Who is the target audience? What are their attributes? How do they make buying decisions?

Mercedes-Benz is a well-known brand of luxury cars. Mercedes Benz's usual line of products consists of German engineered and made cars which are known as status symbol of high end consumers. All consumers have their own values and beliefs which influence their car buying decisions. There are several factors responsible for the purchase decision. The car industry continues to grow worldwide. There is a rapid change in trends and consumers preferences for comfortable, reliable, highly efficient and economical cars. Mercedes-Benz must provide consumers with the choices they desire to maintain its brand position in the market and also to grow its market share in the car industry. The company must adapt new hybrid technologies and techniques to build its new Smart Car's brand among "green" consumers.

Today's consumers are well informed and capable of making highly intelligent decisions in selecting a car that meets their needs. They look for the best options available for the best price. They demand not only highly efficient, affordable, reliable cars but also those with comfortable amenities, stylish body styles and high powered engines. Some consumers also consider that the cars should be environment friendly, and these are often referred to as "green" consumers.

Mercedes Benz can segment its markets psychographic where they focus on satisfying this new niche of customers they have not served before. These are cost conscious "green-minded" middle class consumers who may never have considered a Mercedes as an option due to its high cost. The Smart car however is designed to save the consumer money. The Smart car is being priced at $15,000 to $25,000, depending on options and it also designed to save expensive fuel costs through its high mileage rating of between 37 to 50 miles per gallon depending on the final EPA rating (Gartner, 2005). These new customers can now afford the perceived values of high quality and luxury associated with the Mercedes Benz brand.

What should the price be?
The Smart car is being priced at $15,000 to $25,000, depending on options because this is the price range in which buyers are looking for a car that is the cheapest to buy or to operate. At anything past this price range consumers seem to be more concerned with high powered engines and large, and well appointed cars putting "green" thinking last on their list of priorities. Since the focus of the Smart brand is the fuel economy that appeals to cost conscious "green" consumers, the $15,000 to $25,000 range makes the best sense for Smart Cars (Wald, 2005).

Where should the product launch? How?
One option is for the Merced Benz Smart Car to launch in the US through its already established dealerships because this will help the company capitalize on the already well known and well positioned Mercedes Benz brand. Mercedes-Benz can capitalize on its successful premium brand by offering the same technical perfection, quality standards, and innovative impact to this new class of "green" consumers.

Another option would be to have another company launch its vehicle first in the US market. This could prove advantageous because it will enable Mercedes to see how much interest there is without spending any additional funds necessary to launch it themselves. Mercedes-Benz has tried this option before with its Gelaendewagen which was sold in the United States by a third party before the company's version launched (Gartner, 2005).

Mercedes must put a high emphasis on its promotion budget for the Smart Car promotion to correctly position the brand attracting its desired target market. They must use mass communication tools such as advertising in television, billboards and the internet to put their message in front of the correct audience. Mercedes can also sponsor high profile "green" events such as tree plantings held on Earth Day to begin building a relationship with its targeted "green" customers.

Who is the competition? How should the car be positioned relative to the competition?
The Mercedes-Benz Smart Car is facing very strong competition from Japanese brands of hybrid cars specifically the Honda Insight and the Toyota Prius as well as from "Mini" car brands such as the highly popular Mini Cooper. The Honda Insight and the Toyota Prius have the advantage of having been the earliest brands of hybrids to launch in the market and have therefore already built up a following in the market as well as brand loyalty. The Mini Cooper and others such as the Volkswagen Bug are positioned as cars that will turn heads due to their unique styling (Gartner, 2005).

For the Mercedes-Benz Smart Car to position itself successfully in spite of this stiff competition, the brand must leverage its own historic brand positioning as a high quality brand plus combine the positioning of its competition to appeal to both consumers who like distinctive body styling that will turn heads as well as "green" consumers who want to be earth friendly and save money at the same time. This means that the Smart Car must have unique and stylish body design as well as highly reliable hybrid engine that delivers what it promises to its target market and that is uncompromising fuel economy.

These considerations are the bare minimum, but should get you started. This is an individual assignment. The paper is due on the last day of class and should be between 1,250 and 1,500 words.

This is additional content that you can include to round out your paper:

A SWOTT analysis is always necessary before the launch of any new brand. A SWOTT analysis of the Mercedes-Benz Smart Car follows.

SWOT Analysis:

Strengths:

1. Established and trusted brand name.
2. Dynamic strategies for the success in the market such as a well defined and segmented target market.
3. Introduction of low-priced high quality hybrid cars for middle income level consumers.

Weaknesses:

1. Well established competition already exists for the same target market
2. A redesign may be necessary to create a unique mini look for the cars that many consumers now desire.
3. Possible high cost of maintenance and high cost of spare parts.
4. Mercedes Benz must establish the Smart Car's EPA mileage rating at a number comparable to its competition and this may require additional engine design work.

Opportunities:

1. Mercedes Benz has the opportunity to offer consumers a unique combination of head-turning design in a highly fuel efficient, reliable, inexpensive car.

2. Mercedes Benz has the opportunity to establish itself as the leader in the Hybrid cars market by leveraging its competitor's strengths.
3. Mercedes Benz has the opportunity to make certain parts and service for the Smart Car are readily and cheaply available in the US market, giving it a competitive advantage over already established competitors.

Threats:
1. Availability of low cost and more efficient domestic and Japanese cars in the market
2. Stiffening EPA standards for hybrid cars

Marketing Four P's

The marketing four P's are: Product, Place, Promotion and Prize. These variables are also known as marketing mix. They are the variables that marketing managers can control in order to reach and satisfy customers in the target market.

1. Product: The Mercedes Smart Car will be a high quality reliable car with a high mileage rating and unique body design.
2. Place: Mercedes-Benz is a well known brand and it will be available at Mercedes dealerships everywhere in the world in addition to possible partner marketing outlets.
3. Promotion: Mercedes will promote the Smart Car through advertisement, public relations and personal selling.
4. Price: Historically the Mercedes-Benz brand has been an expensive brand of luxury car that was out of range of most middle class consumers, but the Smart Car will be moderately -priced at $15,000 to $25,000, depending on options because this is the price range in which buyers are looking for a car that is the cheapest to buy or to operate. This will place the Smart Car well within the affordability range for middle class consumers.

Conclusion & Recommendations

Mercedes-Benz is a well known and established brand often thought of as a status symbol for high end consumers. Middle class consumers feel affluent when and if they can afford to buy Mercedes' cars. The rise of a new kind of car consumer who cares about price, dependability, a high mileage rating as well as high style has spurred Mercedes Benz to launch the Smart Car. Despite stiff existing competition and some possible redesign challenges to its original offering, Mercedes has the opportunity to establish the Smart Car as the leader in the hybrid category by leveraging the strengths of its own established brand name as well as the strengths of its competitors. Adjusting its marketing strategies to better meet the needs of its target market will ensure the success of eth Smart Car brand as well as the continued success of Mercedes Benz.

References:

Gartner, J. (2005, May). Smart Car seeks small niche. Wired News. Retrieved from: http://www.wired.com/news/autotech/0,2554,67405,00.html

Wald, M.L. (2005, July). Hybrid cars burning gas in the drive for power. New York Times Online. Retrieved from: http://www.nytimes.com/2005/07/17/automobiles/17hybrid.html?ex=1279252800%26en=ae427a90941e848d%26ei=5090%26partner=rssuserland%26emc=rss