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Mercedes-Benz is not a company by itself; its a division of Daimler AG, its parent company. Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. The name first appeared in the second decade of the XX century. Still, the true origins of the Mercedes-Benz movement started long ago, going back to Daimler’s 1901 Mercedes and to Karl Benz’s 1886 Benz Patent Motorwagen in Germany. The company started by Karl Benz’s creation of the first “petrol-powered” car patented in January 1886. The Mercedes car was first introduced and marketed in 1901 by “Daimler Motoren Gesellschaft”. However, it wasn’t until 1926 when the first Mercedes-Benz brand name vehicles were produced and sold. Nowadays, Mercedes-Benz becomes a big brand in luxury car market and gets a lot of profits annually.
Body:
Segmentation:
In whole car market, there are a lot of various segmentations. A car brand will be segmented based on characteristics, price, quality and kinds of consumers which that car brand want to serve. There are 4 important groups of segmentations which all car brands will consider to serve.
Demographic Segmentation:
Income is one of the most important segmentations which car brands will consider to choose in the whole car market. At this segmentation, some car brands will choose various kinds of consumers to serve based on their income in society. Some will choose low-income consumers to serve, such as: Kia, Toyota. On the other hand, some others will choose to serve rich people. According to Woods (n.d), rich consumers will be satisfied by luxury car brands through superior quality and functions of products, such as: Porsche, Mercedes or Ferrari. And at last, some brands don’t want to serve low-income consumers but they also don’t want to focus into very rich consumers, so they will lead their products to mid-income people who should have high-average income in society, such as: Honda, Hyundai.
Besides income segmentation, age is also considered to serve. Basically, consumers who must be 18 year-old or above can drive a car. Of course, car brands will ignore ages below 18 and focus to serve ages over 18. Generally, car brands will divide this segmentation into 2 parts. The first part is group consumers from 18 to 35, or called young consumers. And the second part is group of consumers from 36 to 60, or called old consumers. Dependent on various groups, designs of cars are also quite different. For example: with young consumers, cars are designed more fashionable and with old consumers, they are more elegant.
Geographic Segmentation:
In car market, geographic segmentation is mainly focused into countries. Super luxury car brands will focus to serve consumers who are in rich or developed countries and vice versa. According to Bolognese (2008), a big representative of super luxury sport car brands is Lamborghini expanded its business to rich countries of Asian, such as: China, Hong Kong as new business opportunities. In China market, a huge amount of citizens (nearly 1.2 billion) will become a big business chance for Lamborghini. Strong purchasing power and high GDP of China are attractive characteristics for big car brands.
On the other side, Nissan is a representative of low-price car brands. Purpose of Nissan is leading its low-price products to developing or poor countries where consumers will highly demand cheap products. Demoro (2012) stated that Nissan will have more business opportunities in where consumers easily accept its products with prices around just $3000.
Psychographic Segmentation:
Social class is an important segment in area of psychographic segmentation. Firstly, in the whole car market, social class is divided into 3 categories of high, middle and low class. Same as income, car brands will focus to serve respective consumers. For example; Mercedes will want to serve upper class or successful consumers in society system because these consumers just choose a luxury product for them to get esteem from others and to esteem themselves. For example; a successful businessman will want to enjoy a Mercedes CLS than a Toyota Prius.
Another segment is also as important as social class, it is lifestyle. This segment is focused to car-loving consumers. Some consumers love luxury cars and others can love sport cars. Dependent on personality characteristics of consumers in a car market, car brands will develop respective characteristics, such as; luxury design or powerful engine for their products. According to Ferris-Lay (2012), for example, rich consumers of some Middle East countries have highly enjoy with luxury car brands, especially Roll-Royce.
Behavioral Segmentation:
One of the most important segmentation in behavioral segmentation is brand loyalty. Generally, some car brands always have a fixed amount of loyal consumers through history of brand and product development. These consumers just care about their favorite brands at most. According to Bowman (2011), there is a high possibility of loyal consumers choosing their favorite brands in future purchasing decisions.
Benefits-sought segment is also an important segmentation in behavioral segmentation. Some consumers care a lot of benefits of products what they pay attention to buy. Saving-fuel and duration of engine are objectives what consumers commonly care a lot for a car. Rapid increases of fuel prices caused consumers to find out specific kinds of product what can help them to save fuel, it means saving a lot of money for consumers (“Gas-Saving” Products”, 2006). Car brands in this segmentation will focus to develop their products in way of saving-fuel efficiency.
Target Market:
Introduced to market first time in 2004 by Mercedes-Benz, series CLS- Class itself was more considerable than their same-brand brothers, such as; C-Class, M-Class and E-Class because it was the first and the newest 4-doors coupes in the world. CLS-Class coupe also has excellences in design, functions, engine, and installations which can help it to have competitive advantages compared with other brands, such as: BMW, Audi, Lexus. Gale (2010) stated that Mercedes-Benz created a new type of coupe which has enough great characteristics, specially in design, to compete with international or national rivals in car market.
At the beginning time, Mercedes wanted to lead series CLS-Class to a symbol of luxury cars. Multi-National Mercedes Company has planned to serve the high income and higher social class consumers as its main target markets. They are highly potential and very large segmentations for luxury car brands and Mercedes had a lot of experience to deal with these kinds of consumers. In the whole developing economics, amount of high income consumers is increasing rapidly and this leaded to an increase for demand in luxury goods. Concretely, at rich countries, as China, population around 1.2 billion with high GDP and a big amount of consumers have wealth of around $1.3 million. These rich consumers usually use luxury cars to esteem for their success. China Daily also stated that Chinese government officials also target to some luxury car brands to choose more than other lower-grade car brands (“Rich Chinese driving growth of luxury auto market”, 2010). Product lines of Mercedes brand can satisfy these kinds of consumers well because they are luxury and have excellent quality, high price. Based on information from China Daily News, Mercedes sold exceed to 112 percent of cars in first 3 months of 2010 comparing with 2009 (“Rich Chinese driving growth of luxury auto market”, 2010). As a positive result, new series CLS-Class will keep focusing into rich consumers or higher class consumers as same-brand brothers because 2 these segmentations can help series CLS-Class to achieve a lot of profits in return.
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Positioning Strategy:
. As a leading automobile manufacturer, Mercedes-Benz has introduced many technological and safety innovations over the years and those later became common in other competitive car brands. Needless to say, Mercedes-Benz is one of the most well-known and established automotive brands in the world. After launching series CLS-Class, Mercedes-Benz identified for its new child as strategic weapon to penetrate into 2 target market: High income and upper social class. Mercedes CLS-Class has been planned to position itself as number one of brand and product in luxury consumers’ minds through 2 main objectives: bring more superior value to consumers and take competitive advantages.
Superior values to consumers:
Mercedes CLS-Class is strengthened actual and augmented products following with core product. Series CLS-Class included many designs, such as: CLS 350, CLS63 AMG or CLS 550. Besides vary of designs, Mercedes CLS is the first 4-doors coupe in the world with many excellent functions. In the past, there were also a lot of coupes but they were 2-doors coupes. Mercedes created a new concept of coupes by producing the first 4-doors coupe CLS-Class. When using CLS-Class, it means consumers are using a new concept coupe in the world.
Mercedes CLS-Class is focused into hi-tech designs, such as: LED technology, saving fuel engine, lightweight construction, safety features and long-life performance. Mercedes CLS-Class’ design is more sporty and attractive than previous classes. Besides that, saving-fuel engine is also an important point that Mercedes-Benz has improved for it better than previous versions. According to Dykes (2011), CLS-Class can save about 30 to 40 percent of fuel consumption depending on surface of streets. CLS-Class is also identified lighter than older versions or rival versions; such as: Audi, Lexus or Roll-Royce and equipped an “ATTENTION ALERT” system that will alert driver about front obstacles.
Competitive Advantages:
. Firstly, Mercedes-Benz had a long-term reputation in luxury car market. Almost of luxury consumers in this market had already known about this brand. This is really a good competitive advantage with other rivals. Through long-term history of brand development, Mercedes-Benz created high position in luxury car market. When talking about Mercedes-Benz, consumers imaged about a luxury brand producing excellent quality cars. Mercedes CLS-Class would take this advantage when it is launched into luxury car market.
Secondly, Mercedes CLS- Class has an unique advantage that no brand can have. It is the first 4-doors coupe in the world, or called new concept coupe in luxury car market. This brings a lot of emotional benefits to consumers when they want to enjoy a special car.
Positioning Map:
As information stated above, Mercedes want to lead its new child to luxury car market, so Mercedes CLS-Class has common characteristics of luxury goods, they are: high quality and high cost.
HIGH QUALITY
LOW HIGH PRICE PRICE
LOW QUALITY
Marketing Mix (4Ps):
Product:
Design & Feature:
Though the car we can see every bit is as accommodating as Mercedes full-size luxury flagship, its dimensions in back are tighter in nearly every direction when compared to other sedans. Additionally, the high beltline with small rear windows can make customers feel closer. Overall, there a car with strong performance and a sumptuous interior, the CLS is easy to recommend. Mercedes-Benz put all of its latest safety features into the CLS-class. In addition to front airbags, there are side impact airbags in the front seats even the side curtain airbags throughout. The car features a smart sensor system for the seatbelts and airbags that can detect and react to accident very affected.
An optional Pre-Safe system can predicts an impending collision every time when the system is on, the seatbelts tighten, the front passenger seat adjusts to crash positioning, and the sunroof closes automatically.
Mercedes included some advance technology such as: all-LED active headlamps, DVD/CD player, HD Radioâ„¢ stations, Bluetooth® audio streaming, and AUX and USB ports. Also standard are 610 watts of Harman/kardon LOGIC7® surround sound, SiriusXM Radio, and a 10GB Music Register for storing your digital music. Voice-controlled navigation features an 80GB hard drive. With these features, the CLS now faces competition from the BMW 6-Series Gran Coupe and the Audi A7, as well as the Porsche Panamera S.
Engines & Performance:
The Standard Mercedes CLS built in withV-8 engines bring to the car 200 kW (272 ph. DIN) and top speed reach 250km/h. The CLS 55 AMG and CLS 63 AMG are modified versions of the CLS produced by Mercedes-AMG.
Price:
The Mercedes CLS use Premium-pricing strategy and made the price to focus on high-income customers, with high class and the age usually more than 30 years old.
The Mercedes CLS Class use The Premium-pricing Strategy to take the effort of other competitor by providing better quality with high performance also with higher price compare to other brand.
PROMOTION:
Firstly, when the new Mercedes CLS come in to the market, the organization had made some video Promotion to introduce about the new car as well as using advertising promotion such as: billboard, website, TV ads, newspaper…Beside that, the organization also use sale person strategy to promo about the car. They introduce the new car in showroom and most of the export around the world.
But nowadays, new Mercedes CLS Class is getting well known, the promotion strategy has been changed. The organization focus on the quality and comparison price with other brands. For example, the Mercedes Malaysia just release the new Promotion and offer:
Free Maintenance Service for every accident repair bill of RM20, 000 and above*
Free Premium Leather Set
Free Pick Up & Delivery Service
Free basic car wash (excludes interior cleaning) for car that has undergone major repairs.
PLACE:
Distribution channels of Mercedes CLS CLS-Class are as big as its reputation. Multi-national Mercedes-Benz released version CLS-Class all over the world. Popular distribution channels of Mercedes CLS-Class will be divided into:
Intermediates: Mercedes CLS-Class will be released to big intermediates at big cities where there are lot of rich people.
Agencies: Mercedes-Benz also co-operate with international agencies to distribute series CLS-Class to international markets outside German’s territory. For example; at Vietnam market, Mercedes-Benz Vietnam is an agency of mother Mercedes-Benz to distribute its products Vietnamese consumers.
Online Traders: They are sales websites where consumers can find information about products easily and they can order a purchase. These online traders have a large range of intermediates at many big cities where they can easily delivery products to consumers.
Conclusion:
By launching Mercedes CLS-Class into luxury car market, Mercedes-Benz created new wind to traditional concepts about coupes. The first created 4-doors coupe makes competitors hardly to occupy market shares with Mercedes Benz. Besides that, existing famous reputation helps Mercedes CLS-Class to attract attention from consumers when Mercedes CLS-Class enters the market. Loyal consumers of Mercedes brand had dreaming cars for their styles and Mercedes-Benz still position the brand as a luxury symbol into consumers’ minds by effective marketing mix.
