to help build the new vehicle after is design is finalized. Beijing Benz already manufactures their E and C-Class luxury vehicles so it would seem logical for Mercedes to also develop the new vehicle in a partnership with Beijing. Since the company already has all the infrastructure, supply chain and experience building high quality, luxury vehicles for Mercedes it should be easier for the company to execute their new project due to their vast technical expertise and experience. As far as promotion is concerned the company must develop a new marketing campaign to launch its new innovative urban vehicle concept, possible under a new name since the vehicle will not be aimed at the luxury market than Mercedes Benz typically caters. The ad campaign should focus on creating a buzz around the new lifestyle cars coming soon from Mercedes Benz. The target market will be up and coming middle class families looking for a beautiful, safe, high quality, small urban vehicle that incorporates the latest technological advancements and designed by one of the world class luxury car manufacturers, Mercedes Benz. By focusing their new marketing campaign to their new target demographic while emphasizing the quality, safety, and efficiency world class performance will not be lost in the new design. Mercedes should have a winner in their hands. Providing a truly luxurious, safe and well-appointed small urban car that caters the needs of the needs and wants of the new Chinese middle class will assure the success of the new venture for Mercedes Benz. References 4-traders.com (2011). Daimler AG. < http://www.4-traders.com/DAIMLER-AG-436541/news/DAIMLER-AG-Mercedes-Benz-China-Mercedes-Benz-will-see-another-record-year-in-China-by-exceeding-2010-13882520/> [Accessed 21 November 2011] CultureGrams (2011). People’s Republic China. [Accessed 21 November 2011] Mbusa.com (2011). BlueTEC Clean Diesel. < http://www.mbusa.com/mercedes/innovation/thinking_green/bluetec> [Accessed 21 November 2011] Mudwig.com. China Manufacturer the best and most powerful manufacturer. < http://www.mudwig.com/2011/11/07/China-Manufacturer-the-best-and-Most-powerful-Manufacturer/> [Accessed 21 November 2011] Worldbank.org (2011). China Data. < http://www.worldbank.org/en/country/china/data> [Accessed 21 November 2011] Read More