- The Mercedes A-class was launched in 1997 as a compact car to expand Mercedes' product portfolio and attract younger customers. It targeted professionals and couples with a small family income. - While it faced competition from BMW and Audi in the premium compact segment, its positioning under the Mercedes brand helped establish its luxury credentials. However, it was initially not marketed in the US and Asia due to cultural preferences. - The A-class suffered a major setback when motoring journalists published that it failed a key safety test, but Mercedes redesigned the chassis to address the issues and regain customer trust in the brand.

1. John Paul Mifsud
Mercedes A-class - A consumer Behaviour approach
CCT 5580 Consumer & Organisational Buying Behaviour

2. Introduction
The following analysis will provide an insight on how consumers behave and relate to the
Mercedes A-class. The automobile was developed by Daimler-Benz. in 1997 after the
company decided to launch a small, compact car that would fit within the product
portfolio. Unlike the other Mercedes classes currently on the market, this car strikes the
consumer as being utterly unique in comparison. It was the smallest Mercedes ever
introduced in the market. The A-class was designed to be one of the safest and compact
cars on the road, particularly on the narrow roads of crowded cities in Europe. The A-
class was a response to both the changes in market trends and the consumers’ needs and
wants (Benetton et Al. 1997).
Market Environment & Competitors

3. The Compact Multi Purpose Vehicle (MPV) market can be divided into two major
segments: mainly the Premium market composed of Mercedes A-class, the BMW 1 series
and the Audi A3; and the mass market with a large volume of brands such as Renault
Scenic, Mazda 3, Ford Focus C-Max and others.
The compact MPV market is one of the most saturated markets in the automobile
industry (Colley, 2004). On the other hand only a few brands have ventured in the
premium segment of MPVs. Of all the vehicle segments, the compact MPV registered
the biggest explosion in new car registrations between 2000 and 2007. The increase in
sales by 56,800 during this period had a reversal effect on the market of used cars
(Compact MPVs, 2008). The Premium market of the MPVs is relatively small but has
the potential to grow due to increasing standard of living and expectations of
commodities, the urban lifestyle and limited parking space and the governments’ (EU &
US) policy favouring incentives for low emission cars.
The A-class, the BMW 1 series and the Audi A3 share similar prices with the highest
version falling under the £20,000 (Audi A3 vs BMW 116i vs Mercedes A170, N.D.) The
Mercedes A-class is not targeted to the North American market. On the other hand the
BMW 1series and the Audi A3 have penetrated the market (Benetton et Al. 1997). The
Mercedes A-class is expected to enter the Northern American Market in 2011 (Aziz,
2008). There is a strong competition between BMW 1 series (Marketing Plan – BMW
1-series in Germany, N.D.) and the Audi A3 (Audi A3 review, 2007) since they both
target a similar segment. Their target groups are the educated younger generation which
are sports oriented and wish to purchase a premium ‘affordable’ car. As we shall discuss,
the Mercedes A-class is different from its competitors (The Death of America’s “Big
Car” Culture: GM Gives Up on Hummers, 2008).
Segmentation and Market Segment

4. The A-class was designed to a particular market segment. In order to identify their target
market Daimler-Benz made use of hybrid segmentation approach by creating
psychographic-demographic profiles. The main variables considered were lifestyle,
income, status, class, geography and age. As highlighted in table 1 (Assignment MMG,
2006) the A-class target consumers in the middle class (middle managerial, professional
or administrative jobs and the lower middle class (supervisory or clerical jobs, junior
management). By applying Mc-Cann Erikson lifestyle Model one notices that the
customers within this segment want to be contemporary to win approval. They act as
indicators of social change, but on the other hand they imitate the flow. Using the Target
Group Index classification developed by Geoff Wicken (Assignment MMG, 2006) one
can conclude that this car is targeted to outgoing fun lovers characterized as magazine
and newspaper oriented, love traveling, entertaining people at home, eating out and
above-average viewers of TV.
Unlike most Mercedes Models who are targeted for affluent mature customers, the A-
class is versatile, capping customers ranging from the age of 25 to 45(Assignment MMG,
2006). In fact the first model of the A-class (1997) was also targeting the late baby
boomers cohort desiring a small, practical and compact car that reflects their mentality
(Benetton et Al. 1997). Moreover this car is targeted towards females. The statistics
show that the target segment is composed of 64% females, 30% males and 20% mixed
over 25years. The A-class is an attempt to attract young, but especially female customers
to Mercedes since their customers are mainly men (Assignment MMG, 2006).
The A-Class is specifically designed to capture the market of professionals over 25,
couples with a small family or a two person household. These consumers would normally
have to wait until financial circumstances improve before they would be able to purchase
a 'luxury car'. The A-Class is also positioned as a desirable second car for those who are
already Mercedes owners (Benetton et Al. 1997).
Geographically the car was marketed mainly for the European market. The compactness
of a city car and the energy efficiency of the A-class make it a perfect match for
European urban cities. On the other hand the Asian market seems to favour only the

5. extra-luxury models such as the S-class and CL-class. As stated earlier, the A-class was
not introduced in North America since their market is dominated by local MPVs such as
the Chevy Aveo. Furthermore, the American automobile culture is oriented towards
expensive big cars. Mercedes is perceived to be a super luxurious car. Currently, the
introduction of the A-class in the US market would harm the brand image, although the
market is changing due to increasing oil prices.
Cultural implication-s UK & Thailand
A comparative study was conducted by Anurit et al. (N.D) on how consumers’ perception
of Luxury automobiles differs between the UK and Thailand. They argue that while
Mercedes cars are more expensive than BMW in every segment in both countries, BMW
is more popular in the UK, while Mercedes is traditionally more popular in Thailand.
From an economic point of view, Mercedes should appeal more to a rich country such as
UK and vice-versa.
They argue that the reason behind this discrepancy is due to the symbolic benefits
associated with the brands in both countries. The image of BMW as a prestigious,
individualistic car appeals more to the successful professionals in the U.K. The image
enhanced by Mercedes in Thailand is that the car is very expensive, luxurious and
prestigious. The status symbol associated with Mercedes attracts more the Thai market.
This image is further enhanced by the Thai royal family sitting in the Mercedes
limousine. Purchasing a Mercedes in Thailand is an expression of power, wealth and
status while purchasing a BMW in the UK is an expression of achievement. This value is
attributed more value in the U.K than in Thailand. Metaphorically we can argue that ‘UK
luxury car customers drive the cars’ but ‘Thai luxury car customers let the cars drive
them’ (Anurit et. al, N.D.). Through this study one can understand why the Mercedes A-
class, as an expensive but affordable car, did not find its roots in the Asian market.
Brand Name and Positioning

6. Brand name awareness is a gateway for entry into consumers' consideration set. ‘A well-
known brand name enhances initial reaction, interest, and willingness to consider or try
the product’ (Benetton et al., 1997). To prevent any negative reactions from the public,
Mercedes begun to promote the A-Class a year prior to its launch by stressing that this
car continues to uphold the brand image of Mercedes as a luxury car. Furthermore, in
order to maintain and protect the exclusive image of Mercedes, they limited the A-Class
production to only 200,000(Benetton et al., 1997).
As illustrated in figure 1-3, the car is mainly advertised with other Mercedes models. The
marketing concept behind these adverts is to inform potential customers that the A-class
is not different from the other cars in the Mercedes portfolio, ‘it is the same posy car but
a different segment’. The use of Mercedes’ well-recognized brand name on the A-Class
automatically provides name recognition and facilitates the communication process
(Benetton et Al., 1997). One can therefore claim that the strategy applied by Mercedes
for the A-class is umbrella positioning. If this model was marketed separately, like in the
case of the Smart model, most probably it would have been just one of the many MPV in
the market and possibly fail.
Brand Personality
Brand personality is a set of human characteristics associated with a brand. These
characteristics are important because they form an overall concept of what to expect from
the brand (Brand Personality, 2008). Applying Aaker’s brand personality framework
(Schiffman & Kanuk, 2004), Mercedes fall within two main categories, mainly
competence and sophistication. The luxury attributes associated with the company makes
the brand appear to be upper class and charming. Furthermore attributes such as
reliability, intelligence and successfulness can also be attributed to Mercedes due to its
successful history in producing high-end quality automobiles.
The classical Mercedes, such as the E-class, are perceived as wealthy, stylish, traditional,
masculine and snobbish. The A-class personality differs in some aspects from the others.
The A-class is innovative, unique, feminine, modern, fashionable and less sophisticated
than the classical Mercedes.

7. The assignment of a personality/ celebrity (user imagery) to a brand is a powerful driver
since it makes it easier for the consumer to personify the brand (Brand Personality, 2008).
Mercedes used Celebrity endorsers Christina Aguilera and Giorgio Armani to promote
the brand. Giorgio Armani is associated with fashion and design while Christina
Aguilera with courage, success and perseverance. Christina Aguilera claimed “I’ve
always followed my own star, and I succeeded in finding my own style. That’s my recipe
for success, and it’s also the message of this song and of the new A-Class” (Brand
Personality, 2008).
Needs & Motivations
The choice of purchasing a product-service is triggered by our needs and motivations.
Maslow's Hierarchy model of needs provides a framework into understanding why
people buy and consume certain products (Schiffman & Kanuk, 2004). The purchase of a
Mercedes A-class is triggered by the need to satisfy the social and ego-needs. The
Mercedes A-class is perceived to be a premium MPV for an up-scale market. A
consumer might decide to purchase such a car to satisfy his needs for affection, respect
and sense of belonging to a group. The car could serve as means to integrate the
individual in a particular social group or class (end). It could also serve to boost his/her
ego needs to gain prestige, status, self esteem.
Further to this model one can apply Mc Clelland´s theory of learned needs (Schiffman &
Kanuk, 2004). The purchase of this relatively expensive car can serve as a manifestation
of wealth. Wealth and power are interdependent (Haralombus & Holborn, 2000). The
purchase of this car can be triggered by the need to exercise power and control over
others. It can also be motivated by the desire to manifest success and achievement.
Similar to Maslow’s model, affiliation suggest that behaviour is strongly influenced by
the desire for friendship, acceptance and belonging (Schiffman & Kanuk, 2004).
Consumer Personality

8. Personality has a fundamental role in influencing consumers in the decision making
process. The Freudian Psychographic theory suggests that unconscious needs and drives,
particularly sexual and biological, shape our personality and motivation (Schiffman &
Kanuk, 2004). In this context the need to buy the A-class could be influenced by the
need to receive affection, attention, love and to satisfy the sexual drives. On the other
hand if one applies the traits theory, the A-class appeals to consumers who have a
positive approach to innovation and have a sense of open-mindedness to new products.
Moreover this car applies to consumers with a high sense of uniqueness and who prefer
an environment crammed with novel, complex and unusual experiences (Schiffman &
Kanuk, 2004).
Behaviour & Attitudes
Our decisions are also a product of our attitudes. An individual might have a positive
experience, for example driving his friend’s A-class, which in turn affects his attitude
towards Mercedes and changes his behaviour in purchasing an automobile. Attitudes are
not constant and change over time since they are a result of experiences (Schiffman &
Kanuk, 2004). A car crash might change the attitude towards the brand and one might
decide to exclude Mercedes as an option when buying a car.
Learning Process
The A-class was a new product both for the market and the company. In order to attract
consumers in buying the ‘new’ A-class, the company had to lead the consumers
(audience) in learning about the product. Consumers do not only learn through repeated
trails but also through cognitive learning by developing mental associations. These
associations are retrieved from the long term memory and assist the consumer in the
decision making process (Schiffman & Kanuk, 2004). As illustrated in figure 4 (Swiss
Knife Car, N.D), Mercedes associated the Swiss knife with the A-class. The multi
functions of the Swiss knife represent the versatility of the A-class. The message
conveyed is that the car is not just another MPV but it is a premium lifestyle car for those
who are artistic, sportive and adventurous. For the launch of the new version of the A-
class (2004), a song (Hello) was composed by Christina Aguilera exclusively for the car

9. (Christina Aguilera and Giorgio Armani - Prominent ambassadors of the “Follow your
own star” motto, 2004). This type of promotion enhances mental associations between
the car and artist/ song.
Perceived Price, Quality
In the Automobile industry there is a strong relationship between price and quality.
Usually price is perceived as an indicator of quality (Schiffman & Kanuk, 2004).
Mercedes is perceived as an expensive car with high quality. The traditional Mercedes
customer is not price sensitive (S-class AMG) as illustrated in table 2. One can argue the
typical customers who purchase an A-class are less price sensitive than those purchasing
a mass MPV version, such as the Mazda 3, but are still sensitive to price. The A-class is
targeting a younger market with limited resources. Typically the customer would
rationalize the high cost by justifying that he/she is buying a premium affordable luxury,
i.e. a Mercedes fit to his budget.
Normative Influence and Reference Groups
According to Bournes (as cited in Benetton et al., 1997) Product-Brand Taxonomy, ‘the
purchasing of luxury products that portray highly visible brand names, often reflect a
high level of personal influence, predominantly in the forms of reference groups and
normative influence’. Consumers, particularly those conscious of their self image, rely
heavily upon reference groups.
The purchasing of an automobile is one in which a peer's opinion, often determines what
brand is actually purchased, more so than the attributes of the car itself (Benetton et al.,
1997). As stated earlier, purchasing an A-class might lead to a desired level of social
acceptance among the peers.
The family is also an important reference group in purchasing a car. If the family has a
tradition of buying Mercedes, it will influence the other members to opt for a Mercedes,
especially if they had a positive experience with the car. We tend to trust the family’s
advice. On the other hand, like the Oldsmobile, Mercedes can be perceived as the old
traditional ‘daddy’s car’ and typically the young want to disassociate themselves from

10. their parents image. The A-class might be a successful move into providing a ‘fresh’ and
innovative car, appealing to a younger audience while maintaining the luxury image.
Negative Influencers- Elk test (moose)
Experts are key influencers when it comes to purchasing an automobile since we tend to
trust their judgment. If they rate a car as not worth the money, we tend to conform to
their opinion. While key influencers can influence us positively to buy a product/service,
they can also influence us negatively.
The Mercedes A-Class suffered from a damaged reputation after five Swedish motoring
journalists managed to flip over the Mercedes A-class. This meant that the car failed the
prestigious elk test, also known as the 'moose test'. (Marketing-1_2_assignment, 2009).
The embarrassing publicity was a shock for the prestigious company apart from the fact
that the Swedish market got hostile towards the car. The negative effect was catastrophic
and this widely reported handling shortcoming represented a major crisis for the
company, well-known for its quality and safety standards. The influence these experts
exerted was so huge that the company had to stop all deliveries and redesign the chassis
(Menke-Gluckert, 2008).
Decision making process
Whereas some purchases require little or no effort on the consumer's behalf, for most, the
purchasing of a car requires extensive problem solving (Schiffman & Kanuk, 2004). This
means that the consumer places a significant effort in the purchase making decision. The
purchasing of a Mercedes A-class requires a high involvement decision. The cost
associated in buying a car is an important variable that leads to high involvement decision
but not always. A CEO of a company who wishes to change his old S-class (more costly
than A-class) would probably experience a low involvement since most probably the
company would buy directly the latest version of the S-class without going into extensive
research.

11. The first step in the decision making process is the recognition of a need. The need of
buying of a car is essentially an acquired need. In order to satisfy our needs we set goals.
Goals can be either general goals “I want to buy a car” or specific “I want to buy a
Mercedes A-class” (Schiffman & Kanuk, 2004). The need to purchase an A-class is not
triggered by the functional need for transport but by psychological factors, as discussed
earlier.
At this stage the consumer will search for information to explore the choices. The
information is obtained either internally, retrieved form the long term memory
(experiences) and/or externally from his friends, family, marketers sources and public
information (Schiffman & Kanuk, 2004). His past experiences and the associations
stored in his memory are evoked to guide the consumer. At this stage the reference group
will play a decisive role. In the case of buying an automobile, the search is typically
extensive, especially since it is a high risk decision (social/financial). This is the most
critical stage for marketers. At this point they can evaluate whether their marketing
efforts have been a success or not. If the consumer did not recall the A-class, the
marketing efforts of Mercedes would have been in vain.
A successful information search leaves a buyer with possible alternatives, the evoked set
(Schiffman & Kanuk, 2004). If the consumer decided to opt for a premium compact
MPV, the possible alternatives would be the Mercedes A-class, the BMW 1 series or the
Audi A31. At this point the consumer needs to device a set of criteria (heuristics) to
weigh the proms and cons of each alternative. The consumer needs to question, which
attributes or features of the car would satisfy my desires and needs? What are my
priorities? Once the criterion is set, these attributes are ranked according to their
importance. If the individual values more safety, quality, reliability and prestige he/she
would be inclined to buy the Mercedes A-class, while if the individual gives more weight
to the design, performance, efficiency and sportive look his/her decision would fall for
either the BMW 1 Series or the Audi A3. The decision is taken on the basis of which
alternatives scores the highest. Furthermore, the individual is involved in a series of other
1
For the purpose of this evaluation and from the limited research carried out I am assuming that only
premium compact MPVs in the market are the Mercedes A-class, BMW 1series and Audi A3.

12. decisions such as choosing the make or country of origin, the dealer and the financing
options (Schiffman & Kanuk, 2004).
After following this process, the consumer is prepared to make the purchase, in this case,
buying the A-class. Now that the consumer has affected the purchase he/she can evaluate
the product performance in light of his/her expectations (post purchase evaluation). The
A-class might match his expectations (neutral) or exceed his expectations. If the
performance exceeds the expectations, the consumer would feel satisfied with the
purchase. On the other hand, the product might not satisfy his expectations. In such case
the consumer would be dissatisfied with the purchase and may possibly experience a post
purchase dissonance (Schiffman & Kanuk, 2004). The consumer might, for example,
feel ‘guilty’ of spending so much money on such a small car. The extent to which the
process is followed will also determine the extent of the post-purchase dissonance.
References
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Harper Collins.
Schiffman, L.G., & Kanuk, L.L. (2004). Consumer Behavoir. New Jersey: Pearson
Prentice Hall.
Websites

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Exhibits
Table1 Table 2

15. PRODUCT PRICE (£)
AMG
From To version
A-class 13.025 19.890
C-class 19.995 29.200 43.790
E-class 24.940 41.840 60.640
SEDAN S-class 44.410 87.580 85.890
C-class 20.945 31.650 44.740
BREAK E-class 25.840 40.840 56.940
SLK 25.080 31.350 44.460
CLK cab 29.940 44.190
ROADSTER SL-class 54.641 67.790 89.040
CoupeSport 18.795 22.105
CLK 27.240 43.040 57.040
COUPE CL 66.440 81.940 84.140
G-class 35.487 54.444
4WD M-class 29.395 41.990 51.690
Vaneo 14.680 18.680
VAN V-class 23.880 27.915

16. Source: Assignment MMG, (2006) Source: Assignment MMG, (2006)
Figure 1 Figure 2

17. Source: Ads, (N.D.) Source: Ads, (N.D.)
Figure 3 Figure 4
Source: Ads, (N.D.) Source: Swiss Knife Car, (N.D.)