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Mercedes Benz's Road Back To World Domination Must Pass Through China

Article illustrative image Partner logo Merc in the New Territories

BEIJING - Last month, Mercedes-Benz launched its SL-Class Roadster at the Mercedes-Benz China Fashion Week.

As the legendary model of the German car manufacturer, the late release into China of the SL-class cabriolet aims to show that Mercedes-Benz is confident about the Chinese market. It is trying hard to put forward a “Rejuvenated Mercedes-Benz” image.

The plan of a joint venture between two separate sales units, Mercedes-Benz China (imported vehicles) and Benz Beijing (locally made cars) is going forward. It is believed that Benz China will be in charge of the sales, marketing, finance and customer services whereas Benz Beijing will be responsible for the network expansion, second-hand cars, human resources and the labor unions. The goal of the joint venture is for the two sales units to operate “with the same voice and the same brand” in order to achieve a more effective concentration of resources.

All these efforts are just part of a strategy launched by the Daimler group in China five years ago. The brand resetting strategy aims to consolidate its image as the top luxury car manufacturer for young, sporty and glamorous people. In 2009 and 2010 Mercedes-Benz achieved a 77% sales increase year-on-year, becoming the fastest growing luxury car brand for the Chinese market.

Even when the problems caused by operating two separate Mercedes-Benz sales units in China started to affect the brand’s sales performance in the second half of 2011, it nonetheless managed to enjoy a 59% growth rate. This is why the two sales units have decided to combine their forces.

Star power

It was through sponsorships to venues such as the National Theatre, the Mercedes-Benz Cultural Centre, sports competitions, arts festivals and fashion weeks that the German luxury car manufacturer achieved its first five-year-stage of brand resetting. These venues are Mercedes-Benz’ targeted consumer group. The brand used precision marketing to target its consumer group’s points of interests and contacts.

In order to cater to the increasingly discerning Chinese consumers, all luxury car brands have been adapting their sales strategies.

BMW tries to promote itself as the car of the Chinese elite, whereas Audi has been trying to get rid of the association between their cars and corrupt officials.

Meanwhile, rejuvenating its image is the must for Mercedes-Benz in China. Since young people mostly identify with celebrities, the brand has started using sports, film and pop stars as their spokespeople. In addition, it is emphasizing a more emotional communication approach.

In 2011, one of its made-for-China advertisements - featuring Kobe Bryant in a tiny Smart car - was so successful that not only it reversed the flagging sales of the Smart cars in China, but went on to be launched on the global market as well.

Mercedes-Benz has been using star-power to send a different kind of message: Stars are bright, but most importantly, they are Mercedes-Benz clients. Kobe Bryant was in Shanghai to hand over the key of China’s 10,000th Smart car to its new owner, while Roger Federer participated in a M-Class SUV promotional event.

There is a consensus among high-ranking executives of automotive brands that a car’s global image largely depends on the car company’s image in the Chinese market. This month, in the 2012 best global brands survey by global branding consultancy Interbrand, Mercedes-Benz ranked no. 11.

Certain critics pointed out that over the past hundred years, Mercedes-Bens has had a mainstream culture of engineers. This has led to the loss of countless business opportunities. But on the other hand this has also helped to build it as the most valuable brand while at the same time maintaining its technology innovation tradition.

The dual innovation in both technology and brand marketing are the guarantee of the goal set by Daimler's CEO Dieter Zetsche, to reclaim the top spot in the luxury car segment by 2020 at least. But first it has to succeed in China.

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About this article source Website:

The Economic Observer is a weekly Chinese-language newspaper founded in April 2001. It is one of the top business publications in China. The main editorial office is based in Beijing, China. Inspired by the Financial Times of Britain, the newspaper is printed on peach-colored paper.

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