Marketing Management

Presentation

Mercedes Benz – A Competitive Analysis

By: Ritika Sharma , MBA SEM I1

Mercedes-Benz

Type : Division of Daimler AGIndustry : Manufacturing Predecessor : Benz, Daimler Motoren GesellschaftFounded : 1926 Founder(s) : Karl Benz ,Gottlieb Daimler Headquarters : Stuttgart, Germany Area served : Worldwide Key people : Dieter Zetsche (Head Mercedes-Benz Car Division) Products : Automobiles,Trucks,Buses,Financial servicesProduction : Europe, Asia, Africa, North & South America

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Mercedes Benz in the Indian market……….

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Mercedes Benz India Pvt.Ltd

Type : 100%-owned Subsidiary of Daimler AGIndustry : AutomativeFounded : 1994Headquarters : Pune, MaharashtraKey people : Peter T. Honegg , MD &CEOProducts : Luxury & Commercial vehiclesParent : Daimler AGManufacturing facilities : Chennai & Pune

The C-Class and E-Class are assembled locally others are fully imported from Germany

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Mercedes-Benz presence in India....

Presently, Mercedes-Benz India’s engagement covers several domains:

Local production of Mercedes-Benz cars,Making available imported Mercedes-Benz cars, Commercial Vehicle operations, Global sourcing of auto components, Innovation and R&D.

Social Involvement of Mercedes-Benz

‘Biofuel from Jatropha’ Automotive mechatronicsRoad safety project for children Automotive education, etc

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Strengths of Mercedes… World Class Dealer & service network:

22 dealerships across 17 cities in 11 states and 2 Union territories.Service Stations in 32 cites in 16 states and 2 Union territories of India.

Core Competencies :

Name ,Quality & Innovation

“Positioned itself as player in Niche Segment which reflects a symbol of status, luxury & comfort. Known for its standards of safety , quality, innovative drive & visual appeal”

The top 100 most trusted brands of India (The Brand Trust Report)

Won the Best Brand Award by Auto India Best Brand Awards 2011.6

Industry Analysis

In Asia, India is the second biggest market for luxury cars after China & will be amongst the top 3-4 markets , along with Germany, United States and China.

Luxury car majors in India - Mercedes-Benz, BMW and Audi put together have around 85% market share.

BMW & Audi Most direct competitorsThe luxury car market in India is estimated at around 15,000 units annuallyThe Indian luxury car market is favorable for new entrants capable of

grabbing the untapped opportunities by following the customer-oriented approach.

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Executives say on competition..

“The No.1 position is not the ultimate target…we are here to sell cars. We have gained some market share last year. We are not afraid of competition, competition helps you and it is necessary.”

Peter T. Honegg , MD &CEO

“If I talk about my rivals, mainly BMW, their path to leadership has been built on

discounting, model strip downs and low-entry cars. This is not what Mercedes does. We are clear on maintaining our product quality and brand, while having an aggressive pricing. A stripped down model really does not work for Mercedes and the luxury customers. Mercedes is not there in certain segments like the mini SUV category, which has given rivals an edge in volumes.”

Debasis Mitra, Director (sales and marketing)

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Effect of competition- Numero Uno position of mercedes lost

First-mover advantage in 1995

Till 2007 stood at top among all the in its segment but lost its leadership position to BMW in 2009.

“Audi and BMW have introduced their latest models in the Indian market by more sportier cars as the profile of new luxury car owners is changing with younger professionals while Mercedes Benz portfolio has some dated cars”

BMW’s aggressive marketing, fast expansion of product profiles, strategic dealership location selection and supplementary financial service offering.

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Why BMW at No.1 ?---Quickly reacts to strategy of Mercedes Part 1 of 2

Following what Mercedes did, BMW Group is planning to introduce BMW Financial Services India (for customers and dealers)

Discounting older models

BMW’s 5-year coverage (after sales) as compared to the 2-year warranty provided by Mercedes-Benz.

In the Indian scenario, the luxury cars are generally chauffeur-driven. This trend has been well-imbibed by BMW as it has focused more on back-seat facilities during designing and marketing.

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Why BMW at No.1 ?--- Quickly reacts to strategy of Mercedes Part 2 of

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BMW is planning to launch ‘Pre-Owned Car Sales Program’ in 2011.Mercedes is already in that from 2009.

BMW has been acting very swiftly in identifying its dealership locations to achieve maximum sales volume aligned.

BMW with 15 dealership locations (two locations in Delhi and Mumbai) competes with Mercedes-Benz having 32 dealership locations because it has strategically expanded its dealership network to higher demand luxury car markets.

In next phase BMW is planning to target emerging tier 1 and 2 cities to compete with Mercedes whose 25-30% sales revenue comes from tier 2 cities.

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Strategic Moves of Mercedes…..

Strategic Moves of Mercedes…..

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STRATEGIC MOVES by Mercedes Benz……….

To snatch the market position from BMW, Mercedes has adopted a 3 layer strategy:

More new cars

More diesel cars

More dealer

s

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Competitive Strategies part 1 of 2

Tap markets which are still virgin (semi-urban cities)Position products properly & play around itOpening of its financial arm (“The Daimler Financial Services”)Planning to introduce the leasing concept in the luxury car marketFocus on localisationInvestment in customer relationship(digital marketing)Safety innovation (state-of-the-art safety features)

StrategiesDifferentiationCost LeadershipProduct Development

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Competitive Strategies part 2 of 2

Mercedes-Benz to partner the Indian Grand Prix (F1)

Building brand centre in India at Gurgaon & Mumbai.

Steers marketing strategy towards youth ( MTV “Date with Speed” programme , to compete with BMW & AUDI ).

Displaying its vehicles at shopping malls to promote the brand.

“We are changing our way of marketing, not exactly in 180 degree direction, but a shift towards tapping the youth”

“Indian customers are very complicated and fragmented and we need to address them separately” --Peter Honegg, MD

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All new E-class withblue EFFICIENCY

The beginning of green with all new E-classto counter back its position

Improving every aspect of automotive technology to reduce the impact on the environment

Introduction of Blue EFFICIENCY, for the first time in India, with the launch of the E 350 CDI Blue EFFICIENCY vehicle in E-class

To reduce fuel consumption & reducing CO2 emissions up to 23%.

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“ProvenExclusivity”-- Pre-owned car business Once a star, always a star.Offers the opportunity to acquire a new pre-owned Mercedes-

Benz at an irresistible price.Program has been in existence since 2009 and operates across

35 countries presently & uptil now 400 vehicles sold through this route.

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Demand dip...

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Reactions…

Luxury car sales constituted around 1.5% of sales of all passenger cars in 2010

To maintain sales traction, luxury players :

Intensified marketing strategies,

Started price subventions ( in entry-level products like BMW 3 Series, Mercedes-Benz Class and the Audi A4 which form the bulk of sales of luxury cars),

Discounts range up to Rs 4-5 lakhs.

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THANK YOU

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