Selling to the young can be really profitable. And Mercedes has figured out how to market to them.
Mercedes-Benz’s Nathan Tan, a supervisor of advertising, was hosted on campus last night by MUSE, Penn’s undergraduate marketing club. He discussed Mercedes’ strategies for survival as a luxury car brand in a slowly recovering economy.
According to Tan, bringing in younger customers has been one of Mercedes’ goals. Mercedes recently surveyed 21- to 29-year-old potential consumers and found that 59 percent of them had a satisfactory first impression of Mercedes vehicles. However, only 50 percent expressed a willingness to purchase one. Mercedes’ largest competitor, BMW, saw 56 percent favorable impressions and 64 percent willingness to purchase within the same age group.
The discrepancy in numbers was largely because many young people have stereotyped opinions of Mercedes cars. Young customers tend to view the cars as “stuffy” and “more for their fathers than for themselves,” Tan said. Appreciation for Mercedes comes more from the prestige associated with the brand than from the cars themselves.
Tan’s presentation focused on the new CLA-Class cars , which are Mercedes’ solution to resolving its relatively low popularity among the young. The CLA cars feature a compact design and a relatively low price — models start at less than $30,000. Tan thinks the huge success of CLA cars since their release has largely been due to Mercedes’ effective marketing strategies.
Although CLA cars were first sold in the United States in September 2013, they were advertised starting in February of that year during the Super Bowl. Mercedes’ Superdome Stadium hosted the game and the company put up a commercial starring Kate Upton two weeks before the game.
On game day, before the fourth quarter, Mercedes aired another commercial. The commercials’ high quality generated enough buzz to successfully sell CLA cars, Tan said.
In the next few months, Mercedes put its main marketing focus on social networking. Mercedes first established a partnership with famous filmmaker Case Neistat. In exchange for a CLA car, Neistat made four videos showing his personal experience with Mercedes’ vehicles.
Mercedes also invited Instagram’s five most popular photographers to drive CLA vehicles and post photos to the site. The photographer whose post garnered the most attention won a car.
Tan said that the effort paid off in September. The average age for CLA buyers was 46 — 11 years younger than Mercedes buyers in general. Mercedes ended up with an 82 percent conquest rate, or percentage of new buyers who had previously chosen another brand. Seventy percent of new buyers had never previously bought a luxury car. “It was the greatest advertising in Mercedes’ history,” Tan said.