The Digital Marketing Activities of Mercedes Benz
Mercedes-Benz AG (Mercedes-Benz) is a renowned German automotive manufacturer and brand that was founded in 1926. As a division of Daimler AG, Mercedes-Benz is an automotive marque specializing in passenger cars, trucks, coaches and ambulances. Mercedes me, Mercedes –Maybach and Mercedes-AMG are some of the sub-brands of Mercedes-Benz. With 175,000 employees and 40 production sites across 4 continents, Mercedes-Benz sold over 2.3 million passenger cars and 420,000 vans in 2018, to position it as the best selling luxury brand in the world. The company earned 93,193 and 13,626 Euros from cars and vans respectively, in 2018, and its third-quarter sales in 2019 are up 8 % courtesy of Ola Kallenius, the chairperson of the Daimer AG management board and head of Mercedes-Benz cars, and his management team. In early 2019, Mercedes-Benz AG took control of the Daimler AG website to conform to General Data Protection Regulation (GDPR) in the European Union (EU) and reflect the new corporate structure at parent the company. Mercedes-Benz has mastered the digital space by combining user engagement, customer experiences and product bundling to showcase its innovativeness and funnel prospects into buyers (Letki).
Despite its longstanding history, Mercedes-Benz faces stiff competition from other German and foreign automotive manufacturer, and the digital platform remains pivotal for staying ahead of rivals. An analysis of Mercedes-Benz’s online brand presence is undertaken to unearth the aspects that need improvement and inform the recommendations.
An analysis of the macro-environment around Mercedes-Benz is undertaken using the PESTLE analysis and Porter’s five forces analysis to reveal forces that shape the automotive industry and the opportunities and threats facing the company.
The political environment influences the automotive industry significantly because of their contribution to national economies, considering that automakers are large employers and taxpayers. Recent development in the European Union occasioned by Brexit may be detrimental to the company’s business in the United Kingdom, as one of its largest markets. For instance, the company abandoned plans to establish a plant in the UK and has warned against a hard exit because it would impose tariffs that would increase the prices of its cars in the UK market (Morrison; Taylor and Schwartz). Rising economic nationalism globally as governments adopt inward-looking policies rather than out-ward looking ones may create new hurdles for the company in its large global markets like the United States and China and interfere with its foreign production plants.
The economic environment remains volatile and depressed as the recovery from the financial crisis of 2007 remains slow. The automotive industry is witnessing a preference for low-priced fuel-efficient models and depressed demand for luxury models. The Chinese market, which held much promise for the automotive industry and Mercedes-Benz, registered a drop in sales returns from 9 % to 6.1 % between 2018 and 2019 on Mercedes-Benz cars (Boston).
The sociological factors affecting the luxury automotive brands are engrained in the values, attitudes and culture associated with high-end products. Mercedes-Benz is positioned as a luxury brand appealing to the affluent and the ambitious middle-class who want to display upward social mobility. Therefore, the emerging middle-class in many emerging economies is targeted by the company and its shrinkage or economic disempowerment would injure the sales and profits of the automaker.
The automotive industry is engaged in a technological to make electric cars a reality for the common person and competition between different companies is fierce. This competition is also intense in Germany with companies like BMW and AUDI making significant progress.
The legal environment surrounding the automotive industry is changing fast as governments rein in on vehicular environmental pollution. Moreover, the EU enacted the General Data Protection Regulation in 2018, which will influence how automakers engage with clients online and conduct their marketing activities (Mercedes-Benz Southwest).
Environmental concerns related to the use of fossil fuels and global warming are pertinent to the automotive industry and inform the advancement towards alternative fuels. Mercedes-Benz is committed to lower automotive emission rates by developing electric cars and keeping the emissions of its regular cars low.
The threat of new entrants is low due to huge capital, economies of scale, distribution, and legal requirements. The bargaining power of suppliers is low because the firm dictates the prices and can easily switch suppliers for its standardised parts. Similarly, the bargaining power of buyers is low considering that Mercedes-Benz is a luxury brand targeting buyers who are not price sensitive. The threat of substitutes is low in the automotive industry, with alternatives being few and highly priced. The rivalry among the few luxury automakers is fierce because they are providing almost similar features and capabilities in their automotives. Companies such as BMW, Volvo, Volkswagen and AUDI offer stiff competition to Mercedes-Benz.
Opportunities and Threats
The developing of electric cars, reducing fuel consumption and lowering greenhouse gas emissions present opportunities to the automotive industry and Mercedes-Benz. Moreover, the expansion of the middle-class increases the target market for luxury car brands. However, the industry and Mercedes-Benz are threatened by the slowing economic growth, which is reducing the disposable income to be spent of car purchases. Also, changing laws and trade tariffs instigated by politically-motivated economic nationalism may reduce the international market for luxury vehicles. Moreover, tightening of internet-related laws will challenge the online marketing activities by automakers.
Mercedes-Benz has a longstanding brand history and presence, which it leverages as a distinguished luxury car brand. The easily recognisable design and use of advanced technologies are differentiating features of Mercedes-Benz cars. The brand is also associated with utility vehicles such as vans, buses, and trucks, renowned for their durability and performance.
Mercedes-Benz is available worldwide through an elaborate network of dealerships, transporters and service stations served by its 40 production sites. The brand is available in large cities globally, where the target market is concentrated. Europe, North America and recently, China and Russia are its major markets in the world. A combination of brick-and-mortar showrooms and online channels allow customers to interact with the products and the firm.
Mercedes-Benz uses the value-based pricing strategy in which the vehicles are priced as premium products to resonate with the customers’ beliefs of their worth. The price ranges from about 20,000 euros for the more regular vehicles to millions of euros for the rare, concept, high-end machines. The premium pricing of these vehicles is based on the features and competing models.
Mercedes-Benz is an aggressive promoter that uses a multichannel approach comprising of a mix of traditional and new media advertising channels. Promotions range from television and print commercials, to sports tournaments, celebrity endorsements, driving challenges, social media presence and product bundling.
Strengths and Weaknesses
The company has remarkable presence in motorsport and numerous other sports, which it uses to showcase the quality of its vehicles. Its omni-channel marketing approach makes the brand easily recognisable across the world. However, intense competition threatens the growth of its global market share. Similarly, the global recognition of the brand makes it vulnerable to reputation damages from the exaggeration of minor issues.
The digital analysis is bases of Google Chrome, which is the predominant web browser used by many online users as illustrated in figure 1.
Figure 1. Most popular web browsers
Mercedes-Benz has been promoted extensively through its website, using captivating pictures and videos. However, the company’s value proposition was absent in the landing page, an indication that the company assumed that the website visitors were already familiar with the quality of the vehicles. The website is rated 89 by Website Grader as illustrated in figure 2. While the website was optimized for the search engines, secure and mobile-friendly, its performance was suboptimal. The website performance was graded 19 out of 30, while mobile, search engine optimization and security got a perfect score, according to Website Grader. However, while the website is responsive on mobile devices, this avenue is not leveraged by the company to capture smartphone enthusiasts such as the millennials. Notably, the website is secure because the company owns the SSL certificates, which is important in this era of increased privacy and cybercrime concerns. Users can be confident that the website is trustworthy and authentic, which is valued by loyal customers.
Figure 2. Mercedes-Benz website ranking
Source: Website Grader
Further analysis of the website performance revealed performance areas that needed improvements, as illustrated in figure 3. For instance, the page size was 3.6 MB, while the recommended size is below 3 MB. Moreover, the website received 107 requests, which are on the higher side because they make the website slow. Nonetheless the page speed is 3 seconds, which is within the acceptable loading speeds that would prevent visitors from looking elsewhere.
Figure 3. Page size, requests and speed of the Mercedes-Benz webpage
Source: Website Grader
The overall report from Nibbler-sliktide.com rated the website 8.0. Although website accessibility was rated 8.1, with the page titles and mobile compatibility being rated at 10 each, the website had minimal internal links, which were rated at 2.5. Notably, the marketing performance of the website was rated lowly, at 6.6, because of the low social interest and few meta-tags, as shown in figure 4. The link texts were too long, while only 60 % of the web pages had a description meta tag.
Figure 4. Performance ranking using various metrics of the website
Nonetheless, Mercedes-Benz is now responsible for its website as illustrated in the notice displayed in figure 5. The reorganisation of the parent company, Daimler AG, has empowered Mercedes-Benz to control its website and make it suitable for the marketing of the vehicles.
Figure 5. Notice of website control change
The Mercedes-Benz website was legible, as shown by green bars in figure 4. Moreover, about 15.5 % of the words were complex, with each sentence containing about 8 words. Since the readability indices are referenced to the American school level, the website is readable by people with a reading competence between grades 6 and 7.
Figure 6. Readability analysis
Source: Web FX
Moreover, the high-contrasting of black and white texts and backgrounds, as shown in figure 7, facilitates legibility of the website. However, this is not translated in the other pages of the websites where pictures dominate the background, making some text unreadable.
Figure 7. Text and background contrast in the contact page of the website
Most traffic to the company’s website is though desktop computers, including laptops. Most internet users go directly to the website, while a significant proportion uses search engines to access it. Although much traffic is generated from referrals, very little of it originates from social media platforms. The electronic mailing channel hardly generates any traffic, which indicated a departure from traditional marketing preferences among the nbrand enthusiasts, as exhibited in figure 8.
Figure 8. Source of traffic to the Mercedes-Benz website
Search Engine Optimization
Mercedes-Benz domain is search engine optimised, going by the position and number of returns that point towards the company in Google search (Figure 9).
Figure 9. Mercedes-Benz Google SEO
However, SEO Site Checkup graded the website at 74 % as shown in figure 10, which indicates the presence of optimization gaps that need to be addressed. Notably, the code ration was below 10 %, while many titles were either too shirt or too long. Moreover, there were only 47 out of 2007 backlinks to the website. Another analysis revealed that the website had 32,000 keyword opportunities breakdown due to 17,300 keyword gaps.
Figure 10. SEO ranking of the Mercedes-Benz website
Source: SEO Site Checkup
Despite having 2.7 million visitors, the website has a bounce rate of 43.87 % as shown in figure 11.
Figure 11. Total website visits in the last 6 months
Mercedes-Benz.com was ranked the twenty-six best vehicle website globally. The ranking of was reducing around the world and in Germany, as illustrated in figure 12, which indicated that less people were either disinterested in the company’s vehicles or the competitors were becoming more popular.
Figure 12. Global ranking of Mercedes-benz.com
Despite having several social media links on its landing page, as illustrated in figure 13, social media engagement is ranked lowly. Seven social media platforms have links in the website, although there was little evidence indicating their effective use.
Figure 13. Social media links on Mercedes-Benz website
Only 2.6 % to the traffic to Mercedes-Benz.com is attributed to social media platforms. Most of the traffic is through Facebook and YouTube, as shown in figure 14. This means that there is minimal electronic word-of-mouth (e-WOM) among the public, an indication that the brand is not exciting. Indeed, the very low traffic on Twitter, Instagram and WhatApp is indicative of the lack of customer engagement over social media.
Figure 14. Contribution of social media platforms to company website traffic
An inspection of the Facebook and Twitter accounts of the company revealed that the focus was selling vehicles and sharing rare experiences among the elite in the society, as illustrated in figures 15 and 16. As such, Mercedes-Benz was not engaging the emerging customer segment enough. The corporate culture at the company may be holding on to traditional approaches of engaging customers and ignoring the millennials and other youthful potential customers, who were ardent enthusiasts of social media.
Figure 15. Facebook page of Mercedes-Benz
Figure 16. Twitter page of Mercedes-Benz
When compared with competitors such as BMW, Volvo, Audi and Volkswagen, Mercedes-Benz performed the worst, with engagement strength at 33 %, as illustrated in figure 17. Moreover, the positive sentiments were the lowest among rivals, although they shared the aspect of having most sentiments as neutral. However, Mercedes-Benz can be comforted by the low negative sentiments and high passion level among social media users.
Figure 17. Social media engagement among Mercedes-Benz competitors
Source: Social mention
However, although Mercedes-Benz is an endorser of sporting activities such as formula 1 and golf tournaments, it has not mastered influencer marketing in its digital marketing strategy. The highest ranked influencer, Vaderklasse, had only 62,600 followers, while Laura Tobon, who had 485,000 followers, was ranked 6th, as illustrated in figure 18. This demonstrates that social media influencers were having little impact in the digital marketing strategy of the company. In any case, there were few influencers in the company’s traditional markets in Europe and Northern America.
Figure 18. Top 6 influencers of Mercedes-Benz
The Mercedes-Benz website is captivating to traditional customers who are conversant the brand; but its linkage to social media platforms is ineffective. As such, the digital marketing strategy of the company is not effective at targeting the millennial customers, whose proportion is rising significantly in the global middle-class. Besides, the website can be improved to engage the customers more and create a buzz around new cars rather than just furnishing technical information to the target population. Improvements in search engine optimization, social media presence and user experience
Search engine optimisation
The use of plain backgrounds rather than images is recommended to enhance website legibility. Also, backlinks between the website and the online merchandise shop and other pages, would help direct users to the company’s website. In this regard, the page requests should be reduced to less than 30 by combining files. Moreover, to improve the quality and effectiveness of the links, the links’ destinations should be accompanied by important anchor text.
Although the website had social media links, the pages were weakly linked to the social media platforms. From the analysis, there was little evidence that social media was being leveraged enough to create buzz and activate e-WOM among social media enthusiasts. To turn the neutral sentiments to positive ones, millennials needed to be targeted by the online marketing strategy, using seamless linkage between the corporate website and the social media platforms. Optimising the webpage for mobile gadgets is recommended because the new age of emerging customers were smartphone and tablet enthusiasts.
It recommended that pop-ups that guide users to prevent them from abandoning the website once they bounce. Moreover, the company’s online merchandise shop should be linked to the corporate webpage, considering that some brand enthusiasts may start by going through the merchandise before going through more technical content about the vehicles. Indeed, increasing the backlinks to the website would not only draw more traffic to it but also instigate content creation and sharing among users. Also, optimizing the placement of calls for action in the website may reduce the bounce rate
Mercedes-Benz still approaches marketing traditionally in many aspects. The company has leveraged traditional marketing channels, such as television, print and out-of-house, to advance its premium brand. Moreover, the company is successful in promoting its brand through sports endorsements. The company is still holding on to its traditional marketing approaches, while the customer preferences have changed as more millennials enter the middle-class. Moreover, the newly enacted General Data Protection Regulation alongside the autonomy to control the website by the Daimler AG, the parent company of Mercedes-Benz are posing challenges to the company as it assumes a bigger role in its marketing strategies.
Despite depressed economic environment in the company’s major markets, millennials are increasingly seeking luxurious cars as their financial position increases. Moreover, they are attending sporting activities such as formula 1 to watch the performance of the premium vehicles on the race tracks. Mercedes-Benz has the financial muscle to invest in social media to engage this emerging customer segment globally. Therefore, linking its website to social media platforms would not only increase traffic but also endear the interest of social media enthusiasts to the company’s vehicles without diminishing their value positioning. Moreover, optimizing the website for mobile devices many increase traffic from this customer segment, based on their enhanced mobile use. Altogether, which digital marketing is evolving rapidly and challenging companies with a longstanding history, culture and tradition, it can be embraced by Mercedes-Benz, which has done well enough to make cars that are attractive to the affluent and the utility-conscious emerging middle-class.
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