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Situational Analysis of Mercedes Benz

Question:

Discuss about the Consumer Behavior.

Consumer Behavior refers to the study of people, groups, or associations and all the actions connected with the buy, utilization, and distribution of products and services by including consumer feelings, psychological factor, behavioral reactions that follow these activities (De Mooij, 2010). This report describes the marketing consumer behavior on product Mercedes Benz E250. Mercedes Benz is a globally car manufacturer and also a department of German company known as Daimler AG. The brand is well-known for its vehicles such as luxury cars, transports, coaches and lorries.The report explains the situational analysis of the company, market description, and target market decision making the procedure of company. The report also explains the various impacts on buying behavior such as social, psychological, and personal. The main objective of this report is to understand why, when, how and other factors influence buying decision of the consumers.

According to Ott (2013), Mercedes Benz is a currently a producer of various kinds of automotive vehicles, such as transports, lorries, and coaches. Presently, the organization has turned into a department under its parent company known as Daimler AG Group of companies. The company has portraying various innovations progress and security advancements that have become famous in the automotive industry. Mercedes Benz is one of the world's most automotive brands that are still in presence today. Mercedes Benz has made numerous concepts of cars with alternative drive, such as hybrid electric, fully electric, and energy unit power trains. The company has presented the three Bluezero concepts at the North American International Auto show in 2009. Every car feature has a distinct power train that is battery electric, energy component electric and gasoline-electric hybrid (Wu, 2012). The company is also maintained goodwill which is known for its quality and stability. The company main focus is to build the most secure, most comfortable and most effective vehicles in the world for their customers and to produce them in top quality in the overall assembling plants. Company adapts the plan and features of their vehicles as required to particular customer demands in various markets. At the same time, company continues to conducting research that supports the claim to leadership in the automotive industry with new developments. According to Worner et al. (2013), Mercedes Benz contributes in the advancement of alternative drive frameworks such as electric vehicles or plug-in hybrid innovation. Also, company is advancing the exploration into autonomous driving cars significantly. The base 2016 Mercedes Benz E250 Blue TEC sedan brought out with a turbodiesel 2.1 liter, four-cylinder engine that produce 195 horsepower. The E250's EPA-evaluated 28/42 mpg city/expressway mileage rating is superior to the fuel economy ratings of most other upscale average size autos, including other diesel models. While the 2016, Mercedes Benz E-Class may not be the sportiest decision in the class, critics say it compensates for that with a remarkably smooth ride, powerful engines and created handling.

Market Description

According to Chen et al. (2013), a target market defines the customers or groups which are most likely to buy a specific product or service. The conventional target market of company includes rich class consumers who are above the age of 40 and who want a car with the purpose of lavish services and a high-class feel. Fundamentally, every expensive mid and full sized car such as Sedan, wagon, cabriolet on the market is an effective target. The reason is that E-class consist more models in its lineup than ever before and can be had with back drive or wheel-drive,as a two-door coupe, convertible, station wagon or four-door sedan, with customer decision of two V-6 engines, a V-8 and, and a four-cylinder turbo diesel. The target customers of Mercedes Benz E250 are mostly rich. The target market for the Mercedes Benz E250 consists the middle-aged individual with higher incomes or upper rich class businessmen who need cars as a status symbol. The company does not manufacture low price vehicles because the company focuses on upper class customers. Mercedes Benz E250 also targets males and females both as they manufacture cars to fit both male and female specifications (Sierzchula et al., 2012). In 2016, Mercedes-Benz brand sold a record of 2.2 million cars, up 10 percent over the earlier year. China is the greatest market with 22 percent of unit deals, trailed by the United States that is16 percent and in Germany 14 percent.

According to Darley et al. (2010), the consumer decision process is consisting of five phases to examine how customers create their purchasing decision. The purchasing of a Mercedes Benz E250 needs a high engagement decision. The price connected with the in purchasing a car is a significant variable that leads to high engagement choice but not always. The target market decision-making process for Mercedes Benz E250 includes various phases which are explained below (Xu et al., 2011):

Need recognition: The first stage in the consumer decision process is the identification of a need. The requirement of purchasing of a car is basically an obtained requirement. In order to fulfill customer needs, the company set objectives. Objectives can be either broad objectives that are "I need to purchase a car" or particular "I need to purchase a Mercedes E-class". The requirement to buy an E-Class is not activated by the functional requirement for transport but by psychological factors.

Target Market Decision Making Process

Search process: In the next phase, the customer will look for information to investigate the decisions. The data is acquired either by inside, such as retrieved form the long-term memory and or outside from his friends, family, advertisers sources and the public information. At this phase, the reference group will assume a decisive role. In this phase, an organization can assess whether their marketing endeavors have been a success or not.

Evaluation of Alternatives: A successful data investigation leaves a purchaser with the possible choices. If the customer chooses to pick for a premium compact multipurpose vehicle, the possible choices would be the Mercedes   E-class, such as a sedan or the wagon. At this phase, the customer needs to device an arrangement of criteria to measure the merits and demerits of each option.

Selection phase: Once the criteria are set, these attributes are positioned by their significance. If the customer values more security, quality, dependability, and distinction, he or she would be inclined to purchase the Mercedes E-class, on the other hand, if the customer gives more value to the design, performance, productivity and sportive look his or her choice would fall for either the Sedan or Wagon. The choice is taken on the basis of which choices scores the highest.  Evaluation of Decision: In the last phase, the customer is prepared to make the buy, for this case, purchasing the E-class. Since the customer has influenced the buy, he or she can assess the product execution in light of his or her expectation (Tzeng & Huang, 2011). The Mercedes Benz E-class may match his expectations or exceed his expectations. If the product exceeds the expectations, the consumer would feel satisfied with the buy.

According to Moshrefjavadi et al. (2012), social factors refers to the elements that are pervasive in the society where a customer lives in. The society is made out of a few people that have distinctive inclinations and practices. These varied behaviors affect the personal preferences of the other set of people as they have a tendency to execute those activities which are satisfactory to the society. The two main important social factors which influence the behavior of a consumer in one or other way (Soroa-Koury &Yang, 2010):


Family: The family members assume a critical role in creating one’s preferences and behavior. It provides a situation where in the consumer engages, create an identity and obtain values. The family can affect the purchasing behavior of a consumer in the following ways:

Factors Impacting Buying Behavior

Affects the consumer identity, attitude, convictions, and features

Influence the target market decision process in regarding to the purchase of particular goods and services.

On the other hand, a spouse and kids also has a big impact on the consumer’s purchase. Communication among spouses and kids assume an important strong role in buying behaviors. This family affects how the customer looks at buys more specifically than most other social impacts on customer buy.

Reference group: Reference group refers to those groups that customer will see to help in making a buying decision. Reference group is the groups that purchaser contrast themselves to or connect with. Reference groups are same to opinion leaders in that they can impact purchaser behavior. An opinion leader is a person inside a reference group who applies the effect on others as a result of unique abilities, knowledge, and identity. Thus, all the above social factors can influence the consumer buying behavior.

According to Oliver (2014), psychological factors may be defined as those factors that speak about the psychology of a person that drive his activities in order to seek the benefits. The two important psychological factors which affect the buying behavior of a consumer is explained as follows:

Motivation: The level of encouragement affects the purchasing decision of the customers. It is well-defined by Maslow through his need hierarchy theory containing fundamental requirements, security needs, social needs, and self-actualization needs. The more essential the need, the more prominent the need it expects in driving customers to satisfy it. If the company convince customers that the product or services cater one of their motivating drives, or can convince to purchase what the organization is selling. Marketing can help the organization to connect a product with need satisfaction.

Attitudes and Beliefs: The people have certain convictions and states of mind towards products on which their buy choices rest. These dispositions and convictions are the tendency to react to a given product in a specific way, and these make up the brand picture that affects the customer purchasing behavior (Huijts et al., 2012). Thus, the marketers of Mercedes Benz E250 try to understand the attitudes and convictions of the people and change these through various marketing efforts.

According to Gifford & Nilsson, (2014), the personal factors are the individual variables to the customer that powerfully affect their purchasing behaviors. These variables shift from individual to individual that outcome in a distinct set of observations, attitudes, and behavior towards specific goods and services. The important personal factors which influence on consumer purchasing behavior is as follows:

Social Factors

Age: The customer purchasing behavior is mostly influenced by his age that is life cycle phases in which individual falls. The individual purchases distinctive products in various stages of the life cycle. 

Lifestyle: The customer purchasing behavior is affected by individual lifestyle. The lifestyle implies individual’s interest, qualities, assessments, and the activities that imitate the way in which individual lives in the society (Van Doorn et al., 2010). For example, if the individual is living in a luxurious lifestyle, then he will maintain a Mercedes Benz E-class as to maintain the status symbol.

According to Benlian et al. (2012), the major recommendation that can be implementing by the company is discussed as follows:

Concern about environmental issues: The Company should worry about the environmental problems which can be occurring in the car designing. This is because consumers are becoming more demanding and consequently, any new concepts that are able to deliver the benefits to the environment will be favored.

Fuel efficiency: The organizations should also contribute to join the concept of fuel efficiency into its plan. As the oil and petrol prices are depend on the ride on an increasing pattern, it is management fundamentally for the organization to understand such issues and take appropriate protective actions in order to avoid the current market share being seized by other competitors. 


Strategic alliances with other manufacturers: The organization can choose to make the strategic alliances with other car manufacturers. Due to the extreme competition, company should consolidate those forces which can compete effectively and viably in global market place. In order to enter to the developing business sector, it is also important for companies to make associations with the local parties from the developing nations, as these local parties generally have more knowledge on the local market.

Creating new brand: The administration must also focus on creating a new brand in order to meet with the middle-level groups. This step can be accomplished by framing key accomplices with a part of the smaller scale manufacturers in the Asia Pacific areas.

Various organizations are enduring because of not having the necessary technology edge to competitive with other big vehicles manufacturers Therefore, Mercedes Benz can get this chance in order to connect with these partners and gives innovative support in return for a share in these companies revenue.

Conclusion

From this report, it has been concluded that Automobile market is rapidly in the sneak of surging as a major car producer, individual is buying a car as there is a rise in income of ordinary people as well as a change in tastes and preferences. It is important for the car producers and car dealers to be capable in order to understand the various factors influencing the degree of car buying behavior. The report explains the social, psychological and personal factor which has an impact on the consumer buying behavior. Car manufacturers must keep in kind all these factors while designing their product. The report also recommends some measures which help the organization to adjust the changes in the market and to capitalize on the trend of globalization and information technology in the next decades.

References

Benlian, A., Titah, R., & Hess, T. (2012). Differential effects of provider recommendations and consumer reviews in e-commerce transactions: An experimental study. Journal of Management Information Systems, 29(1), 237-272.

Chen, J., Nguyen, B., & Klaus, P. (2013). Public affairs in China: exploring the role of brand fairness perceptions in the case of Mercedes?Benz. Journal of Public Affairs, 13(4), 403-414.

Darley, W. K., Blankson, C., & Luethge, D. J. (2010). Toward an integrated framework for online consumer behavior and decision making process: A review. Psychology & marketing, 27(2), 94-116.

De Mooij, M. (2010). Consumer behavior and culture: Consequences for global marketing and advertising. Sage.

Gifford, R., & Nilsson, A. (2014). Personal and social factors that influence pro?environmental concern and behaviour: A review. International Journal of Psychology, 49(3), 141-157.

Huijts, N. M., Molin, E. J., & Steg, L. (2012). Psychological factors influencing sustainable energy technology acceptance: A review-based comprehensive framework. Renewable and Sustainable Energy Reviews, 16(1), 525-531.

Moshrefjavadi, M. H., Dolatabadi, H. R., Nourbakhsh, M., Poursaeedi, A., & Asadollahi, A. (2012). An analysis of factors affecting on online shopping behavior of consumers. International Journal of Marketing Studies, 4(5), 81.

Oliver, R. L. (2014). Satisfaction: A behavioral perspective on the consumer. Routledge..

Ott, D. (2013). Automatic requirement categorization of large natural language specifications at Mercedes-Benz for review improvements. In International Working Conference on Requirements Engineering: Foundation for Software Quality(pp. 50-64). Springer, Berlin, Heidelberg.

Sierzchula, W., Bakker, S., Maat, K., & Van Wee, B. (2012). Technological diversity of emerging eco-innovations: a case study of the automobile industry. Journal of Cleaner Production, 37, 211-220.

Soroa-Koury, S. and Yang, K.C. (2010). Factors affecting consumers’ responses to mobile advertising from a social norm theoretical perspective. Telematics and informatics, 27(1), pp.103-113.

Tzeng, G. H., & Huang, J. J. (2011). Multiple attribute decision making: methods and applications. CRC press.

Van Doorn, J., Lemon, K. N., Mittal, V., Nass, S., Pick, D., Pirner, P., & Verhoef, P. C. (2010). Customer engagement behavior: Theoretical foundations and research directions. Journal of service research, 13(3), 253-266.

Worner, R., Damm, A., Eberspacher, R. and Gitt, C. (2013). Front-Transverse Transmissions from Mercedes-Benz. Auto Tech Review, 2(5), pp.44-49.

Wu, B. (2012). Manufacturing systems design and analysis. Springer Science & Business Media.

Xu, H., Luo, X. R., Carroll, J. M., & Rosson, M. B. (2011). The personalization privacy paradox: An exploratory study of decision making process for location-aware marketing. Decision support systems, 51(1), 42-52

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