Brand Audit

Reviewed and completed by Harold Park

12/10/2015

Table of Contents
I. Brand Inventory
 A. Company p 3 - 13

B. Category and Competition p 13 - 15

C. Products Within Category p 16 - 19

D. Brand Analysis p 19 - 20

E. Consumer Profile p 21 - 22

F. Advertising/ Marketing Communications p 23 - 24

G. Media p 24 -

H. Promotions p

I. Internet and New Media p

J. Brand Value p

II. Brand Explanatory

A. Qualitative/ Quantitative Research p

B. Recommendations p

III. Sources p

Company Overview
Location
The parent company (headquarters) is located in Stuttgart, Germany. The majority of the iconic
Mercedes-Benz vehicles are produced in the motherland, but the company also has production
capabilities in the United States, France, South Africa, Brazil, India, Malaysia, Thailand,
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Vietnam, Indonesia, and China. Below is a picture that details the ability of Mercedes-Benz to
operate anywhere in the world.

Brand History
Established in 1871, Benz & Cie. was the most important of several companies founded by Karl
Benz. In 1890 Gottlieb Daimler and Wilhelm Maybach created and founded the Daimler
Motoren Gessellschaft (DMG). However, Daimler passed away in 1900 and Maybach left DMG
in 1907 and by then the two companies Benz & Cie. and DMG were rivals. It was in 1924, and
primarily the cause of World War I, that they entered into an Agreement of Mutual Interest that
would last until 2000. This would allow them to manufacture and sell under their own brand

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names. As a result of the merger in June 28, 1926, the firm became known as the famed Daimler-
Benz.
The hyphenated brand name Mercedes-Benz was established after that merger. The brand name
Daimler had been licensed for use on other automobiles in France and the United Kingdom, and
was therefore not available to Daimler-Benz. Instead, the name of its seminal Mercedes model
designed by Maybach over twenty years before was chosen for the DMG portion on the new
brand. (Mercedes had been painted on a DMG vehicle used in races by a man in honor of his
daughter, and became the formal name of a DMG model in 1902.) Thus, Mercedes-Benz became
the brand name applied to the models of one of the new firm.
As part of the 1926 merger, a new logo was created that would include a symbol for each and
integrate the names of the two former companies. A three-pointed star had been designed by
Gottlieb Daimler, to show the ability of his motors for land, air, and sea use. The traditional
laurel wreath symbol used by Karl Benz was added along with his name to complete the new
logo. The logo with a plain ring, as seen today, was not used until 1937.

Key Personnel

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Organizational Structure
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Mercedes-Benz comprises eleven different departments, with an average of four core practice
areas in each. They are:
1. Corporate Communications/Public Relations
a. Core areas include:
i. Brand Public Relations
ii. Product/Technology Public Relations
iii. Corporate Public Relations
iv. Corporate Communications
2. Customer Service
a. Core areas include:
i. Customer Assistance Center
ii. Parts Assistance Center
iii. Technical Assistance Center
iv. Parts Distribution Centers
3. Distribution & Logistics
a. Core areas include:
i. Vehicle Preparation Centers
ii. Volume Planning
iii. Supply Chain Management/Inventory Management
iv. Import & Domestic Transportation Logistics
v. Retail Distribution
4. Specialized Technical
a. Core areas include:
i. Technical Assistance Center Operations
ii. Vehicle Preparation Center
iii. Parts Assistance Center
iv. Warranty Evaluations
v. Vehicle Test Centers
5. Engineering
a. Core areas include:
i. Product Analysis
ii. Service Engineering
iii. Emissions Control
iv. Technical Writing
v. Warranty Services
vi. Test Centers
vii. Field Technical Services
viii. Customer Satisfaction
ix. Quality Engineering Center
6. Human Resources
a. Core areas include:
i. Employee Development & Organizational Design
ii. Compensation & Benefits
iii. HR Operations Talent Acquisition and Associate Relations
7. Information Technology
a. Core areas include:

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 i. Dealer, Corporate & Customer Systems
ii. Vehicle Sales Systems
iii. Network/Web Operations
iv. Information Management
v. Project Management
vi. HRIS
8. General Counsel
a. Carries out legal processes necessary to affect the rights, privileges and
obligations of the Company.
9. Marketing
a. Core areas include:
i. Product Management
ii. Events Marketing
iii. Marketing Communications
iv. Internet Marketing
v. Relationship Marketing
vi. Market Research & Strategy
vii. Smart Marketing
10. Sales
a. Core areas include:
i. Sales Operations
ii. Regional Operations
iii. Pre-Owned Operations
iv. Retail Development
v. Corporate Fleet Sales
vi. Remarketing
11. Finance
a. Core areas include:
i. Profit Planning & Financial Reporting
ii. Corporate Finance, Controlling & Risk
iii. Corporate Treasury
iv. Tax Administration
v. Purchasing
vi. Payroll
12. Learning and Performance
a. Core areas include:
i. Corporate Training
ii. Retail Training

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Major Activities

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Financial Data and Annual Report
Below is the screen cap of the 2014 annual report.

Below is a review of all of Daimlers divisions

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Furthermore, below is the screen cap of the success of Daimler worldwide

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 Su
bsidiaries

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Recent News
Mercedes-Benz reports an all-time record August sale at 31,250 units, increasing 3.2% from the
30,294 vehicles solds during the same month last year. The Mercedes-Benz brand tallied 28,373
units sold, a 4.8% increase over August 2014. Sprinter delivered 2,260 sales for the month of
August, up 15.3% for the year, while smart recorded 617 units in August. On a year-to-date
basis, Mercedes-Benz retails totaled 220,870, up 7.3%. Adding year-to-date sales of 17,957 for
Sprinter Vans and 4,682 for smart, MBUSA posted a grand total of 243,509 units through
August.

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Category and Competition
Category Definition
For the U.S. market, MB USA caters to the luxury segment of the car buying market. Compact
sedans are offered in the C-class as well as full-sized sedans like the S-class. In recent years MB
has expanded their segmentation to include several SUV models. The original MB SUV was the
G-class (Gelandewagen), which has been in the MB lineup for more than 2 decades. Recent SUV
additions have included the M and GL classes, in respective order of introduction. More recently
MB Passenger Cars has launched the R-class, which is essentially a luxury mini-van. MB was
the first European carmaker to introduce a luxury-class mini-van in the US market.
Outside of the US, MB caters to an even lower-end car buyer in the sub $30,000 range. These
two lines include the A and B-classes. The U.S. segmentation is markedly more up-market, and
in line with other luxury car competitors in the U.S., including Audi, Jaguar, and BMW. BMW
has decided to bring the slightly more down market 1-series. MB plans to compete in an even
more down-market segment via the Smart car, which is primarily owned by MB. The Smart will
go on sale in the U.S. for the first time in 2008 via the Penske Groups sales channel. Audi has
brought its A4 to the U.S. recently as a direct competitor, but Jaguar does not compete in the sub
$30,000 market, however they are increasingly moving up-market as they cut the X-type line in
2008, and replace the S-type with the XF. Plans for segmentation may, however, change as Ford
sells Land Rover and Jaguar form its portfolio in the early 2008 timeframe.

Size of Category

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Methods of Production and Distribution
Mercedes-Benz prefers a narrow reach of the market share as they have loyal customers who
continue to go through them or find newer customers who are interested in their brand. Because
they offer additional services for their vehicles they do not need to worry about being intensive
to reach more customers, but rather keep their availability more exclusive to match their
competitors. For example, they do not have multiple dealerships in one area or metroplex. They
also do not carry a huge quantity of any model, especially with higher quality models that are
more expensive. They focus on parallel distribution as well, in order to boost both their
wholesale and internet sales volume. Additionally, they have partnerships and sponsor in tennis

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and gold that attract large amounts of viewers and are entitled to being more prestigious than
some.

Competition
The top three competitors for Mercedes-Benz are BMW, Lexus, and Audi. Referring back to the
market share chart, MB is directly under BMW with Lexus following closely, and Audi trailing
behind everyone else. Lexus has been very successful in increasing their market share to their
current status. BMW has been neck and neck with MB trying to push them out for the top spot.
Currently, BMW has the reigns but MB was a top finisher for years before. Ideally, MB would
want to relinquish the grips from BMW and take back their dominating performance.

Seasonal and Regional Factors

Seasonal factors - although used vehicle demand is driven by many industry and economic
variables, seasonal demand is attributed to a limited number of factors. Firstly, tax refund season
most used vehicles require a down payment and income tax refunds are a common source for
it. Increasing inventory during tax refund season effectively rives up demand and net profit.
Secondly, weather extreme changes in the weather can adversely affect dealerships and related
auction activity. Weather trends can be a double-edged sword as different climates can drive up
demand for sedans, favorably, or drive up demand for the need of vans and SUVs and reduce
demand for sedans. Lastly, holidays periods of lag time leading up to holidays can adversely
affect the demand for vehicles, thus dealers manage retail inventory accordingly.
Regional factors Some factors include the competition from BMW, Audi, and Lexus and some
include the availability of dealerships in a given region of area. Due to their narrow-reaching
marketing strategy their exclusiveness can sometimes be a hindrance to them.

Legal Considerations and Product Recall

In early 2014, Mercedes-Benz recalled over 250,000 C-class vehicles from their 2008 to 2011
model years. The recall came about after the German automaker learned that a ground pin
connector might oxidize, causing the taillights to dim or fail, increasing the chances of an
accident. Mercedes-Benz has received complaints about the defect since 2009, according to the
New York Times. Not only have five fires been reported, but Mercedes-Benz has also received
402 complaints about the issue and 24,000 warranty claims related to the defect.

Products Within Category

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New Products and Innovations
Like every luxury car company, Mercedes-Benz wants to focus its attention to producing newly
innovated cars. They plan on introducing the S-class Cabriolet, C-class coupe, C350 Plug-In
Hybrid, GLS, and an all new F 015 concept car that will allow full functionality of switching
between manual and autonomous driving. Below featured are the Cabriolet, coupe, SUV, and the
new F class.
The 2017 S-class Cabriolet

The all-new 2017 C-class Coupe

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The 2017 GLS

The F
015 Luxury in Motion Concept Car

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Recent News About Product
Category
Mercedes-Benz is in the forefront for creating
new and innovative ways that combine
technology and progression, but is also
simple and easy to use. In the new 2017 E-
class that is expected to debut at the North American International Auto Show in Detroit next
month, there are two 12.3 inch, high definition screens covered with bonded glass. One display
sits directly in front of the driver along with the rest of the cabin instruments, whereas the other
display sits adjacent to the driver occupying the space that others would recognize as the
navigation scree or touch display near the middle of the cabin. Controlling the screens requires
smartphone-like swipe gestures (a
first ever feature in a car) to command
various functions. And they are done
by using two touch-control buttons
integrated into the spoke of the
multifunction steering wheel. Using
the touch controls the user can expect
to adjust information on both screens,
toggling between navigation, audio
menus and searching for real-time
fuel prices in the area. Users can also expect to change their design themes for the displays by
choosing between: Classic, Sport, and Progressive.

Brand Analysis
Top Brand by Unit Sales, Growth, and Pricing Trends

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Top Sales by Country

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There are quite a handful of car brands and even more countries. So I narrowed the search to the
top 10 countries with the best over sales in car brands since not everyone wants to buy a luxury
car. Also worth nothing, in some places the luxury models actually offer alternatives that are
much more affordable and are designed to be able to fit into a low bracket income.

Consumer Profile
Demographics of Users, and Heavy User Profile
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The average age of ownership with luxury cars is the lowest with BMW and Audi whereas it is
53 with Mercedes-Benz. Meaning that an older public tends to prefer Mercedes-Benz moreover
than the former two brands. The median income was greatest Audi, lowest with BMW, and
Mercedes-Benz was in the middle of those two. The percentage of how many drivers had a 4-
year college degree was highest with Audi, lowest with Mercedes-Benz, and BMW was in the
middle of those two.

Place and Frequency of Purchase

There are three ways to purchase a Mercedes-Benz automobile. The first way is to purchase it
entirely new and straight from production at a Mercedes-Benz dealership. The second way is to
purchase it through a used car site or a used car dealership that specializes in luxury or European
models. The third way, and this is the rarer option, would be to purchase it through an auction.
The first option allows you to purchase a vehicle immediately, but the customer would have to
face losing an easy $10,000 as soon as they leave the dealership. This is only recommended for
those buyers who have a lot of money and can afford the ability to making a purchase so
expensive. The second option is the most reliable one because it allows the customer to pick and
choose what they want (to a certain extent) and purchase their vehicle of choosing at a reduced
price. Albeit, the prices may be lower but the quality and maintenance on the vehicle need to be
carefully looked at so as to not buy a car that will cost more than it really is. The third option is
to purchase a vehicle through an auction. This is the rarest way to purchase a Mercedes-Benz
vehicle because most auctions will particularly be auctioning off vintage cars that have been
carefully maintained and preserved. Meaning that this option would be the most expensive one
since the customer can directly bid against other customers who might want the same car.

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Brand Awareness, Loyalty, and Attitude
Mercedes-Benz is an iconic luxury car name. The company has been successful in branding
themselves in such a way that they can differentiate themselves effectively from the rest of the
luxury car market. Phoenix Marketing International, a global marketing services firm, released
data on an audit they did on Mercedes-Benz back in 2009. It stated that after looking closely at
luxury automotive brand advertising for the last 18 months [it] revealed that Mercedes has been
able to over deliver on key communication challenges including introductions of new and
redesigned vehicles (E Class and M Class), brand image ads (The Best or Nothing) and sales
event ads. Their lift to brand impression (norm @ 26%) and lift to purchase consideration
(norm at 22%) were both significantly above the norm at 30% and 27% respectively. For
advertising recall (norm at 29%), Mercedes also performed significantly above the luxury market
norm at 30%. Consumers also see the ads as significantly more likeable than the norm, at 36%,
(5%above the norm). The luxury auto manufacturer also leads in getting consumers to take
action with 43% of consumers engaging with the brand through activities such as visiting a
dealer, looking for information on dealer and manufacturer websites, and connecting with other
consumers (online and socially) regarding the brand.

Decision Makers vs. Purchasers

The difference between decision makers and purchasers is little when comparing it with
Mercedes-Benz. There are many people that are largely decision makers because most
consumers are engaging in a thought process on whether to buy a Mercedes-Benz automobile or
not when it comes to choosing from the top of the line luxury brands. The consumer would either
have to buy into the Mercedes-Benz brand or not. There is no if or maybe. Because of the
quality that the consumer is investing their capital into for their sake of pleasure on the road,
there is no room to get a luxury brand car and think about switching over. Buying a car is not like
buying a clothing or household item. It is something you have to invest both time and money
into. Time to think about the purchase and money to complete the purchase.
Which is why purchasers can be more reliable when it comes to buying a higher end luxury
automobile. They have the capital and capability to purchase a car (new or used) and enjoy it to
their full extent. If they want to return the vehicle or get it replaced because of untimely and ill-
witted events, then they can because they have the ability to do so.

Advertising/Marketing Communications
Creative Strategies, Appeals, Claims, Special Effects

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CLA Campaign Summary: One of their creative strategies employed releasing a car that would
hopefully bring the average age of buyers down. Currently, the age has been lowered to the mid
40s. The average age of buyers for Mercedes-Benz was 54, a number that is 5 years older than
both BMW and Audi buyers. The campaign focused on launching the all-new CLA, and the
brand turned to five popular Instagrammers to compete for the best photos for a chance to win
their very own CLA.

Strategy: Mercedes-Benz wanted to release the vehicle two months before its inception to drive
consideration and awareness. But the company wanted to know how they were going to reach a
Gen Y target who not only rejected the brand, but [also] ignored traditional media. So their
objective had three key measures:
1) Positive sentiment: The target was at least 200,000 social mentions that would be at least
75% positive.
2) Engagement: The goal was to create at least 2,000,000 engagements with the brand.
3) Consideration: They wanted to drive at least 200,000 visits to the CLA content site, with
at least 25% of the visits from consumers 35 years old or younger. Moreover, they wanted
a target of more than 50,000 completed build-your-owns and 2,000 leads that actually
contacted a dealer through the site.
Creative Strategy & Execution: With the current day and age revolving around the new obsession
with mobile phones and apps the company decided to challenge five of Instagrams best
photographers to spend five days behind the wheel of the Mercedes-Benz CLA. Each would
document his or her trip, sharing six photos a day on their own accounts and the Mercedes-Benz
Instagram accounts. The hook? Whoever got the most likes kept the CLA. Tim Landis (557,000
followers), Michael ONeal (510,000 followers), Alice Gao (561,000 followers), Chris Ozer
(507,000 followers), and Paul Octavious (442,000 followers) each explored a different location
in the United States and documented their adventures. The images were shared with Mercedes-
Benz Facebook (more than two million followers) and Twitter (220,000 followers) communities,
while a responsive campaign hub allowed consumers to follow the current scores of the
influencers, explore the images, and track who was winning.
Results: Mobile photography delivered real results for the brand: on Instagram alone, the content
achieved 87 million organic impressions.

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 1) Positive sentiment: There were 549,000 social mentions on Facebook and Twitter alone,
which were 90% positive.
2) Engagement: The photos shared during the campaign attracted over two million likes
alone. This figure was before the paid amplification program drove 170,000 visits to the
campaign hub and more than 11.5 million trailer views.
3) Consideration: In August there were 3.5 million visits to MBUSA.com, the highest in
the sites history. More than one million visitors viewed CLA content, with 342,000
build-your-owns and 5,400 leads generated. The CLA accounted for 67% of all scheduled
test drives.
47% of all visitors were under 35, and by the end of 2013, Mercedes-Benz had surpassed BMW
as the top-selling luxury automaker in the country, mostly accounted for by the sales from the
popular CLA. Because of this huge success, Mercedes-Benz has made mobile photography a key
pillar of its marketing efforts. Within months, similar campaigns from both Lexus and Lincoln
were created and proved that the use of these mobile platforms was a new venue to venture into.

Internet and New Media

Purpose of Site and Social Media Activities
Facebook

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Twitter

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Instagram

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LinkedIn

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