Marketing Plan of Launching Mercedes Benz E-Class in Hong Kong - Case Study Example

Marketing plan of launching Mercedes Benz E-Class in Hong Kong 2010-2011 Table of Contents Table of Contents 1 Executive summary 2 Introduction 3 Marketing Plan for Mercedes-Benz E-Class (2010-2011) 4 Researching and Selecting Market Opportunities: 6 Implementing and Controlling the Marketing Effort: 11 Conclusion 13 Reference 14 Executive summary The importance of cars in the contemporary world is no longer restricted to a mere locomotive tool. People use their cars to express their taste and status. The change in the thought process of the consumers has directly affected the policies followed by the car manufacturers. The car manufactures are now more focused in introducing advanced technology and better features to cater to the needs of this section of customers. This has resulted in a wide array of cars, each designed to address specific customer concern. Automobile industry is one of the most competitive industries. Hence in their struggle to gain competitive position various marketing strategies are framed and implemented. This project deals with the marketing plans that need to be followed while launching Mercedes Benz E-Class in Hong Kong for the year 2010-2011. To begin with the prevailing market condition of Hong Kong market has been analysed and then the marketing strategy of Mercedes has been discussed. Competitors, who play a great role in influencing the marketing strategy of the company, have also been identified. Taking all the vital information into consideration, the marketing plan for launching Mercedes Benz E-Class in Hong Kong 2010-2011 has been developed. The plan takes care of each of the elements in 4P mix and also the budget to be used for the marketing plan. Introduction Mercedes-Benz is a luxury automotive manufacturing German company that produces a vast range of cars, buses, trucks and coaches. The company was founded in 1881and today the name Mercedes Benz is a symbol of quality and style. At present the company produces a wide range of passenger cars like A-Class, B-Class, C-Class, CLS Class, E-Class, G-Class, M-Class, R-Class, S-Class and few more. Among them, E-Class offers executive size cars of different engines and body style. The symbol “E” stands for a German term Einspritzmotor which means fuel injection. This series was launched in 1930’s and even today it is known for its innovative and attractive models. Few of the famous models offered by Mercedes Benz are E350 Coupe, E350 Sedan, E550 Coupe, E550 Sedan, E63 Sedan, E350 Cabriolet, E550 Cabriolet and E350 Wagon (Mercedes, n.d.). The E-Class cars were considered as the “Motor Trend's Import Car of the Year for 1996” (Motor trend, n.d.). Many of the older models offered by E-Class are durable and fuel efficient and hence are often used for taxis and for special purpose vehicles in countries like Singapore and Malaysia (Mercedes-a, 2010). Though it has now been replaced by the new models offered by Mercedes Benz E-Class which are more stylish and are targeted to the high income group people who can afford to pay a ransom for purchasing them. Marketing Plan for Mercedes-Benz E-Class (2010-2011) The steps to be followed in marketing plan are as follows: Analyzing Market Structure and Behaviour Researching and Selecting Market Opportunities Developing Market Strategies Implementing and Controlling the Marketing Effort Analyzing Market Structure and Behaviour: Mercedes Benz Hong Kong limited was founded in 1986. However, it was Mercedes-Benz China Limited which was actually servicing the Northeast Asian customers till 2005. This solely owned subsidy of Daimler AG was the franchise holder of different products manufactured in Macau, mainland China and Hong Kong SAR. In January 03, 2006; Mercedes-Benz Hong Kong Limited was launched to take up the responsibilities related to import and distribution of cars produced by Mercedes Benz. In Hong Kong the company has three showrooms as well as six workshops. The company is trying hard to expand its product portfolio and also to offer world class service to the customers of Mercedes Benz (Mercedes Benz, n.d.). Figure 1: Sales & Service Network (Source: Mercedes Benz, n.d.) In Hong Kong, the premium models were highly appreciated by the customers and they gave a healthy response to almost all the models (Mercedes Benz-a, n.d.). Encouraged by it, Mercedes Benz (MB) decided to increase the production of new models of Mercedes Benz E-Class in Hong Kong to further increase the market share of the company. Though BMW went on to become the leader in global luxury car market, MB on the other hand had to be satisfied with the second position. Sale of MB showed a positive growth in China and Hong Kong but the competitors like BMW and Audi also registered an enhanced growth in the sale in these markets. E-Class is projected as the ultimate choice of the elite and the connoisseurs of high class car. In December, the company sold more than 380 units in Hong Kong and occupied the position of the lead brand in this market. The total delivery of E-Class cars in Hong Kong (2009) was 1,171. Figure 2: Overview of Sales by Mercedes-Benz Cars (Source: Diamler, 2010) Researching and Selecting Market Opportunities: The economic condition of the Hong Kong is one of the strongest in the Eastern Asia. It is considered to be one of the most open and dynamic economies. The automotive industry of Hong Kong largely depends on its economic condition. Hong Kong economy was significantly affected by the global crisis on 2007-2008. However, in 2009 the rate of decline of GDP did show a considerable improvement as compared to the previous year (U.S. Department of State, 2010). The economic condition of Hong Kong is very much influenced by its market condition. Demand for automobiles was boosted as a result of the liberalisation of the Mainland, which is one of the leading automotive markets in the eastern Asia. Technology The technology of Hong Kong is mainly influenced by the Japan, China and Korea. The population of Hong Kong is very inclined towards the latest technology for their automobiles. Hong Kong government provides sufficient funds in order to foster innovation and technology. The automobile industry in Mainland has introduced latest technology and know-how but most of these technologies have been imitated from the developed countries. Hong Kong Mercedes Benz has realized the technology trend. Automobiles with “Telligent brake system” and with eco-friendly engines are some of the prominent technologies used by Mercedes Benz (Mercedes Benz, Honk Kong. n.d.). Cultural and Social Status of Benz Owners The worldwide marketing strategy of Mercedes Benz is focused on catering to the taste of mainly the elite class and wealthy customers as the price range of its cars are quite high. With the rise in the standard of living in Hong Kong, the customers are now able to buy high cost cars. “As one of the world's most exciting and prestigious brand, Mercedes-Benz offers a comprehensive range of products to the customers in Hong Kong and Macau” (Mercedes Benz, Hong Kong. n.d.). Mercedes Benz cars are an icon of prestige, excellent motoring, and luxurious look. Therefore the Mercedes Benz customers generally belong to the high end of society. Product Review The customers of Mercedes Benz are from the elite class which is but a fraction of the entire population. However, the company serves their limited customers with a wide variety of products. Currently, the company is offering different models of cars like A-class, E-class, C-class, S-class, GL-class, M-class etc. The E-class cars have a sporty look with 4-cylinder engine. Then maximum average speed of E-class model is around 240 km/hr. The displacements of these models are 1749 cc. These models are midsize luxury sedans which provide more technology at a lower price range. The price ranges vary from HK$ 465,000 to HK$ 1,509,000 depending on the features and added technology (Mercedes Benz, Hong Kong. n.d.). Competitive Review At present the car market is highly competitive, and Mercedes Benz is facing a strong competition from the car manufactures from US and Japan. Products like Audi A6, BMW 5-Series, Acura RL, Chrysler 300, Jaguar XF Series, Volvo S80 and many others are competing with the cars offered under Brand name of E-Class (MSN, 2010). Thus while developing the marketing strategy MB needs to review the competitive strategy followed by its competitors. Strength Weakness Opportunity and Threat (SWOT) of MB E-Class in respect to Hong Kong Market: Strengths 1. It offers different models to suit the requirement of different customers. 2. The cars have world class technology and posses many innovative features. 3. Strong brand image in domestic as well as in overseas markets. Opportunity 1. The people in Hong Kong are getting more conscious about their living standards and are accepting luxury cars as they add value to their social image. 2. The per capita income will show positive growth in near future as economic condition is improving. 3. MB has the option of forward as well as backward integration to gain synergy. Weaknesses 1. Further expansion of business might result in certain problems related to efficient human resource management. 2. Almost all the product range under the E-Class brand is for high end users, but the living standards of many people in Hong Kong in not so high. Threat 1. The competition is high. 2. The competitors are also introducing new technology in their products; hence it is difficult to gain customer loyalty. 3. Other issues like fuel prices and environmental issues affect the company. Developing Market Strategies: MB will position (place) E-Class cars as high end user luxury cars. While designing the marketing plan for E-Class in Hong Kong, all the four elements in marketing mix will be taken care of and they will help in developing the market strategy. These are as follow: Product: 1. At present MB has introduced certain specific products in the Hong Kong market and almost all of them have given a positive result, so MB should introduce certain new products to attract more and more customers. 2. To trade-off the risk associated with environment degradation and emission of greenhouse gases, more fuel efficient technology should be introduced. 3. With time, cars using electrical energy or any other mode of energy should be promoted under the brand name of E- Class. 4. While launching the new product the company should verify whether the new model suits the requirements of the local customers in Hong Kong. 5. Along with the enhancement in quality and technology, safety will also be a governing factor while designing new cars. Price: 1. As the automobile market in Hong Kong is highly competitive, hence the best strategy is to follow “competitive pricing”. At present BMW 5 series as well as Audi A6 are strong competitors of the MB E-Class range. Hence while setting the price MB should take into account the price offered by them. 2. As E-Class is a range of luxury cars, low price might give wrong impression regarding its quality to the potential customers. Hence gaining price leadership will not add a competitive edge to the company. Place: 1. An efficient distribution channel always assists the company to enhance its sale through smooth distribution of products. Hence MB will revive its distribution channel efficiently through reorientation. 2. The company will try to develop forward integration with the distributers to reduce business risk. 3. The company will open a number of new showrooms where the customers will have a chance to see, feel and test drive different models. 4. Numbers of service providers will also be increased because this will assist in increasing customer satisfaction and developing a healthy relation with them. Promotion: 1. The company will continue to rely heavily on advertising in different media for mass promotion of its products. 2. As compared to customers of developed nation, price is a major factor for the customers in Hong Kong. Therefore the company will offer heavy discount as and when possible. 3. Internet based promotion will be used to attract young generation. 4. Relation based marketing provides a healthy way of attracting and retaining customers in automobile industry, hence MB will use relation based marketing to promote E-Class product range. Implementing and Controlling the Marketing Effort: The whole marketing plan will be segregated on basis of monthly activities so that the plan can be implemented effectively. The month marketing plan 2010-2011 is as follows: January- The marketing department will collect and analyse data of last year’s sale. This will assist in understanding buyer’s behaviour. February- The marketing team will start work related to opening of new showrooms. For that appropriate location will be identified, the company will take vital decisions regarding the size of the showroom, the budget to be allocated and also requirement of human resource. March: The marketing department will assist the research and development department for developing cars that best suits the requirement of customers in Hong Kong. April: The company will launch new advertisements in different media. Data related to customers will be gathered and will be analysed for relation based marketing. May: Off season sale will be given in different showrooms to attract more customers. June: The company will participate in different activates related to corporate social responsibility. This will assist in getting positive publicity. July: The company will start few service centers for providing better service to its customers. August: Till this time some of the showrooms will be inaugurated and company will advertise to make customers aware of this issue. September: The company will introduce certain new models under the brand name of E-Class. October: The company will gather information regarding the marketing strategy followed by its competitors. This information will be used to revive the marketing strategy of the company. November: From now onwards the festive season starts, this means that the company will pay extra attention on its marketing communication strategy. Rate of advertising will increase, in addition to this, different offers in form of free gift and heavy discounts will be used to attract customers. December: This is the curtail phase of festive season, hence company will continue with the marketing strategy used plan in November. If required the rate of discount may be increased to attract more customers. The company will conduct monthly review of its marketing plan so that it can modify the plan as per changes taking place in economy and in the market condition. This monthly analysis will also assist in finding the reasons because of which the company failed to achieve its sales target. Conclusion After undertaking the research of market conditions in Hong Kong the above mentioned marketing plan will be launched. This will assist the company to further enhance its market share in Hong Kong and to retain the position of market leader in the luxury car market. It can be assumed that with further improvement in the economic condition in Hong Kong, market for E-Class product range will develop and thus the company will succeed in improving its sales and profitability. Reference Diamler. 2010. Mercedes-Benz is Premium Brand with Strongest Growth in December and Fourth Quarter. [Online]. Available at: http://www.daimler.com/dccom/0-5-7153-1-1264482-1-0-0-0-0-0-9293-7145-0-0-0-0-0-0-0.html [Accessed on May 31, 2010]. Mercedes. No date. E-Class Overview. [Online]. Available at: http://www.mbusa.com/mercedes/#/classLanding/?vc=E&yr=2010 [Accessed on May 31, 2010]. Mercedes. 2010. Taxi & Mietwagen. [Online]. Available at: http://www.mercedes-benz.de/content/germany/mpc/mpc_germany_website/de/home_mpc/special_vehicles.flash.html [Accessed on May 31, 2010]. Mercedes Benz, Hong Kong. No date. About Us. [Online]. Available at: http://www.mercedes-benz.com.hk/content/hongkong/mpc/mpc_hongkong_website/enng/home_mpc/passengercars/home/passenger_cars_world/About_Mercedes-Benz_Hong_Kong.html. [Accessed on May 31, 2010]. Mercedes Benz, Hing Kong. No date. Price List. [Online]. Available at: http://www.mercedes-benz.com.hk/content/hongkong/mpc/mpc_hongkong_website/enng/home_mpc/passengercars/home/new_cars/price_list.html. [Accessed on May 31, 2010]. Mercedes Benz. No date. Mercedes-Benz Hong Kong Limited . [Online]. Available at: http://www.mercedes-benz.com.hk/content/hongkong/mpc/mpc_hongkong_website/enng/home_mpc/passengercars/home/passenger_cars_world/About_Mercedes-Benz_Hong_Kong.html [Accessed on May 31, 2010]. Mercedes Benz-a. No date. MB Launches E-Class Prime Edition. [Online]. Available at: http://www.mercedes-benz.com.hk/content/hongkong/mpc/mpc_hongkong_website/enng/home_mpc/passengercars/home/passenger_cars_world/News_and_Events/e-class_prime_edition.html [Accessed on May 31, 2010]. Mercedes Benz, Honk Hong. No date. Telligent® brake system. [Online]. Available at: http://www.mercedes-benz.com.hk/content/hongkong/mpc/mpc_hongkong_website/enng/home_mpc/truck_home/home/trucks/atego/telligent_system.html. [Accessed on May 31, 2010]. Motor Trend. February 1996. Mercedes E-Class - Motor Trend 1996 Import Car Of The Year. [Online]. Available at: http://www.motortrend.com/features/112_9602_import_car_of_the_year_mercedes_e-class/index.html [Accessed on May 31, 2010]. MSN. 2010. 2009 Mercedes-Benz E-Class. [Online]. Available at: http://autos.msn.com/research/vip/overview.aspx?year=2009&make=Mercedes-Benz&model=E-Class [Accessed on May 31, 2010]. U.S. Department of State. 2010. Background Note: Hong Kong. [Online]. Available at: http://www.state.gov/r/pa/ei/bgn/2747.htm#econ. [Accessed on May 31, 2010]. Read More