Mercedes-Benz, the well-known luxury car manufacturer that is part of the Daimler-Benz company, has built its reputation in the United States on a foundation of quality and exclusivity. The company's marketing program has been instrumental in cultivating this reputation, and the company has successfully targeted the upper middle class and upper class as its target market. Recent years, however, have seen an increase in the number and type of cars that have entered Mercedes-Benz's traditional niche, with the result that the company now competes against its European rivals BMW and Jaguar, as well as against new upscale models of Nissan and Toyota (Lexus and Infinity brands). This research examines a hypothetical promotional plan for a new Mercedes-Benz model by considering the company's current marketing strategy and the appropriate positioning of a new vehicle.
Mercedes-Benz manufactures and markets luxury automobiles through a network of dealers within the United States. Its cars are sold throughout the world; within the United States, the company focuses on the luxury car market. Its offerings include hardtops, convertibles, sedans, coupes and sports sedans. Within this broad category, the company has a broad price structure, with models targeting the low end of the niche market (prices in the $30,000 range) and continuing to cars costing more than $60,000 (depending on the model and options). The average Mercedes-Benz sales price in the United States was $55,000 in 1992.
Mercedes-Benz is profitable within its market niche, but its market share has been eroding due to competition from European companies as well as from Japanese companies. Mercedes-Benz has recently faced strong competition from Lexus and Infinity, which are luxury car brands marketed by Toyota and Nissan through a separate dealer network from the companies' traditional vehicle offerings. These cars, which compete with Mercedes-Benz lower-end vehicles...