Mercedes Benz redefines the luxury label to plot a millennial trail

Once a symbol of societal status, the auto brand is remaking itself in the mould of its new consumers as one that marks brash ambition and youth

From being a brand that has traditionally associated luxury with wealth and framed itself within a class-led social hierarchical system, Mercedes Benz is looking to define itself afresh, for its millennial buyers. With a new campaign Mercedes Benz wants the young to be ‘restless for tomorrow’ or in other words, pull the brand off their wish lists and drop it into the purchase cart.

Santosh Iyer, vice president, sales and marketing at Mercedes Benz India says “One clear insight from the market research was the spirit of restlessness. It’s not about been-there-done-that any more. People are constantly challenging themselves, be it a start-up or an established business. They aren’t averse to risks.” The company’s market research indicated that new buyers are unlikely follow the traditional purchase route that used to be to first buy a mass market model and then upgrade to a luxury brand.

Iyer says that close to 10 per cent of auto buyers are those that are straight away buying a luxury car and have never owned a car before. And, he adds, Mercedes is enticing buyers to own the car they always aspired for, today, instead of an indeterminate future in a yet undefined salary slab.

A greater digital thrust has helped the company understand its customers better. The company said that it had been prioritising digital when devising a communication, sales and retail strategy and has, over the years, increased its digital spend though it is still lower than traditional mass media channels. It has collaborated with Facebook, LinkedIn and other partners to know its buyers and has an integrated CRM platform that gives marketing, sales, commerce, and service, a single, shared view of every customer.

Focusing on the numbers has helped. For instance, the company took cue from the growing share of female buyers in its sales gender mix and by targeting its marketing efforts, managed to double the share of female buyers in its mix. Women made for 16-17 per cent in Mercedes’s total sales in 2019 as compared to the previous year.

How does it intend to get the young to think of the brand as their first buy? With more choice — as many as 10 new models will hit the road this year and ease of access —a hassle-free finance scheme bunched under the “restless package,” assures a fast track loan. Easy instalments and easy credit will bring the young on board, says Iyer. The objective has been to create an integrated offering across finance, marketing and product functions that caters to the new consumers.

“Eventually what matters to shoppers is convenience. Gone are the days, when one will visit the showrooms within the designated hours — 9 am to 8 pm. One gets inquiries even at midnight,” says Iyer.

The German carmaker’s Indian pitch comes at a time when luxury car sales in the country are down. Given the low penetration of luxury vehicles in India, cars priced above Rs 25 lakh account for less than 2 per cent of the overall passenger vehicle market, this has meant the shrivelling of an already thin layer of buyers.

Analysts and auto industry consultants believe that aggression is warranted in such a market, one that is likely to get even more fragile in a post Coronavirus world. “Mercedes has been very consistent in its performance. Under the current market scenario and growing competition from BMW, they need to be more aggressive and reorient themselves,” said Puneet Gupta, associate director at IHS Markit.