Case Study-Mercedes-Benz

Foundations of Management And Organizational Behavior

Introduction

The Mercedes-Benz brand conjures up images of motoring luxury, quality, and performance. Indeed, the brand has been responsible for producing some of the world’s most stylish performance cars. The common values of all Mercedes-Benz cars are superb design and engineering, together with a sense of heritage. The name Emil Jellinek probably won’t ring any bells but his ten-year-old daughter Mercedes will. In 1898 Karl Benz designed a new car for Jellinek to compete in the ‘Nice Race’ that year and on Jellinek’s request, it was named after his daughter, Mercedes. The famous Mercedes-Benz star logo came about after Karl Benz sent his wife a postcard with a star marking out the house where he was living in Deutz, Germany. “One day this star will shine down on my work”, he wrote.
1909 a trademark was taken out on the star, the three points of which have come to symbolize the threefold nature of motor transport — by land, sea, and air. They have also come to represent what the brand stands for service and safety and all over the world, a pioneering spirit and tradition. Case study provided by The Brand Council. The Mercedes-Benz brand conjures up images of motoring luxury, quality, and performance. Indeed, the brand has been responsible for producing some of the world’s most stylish performance cars.

The common values of all Mercedes-Benz cars are superb design and engineering, together with a sense of heritage. The name Emil Jellinek probably won’t ring any bells but his ten-year-old daughter Mercedes will. In 1898 Karl Benz designed a new car for Jellinek to compete in the the‘Nice Race’ that year and on Jellinek’s request, it was named after his daughter, Mercedes. The famous Mercedes-Benz star logo came about after Karl Benz sent his wife a postcard with a star marking out the house where he was living in Deutz, Germany. “One day this star will shine down on my work”, he wrote.1909 a trademark was taken out on the star, the three points of which have come to symbolize the threefold nature of motor transport — by land, sea, and air. They have also come to represent what the brand stands for service and safety and all over the world, a pioneering spirit and tradition.

Racing has always been in the brand’s blood and indeed was responsible for the formation of Mercedes-Benz in the first place. Back in 1924, after winning 269 races between them, Daimler and Benz, up to that point competing companies, opted to cooperate and merged their operations into the present day Mercedes-Benz. Innovation and dramatic styling are also part of the company’s tradition. 1952 saw the introduction of the futuristic, gull-wing doored 300 SL; a dream car from the moment it made its first appearance. With a top speed of over 150 mph, it was the first of the famous SL-Class models. On the race track, the car was a huge success, leading to the creation of the 190SL, a ‘popular’ and more affordable version. The pedigree line has continued to this day with the current generation of SL roadsters that epitomize head-turning elegance as much as sportiness on the road. The line continues with the SLK-Class, unveiled as a ‘concept car’ at the 1994 Turin Motor Show to a rapturous welcome. A new SL-Class was launched in April 2002 in the UK and the SLR will be launched in 2003.The other facets of the Mercedes-Benz personality — safety and technical innovation- — are hugely important to the brand. Mercedes was the first in the world to fit a four-valve diesel engine in a car to offer enhanced performance, smoothness, and extreme longevity. In addition, as early as 1961, the company started to fit anchorage points for seat belts as standard. Mercedes also pioneered ABS braking, the airbag, pre-tensioning devices, and the passenger safety cell. The innovative Mercedes-Benz A-Class heralded a new generation of relatively small vehicles which boast the abilities of larger ones in finding space for people and luggage, but in a pleasingly compact frame. The A-Class has also attracted a younger group of people to the Mercedes-Benz brand, with more relaxed lifestyle values than the traditional Mercedes-Benz owner. The stylish ‘Oh Lord, won’t you buy me a Mercedes-Benz’ TV and the print campaign helped to introduce a new generation of people to the brand, as well as reflecting its aspirational qualities. In addition, Mercedes continues to sponsor carefully selected events that reflect the brand’s values.

Maslow’s Theory of Hierarchy in Mercedes-Benz

Maslow (1943, 1954) stated that people are motivated to achieve certain needs and that some needs take precedence over others. Our most basic need is for physical survival, and this will be the first thing that motivates our behavior. Once that level is fulfilled the next level up is what motivates. Maslow’s hierarchy of needs is a motivational theory in psychology comprising a five-tier model of human needs, often depicted as hierarchical levels within a pyramid.

Needs lower down in the hierarchy must be satisfied before individuals can attend to needs higher up. From the bottom of the hierarchy upwards, the needs are physiological, safety, love and belonging, esteem, and self-actualization.

Summary of Hierarchy of needs-

1.Human beings are motivated by a hierarchy of needs.
2.Needs are organized in a hierarchy of prepotency in which more basic needs must be more or less met (rather than all or none) prior to higher needs.
3.The order of needs is not rigid but instead may be flexible based on external circumstances or individual differences.
4.Most behavior is multi-motivated, that is, simultaneously determined by more than one basic need.

Application of theory in Mercedes-Benz

This particular ad falls into the category of “Esteem Needs” of Maslow’s Hierarchy of Needs. Esteem needs are those needs that relate to our desire to be accomplished and useful like Self-respect, superiority, prestige, status, mastery, independence, dominance, etc. This particular ad is a perfect example as it shows how Mercedes-Benz SLS AMG is not just an ordinary car but is designed like a plane, in fact so much that it’s hard to differentiate between the two. Even the tag line says “You have to file a flight plan before leaving the driveway” which clearly emphasizes that this isn’t merely a car, but a car that’s like an airplane, in terms of its design, speed, and possibly every other thing. This ad perfectly expresses the esteem need because it is trying to tell its consumers that if they buy this car they’ll feel very prestigious. They’ll feel like they have a higher status on the road than others because their car is compared to a plane. Buying this car will make consumers feel superior, dominant and will take their self-esteem to the next level.

The manufacturing process and process strategy

Mercedes-Benz automobiles are mainly manufactured in Sindelfingen, Germany assembly plant. This is where all the important functions like sales record, design and development, pre-product, and production planning worldwide have been integrated at one site. In early 1994, the foundations for the plant and the production system for Mercedes-Benz US International. (MBUSI) were set up and it was not far away from Tuscaloosa, Alabama. The site mainly manufactured the Mercedes-Benz M- Class, GL-class, and R-class SUVs. In 2011 the plant produced more than 148,000 vehicles and employed approximately 2,800 people by year’s end. The production facility in Tuscaloosa, Alabama, involves six production cornerstones of the vehicles’ assembly process. The employees are encouraged to work toward developing improvements and emphasized cleanliness and safety. First of all, the factory has a large office area where all the materials and parts that are ordered from suppliers which are mainly come from North American suppliers and others. The production team will then set a production
date and create a barcode including the VIN and other specifications.

Mercedes-Benz does not stick up a lot of parts. In fact, they adopt the “just-in-time” method and maintain only two to three hours of inventory on the line. Moreover, Mercedes-Benz does not stamp out its own metal body
parts.

Execution:

In the automotive category, a brand’s online platform is increasingly its most important customer experience touchpoint as it plays a central role throughout the consumer purchase funnel. Mercedes Benz needed to upgrade the platform’s performance in order to improve consumer pathways to purchase, test-drive conversion rates, and customer service capabilities. Focusing on our digitally owned assets was the most cost-efficient way to achieve the required sales uplift without increasing advertising/media investments.

All digital channels, including the website, were tagged to measure customer pathways, inbound searches, and website behavior. Inbound visitors who were consuming large amounts of automotive content on other sites were considered a hot prospect and thus the landing pages were focused on conversion. We implemented multiple conversion rate optimization tests in real-time to decrease the bounce rate while increasing the conversion rate and thus the number of test drive bookings Mercedes Benz gets from different channels. The real-time testing was implemented on both the desktop and mobile versions of the website.

Innovation

Space constraints that limit the number of automobiles on display are offset by liberal use of technology to create an immersive, informative customer experience. Sixty displays are carefully distributed in each of the Mercedes Benz stores, 16 of which create a traditional 4x4 video wall that displays videos, vehicle specifications, and other anecdotal information about Mercedes Benz. The two other video walls are mounted on separate walls that join at a 90 -degree angle where dozens of displays are tiled together in a mix of vertical and horizontal orientation, mounted at various depths to create a unique three-dimensional look. These video walls synchronize to create a single piece of art, displaying a mix of artistic photography and animated art, interlaced with Mercedes Benz branding. The remaining displays are wall-mounted horizontally in a casual seating area framed by leather couches.

“Limited square footage required that we think creatively about how to utilize the space as efficiently as possible — and that’s where digital signage offers a huge creative advantage,” said Paul George, President of Gorilla Production Group. “The video walls we installed function not just for the sake of information delivery, but as an artistic focal point to draw in customers and serve as striking backdrops to the cars on display.”BrightSign’sHD223 media players feed content to all 60 displays in each store, including 41 43-inch screens, 15 32-inch screens, and four 65-inch screens.

Bright Sign’s Bright WallTM feature within Bright Author was essential to create and publish content that synchronizes perfectly across all three video walls. “Creating three video walls in a relatively small space required that we space the individual displays just right and that the content displayed perfectly on each screen to create the impact we desired,” said Darryl Kuder, President of Red Dot Digital Media. “Bright Sign’s hardware and software works seamlessly and are essential to perfecting high-visibility projects like our latest collaboration with Mercedes Benz.”

The significance behind the logo-
Where Did the Mercedes-Benz Star Come From?

In 1872, Daimler sent a postcard to his wife. Daimler used a unique three-pointed star to show her the location of his home in Germany, adding that one day that star would rise over the industrial empire he was seeking to build.
In 1909, the halo had already been in use by DMG to market their Mercedes vehicles. Recalling their father’s postcard, Daimler’s sons, Paul and Adolf, adopted the three-pointed star as the trademark logo for their Mercedes vehicles.

Prior to their merger, Benz & Cie had trademarked their own logo which featured a laurel wreath surrounding the manufacturer’s name. Following the merger, Daimler-Benz AG combined the logos for a duotone badge that featured a laurel wreath embedded in the Mercedes-Benz halo, surrounding the three-pointed star. Although it began in blue, the badge changed to its modern silver color in 1934 for the inaugural Grand Prix at Nürburgring.

What Does the Mercedes-Benz Logo Mean?
Daimler is rumored to have said that the star represents DMG’s ambition to lead performance industries in land, sky, and sea. What we know is that the logomark represents a rich history-racing, ambition, and the convergence of powerful industrial innovators. Its distinguished symmetry, monochromatic design, and powerful angles have made the Mercedes-Benz badge instantly recognizable and highly prized. A symbol of reliability, first-class performance, and historical conservatism, the iconic star points to Mercedes-Benz’s past, present, and future!

Competition

The background of the study is research on the competitiveness of car brands BMW and Mercedes Benz in North Cyprus. The researcher’s motivation for the study emerged from the need to help the companies (BMW, Mercedes Benz) in deciding how best the brands can be maintained or improved so as to remain competitive in the market that is dominated by big giants, for example, Toyota, GM (General Motors)and a host of others. Apart from revealing the key factors that affect brand preference, the researcher also sought to investigate the loyalty status of the market to the car industry. More so, the study was carried out against the backdrop of an increasingly shrinking market share, as well as increasing competition from new entrants namely TESLA.

Summary

The report has critically appraised the theoretical frameworks pertaining to operation management by explicating its key components including inventory control, supply chains, capacity planning, and total quality management. Case studies of one manufacturing company i.e. Mercedes and one service-based company i.e. Tesco; have been profoundly investigated to evaluate the impacts of operation management theories and application; on the innovation, competitiveness, and sustainability of these organizations. To conclude, it can be stated that both Mercedes and Tesco are market leaders within their territories and the analytical report suggests that their success lies within their strategic deployment of operational and functional processes.