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Branding Luxury Cars in China and India Marie Tuxen - 301471 Page 1 of 40 Prescribed Front Page Home Assignments, Project Reports, Synopses With Oral Defence Department of Business Communication Name: Marie Tuxen Student Exam No.: 301471 Program: Marketing and Management Communication Exam Title: Bachelor Thesis 2013 Supervisor: Sara Hamid Alwan Number of Characters: 54,997 (excluding spaces)

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Branding Luxury Cars in China and India Marie Tuxen - 301471

Page 1 of 40

Prescribed Front Page

Home Assignments, Project Reports, Synopses

With Oral Defence

Department of Business Communication

Name:

Marie Tuxen

Student Exam No.:

301471

Program:

Marketing and Management Communication

Exam Title:

Bachelor Thesis 2013

Supervisor:

Sara Hamid Alwan

Number of Characters:

54,997 (excluding spaces)

Branding Luxury Cars in China and India Marie Tuxen - 301471

Page 2 of 40

Branding Luxury Cars in China and India With Mercedes-Benz as a Case Study

Marie Tuxen - 301471

BA Marketing and Management Communication

Aarhus School of Business and Social Sciences (BSS) Aarhus University

Business Communication Bachelor Thesis

Supervisor: Sara Hamid Alwan

05.06.2013

Thesis length: 54,997 characters excluding spaces

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Abstract

Despite a financial crisis, the luxury market has discovered a way to expand and thrive while

other industries have been struggling to recover (Passport, 2012, p. 38). The luxury industry

has namely opened their eyes to Asia or more specifically, the Chinese middle and upper class

have opened their eyes to Western luxury. Since the beginning of the 21st century,

international luxury brands have mushroomed throughout China and caused that 85% of the

world’s luxury brands are present here (Business Daily Update, 2011, p. 1). Due to this rapid

penetration, China has become the world’s greatest luxury market, accounting for 25% of the

global sale (Fortune Magazine: China, 2012, p. 1). Further, experts forecast that in a few years

India will become the next major luxury market after China because the country is developing

with increasingly speed in the same direction as China (Eng & Bogaert, 2010, p. 58).

Guided by such facts, this thesis intends to investigate from a theoretical perspective and with

focus on Mercedes-Benz’s branding strategy in China, to which extend the Indian luxury car

industry can benefit from the experiences of the luxury market leader, China, to be prepared

for a future increase in luxury demand. This problem statement will be viewed from the

paradigm of philosophical hermeneutics because the primary research of Mercedes-Benz’s

TV-commercial, “The Fashion Show”, will utilise the hermeneutic circle as the meaning is

constantly growing when the thesis writer’s horizon fuses with the TV-commercial and

scholar statements (Skinner, 1986, p. 24). Also, main theories like Ricca and Robins’ meta-

luxury, Kapferer’s brand identity prism, Hofstede’s five dimensions of national culture, and de

Mooij’s marketing and cross-cultural studies are utilised since they support the notion of “no

one truth” which is the core of philosophical hermeneutics (Skinner, 1986, p. 25).

On basis of the qualitative research, this thesis induces findings, revealing that China and

India to a large extend are similar in social and cultural development, thus substantiating that

India’s luxury car industry is able to learn from Mercedes-Benz’s branding strategies in China.

More specifically, collectivistic values such as brotherhood, loyalty, relationships, and “being

one with nature” but also individualistic attributes as fashionable and cosmopolitan

sophistication are important to emphasise. Further, national celebrity endorsers will be just

as well received in India as in China because the new risen middle and upper class aspire to be

associated with a higher, wealthier social class (Eng & Bogaert, 2010, p. 64). However, it is not

suggested that standardised marketing materials can be used in China and India because the

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thesis only evidences that China and India are somewhat similar on the surface, and therefore

adaptation to the Indian market and culture is vital for the luxury car industry.

Thesis length: 54,997 characters excluding spaces

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Table of Content

CHAPTER 1: FRAMEWORK OF THESIS ...................................................................................................... 6

1.1. INTRODUCTION: ................................................................................................................................... 6

1.2. PROBLEM STATEMENT: .......................................................................................................................... 7

1.2.1. Research questions .................................................................................................................. 7

1.2.2. Thesis structure ....................................................................................................................... 8

1.3. DELIMITATIONS: ................................................................................................................................... 9

1.4. THEORY OF SCIENCE: ............................................................................................................................. 9

1.4.1. Methodology ......................................................................................................................... 10

1.5. THEORETICAL FRAMEWORK: ................................................................................................................. 10

CHAPTER 2: CONTEXTUAL BACKGROUND.............................................................................................. 12

2.1. THE LUXURY MARKET’S SURVIVAL DURING A FINANCIAL CRISIS: ................................................................... 12

2.2. THE CHINESE LUXURY MARKET AND ITS CONSUMERS: ................................................................................ 13

CHAPTER 3: CAMPAIGN ANALYSIS ........................................................................................................ 16

3.1. MERCEDES-BENZ: ............................................................................................................................... 16

3.2. KAPFERER’S BRAND IDENTITY PRISM: ...................................................................................................... 17

3.3. ANALYSIS OF MERCEDES-BENZ TV-COMMERCIAL: .................................................................................... 18

3.3.1. Brand physique ...................................................................................................................... 19

3.3.2. Relationship mode ................................................................................................................. 19

3.3.3. Customer reflected image ..................................................................................................... 21

3.3.4. Brand personality .................................................................................................................. 22

3.3.5. Brand culture ......................................................................................................................... 22

3.3.6. Customer self-concept ........................................................................................................... 23

CHAPTER 4: COMPARING CHINA AND INDIA ......................................................................................... 25

4.1. INDIA’S HISTORY, ECONOMY, AND CULTURE: ........................................................................................... 25

4.2. SIMILARITIES BETWEEN CHINA AND INDIA: .............................................................................................. 26

4.3. LEARNING FROM MERCEDES-BENZ: ....................................................................................................... 29

CHAPTER 5: DISCUSSION AND CONCLUSION ......................................................................................... 32

5.1. DISCUSSION OF GLOBALISATION AND LOCALISATION: ................................................................................ 32

5.2. CONCLUSION: .................................................................................................................................... 33

REFERENCE LIST ................................................................................................................................... 35

APPENDIX ............................................................................................................................................ 40

A Mercedes-Benz’s TV-commercial “The Fashion Show” for the GLK-class, China 2010 .................. 40

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Chapter 1: Framework of Thesis

1.1. Introduction:

This bachelor thesis investigates the luxury industry as this area actually thrives in the

economic recession (Kapferer & Tabatoni, 2011, p. 274-275). Many industries have felt the

downturn since 2007, but somehow the luxury industry has found an oasis within the BRIC

countries1 as the demand for luxury goods has exploded - particular in China during the

financial crisis. A 2012 statement by Hongkong and Shanghai Banking Corporation reveals

that “Chinese shoppers' habits are closely watched by luxury brands. That's because China

accounts for a quarter of global luxury sales today, compared to 5% just five years ago”

(Fortune Magazine: China, 2012, p. 1). It means that China has replaced Japan and now

consumes the greatest share of the world’s luxury market (Lui, 2012, p. 1).

However, China is not the only BRIC country in development as India’s luxury market is

heading in China’s direction and forecasted to comprise 8-10% of the luxury market by 2015

(Campaign India Team, 2011, p. 1). In common between the two countries is not just the

rather similar size of population, infrastructure, rise of the middle and upper class but also

superior economic growth (Eng & Bogaert, 2010, p. 59; Gale, 2012, p. 28). 2012 numbers

reveal that China’s GDP grew 8.2% and India’s 7.8% annually while much of the world was

stumbling through the recession (Gale, 2012, p. 32). Experts forecast that India’s GDP will

increase by 9.5% annually during the next five years and soon become the world’s third

largest economy, behind China and USA in GDP (Mukherjee et al., 2012, p. 482). Also, in 2025

India is predicted to become the fifth largest consumer market in the world, indicating the

country’s fierce development (Shira, 2012, p. 3, 242). When bringing the luxury industry into

focus, the Chinese and Indian market of luxury cars has in particular felt the economic upturn

with Mercedes-Benz, BMW, and Audi as the most popular brands in both countries (Koifman,

2012, p. 1; Business Insights: Essentials, 2012, p. 1).

By looking at China’s strong growth in the luxury market and comparing these facts with the

tendencies seen in the Indian consumer market, it is evident that luxury car manufacturers in

India need to prepare themselves for the future prospects. However, merely few research

1 The term “BRIC countries” or “BRICs” was invented by Goldman Sachs in 2003 about the four developing countries

in avid economic growth - namely Brazil, Russia, India, and China (Kotler et al., 2009, p. 476)

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articles have looked into consumer behaviour on the Indian luxury market, hence India needs

to borrow literature about luxury consumption from other countries (Gupta, 2009, p. 39; Eng

& Bogaert, 2010, p. 56). For such reasons, this thesis will investigate the luxury car industry

by using Mercedes-Benz as pivotal point and hereby draw conclusions from the experiences,

gained in the Chinese luxury car market. These findings will then be evaluated on to

determine to which degree, Indian luxury car manufacturers should be able to learn from the

luxury market leader, China.

1.2. Problem statement:

Since India has been predicted to become the next major luxury market after China, the

purpose of this thesis is to research (Eng & Bogaert, 2010, p. 58):

From a theoretical perspective and with focus on Mercedes-Benz’s branding strategy in

China, to which extend can the Indian luxury car industry benefit from the experiences of

the luxury market leader, China, to be prepared for a future increase in luxury demand?2

1.2.1. Research questions

In order to thoroughly answer the problem statement, the following three research questions

have been outlined and are to be answered in each their chapter throughout the thesis.

Research question 1 (R1)

How come Chinese consumers have increased their expenditures on luxury during the

financial crisis and hereby made China the world’s greatest luxury market?

By understanding Ricca and Robins’ concept of ‘meta-luxury’, the financial crisis’ impact on

the luxury industry will be clarified before this chapter examines the Chinese luxury market

and its consumers.

2 Mercedes-Benz is also on the Indian market but sales volume is extremely low here compared to China’s. Since India

is also lacking knowledge about its luxury consumers, the country is encouraged to learn from China’s car market

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Research question 2 (R2)

How does Mercedes-Benz brand its cars in China through “The Fashion Show” TV-

commercial as representative?

By using Kapferer’s ‘brand identity prism’ as framework, this part investigates which

branding strategies the Chinese luxury car industry, through the scope of Mercedes-Benz,

takes advantage of.

Research question 3 (R3)

Which branding strategies can India’s luxury car industry learn from Mercedes-Benz’s

way of advertising in China?

By combining the findings from R1 and R2 with facts about India’s growing economy and

country similarities with China (based on Hofstede’s and De Mooij’s notions), this section

looks into which branding strategies India should be able to learn from China.

1.2.2. Thesis structure

The following figure creates an overview of the thesis and how it has been organised to

answer the three research questions and hence the problem statement in a natural manner.

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1.3. Delimitations:

Due to the restricted length, delimitation is needed in order to clarify what this thesis will

comprise and what it will not touch upon. For example, the primary research can only

embrace one campaign analysis from the luxury car industry, meaning that findings,

generalisations, and suggestions, created from the research, are drawn on a limited scope - a

larger scope of investigation may have strengthen or changed the final conclusion. Also, only

visuals will be analysed upon in the TV-commercial, omitting the Chinese text and speak

because a translation into English will never mirror the exact same meaning as intended in

Chinese, hence in both ways somewhat challenge the validity of the analysis. Moreover, this

thesis only focuses on the luxury car industry in the two developing countries, China and

India. It causes that luxury brands in developed countries or other luxury categories would

only be able to take little inspiration from these findings. Even though China and India are two

of the largest countries and in reality cannot be homogeneous across all regions within each

nation, it is necessary to conduct culture generalisations to make the thesis plausible. It means

e.g. that generations and social classes are seen as homogeneous throughout each country.

1.4. Theory of science:

Hans-Georg Gadamer’s ‘philosophical hermeneutics’ has been chosen as the scientific

tradition that sets the framework for the theoretical approach of this thesis. Scientific

paradigms help individuals describe and understand the universe around them and the

phenomena (events, books, visuals etc.) in it (Skinner, 1986, p. 34). While natural sciences,

like critical rationalism, intend to explain the universe, human sciences as hermeneutics seek

to understand it (Chalmers, 1999, p. 43). Since our understanding of the universe and

phenomenon is created on the basis of subjective interpretations (influenced by background

and preconceptions), philosophical hermeneutics states that no “one true” meaning exists as

each interpretation is as good as another person’s (Skinner, 1986, p. 26). Therefore, primary

research and understanding of secondary research will be marked by the thesis writer’s way

of viewing the subject and perceiving the world, meaning that understanding is always

produced between receiver and phenomenon (Skinner, 1986, p. 25). Nevertheless, this thesis

intends to verify itself by including theories and statements from scholars and specialists in

order to support interpretations of the thesis writer which is one aspect of the methodology.

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1.4.1. Methodology

To conduct primary research in the thesis, a ‘qualitative method’ is used as the TV-commercial

is analysed through an interpretative approach, resulting that the analysis has a certain level

of subjectivity which corresponds with the notion of philosophical hermeneutics (Skinner,

1986, p. 24). Thus, the campaign analysis and discussion of findings reflect the ‘hermeneutic

circle’ because meaning is created in an ongoing process in which the horizon of Mercedes-

Benz’s TV-commercial, the thesis writer’s universe, and notions of scholars are constantly

fusing to create a better understanding (Skinner, 1986, p. 25). Moreover, the primary research

takes an ‘inductive’ stand because it analyses the specific case of Mercedes Benz’s TV-

commercial (Chalmers, 1999, p. 41). On the basis of these findings, the thesis generalises to a

certain degree in order to clarify what Indian luxury car manufacturers can learn from the

Chinese luxury car industry.

1.5. Theoretical framework:

Due to the paradigm of philosophical hermeneutics, this thesis seeks to substantiate itself by

utilising theories from a handful of respected scholars within the category of either luxury

branding or cross-cultural branding, thus avoiding too subjective interpretations.

Even though marketing scholars such as Philip Kotler and David A. Aaker are considered two

of the most admired marketing gurus, they have been omitted in favour of the following three

experts who have specialised within luxury branding, written “Meta-luxury” and “The luxury

strategy”, respectively (Marketing Minds, 2012, p. 1).

Manfredi Ricca and Rebecca Robins are both Directors at Interbrand, the world’s leading

brand consultancy, and have over a decade’s experience with consulting the world’s most

respected luxury brands (MacMillan, 2013, p. 1). Their concept of meta-luxury embodies

craftsmanship, focus, history, and rarity which are perceived differently depending on a

person’s education, social class, purchase behaviour etc., hence this theory supports

philosophical hermeneutics (Ricca & Robins, 2012, p. 25-26).

Jean-Noël Kapferer is a worldwide-thought leader on brand management and particularly

within the luxury brand industry (Kapferer & Bastien, 2012, jacket) His brand identity prism

focuses not just on how luxury brands market themselves, but also how they communicate the

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brand personality and how it is perceived by consumers (Kapferer & Bastien, 2012, p. 148).

According to philosophical hermeneutics, there cannot be “one truth”, thus the way luxury

brands want to be perceived may vary greatly from the perception each and every consumer

holds about the given brand.

Geert Hofstede is an extremely acknowledge pioneer within cross-cultural studies and is most

known for his five dimensions of national culture. These dimensions are, however, very broad

and generalised but useful to get an overview of cross-cultural comparison (cf. part 4.2.). A

valued scholar like Fons Trompenaars, who has modernised the five dimensions, could have

been chosen but Hofstede’s original framework has been found most suitable (UK Essays,

2011, p. 1). Only, because Marieke de Mooij, who is a respected Doctor in Communication like

Hofstede, has viewed his five dimensions from a marketing and consumption-related

perspective in the book “Global marketing and advertising” (De Mooij, 2005, p. 60). As

Hofstede and De Mooij recognise, cultures are perceived differently depending on who

evaluates them and in what perspective they are viewed, meaning that the two scholars’

notions belong to the category of philosophical hermeneutics.

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Chapter 2: Contextual Background

To get a basic understanding of the luxury industry and consumer market, this chapter will

delve into how it has been possible for China to become the world’s largest luxury market

during a recession. First, by looking into how the financial crisis has affected the luxury

market both in China and in a global perspective which are substantiated by Ricca and Robins’

definition of meta-luxury. Second, an understanding of the Chinese luxury market is sought in

a historic and cultural perspective in order to characterise Chinese consumers of luxury and

grasp the motivation behind this extravagant spending. On the basis of such research, this

chapter endorses to answer R1.

2.1. The luxury market’s survival during a financial crisis:

The financial crisis in 2007 triggered a global economic downturn that affected unnumbered

industries, evident in the global real GDP which fell 0.7% in 2009 - the first decline since the

Wall Street Crash in 1929 (Passport, 2012, p. 15). To put it into a luxury perspective, the US

luxury market plummeted 16% and the European market shrank 8% in 2009 whereas China’s

cravings for luxury were still going strong despite the fact that many advanced economies

suffered from severe job losses and significant decrease in consumer spending and private

investments (Ngai & Cho, 2012, p. 255; Passport, 2012, p. 15). Such statements reveal that

many developed countries were harshly affected by the economic downturn while China was

one of the first countries to recover after the recession (Passport, 2012, p. 38). In fact, the

BRIC countries (Brazil, Russia, India, and China) have been appointed as being the source of

growth that will bring the world economy out of the financial crisis as these four countries are

among the few which have experienced an impressive annual growth in GDP since 2007 (Van

Agtmael, 2012, p. 79; Buscaglia & Weismann, 2012, p. 3).

The financial crisis has had a negative impact on the previously popular luxury markets,

namely Japan, USA, and Europe, by means of changing consumption behaviour. These luxury

markets have not just shrunk due to decline in the level of extravagant spending but also due

to changing buying behaviours, caused by the economic downturn. As luxury shoppers have

been forced to re-examine their priorities in luxury consumption, it has become a trend to

rent luxury commodities to “show off” for a short period of time or to buy second-hand luxury

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goods to get the real deal for a bargain price (Yeoman, 2011, p. 48-49). However, the luxury

industry has found an oasis in China as the luxury market here is the fastest growing

economy, thus it is not surprising that China today accounts for 25% of the global luxury

market (Business Daily Update, 2011, p. 1; Fortune Magazine: China, 2012, p. 1).

The changing consumer behaviour in the luxury market can also be seen from a theoretical

perspective as Ricca and Robins (2012) believe that the “concept of luxury” has also changed

during the recession (p. 5). In the beginning of the 21st century, the economic stability made

consumers think less about the reasons for purchasing luxury and from whom (Ricca &

Robins, 2012, p. 76). However, the financial crisis has changed consumers view on luxury -

now “it is about luxury beyond luxury” and what Ricca and Robins (2012) have named meta-

luxury3 (p. 5). It means that luxury consumers desire to invest money and resources in

valuable objects, and hence luxury today must embody craftsmanship (expertise and quality),

focus (commitment to excellence), history (longevity and heritage), and rarity (exclusivity and

limited accessibility) (Ricca & Robins, 2012, p. 25-26). Additionally, these four factors reflect

the paradigm of philosophical hermeneutics since they may be perceived differently.

Individuals are not ‘tabula rasa’, meaning that their social background and experiences

influence how they e.g. perceive “quality” and “exclusivity” (Skinner, 1986, p. 25).

In sum, the financial crisis has in several ways changed the behaviour of luxury consumers all

over the world, and hereby forced luxury brands to seek new or fortify markets which China,

among other developing countries, has had the economic growth to be target for. To put it

differently, Asians have not moved towards Westernisation but the West has moved

increasingly more towards Asia and especially China (Zhang & Prosser, 2012, p. 18).

2.2. The Chinese luxury market and its consumers:

Even though the global luxury industry has first gained a firm foothold in China from the 21st

century, extravagant spending has for thousands of years been a part of the Chinese culture -

but to start with, only for royals, aristocrats, and scholar-bureaucrats as they were considered

the “leisure class” (Ngai & Cho, 2012, p. 257). Between 1960-1976, called the Cultural

Revolution, this leisure class was crushed by a leader who wanted to create a classless society.

3 Definition: “Meta-luxury is an enterprise paradigm based on knowledge, purpose and pursuit of timelessness,

ultimately embodied in a unique achievement” (Ricca & Robins, 2012, p. 10)

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In the years to come, this leader was inaugurated, causing that another radical social change

marked China as the Economic Reform started in 1978 and shifted the country’s view towards

wealth and luxury (Ngai & Cho, 2012, p. 257). In 1990, The Open Door Policy unlocked the

Chinese market for foreign traders from e.g. Europe and USA, resulting in strong economic

growth that increased China’s purchasing power. This was reinforced in 2001 when China

joined the World Trade Organisation, meaning that the country’s foreign trade policies were

liberalised and made it easier for foreign businesses to enter the Chinese market

(Euromonitor International, 2012, p. 4). Important about this historical outline is that these

revolutionary social and political changes have imprinted the people of their time, and

therefore made consumer behaviour of the Chinese population very heterogeneous (Degen,

2010, p. 1). Nevertheless, generations after the Economic Revolution in 1978 will be delved

into as these are important consumers in a luxury perspective.

The Upwardly Mobile Generation is today in the age range of 35 to 50, and these individuals

are therefore the first to truly embrace the Economic Revolution, thus able to get good

educations at universities in order to climb the ladder of wealth (Degen, 2010, p. 1).

Additionally, this generation can be compared with the Western Generation X4 whereas the

next “Chinese generation” is a parallel to Generation Y that is significantly interesting for the

Chinese luxury industry (Gelston, 2008, p. 1). The Young Emperor Generation is today aged 13

to 34 as they are all born after the Economic Revolution in 1978 and marked by the One Child

Policy that was imposed to control growth of the population (Degen, 2010, p. 1). The policy

meant that each couple were allowed to give birth to only one child, coursing this generation

to be highly spoiled, best educated, thus most confident, ambitious, and therefore dubbed “the

young emperors”.

This generation has been characterised as “self-centred, frequently self-indulgent, and the most

avid and savvy consumers” (Degen, 2010, p. 1) in the Chinese society, meaning that these

individuals are most attractive to the luxury industry as they consequently have a tendency

for self-indulgence and lavish consumption (Ngai & Cho, 2012, p. 247). Guided by this, the

young emperors perceive fashion to be a pathway to individuality by means of acquiring

global appeals such as modernity, cosmopolitan sophistication, status, and respect that set

them apart from others (Zhou & Belk, 2004, p. 67; Guoxin et al., 2012, p. 1518).

4 Generation X is individuals born between 1961 and 1981 while Generation Y is individuals born after 1982 (Gelston,

2008, p. 1)

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Chinese luxury consumers are not just described as being young emperors but also the middle

class and of course the upper class which are both rising rapidly due to China’s economic

growth (Centaur Communications Ltd., 2007, p. 1-2). The middle class is defined by having an

average annual income between US$ 7,800 and US$ 65,000 and is increasing so dramatically

that in 2020, 55% of the Chinese population will be in this category (Centaur Communications

Ltd., 2007, p. 1; Euromonitor International, 2009, p. 3). The 250 million individuals in the

middle class desire luxury because it is important to show the class they aspire to become a

member of and naturally to show instant proof of status, success, and new gained wealth

(Degen, 2010, p. 1). These ordinary people would identify lavish consumption of luxury goods

as extraordinary whereas extraordinary people, the 18 thousand billionaires and 440

thousand multimillionaires in China, would classify luxury items as ordinary (Kapferer &

Bastien, 2009, p. 314). Regardless of social class, Chinese luxury cravings can also be

described by deep cultural norms, founded by the core of traditional Chinese culture, called

confucianism. Confucianism values in-group harmony, meaning that there is great emphasis

on a subject’s obligation to e.g. leader, family or friends (Ngai & Cho, 2012, p. 263). Thereby, it

is an individual’s duty to show his family’s wealth or the status of his education through

luxury attributes that reveal one’s social class.

Conclusively, the remarkable history of China has clarified that its population is very

heterogeneous, however, the ‘target audience’5 of the luxury industry seems somewhat

generic. Also, luxury cravings of the young emperors, and the rising middle and upper class

explain how China in such short time has become the world’s largest luxury market.

Moreover, the attitude towards buying luxury is diverse since Chinese consumers to a larger

extend are attracted by individualistic values of Western cultures, but at the same time they

are still drawn by deep rooted cultural values e.g. formed by confucianism.

5 Definition: ”They are the many groups of people towards whom marketing communications may be focused” (Pickton

& Broderick, 2005, p. 162)

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Chapter 3: Campaign Analysis

This chapter investigates how marketing of luxury cars is conducted in China in order to grasp

how luxury marketing within the car industry can be executed to allure Chinese consumers of

the middle and upper class. To conduct R2, the global luxury car manufacturer Mercedes-Benz

has been chosen because the automaker in 2012 was in top three of the most popular luxury

car brands in China (Koifman, 2012, p. 1). Further, the primary research of Mercedes’ TV-

commercial “The Fashion Show” will be analysed by means of Kapferer’s brand identity prism

and concepts from other marketing scholars, thus taking advantage of the hermeneutic circle

when generating knowledge.

3.1. Mercedes-Benz:

Mercedes-Benz (from now on abbreviated Mercedes) has been chosen for the primary

research because the manufacturer has a fascinating history and not least interesting

statistics. Also, Mercedes has been present on the Chinese marked since 1994 but in spite of

its already global success back then, the manufacturer had a slow start in China which is seen

in annual sales of only 4,800 units in 1999 (Daimler, 1994, p. 1; Jones, 2010, p. 1). However, in

2012 Mercedes annual sales in China had increased dramatically by growing to 206,150 cars

sold in one year, indicating that Mercedes is still getting significantly more popular in China

(Daimler, 2013, p. 1).

To substantiate the luxury car market’s fierce development in India, it is worth noticing that

Mercedes has been present on the Indian market since 1996, but its annual sales here are still

rather small with only 7,630 cars sold in 2012 (Daimler, 1996, p. 1; Mercedes-Benz India,

2013, p. 1). Nevertheless, the Indian luxury car industry has a great market potential in the

coming years since Mercedes states that the sales in India are predicted to be in the 25,000 to

the 70,000 corridor by 2020 and is hereby following China (Jones, 2010, p. 1).

In a historical perspective, the background for Mercedes’ world-success is rooted in its

heritage from the automaker’s founding fathers. In 1886, the German Gottlieb Daimler and his

son, Paul Daimler, developed the world’s first motor driven, four-wheeled, road vehicle which

was the foundation stone for establishing Daimler Motor Company in 1890 (Orgarin, 2011, p.

1). Shortly after, a wealthy banker and sportsman, Emil Jellinek, discovered the great

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prospects for Daimler and gave almost unlimited funds to develop stronger, faster and more

modern cars. In 1900, Daimler completed a new car which was named “Mercedes” after

Jellinek’s beautiful daughter to honour him as Jellinek had already begun to promote and sell

Daimler automobiles to the higher echelons in society (David, 2012, p. 1). Due to this success,

the automaker was legally registered as Daimler-Mercedes. During and after World War One,

the financial situation was opposing the dreams of Daimler-Mercedes which lead to the merge

with Benz & Company in 1926. Also a German automaker that had started production of

motor-driven vehicles around the same time as Daimler and therefore equally respected

(David, 2012, p. 1). The trademark was then named Daimler-Benz, but promptly the company

became known as Mercedes-Benz as we know the manufacturer today.

Above all, Mercedes has been chosen for the primary research because the brand is in

quintessence of true luxury due to its longevity and unique cars that have always symbolised

“flawless quality and cutting edge engineering” (Auto Evolution, 2012, p. 1).

3.2. Kapferer’s brand identity prism:

Kapferer’s brand identity prism consists of six aspects; ‘brand physique’, ‘relationship mode’,

and ‘customer reflected image’ that are the three external facets and ‘brand personality’,

‘brand culture’, and ‘customer self-concept’ which all are internal facets (Kapferer & Bastien,

2012, p. 148). Even though these facets draw on either intangible or tangible aspects, common

to them are that these facets are symbolic dimensions that not just contribute to build the

brand identity but certainly also to build an identity of the consumers. Therefore, this prism

reflects philosophical hermeneutics because understanding is created between the

sender/phenomenon and the receiver, resulting in multiple meanings. In other words,

Mercedes cannot fully know how the receiver perceives the message as meaning is first

created when the horizon of the TV-commercial clashes with the horizon of the receiver

(Skinner, 1986, p. 34).

Regarding external facets of the brand identity prism, brand physique is worth examining to

start with. It comprises codes, signs, colours, traits, iconic products, and features that make up

a unique familiarity. Such non-verbal attributes are important in the creation and

communication of the symbolic, social, and cultural function of the brand and hence the

luxury products (Kapferer & Bastien, 2012, p. 148). Second, relationship mode defines the

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nature of the relationship which is created between the luxury brand and the recipients - e.g.

by a certain communication style, media or communicator. Third, customer reflected image

makes references to the stereotypical consumer because the luxury brand represents a

reflection that not necessarily mirrors the recipients but nevertheless establishes a desired

personality that the target audience wants to buy into (Kapferer & Bastien, 2012, p. 149).

Regarding internal facets, brand personality is not just focusing on the created brand

personality but the physical creator and originator of the brand whose character traits have

been the foundation for brand establishment. Next, brand culture is important as it illustrates

a brand’s DNA such as its deepest values, religion, country of origin, and inspiration source

which all together depict an exceptional brand and not just generic and superficial traits

(Kapferer & Bastien, 2012, p. 150). Last, consumer self-concept is focusing on consumers’ self-

perception once purchasing the desired luxury product. In the third external facet, customer

reflected image, the “external mirror” was delved into, reflecting how consumers believe they

present themselves to the external environment. This facet outlines instead an “internal

mirror”, meaning that feelings of personal satisfaction and achievement, gained by possessing

these desired luxury items, are important (Kapferer & Bastien, 2012, p. 149).

Finally, combining Kapferer’s brand identity prism with a campaign analysis is merely ideal as

he has stated about the prism’s facets; “these aspects can only come to life when the brand

communicates with the consumer” (EURIB, 2009, p. 2) and that is highly the case when

analysing marketing materials.

3.3. Analysis of Mercedes-Benz TV-commercial:

Mercedes’ TV-commercial, “The Fashion Show”6, for the Mercedes GLK-class from 2010 has

been chosen as pivotal point for the analysis and will be analysed by means of Kapferer’s six

steps in the brand identity prism. Since the prism investigates both internal and external

facets of a brand, the analysis of the TV-commercial will be supported by facts, found in

Mercedes’ history in order to complete the prism. This is also necessary for the analysis as it

will only embrace visual elements and therefore not look into verbal messages.

6 Appendix A: Mercedes-Benz TV-commercial “The Fashion Show” (CD/link: 47 seconds-long in total)

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3.3.1. Brand physique

Mercedes has a few key materials that make up the brand physique. Mercedes’ three-pointed

star from its logo [02, 46]7 (and as radiator mascot on some models) has always been a part of

the manufacturer’s history, and therefore an important icon of the

longevity of the Mercedes brand. The three-pointed star and the

well-known radiator grille of Mercedes are conspicuous elements

that make people instantly realise that this car is a Mercedes whether they know anything

about cars or not. This is a result of Mercedes history - the state leaders and royals who have

been known for driving Mercedes, and the fact that the automaker has always branded itself

and the cars with these prominent elements (David, 2012, p. 1).

In short, the prestige and respect Mercedes has assimilated through its longevity are

represented in the three-pointed star, radiator mascot, and radiator grille which people are

willing to pay an extended price for.

3.3.2. Relationship mode

The story line establishes a specific relationship with recipients as the story between the

model and the driver automatically is associated as values of Mercedes and the branded car.

Returning to the story line, the model arrives at a menswear

fashion show in a GLK-class Mercedes, indicating the social class

she belongs to - also because the intensive attention from

paparazzo reveals a glamorous life of a star [07, 15]. In the

meantime, the model’s driver embarks upon a long, tough but beautiful journal into the

country to visit a remote village and deliver books and gifts for school children [19-36].

Despite the model’s high status, she has not forgotten about

the less fortuned in society [4, 17, 43]. This aspect is

important from a culture perspective as brotherhood,

collective responsibility, helpfulness, and “being one with nature” [28-34, 31] are key values

in the Chinese society (Zhang & Prosser, 2012, p. 20; Li et al., 2011, p. 167). Also, loyalty

towards one’s relationships is important which is seen in the TV-commercial [05, 41] when

the driver promises the model to deliver books and gifts for the remote school (Zhou & Belk,

7 Numbers within such brackets indicate how many seconds into the TV-commercial, one can find the discussed

elements - the underlined numbers mark the second into the commercial in which the screen shot has been taken

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2004, p. 71). Additionally, it is also custom in China to give and receive gifts with two hands

[5, 37] which is also present (Mack, 2010, p. 1). Such values are supported by Hofstede’s

distinction between ‘individualistic and collectivistic cultures’.

In the former, individuals are “I-conscious”, task oriented, and

prioritise self-actualisation while individuals in the latter are

“we-conscious”, basing identity on social systems, and

priorities relationships (De Mooij, 2005, p. 62). China is a collectivistic country, and therefore

the above mentioned values are important for the majority of the public which make the

target audience more receptive to the TV-commercial as it embraces the Chinese culture

(Zhang, 2010, p. 3).

Further, these values are communicated efficiently through a TV-commercial because the

medium supports both verbal and non-verbal communication. According to Hall, China is also

a ‘high context culture’, resulting that most information is part of a context, thus

communicated implicitly through e.g. non-verbal language [4, 16, 40] (De Mooij, 2005, p. 56).

This notion opposes ‘low context cultures’ which are mostly seen in

individualistic countries as these people communicate in a more direct

and explicit manner (De Mooij, 2005, p. 56). One may argue that

Mercedes has chosen the TV-medium because the automaker is well aware that implicit and

non-verbal messages are important persuasion appeals in China. Moreover, research reveal

that the oldest half of Generation Y and the youngest half of Generation X (individuals aged

20-40) are to an increasing degree being influenced by Western cultures (Zhang, 2010, p. 3).

This consumer group is therefore equally persuaded by collectivistic/high context and

individualistic/low context marketing appeals (Zhang, 2010, p. 3).

In brief, the chosen medium and communication style create a unique relation to the

recipients as Mercedes takes into account the cultural and social values of China to establish

an uncomplicated relation with the target audience. Additionally, the TV-commercial also

manages to draw on Western appeals such as the clothing and accessories which appeal to

young consumers in China (cf. part 2.2.).

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3.3.3. Customer reflected image

In continuation of relationship mode that touched upon the story line, the customer reflected

image is also mirrored in the story line. The model and driver function as ‘celebrity

endorsers’8 for Mercedes, and hereby their personal history and status provide a realistic,

perhaps more tangible, perspective to the roles they play in the TV-commercial. The role of

the model reflects a glamorous life of a star which one can assume that many luxury

consumers desire to experience [6-16]. This perception of the model’s role is supported by the

story of the actress’ actual life. The woman is the supermodel

Lin Chiling who is known as being “The First Face of Taiwan”

due to her popularity - not just here but also in Japan and

China (Hub Pages, 2011, p. 1). When looking at the driver in

the TV-commercial, he shows loyalty, goal orientation, control, courage, strong driver skills,

good taste of cars, clothing, and accessories (aviator sun glasses), and a good heart (caring and

helpful) [6, 18-39, 32]. Again, this role is supported by the actor’s

own story of life as Hanyu Zhang is a qualified film actor from Beijing

and has won several Best Actor Awards for his role in various

Chinese films (Love HK Film, 2010, p. 1). Hence, the model and actor have been chosen for the

roles because they are already famous and respected celebrities in China. As Kotler et al.

(2009) state about celebrity endorsement, it is important that they are recognised by the

majority of the public as attractive and liked persons; credible in what they do and have

achieved; and in a way have expertise or experience within the category, the endorsed

product belongs to (p. 478). Here, one may argue that the social class and status that the

model and actor are perceived to belong to, connect them to the luxury category and hereby

implicitly makes them experts in choosing the right luxury car brand - here Mercedes.

Finally, the model and driver in the commercial, combined with the popularity and status of

the actress and actor, create a reflection of a stereotypical consumer of Mercedes cars.

Whether the actual consumer of Mercedes cars mirrors this stereotype is not important as

long as the real consumer desires this image and believes he/she can become “some sort of a

star” by purchasing a Mercedes GLK-class.

8 Definition: ”The overt and explicit support for a product or service from a well-known or famous individual” (Doyle,

2011, p. 157)

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3.3.4. Brand personality

The brand values of Mercedes come from its history and hereby its founding fathers; Gottlieb

and Paul Daimler, Emil Jellinek, and later also Karl Benz. Even though it is Daimler and Benz’s

engineering and innovation skills which are the foundation for the Mercedes brand, one may

argue that Jellinek is the one in a branding perspective who has had the greatest influence.

Due to Jellinek’s financial involvement, for ten years he had the power to determine when to

produce cars, how they should be designed and engineered, the volume of the production, and

not least who were permitted to become a customer (David, 2012, p. 1). Jellinek had excellent

connections due to his banker status and international reputation as a racing driver which

meant that he only allowed individuals of known influence to purchase one of the exclusive

Mercedes cars. Jellinek has ever since been honoured through the use of the Mercedes name

as he established the brand’s reputation “as a quality and high performance product” (Ordarin,

2011, p. 1).

When linking these facts to the chosen TV-commercial, it becomes evident that the attributes

of the driver (loyal, goal oriented, in control, courageous, strong driver skills, and good taste)

also become attributes of the Mercedes car, meaning that the GLK-class is reliable, in power

and control, has high performance, safety and driving qualifications in a classic, yet modern

design. Therefore, Mercedes’ history supports such attributes but if it is not known by

consumers, the associations are reflected in the TV-commercial as well.

3.3.5. Brand culture

Brand personality and brand culture are closely connected as a brand’s personality naturally

has its roots in the brand culture. Thus, the values established by Mercedes’ founding fathers

are part of the brand’s culture as well, but to touch upon another vital trait of Mercedes,

‘country of origin’9 will now be examined.

Returning to the history of Mercedes, both the original Daimler Motor Company and Benz &

Company were established in South Germany, hence Germany has always been known for its

unique engineering and craftsman skills (Ordarin, 2011, p. 1). Here, it is worth noticing that

China perceives Europe as being the home of luxury and fashion, resulting that country of

9 Definition: ”The sum of beliefs, ideas and impressions that a person holds of products of a specific country” (Pickton &

Broderick, 2005, p. 720)

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origin is very important to Chinese luxury consumers (Centaur Communications Ltd., 2007, p.

1). This statement is also supported by the fact that the three most popular luxury car brands

in China (Mercedes, BMW, and Audi), are also the three best selling luxury car makers in the

world, and they are naturally from Germany (Koifman, 2012, p. 1; DW, 2013, p. 1). In this

perspective, the country of origin means a great deal to branding as it can be an important

persuasive appeal and quality factor (Li et al., 2011, p. 166). Nevertheless, one may argue that

Mercedes’ link to Germany is implicit in this TV-commercial as the brand is already well

established in the minds of Chinese luxury consumers.

Further, Mercedes’ logo and name are enough to make people remember that the brand is

associated with a high level of credibility and quality as its origin is German. Even though

BMW and Audi also draw on country of origin, Mercedes differentiates itself by being known

as the oldest automotive brand in the world which is still in existence today (Auto Evolution,

2012, p. 1).

3.3.6. Customer self-concept

In the light of China’s economic growth, the middle and upper class have increased greatly in

only a few decades (Gale, 2012, p. 32). It means that many luxury consumers are from the

lower middle class, and therefore the purpose of buying luxury goods is to gain recognition

through signalling their success (Kapferer & Bastien, 2012, p. 130). It is also a fact that the

Chinese luxury market is marked by Generation X and Generation Y as 73% of luxury

consumers in China is less than 45 years old of which 45% is less than 35 years old (Kapferer

& Bastien, 2012, p. 131). As previously stated, Chinese consumers aged 20-40 are attracted to

individualistic appeals (cosmopolitan sophistication, status, modernity etc.) which they

believe to get through Western luxury items (Zhou & Belk, 2004, p. 67). Also, masculinity in

China’s upper society is defined by commodities, consumption, and attributes which naturally

are symbolised best through luxury (Song & Lee, 2012, p. 9).

Guided by these statements, it becomes obvious that the characteristics of the driver in the

TV-commercial not just function as attributes of a stereotypical customer or the GLK-class, but

these qualities are also values that the actual consumer believes to get transferred when

possessing this particular Mercedes car.

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Conclusively, the main findings from Kapferer’s brand identity prism will be highlighted and

elaborated on in the following chapter (cf. part 4.3.) as it investigates what branding

strategies the Indian luxury car industry can learn from Mercedes’ TV-commercial “The

Fashion Show”.

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Chapter 4: Comparing China and India

This chapter will first look into India’s history, economy, and culture in order to justify why

India has been chosen as the country to compare with China. Second, Hofstedes’s five

dimensions of national culture in collaboration with De Mooij’s cross-cultural marketing

perspective will explain to which extend, India’s culture can be compared with China’s. Third,

by combining research about China (R1) with facts about India’s growing economy and

country similarities with China, this part will answer R3 by concluding which branding

strategies, India can learn from the Chinese luxury car market by drawing on findings from

the primary research (R2). Moreover, the merge of these findings takes advantage of the

hermeneutic circle since the thesis writer’s interpretation of the TV-commercial rises to a new

perspective when knowledge of India’s culture is added to the interpretation process.

4.1. India’s history, economy, and culture:

Since India and China have the strongest economies within the BRICs and are rated the fastest

growing markets in the world, it is naturally to choose India as the country that, to a certain

extent, should be able learn from China’s experiences within the luxury car industry

(Byoungho et al., 2012, p. 1042). Also, some specialists believe that India has been

overshadowed by China the past twenty years and hence “China’s rise may have provided an

example of what to follow in some respects and, in other respects, and example of what to avoid”

(Shira, 2012, p. 241) since India’s growth has begun to reflect China’s over the past decade.

India’s economic similarity to China is also reflected in the country’s political history. Not

because India was a British colony from 1619 until 1947 where the country became

independent, but because several political disputes resulted in years with economic instability

which was first settled in 1991 when the economic liberalisation reform was introduced

(Shira, 2012, p. 11). This free-market policy meant that India opened to global investments

and most importantly global trade (Shira, 2012, p. 2, 11). It became the starting signal for an

era of economic growth that has transformed India and made it the second most attractive

Foreign Direct Investment destination in 2012 (Shira, 2012, p. 2, 11). Today, India has a

population of 1.2 billion people (China has 1.3 billion people) among whom 25% lives in

poverty, however, the middle and upper class have increased by 12.9% and 21.4%,

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respectively, during a ten years period (Shira, 2012, p. 3; National Bureau of Statistics of

China, 2013, p. 1; Venkatesh et al., 2013, p. 112). The rising middle and upper class demand

new and global consumer goods and technologies to express their new way of living which

have made India such an attractive luxury market since the country began whetting its

appetite for extravagant consumption (Shira, 2012, p. 1, 22).

When turning our focus to the Indian luxury car industry, it is constantly growing which is

expressed by an annual increase of 18% in 2012, caused by the country’s large invests in its

infrastructure (Shinde & Ganjre, 2012, p. 2). During the next five years, India expects to invest

US$ 1 trillion in highways, transportation systems, airports etc. that consequently will boost

the national economy as such projects create more jobs and hereby greater consumer needs

(Gale, 2012, p. 36). Additionally, it is predicted that India by 2050 will have 611 million cars

running on its roads, thus become the biggest automobile market which accordingly will

increase the competition on the automaker market (Shinde & Ganjre, 2012, p. 2).

A century ago, it was only the “Indian Elite”, called Maharajas, who had the status and wealth

to purchase luxury items, but today India’s economic development has taken the rising middle

and upper class into a new world where they are about to consume luxury at the same level as

seen in several Western countries (Shukla, 2011, p. 244; Eng & Bogaert, 2010, p. 56). This is

also substantiated by the fact that the Indian luxury market in 2010 was worth US$ 377

million and has since increased by 28% each year, indicating how fierce the Indian luxury

market is expanding (Eng & Bogaert, 2010, p. 56).

4.2. Similarities between China and India:

During the past two decades, China and India have constantly been subject for comparison

because the two nations share several similarities that originate from history, economy,

politics, geographic, demographic, and technological development (Byoungho et al., 2012, p.

1044). China and India have both in recent times liberalised their politics/economies, and

they have experienced significant growth in GDP in the 21st century (Shira, 2012, p. 1).

Besides being neighbours, India and China are also part of the BRICs, comprising countries

that are defined by major developments, and they have the world’s first and second greatest

populations among whom a rising middle and upper class are taking advantage of their

nation’s increased wealth e.g. by consuming more (Shira, 2012, p. 1).

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Thus, it is not surprising when scholars refer to these two giant nations as “Chindia” because

some believe that “in a near future, the two countries will have reached their rightful place as

regional partners and usher in what then may be henceforth referred to as “the Asian Century”

(Wang, 2011, p. 455; Shira, 2012, p. 243). Moreover, this enlarged interest in comparing India

and China is also seen in the increased number of research articles that compare the two

countries such as Dougherty & Valli, 2009; Quer, Claver & Rienda, 2010; Wang, 2011, and

Byoungho, Mark & Ji, 2012.

Further, when delving into China’s and India’s culture, it also becomes obvious that the two

countries share fairly many similarities which have been discovered through the lenses of

Hofstede’s five dimensions of national culture. The model distinguishes 75 cultures according

to five dimensions; ‘power distance’, ‘individualism/collectivism’, ‘masculinity/femininity’,

‘uncertainty avoidance’, and ‘long-term orientation’ which are measured on a scale from 0 to

100, thus making this model most efficient when putting one culture against another one (De

Mooij, 2005, p. 60). By means of this model, Hofstede’s results of China and India reveal that in

the tree dimensions of power distance, masculinity/femininity, and uncertainty avoidance,

the two countries are 10% or less different from each other, indicating an extremely high level

of resemblance (Hofstede Centre, 2012a, p. 1; Hofstede Centre, 2012b, p. 1). Nevertheless, it is

important to notice that these five dimensions are created on the basis of the universe that

Hofstede holds. With a philosophical hermeneutics’ stand, other individuals may perceive “a

high level of masculinity” or “a low level of individualism” different, hence findings from

Hofstede’s model can be understood in various ways. It makes findings from the five

dimensions very broad and generalising but acceptable to get an overview of two cultures.

Regarding power distance, both China and India have a strong acceptance of unequal

distribution of power in the society, demonstrating a need for hierarchical order (De Mooij,

2005, p. 60). This can be seen in the Chinese values of confucianism where individuals will

always have obligations to other subjects whereas in India, a social hierarchical order is

demonstrated by the Cast System10. These norms state that an individual is born into a certain

social class which one cannot leave regardless of how well he may perform later in life

because separation must be kept, meaning that the lower casts cannot pollute the higher,

10

Even though the Indian Cast System was abandoned in 1950, it is still utilised to some degree in some parts of the country as it is an important part of Hinduism (Daniel, 2005, p. 1)

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purer classes of casts (Daniel, 2005, p. 1). Moreover, in a marketing perspective, De Mooij

states that consumption of luxury brands functions to reveal one’s status to get the proper

respect (2005, p. 60). It also corresponds with De Mooij’s marketing view on

masculinity/femininity as masculine societies, which both China and India predominantly are,

desire to demonstrate their performance and achievements through e.g. luxury attributes

(2005, p. 65). In the light of the rising middle and upper class in China and India, it makes

sense that individuals in developing markets crave to “show off” their new gained wealth and

social class. When looking into uncertainty avoidance, both China and India lie in the lower

end, indicating that they have a high acceptance of uncertainty and therefore extremely open

to change and innovation (De Mooij & Hofstede, 2010, p. 89). In a marketing view, it is seen by

China’s and India’s constant growth and modernisation - consequently, such populations are

not afraid to accept new, foreign brands and commodities.

In the last two dimensions of Hofstede’s notion of national culture, China and India exhibit

somewhat differences as India is a collectivistic culture but in the end of the scale where it is

also slightly influenced by the individualistic culture while China is highly collectivistic

(Hofstede Centre, 2012a, p. 1; Hofstede Centre, 2012b, p. 1). India’s faint individualistic

orientation may China counterbalance with its growing interest in Western values (cf. part

2.2.), thus making the two countries more similar within this dimension. Further, these results

are also reflected in long-term orientation because India is medium long-term oriented

whereas China lies extremely high in this scale (Hofstede Centre, 2012a, p. 1; Hofstede Centre,

2012b, p. 1). It indicates that both countries, to each their degree, emphasise persistency and

therefore creation of long-term relationships (De Mooij, 2005, p. 59). In a marketing

perspective, De Mooij argues that collectivistic countries and long-term oriented cultures are

attracted more by advertising building on creating trust, respect, and relationships while

advertising targeting individualistic countries and more short-term oriented cultures focuses

on persuasive appeals (De Mooij & Hofstede, 2010, p. 89-90).

All together, China and India seem to be rather similar which substantiates the fact that India

to a greater extend should be able to learn from Mercedes’ experiences with advertising in

China. Nevertheless, it is kept in mind that this is very broad generalisations as even small

nations cannot be hundred percent homogeneous internally (Jacob, 2005, p. 515). Therefore,

this thesis only provides enough evidence to suggest what India’s luxury car industry to some

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degree should be able to learn from China’s because India lacks research about the changing

luxury market and consumer behaviour (Mukherjee et al., 2012, p. 484).

4.3. Learning from Mercedes-Benz:

Since India has been identified as the next major luxury market after China but is lacking

knowledge about its new risen luxury consumers, the sparse data available about Indian

consumers have been collected in order to unveil what the Indian luxury car industry can

learn from Mercedes’ manner of advertising in China (Eng & Bogaert, 2010, p. 56, 58). To

formalise these findings, they have been applied to Kapferer’s brand identity prism which was

explained and utilised in chapter three (cf. part 3.2. & 3.3.).

Regarding brand physique, Mercedes’ TV-commercial emphasises the three-pointed star and

the radiator grille as they are associated with the quality, status, and longevity that make the

Mercedes brand unique and recognisable. Due to India’s rapid rise of the middle and upper

class, many Indian luxury consumers are “new” in this world and do therefore have sparse

knowledge of luxury brands and their penetration (Mukherjee et al., 2012, p. 493). Hence, one

may argue that it would be reasonable to put emphasis on such prominent objects in order to

increase the ‘brand awareness’11 when introducing marketing materials for the Indian luxury

car industry. Likewise, research show that the longer time a brand has been present on the

Indian market, the more it is utilised because Indians are actually very brand conscious

(Mukherjee et al., 2012, p. 483, 491).

When looking into brand relationship mode, it is stated by Hofstede that China is a highly

collectivistic society which India also is, however, in the end of the scale closer to

individualistic cultures (Hofstede Centre, 2012a, p. 1; Hofstede Centre, 2012b, p. 1). Mercedes’

TV-commercial respects China’s collectivistic orientation by including traditional Chinese

values such as brotherhood, loyalty, “being one with nature”, and the gift-giving tradition

which would also be ideal for an Indian luxury car campaign as such values are more or less

common among all collectivistic cultures. Since 80.5% of the Indian population is Hindus, it is

also important to respect the values of Hinduism that e.g. emphasises harmony among people,

and between individuals and nature (Shira, 2012, p. 88). Furthermore, in chapter two and

11

Definition: ”[Prompted] brand awareness is once a brand name is suggested to a consumer, the consumer recalls being aware of it already” (Pickton & Broderick, 2005, p. 259)

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three, there have been stated that the young population of China is to an increasing degree

getting more attracted to Western advertising appeals which are expressed in the TV-

commercial through the luxury concept in general, the chosen clothing and accessories. This

would also be ideal in marketing of Indian luxury cars because the country in its nature is

more receptive to individualistic appeals. Also, research unveil that Indian consumers like to

combine Western styles with traditional Indian styles, thus not abandoning its cultural

heritage in the national modernisation but rather adapting new impressions to Indian values

(Eng & Bogaert, 2010, p. 65).

In the light of customer reflected image, Mercedes’ TV-commercial utilises a Chinese and

Taiwanese celebrity endorser to create a closer relation to the target audience and to make

the created scene easier identifiable. This strategy would also be highly efficient in India

because research reveal that consumers in India are positively influenced by national

celebrity endorsers (Eng & Bogaert, 2010, p. 64). Also, ‘Bollywood celebrities’12 are highly

admired by the general population because they represent a desired level of prestige, image,

success, and status (Eng & Bogaert, 2010, p. 70). It becomes therefore a valuable solution for

including Indian norms without lowering the level of superiority and exclusivity which are

vital in luxury branding (Kapferer & Bastien, 2012, p. 141).

Looking into brand personality, the storyline of “The Fashion Show” functions to establish

desirable attributes of the GLK-class and personal characteristics that consumers believe to

gain when buying this particular Mercedes car. It is an effective strategy in emerging markets

because it is important for such luxury consumers to identify and maintain their new image

through extrinsic attributes (Shukla, 2011, p. 245). Hence, it would also be logical to take

advantage of this in Indian luxury car campaigns because it is a fact that Indians would rather

buy fewer items in order to buy commodities with the right level of quality and popularity

(Passport, 2012, p. 68, 74).

Regarding brand culture, country of origin is also important to Indian luxury consumers

because they, like their Chinese counterpart, identify true luxury brands as having roots in

Europe (Mukherjee et al., 2012, p. 485; Eng & Bogaert, 2010, p. 69). By establishing this

country of origin connection in the minds of Indian luxury consumers, one can only assume

that automakers will significantly increase their possibilities of branding success.

12

Definition: ”Bollywood is the name given to the Mumbai-based Hindi-language film industry in India” (Bollywood World, 2010, p. 1)

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The last facet is customer self-concept which was exhibited in the TV-commercial through a

focus on improved image and social status that Chinese luxury consumers would achieve by

possessing a Mercedes GLK-class. As seen in China, Indian consumers perceive luxury to

symbolise modernity, progression, and social development because emerging markets

naturally desire what developed markets see as ordinary and common to possess (Eng &

Bogaert, 2010, p. 59). These are all important characteristics that especially young, urban

luxury consumers desire when taking advantage of luxury products’ way of increasing one’s

recognition. This notion is also substantiated by the fact that Indian luxury consumers utilise

such commodities to “show-off” which is reasonable to accept when discovering that 54% of

the Indian population is below 25 years old (Eng & Bogaert, 2010, p. 59; Mukherjee et al.,

2012, p. 486). Moreover, the growing Indian middle class is defined by having an income

between US$ 5,000 and US$ 35,000 and being degree holders which correspond to a certain

degree with China’s middle class (Mukherjee et al., 2012, p. 487). In a target audience

perspective, the average luxury consumer in India would be rather similar with the recipients

of Mercedes’ TV-commercial, assumed to target young, Chinese luxury consumers, hence it is

reasonable to state that India’s luxury car industry can learn from “The Fashion Show”.

In summary, this part of the thesis has unveiled elements and strategies that the Indian luxury

car industry can draw on when producing stronger and more targeted national campaigns. It

is naturally a rather general analysis to draw future branding strategies from, but due to the

luxury market’s exponential growth in India; rapidly increasing penetration of global luxury

brands; and not least the lack of profound research articles about Indian luxury consumers,

this thesis establishes basic proves that India to a significant extend can learn from China and

how luxury car branding is conducted here.

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Chapter 5: Discussion and Conclusion

This final chapter will first look closer into the research findings and what they mean for the

Indian luxury car industry. What the findings contribute with in a knowledge perspective will

also be delimited to clarify what this thesis in reality can substantiate. Conclusively, how the

chapters of the thesis have answered the three research questions will also be clarified in

order to raise one final answer to the problem statement.

5.1. Discussion of globalisation and localisation:

In continuation of research findings, it becomes natural to reflect upon them in the light of

globalisation vs. localisation13. It has within the marketing world been recognised by many

scholars that global brands need to adapt their marketing communication to consumer needs

of the local markets (De Mooij, 2005, p. 21). De Mooij (2005) supports this view point by

stating that “there may be global products, but there are no global people. There may be global

brands, but there are no global motivations for buying those brands” (p. 4-5). In other words,

consumer needs may be universal but cultures’ attitudes, motivations, and expression of

needs vary greatly (De Mooij, 2005, p. 21).

In this reflection, the concept of ‘global tribes’ becomes interesting as marketers with this

viewpoint believe that homogeneous markets or a niche of “global people” are to find across

borders (De Mooij, 2005, p. 21). Some scholars argue that demographic groups of luxury

consumers belong to this category as e.g. “Asian teens, in the way they behave and dress and

express themselves, increasingly resemble American and European teens” (De Mooij, 2005, p.

21), indicating that young Chinese and Indian luxury consumers have the same attitudes.

However, other scholars state that populations sharing the same economic and demographic

aspects are still affected by their national values and therefore “people with similar lifestyles do

not behave as a consistent group of purchasers” (De Mooij, 2005, p. 22). Even though this thesis

has provided evidence for comparing China and India, it is recognised that these assumptions

are very broad and generic. Thus, it is emphasised that only inspiration from the branding

strategies, utilised in Mercedes’ TV-commercial, can to a larger extend be captured by Indian

13

Globalisation of markets means standardisation of identical products worldwide with identical distribution channels and promotion strategies while in localisation, all these factors are adapted to the local market (De Mooij, 2005, p. 20)

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luxury car manufacturers in order to learn how to allure the Indian middle and upper class.

Additionally, a certain degree of localisation of the marketing communication is necessary

when introducing campaigns to the Indian luxury car market since this thesis cannot validate

suggestions for standardising marketing materials between China and India.

Further, Kapferer and Bastien (2012) state that a global luxury brand like Mercedes will be

desired to the same extend by many cultures due to its international character, but somewhat

localisation of marketing materials is essential to establish trust and relation (p. 265). In order

to maintain exclusivity, luxury marketing communication aspire to “tell stories that are

perceived as authentic, somewhat secret, and capable of transmitting an implicit message,

loaded with collectivistic values” (Kapferer & Bastien, 2012, p. 273) which will be challenging

to mediate without “talking the language” of the target audience.

5.2. Conclusion:

Since India has been identified as the next major luxury market after China, the purpose of

this thesis was to investigate to which extend the Indian luxury car industry could benefit

from the experiences of the luxury market leader, China, to be prepared for a future increase

in luxury demand (Eng & Bogaert, 2010, p. 58). Investigating the luxury market in China and

India is a very complex matter, and therefore the focus of the luxury car industry was chosen

due to its popularity in both countries (Business Insights: Essentials, 2012, p. 1, Koifman,

2012, p. 1). Also, Mercedes-Benz was chosen as pivotal point for the primary research which

was conducted by an analysis of the automaker’s TV-commercial “The Fashion Show” for the

launch of Mercedes’ GLK-class in China.

In order to thoroughly answer the problem statement, three research questions were outlined

and answered in each their chapter. First, chapter two (R1) established an understanding of

how the luxury industry had been affected by the financial crisis in order to grasp the reason

for other luxury markets’ decrease which also explained why global luxury brands had fled to

Asia. The second part of chapter two delved into China’s historic, economic, and cultural

development in the past half century to understand who the Chinese luxury consumers are,

and why they are consuming so heavily now. These insights laid the foundation stone for

chapter three (R2) that analysed Mercedes’ TV-commercial and revealed many localised

aspects that had been included to allure the Chinese middle and upper class. In chapter four,

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the first part sought to investigate India’s history, economy, and culture to become equipped

for the second part which provided enough evidence for comparing China and India. The third

part in chapter four (R3) unveiled which branding strategies India’s luxury car industry could

learn from “The Fashion Show” which were substantiated by the sparse research, found about

Indian middle and upper class consumers. The discussion part emphasised the final answer to

the problem statement by concluding that this thesis has provided evidence for suggesting the

Indian luxury car industry to take advantage of the branding strategies, Mercedes has utilised

in China. However, Indian luxury car marketers must not forget to adapt Indian norms and

values to the marketing communication because China and India are still two heterogeneous

countries that only possess significant similarities on the surface.

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Appendix

A Mercedes-Benz’s TV-commercial “The Fashion Show” for the GLK-class, China 2010

CD: The CD contains the 47 second-long TV-commercial

The CD holds three versions of the TV-commercial - they are all the same, however,

downloaded in three different ‘file types’ making sure that at least one of them are able to be

watched regardless of which computer/program showing it.

Link: http://v.youku.com/v_show/id_XMTU4NTU5Nzg4.html (YouKu, 2013)

Naturally, the CD cannot be included in this “online” version of the thesis, however, the above

link takes one to the website where it can be watched.

Thesis length: 54,997 characters excluding spaces