Managing a Brand Through Difficult Economic Times; Mercedes Executive Says: 'First, Figure Out What You're Not'

MONTVALE, N.J., Nov. 6, 2009 -- While many economists are stating that the recession is officially over, no one doubts that the impact of billions of dollars in lost wealth will be felt by consumers for years to come. In an era where the days of "more, more, more" have become "less, less, less," it's more important than ever for companies to manage their brands in a way that appeals to the newly selective consumer, said Mercedes-Benz USA (MBUSA) General Manager of Marketing Services Drew Slaven, during a speech at The Summit Series - an educational and networking event for influential young entrepreneurs.

Slaven began by noting that more companies rise or fall as a result of how they manage their brand than any other single business element, yet discussions of the brand rarely make it on to the agenda of the CEO or the Board of Directors. According to Slaven, the most important thing management must do isn't to figure out what a brand stands for, but rather to figure out what it doesn't stand for.

Slaven explained that this philosophy has driven MBUSA to effectively manage its brand through the recession in a way that has allowed it to outperform its competitors and gain market share while maintaining its long-standing reputation for quality and luxury. As an example, he discussed MBUSA's strategy for launching its new E-Class at a time when competitors were flooding the market with ads that equated price with value, including offering to waive people's first two car payments, and even promising to buy back a car if the owner lost his/her job.

"We had the ammunition at Mercedes-Benz to position the new E-Class right along those lines," he said. "The car was $5,000 less expensive than the predecessor model and was going to include roughly $1,000 more in actual product value. But the fact is, we are not a price brand. The value for us is in the product, not the deal. We ultimately launched the car based on the heritage, emotion and innovation that makes this brand what it is. We might have sold a few more units with an aggressive price campaign at launch, but as the recession lifts, we would pay dearly for that mistake today and long into the future."

Know Thy Customer

Slaven said that ultimately, the best way to successfully position a brand, whatever the state of the economy, is to get to know your customer and avoid falling into the trap of relying too heavily on third-party research.

"Knowing your consumer will yield far greater results than any study, regardless of how tempting the promises of the research vendor may be," he said. "Research can be a very convenient substitute for the real thing."

MBUSA has a series of initiatives that help it better understand its customers. MBUSA's executive management team, including the CEO, regularly has dinner with customers across the country to discuss their thoughts about MBUSA's products, services and brand. In addition, the company runs two online communities: Generation Benz, which consists primarily of Gen Y consumers, and MB Advisors, which is Mercedes-Benz owners. Through these communities, MBUSA asks questions and invites members to provide their thoughts on a variety of subjects, including the brand, its marketing and its competitive position.

Slaven suggested that other marketers use social media in a similar way, by listening to consumers rather than making the mistake of viewing social media solely as a promotional marketing tool.

"The problems start when a company begins to believe that it can use social media in a way no different than it uses advertising or direct mail," he said. "In the world of social media, you have an equal seat at the table. The problem is that the table seats hundreds of thousands. Thus, you are in no position to command the direction of the conversation. So rather than becoming preoccupied with trying to tell your story through social media channels, you are far better off focusing on delivering your brand promise."

Keep Your Eye on the Brand

Slaven believes that the ultimate effect of the recession will be to limit the leeway marketers have in driving people from consideration to purchase. In the past, consumers might have been willing to forgive the occasional mistake. Today, that's no longer the case, which provides a great opportunity for brands that focus on the basics and not to overreach.

"If you stick to your core and remember not to make mistakes - to stay close to your consumers and favor the meaningful dialog over the 'bright shiny objects' - you will come out of this phase in a strong position to go forward," Slaven said. "If you stay on the path, you'll find your customers are right there with you."

Mercedes-Benz USA, headquartered in Montvale, New Jersey, is responsible for the sales, marketing and customer service for all Mercedes-Benz and Maybach products in the United States. MBUSA offers drivers the most diverse line-up in the luxury segment with 12 model lines ranging from the sporty C-Class to the flagship S-Class sedans and CL coupes. More information on MBUSA and its products can be found at www.mbusa.com and www.maybachusa.com.

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