Mercedes-Benz Malaysia

Long and rich heritage holder company The Mercedes Benz has been incorportated with
Mercedes Benz Malaysia Sdn Bhd, a joint venture betwwen Daimler AG and Cycle and
Carriage bintang berhad on 1st January 2003.
Currently Mercedes-Benz Malaysia employs over 230 employees with its administrative and
sales office located at Menara TM in Kuala Lumpur and the production plant is located at
Pekan, Pahang. Mercedes-Benz Malaysia manages the wholesale distribution of MercedesBenz, smart and Mitsubishi Fuso vehicles, service and spare parts as well as software
development for global sales solutions and automotive apprentice training.
The retail network of Mercedes-Benz Malaysia is represented by 59 authorized dealers for
the Mercedes-Benz, smart and Mitsubishi Fuso brands. A total of 90 outlets provides sales
and after sales services nationwide. The emphasis placed on network development is a global
initiative by Daimler AG in line with its brand philosophy to create a uniform worldwide
brand that provides Mercedes-Benz customers with superb quality services.
With a total investment of RM120 million in Pekan Pahang and collaborative effort with
DRB-Hicom Berhad has been resulted in the local assembly of some of the world's most
coveted passenger cars namely the Mercedes-Benz S-Class, E-Class and C-Class as well as
the Mercedes-Benz and Mitsubishi Fuso commercial vehicles.
Mercedes Benz Malaysia is also providing Training support Centre which is known as
Apprentice Training Center (ATC) located at Glenmarie, Shah Alam, aims to develop a pool
of well-trained, technically skilled mechanics in order to support the Mercedes-Benz network
in Malaysia.
The training facilities is equipped with state-of-the-art training aids and graphic services.
BMW Group Malaysia
BMW Group Malaysia Unveils the New Locally Assembled BMW X1 and BMW X4 and
Announces Customised EEV Status Incentives for the BMW 3 Series Gran Turismo, BMW
X3 and BMW 5 Series.
Premium automaker introduces two new models to be locally-assembled in the country and
revises retail prices lower by up to 9% for the BMW 3 Series GT, BMW X3 and BMW 5
Series.
Customer perceived value:
Customer perceived value is a marketing concept which shows the success of a product based
on the belief that customer has and which will satisfy their needs. When company try to
deliver the product message to the final user then customer is the only one who will decide
how to react to the exact message.

Ulaga(2000) informed that based on what is received and what is given, customer perceived
value is an overall evaluation. Sheth (1991) also informed that customer perceived value
actually explain why customer buy or why they dont purchase specific product.
In this study, I am comparing the customer perceived value between Mercedes Benz and
BMW and propose new value proposition.
To identify the customer perceived value of Mercedes Benz I am comparing shelth key
dimensional theories which comprises with five variables such as
1.
2.
3.
4.
5.

Functional
Social
Emotional
Epistemic
Conditional Values

Customer perceived value Of Mercedes Benz:

In the society where we are living now, the luxury life is actually measured by the object. The
frequent use of car actually represent how the luxury you are having. Mercedes Benz cars are
actually much more expensive compared to BMW. There are some research which has
shown that country stereotypes is also the reason or it has the impact on evaluations of
product or purchase decision. Below there are some evaluations of Mercedes Benz based on
Malaysia context.

Functional Values:
Customer satisfaction and loyalty are interrelated with positive functional values. When
customer buy a car esp. luxurious car then functional value is the most important factors that
customers actually taken in to consideration. In this study the functional value of Mercedes
Benz are in terms of economy, engine (capacity, size, KW, horse power), performance,
security and safety aspect with comfort ability
Mercedes Benz car actually offer higher prices regarding to most powerful engine (more
horse power and torque) which lead to better performance. Malaysian customer normally
pursues symbolic sense as a prestige and status. Roads in Malaysia are much more congested
and its accounted as one of the most crowded cities in the world.
At this point BMW and Mercedes Benz functional benefits (reliability, durability, quality,
security) are equal.
Social:
User imagery and usage imagery both are largely related to the social status and class. All
individual normally share, transmitting the objects in a social way so that they can be
represented based on their status or social class. In Malaysia the advertisement of Mercedes
Benz they always promote Mercedes as a very expensive, luxury and most prestigious car

which has reputation for reliability, dependability in terms of ease of maintenance and
repairing.
Cognitive elaboration mechanism is something which is actually used by customer for some
information and general level of interest of the product under certain consideration. This
thing leads to one conclusion that how much successful one person is in the society and their
status having in the society.
There is a small portion of Malaysian customers who are really fascinated to BMW regarding
their sportiness in performance, handling, and outlook despite the traffic congestion
indicating a role for attitudes toward brand image.
Emotional Values
Customers now have more opportunities to achieve functional and economical benefits
regarding performance and handling the both luxury car. In Malaysia customers who are
using Mercedes Benz they actually gain this sort of benefits. People have their mind set that
foreign production car especially from German are much faster in reliability, speed and
values. Malaysian customers have higher purchasing power and opportunities. In Malaysia
people who are buying this sort of luxury car they actually let the car drive them with more
emotional values and social values.

Conditional values:
This value is the most important value perceived by the customer normally when they
determined to purchase the car. It has positive influence on customer satisfaction and
customer loyalty. Both this things plays an important role in organization success.
When the company has loyal customer they actually maximize their profits. These are the
characters of the loyal customers:

Frequently purchase
If the company produces new products or technology loyal customer actually tries
those things.
Word of mouth
Give companies suggestion regarding products and service.

Conditional values for both these luxury cars are high. The reason behind this high value is
that once the customer determined which brand he wants to buy, they actually dont go for
any other brand. While purchasing the car they already have the sufficient information which
leads them to satisfaction and brand loyalty associated with the product.

Epistemic Value:
This value is actually related to curiosity or desire for more knowledge that a customer has.
When customer receives benefits from this value that means products has already satisfied
the curious mind of customer. When customer wants to buy Mercedes benz they actually have
all the information from the secondary sources and which lead them higher gainer in

knowledge related to the luxury car. Those sorts of customers are highly sophisticated and
they are highly knowledgeable regarding luxury car.

Value proposition:
When customer actually looks for the information about specific product or service they
normally read the specifications of that product. Value proposition is a statement that actually
shows how your product or service will provide the benefit to the end user or customer. It
shows what you should do for your potential customer and why your product or service is
better than your competitors. Value proposition is something that actually holds the customer
attention in maximum 10-30 seconds.
Its a clear statement that defines:
1. How your product or service is going to solve customers problem.
2. How you are going to deliver the specific benefits to the end user/
3. Tells why customer should buy from you and what they will achieve in terms of product or
service.

Value proposition for Mercedes Benz:

Target Market:
Geographic: city and urban areas. The target market for Mercedes benz car is metros and
class cities and urban areas.
Demographic:
The demographic of the target market is above 25 years old and its only after this age when
people can afford a Mercedes car.
Income:
Target people with very high income.
Occupation:
Business man, industrialist, and corporate senior executives.

Psychographic:
According to VALS model, innovators and achievers are the target market for Mercedes
Benz.

Behavioural:
For Mercedes Benz target markets are the elite class who seeks luxury, style and class.
Every company must provide accurate product line up to meet their target markets. Mercedes
Benz has found its essential to expand their product line up with more competitive price,
advertisement with proper target market.

Key benefit:
1.
2.
3.
4.
5.
6.
7.

High price segment

Safety and comfort
Astonishing refine handling
Sustainability mobility
Contemporary styling
Exclusive quality
Performances.

Basis of review:
Product:
Blue efficiency is the Mercedes Benz new feature. This technology actually reduces energy
consumption by higher percentage of combustion of the fuel and as a result emission of
carbon di oxide will be reduced.
This technology improves the engine performances. Along with this benefit other features are
higher resale value, SUV bumper, well and sophisticated interior and braking system which
actually secure the customer safety.

Price:
The target markets of the Mercedes Benz are actually high income people who are
sophisticated and well educated. For them social status, class, safety and durability is much
more important than price. So Mercedes Benz provide the value the customer deserved based
on the money they are spending on car.
Place:
Company must have the strong promotional activities if they want to secure their position in
the market. If any company has succeed to deliver the exact communication about their
features and availability at different location then the company can achieved greater success.
For Mercedes Benz products are available through direct sale at showroom.
Promotion:
Mercedes Benz do not believe in high cost of advertisement as it only cares to caters to
premium segment of the customer and the brand has also created a strong position in
customer mind.

Value Map of Mercedes Benz and BMW:

Company: Mercedes Benz

Company: BMW

Value proposition of BMW:

Target Market:
BMW looks at the geographic, demographic, and behavioural and a socio economic
characteristic of the society and that helps them to identify the target market.
Geographic: for BMW their main markets are in Europe which is 65%.

Recently in Malaysia premium automaker introduces two new models to be locallyassembled in the country and revises retail prices lower by up to 9% for the BMW
3 Series GT, BMW X3 and BMW 5 Series.

Demographic:
People, who are able to buy BMW, are actually men and women actually aged 30-50 years
old.
Behaviourally:
Before buying luxurious car like BMW, successful image has already been created to
customer mind.
Income:
BMW target people with very high income.
Occupation:
Business man, industrialist and corporate senior executives.

Psychographic:
According to VALs model, visionaries and achievers are the target market for BMW.

Key benefit:
1.
2.
3.
4.
5.
6.
7.
8.
9.

High price segment

Dynamic
Sporting
Sheer driving pleasure
Superior design
Exclusive quality
Performance
Brand loyalty
Advanced technologies

Basis of review:
10. Luxury segment
11. High quality products
12. Excellent brand pull
13. Good service
Price:
BMW deals with niche segments and they are very much pricing sensitive regarding
products. The customer look at the value of money they are getting such as

Premium pricing
Feelings related with pricing
High cost of brand image.

Place:
Lean distribution model and dealers. Showrooms get good margin. There are very provisions
for spare parts.
Promotion:
In 2012 Forbes announced that BMW ranked as the worlds most reputable company and
BMW is trying to maintain their main key promotional features;

Strong brand pull due to excellent marketing over the decades

Promotional strategies based on pull strategy
Top of the mind positioning in automobile sector.

Value Map:

Price analysis is important when all the beneficial costs are monetized and buyers are
economically balanced.

While making pricing firms normally put more emphasize on product benefits and the
economic value of that benefit is more implicit. Buyers make the final decision before
purchasing the car and they think about some other features. Their final decisions arise from
both economical and non-economic factors.
Pricing decision is the standardize way to match between delivered benefits and product price
in competitive market.

The more benefits that product actually perceives to deliver, the further it actually appears on
the value map.
Suppose:
Product C delivers more benefits than product B and product B delivers the same level of
benefit as product A(B1)
Similarly, higher prices appear higher on the map. For example price of product C is higher
priced than product A (P2>P1)

Even in this simple theoretical diagram, some logical inferences can be drawn with respect to
the value delivered by the products. Product A delivers more value than product B (same
benefits at a lower price).
Similarly, product C delivers more value than product B (more benefits at the same price). In
other words, Product B is in an unequivocally disadvantaged value position.

100%
90%
80%
70%
60%
Series 3

50%

Series 2

40%

Series 1

30%
20%
10%
0%
Category 1

Category 2

Category 3

Category 4

Perceived value
BMW
Mercedes Benz

Price

Plan to implement value proposition both internally and externally:

If any companies try to improve their three benefits such as functional, emotional and
conditional values then they will gain higher customer satisfaction and higher customer
loyalty. As a result they will be able to create strong value proposition both internally and
externally.
Automobiles like Mercedes Benz should put more emphasize on some functional benefits
such as engine reliability, fuel consumption design along with strong positive brand.
Mercedes Benz will gain benefit if they create two types of technological information with
their customers. They should put more technological information to the experienced customer
and while communicating with the inexperienced customer they should simply focus on
strong brand position and corporate social responsibility.

Mercedes Benz should identify those inexperienced customer because they are much more
risk avoidant and they are much more sensitive about to take risk. Management should aware
of it and they need to take proper step or adjustment based on the sales strategy.
Mercedes Benz and BMW are two names that come to mind when customer think of buying
luxury car. Both the companies has strongly and strategically positioned their product so that
it makes the customer to think about easily of their product. Mercedes Benz should put more
emphasize developing a product that would be suited to todays fashion and trend, match
with the major customers are in age group 30-50 years, with low running cost and highly ecoefficient.
Mercedes Benz should focus on expanding their reach to customer in different markets. It has
been seen in the study that many customers are not aware of various facilities provided by
them. They should try to educate their customer regarding various services provided by them.
To create superior value proposition Mercedes should come up with better engine as people
prefer BMW for its engine over Mercedes Benz.

Conclusion:

When consumer purchases luxuries products such as cars, they continuously look for quality
first. Perceived quality has positive influence on purchase decision. When consumer buys
high quality product such as car at that time they think of their car as more than
transportation.

While purchasing luxuries car customer actually look for greater customer with low risk
associated. Before purchasing the car customer think whether the car is worth to buy or not. It
is essential for the automobile companies to think that they should dedicate the budget and
resource to improve the quality of car. With regard to technology luxury automobile
companies such BMW and Mercedes Benz should invest more on advanced technology for
engines such as hybrid engines.
In terms of money, personality, customer life styles and status are also correlated with
purchasing the car. While driving the car on road customer prefers to have higher status,
unique personalities with better lifestyles. For example, high income customer goes to
showroom and the sales executive at that showroom normally greet their customers, serve
them with drinks and provide the adequate information about the specific cars. Other than
that the sales executive also provides them the other technical knowledge. Based on the car
model they actually offer cars rebate and others services (based on free milestone).
When customer receives this sort of treat from the showroom or sales executive, they believe
that the value the company is providing is way beyond their expectations. As a result
customer is willing to take risk to purchase that specific car.
Therefore, they face uncertainty if they purchase the unsuitable car that result in poor
performance, embarrassment, poor self-image and unsafely, which cause them lost in
financial risk, physical risk, social risk and performance risk. So, customers will tend to
purchase cars that value for money.