Brand Management: Mercedes - Essay Example

BRAND MANAGEMENT, MERCEDES College Brand Management, Mercedes Brand Identity Mercedes-Benz is a decades old company that specializes in automobile manufacturing. The company utilizes the motto “Best or Nothing” to describe their cool automobile brands that have attracted many customers across the world. This brand is used for luxury automobiles, buses, coaches and trucks, being the centre of their manufacturing. The brand target market is middle income earners and the upper class in the society due its relative high cost as compared to its competitors such as Toyota. The middle and upper economic class prefers fashionable designs of luxury cars, which the Mercedes-Benz sufficiently suits. Specifically that brand aims at reaching out for the professional class, which can afford to purchase and maintain this brand of vehicle (Spiggle, Nguyen, & Caravella, 2012). The company has diversified its models to fit the various demands of their target customers by manufacturing small and bid body size cars, all body types. Apart from being a part top-class vehicle, Mercedes model is preferred for its safety features. Mercedes-Benz has invested a lot on the safety of their vehicles by considering its high quality brakes, stable body structure and installation with airbags for sensitive impacts. This makes it ideal for its target class, who consider safety as a priority while selecting a vehicle brand. The originality of the vehicle makes its one of the most unique automobile brands in the automobile industry. For instance, its body type is unique and different from that of competitor companies. As depicted in the company’s website, the model takes the body of a “chicken” that is complex to define and hence unique only to the company. Uniqueness is a feature that the upper-class associated with style and fashion of an automobile (Whitson, R 2013). This is the major reason why this brand has received a lot of favoritism from the professional class. Over 80% of the purchases of the Mercedes-Benz brand prefer it for its optimal fashion design. Quality is an important aspect of the Mercedes-Benz brand that makes its preferable by its target customers. Although its repair and maintenance are expensive, it does not demand for frequent repair and maintenance, hence giving a desirable service to its users. The physical appearance makes it a likeable brand. Mercedes-Benz has a shiny appearance that reflects its classy design and style which makes it admirable from a far. Technology is another important aspect of the brand that makes it a favorite for the youths in the middle. For instance the C-Class of 2014 has a stereo multimedia system and a navigational panel on its dashboard that makes it an interesting ride for many middle class young people. Advertisement is an important aspect of the brand that creates its awareness in the public. The automobile company pays attention to its brand advertisement, not only on the television but also the internet (Whitson, 2013). The company has its own television that advertises it products to the public, symbolizing a great deal of marketing innovation. Its ability to attract the public, its admirable corporate images makes it a cool brand for the target customers. Customer Based Brand Equity Customer based brand equity is a concept that has gained a lot of relevance in the contemporary business environment. In the 21st century, the customer has become the main focus of the business organizations and the determiner of the market demand. The competitive nature of the business market makes it critical for organizations to focus on the customers, and to make products that are designed by the customer feedback. As competition sets in, the organizations are forced to design products that suit the customer tastes. The effect of market competition is that it leads to an increase in the customer’s bargaining power, while that of the organizations reduces. As Keller (2008) puts it, the customer based brand value is equity is value of a brand that is obtained from the customers’ perception. Unlike in the traditional business set where the organization designed the products and the public formed the part of the consumers, the modern business environment has reversed these roles. The organizations have to focus on the customer’s tastes and strategies through which they can satisfy the specific customer needs. The ability of an organization to remain profitable both in the short and long-run depends on their ability to satisfy the consumer tastes. Mercedes is a brand that receives a lot of competition from rival automobile companies. The BMW, Porsche, Audi, Volkswagen, Jaguar, Ferrari, Aston Martin and Volvo are among the most vicious competitors of Mercedes that are dominating the automobile industry. In view of this competition, Mercedes has no choice but to understand the consumer preferences and to focus on strategies to satisfy them. One crucial strategy that the company has deployed as part of their customer based value model is to create brand awareness through the media. The use of the “the best or nothing” slogan is important marketing strategy for the company that builds its image in public as the best premium automobile in the world. The company has used technology to create public awareness of their brands. The use of the social media particularly has been of great significance to the public today. Social media is a superior advertisement platform for products. In an era when most middle class and upper class can afford smart phones, it is a wise idea for Mercedes to market its products on the social media sites such as Facebook and Twitter (Smith & Burns, 2013). This is because most of the target customers of the brand have access to the online media. This accompanied by the TV advertisement is a crucial strategy for the organization. Another crucial feature of customer based brand value is the understanding of the customer preferences in the international market. The complexity of international market is a factor that a multinational company cannot ignore. Mercedes is a company that ventured in the international market to broaden its geographical coverage and to benefit from the increased number of target customers. The company has considered diversity within the international markets as part letting the people design their products. For instance, colour preferences of automobiles vary from one person to the other and from place to place. For instance, in Africa, the majority of citizens prefer dark Mercedes models rather than silvery ones. The colour diversity of their brands is an important idea of making products that are appealing to the customers. From another point of view, the size of the colour is an issue that affects the customer tastes (Kurylko, 2014). For instance, majority of women prefer to use small cars while majority of men prefer large cars. The ability of the brand to take size preferences of their customers is an important perspective of their customer value based strategy of the organization. The customers provide feedback information which helps the company to create products that best fit their products. The website technology of Mercedes has helped the organization to establish efficient communication with their customers. Customers prefer organizations which they can communicate with while purchasing products from them. The organization provides the customer with the ability to have a personalized account, through which they can speak to the customer care, launch any complains and receive support from the management. This is crucial aspect of the company that allows a two-way communication between the customer and the organization, which ensure that the customers are satisfied (Keller, Apéria, & Georgson, 2008). In addition, the website has the “car configurator” option that allows the customer to design their own cars and compare them with a wide range of custom made vehicles available on the website. The ability of Mercedes to use of an efficient customer value model explains the reason for profit rising trends today. Brand Extension Brand extension in a company refers to the development of new products related to the parent brand, brand improvement or even brand variation. Brand extension within a company aims at sourcing new customers or leveraging the value of the parent brand by satisfying the diverse needs of the target customers. Brand extension is a two sided knife that can either lead to organizational success or expose the organization to weaknesses. Research shows that organizations that extend their brands are bound to receive more customers and to increase their sales. The consequence of this is that the organizational value will go higher and the organization will increase their profits. However, it is crucial that the organization be aware of the possible consequences of loss of the brand image, which may have adverse consequences on the organization (Glynn & Woodside, 2009). Therefore, an organization must remain careful while making a brand extension during an expansion strategy. It is crucial to consider whether an organization should conduct an upward brand extension or a downward brand extension. A down ward brand extension may involve targeting a lower economic class while an upward extension may be a move to target the upper economic class. The complexity of the dynamics of brand extension makes it a risky move for any organization. A company such as Toyota benefited from extending their products (Sood & Keller, 2012). When they released the Toyota Lexus model, the company competed fairly with other luxury vehicles such as the BMW and Mercedes. As a result, the company profited from diversifying its products in the market, which resulted to an attraction of the higher economic class. This is a typical example of upward brand extension in the automobile industry. Brand extension has been a subject of discussion for Mercedes brand, as the organization considers the motive to launch a “beyond a car brand.” The major strategy of the organization has been to focus on other customers by leveraging on their [positive brand identity in the market (Kim & Yoon, 2013). The intention of the organization is to increase its customers and benefit from the good public image it enjoys in the market. Already, the organization has extended its brand in several dimensions. To begin with, the company made a downward extension when they launched the C-Class vehicle which targeted the lower economic class. The C-Class is now a popular automobile whose number in the public exceeds that of the other prestigious vehicles. From a critical point of view, the down ward extension has both positive and negative consequences. On the positive side the company benefitted by increasing the affordability of its products, which helped it to compete with non-prestigious brands such as Toyota. This resulted to an over 10% increase in the organizational annual sales. However, the organization risked losing its image as a prestigious brand (Kapferer, 2008). A reduction in the price of the brand resulted into increase in the number of C-Class Mercedes vehicles in the public, which put the company’s image at risk. The professional class felt that Mercedes has down-graded its class and that it was no longer a prestigious brand. On this ground, it would be crucial for the company to further provide a brand variation especially to this brand extension. The company should focus retaining its brand image with the C-class family. To do this, the company needs to review the brand and limit its sales within the public. They should consider improving the quality of the brand and reviewing the cost patterns. This will ensure that there is no high inflow of the brand, which may risk the loss of the corporate images as a prestigious brand. Its strategy to extend beyond the car services may be consequential. The company has plans to provide licensing for any company that meets the standards of manufacturing of the company. While this may be a move to increase the brand awareness, it may jeopardize its quality and hence its corporate image (Spiggle, Nguyen, & Caravella, 2012). On this note, it would be crucial for Mercedes-Benz to consider new brand extension strategy. To achieve optimum benefits, the company should focus on a strategy to manufacturing of air crafts (Cutright, Bettman, & Fitzsimons, 2013). Since the company targets the high economic class who are frequent users of the air travel services, leveraging the brand identity would be profitable for the organization. This would be an upward brand extension targeting the prestigious car users. Manufacturing Mercedes-Benz Air crafts would make it possible to target air travellers with the brand image. Brand Logo Business organization use brand Logos to represent their brand images and to symbolically express their mission and vision. Companies use the Logos as part of the branding strategy. Scholarly literature shows that Logos are important brand marks that structure the recognizable image of the company in the public. Many customers can recognize the brand by identifying the logo (Jansen, Zhang, & Mattila, 2012). On this note, brand logo is part of an organizations marketing strategy that a company should give attention while designing. While building a brand logo, it is crucial for a company to ensure that the logo represents the strategy of the organization (Domansky, 2006). When the wrong brand logo is developed for a company, it may affect the company’s public image, which will affect the customer response to the brand. Hence, an organization should play a clear attention to its Logo, to ensure that it is aligned to the company strategies. The Logo for Mercedes-Benz is a circled three-pointed star. The Mercedes Benz logo has evolved since the ages of the early 1990s. The company has used 7 logos since its formation but the current logo has been used since the year 1925. Mercedes-Benz utilizes the three-pointed star to represent its strategy to dominate on land, the sea and the air. Therefore, the logo is a clear representation of the organizations mission to be a leading automobile producer company for cars, ships and aircrafts. The strength in using this logo is the ability to focus both on the short term and long term vision of the organization. From a neutral point of view, it is clear that Mercedes Benz dominates over land especially among the middle and the upper economic classes. Currently, the organization has a plan to focus on manufacturing of aircrafts interior and exterior design. It is recommendable that the logo of a company remains constant, and should be able to last year after year. Changing a company logo may have adverse consequences for an organization. If a country provides a new logo each year, they may be unable to establish a unique identity, which is necessary if the company has to market its brand to the public (Girard, Anitsal, & Anitsal, 2013). Therefore, the ability of the Mercedes Logo to remain constant and to represent both the short term and long term plans of the organization makes it a strong marketing strategy. From a close observation of the public, they have learnt to associate the three-pointed star to the Mercedes-Benz logo to prestige. The brand mark has become a mark of identity for the company, with most people associating this mark to some of social prestige. Therefore, the image has become core to the marketing strategy of the organization, which is crucial for organizational development. A positive brand image is crucial for the identity of the organization. The purchasing behavior of customers depends on their emotional attributes towards a particular product (Cian & Elder, 2014). Among middle and high income earners, the purchasing behavior depends on the “euphoria” that is behind a particular product. For instance, the workers in a certain organization will buy a specific brand so as to keep with their class. The purchasers of the Mercedes brand have won over the public for being able to maintain a strong public image and to associate the brand logo with prestige. The ability of the company to maintain a positive identity explains the reason why the company has remained a top seller in the automobile company. On this note, Mercedes Benz is one of the cool companies that have developed strong strategies to market their products to the target customers. Through a strong identity construction, the company has managed to reach for the middle class and the high economic class to purchase their luxury car brands. The company brand is interesting and fun especially for the lovers of innovative brands. Brand extension has been an important policy for the company as one way of satisfying their customer and competing with rival companies. However, it is crucial for the company to focus on extending their brand to produce aircrafts. This will not only satisfy the long term vision of the company to dominate on land, air and sea, but also increase its customer population. The Mercedes Benz brand has been effective to a large extent in developing strong brand image that has seen its succeed in the competitive automobile industry. Bibliography Cian, L, Krishna, A, & Elder, R 2014, This Logo Moves Me: Dynamic Imagery from Static Images, Journal Of Marketing Research (JMR), 51, 2, pp. 184-197, Business Source Complete, EBSCOhost, viewed 26 May 2014. Cutright, K, Bettman, J, & Fitzsimons, G 2013, Putting Brands in Their Place: How a Lack of Control Keeps Brands Contained, Journal Of Marketing Research (JMR), 50, 3, pp. 365-377, Business Source Complete, EBSCOhost, viewed 26 May 2014. 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Spiggle, S, Nguyen, H, & Caravella, M 2012, More Than Fit: Brand Extension Authenticity, Journal Of Marketing Research (JMR), 49, 6, pp. 967-983, Business Source Complete, EBSCOhost, viewed 26 May 2014. Whitson, R 2013, How Cool Brands Stay Hot, Journal Of Brand Strategy, 2, 2, pp. 210-211, Business Source Complete, EBSCOhost, viewed 26 May 2014. Appendix 1:Brand Essence Model Appendix 2: Suns and Satellite Analysis Read More