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Case Title:

Mercedes: In Search of Growth

Publication Year : 2005

Authors: Abhijit Sinha, Kumar Satyaki Ray

Industry: Automobiles

Region:Europe

Case Code: GRS0154K

Teaching Note: Not Available

Structured Assignment: Not Available

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Abstract:
In 2005, according to the survey conducted by Interbrand and J P Morgan Chase, ‘Mercedes’, the brand synonymous with quality in the global automobile industry, slipped to the 11th position from its previous year’s ranking at the 10th place. In the same year, Daimler Chrysler, owner of the Mercedes brand, planned to withdraw 1.5 million vehicles from the US and European markets due to quality problems. Along with problems in quality, the company also experienced a sluggish growth rate in its premium segment, where it was facing severe competition from Japanese auto makers, like Toyota, Nissan, Honda and Mitsubishi. The company launched Mercedes A class (popularly known as the Baby Benz), which was an instant hit in the European market. Analysts predicted that this was the main reason behind Mercedes’ slip in brand rating as Mercedes lost its exclusivity. The main dilemma therefore, was the tradeoff between product volume and exclusivity of the brand. Daimler Chrysler also wanted to consolidate its presence in the emerging Asian markets. Therefore, the popular Mercedes A class was unveiled in China and Malaysia as well. The company further introduced several innovative marketing strategies, customer relationship management practices and promotional methods to enhance the visibility and presence of its premium ‘Mercedes’ brand in the Asian countries, particularly in China, South-East Asian countries and India. A group of analysts also opined that the company’s plans to consolidate its presence in the Asian market might not succeed as envisaged. Though Asia was the most lucrative market for Daimler Chrysler, the premium segment was very limited and the compact car segment already had a huge number of automobile brands. The entry of premium players (Rolls Royce, GM, and BMW) in the niche category would make the niche segment overcrowded and fiercely competitive. Industry experts were skecptical whether ‘Mercedes’ could maintain its exclusivity as well as its growth in terms of production volume

Pedagogical Objectives:

  • To give a detail about the European automobile industry, trends and patterns
  • To understand the segmentation-targeting and positioning strategy in automobile industry
  • To understand the different segment in automobile industry
  • To understand the marketing strategy adopted by automobile company to launch a new model
  • To understand the innovative promotional strategies to make a brand successful one
  • To understand the key success factors that make a particular auto brand a success story.

Keywords : Chryslers corporation; Five pointed star design; Growth Strategies Case Study; Daimler-Benz AG; Daimer-Benz’s competitors; Daimler-Chrysler; VSP of the brand; Crisis in the European market; New marketing initiatives of Mercedes; The dilemma

Contents : 
Introduction
Daimler-Benz
Daimler Chrysler
Mercedes: Usp Of The Brand
Facing The Heat In European Market
Mercedes: New Marketing Initiatives
Mercedes: The Dilemma
Different Brands Of Daimler Chrysler
Falling Ranks Of Mercedes

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