MERCEDES BENZ: LOOKING FOR ANSWERS

You probably would agree with Janis Joplin when she sings, “Oh Lord, won’t
you buy me a Mercedes Benz.” Certainly Mercedes hopes so. With a sales goal of
over 125,000 cars in the United States by 2000, the luxury car maker has to motivate
a lot of customers to buy a Mercedes without waiting for divine intervention.
Mercedes’ sales peaked in the United States in 1986 at 99,314 cars and slid to 61,899
in 1993. Many factors such as the economy, competition from other luxury cars
(introduction of the Lexus and Infiniti), and changes in consumer attitudes have
contributed to the loss of sales.
To determine why sales were down, Mercedes Benz conducted attitudinal
research. It used a series of focus groups and dealer showroom interviews to gather
consumer feedback. The good news from the research was that the well-known
Mercedes tagline—”Engineered like no other car in the world”—worked for
consumers. Customers applauded Mercedes for its quality, engineering, and
integrity. The bad news was that they didn’t like Mercedes’ aloofness, its distance
from buyers.
With this research in hand, Mercedes set out to reposition its cars, to convince
customers that Mercedes means fun as well as quality. The target market is baby
boomers—individuals in their mid to late thirties, forties, and early fifties. This is the
single largest age group in the market and people in this age range have achieved the
financial success necessary to buy a Mercedes.
Reaching baby boomers is not easy, however. “There’s a general shift going
on in the luxury segment,” says Mike Jackson, executive vice president of marketing.
“Baby Boomers, by definition, are very young-minded. To keep your relevancy you
must connect with them on an emotional level.” The key phrase here is “emotional
level.” The purchase of a Mercedes is not driven by rational motives; it’s driven by
emotion—strong feelings about the car. People must want to buy a Mercedes.
Mercedes upped the emotional level when it launched its E-class car using the
concept of fun. Having fun produces strong positive emotions. To inject its
promotional campaign with fun, the company used a tongue-in-cheek TV spot that
shows a driver passing supermodel Paulina, space aliens, and Ed McMahon with a
$10 million check without stopping. The car was so much fun to drive, they didn’t
need to stop. To appeal to older baby boomers, Mercedes used the song by Janis
Joplin, who symbolizes the hippie lifestyle associated by baby boomers with their
youth. For these consumers, Janis Joplin has always evoked strong emotions.
Other promotions by Mercedes include the introduction of a Website, direct
mail to 300,000 current and prospective Mercedes owners, and airplay in theaters for
one of its new TV spots. The company will sponsor an Elton John concert in New
York to showcase the E-class among younger consumers and will pay $40 million to
sponsor the tennis ATP Tour, in which the Mercedes’ logo will be emblazoned on the
tennis net itself during telecasts. In December 1995, the company teamed with
publisher Hachette Filipacchi to produce Mercedes Momentum, a magazine that is
distributed to 500,000 dealers and Hachette subscribers. This lifestyle publication
carries stories on everything from cigars and wine to ultramarathoners and New
England fishermen. Of course, it also provides details on Mercedes models amid the
feature articles. “Rather than doing a car book, we decided to focus on lifestyle,”
says Al Weiss, director of national marketing communications. By featuring
Mercedes as part of the lifestyle of baby boomers—actual or desired—the magazine
also increases the emotional attachment to Mercedes.
Although all these efforts seem intuitively to be on target, it’s the job of Bob
Baxter, director of marketing research, to assess how successful each is. Baxter’s
staff regularly collects information about the economy, the auto industry, and
Mercedes in particular. In addition, a staff of trained telephone interviewers can
quickly conduct nationwide surveys of customers, dealers, and sales personnel.
Other interviewers can conduct in-showroom and focus group interviews. Baxter’s
staff also conducts written surveys, and his crew of statistical experts analyze the data
produced. It is important to gather market research information from a number of
sources to help establish its validity. If six separate pieces of research produce the
same result, then it must be valid, and if the same research done over and over
produces the same result, it must be reliable.
Besides being valid and reliable, marketing research should also be
representative. This means that the right sample should be selected. For example,
the fun emphasis of advertising for the E-class car is aimed at the under-40 market,
whereas the Janis Joplin ads and the Elton John concert are aimed at an older
audience. The Mercedes Momentum targets both groups. Research must distinguish
among the opinions and attitudes of these different segments.
Good research requires a thorough understanding of marketing program goals.
Research usually aims to answer a specific question. For example, the goal of E-
class advertising is to change the way target consumers think about Mercedes. Thus,
E-class research seeks to answer questions about changing consumer image
perceptions. One way to find out if the advertising worked is to interview viewers of
the ads. Although Baxter could have his staff conduct focus groups to gauge the
impact of the ads, this technique would not be particularly appropriate. Focus groups
are usually exploratory in nature, and evaluation of an ad campaign is primary
research which falls in the problem-solving, decision-making arena.
For each marketing research effort, Baxter and his staff have to make sure that
they are researching the right question, with the right group of people, using the right
technique. Given all the recent Mercedes promotional efforts, they have lots of
issues to research. The research can be costly, but to Baxter’s way of thinking, the
returns are worth every penny.
Questions for Discussion

Develop a marketing research plan for evaluating each of the following:

 Consumer reaction to the Janis Joplin advertisement.
 Consumer reaction to the “fun” ad for the E-class auto launch.
 Success of the Mercedes Website.
 Audience response to the Elton John concert in New York.
 Consumer attitudes toward sponsorship of professional tennis.
 Audience response to Mercedes Momentum.
In each case, list appropriate research questions that Mercedes might attempt to
answer. Specify the type of research you would use (exploratory, problem solving,
secondary or primary) and describe how the research should be conducted. Finally,
indicate the characteristics of who should be researched.

Sources: Steve Gelsi, “Benz Revs Up New Pitch,” Brandweek, March 18, 1997, pp.
20-22; Joshua Levine, “Give Me One of Those,” Forbes, June 3, 1996, p. 134; and
the Mercedes Benz Web site at www.mercedes.com.