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Mercedes Benz Companys Marketing Plan for the UAE
Abstract
This is a marketing plan for Mercedes Benz. The main objective is to increase the market share of Mercedes Benz in the UAE. Mercedes Benz is a pioneer in the automotive industry with a wide variety of automotives like trucks, vans, passenger cars, etc. Mercedes Benzs industrial operations in UAE are identified and recognized. The customer value of Mercedes Benz in the UAE is analyzed and it proves that the company has an increasing sales trend in the UAE markets. Mercedes Benz BCG matrix shows that the companys luxury cars are in high demand in comparison to the demand for its economical cars. The target customers are analyzed and it proves that the company can expand its niche platform which is already present in the market. Recommendations such as to launch economic pollution-free vehicles and to reduce wasteful activities are of great significance and can help in increasing the sales and in expanding the market presence in UAE.
Industry of operation and product portfolio analysis
Key product lines in terms of market share/profits
Mercedes Benz is a leader in the automotive industry and has a strong industry presence, especially in the UAE markets. The Market share of a product plays a vital part in a product portfolio scheduling model. Mercedes Benz is the first European car manufacturer to introduce cars in the UAE market and the response generated through sales has been of high significance. Mercedes Benz has a fair product portfolio. It has passenger cars, vans, and trucks. Passenger cars have the key market share in the UAE Automotive market. The new White Gold Car launched by Mercedes provides a chic look with all the luxurious comforts. During the year as a whole, Mercedes-Benz delivered 1,012,300 vehicles to customers worldwide (2008: 1,121,700 minus 9.7%) and, in many cases, performed better than the total market in many countries including the U.S., China, Canada, Russia, the UK, South Korea, and Brazil (Reese 2010).
The product life cycle of Mercedes
A life cycle of a product is divided into 4 stages; the introductory, the expansion, the maturity, and the decline stages. The life cycle of Mercedes Benz is amazing because it started in 1886 and has been in great progress to date with the introduction of more innovative products on a timely basis. Mercedes Benz has hybrid sedans, luxury cars, sports vehicles, etc. The luxury cars are in the category of S class, SLK class, E class, C class, CLK class, etc. the E class model fits into the budget of an executive car buyer. The latest launch in UAE has been the new E class model Cabriolet which has an advanced light system and other comforts like detection of drowsiness and the W212 model E-Class cars. So the model E-class is still in the introduction stage. In the growth, the stage is the C-class, S-class, and 600 series. Mercedes has been launching both introductory products as well as are bringing out various variants of the cars according to the products demand. There is no specific life span that Mercedes offers for its products. When a product is in the growth or declining stage then Mercedes prefers to withdraw it from the market.
Mercedes-Benz General Distributors in Abu Dhabi and Al Ain and the flagship company of Al Fahim Group recorded a 40% increase in Mercedes-Benz SLR sales from 2008 to 2009 (EMC records 40% increases in Mercedes-Benz SLR sales in 2009 2010).
Mercedes BCG model
The BCG matrix is a guideline to manage a product portfolio and balances the stages of the product life cycle. In the BCG matrix model, products are usually placed in 4 categories which are stars, question marks, cash cows, and dogs.
Mercedes Benz is a differentiator in the automotive market. It is the normal routine of the market that todays stars become tomorrows cash cows. Question marks of a firm should be converted into stars so that eventually they can turn out to be cash cows. The E models of cars are the biggest cash cows of Mercedes which implies that they are the biggest cash generators for Mercedes. Question marks of Mercedes are the low-priced A class series. The sports model SLK cars are the stars in the UAE markets. Dogs have a low market share as well as a low growth rate and are not profitable for the business.
Mercedes Benz has a low share of the total car market, but a high share of the luxury car market, and that is the reason why Mercedes Benz is broadening its market appeal through the production of the smaller, lower-priced A series and the launch of a competitively priced sports model, the SLK (Needle 2004, p.314).
Overall market analysis
The 8 Ps used in the marketing strategy of a product are:
Customer Value of Mercedes Benz
Customer value simply means the value that the customer gets for his payment of service. Mercedes-Benz is an excellent leader in business with respect to its consumer satisfaction. Mercedes Benz has an excellent customer profile in UAE which is evident through its skyrocketing sales in the previous years and its establishment in the UAE markets. Technology as well as the customary elegance helps to retain the loyal customer. Receiving customer queries and responding to their growing requirements and needs is a great method to increase their loyalty. Customer value helps to make proper decision-making power of the Mercedes Benz. One of the most important objectives of the marketing section is to obtain, maintain, and build up the most precious consumers. A consumer value development strategy helps to maintain this. Mercedes Benz recognizes that its clients are not merely purchasing a car to travel from one place to another and they effectively capture this idea through the course of their advertisement and promotion activities. Marketing strategy in UAE for the Mercedes Benz was formerly centered on protection, lavishness, and precision, etc&because of the emerging rivalry among the luxury car business consumers approach to the branding of Mercedes Benz was altered. Mercedes Benz has turned into a primary prestige vehicle producer to provide a permanent cost substitute parts and appropriate services enveloping its majority of well-known models. Mercedes-Benz is number 1 in J.D. Powers customer retention survey (J.D. powers customer retention survey 2010). Mercedes Benz holds an accepted utilized occasion with the large diversity for the selection of forms from A-Class Mercedes-Benz to S-Class for its consumers.
Customer Analysis
Mercedes Benz has produced passenger cars, vans, and trucks. But in the UAE market Mercedes passenger cars are in high demand. The trucks of Mercedes Benz have still not been able to establish themselves in the UAE market like the passenger cars. The company has targeted passenger cars because it is a product used by all office commuters as well as those who travel daily. UAE needs trucks for all delivery purposes so Mercedes Benz can target the truck users so that it can also establish the truck portfolio. Mercedes Benz can do little restructuring to increase their sales of trucks as well as vans. The buying behavior of customers changes from time to time. The product life cycle shows that Mercedes Benz products still represent both growth as well as maturity stage in the recession phase of the economy. New Mercedes Benz passenger cars models like Saloons, Roadsters offer complete luxury to people and are of high performance and so are in high demand among customers too. Its main target customers are those who want to have luxury cars because the demand for luxury cars is immense in UAE. Since customers want to have all luxuries, Mercedes Benzs passenger cars are really in demand for people who have a taste for luxurious life. The development of markets for trucks as well as vans will improve the market share of Mercedes Benz. So the future target of customers is the truck and van users because Mercedes has already established itself in the passenger car market.
Macro-environmental analysis PESTEL tool
Mercedes Benz is a member of the DaimlerChrysler group. And it is one of the biggest automobile manufacturers. It is a world class product and has three great brands, its employees are highly qualified. Mercedes Benz is a modern and ground-breaking automobile, and it is famous for its quality, security, and comfort. The peculiarity of the Mercedes Benz is that excellent reputation, safety technology, and the standard automotive features today we can see in a Mercedes Benz car. They make an available wide collection of cars from the best quality small-sized cars to the Mercedes AMG. The majority of the cars are produced from the country of Germany itself and some production facilities are there across the United States, South Africa, France, Brazil, India, Indonesia, and Vietnam. Since 2005 China also have the facility for production. And its headquartered in Stuttgart, Germany. Daimler Chrysler gives more focus towards being environment friendly, produce groundbreaking technology, and excellence. And also they set to achieve high growth as well as profitability.
SWOT Analysis
SWOT has a long history as a tool of strategic and marketing analysis. No one knows who first invented SWOT analysis. It has featured in strategy textbooks since at least 1972 and can now be found in textbooks on marketing and any other business disciplines (SOWT analysis n.d.).
Here is the SWOT analysis of Mercedes Benz:
Marketing strategy
Overall objectives of organization
The Mercedes Benz is a superior product in the automobile industry and they are much centered on the differentiation strategy of the products. The marketing strategy consists of the inbuilt logic of marketing which acts as a catalyst for the success of business in the organization.
Marketing objectives
The marketing objective of Benz includes; to be focused on the differentiation strategy in the market and being in the superior position in terms of price and quality. The marketing objective of the company includes the conducting of integrated marketing campaigns for new models. The integrated communications aim in convincing the customers about the new product concepts and the advantages of using the product.
Our objective for this campaign is to motivate customers to experience for themselves the superior driving culture offered by the new C-Class, says Dr. Olaf Göttgens, Vice President Brand Communications Mercedes-Benz Passenger Cars (Mercedes-Benz launches integrated marketing campaign for the new c-class 2007). The company has certain marketing objectives; they make the owners of the Benz toggle in the vehicle insurance and to create awareness in choosing the vehicle insurance and its advantages.
The financial objectives
The financial objectives play a very important role in the organizations developments, financial services provider of Mercedes-Benz providing flexible, innovative and tailor-made finance and insurance solutions across the associated passenger car and commercial vehicle brands, offers customers a seamless experience; from vehicle purchase, finance, and insurance, to refinancing (Mercedes-Benz financial service n.d.).
Product strategy
The product strategy of Benz is based on the result of the product conception, the product design followed by the product manufacture and the development and finishing products, and the logistics. It includes; producing the best in terms of quality and services to the customers. The false strategic assumptions are to be discarded from the manufacturing of the product as they concentrate much on the quality aspects. The product strategy has the main intention on the customer and the company should be keener on the entire product portfolio and specifications in terms of quality, brands, and designs. The product has to be mainly specified on the customer tastes and preferences and more concentration should be done on the market where the Mercedes belongs to the premium segment in the market they find the market in the urban areas, the analysis should be made in terms of the brand image, the societal acceptance of such a posh car and the appeal that is created among the customers.
Price strategy
The pricing in the industry is depended on economic conditions and the financial market fluctuation in the automobile environment. The Mercedes Benz targets more on the competition price in the market, the Mercedes are the leaders in the automoblile market and they follow the skimming price stratergy, which means the superior pricing leader in the industry. The pricing is done in such a manner that more concentration is aimed on the urban areas and the posh cities where the economic and the living conditions are found to be very high. The higher you price certain products like Mercedes Benz, the more desirable they become. Most customers associate high quality with high prices. Image plays an important role in setting prices (Smith 2006).
Place stratergy
For Mercedes Benz, the place forms an important part in the logistical scenario of the automobile industry and as it marks the availability of the products and the need for customers to choose the product via internet, in order to make the selection of design and see the showrooms that have been set up which forms the main source of physical distribution of the product.
Promotion strategy
The promotion mix is a vital part in the marketing which creates an idea and the perception of the product concept which persuades them to purchase the product. The company uses the internet and the html advertisement strategy to oblige the product, in the web the advertisement of the car makes use of the sides of the browser window to show its features and to create a need for the product in the mind of people. The company also conducts integrated marketing campaigns, intensive promotions and Mercedes fashion week that are also much people driven, which help them to promote the product extensively. The company despite of the new campaigns also uses the traditional banners and menu cards and the advertisement in the print media.
People/productivity
The company has a very good people focus, they highly concentrate on the customer relationship management and they maintain a good bonding between the customers. The company provides very good opportunities for the people through different strategies incorporated by them. Keeping the customer in mind the firm introduced the online ordering system and an option for viewing their desired car and fixing the date of delivery of the vehicle. The people include the upper middle class individuals, business magnets and entrepreneurs who focus on better performance and sustainability than the competitors.
Process strategy
The Mercedes Benz as a business organization is driven by the process concept where the process is much concentrated on superior design and ingenious products that sees improvement in a shot span of time. The company incorporates the e-commerce system in its process which gives an option for the dealers to show the product and explain the features of the same to the customers and the customers are at a liberty in choosing the product and fixing the date of delivery. They provide an efficient service to the customers and enhances the strong bond of customer relationship.
Physical evidence strategy
The Physical Evidence in a broader sense is used to procure, carry off and follow-up as an up-selling tool among the company, customer and the end user. The physical evidence strategy of the Mercedes Benz includes the merchandise which is the assortment of products and categories that consist of a stock up or supply layout, it consists of various brands that compete within the same automobile industry. Planning and executing the promotion of goods and services in an attempt to obtain the greatest value for the seller. Merchandising in a grocery store might include holding promotional events, installing point-of-purchase displays, and issuing cents-off coupons (Merchandising definition-business 1996).
The different handouts are provided by the company which specifies the different features and the specifications of the product.
Recommendations
Continuous service providers for improvement
The service should be provided at each time in the UAE market where they may need the service of insurance company, the repair shops, the maintenance division etc which are very important.
Reducing wasteful activity
The wasteful activities should be considered and monitored properly where the distance between the supplies, floors, stores, and the distance have to be reduced.
Reducing the Inconsistencies
The different mortgages are hired before the purchase of the product after ordering them, this may create time gap between actual quality of work, time and impatience to the customer
Providing economic vehicles
As the Mercedes Benz are the premium segment in the UAE, they are only concentrated in cost segmentation, i.e. the affluent class of the society. They can have a product penetration by making their product available to the middle class and be market flourished.
Reference
EMC records 40% increases in Mercedes-Benz SLR sales in 2009, 2010. Web.
J.D. powers customer retention survey, 2010. [Online] 4Wheelesnews.Com. Web.
Mercedes-Benz financial service, n.d. [Online] Mercedes-Benz Australia/Pacific Pty Ltd. 2010.
Mecedes-Benz launches integrated marketing campaign for the new c-class, 2007. Web.
Mercedes in Dubai: Luxury at its best, 2009. [Online] Emirates Update. Web.
Merchandising definition-business, 1996. [Online] Your Dictionary.Com. Web.
Needle, D., 2004. Business in context: An introductionto business and its environment, 4th Ed. [Online] Cengage Learning EMEA. Web.
Reese, P., 2010. Mercedes- Benz increases GCC market share. [Online] Drive Arabia.Com. Web.
Smith, A., 2006. 8 pricing tips for advertised products art or science or both? from a South African perspective. Web.
SOWT analysis, n.d. [Online]. 2010. Web.
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