Comparison Of Marketing Mix Strategies – Mercedes And BMW

Product

Marketing-mix is a combination of several factors controlled by the company to affect and influence the customer to purchase their products. It is a set of marketing tool that a organisation uses to achieve marketing objectives and goals. In the below report, Part-A discusses the marketing mix of Mercedes and its competitor BMW. Both Mercedes and BMW are luxury brands. The report brings out a comparison on marketing mix of Mercedes and its competitor BMW. The marketing-mix have been extended to 7ps named product, price, place, promotion, people, physical evidence, and process (Offlorence, 2018).

Mercedes-Benz offers a range of wide products portfolio from compact to luxury vehicles. Mercedes has been expanding its range of vehicles in every segments. Mercedes has stood among the important automotive innovations. Mercedes keep investing in developing the alternative drive system that has mass-production of electric vehicle. Moreover, ten models with alternative driving system that were availed to dealers in 2017 and it includes variants models S 500 e, C 350 e, and estate including GLE 500 e- 4MATIC and GLC 350. In opposition to Mercedes, its competitor BMW offers slight different attributes in its products. The group owns BMW, Mini, and Rolls-Royce. BMW is well known for ultimate driving machine. Whereas, Mercedes is well known for its quality engineering.  BMW is marked as boast for powerful engines, fantastic speed, a reliability of safety and extra ordinary pickup. Limiting availability of AMG model Mercedes created a narrow product line that made this division of brand more exclusive (Fletcher, 2018).  

Mercedes need to concentrate on prices more as compared to competitors. BMW wishes to drive its revenue per vehicle. Both of companies Mercedes and BMW think that strong brand recognition and their admirable quality of the products can help them to achieve the goal. As a whole, they will not down their price rather they will sell the reasonable number of well-produced to gain a potential profit. Mercedes manufactures different convertibles, full sized sedans, sport sedans, and coupes. 14 car models range from INR 21, 49,000 to 7, 68, 00,000. BMW has been dealing with niche segment ranged from $30000 to $100000; the variety depends on the model. In opposition to this, its competitor BMW have launched low priced automobiles such as BMW X1 and the prices start from 22.5 lacs. A luxury mid-sized car manufactured by Mercedes-Benz. A four-door fastback model based on E-class platform but this model was very close to the attributes and prices of BMW 645Ci but CLS is more comfortable. The strategy is to achieve a leadership position and deal with competition from BMW but it has adopted market-skimming pricing for its diesel models that will increase their revenue from such segments that are willing to pay high price and to avail them this BMW can make fewer profitable sales (Casas, and Silverio, 2015).

Although, almost sales of BMW and Mercedes attempts to through car dealerships. Costumers have become aware that they should do research on which vehicle is good to buy before going to car dealers. Mercedes intend to change the thinking of the brand and position in order to make it more appealing it to younger people. Mercedes have also launched technological and safety innovation to its product. This introduced was further adopted by BMW after seeing Mercedes doing it. Whereas, BMW is more famous for the high-skilled people that are working for them starting from mechanics to helpline for the customers. Same as Mercedes, BMW has a network of dealership network to sale the automobile and it appoints showroom dealers because investment is high to assign a distributor. BMW has good provisions for spare parts. Dealerships of Mercedes are full retailers, which can offer slow moving of speciality of goods. These goods create high operating costs that is passed to consumers by charging high prices. BMW becomes more competitive because of its planned marketing logistics network.  

Price

During 2008, Mercedes announced a sum of $100 million TV advertising campaign that promote the C-class and M-class SUV premium. Mercedes shifted its investment from local dealers to attract attention. Whereas, BMW says that it totally rely on internet, print, and interactive marketing. BMW have decided to not to spend more on TV advertisements. On the other side, Mercedes uses TV in order to boost C Class. During 2009, Mercedes have spent first quarter of around marketing dollars on TV advertising that includes NCAA basketball tournament, super Bowl pregame show, and academy awards. Whereas, BMW in 2008 started focusing on social networking sites such as Facebook and Myspace to target the potential car buyers. BMW adopts product line pricing with successive model that offers additional features such as diesel models offers 30 percent more fuel efficiency as compared to premium gasoline that is priced a slight higher. If can be concluded, BMW marketing strategies controls the market superior over the Mercedes (Mbaskool, 2018).   

The mobility of Mercedes in future will stand on four pillars- Connected, shared, electric, and Autonomous. It aims to achieve emission-free automobile in future. New brand “EQ” wants to achieve something beyond electric vehicles. Although, both Mercedes and BMW are recognised as luxury cars then BMW selectively call it as “premium brand strategy” and Mercedes promotes it as “world`s leading luxury brand”. BMW encourages itself in innovating products rather than just focusing on simply designing its new versions of same old product. Example- while promoting the compact sports tourer, Mercedes said that it is an surprising response to new enthusiasm for life such as athletic, versatile, and distinctive. Mercedes promotes itself in such a way that can make cars for people that are not scared to stand out from the mob. Physical evidence also covers the ambience and interior of the cars and the showrooms. Power-adjustable seats in 2018 BMW-3 series come with different 14 configurations. The comfortable seat include various settings for lumbar support and side bolsters. For durability, lightweight poly named as sensaTec upholstery is wrapped around the seats in BMW sedan. In opposite to this, the power front seat in Mercedes C-class come with multi-stage heating accomplished with memory system. Both Mercedes and BMW have automatic climate controlling system with two zones and cabin air filtration. BMW ambiance lightning enhances the appeal of luxurious cabin.    

Process ensures the system that is involved in efficient services. BMW control and designs the operating system in each of its distribution centre. All the BMW dealers are connected to the main office of the company. Dealers can electronically submit the orders to the computer system of BMW through BMW intranet. Moreover, the majority of the parts are shipped from the German’s factories to various distribution centre where the radio frequency systems is used to scan the parts barcode and sort them to the appropriate centre. This can be said that to meet the order quickly and avail them conveniently for BMW`s enabling the organisation to build cars that can fulfil the customer demands. Since, a company has to maintain a striking balance between customisation and standardisation. The process need to clearly define the activity involved in service delivery to every customer. Mercedes intensively works on improving the processes and systems in order to meet the future sales volume. The company uses various IT implementation processes and landscapes such as Customer relationship management, CESAR, Data management system (DMS), and DFS PoS.  

Place

People is an important element of marketing-mix such as services and experiences. Service is tend to be produced and received by customers. Cell centre staff and sales people provides the services and to promote contact number of insurance claims and how the customer reimbursed. In US, there is a better way to gain customer attention in their time when advertising to super Bowl. Super Bowl is the Olympics for advertising. This is where world is looking for. It will reach probably around 800 million people at worldwide. Mercedes is trying to communicate on human level. Luxury currently has become personalised and exclusive that can make customers feel like special. Now a days, youngers are well-travelled, demanding, addition knowledge of basic technology and engineering so they directly look for what status symbol a car can give them with look with quality, craftsmanship and customisation. Mercedes provides a design platform to the individualization options from exclusive paints to high quality interior, trims etc. Whereas, BMW targets on customers aged 25-45 without aliening with the current customer base. Combining the ideas of short films to promote BMW where 85 % of customers use internet so it can be a good source of advertising campaign (Schmidt, 2012).  

Conclusion 

The above discussion was carried on the elaboration of 7`ps of marketing-mix. The concise discussion of 4p`s is extended to 7`ps and a comparison is being seen between Mercedes and its competitors. The discussion on marketing-mix analysis that where their remains a short of models in Mercedes when as compared to BMW. The price specifies that what services and attributes in least price with a luxury mark.

Mercedes is recognised as one of the luxurious car among the different automobiles available in the market. It is a global trademark and division of German company. The brand is well known for luxury automobiles, coaches, Lorries, and buses. It is headquartered in Stuttgart and renowned as Daimler-Benz. For the very first time in 1930, it produced 770 model that became very popular among Germany`s Nazi. Part-A focused on the elaboration of 7p`s of marketing-mix whereas, this part is more of analysis of the main company not about BMW.

Mercedes is well known for its reputable brand and is among the German`s big 3 luxury makers with Audi and BMW that remain recognised as successful luxury automaker. It provides manufacturing facilities across six continents and in rest 26 countries, it includes both passenger cars as well as buses that can help them by lowering the operational cost and increasing profits. The company always enjoys an advantage of good IT team such as technology advancement just after the introduction of internal ignition engine since 1886 and pre-safe technology in 2013. Moreover, the company have strived hard to establish it as in superior passenger and truck segment. Premium automobile companies such as AUDI and BMW have been besting in developed economies. Ultimately trailed by Mercedes in emerging and emerging economies such as India.    

The servicing cost is an important decision factor when are planning to buy a vehicle. Mercedes servicing cost is high in comparison to other players targeting the same audience. It may led to conflict when operating various groups of the same company at the same time. Daimler being such a big group can decrease into the prey of contradictory objectives that may affect the whole brand.

Promotion

American and European market is the hub for the operations of this industry but currently they have shifted their focus to developing economies such as china and India due to increase in personal disposable income, stable economic conditions and changing lifestyle. Alliancing and collaborating can be proved as smart strategy for automobile companies. Growing Automobile industry can present economic growth and access to doctors and other job people in the market becomes easier (Hinson, Hamid, and Osabutey, 2017).   

Existence of several players such as BMW, Audi, and Volvo have not leaved any chance to emerge as a stronger competitor in the industry. Fluctuation in fuel prices remain a factor for the development and government regulations relate to the use of CNG. Macroeconomic factors such as recession and unemployment are two major economic indicators that would discourage automobile industry (Kotler, 2017).  

This factor plays an important role in affecting the profitability of automobile industry. To support EPA (Environment Protection Act), government favour low emission vehicles. Taxes on luxury goods have been growing. UK and EU markets can provide government funding for low emission vehicles. The import procedures and taxes differs from country to country. If china has become favourite among due to low costing labour that is because of lenient wage rate system. EU is coming up with new rules that has an average co2 emission that are produced in UK (Pyo, 2015).  

Economic factors directly affect the retailing price of the product. Exchange rate between Euro and Ringgit affect the price of imported cars. Economic recession and slowdown in Malaysian market can be a major factor that decreases the purchasing authority of the employees. Car manufacturers can find it difficult to sell the cars with low GDP growth. Inflation is one of the major factor that affect the spending habit of a person. The financial crisis and recession has inflicted countries inclusive of automobile sector. It resulted in closing some high profile factories in 2009, which has decreased the sales volume of cars. UK government has recognised that problems with automotive industry was caused due to not being a part of Euro currency. Due to fluctuating exchange rates, cars in UK have become more exclusive. High charges for carbon emission increases the production cost (Deal, 2014).

More than half of the population of UK resides in cities and the proportion has been rising. In addition to this, digital technologies have been changing the corporate lifestyle. Mercedes is responding to the demand of British’s customers that is increasing at individual, needs-oriented level. On the same said, it tries to respond to the mobility concepts through convenient solution for private, public, and commercial sector (Vinuales et al., 2018).

Luxury vehicle division such as BMW, Audi, and Mercedes are based on Germany. Germany inspires the nation to incorporate exploration and development towards eco-technology. The hybrid technology makes manufacturers in Germany (Daimler, 2016).      

The main objective of Mercedes is to maintain a good relationship with its customers with having a strong market share in UK market. It wants to strengthen its core business activities while implementing the growth strategy with safeguarding the leading position in the global premium segment. The aim of marketing plan is to increase the sales and boost the market share of Mercedes in UK automobile industry. The aim is to sell 60,000 units of Mercedes A-class model by 2019 (Statista, 2018).

Physical Evidence

In order to successfully, enter the UK market by using segmentation approach, it is important to identify segments in UK and chose the segment that can fit in the organisational goals. Behavioural and demographic segmentation will be able to segment the UK market for A-class model. Mercedes have already been allocation the luxury market. It is found that people who prefer to buy luxury car has always remained over 40 years but the aim of marketing plan is to attract more customers (Tybout, and Ragsdale, 2017). Mercedes is trying to target and focus on younger generation. Moreover, the peculiar demand of customers and cultural differences in UK. The marketing of Model A-class has targeted young generation and executives too to convince and launch programs for youngsters as a marketing campaign. A- Class model in UK is targeting young executive professional and business entrepreneurs that have an age in late twenties and early thirties. They will afford it because people living in urban setting and tending to target middle class, income ranging at an early age (Irani, 2018).   

According to segmentation, the target market for A- class model is young professionals having age 23 to 35. While penetrating the unique segment, the strategy of maintaining the brand image has to be found appropriate. Mercedes the middle-aged youngsters tend to be conservative and relies on thinking that expending money for a fuel is an expensive lifestyle. The model’s stylish design and its versatility of AS-class model can appeal to generation of young people (Daimler, 2018).   

The strategy to position the A-class model can be through market development strategy. As Mercedes already enjoys a brand reputation and a supreme quality. A designed concept of A-class model is to gain a reputable a market share. A- Class model carries superior quality but at the same time, it must undertake appropriate offers to make it affordable, create a sense of security and a flexible functioning (Schmidt, 2012).  

Mercedes is a well-known and famous brand. Promotion is based on luxury product that is directed to special group of customers, which require high quality recognised products, that confirms the financial standing. Mercedes have decided to change and more precisely make strategy on social status (Mnih et al., 2015). The promotional strategies includes local strategies and promotion mix such as sales promotion, direct mail, advertising, trade fair, sponsorship and exhibition to promote selling of A-class models. Mercedes can use new means of communication and have its own profile on Facebook. Mercedes has decided to allocate 30 percent of the UK marketing budget to social and digital media due to advance consumer attitude. Further, Mercedes is an official car sponsor of London fashion week (Marketing Controls, 2018).

Marketing strategies of Mercedes usually spend big amount for several advertising campaigns. It launches international advertising campaigns to sustain and meet the demands of target market. Moreover, apart from the table, four different print ads and online campaign will be added to large circulated magazines in UK. The sustainability campaign is extended to increase the sales of A-class model by 20 percent in 2017. In marketing campaign, Mercedes promote innovative technology such as sound mobility. Public and sponsorship events has to incur projected cost by launching two public events and three sponsored events (Daimler, 2018).

Process

In order to get proper and effective results of various marketing campaigns. It is important to keep a check on how effectively these advertising campaigns can approach the target market or the young people.  There is a hypothetical set budget for what two public events is to be organised and how young potential target market. Three sponsorship events can be organising of London fashion week and sport event can attract the young people because currently, youth have become hyperactive active by participating in fashion weeks and participating in sport events (Olson et al., 2018). The control of marketing plan is to ensure that company achieves the target sales and planned relative profits. The process of control involves measurement, evaluation, and monitoring the tasks. There are various methods to measure the deviation of whether target market have been able to convince such as Marketing Audit, analysis of market share, budgetary control, analysing the ratio that considers marketing cost control (Marketing Controls, 2018).   

Conclusion

From the above discussion, it can be concluded that marketing plan has to undertake various internal and external analysis. As an marketing manager, analysing the environmental issues is necessary to make a marketing plan. The marketing plan decides the strategies such as segmentation, targeting, and positioning to target the potential customers. Then, tactics and actions have been formed to make promotional strategies. Then a budget is decided, to launch international advertising campaigns to meet the demands of target market.  

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