Mercedes-Benz's Marketing Strategy in Mexico

TABLE OF CONTENTS

1. Introduction

2. Mercedes-Benz’s Marketing Strategy in Mexico
2.1. Products in Mexico
2.2. Services in Mexico
2.2.1. After-Sales
2.2.2. Financing
2.2.3. Distributors
2.2.4. Parts/Original Equipment
2.2.5. Maintenance
2.3. The A-Class

3. Target Groups for the A-Class

4. Promotional Strategies
4.1. Sponsoring
4.2. Social Media
4.2.1. Facebook
4.2.2. YouTube
4.2.3 Evaluating Mercedes-Benz México’s Marketing Strategy within Social Media
4.3. Traditional Advertising
4.3.1 TV Advertising
4.3.2 Billboards, Newspapers and Magazines
4.3.3 Radio
4.3.4 Evaluating Mercedes-Benz Mexico’s Marketing Strategy with Traditional Advertising

5. Possible Improvements

6. Appendix

7. Bibliography

1.Introduction

The automobile industry is famous for being ahead of the curve in most areas. Automotive companies cannot rely on a one-time announcement or word-of-mouth chatter to keep a steady stream to customers. These companies have to have well developed advertising strategies in their marketing processes, in order to sustain a profitable growth in all the markets they serve throughout the world. Mercedes-Benz (MB) is a German high-class automobile company. Its products stand for luxury, reliability and dependability. The company belongs to the multinational division of the German manufacturer Daimler AG and has its headquarters in Stuttgart, Baden-Württemberg, Germany. The company has 274,616 employees and gained a profit of 10,887 billion U.S. dollar with revenue of 147,257 billion U.S. dollars. ^[1]

Mexico is very important for the company’s North American strategy, which can be proved by the fact that Mercedes-Benz produces its cars in Monterrey, Nuevo Leon, Mexico. According to the McKinsey Global Media Report 2013 Latin America provided the highest growth in expenditure for advertising, in 2012 the increase was 13.3 percent. ^[2] The increasing investments of automotive companies are a reason for it – in 2011 the industry expanded its expenditures in advertising by 101 percent. ^[3]

A critical analysis of the MB’s marketing strategy in Mexico is the purpose of this research paper. Since we are not able to cover all aspects of the marketing of MB due to the limitation of 10 to 15 pages for this paper, the study will be focusing on the following areas: sponsoring, social media, TV advertisements and magazine commercials. Thus, other areas of marketing like brand management or viral marketing will not be addressed. The products and services the company offers in Mexico will be mentioned. The marketing strategy of Mercedes-Benz México will be described and target groups will be defined. At the end of this paper we will state how MB can use its marketing in Mexico more efficiently in order to gain higher profits.

2. Mercedes-Benz’s Marketing Strategy in Mexico

2.1. Products in Mexico

Current car models MB is selling in Mexico:^[4] A-Class, B-Class, C-Class, CLA-Class, CLS-Class, E-Class, G-Class, GLK-Class, GL-Class, GLA-Class, M-Class, S-Class, SLK-Class, SL-Class, Viano-Class.

MB offers these cars in different sections. The A-Class is sold as a hatchback. The top-sellers are classified in the segments Sedánes (E-Class Sedán, C-Class Sedán and S-Class Sedán), Tourer (B-Class Sports Tourer), Shooting Brake (CLS Shooting Brake), Coupés (C-Class-Coupé, CLS-Class, E-Class Coupé, CLA-Class Coupé and S-Class Coupé), Convertibles/roadsters (E-Class Convertible, SL-Class Roadster, SLK-Class Roadster), and Todoterreno (Todoterreno G-Class, GLA-Class, GL-Class and M-Class). Cars do not sell so often, like the Viano, are not classified into any group.

The price range of the cars varies from $384,900 Pesos (for one A-Class) to $2,089,000 (for one SL-Class). Compared to the average household net-adjusted disposable income per capita of $128,500 Pesos, the cheapest car of MB costs almost three times as much as the A-Class model, therefore we can classify the upper class as target group for Marketing activities of the company, because they are the only ones who are able to afford the costs for the car.

2.2. Services in Mexico

As already mentioned in “1. Introduction” MB gives the Mexican market higher value. Because of that the firm starts with adapting quality standards for customer services from the German market to the Mexican market. ^[5] The customer service of Mercedes-Benz México consists of the areas After Sales, Financing, Distributors, Parts/Original Equipment and Maintenance.

2.2.1. After-Sales

Customers of Mercedes-Benz México tend to buy several vehicle of the company. Additionally the firm offers customer service programs and immediate assistance. The service of MB grants wishes of the clients like quick repair at a fixed price. MB keeps its quality promise and the service support ‘365’ is available 24 hours a day, 365 days a year.

2.2.2. Financing

In order to increase the amount of sales, Mercedes-Benz México offers its customers loans to find a solution for financing of the purchase. Customers get support in developing a plan for financing the funding. The service includes that the customers are able to calculate online the amount of the needed loan and therefore they can decide between different options for repayment.

2.2.3. Distributors

In order to reach the highest amount of customers as possible, MB is represented by more than 40 distributors in Mexico. Due to this high number of distributors, MB is represented in nearly every federal state of Mexico.

2.2.4. Parts/Original Equipment

Mercedes-Benz México offers its customers special prices if some of its exclusive products and/or components of the product break. Due to this vanes, wipers and air filter can be easily replaced when they break for a fair price.

2.2.5. Maintenance

Since the company is conscious of its customers’ needs, Mercedes-Benz México offers service maintenance. This means that the firm offers every tool at its disposal to ensure its vehicles perform well. Customers can decide between different specified maintenance schedules to explore prepaid maintenance options for new and certified pre-owned models. Due to this offer customers are continuously able to get invaluable operating advice, maintenance tips and service checklists to ensure that the cars are performing on their highest performance.

2.3. The A-Class

The Mercedes-Benz A-Class is a compact car, produced in the third generation since 2012. This car is designed to be a direct competitor to the BMW 1 Series and Audi A3. As a marketing element of the A-Class introduction, Mercedes-Benz started the ‘A Rock’ concert series with the British rock band Placebo. ^[6] The 5-concert tour took place in Paris, Rome, Zurich, Hamburg and Madrid in the summer 2012. In 2013 MB was thanks to the A-Class able to reach record sales in the first half of the year. The company sold in total of 783,520 cars, in the North American market (Canada, USA and Mexico) and sales increased by 9.1 percent. ^[7]

The price for a new Class-A model is $ 384,900 Pesos in Mexico and $ 369,000 in Germany, a new BMW 1-series model costs at least $ 374,900 Pesos in Mexico and $ 369,900 in Germany and customers who want to buy a new Audi A1 have to pay at least $ 282,700 in Mexico and $ 380,000 in Germany. This shows that beside Audi neither BMW nor Mercedes lowered their price for the car in the Mexican market. As we see, Mercedes-Benz México does not lower the price for its entry level model in Mexico even though the average net adjusted average income of a Mexican family is a third of the price for this car. This means that the company segments the car as a high quality product even though there is the logical danger that people will decide to buy the Audi A1, because the costs are approximately $ 100,000 Pesos less.

Therefore the A-Class was launched 2013 in Mexico it is in the homepage still presented in the section “Vehiculos Nuevos” – new cars. The picture of the car emphasizes the futuristic design. Despite the fact that this illustration is for the Mexican market, the car’s license plate is a German one. Obviously, this should evoke associations the viewer has with Germany - according to a BBC survey the most people in the world have positive associations with Germany, especially for its quality products. ^[8] On the right side of the internet presence you’ll find below the sentence “La nueva Clase A.” (The new A-Class), the slogan “Compact Insanity” – which is the only part of the site in English. On the left side you’ll find below the tab for the starting page (Pagina de Inicio), as well as three other tabs: Fascinacion, Todos los hechos and Assesoria (Fascination, All the facts and Advices). This shows that the marketing of Mercedes-Benz México wants to amplify the positive associations because the tab for a feeling (Fascination) is higher located than a tab for facts (All the Facts or Advices).

3. Target Groups for the A-Class

The launch Price at $384,900 for the Mercedes A-Class in Mexico and the design of the vehicle makes this product a target group specific car. It is a new revolutionary vehicle, as stated by Joachim Schmidt, head of sales and marketing of Mercedes: "The A class is the right product at the right time and has tremendous potential to tap into new target groups and markets”. A target market is defined as the group of customers towards which a business has decided to aim its marketing efforts and products or services. The first step to identify the target markets for this vehicle is to segment the market and to position the product. We will start by segmenting by demographics: age group, due to the sport nature of the A-Class design and drive, we conclude that the age segment for this vehicle in North America, is for people in their late 30´s and mid-forties, although there is also a possibility to extend the age group range starting from the mid-twenties to forties, in order to gain more market share as it is Mercedes Goal in Mexico.

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^[1] Mercedes Benz Annual Report 2013. 2013. Available from: ;http://www.daimler.com/Projects/c2c/channel/documents/2432178_Daimler_2013_Geschaeftsbericht.pdf [18. November 2014].

^[2] McKinsey Company, 2013. Global Media Report 2013. Global Industry Overview [Online]. Available at: ;http://www.mckinsey.com/client_service/media_and_entertainment/latest_thinking/global_media_report_2013 [16. November 2014].

^[3] Digital Strategy Consulting, 2012. Available from: ;http://www.digitalstrategyconsulting.com/intelligence/2012/06/mexico_online_ad_spend_up_36_i.php. [17. November 2014].

^[4] Mercedes Benz Mexico. 2014. Available from: ;http://www2.mercedes-benz.com.mx/content/mexico/mpc/mpc_mexico_website/es/home_mpc/passengercars/home/new_cars/model_overview.flash.html [18. November 2014].

^[5] Mercedes Benz Mexico. 2014. Available from: ;http://www2.mercedes-benz.com.mx/content/mexico/mpc/mpc_mexico_website/es/home_mpc/passengercars/home/new_cars/model_overview.flash.html [20. November 2014].

^[6] Daimler – Global Media Site. 2012. Available from: ;http://media.daimler.com/dcmedia/0-921-1457194-1-1496968-1-0-0-0-0-1-11701-854934-0-1-0-0-0-0-0.html?TS=1354002950267 [20. November 2014].

^[7] www.Autozeitung.de. 2013. Available from: ; http://www.autozeitung.de/auto-news/daimler-mercedes-verkaufszahlen-mai-2013-absatz-global-gn20230 [20. November 2014].

^[8] www.WirtschaftsWoche.de. 2014. BBC-Umfrage – Fast alle mögen Deutschland. Available from: ; http://www.wiwo.de/politik/ausland/bbc-umfrage-fast-alle-moegen-deutschland/8243618.html [22. November 2014].