mercedes benz and its competitors in india analysis 2014

Mercedes-Benz Detailed Analysis

May’ 14

Overview Of The Luxury Car Market 2014

• The segment of luxury cars is still accelerating, the wealthy are much less sensitive to high interest rates and are more resilient overall to downturns.

• Luxury cars sales are growing at 15% plus year on year.

• Even though India staggers from it’s worst downturn , previous years of rapid growth have created a new moneyed class.

• The big spenders are top executives , ex-farmers who’ve sold property and wealthy entrepreneurs.

Mercedes-Benz analysis

Overview Of The Luxury Car Market 2014

• In mature markets , luxury cars account for 10-15% of sales, while in India just 3% of sales comprises of premium vehicles.

• Delhi and Mumbai account for nearly 50% of luxury car sales.

• Emerging markets show a younger profile compared to developed ones.

• The average luxury car buyer in India is around 35 years old , Globally it would be 43-45.

• Indian consumers are value –sensitive not price sensitive.


Growth of Luxury Car Market Players(Sales units)

2010

2011

2012

2013

6246

9371

9375

7327

3003

5511

9003

10002

5819

7430

7138

9003

MERCEDES-BENZAUDIBMW


Types Of Luxury Car Consumers

Rational

Rewarding

Indulgence


Types of Luxury Car Consumers

• RewardingThe ‘status-symbol’ is the driving factor for this segment . The average age for this category is 35 years.

• FunctionalPurchase based on logic rather than emotion.

• IndulgenceConsumers allow themselves to enjoy the money that they have earned . This category is experiencing highest growth in Delhi-NCR.


Marketing Techniques Used By the Luxury Car Market Players

Marketing Techniques Used By The Luxury Car Market Players

• Direct mail has been created to invite prospective customers to experience the car.

• Audi focuses its campaign on imagery rather than generating numbers.

• Audi used it’s ‘India, Land of Quattro’ campaign for a long time.

• A 24 hour online race was launched by Audi to garner support for the Audi R18 TDI racing.

• Audi engages with 24 year old IIM and IIT students on Facebook and Twitter because of their likelihood to consider the car after a few years.


Marketing Techniques Used by The Luxury Car Market Players

• Advertisement costs are distributed as follows-60%print,15%online,15% social media and 10%TV.

• BMW launched an ULTIMATE3 drive campaign for its 3 series.• BMW used Sachin Tendulkar to invite fans to experience the

Dynamic 1.• Tie ups with clubs , road shows and displays at prominent locations

such as malls and corporate conferences are commonly used marketing techniques.

• BMW used the ‘JOY’ campaign for communicating to consumers that the purchase of a BMW is directly related to the emotion of joy.


Digital campaigns by market players

LinkedIn Many automakers have started utilizing the LinkedIn

company page. Since company pages is a new feature from the stable of LinkedIn, very few companies have actually have taken advantage of it & Volkswagen is one of those. They have listed 7 of their vehicles on LinkedIn so far & have got staggering 2772 recommendations in a matter of 1 month.

This is a powerful area where it can get a lot of benefit due to such a large number of recommendations. You never know when some executive on LinkedIn sees a recommendation by a person who happens to be his LinkedIn connection & he makes the decision to buy that car! Or there can be bulk orders too.


DIGITAL CAMPAIGNS BY MARKET PLAYERS

24 hour online race by AudiMercedes-Benz analysis


For the Dynamic BMW 1 Series, BMW India launched ‘Experience the Dynamic 1’ where fans could experience the BMW brand. 10 lucky ones were given the chance to go on an all expenses paid trip to Germany including an exclusive guided tour to BMW Welt and BMW Museum in Munich. Also, they got to be the first to drive the new car along with cricketer and BMW brand ambassador Sachin Tendulkar . A dedicated website was created for the same where fans had to answer questions, in addition to exciting offline drives.



With the Audi A6 micro-site , the same ability has been extended to the Internet. Users can navigate through the features of the car by merely pressing a key on their keyboard, where each key explains a feature of the car. The innovation extends to online advertising as well. The banners are integrated using ‘live content’ instead of ‘dummy content’ as used traditionally. Features like the MMI touch can be virtually experienced in the banner ads that are currently running on some of the top business portal"


ON GROUND ACTIVATION BY MARKET PLAYERS

Audi wanted to create a unique experience for a consumer that gives him a simulated experience of driving an Audi ,a motion sensor game for the company which was used as part of aground activation campaign that was spread across India.The game integrated Facebook thereby creating buzz on social media.



To create buzz around the forthcoming BMW 1 Series, the German carmaker came up with an integrated campaign that involved on ground, mobile, web and social media. Titled BMW 1 SERIES Dynamic Challenge, They could speed up, stop or reverse their cars using the iPads. The scores of the participants were then put up on Facebook. People could see their scores along with others who participated from different locations where this activity was held.



On a bright Sunday morning, 10 unsuspecting customers were in for a surprise, when they were invited by German luxury car maker BMW for a test drive( Mumbai ). Besides been treated as royalty, the "cherry on the cake" moment came when these chosen customers walked the red carpet, where they were greeted by cricket legend Sachin Tendulkar. A video of this whole experience was taken which went viral online . The basic aim of the video was to promote BMW Financing.



Audi Chennai(Madras) dealership held a promotional test drive to introduce the R8 V10 Spyder and the RS5 Coupe in the Madras(India) market.



Audi, the German luxury carmaker, organized a comprehensive launch campaign for its Audi Q5 . The activities were primarily centered around the Customer Off-road Driving Experience that was held at an offbeat location ‘Camp Wild' at the Gurgaon Faridabad Road. The main objective of the launch was to provide a unique driving experience that resonated with the campaign tagline ‘India. Land of Quattro’.Mercedes-Benz analysis

ON GROUND ACTIVATION BY PLAYERS

Audi has launched the 2014 A8L for the Indian market with huge fanfare, so much so that the launch event wasn’t actually held in India at all. The German company has flown about 150 people, mostly prospective buyers and some journalists to the launch ceremony that was held in Dubai. the lavish event included the world’s tallest building, Vegas style fountain shows, a world class illusionist and a guest appearance by Nicholas Cage!


Trends Of The Luxury Car Market

• The Luxury car players would cater to a much younger set of consumers in the future .

• ‘Indianising’ products alone is no longer enough , players must aim to ‘Indianise’ their entire strategy to increase sales.

• The concept of future consumers would be used by players .• Entry level luxury hatchbacks and SUV’s would gain even

more demand from the market.• Barring luxury sports cars , consumers would rely more on

the driving experience for the lower segment of the luxury car market, however it wouldn’t be given much importance by those buying super luxury segment cars as most of the driving would be taken care of by their chauffeurs . Considering this, chauffeur training provided by companies would be very beneficial as complimentary .


Mercedes-Benz has started to get the attention of the young Indian automobile consumers by launching the A class , B class and its AMG line up for India. Amongst the latest launches of Mercedes-Benz ,the A class has been an astounding success, factors being aggressive marketing and ideal target market choice, apart from that even the E class has continued with its success story after being revamped by the company .The biggest success story though was the S class which had 125 bookings within 16 days of its launch , these bookings being sight unseen of the car . This reveals that new launches according to customers needs combined with good marketing induces growth of the market and success rate.In aggregate, The company saw a 32% increase in sales , Even though it is currently 2nd amongst the luxury car players , there is tremendous scope for Mercedes and if all goes according to the plan it would overthrow Audi .


Targeted Customers Of Mercedes-Benz

While the real estate segment accounts for about 35 per cent of Mercedes-Benz’s net sales, the share of female customers has already been increasing through the last few years. Today, while sedans are very often driven by chauffeurs, more and more people, including women, are choosing to drive on their own. New cars would have more attractive offerings for women and see the share of women rising. Women don't want 'women cars' per se; they would opt for cars that suit them better. Also, with the A-Class and B-Class, now, Mercedes has more affordable cars on offer---a number of their products are priced below Rs 30 lakhs (ex-showroom). So, they will see a lot of first-time buyers in their portfolio.


Reasons For Audi Becoming Market Leader

Audi attributes it’s success in India in such a short span of time to four strong fundamental pillars - Expansion of product portfolio and service offering, expansion of their dealer network in the country, progressive Customer Connect initiatives and a talented pool of human resources. The strategy that they follow is having the right product mix, a good dealership network, a wide area of after sales service & well trained personnel for customer service. Audi is investing heavily in after sales service and have invested 50% more this year than last year in after sales facility for better customer service. One of their key differentiators is their marketing strength and progressive customer engagement initiatives through the creation of unique driving experience programs (Audi QDrive, Audi R-Drive, Audi Women’s Power Drive, Audi Multicity experience, Audi Ice Driving experience, Audi sportscar experience, among others) for their existing customers as well as enthusiasts .


Conclusion The luxury car market seems to have bucked the downturn and this is as true of

automobiles as of other luxury products. But, in cars the growth has come on what is still a very small base, so when car companies have launched new products, the market has grown. Also this segment is less affected by the general economic environment, so it's easier for it to buck the downturn. As far as Audi and Mercedes-Benz are concerned , both have been promoting themselves very strategically , along with new launches , Mercedes has also started wooing the young Indian customers which is reflecting in it’s sales, considering its phenomenal sales growth last year, It is very likely to salvage it’s number 1 position. Audi has been using aggressive marketing and emphasizing on its cars style and performance as superior to the competition , this has worked in its favor as it is now leading in sales.As far as BMW is concerned ,it has been overthrown solely due to Audi and Mercedes Benz’s aggressive marketing and financing strategies.BMW would have to look to change its marketing strategy and open more dealerships and market itself more strategically in tier 2 and tier 3 cities in order to overthrow the competition.All in All,2014 will witness a very cutthroat competition between these 3 players. Mercedes-Benz analysis

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