Principles and Practices of Marketing

Introduction

Background of the Company

Mercedes-Benz is among the world’s famous and most established automotive brands. It is a German automotive marque that was founded in the year 1926, making it one of the oldest car manufacturers in the world. It is also a subsidiary (as Mercedes-Benz AG) of Daimler AG. The company, which is headquartered in Stuttgart, Germany, is known for the production of luxury cars, vans, trucks, buses and passenger vehicles. The Mercedes-Benz trademark represents the value of innovation, traditional awareness, quality and performance (Daimler AG, 2015). The company, which has over 170,000 employees globally, has a product portfolio that is made up of the Mercedes-Benz brand, Mercedes Maybach, G-Class, Mercedes-EQ, and the smart brand. As one of the largest luxury passenger cars manufactures globally, the company sold approximately 2.1 million passenger cars and around 375,000 vans. The firm continues to expand its global production scale, undertaking production in 35 sites spread across four continents- Europe, Australia, America and Asia- as well as building and expanding its worldwide battery production network on three continents. Besides car manufacture, Mercedes-Benz has also diversified its activities to provide automotive repair and financial services. The company, whose goal is the building of the world’s most desirable cars, has adopted a business strategy aimed at transforming it to the leader of electric mobility and digitalization, increasing profitability as well as sustainability across the entire value chain. The company has also adopted various marketing and promotional tactics targeted at achieving its current and future organizational goals.

Promotional Mix and Activity of Mercedes-Benz

Promotion refers to the means through which a company or organization attempts to introduce their products or services as well as reach and communicate with its target customers (Brassington and Pettitt, 2012). This is a very critical aspect that predicts a product’s consumption levels as well as success within a particular market. Mercedes-Benz has, over the years, implemented a number of marketing and promotional strategies- to effectively communicate with its targeted customers as well as other shareholders the thrusts and benefits of their products- that have seen it become a leader in the highly competitive automobile industry. The company, just like any other, makes use of the key categories of promotional tools, including: advertising, public relations, personal selling, direct marketing, sales promotion, events and experiences, interactive marketing and social media marketing.

Mercedes-Benz uses various advertisement promotional tools such as TV and print media, digital and billboards. Whereas the company did not previously feel the need to use the traditional advertising methods given its positioning as catering to the luxury segment changing times and consumer attitudes have seen it resort to the various channels of advertisements in a bid to increase its market share. As a premium brand, the company mostly employs above the line advertising promotional strategies. This means that it advertises majorly through the mainstream media, and sometimes through social media. However, a significant proportion of its advertisements are run on the official Mercedes-Benz website (www.mercedes-benz.com). Its adverts are usually run-in premium media including magazines such as the Vogue. Through advertising, the company is able to ensure that it effectively reaches and communicates with its target market and also maintains the integrity of its brand. Mercedes makes sure that its adverts are eye-catching and informative, in a manner that serves to reaffirm the company’s product orientation as well as confirm its targeting of affluent individuals from higher social classes. Additionally, the company has adopted an advertisement style that reflects its market segmentation on the basis of geodemography, and continued emphasis on the product.

In the above advertisement, for instance, it can be seen that the vehicle (product) is all that is significantly shown with the background remaining largely grey. This way, the company is able to place a lot of emphasis on the product’s aspects of design, as well as reflect a feel of luxury and to luxuriously appeal to its target customers.

The company has also slightly shifted its advertising in an attempt to appeal to and lure younger consumers to buy its products. One way Mercedes had done this is in relation to the new GLA class which debuted in the United States in 2015, during which the renowned talk show host Ellen DeGeneres gave away some units. In 2018, Mercedes Benz involved Nicki Minaj in a global ad campaign that was aimed at launching the Mercedes-Benz A-Class model (Campaign, 2018). According to Mercedes, then, this would be their first car ever to adapt to different individual drivers. The ad that was developed by Antonu began by showing a seemingly conventional car then it went on to clarify that the vehicle was actually unique, networked and digital with various features including, intelligent voice control. Suddenly, Nicki Minaj showed up in the front of the passenger seat while her song was being played via tidal on the car`s speakers. That was aimed at promoting the partnership between Tidal and Mercedes Benz. Erick Barrios and Andre Santa Cruz, Daniel Righi, Yann Fischels and Erick Barrios did the art direction for the ad.

These moves are seen as the company’s way of attempting to convey Mercedes’ new designs that aim to convey the products’ fresh and young look. Ungureanu (2015) perceived the move as one which quite possibly boosted the company’s sales that year. From its advertisement styles, and based on its positioning as a luxury car brand, the company’s advertisements are targeted at affluent customers from upper social classes, executives and professionals who are inclined towards the company’s offerings of safe, stylish, luxurious and efficient vehicles equipped with the latest technology. Mercedes also, more recently, targets young consumers who are enthusiastic about driving modern cars that resonate well with their fashion statement and style. While the brand previously signalled and centred its strategy on the luxury, safety and precision engineering of other cars, changing consumer needs and increased competition in the luxury car segment saw Mercedes change this strategy. It adopted a brand signal that aims to convey it a more lifestyle oriented.

Mercedes Benz also uses commercials. Commercials help the public learn more about products. Several of the most popular TV spots come from automotive brands. Often, these commercials feature celebrities, either as voice notes, or on-screen. For instance, back in 2017, Mercedes Benz produced a commercial for their E-class model which was voiced by actor John Hamm. John Hamm who is widely known for his leading role in Mad Men as Don Draper, has actually been Mercedes Benz`s voice actor since 2010 having replaced Richard Thomas. Since 2010, Hamm has been in several Mercedes Benz commercials, with one in 2017 for the Mercedes Benz C-Class family (Admin, 2017). There are two types of cars in the C-Class family, a coupe, a sedan and the Cabriolet. It is worth noting that these different car types, while being unmistakably Mercedes Benz have their own distinctive styles. In the commercial, the models three versions were shown paired with Hamm`s signature voice. As seen from the commercial, Hamm went on to explain that there was a C-Class just for anyone, for those who go after super performance, those who love a breath-taking style and those who prefer advanced intelligence. Celebrity branding and endorsements have the potential of increasing sales significantly. What makes celebrity endorsements powerful is the presence of vast celebrity networks. Using different mediums, celebrities are able to reach countless people. Celebrities are able to reach people through social media, traditional media and also television. The celebrity effect is another reason why using celebrities in commercials is powerful. The use of properly organized voice has the potential of boosting a brands trustworthiness and also exposing the product to wider audiences. On a daily basis, people get exposed to countless adverts, and the use of voices that are familiar cuts through the noise and effectively creates emotional connections with audiences. The use of established actors like Hamm also does away with the need of extensive voice over training. It is easier for actors to adapt to voice acting techniques. It is however, worth noting that being an actor does not directly translate to one excelling at voice overs. Voice acting is not reliant on facial expressions which makes it necessary to pack all the emotions that would otherwise have been conveyed through body movements through the voice.

The voices of celebrities also have the potential of helping brands with the establishment of credibility in foreign markets. One of the easiest ways through which to get people excited when selling in completely new markets is the use of famous and familiar voices.

The company also uses public relations and publicity to promote its products. As one of the best-known car manufacturers in the world, Mercedes as a brand certainly gets people (in the mainstream and industry press) talking about it.

Mercedes Benz advertisements and posters, even those from the past, bear witness to past times and further offer rather fascinating historical snapshots. The poster below from 1921, for example shows the Mercedes 28/95 HP Phanteon (Mercedes-Benz, 2021).

In a different Ad, the Blowfish by Antoni, Mercedes-Benz showcased their different safety features using a dramatic tale of a boy and a fish. At the beginning of the ad, the boy is seen entering a room that is dimly-lit and whose centrepiece is a fish tank. After an interaction with a goldfish that was fairly meek, the boy reaches for the tank in the same way as the girl who had braces in Finding Nemo. That is done in an attempt to get closer to the newly found friend, the fish. The fish, however, receives protection from his blowfish friends who are seen inflating so as to ward off the entitled child (Campaign, 2020). That highlights the need of protecting one`s loved ones. This ad was created by Malte Bulskamper and Teresa Guggenberger.

Another notable ad by Mercedes was the launch campaign for the Mercedes Benz GLE SUV. The ad was a modern family story of a strong mother who was training for her first triathlon. Even with the presence of an event hanging on her like a shadow, she manages to overcome the mental and physical limits for the achievement of her dreams. In the film ad by Antoni Garage, different themes were explored, including the theme of love, dedication and patience, in a time when most people have high expectations of instant satisfaction. Further, the film managed to position the SUV as a modern family car and not just a vehicle for rugged adventures. The SUV`s release coincided with the International Day for Persons with Disabilities by the United Nations. Jan Frodeno, the Mercedes-Benz brand ambassador, two-time winner of Ironman Hawaii and an Olympic triathlon champion made an appearance in the ad.

AIDA Model

The AIDA marketing model is quite famous and traces the journeys of customers through Awareness, Interest, Desire and Action. Awareness involves the creation of brand awareness and affiliation with a company`s products. Interest involves the generation of interest in a product’s benefits and interest that is sufficient enough to encourage buyers into carrying out further research. Desire involves creation of desire among customers for a product, through emotional connections which show the personality of a brand. This stage is characterized by moving customers from liking a product to wanting it. Actions involves moving buyers into interacting with the company and going forward to the next step, that is, making a phone call to make a purchase enquiry. Retention is quite important for referrals, cross-sell, upsell and advocacy. Through this model, the cognitive stages that individuals go through when they go about the buying process are identified.

Mercedes Benz has effectively adopted the AIDA model in its marketing activities. The use of this model involves first building awareness about the brand (Montazeribarforoushi et al. 2017). That involves identifying the best ways through which to make buyers aware of the different Mercedes car models, developing an outreach strategy, developing a brand awareness campaign and the further identification of the appropriate tools and platforms to use. To build awareness for their brand, Mercedes Benz commonly runs campaigns months before the launch of new car models and these are reinforced by DM campaigns to target customer groups. For instance, as a mark for the launch of the new generation of the A-Class, Mercedes-Benz has started a rather extensive advertising and marketing campaign on its various channels of communication. The campaign is centred on a TV commercial and also on different print advertisements. The cars target group are the modern and young people with the key message communicated being that the car provides added comfort and at the same time remains dynamic as ever (Mercedes-Benz, 2020). The second step involves identifying the different ways through which to gain the interest of the customers, developing a content strategy and determining the different ways through which to make the information available. In desire, several questions are answered, what makes the products that Mercedes offers desirable? How do they interact personally with their customers to create emotional connections? In the print advertisements for the Mercedes Benz A-Class, different themes of the print advertisements presented the car in a relatively rich contrasting urban setting. The daylight procedures include clear contours with modern architecture and graphic lines. The adverts also contain yellow line marking that provide an air of dynamism with an additional sense of emotion being provided by the presence of passer`s by in the background. The A-Class is given a confident, and solid poise by the shadows that merge the vehicle and the ground into a single entity. TV commercials are also expected to show a relatively dynamic temperament of the A-Classes` new generation. Through variations in colour transitions, a fantastical journey is effectively created to a different world.

To create desire for their new car models, Mercedes Benz always runs exclusive launch events that are widely advertised on social media and also on the press. That, in effect, creates a local buzz among people excited in seeing the new model.

For customer retention, Mercedes Benz has a range of loyalty programs. For instance, the Mercedes Subscription Program has been driving customer loyalty. The theme behind the program is “The Best or Nothing,” and it provides a rather broad offering for drivers who show preference for the variety and convenience that comes with subscription services (Tiarney, 2021). Through a collaboration between Mercedes Benz Financial Services, Mercedes Benz USA, and Mercedes Benz dealers, the Mercedes Benz collection subscribers are provided the options of switching between different vehicle types depending on their lifestyles and needs. Subscribers are able to access the vehicles they so wish provided it falls within their tier without any mileage limitations. From the monthly subscription to any of the tiers, the subscribers also get 24/7 insurance assistance, insurance and vehicle maintenance.

Mercedes Benz also relies on the Balanced Scorecard tool. This is a tool for performance management and strategy planning that was developed by Kaplan and Norton. Through the tool, the managers at Mercedes are provided with opportunities of seeing how well the business is being run on the basis of the extent to which the company`s objectives are met through staff monitoring and the further execution of planned activities (Rafiq et al. 2020). Mercedes Benz sets its objectives in line with their overall mission and their vision which puts them at a better place to succeed. According to the balanced scorecard tool, financial performance alone is not enough for businesses to achieve success. Subsequently, the tool considers the perspectives of different organizational areas and further measures their performance on the basis of their individual objectives.

The mission statement of Mercedes Benz says that they inspire and further create an exceptional place for working and doing business. One employee, one customer, one vehicle at a time. Through their relatively transparent atmosphere, individualized customer care, and premium auto inventory, they are able to create luxury shopping experiences that their customers deserve (Mercedes-Benz of Charleston, 2021). Their vision is to become a renowned centre for customer service all over the world in the automotive sector. To meet this goal, they endeavour to create effective and efficient environments for skilled people drawn from all over the world. That is informed by the knowledge that only the best people are able to provide the best possible customer service. Their objectives are based on this mission and vision and their goal is to continuously play a leading role over the long term in the worldwide premium segment. Additionally, they also aim to enhance the pioneering role of smart brands in electric and urban mobility.

The balanced scorecard model has four perspectives, internal business processes, customers, financial and learning and growth (Georgiev, 2017). To achieve their vision, Mercedes continuously offers staff training and learning which is aimed at improving their knowledge resource. In line with the internal business processes perspective, the company is able to see how well it performs on the basis of whether the cars they offer to the market really meet the needs of customers. In line with the customer perspective, Mercedes Benz recognizes too well that the satisfaction of their customers is very important and that customers tend to switch to alternatives when their expectations are not met (Mercedes-Benz of Charleston, 2021). It is worth noting that even though the Balances Scorecard tool looks into other areas other than finance, that does not imply that traditional financial metrics are completely ignored. As such, Mercedes Benz also uses financial metrics in determining the exact extent to which their operations are. Through the implementation of a balanced scorecard in their operations, Mercedes Benz has been able to improve its processes and the satisfaction of customers, achieved increased motivation of its staff and clearer and more positive financial results.