Volkswagen and Mercedes-Benz: Promotion and Advertising

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Table of Contents

Introduction
Promotional Strategies Employed By Two Companies
Recommendations
Consumer-Oriented Promotions
Price Objective
The Most Effective Advertising Media for the Automobiles Industry
References

Introduction

Competition in the current market scenario is very stiff, which means that each company must make use of good promotion and advertising strategies to ensure that it increases its sales maintain its existing customers, as well as increase its customer base. The marketing strategies used are unique to each company because using a unique and relevant advertising and promotional strategy attracts many customers as opposed to competitors.

This work will compare and contrast the promotional and advertising strategies of two firms in the automobile industry in Germany; Volkswagen and Mercedes-Benz. The essay compares and contrasts the different advertising, promotional, and pricing strategies employed by the two companies that make them able to compete favorably in the market.

Promotional Strategies Employed By Two Companies

Comparisons

There are a number of strategies that both companies use. For example, the most common method is offering a variety of new products, which Volkswagen introduced through the use of Bluetooth technology that allows one to communicate without necessarily having to use their Smartphone. On the other hand, Mercedes also provides a variety of models for its customers to choose from. Such a strategy makes sure that both companies carter for the needs of all their customers (Biebrach, 2009).

Next is the use of the company websites from where customers can find out information about new products, prices, dealers, and services. The sales representatives of both companies update the sites in case there are new products launched. Moreover, the companies post on social sites such as twitter and Facebook where the customers can share photos or write comments about given brands of cars. Additionally, the companies periodically release e-reports and magazines to update the users on new products and also upload YouTube videos to allow the customer watch and find more about any innovations and models.

There is also the use of the visual media such as television. Such media helps the companies to reach a large number of clients within a short time because it is one of the most common methods of product promotion. Both companies focus on both brand building and promotion of specific products and models that they make. The firms also use radios and newspapers to advertise while targeting increased sales. Both Volkswagen and Mercedes have strong brand reputation because they have been in the market for a relatively long period.

Contrast

While Mercedes uses celebrity advertising to improve its market prominence for luxurious cars, Volkswagen targets the middle class. Therefore, the latter company does not use celebrity advertising, which creates a notion that Mercedes Benz cars are for the affluent class.

Recommendations

One way in which Mercedes-Benz can gain advantage against competitors is to provide cheaper alternative cars with little fuel consumption and unique features (J.D. Power & Associates, 2009). The company can also rebrand the cars to eliminate the perception in the market that Mercedes-Benz belongs to the affluent class. To eliminate such a perception, the firm should provide relatively cheaper products of different varieties depending on the customers’ specifications and preferences.

Moreover, the company can also carry out market research and establish customers’ views concerning its products and use the information to improve where necessary (Biebrach, 2009). The firm could also use market skimming, which involves setting high prices to those who can buy expensive brands and setting lower price to those able to buy cheap brands. Employing the strategy will enable Mercedes-Benz Company to be relevant to different types of customers.

For Volkswagen to remain competitive in the market, it has to provide good offers to the buyers such as discount and quality services. Such a strategy helps in winning the trust of customers and could be useful in the launching of new models.

Consumer-Oriented Promotions

Both firms require to adopt consumer-oriented promotional strategies such as provision of discount that will assist them to increase their sales volumes. Using such a strategy generates a feeling that the companies care for their customers (Ferrell & Hartline, 2011). The two firms could also adopt the pricing objective, which refers to setting the cost of a product or service by ensuring that it reflects the company’s financial, product and marketing goals, as well as consumers’ expectation of a price (Lamb, Hair & McDaniel, 2012).

The companies can also adopt personality promotions such as the use of popular sports personalities who may sign autographs for customers who visit the stores. The use of such a strategy attracts a large number of customers because people will be attracted by the celebrities, which will increase the volume of sales of the two companies.

Price Objective

There are four pricing objectives; survival, profit, sales, and status quo. Mercedes utilizes pricing to maintain its status quo because it targets customers in the upper class. For instance, the company produces a variety of expensive but high quality cars for its customers and uses celebrities such as Lady Gaga for promotion. Such a strategy makes the company not to compete using prices with other companies. The strategy also ensures that the company maintains relevance to its customers through provision of high quality products (Uhlig, 2015). Other companies in the same industry can use other pricing objectives such as profit and sales.

First, if the companies have to price their products for profits, they have to survey the market for the most appropriate consumer prices and use such information to compete. Second, the companies should price their products at prices, which will ensure that they make the largest sales volumes. The rationale for the two recommendations is that pricing for status quo works only for companies that have well-established brands, which is not common for all firms in the industry.

The Most Effective Advertising Media for the Automobiles Industry

Firms within the automobiles industry should use visual media such as television to advertise their products both in the long-run and in the short-run (Biebrach, 2009). The rationale for the chosen medium is the fact that it has an ability of reaching a large number of customers across the globe. Secondly, the use of television adverts could also be used to popularize the companies’ websites because of their popularity among people across all the social classes.

In the event that television adverts market the companies’ websites, customers will have an interactive forum with sales persons, which will help to boot their sales. Another reason for the use of television is the fact that it builds product reputation within a shorter time than the rest of the advertising media because of the wide coverage it enjoys. Development of a strong brand has the effect of popularizing a brand and allows the company to utilize other pricing strategies in the long-run

References

Biebrach, C. (2009). Mercedes Benz – How A Great Campaign Can Almost Kill A Company. München: Grin Verlag.

De, K. C. A., & Business Expert Press. (2010). Fundamentals of global strategy: A business model approach. New York, N.Y: Business Expert Press.

Ferrell, O. C., & Hartline, M. D. (2011). Marketing strategy. Australia: South-Western Cengage Learning.

J.D. Power and Associates. (2009). The Power report on automotive marketing. Los Angeles, CA: Power Associates.

Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2012). Essentials of marketing. Mason, Ohio: South-Western Cengage Learning.

Uhlig, D.K. (2015). Four Types of Pricing Objectives. Web.

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