Written Analysis and Communication 2 Assignment 3: Mercedes-Benz Indias.

Submitted to: Professor Danesh Gojer Submitted by: Kinjal Mehta Ashish Clifton Niraj Baua Dhruv Patel 7th May 2011 60040 60097 60422 61250

Submitted on:

Brainard, Bennis & Farrell.

Date: 1995.

To:

Peter T. Honegg, Managing Director and C.E.O DaimlerChrysler India Private Ltd. Dhruv Patel, Management Trainee.

From:

Subject:

Report on the functioning.

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Enclosed is a report on the strategy that will help DaimlerChrysler India Private Ltd., attain its top position in the Indian Luxury car market.

Executive Summary
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Table of Contents
Sr. No. 1 2 3 4 5 6 7 Contents Situation Analysis Problem Statement Options Criteria for Evaluation Evaluation of Options Recommendations Action Plan Page No 5 6 6 6 7 9 9

Situation Analysis
DaimlerChrysler India Private Ltd., was established in November 1994 as a jointventure between Daimler-Benz AG and Tata Motors. It has its own manufacturing plant in Pune where the C-Class and the E-Class are manufactured. SL-Class cars are imported as completely built units. In 2006, BMW entered the Indian market and established a manufacturing plant in Chennai. BMW with its aggressive marketing, fast expanding public profiles, strategic location of dealerships and financial service offerings got a market share bigger than Mercedes-Benz. With 60% of the purchase of cars being done through financing, BMW Group plans to start BMW Financial Services. It will provide service to fleet owners and dealers. It is also launching a Pre-owned Car Sales Program. Also BMW offers 5 year coverage as compared to th2 years offered by Mercedes-Benz. Audi entered the Indian markets in 2007 and has been a craze amongst the technogeeks. It also enthralls customers with new models and variants of the current models. The company needs to increase its advertising budget and try to recapture the market share lost to the rivals. For this either the company can go in for media advertising or it could go in for personal selling or sponsor a road show of all the antique cars in a few cities. Media advertising is expensive and will have a vast reach. The company will be able to showcase all its latest models and their features, but the effect will not last long. If the company goes for personal selling by approaching clients, it will have to offer services comparable to the competitors. Sales representatives targeting high profile clients and giving them a demonstration and a test drive of the model they like will help in generating product interest.

Problem Statement
Which strategy should the company use to regain its market share?

Options Available
Media advertising Personal selling Sponsor a road show of all the antique cars in a few cities.

Criteria for Evaluation

Large Coverage It is essential that the strategy is able to reach across to a large number of people. Effective transfer of message It is essential the message of the campaign that Mercedes-Benz cars represent luxury should also get across. Reasonable expenses The strategy should not demand a lot of financial expenses. Create product and brand awareness The strategy should make the people aware of the various models available.

Evaluation of Options
Option 1 Media advertising has a very wide coverage. Of the three competitors, Mercedes-Benz spends 30% of the total amount spent on advertisements. There has to be a rise in the total spending in media so that company can come to par with its competitors. Media advertising will create awareness amongst the people for the various models available and their features. But the essential message of the company may not get out properly as most of the people also perceive other imported cars as luxurious.

Option 2: Personal selling by contacting the top class people will help to increase sales. However, this method is expensive and a large audience representation is absent. The sales representatives have to visit the clients individually after prior appointments, and about 4 to 5 visits are needed per client before one is convinced. The sales representative can give a demonstration of the product and explain the features. Option 3: A road show of old Mercedes cars will generate a lot of public interest and if the cities are selected properly then there will be huge publicity. People will be aware of the Mercedes-Benz brand and how it has evolved over the years. The cost will be high but the features of new products will not be demonstrated clearly.

Recommendations
It is recommended that the firm should go ahead with the first option and advertise heavily to get people aware of the new product and urge them to take a test drive of the model they like.

Action Plan
Increase advertising expenditure Focus advertising on the strength of the Mercedes-Benz brand Offer financial services Comparable services to the competitors

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