RobinsonJ_u1148290_mkt3100_assign1

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Marketing

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Feb 20, 2024

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MKT3100 Digital Marketing and Social Media Assignment 1 Written By: Jacob Robinson (u1148290) Prepared For: Dr. Peter Gandhi Date: 29 th July 2023

Introduction The chosen brand for this assignment is Mercedes-Benz. Mercedes-Benz's history began in 1886 when engineer Karl Benz invented the world’s first car (Mercedes-Benz, 2023). Since 1926, Mercedes has been and continues to be at the forefront of automotive engineering and design, setting the standard for luxury vehicles (LinkedIn, 2023). With a market capitalisation of 176.31 million AUD and a market share of 5.04% including all motor-vehicle companies (Statista, 2022), it is evident that Mercedes-Benz is the leader in the luxury vehicle industry. Determine Current Situation Marketing strategies are developed to ensure a business provides value creation to all stakeholders. Overall, a marketing strategy will be developed to create value for consumers, influencing them to purchase your products. Over the years, Mercedes-Benz has developed many different marketing strategies to uphold the societal expectations of a luxury car brand. In the past, Mercedes's marketing strategy had been focused on safety, luxury, and precision engineering within their vehicles. However, nowadays due to the ever-changing societal expectations, particularly in youth society, Mercedes has decided to focus on a more lifestyle-orientated approach, highlighting the approachable, energetic, and fun sides of the brand (DigitalAgencyNetwork, 2023). Porter's Five Forces model is a model that identifies and analyses five competitive forces that shape every industry and helps determine an industry's weaknesses and strengths (Investopedia, 2023). Porter's Five Forces are as follows: competition in the industry, the potential of new entrants into the industry, the power of suppliers, the power of customers and the threat of substitute products. When analysing Porter's Five Forces in correlation with Mercedes-Benz, it can become easy to determine the company's strengths and weaknesses. The first force – competition in the industry – relates heavily to Mercedes's competitors within the luxury vehicle industry. Considering this is an extremely competitive industry, the level of competitiveness is reasonably high. Competitors of Mercedes-Benz include BMW, Audi, Volvo, Jaguar, Tesla and more. Due to a highly competitive market and growing customer expectations, companies are forced to heavily invest in both product development and product marketing. With these major competitors, it is key for Mercedes-Benz to provide a highly aggressive marketing technique to differentiate themselves from these close competitors. Overall, it can be determined that the competition in the industry is quite high, providing much difficulty when performing both traditional and social media marketing. When analysing the threat of new entrants within the industry, it can be determined that the danger level is extremely low due to well-established companies already dominating the market. In terms of the threat of new entrants, Mercedes have very little to worry about considering that it would be extremely difficult for any newcomer automotive company to compete, let alone enter into the automotive industry without enduring exponentially high start-up costs. As for the power of suppliers, it can be determined that Mercedes-Benz has very little leverage when it comes to suppliers. Due to factors including the exclusivity of Mercedes-Benz products and parts, it can become extremely difficult to bargain or create deals with suppliers, given that suppliers rely on these luxury brands to create profit, it can be stated that there is very little power over suppliers within the luxury car industry. The power of customers is believed to be one of the most crucial forces of the five-step analysis based on the fact that customers are what create a profitable business. Overall, especially within the luxury vehicle industry, it can be stated that these companies have much power over customers as customers are willing to pay these high prices for these premium, luxury vehicles. Lastly in Porter’s Five Forces is the threat of substitutes. When referring to Mercedes-Benz, it can become evident that replacements are more likely to come from rival brands or other travel options including public transport or ride-sharing services. However, given that these substitutes are roughly mild, it can be concluded that the threat of substitutes is quite moderate

(MBASkool, 2023a). A SWOT analysis analyses and evaluates a brand by its strengths and weaknesses – which are internal factors – as well as opportunities and threats – which are external factors. Beginning with strengths, Mercedes-Benz has a majority of strengths when it comes to a SWOT analysis, a few of these strengths being, having the ability to be a financially strong company meaning they can invest mass amounts of money into manufacturing and brand building, having an exceptionally strong brand value and being a global leader within the premium car industry, being leaders of innovation – Mercedes have introduced many aspects into the luxury car industry which many companies are utilising to this day, and many more. The second aspect of the SWOT analysis is weaknesses, although very few weaknesses for Mercedes, there are still aspects of the business that need improving. These weaknesses being in such an intense market, which intense competition, can limit market share growth for the business. Secondly being a global car brand, very small issues within either the car or the brand can have mass effects on the brand image. Thirdly in the SWOT analysis is opportunities, these opportunities are aspects that Mercedes can use to further grow the business. These opportunities include, with the ever-changing society, hybrid and fuel-efficient cars making a move into the market, an opportunity from this would be Mercedes branching out into hybrid and fuel-efficient cars for the future. Secondly, the brand's strong image can be used to acquire more customers with the correct marketing techniques. Lastly in the SWOT analysis is the threats to the company. As for Mercedes, threats can include, everchanging fuel prices that may alter a consumer's mind to change the way they travel and intense competition from competitors may affect the business (MBASkool, 2023b). The marketing mix framework is a marketing strategy that analyses a business based on the product, price, place, and promotion. First of all, Mercedes- Benz's product strategy. With its huge portfolio of luxury vehicles being its best sellers, Mercedes's strongest point most definitely refers to its luxury vehicles. With correlation to their target audience – being middle-aged upper class and young people – they most definitely market their product to be suitable for this audience. As for the future, Mercedes is investing over 11 billion dollars into electric and hybrid vehicles to keep up with societal expectations for the future. As for Mercedes's pricing strategies, Mercedes is in the luxury segment, meaning customers tend to value the quality of pricing. Therefore, the marketing mix pricing strategy is high-valued pricing, based on the quality of the products they provide. The third marketing mix refers to the place strategy. Considering Mercedes caters to many countries worldwide – including, China, Asia, Europe, Germany, North America etc. This shows a global reach for the brand, suggesting that the brand's place and distribution strategy is extremely strong. The last section of the marketing mix refers to the promotion. Mercedes-Benz has always been noted as an ’aggressive promoter’. Especially within the past decade, Mercedes has used all media channels including TV, print, online, billboards etc. Being within the luxury segment allows Mercedes to bypass traditional marketing methods and utilise digital marketing methods. It uses many different events to promote the brand including world-class golfing tournaments and F1 tournaments which furthermore display the global reach of the brand (MBASkool, 2023c). Understanding Consumers Market Segmentation is the practice of dividing your target market into approachable groups (Qualtrics, 2023). The traditional market segmentation approaches include geographic, demographic, psychographic, behavioural, and decision-making. For many years now, Mercedes has attempted to set the specific target of their products to a younger audience. Therefore, segmenting their market based on a demographic attribute. After much research, it can be determined that the target market for Mercedes-Benz is young adults – aged 18-25, providing medium to high income, and presenting an upper-class lifestyle. When taking reference to the Circular Model in Dolbec (2021), a customer journey can be mapped to determine a consumer's loyalty to the brand and how

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the brand creates that loyalty. Beginning with the initial consideration set, Mercedes takes pride on its brand perceptions and exposure, ensuring that consumers reflect nothing but good from the brand. Secondly is the active evaluation, at this stage, consumers actively evaluate their options through gathering information and shopping. This is the stage in which consumers add brands to their consideration set. By helping consumers make their decisions, then businesses will be considered by them. When creating a digital marketing strategy for Mercedes, providing awareness- generating campaigns, online reviews etc, will ultimately assist consumers in making decisions, therefore allowing them to be considered by consumers. The third step is a moment of purchase. This is when the consumer is influenced and purchases a vehicle. The final step of the model is the post-purchase experience, this is where the consumer builds expectations of customer service, ultimately creating brand loyalty and a loyalty loop. Overall, with this model, it is exemplified that a digital marketing strategy needs to be created that assists the customers in a hassle-free experience when purchasing from a brand. The last step to understanding consumers is creating a consumer persona. With this, you must first identify a few sociodemographic characteristics and find one general need or problem they are facing. In terms of Mercedes and a digital marketing strategy, a few sociodemographic characteristics would be the age of consumers being between 18 and 25 with a medium to high-level wage and an upper-class lifestyle. Overall, Mercedes satisfies the need for luxury, quality, safety, and reliability. Therefore, creating the persona of a young adult living an upper-class lifestyle, relying on Mercedes to provide luxury, quality, and safety each time they drive. Summary: Proposed Target Audience and Persona To summarise, the proposed target audience for the digital marketing strategy for the company Mercedes-Benz will be targeted towards young adults, aged 18-25, wishing to live a luxurious lifestyle, whilst providing safety and quality that satisfies the needs of consumers. With this digital marketing plan, it is key to create an ease-of-purchase experience for consumers by assisting them with decision-making techniques. Conclusion Overall, the current situation of Mercedes can be determined within the listed analysis’ provided above. Furthermore, an understanding of consumers was developed, developing a target market and audience to create an ideal digital marketing plan. Finally, a summary of the proposed target audience and persona was developed to identify the needs of consumers within the target audience.

List of reference Linkedin 2023, Luxury at its finest: Why Mercedes Benz Stands Out Amongst the Rest , Linkedin, viewed 8 August 2023, < https://www.linkedin.com/pulse/luxury-its-finest-why- mercedes-benz-stands-out-amongst-john-theuri#:~:text=Mercedes%20Benz%20is%20a %20household,the%20standard%20for%20luxury%20vehicles > Mercedes-Benz 2023, Origin and History of Mercedes-Benz , Mercedes-Benz, viewed 8 August 2023, < https://www.mercedes-benz.com.au/passengercars/brand/history.html > Statista 2023, Mercedes-Benz Report, Statista, viewed 8 August 2023, < https://www.statista.com/study/59975/mercedes-benz-report/#:~:text=In%20the%20market %20share%20by,had%20a%205.04%25%20market%20share > Investopedia 2023, Porters 5 Forces Explained and How to Use the Model, Investopedia, viewed 8 August 2023, < https://www.investopedia.com/terms/p/porter.asp > DigitalMarketingAgency 2023, Outstanding Digital Marketing Strategies of Mercedes-Benz, DigitalMarketingAgency, viewed 8 August 2023, < https://digitalagencynetwork.com/outstanding- digital-marketing-strategies-of-mercedes-benz/ > aMBASkool 2023, Five Forces Analysis, MBASkool, viewed 8 August 2023, < https://www.mbaskool.com/five-forces-analysis/companies/18289-mercedes- benz.html#competition > bMBASkool 2023, Mercedes-Benz SWOT Analysis, MBASkool, viewed 8 August 2023, < https://www.mbaskool.com/brandguide/automobiles/1300-mercedes-benz.html > cMBASkool 2023, Mercedes Benz Marketing Strategy & Marketing Mix (4Ps), MBASkool, viewed 8 August 2023, < https://www.mbaskool.com/marketing-mix/products/16988-mercedes-benz.html > Qualtrics 2023, Market Segmentation: Definitions, Types, Benefits, & Best Practice, Qualtrics, viewed 8 August 2023, < https://www.qualtrics.com/au/experience-management/brand/what-is-market- segmentation/#:~:text=Market%20segmentation%20is%20the%20practice,better%20understand %20the%20target%20audience > StephenZoller 2023, Marketing Segmentation, StephenZoller, viewed 8 August 2023, < https://www.stephenzoeller.com/mb-marketing-segmentation/ > OpenTextBooks 2023, Understanding the Digital Consumer, OpenTextBooks, viewed 8 August 2023, < https://opentextbooks.concordia.ca/digitalmarketing/chapter/chapter-2-understanding-the-digital- consumer/ >

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