INRODUCTION:
Mercedes-Benz India Pvt. Ltd. is a wholly owned subsidiary of the German Daimler AG. It is founded in 1994, with headquarters in Pune, Maharashtra. The
company has a commercial
vehicle plant outside Chennai, which it is
currently upgrading with an investment of €700 million. The passenger cars
manufacturing plant is located in Poona, same as the headquarters.
MARHET POTENTIAL:
The
company sold around 9003 units in FY 13/14 in India, which is an increase in
its sales by 32 % in a year. Though the sales stood second in German Big 3
cars, the percentage increase is huge, showing its increasing potential in
Indian market.
OVERALL BUSINESS STRATEGY:
Mercedes-Benz
has focused more on market penetration and product development strategies to
maintain or increase the sales of its business units.
·
Market
penetration strategy: The automobile industry of India is
growing at a high pace. The company is looking forward to expand the sales of
its automobiles in current markets by competitive pricing, intense distribution
and aggressive promotion. The company is also looking to raise the usage rate
of its customers, attracting new customers and converting the customers of its
competitors.
·
Product
development strategy: In the dynamic and turbulent market,
where the models of automobiles are changing rapidly, the company always
strives to design new models, and keep high quality to attract new customers
and also to retain old ones.
'
MARKETING STRATEGY:
Mercedes-Benz
adopted a 360 degree marketing strategy, which it believes is the reason for
increase in sales. It also believes that consumers engaged through more than
one channel are more valuable than the ones who interact through single
channel. The brand is especially known for marketing through social media,
mobile applications and behind the screen videos.
Mercedes-Benz Facebook page is a place for
interaction with its customers. Their blogs is another place of interaction
with their followers counting over 2 million.
Another innovative marketing strategy the company
has adopted is video campaign. They have not just uploaded commercials videos
in YouTube but also have uploaded behind the screens in making an
advertisement. They also divided the feed into types of vehicles and
commercials for easy navigation.
Other than these digital forms, Mercedes-Benz also
campaigns through print magazines, billboards and direct mail. Push
notification in mobile apps is another avenue. Holding events and participating
in auto shows are its other marketing strategies.
POSITIONING STRATEGY:
Mercedes-Benz
is known for offering best luxury cars in India from long time. But the
increase in competition from other premium car manufacturers is threatening to
the company. Therefore the company has undertaken a rebranding exercise to
target the youth. The company has worked on model line ups, marketing and brand
positioning simultaneously to align with its positioning strategy.
AREAS OF STRENGTH:
- · Mercedes-Benz has a very strong brand name attached to it. The additional value placed by the consumers for the brand gives the company an ability to charge high price and helps in gaining high profits.
- · The company has superior technology which the competitors cannot imitate. By this, Mercedes-Benz can meet the needs of the consumers effectively and maintain its brand value.
- · The company has high financial leverage which makes it easy to expand its business and gain profits.
- · The innovative culture of the organization helps in producing unique products and services that meet their customer needs.
- · Instead of targeting all customers, Mercedes-Benz targets only its new customers to grow their business. The loyalty of customers increases by this specific targeting and accordingly brings profits to the company.
THREATS:
- · There are many international companies for the premium automobile segment across the globe. Each company has its own advantage and combating with them is tough for Mercedes-Benz.
- · Also the competitors offer special discounted prices to the same segment of population. This intense competition may make it difficult to sustain.
- · The tastes of consumers change very rapidly. Therefore Mercedes-Benz should always keep its pace with the needs of its consumers.
- · Availability of cheap and highly efficient domestic and Japanese cars poses a threat to the sales of the company.
- · Government rules for this sector like tax increase for importing vehicles, increasing fuel prices may decrease sales due to high costs involved in buying and maintaining.
FUTURE POTENTIAL/GROWTH PLAN:
As
a part of its strategy, the company is planning to invest Rs. 350 crore to
introduce new small and compact car in India by 2015. The company has also
planned to introduce its 10 new models in the country in next few years and for
that it is looking to assemble SUV’s ML, GL and GLC-Class in India.
Mercedes-Benz has identified the
need for more compact cars and the benefits of assembling the vehicles locally.
Localization of the content reduces the cost of its vehicle and brings price
advantage for the company. The company is also looking forward to sell around
5500-6000 cars by 2020. This is part of the large growth plan to be in the
leading position in the premium automobile segment in India.
The company is looking forward to increase its
profitability by making project related collaborations with other manufacturers
like Renault/Nissan and from savings obtained from different strategies and
improved efficiency in its value chain.
CONCLUSION:
Mercedes-Benz
has set up a growth strategy for 2020 not just to occupy leading position in
the premium car segment in terms of brand, products and profitability but also
to increase its unit sales. Many efforts like implementing large no. of events
are being taken by the company to achieve these four goals. Though to handle
the future uncertainties, it might need to up its game and engage proactively
in product placement and stronger brand equity creation to sustain its
position.
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