Mercedes-Benz Changes Its Marketing Strategy for 2010

[Merc1]

If there is any problem at BMW with sales of the 335d I'd say it's the price. Its a awesome car, but its expensive.

If Mercedes could sell a C250 here for the same price or less than the C300 then they'd have a hit IMO. Not sure if that is feasible though.

M

 

[tennmb]

Problem is 335hp hp in such a car (as in the GL450) is not enough anymore.

To some, but not most. Actually it is more than enough for many if not most S-buyers. Many of your S-buyers are not people like us who visit car fan sites and get all juiced over performance. Many people are overwhelmed at all the HP wars, and it doesn't drive their buying decision. Where MB suffers in that regard is with people who buy Infiniti G35s and BMW 335s. 335 is more than enough. At least to introduce an S450 to the US. This would do more to help sales with the S-class than anything else MB could do.

Wimmer,

No doubt that MB is behind on their V-6 engines. They get less power and less mpg than most of the competition. My techs don't like them either and say they are unnecessarily complicated.

Most dealers in our region sell about one E550 for every 15 E350s that are sold. It may be more than that. So, the base price from an E to an S is $40k. Plain and simple. The biggest reason a buyer has for going from an E to an S is size, not engine.

Who looks at a base E-Class and think they're going to get a "full size" Mercedes for less than 30K more. Buyer is more or less cluess in that regard IMO.

Most buyers are very savvy today. I can't tell you how many times I've shown an E-class, and the buyer asks, "what do you have between the E and the S-class in terms of size." Sadly nothing.
Or, "what does it cost to go from an E to an S?" And then watch how quickly they rule out MB becaue they can't get the size they want in their budget, because the E is too small and the S too much. It's like gift wrapping a customer for Lexus.

What has really hurt, is this gap has allowed Lexus to re-train the brains of their consumers. Lexus has done well with the LS. They stole a lot of business from MB during the 90s. They offered a car that was bigger than the E and priced significantly lower than the S. Sadly the economy was sooo good that MB couldn't see that they were losing business. Over those years, the LS has grown, and become more like an S-class in terms of size and content. You can get a $70k LS or a $100k LS. I would have laughed if you had told me that Lexus could get $90k for a car in the US. Yet they are doing it. Why? Because Lexus stole that business, and conditioned that buyer over time to pay more and more, and to look at the Lexus as a equal to MB, not a compromise. This thread is about MARKETING. That my friend, is MARKETING.

 

[HighestOfHigh]

"what do you have between the E and the S-class in terms of size." Sadly nothing.

Even though it's not a traditional sedan, would the CLS some what fit that role?

It would be nice to see Mercedes-Benz introduce the S350 to the market and maybe as $70-$75k for it. Maybe in the states their just letting the CLS have that spot.

Another thing...Most Mercedes-Benz customers are educated. So why in the world would they come to a dealership and ask if there is something in between the E and S-class price range? MBUSA has the prices posted right online. When I worked at Toyota, most of the customers knew exactly what model they were interested in and already had pictures and pricing from online websites.

Unless it's an older customer there is no excuse for not being informed of a dealers current line up. In the end, the misinformed end up wasting the salespersons time as well as their own.

 

[Merc1]

To some, but not most. Actually it is more than enough for many if not most S-buyers. Many of your S-buyers are not people like us who visit car fan sites and get all juiced over performance. Many people are overwhelmed at all the HP wars, and it doesn't drive their buying decision. Where MB suffers in that regard is with people who buy Infiniti G35s and BMW 335s. 335 is more than enough. At least to introduce an S450 to the US. This would do more to help sales with the S-class than anything else MB could do.

This may be the case now, but a S450 would have just messed up everything when the W221 was introduced. Let me see if I can explain this clearly. The S450 would have just stole sales that would have gone to the S550 anyway, and on top of that it would have dropped some of those same sales too because a lot of buyers would not have seen the point of buying a weak 335hp S450 over a 380hp LS460. In the end the S-Class lineup would have muddled up and and not worth it to some (not all) buyers. I think Mercedes was very smart to only offer the S550. You either bought up from the Lexus or you didn't buy. More profit for everyone and the S550 sold like hotcakes for a good while, at least before this downturn. A downturn I might add that affected Lexus LS sales even more so than the S-Class.

Now, it may be helpful to introduce the S450, but 335hp isn't going to cut it and they know it. When Canada has the same car there has to be a marketing reason why MBUSA won't offer the car here. A S450 would likely cost more or the same as a mildly optioned LS460L and that won't work IMO. The car needs more power and a better reason to be imported other than it is too much of a jump from E to S-Classes.

Most dealers in our region sell about one E550 for every 15 E350s that are sold. It may be more than that. So, the base price from an E to an S is $40k. Plain and simple. The biggest reason a buyer has for going from an E to an S is size, not engine.

How is that, unless you're saying that most E-Class buyers buy base E350s and no one gets a discount on a S-Class?

Most buyers are very savvy today. I can't tell you how many times I've shown an E-class, and the buyer asks, "what do you have between the E and the S-class in terms of size." Sadly nothing.

Or, "what does it cost to go from an E to an S?" And then watch how quickly they rule out MB becaue they can't get the size they want in their budget, because the E is too small and the S too much. It's like gift wrapping a customer for Lexus.

I'm almost tempted to say that this type of buyer is just plain dumb. When has there ever been anything between the E and S as far as size goes. Never.

Again, Lexus pays the price for having a LS so close in price to their mid-size offering, the GS. No one buys the GS. Look at its numbers compared to the E and then look at the S vs the LS. The E clobbers the GS way more than the LS does the S in sales.

I doubt such a person could afford an imaginary 80K S450 either. Mercedes would be stupid to create a car in between the E and S. A SWB S450 is all they're ever going to get.

What has really hurt, is this gap has allowed Lexus to re-train the brains of their consumers. Lexus has done well with the LS. They stole a lot of business from MB during the 90s. They offered a car that was bigger than the E and priced significantly lower than the S. Sadly the economy was sooo good that MB couldn't see that they were losing business. Over those years, the LS has grown, and become more like an S-class in terms of size and content. You can get a $70k LS or a $100k LS. I would have laughed if you had told me that Lexus could get $90k for a car in the US. Yet they are doing it. Why? Because Lexus stole that business, and conditioned that buyer over time to pay more and more, and to look at the Lexus as a equal to MB, not a compromise. This thread is about MARKETING. That my friend, is MARKETING

This is old news my friend, very old. Lexus stole business from everyone, not just Mercedes. Problem is that now the Lexus isn't such a bargain anymore. Sure to the clueless who think they're getting a S550 level of car with a 65K SWB LS460. When you option up a LS460L to match a S550 they value isn't so apparent anymore. A 100K LS is a joke.

I agree Mercedes should offer the S450, but it needs work before they do. A 80K (10K less than the S550) S450 with 335hp will get eaten alive by the LS460 and detract from people who already knew the S550 was the way into the S-Class. Now they'll look at the S450 and probably not buy because of the weak specs. True some buyers would buy a s450, but then the S550 would become irrelevant.

M

 

[tennmb]

Even though it's not a traditional sedan, would the CLS some what fit that role?

So why in the world would they come to a dealership and ask if there is something in between the E and S-class price range?

the reason is they look at the E, and think it is too small for their needs. So, they look at the S and it is too much for their budget. Going from a $55k E350 to a $95k S550 is a dramatic jump.
The CLS has less interior room than the E-class. So, I don't see how that fits the role. The CLS is a niche car, and doesn't fill that void at all. Not too mention the split seating in the rear.

The S450 would have just stole sales that would have gone to the S550 anyway

Bro, that's been over 3 years ago.
I guess my 15 years in the business, 11 with MB, analyzing and studying to know buyer motives and behavior is just off base. I was with MB when the S430 and S500 launched, and we sold both well. Very well. And they launched at the same time.

The GL 450 isn't unpowered and sales prove it. The 450 engine would work well in the states.

How is that, unless you're saying that most E-Class buyers buy base E350s and no one gets a discount on a S-Class?

What?? I am comparing the base price on a E and an S. The base on the 2010 E is $49,600. The s $91,600. That's a difference of $42,000. Most buyers don't buy a base E or a base S.

I'm almost tempted to say that this type of buyer is just plain dumb. When has there ever been anything between the E and S as far as size goes.

Yes, I'm sure that is how they got in a position to buy a Mercedes. And it doesn't matter if you think it is smart or dumb. All that matters is what is? Is size the only factor? No. But it is a big factor. Especially here in the US.

The GS suffers for a number of reasons. The main reason is that the ES is a larger car than the GS for substantially less money. And it fits the type of buyer Lexus is going for. The GS is the most European of the Lexus vehicles, and that is not why people buy Lexus.

Mercedes would be stupid to create a car in between the E and S. A SWB S450 is all they're ever going to get.

That's exactly what I am suggesting. SWB S450.

Why hasn't MBUSA done it? That's what I'm trying to tell you. This thread is about marketing. They have had major marketing failures. they have made some strides in recent years, but are still missing it in many areas.

You guys on the site have to understand something. You are not the average buyer. We have a bunch of car fans here.

 

[Merc1]

The GL450 having 335hp is one thing, a S450 with 335hp is another. GL has nothing to do with a S450. Different cars, different segments. On paper in the real world the S450 would be eaten alive by people who look at spec sheets and count up features, which is why MBUSA doesn't offer the car here.

Just because a person is able to afford a Mercedes doesn't mean they're a knowledgeable about cars or car buying. You've got to be kidding me if you think that having money means they're automatically smart about car buyers. So many people with money are as dumb as the day is long when it comes to cars, you should know this....I'm sure you've have people with money pay sticker price for a Benz in your 15 years. One that they could have easily gotten a better deal on. Rich folks get took like anybody else.

Yeah the ES makes the GS pointless for a lot of Lexus buyers, as does the SWB LS. Again if you look at the sales of the ES, GS and LS you'll see what I'm talking about. There is no point in one buying a GS because of the SWB LS at the top and the ES at the bottom. If Mercedes makes a cas in between the E and S they'll do the same thing to the either the E or the new model will flop.

I agree they could use the S450 now, but it still needs work IMO. 335hp isn't enough for a proposed 80K when everything else has 350-380-400hp for the same or less money. Only a BMW 750 would be more expensive than S450. S450 would be a bad value.

I am comparing the base price on a E and an S. The base on the 2010 E is $49,600. The s $91,600. That's a difference of $42,000. Most buyers don't buy a base E or a base S.

You're telling me that on one gets a discount on a S-Class? If no one buys a base E350 and the S isn't going for sticker anymore then how is the real world difference 42K? It isn't. You're a salesman right? Make the numbers work. I would never tell anyone that it will cost them 42K to move up. It depends on options and what not.


I'm not saying you're off base, but just like you say that we here are car fans and not typical buyers, you're trying to get Mercedes to reshape their whole lineup position to suit U.S. buying habits. There will never be another car between the E and S. A cheaper version of the S would work, a S450, but it needs an update before trying to cut it in today's market. MBUSA knows this. A S450 would only detract from the S550 which makes them more money. Some buyers will look at the S450 and the LS460 and not buy an "S-Class" at all. S550 makes a much more compelling case IMO.

 

[HighestOfHigh]

You got to be kidding me if you think that having money means they're automatically smart about car buyers.

Well I can speak for Mercedes-Benz Sales Associate, but when I was a Sales Associate (of course a much different customer base) the "rich" customers were very intelligent. They may play dumb, but they do (for the most part) have an extensive knowledge on the automobile industry. They may not be fully aware of horse power, torque, engine choices and technical equipment, but they are away of their options.

On the other hand, I guess you still have a few lotto winners coming to Benz with an open nose and no common sense. For the most part, car buyers have been very well educated in car buying tactics.

I just don't know why anyone in their right mind would come to a Benz dealership looking for a car between the S-class and E-class that's cheap. It's just stupid.

Honestly, unless I knew I had a deal with that type of customer I would insult them and tell them to go buy a Lincoln Town Car. It's cheap Big as hell and comfortable. Most people research this if they are "serious" buyers.

Then again people like Paris Hilton buy Mercedes-benz cars...So maybe you do have a point.

 

[Wolfgang]

Going from a $55k E350 to a $95k S550 is a dramatic jump.

How about a 2006 W220 CPO to slot in between them? Over 60 are currently listed, and more than hundred 2007 W221 CPOs.

http://www.mypreownedmercedes.com/

Might also mention "the new frugality".

The new S400 lists for $87,950, less the $1,150 tax rebate and fuel savings, should drop it by 8 to 10K compared to a S550...

http://www.benzblogger.com

 

[tennmb]

Wolfgang,
We've seen one S400 so far at our dealer. That car is the epitome of everything that is wrong with Mercedes today. The brakes alone make the car unfit to drive.

A pre-owned car, no matter how nice is ever a new car. There is no used car factory.

HOH
As you are probably well aware, people operate in price segments. The S430 was a great example of this. There were a lot of people who were willing to pay $75k for a Mercedes S. Once they tapped on the $80k, it was their ceiling. People are just that way. It has nothing to do with buying a Mercedes cheap. Mercedes is supposed to be a high end luxury car. Yet they have a $40 price gap from the E to the S. Between $50k and $90k is the sweet spot for the luxury market. And Mercedes has a gaping hole in the product line. The competition is lapping it up. That is all I'm saying.
We sold the snot out of S430s with 275hp. It was way underpowered at the time, but those buyers liked the size and luxuries of the S.

On paper in the real world the S450 would be eaten alive by people who look at spec sheets and count up features, which is why MBUSA doesn't offer the car here.

Sure. I explained that earlier. You've got your car fans, But how many buyers does that make up?? I have over 700 Mercedes owners personally. I think I've got a pretty decent grip on this.

The GL450 is a good example. A lot of people with an S-class buy the GL. The GL is quite a bit heavier than the S, and that engine pulls the GL remarkably well. In fact the GL450 outperformed the 400hp Escalade in acceleration.

S450 would be a bad value.

I give up on trying to convince you. If you were looking at ONE thing, hp, and that was it, sure. But that is a far cry from what the S buyer considers as a whole. If everybody was a poster on GCF, then maybe. But they aint my friend.

 

[Merc1]

Ok TennMB...I trust your judgement on this. Really I do.

I guess part of me doesn't want to see a S450 kicked around like the S430 was in the magazine comparos.

I admit that these comparos mean nothing to the average buyer in the real world, so ultimately I agree with you that a S450 should be offered, but I guess I just want it to have more hp so it doesn't look like the weak sister of the bunch.


M

 

[tennmb]

You're telling me that on one gets a discount on a S-Class? If no one buys a base E350 and the S isn't going for sticker anymore then how is the real world difference 42K? It isn't. You're a salesman right? Make the numbers work. I would never tell anyone that it will cost them 42K to move up. It depends on options and what not.

???
To move up in size from an E350 to an S550 is going to cost you about $40k.
The average E350 is coming in around $55k. The average S is about $96k.
You can get a discount on any car, not just an E. You think "making the number work" is some shell game, and we can just whip out any figure?

I would never tell anyone that it will cost them 42K to move up.

I would only tell the buyer the truth of what it will cost them. What good what it do to lie to a buyer about what a car cost?

We did sell a lot of S550s when the car launched. It was a smashing success. The flip side of the coin is there were a lot of buyers who swithced brands because the 550 exceeded their price ceiling. Think of it this way. When the 220 launched as a my2000, I believe the base price was just south of $70k. Just 10 years later the 221 base price is $20k higher. sure, I'm way off base here.

 

[HighestOfHigh]

HOH
As you are probably well aware, people operate in price segments. The S430 was a great example of this. There were a lot of people who were willing to pay $75k for a Mercedes S. Once they tapped on the $80k, it was their ceiling. People are just that way. It has nothing to do with buying a Mercedes cheap. Mercedes is supposed to be a high end luxury car. Yet they have a $40 price gap from the E to the S. Between $50k and $90k is the sweet spot for the luxury market. And Mercedes has a gaping hole in the product line. The competition is lapping it up. That is all I'm saying.
We sold the snot out of S430s with 275hp. It was way underpowered at the time, but those buyers liked the size and luxuries of the S.

It probably would be beneficial for them to sell The S450 and/or S300 V6. Especially since S-class sales are not where they need to be. You probably know more about what Mercedes-Benz sales need then we do. Hopefully Benz will make the well needed changes to be successful especially since they keep adding to the price of the S-class. Even on MBUSA...if you add just a few options to a S550 it's almost 100k. So you're right Lexus & Jag fills that void very well.

It will be interesting to see how many Hybrids you all sell. Even thats about $80-87k right?

 

[Merc1]

???
To move up in size from an E350 to an S550 is going to cost you about $40k.
The average E350 is coming in around $55k. The average S is about $96k.
You can get a discount on any car, not just an E. You think "making the number work" is some shell game, and we can just whip out any figure?

Not to go over this again (did you see my previous post?), and not to deride car salespeople, but yeah you all do that sort of thing with numbers all the time. There is an E550 there but I know same size car, bigger engine..doesn't help. I agree with you that the S450 may be needed now, but it needs work IMO. People on MBWorld reporting getting 15K off 2009 S550s.

We did sell a lot of S550s when the car launched. It was a smashing success. The flip side of the coin is there were a lot of buyers who swithced brands because the 550 exceeded their price ceiling. Think of it this way. When the 220 launched as a my2000, I believe the base price was just south of $70k. Just 10 years later the 221 base price is $20k higher. sure, I'm way off base here.

I see what you're saying here, kinda what happened when the W126 was replaced by the W140. The 1992 300SE costs the same or more than the 1991 560SEL. I get that, but what I'm saying is that we'll never know how many of those buyers who switched brands would have bought an S450 either. Some of them would have looked the power/specs and still left since a more powerful and probably better equipped LS460 would have still been cheaper.

Now, again...now I don't see a problem with selling a S450 here, well other than the class-laggard hp number.

Dont you all have district/dealer meetings with MBUSA? Why not scream for the S450 SWB and LWB models? Is Mercedes really loosing that many sales and if so are they really that cluess as to not see it?


M

 

[Yaz]

Forget the S450, how about a 335HP S350? With everyone downsizing and tightening their belts, MBUSA should re-introduce the V6 S again.

Anyway, regarding that commercial where a Mercedes saves a family, the commercial "Faithful" features the Kennedys and their W211 that saved their lives.

I also noticed that the new GLK ad with the emphasis on safety.

 

[Merc1]

Forget the S450, how about a 335HP S350? With everyone downsizing and tightening their belts, MBUSA should re-introduce the V6 S again.

Anyway, regarding that commercial where a Mercedes saves a family, the commercial "Faithful" features the Kennedys and their W211 that saved their lives.

I also noticed that the new GLK ad with the emphasis on safety.

If only Mercedes would get up off their arse and update their V6 engines, yes a 335hp S350 might sound better, thats great power for a V6, but not a V8 IMO. Better yet why not a S350 Bluetec?


M