VIDEO CASE 4 MERCEDES BENZ: LOOKING FOR ANSWERS You probably would agree with Janis Joplin when

she sings, Oh Lord, wont 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 wellknown Mercedes taglineEngineered like no other car in the worldworked for consumers. Customers applauded Mercedes for its quality, engineering, and integrity. The bad news was that they didnt 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 boomersindividuals 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. Theres 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; its driven by emotionstrong 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 didnt 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 boomersactual or desiredthe magazine also increases the emotional attachment to Mercedes. Although all these efforts seem intuitively to be on target, its the job of Bob Baxter, director of marketing research, to assess how successful each is. Baxters 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. Baxters 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, decisionmaking 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 Baxters 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.