Marketing Mix Decisions of Mercedes-Benz - Case Study Example

Marketing Mix Decisions of Mercedes-Benz Name: University: Date: Marketing Mix Decisions of Mercedes-Benz Introduction Marketing mix according to Goi (2009) is a business tool utilised by organizations’ management to remain competitive in the global markets. Marketing mix focuses on four key areas of decision making (product, price, place and position) in the process of marketing that are integrated as well as mixed so as to get the desired results and be able to meet the wants and needs of the customers. Therefore, marketing mix can be described as tactical marketing tools that must be controlled by the marketing managers so as to effectively satisfy the needs of the customers. These days, for automobile companies to be successful in the marketplace that is increasingly competitive, they must offer quality products that satisfy the needs of the customers and take part in the broader distribution and supporting it with effective promotion strategy. Modern organizations use a different set of tools to successfully communicate the thrusts and upside of their service or product offerings to the consumers as well as other stakeholders. Mercedes-Benz is well-known for its exclusivity and quality all through its product lines. Its products are normally marketed to upper class as well as middle-class people across the globe with outstanding success. The company has been able to effectively differentiate itself from its competitors such as BMW, Toyota, and GM through successful positioning (VigarEllis, Barrett, & Chiweshe, 2009). This has been achieved by offering its customers superior value, thereby generating value that customers use to make purchasing decisions. Mercedes-Benz has been successful in its positioning strategy because of the unique pricing and promotion strategy it uses. The paper seeks to examine the marketing mix decisions of Mercedes-Benz with focus on the 4Ps Discussion According to Owomoyela, Olasunkanmi, and Oyeniyi (2013), during the designing of the product the company must first evaluate the needs of the customers. Mercedes-Benz is associated globally with world-class brand of tracks, cars, coaches as well as buses well-known for their luxurious nature. Presently, the company’s product line ranges from advanced luxury coaches, trucks to buses and cars. Mercedes-Benz has introduced numerous innovations, which have facilitated the establishment of the company. At the company, the product is considered the strongest P of the 4Ps. presently, the company produces different types of car models such as C-Class, E-Class, S-Class, as well as the ML-Class models. Other models that the company produces include SLK-Class, CLS-Class, GL-Class, Mercedes-Maybach, SLS-Class, and many others. The Mercedes luxurious appeal has brought about success in the company thanks to the different models that it offers. Mercedes-Benz ensures that it offers its customers optimal driving comfort and performance through cheaper professional quality maintenance and 3-year warranty for new products sold. To satisfy the customers, the company through its Certified Collision Centres makes sure that the need for repair is done with deft precision by utilising genuine Mercedes-Benz Parts during the maintenance. Therefore, Mercedes-Benz should ensure the needs of the customers are determined by ensuring that the designs and models of their cars fulfil such needs. Furthermore, the company should ensure that products’ attributes, which includes quality, brand name, complexity and newness does not affect the behaviour of the consumers. Mercedes-Benz should carry out consumer segmentation analysis with the goal of ensuring that the product mix is consistent with the customer mix. Inventories should be reduced at Mercedes-Benz by providing a product mix by that is stronger relevant and more targeted. Pricing strategy as mentioned by Musonera and Ndagijimana (2008) is a crucial factor that shapes the purchasing behaviour as well as decision making process of the customers. For a company like Mercedes-Benz, pricing is a crucial element of the marketing mix since it generates money and defines the ability of the company to survive in the competitive marketplace. Mercedes-Benz tends to follow Customer Value-Based pricing approach, whereby the price of the product is dictated by the consumers’ perceived value (Doyle, 2009). Therefore, the product price is determined prior to the production and marketing of the product. The prices of the Mercedes-Benz’s products are very high; still, the price is matched with the remarkable performance and justified with comfortable and luxurious exterior and interior. Rather than providing a low-cost price, the value-added approach justifies the expensive product through the addition of services and/or features. Besides that, Mercedes-Benz uses premium pricing strategy, whereby the products prices are artificially kept high with the goal of encouraging favourable insights amongst customers. This strategy exploits the tendency for customers to believe that highly priced products have a unique reputation or signify incomparable distinction and quality. Besides that, the company has invested a lot in user experience and design; for example, the company has been doing research about driverless vehicles and lately introduced a driverless delivery truck. In view of this, the price of the products the Mercedes-Benz produce should not just be classy but also affordable for every consumer. The company must look for ways to price their products to the extent that the consumers feel comfortable to purchase the products. Evidently, there are several pricing strategies that can be used by Mercedes-Benz to market its products in the increasingly competitive marketplace; therefore, the company should use these strategies to ensure their customers’ need for luxury and pocket-friendly products are met. Besides that, the company’s distribution infrastructure has to reflect the product and pricing strategy. Place according to Owomoyela, Olasunkanmi, and Oyeniyi (2013) includes every tool and decisions that are associated with making products accessible to the customers. Therefore, a place may be categorized into direct delivery, institutional houses, merchant houses, and open market. Mercedes-Benz has adopted an aggressive tactic that has made it a fierce competitor in the global market and has managed to push off its competitors. The company has improved its distribution channels through the introduction of manufacturing plants in different continents. These plants have helped the company to improve its distribution channels and facilitate accessibility of the products to the customers. Furthermore, the plants have enabled the companies to solidify their product orientation. Akin to other automakers, Mercedes-Benz has ensured that its distribution channels are organised in a three-layered hierarchy; the first layer consists of the factories, research & development facilities as well as centres for sales and marketing. The second layer consists of national sales organizations tasked with the finishing of new cars for Mercedes-Benz by equipping them with features that are specific to that country. The third layer consists of the local dealers who sell as well as service old and new cars on behalf of Mercedes-Benz. Besides that, the company uses a broad network of dealers so as distribute its product across the globe. Imperatively, Mercedes-Benz should change the brand perception and reposition it so that it can appeal scores of the younger generation. Besides that, the company should consolidate its logistics and production systems since these systems are crucial for sustaining flexibility that is needed by automakers so as to remain competitive. This is particularly important to Mercedes-Benz because it builds premium cars. Even though the logistics structures of the company have technologically advanced recently, the company should ensure the current systems are integrated with SAP system to ensure high flexibility as well as improve business processes support. In terms of promotion, the marketing strategy of Mercedes-Benz have for years focussed on the safety, luxury as well as precision engineering of its products, but increased competition has forced the company to change its product so as to satisfy the consumer attitudes that are constantly changing. Presently, Mercedes-Benz marketing strategy concentrates more on showing a side of Mercedes-Benz that is fun loving, more energetic as well as approachable. The company has changed its marketing strategy so as to be able to meet the demands of the expanding market. To increase communication with the target market, the company access its customers through social media (Facebook, Twitter, Instagram and YouTube); online advertising; print media (magazines and newspapers); television advertising; and creating excellent customer service at the sales’ points. The company has successfully built a reputation of uniqueness and quality in all its products; in consequence, this makes it the most distinguishable brand globally. Therefore, Mercedes-Benz enjoys a reputation of prestige as well as class. Given that the company is considered a premium brand it employs advertising strategies that are beyond the line strategies. This connotes that most of its advertisements are made through the mainstream media and sometimes through social media as well as its website. The techniques of promotion used by the company ensure that its brand integrity is maintained and communication with the target market is effective. The majority of the company’s adverts are normally informative; therefore, this re-affirms the company’s product orientation as well as re-confirms how the target market essentially consists of affluent individuals. Most of the company’s advertisements mirror geodemographic market segmentation, with the objective of showing the car’s design and also to broadcast the luxurious appeal to the customers. Through utilisation of the promotional tools, Mercedes-Benz has been able to bring new customers as well as improve customer loyalty. Still, the company should not underestimate the value of social media marketing because the majority of its younger customers spend most of their time in the social media than on the mainstream media. To make their campaign effective, the company should integrate the promotional tools with the great customer service so as to generate customer loyalty. Conclusion In conclusion, the paper has examined the marketing mix decisions of Mercedes-Benz with the focus on the 4Ps. As mentioned in the paper, Mercedes-Benz has used positioning strategy to become a fierce competitor in the automobile industry. The company uses a multi-channel distribution network to place its products in the global market, and the products are sold in line with the premium strategy. Still, pricing has become a challenging problem for the automakers, because of the increased competition in the marketplace. Many automakers including Mercedes-Benz are facing strong competition, and as a result, they have been forced to look for defendable and unique position for their products against substitute choices. As evidenced in this paper, marketing mix is a powerful tool that has made marketing appear simple, and has enabled Mercedes-Benz to separate marketing from other activities within the company. The marketing mix components, especially product and price have changed Mercedes-Benz competitive position. Still, decisions about one ‘P’ of the marketing mix cannot be made without taking into consideration its impact on the other ‘Ps’. References Doyle, P. (2009). Value-based Marketing: Marketing Strategies for Corporate Growth and Shareholder Value. New York: John Wiley & Sons. Goi, C. L. (2009). A Review of Marketing Mix: 4Ps or More? International Journal of Marketing Studies, 1(1), 1-14. Musonera, E., & Ndagijimana, U. (2008). An Examination of Factors that Affect Pricing Decisions for Export Markets. The Journal of Global Business Management, 4, 189-198. Owomoyela, S. K., Olasunkanmi, S. O., & Oyeniyi, K. O. (2013). Investigating The Impact Of Marketing Mix Elements On Consumer Loyalty: An Emprical Study On Nigerian Breweries PLC. Interdisciplinary journal of contemporary research in business (IJCRB), 4(11), 485-496. VigarEllis, D., Barrett, N., & Chiweshe, N. (2009). Positioning of Luxury Vehicle Brands in the Pietermaritzburg Area. Alternation, 16(1), 51 - 76. Read More