The ad featured Janis Joplin’s iconic wail in “Mercedes Benz,” and an appearance by Sean "Diddy" Combs who was roused from his slumbers by his runaway silver Benz, which joined a fleet of other "runaway" Benz cars. Mercedes sought the opinions of Blanche Barco, MBA ’11, and Manu Sharma, Weizhong Ji, Esra Unluaslan and Axel Thibon, all MBA ’12, because the group spent most of last semester working on a MarketLab project for Mercedes-Benz Certified Pre-Owned (CPO) sales. The team’s hard work paid off, as it won first place at the Fall 2010 Yahoo MarketLab Awards.
MarketLab is a popular action-learning initiative of the Marketing Club where students get the chance to work on real-life marketing projects for companies ranging from Mercedes-Benz and Microsoft to startups and non-profits such as Vishwa Robotics and SugarLabs. MarketLab is mainly a student-run initiative at MIT Sloan, with Professor Sharmila Chatterjee as faculty designate. The projects kick off at the beginning of each semester when companies offer assignment descriptions to which students can apply. Students are then assigned to teams that best match their interests and the diversity of the professional backgrounds of team members.
The Mercedes-Benz Super Bowl ad was well-received among the MIT Sloan students. “The commercial strikes a good balance between acknowledging [Mercedes-Benz’s] tradition and showing off some of the popular and sportier models in its latest line-up,” Weizhong said.
Axel also approved of it. “I like the spirit of the commercial … all the heritage of Mercedes, from the first three-wheeled automobile to the Biome concept, without forgetting iconic models such as the 300 SL or the Le Mans’s race car, is used to promote the brand, create aspiratio, and give a sense of what was, is, and will be Mercedes — ‘The best or nothing,’” he said.
Accelerated action learning
In the Mercedes-Benz project, the five students had not worked together until they were assigned to the project, which challenged the students to find ways to grow the business of Mercedes-Benz Certified Pre-Owned vehicles, specifically among the 18-to-30-year-old age bracket. Each team member had a particular interest in the brand and the automotive sector.
“I thought it was a good marketing exercise working with such a big brand,” Esra said. “It’s a brand that has a challenge in terms of reaching a younger audience, which is essential for any firm to accomplish to stay in business today.”
Axel, a car lover who had previously worked for Renault-Nissan in France and Spain as an engineer or internal consultant, was keen to see how marketing operates. Manu, who had been a management consultant, also wanted to try his hand at marketing. As an added bonus, he added, “I’m an engineer and I love cars.”
Blanche, who participated in MarketLab last year, wanted to work for a luxury brand, and Weizhong was personally interested in the Mercedes-Benz brand name. The team started by writing a project plan that they submitted to the company before they started any work.
Pedal to the metal
The team visited the Herb Chambers Mercedes-Benz dealership in Somerville where they walked through the CPO area and gained insights on their own and from the client. “Next, we had to understand what the demand for the CPO market is,” Esra explained. The group surveyed approximately 250 people, mostly MIT Sloan and MIT students, to understand exactly what young people are looking for in a car. The survey was followed up by 20 face-to-face student interviews where participants were encouraged to give their impressions of the Mercedes-Benz brand, as well as what the deciding factors are when they buy a car.
Unfortunately, students’ opinions of Mercedes-Benz ranged from “old fashioned” to “the kind of car my grandfather used to drive” to “too expensive,” not exactly the chic image needed to attract younger consumers. The surveys also revealed that brands like BMW and Audi were routinely seen as “sporty” and “luxurious.”
“We had two things to look at,” Manu said. “One was the responses from the surveys and the other was current marketing initiatives that various brands have taken up. You could form a direct correlation with the kind of ads that a brand puts out and its perception among younger people.”
The team also performed extensive competitive analysis to see how Mercedes could target a younger customer. Although the brand has an extremely loyal customer base, younger people were not attracted to the Mercedes-Benz name. The team looked at some of Mercedes’s current initiatives, such as “Generation Benz,” and encouraged the company to ramp up its social-media efforts, but in a targeted, specific fashion. Social media marketing must be coherent and targeted. “A lot of companies think they can just start a Twitter feed, but you have to spend a lot of time on it and make sure that it sends out a consistent message,” Manu said.
Esra agreed and said Mercedes has been reliable in terms of maintaining an image of a well-engineered, secure and dependable car, but the company needs to portray itself as an “aspirational brand” in order to attract younger customers. “We recommended to them to first focus on positioning Mercedes-Benz as an alluring brand and proposed ways they can achieve that. Then, CPO sales can be used as an entry point into the brand — an affordable way to own a piece of Mercedes-Benz.”
Building such a brand also means rethinking traditional advertising methods, Weizhong said. The team consulted with Visiting Associate Professor of Marketing Natalie Mizik (who teaches 15.810, Introduction to Marketing) who gave them some great advice on how to reach a younger audience. The Mercedes-Benz brand name can still retain its traditional image, but it must appeal to the youth market. “It’s a really fine balance of not cannibalizing the current image, but building an extra brand image on top of the existing one,” Esra said. They recommended one form of guerilla marketing, already seen in Europe, which involved placing “suction-cup” Mercedes-Benz three-pointed star logos on other cars, in an effort to drive people to the dealership.
MarketLab first place
The team members were thrilled when they recently learned they won first place in the Fall 2010 Yahoo MarketLab Awards. Professor Chatterjee said choosing the winners was challenging. “Picking the top three MarketLab awardees is a real struggle given the high quality at which teams deliver. Picking the best, of course, was a Herculean task. The decision was based on input from judges on each team’s elevator pitch and poster presentation, company feedback, and the rigor and relevance of the research methodology. Given the competition, the Mercedes-Benz team members should be really proud of themselves,” she said.
Much of what the team recommended to Mercedes-Benz must remain confidential, because they signed a non-disclosure agreement (NDA). However, the team is certain that some of its ideas will be implemented. Mercedes-Benz sponsors MarketLab projects each year, and retains a relationship with MIT Sloan. All five students agreed they had a positive experience in working with the client and said the time spent on the project was extremely worthwhile.
Esra, Weizhong, Manu and Axel said they would consider participating in another MarketLab project next year. Blanche has already accepted a job with Sears Holdings Corporation’s apparel office in their Senior Leadership Development Program where she plans to work on marketing strategy.
“It gave us the opportunity to apply marketing concepts to real challenges that brands face today,” Blanche said. Manu added, “[MarketLab] is a great forum to put some of ideas you learn in class into practice. It was a good way to see how things are done in the real world.”