Case analysis #2

Mqking Mqrketing Decisions Case 4-1 il*rc*# *:;-#i:nz: &r:oslir :g1 \r/*!,.-,tl"tr) or Ltt si n n i; *!r::,"',:yt? Luxury car makers face a growing market and growing all these changes may have hurt the overall brand competition for younger buyers. Mercedes, Lexus, reputation. Illvfw, \blvo, and Saab all now offer entry-level sedans Ilecently the Daimler-Chryslcr-owned Mercedes- in thc neighborhood of $30,000. Until nou Mercedes's Benz has pursued an integrated marketing communica- position in the U.S, marketplace has been clear-high tir>n campaign designed to increase awareness among style, engineering, and quality at a premium price. No youthful consumers. The ad campaign is being backed brand says upscale nrore loudly than lvlercedes-Ilenz. by direct mail and onlinc advertising, Efforts are being In 200 I Mercedes-llenz- posted its best year on record made to attract Internet users and to include them in with sales of 206,ti39 units. 'fhe largest increase came mailing lists for direct mail contact, Moreover, from the entry-level CL class of new cars. The focr"rs Mercedes-llenz is introducing a compact SUV instead has shifted to younger owners who seek power and of the very snrail Smart car sold outside the United perfbrnrance as much as Ieather and style, and a ride States. Some industryanalysts believe that Mercedes's rnore in tune with the Autobahn than l8 holes olgolf. bet is that, as gases prices escalate, drivers rvill trade

The new sports coupe cars are un-Mercedes-like in large S[I's for smaller, more fuel-efficient models. several ways. Two-door C230 hatchbacks are $4,000 below any other Mercedes. The shape is almost drag- sterlike, and the intcrior does not include wood veneer. More enrphasis is on performance and maneuveratrility than other attributes.

Unfortunately, these changes have not all been positive in their effects. Research in Europe and the United States reveals that the quality and satisfaction ratings for Mercedes have been dropping since 1999. I. D. Porver recently lowered Mercedes's quality ranking from "good" to "fair." In addition, the quality ratings for competing cars have increased. As noted, worldwide sales have doubled since 1993. However,

Ouestions l. What role does quality piay in the formation of

atritudes?

2. How might Mercedes preclude any further dilution of its brand in the perceptions of consumers?

3. Comment on the effects of competition from Lexus and other brands on the search for informa- tion and decision making by consumers.

4. How do youthful consumers differ from older adults in terms of information search, personal influence, and auto product preferences?