Well, .. quite an interesting thread this is... so
to you all for your comments. Here's my take on certain issues brought up so far:
Osnabreuck: Cynical, yes. But one must wonder, should we attribute this news to BMW's success just as much as we do to Benz's failures?
In my opinion it's a mix of the two. BMW's pursued an aggressive corporate strategy, and have integrated all functions of the company to convey that single image of
"dynamic". Their motto, their advertisments and promotional campaigns, their dealerships, ..and ofcourse, their vehicles.
Mercedes on the other hand have been hampered by quality issues, which have affected them a bit, but I don't believe it has affected them to the extent the some of you think (ofcourse that is your opinion, I'm not disputing that). I believe that Mercedes shortcomings have stemmed from their 'laziness' in promoting their vehicles. The motor industry is all about perception, the prestige market is ALL about image.....so no matter how good your cars is, no matter how many awards that car wins or how highly acclaimed it is by motoring publications, ..if the company itself can not promote the car correctly (in terms of effectively and efficiently), then ultimately, the marketing of the car hasn't gone to plan, and if the image portrayed to that target market isn't what MB wanted to convey, then there is a failure in marketing the car. As I said, this industry is all about perception and brand image...and I think MB has just 'expected' their cars to sell by combining mediocre marketing strategies for each new model and relying on the brand image and value of the 3-pointed star.
BMW have been aggressive and creating a clear-cut image of new, dynamic, daring and sportiness (hence their mottos: "Sheer Driving Pleasure" & "The Ulimate Driving Machine")...where as MB have mainly relied on the whole stigma of 'any car which has the MB badge must be the best', which clearly is beginning to detiorate over the past few years.
warot:I believe that Benz, BMW and Audi should stick to what they do and that is premium cars. We have no need for hatchbacks and R class type cars! There's just no need for any of those cars. Stick to what you do best... it's just not worth pouring $ into cars that should be put into their main cars such as the 5er, C class or A8.
Here comes a marketing dilemma. I fully understand your viewpoint that these 3 carmakers should ditch their lower-end models and concentrate solely on their already established and accepted vehicles. BUT... this industry is getting increasingly competitive. I remember reading an article talking about the new 3er, and it said something along the lines of that when the E36 3er came out, the car only had about 7 competitors, but the nwe E90 has more than 17 competitors (don't quote me on that, but I'm just emphasising the large increase in competition). So as I was saying, competition is increasing in this segment...and also, the current pool of buyers are getting on in terms of age, so there is a scramble to gain as share of the 'young-people' market by offering smaller cars such as the A-clas, 1er, A3, because once they reel in these buyers at a young age, the expectation is that when they get a bit older and establish a solid career and also start a family, they will need a larger car, and therefore trade-up to another MB, BMW or Audi which is larger. So in simple, it's about attracting buyers at a younger age, because research has shown that it can cost 5 times as much to attract new customers than to keep current customers. So when the facts are presented to you like that, it's pretty obvious why these smaller, cheaper variants are hitting the market. (I honestly wouldn't be suprised if Lexus produced a car to compete directly with the A-class, 1er and A3)
Merc1:A lot of people see sales as the end-all of everything, but I personally would just like to see Mercedes make the best car, the highest quality car of the three German brands and the let the sales fall where they may.
Well, at the coporate level, it's the bottom-line which comes into play a lot. Sure the MB marketing department could argue MB's image of 'unsurpassed quality is still very much intact" ..and the engineering department could argue that "their vehicles are the best out there" ...but if sales don't back up their statements then it does make you wonder where the brand is failing in terms of sales. Also, unit sales is the most objective and easiest form of determining where you stand in relation to your competitors. If unit sales show that you've slipped from your perch at the top of the segment like what has happened to MB, then it's pretty obvious that either you're doing something wrong, or the competition is doing something a lot better than you.
Merc1: With a lineup this expansive there is no way each one of these products can be class-leaders. Its too ask, even of Mercedes engineers.
Well, in my opinion, it's not all about whether the cars are the best in their respective segments. As I stated above, all departments of the organisation have to work together to create a car. The R&D do the technology side of things. The engineers produce the car, the Finance department consider costs of production and the marketing department must ultimately promote the car to consumers. I think what's happening in MB is the engineers produce the car and then hand it over to the marketing department and say "here, here's our new car, now it's your job to promote it". That's how things used to be done, but there is a change comming through motoring organisation as the market becomes more competitive. This new idea of an integration of all departments is becoming more and more evident...especially in BMW. We saw with the new 3er coupe that's coming soon. The marketing department played a part in the development of the car and stood firm and said the '4er tag' wasn't going to work..and ultimately, the car had to be renamed back to the 3er coupe/convertible.
So what I'm saying Merc1 is, it's unfair to just state that the job of creating a whole host of class-leading cars is simply too much for MB engineers, because in this day and age, even if your car is not the best, if your marketing department can clearly and effectively emphasise 1 characteristic that is better than the competition, then your car can be successful.
gustavo: There was no misfortune at BMW , there was till 1960's simply no big competence for building road cars. I remember that the owners at BMW even thought about selling BMW to MB at that time
I think you wrong about there being 'no misfortune' at BMW. Simple vist the BMWGroup website and look at the history of the company (
Click HERE for a Link to the site ). Here's just a few key points:
- The Munich plant sustained serious damage in air raids from 1944 on.
- In mid-1945, BMW was granted permission to carry out repairs of US army vehicles, and in return were allowed to manufacture spare parts, agricultural equipment and bicycles. They were also authorised to build motorcycles again, but was as yet not in a position to do so.
- October 1945: US military government ordered the BMW plants in Munich and Allach be dismantled, with intact machinery being dismantled and shipped all over the world by the way of reparations.
As for whether BMW managers thought about selling off the company to MB, that is completely false. BMW were starting to establish themselves by the 1950's with the success of their motorcycles. It was at the end of 1959 that Daimler-Benz made an offer, but BMW's smll number of shareholder and also their workforce rejected this offer and continued to stay independent under Herbert Quandt's leadership and control.
Roberto:But things have changed, perhaps consumers have become wiser and more demanding, but I think the real reason lies more in the bad press Mercedes has received - if it wasn't for all the bad publicity then many people would probably still unquestionably think that Mercedes was the best you could buy.
No question that consumers are becoming more and more demanding. The evidence is crystal clear, with manufacturers offering a wide range of vehicles than ever before to cater for the various needs and demands of consumers. That is also another why MB has largely increased its product portfolio, although some would argue that their 'dip our toes into every viable market' approach has been a catalyst for their fall from the top.
As for MB's quality issues being a deterrent for potential customers, I did have that opinion, but there's just one vehicle in the MB line up which defies this logic..and that's the W220 S-class. It received a host of bad-press, specifically target it's build quality (or lack of build quality more correctly)...and even with this negative publicity, the car sold very strongly until it's final months before the W221 was released. Same with the E-class, the sales of the E havent been dampened because of MB's quality and reliability issues...so it's a bit of a stretch to say that MB's quality issues are the reason for MB's slip up from #1 in the prestige car market.
Now... hope that wasn't too long for you all.
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