2. History
• Mercedes Benz Thailand was first registered as Mercedes Benz Marketing
Thailand company in 1998
• The company’s goal is to establish import and to deal with Benz automobile
business, which used to be controlled by “TAAP” (Thonburi Automotive
Assembly Plant Co., Ltd)
• At the beginning, they emphasized on Branding and Marketing before going
full scale on importing and selling cars.
• They merged with the Benz Daimler Group and the Chrysler Group in 1999.
The name of their joint-company was changed to Daimler Chrysler, which also
sell Chrysler and Jeep.
• In 2007, the company’s was renamed again to
Mercedes Benz Thailand after the Daimler AG sold
80.1% share of their stock to the Chrysler Group.
3. Structure
Daimler AG
(The world’s largest manufacturer of Mercedes Benz vehicle in Germany).
Mercedes Benz Thailand
(MBTH)
Mercedes Benz Leasing Thailand
(MBLT)
Mercedes Benz Manufacturing Thailand
(MBMTh)
4. Mercedes Benz Thailand (MBTh)
• MBTh provides: marketing and selling, research and
development, maintenance, repairs, and after sales service.
• Mercedes Benz(Thailand) LTD., has a network of 31 authorized dealers that
were established throughout the country. There are 17 branches of
authorized dealers located in Bangkok, and about 14 branches located in
countryside.
• Most car parts and accessories are imported from DAG and DSEA (Daimler in
South East Asia).
• Cars that are completely imported will be charged with extremely high tax of
about 169-300%.
• Cars that are assembled in Thailand will be charge with lower tax of about
94-189%. Therefore, MBTh emphasizes on this type of market.
5. MercedesBenz LeasingThailand (MBLT)
• MBLT was found in 1996 as one of the leading financial firms that provides
financial services for Mercedes Benz cars in Thailand.
• They aim to support the business of Mercedes Benz Thailand by providing
credit to Mercedes Benz distributors in Thailand and other services such as:
• Hire Purchase – which allows their customers to purchase Benz cars with a
down payment of some proportion and pay the rest by installments with
same rate
• Operating Lease - this service allows customers to rent Benz cars with the
exact price and period of time. The cars will need to be returned at the end
of the deal.
• Finance Lease - the cars will be rented to customers with fixed price and
duration. After that period of time, customers can decide to own the cars at
a price, subtracting depreciation cost, set by the finance officer.
6. MercedesBenz ManufacturingThailand
(MBMTh)
• MBMTh was founded in 1998 as the firm that company that provide importation,
assembly, and distribution.
• The Product line of MBMTh can be categorized into:
Hatchback
A- Class
B- Class
E- Class Estate
CLS- Shooting
Brake
Sedan
C- Class
E- Class
S- Class
CLS- Class
Sport
SLK- Class
CL- Class
SL- Class
E Coupe
C Coupe
Off-Road
G- Class
M- Class
Van
Vito
Viano
MB100
Supercar
SLS- Class
7. Porter’s Five Force Model
Industry Competitors
The Intensity of Rivalry
Threat of New Entrants
Bargaining Power
(Suppliers)
Bargaining Power
(Buyers)
Threat of Substitutes
8. Industry
• The industry competitive structure is consolidated
• The growth rate of the market shows that the demand
condition is increasing dramatically in the past 4 years
• The increasing of the industry growth rate encourage the
rivalry and competition for market share and revenue
Intensity of Rivalry
10. Market Growth Rates 2009-2012
2009 2010 2011 2012
CAGR 6.59% 31.65% 3.58% 44.76%
Market Value 30,800 40,548 42,000 60,800
Units Sold 7,700 10,137 10,500 15,200
Thailand GDP Growth Rate -2.3% 7.8% 0.1% 5.5% *
Market Value ( Millions)
Intensity of Rivalry
Source: Bangkok Post, Bangkok Biz, Manager
11. Competitors
• There are 3 main companies that are dominate in this market in this
industry which control approximately 86% of the market share in
year 2012; Mercedes-Benz, BMW and Volvo
Intensity of Rivalry
Mercede
s-Benz
BMW
Volvo
Others
2010
Mercedes
-Benz
BMW
Volvo
Others 2011
Mercede
s-Benz
BMW
Volvo
Others
2012
Source: Bangkok Post, Bangkok Biz, Manager
12. Positioning of key players
Intensity of Rivalry
Classic Prestige
Comfortable driving experience
“The Best or Nothing”
Ultimate Performance
Sporty
“The Ultimate Driving Machine”
Safe and comfortable drive
“Volvo for Life”
13. Intensity of Rivalry
Exit barrier for automotive industry
The exit barrier for this industry is considered very high
Capital investment
• There would be huge capital invested in both building the brand equity and the constructing
the manufacturing plant
• For manufacturing plant, there are few companies that invested in manufacturing base in
Thailand due to the fact of complexity in cooperate and signing contract with the Thai
government
• Mercedes-Benz manufacture in Daimler Manufacturing
• BMW manufacture in BMW manufacturing Thailand
• Volvo manufacture in Thai-Swedish manufacturing
Cost and penalties
• Cost of establishing the authorize dealers network
• High redundancy cost
• Cost of hiring the labor
• Employment contract
• Severance cost
• Penalty fee
• It would be difficult to exit if the firm have already sign a contract with the suppliers
14. Intensity of Rivalry : Trends
• Downsizing is now the
trends where manufacturers
use a smaller engine but yet
more efficient or introducing
a small yet luxury segment
(ex. BMW series 1, Mercedes CLA)
• BMW no longer sending out
there famous straight six,
instead there offer more
efficient four-cylinder engine
• Downsizing has become the
flavor of the decades
• Most of the highline luxury
car manufacturer has
introduce hybrid technology
• To save the environment and
to introduce a fuel efficient
vehicles and use sustainable
materials as part of
manufacturing
• The new technology to
serve the environmental
issue and downsizing
the car.
• This cause the SUV market
to decrease down
16. High entry barrier
Few dominants players in market
• It is very difficult to enter to this industry (luxury car) since the
players such as Mercedes-Benz and BMW had already dominate the
Thai market
Capital requirement
• Capital requirement of building the brand of luxury car, in term of
expense and time consume, is very high
• Cost of constructing the showroom
• High marketing expense to create the brand identity toward Thai
customers
Economy of Scale (EOS)
• Car production is difficult to reach the economy of scale
Tax
• Tax policy of imported car is very high (317%)
Threat of New Entrants
17. Threat of New Entrants
Grey dealers, Low entry barrier (Exceptional new entrant)
Permission and requirements
• To open a grey dealer, no official permission from the selling brands require
Implementation cost
• The cost of establishing the grey dealer is relatively low
• No standard format require
• Gap in the law allows grey dealer to import the automobile with a lower tax
rate around 210%-300%
• Some dealers sell the car on credit (Dealer receive money before handing the
actual car to the customer)
Economic instability of Europe
• The depreciation of EURO currency make it cheaper to import the cars
18. Threat of New Entrants
Competitive strength of Grey dealers
Tax benefits
• Grey dealers have the ability to import with lower tax rate and take fewer
time
Customization
• Availability of customized options for customer to choose
• Ex. Harman Kardon Stereo, Special Leather seats, mirror roof
Better operating system
• The operating system is flexible
• No standard price, focus more on price competitiveness
• No requirement for after sale service
19. Bargaining Power (Suppliers)
The bargaining power of suppliers is higher over Mercedes-Benz
Few suppliers and substitutes
• Product that suppliers sell to Mercedes-Benz has few substitutes
and is vital to the manufacturing process
• Raw material such as Advance alloy steel, carbon fiber are
imported from the European countries
• It is very important to maintain the relationship with the suppliers.
This is because, it would be very difficult for Mercedes-Benz to
backward integrate to the sourcing process
Not authorize
• Mercedes-Benz Thailand is not authorize to select the supplier by
themselves without the permission from the head company
20. Bargaining Power (Buyers)
The emerging of Japanese cars in the mind of consumers:
The bargaining power of Mercedes-Benz towards the emerging of Japanese car in the mind of
customers is consider to be low
Perception
• In the past people think that European cars are better than Japanese cars in terms of
quality and service provide to customers
• Nowadays, the perception has been change. Japanese car provide better quality of the
car they produce with great before and after services, also the maintenance cost is much
cheaper
Price
• With affordable price that comes along with standard quality, customers choose to buy
what is worth for their money (value)
Eg. Camry Hybrid, Honda Accord, Nissan Teana etc.
• There are some series of Mercedes-Benz car that are risky to be takeover by the top
Japanese car models
Eg. A-Class and C-Class
• People can use the money they have to pay for one standard Mercedes-Benz C-Class
( 2,250,000) to buy the top series of Honda Accord with full options and still have money
in their pocket.
21. Bargaining Power (Buyers)
Strong brand image in luxury cars industry :
Mercedes-Benz has higher bargaining power in terms of the strong brand image in luxury
cars over the consumers
Top of mind
• The brands that stand out of the customers’ minds when thinking about luxurious cars
are Mercedes-Benz and BMW
• Mercedes-Benz has a long history in Thai automotive industry
The first Mercedes-Benz that had been import to Thailand is in the year 1920, it is owned by King Rama 5 at that
time
Convenience
• There are only few brands in the luxury cars industry in Thailand that have many
authorize dealers and showrooms to provide services to customers such as Mercedes
and BMW
• Mercedes-Benz has 17 branches of its authorizes dealer in Bangkok and over 14
branches in suburb area in Thailand, where other competitors has only few in the
suburb area Eg. BMW has only 5 branches
• By having many dealers and showroom, this can be one of the most influencing factors
that lead the consumers to choose Mercedes-Benz over the other brand if the buyers
are considering about after sales service and maintenance
For eg. - The adequate of spare parts
- The short maintenance queue
22. Threat of Substitutes
The high switching cost:
Value
• People nowadays tend to have a habit of changing their car often.
• This means people would have to resale their current car to be able
to buy a new one.
• For Mercedes-Benz, the resale price is very low, the price of used
Mercedes-Benz are after 5 years of usage, the price decrease to
approximately 40% of the real price.
Complexity
• The switching cost is high because there are many process to buy
and own a car.
For example to reserve, to wait for the car, to register for
license plate, to transfer the ownership, etc..
23. Threat of Substitutes
The substitutes products:
Big Bike Motorcycles
• People might switching from using cars to motorcycle because of
bad traffics
• For High end car users like Mercedes-Benz, the motorcycle brand
they might buy should be luxurious brand
Eg. Ducati, Harley Davidson, Kawasaki, etc.
• So these brand can be consider as the substitution for Mercedes
users
Second hand luxury cars
• The price of second hand cars are more cheaper than buying a new
car
• For some brands, the price drop to around 50% of the official price
Eg. BMW, Lexus, etc
• The conditions of the cars are reasonable compare to the price the
buyers have to pay
24. Threat of Substitutes
Substitute products
Alternative prestige products
• Mercedes-Benz cars are consider to be luxurious product, they
might be threaten by other prestigious products categories that
consumers might choose to buy instead of “Luxury Cars”
• These products varies in many product categories;
Eg. - Designer clothing (Chanel, Prada)
- Jewelries
- Luxury house
25. SWOT analysis
Strengths
Strong brand image in luxury car category
• People view the brand Mercedes-Benz as having an innovative engineering and
high capability
• Mercedes-Benz had achieve many reward in safety perspective
Higher resale value
• The resale price of Mercedes-Benz are relatively high compare to other luxury
brand because of the high demand and reliable of the brand
Strong authorize dealer network
• 31 Authorize dealers in Thailand
• Mercedes-Benz also penetrate in the suburb area
• 14 dealers located in suburb area
• Training program for sale representative in every dealers
Relatively cheaper parts and maintenance fee
Financial advantage
• Mercedes-Benz Thailand has vary source of fund from the Daimler
company, making it easier to manage the investment fund in the future
26. SWOT analysis
Weaknesses
Still considered expensive
• Comparing to the major competitor like BMW, the price of
Mercedes-Benz is around 12% higher
• Customer’s perception
• Most of the Gen Y still have the perception of “Old” toward
Mercedes-Benz
Slow delivery time
• It can take a long period of time in delivering the product to
customer after they purchase
• Many models debut in Thailand very late after the official global
debut
Availability
• Some Mercedes-Benz models are not available in Thailand
27. SWOT analysis
Opportunities
New market emerge
• Thai people current, became emotionally attach luxury brand especially
Gen Y whose purchasing power is increasing(sale of C-class increase by
7% in year 2012)
• GDP increase by 5.5%, people have more purchasing power and spend
more on unnecessary products
Trend of clean energy
• Would lead to major opportunity if Mercedes-Benz can provide the right
technology (hybrid)
Politic
• Government support the authorize dealers by increase the tax of imported
car by 15%, since they would receive more tax revenue from those dealers
Thai currency appreciate and Euro depreciate
• The cost of production reduce
• Higher profit margin
28. SWOT analysis
Threat
New entrants(Grey dealers)
• The total revenue of all grey market dealers increase by 15% in 2012
• Grey dealers have higher ability in acquiring new models of luxury car
earlier than the authorize dealers
Conversion of Authorize dealers
• Some authorize dealers converse themselves to grey dealers in order to
serve the demand of other luxury brand apart from Mercedes-Benz
• Poor dealership structure (unnecessary regulation from the mother
company)
• Take longer time for Diamler Crysler to import the new models
Public transportation
• The BTS sky train is expanding all over Bangkok
• Although the target group of Mercedes-Benz who have enough money to
afford the luxury car still consider using public transportation instead, due
to the fact of traffic problem in Bangkok
29. 7Ps
• Mercedes-Benz did not only provide the sales of their luxury
cars, but also the before and after sales services
• The Ps 1. Product 5. People
2. Price 6. Process
3. Place 7. Physical Environment
4. Promotion
30. 7Ps of Mercedes-Benz
Product
Product availability
• Mercedes-Benz offer the product that suitable for every age rage and
every genders
• Ex. A-Class aim for female user, S-class aim for high level executive and SLS model aim
for high end level users
Technology
• Mercedes-Benz introduce many technologies and safety innovation that
have become common technology that apply in other brand several
years later
• Antilock Braking system(ABS) first introduce in 1978 by Mercedes-Benz
• Mercedes-Benz also offer an outstanding technology in advancing the
security and convenience determination
• Tele Aid mbrance technology connect smartphone with the
• vehicle system in the purpose of navigation system and use
• as the car’s key
31. Product (cont.)
Brand
• The brand equity of Mercedes-Benz toward Thai people is very high
Brand value associated with Mercedes-Benz are:
• Innovative
• Luxury
• High society
• Reliable
• Royal
Warranties
• Mercedes-Benz Thailand offer 3 years warrantee with no mile limit
• This offer is standardize throughout all authorize dealers
7Ps of Mercedes-Benz
32. Price
Mercedes-Benz current price (25 March 2013)
• Mercedes-Benz use “Premium Pricing”
strategy
• Keeping the price high to build the
perception of favorable brand in
consumers mind
• The cheapest model of Mercedes-Benz
car is the “A-Class” model
1,890,000
• The most expensive model is the “SLS-
AMG” model
24,999,000
33. Place
• Currently there are 15 authorized dealers in Bangkok and another 15
authorized dealers around Thailand
• On big main cities like Korat, Phuket, Huahin and Chiangmai
• Daimler Thailand try to maintain the standard by create semi-annual
check up and competition to win award for the dealers
34. Promotion
Mercedes-Benz has various promotion to promote their campaign.
• Mercedes-Benz and Kasikornbank offers credit card to Mercedes-Benz loyal customers
• During motor show Mercedes-Benz also offer financial promotion for customers who
ordered their cars at motor show.
• Financial promotion include 0% interest for sixty months , free insurance, and extra discount.
• Mercedes-Benz Thailand also promote themselves by emphasizing on digital marketing.
• Mercedes-Benz Thailand also claims that their Facebook activities is very active such as
having their customers to ‘tag’ or ‘check in’.
• Mercedes-Benz Thailand have done various campaign to promote themselves such as CSR
projects, exclusive dinner for Mercedes loyal customers, lucky draw at motor show, and also
regular golf event.
36. People
Dealer
• Dealer send representative to meeting at head quarter every two months to know updates
about the market, trend and the corporate plans and events.
• Offer Dealers Trip once in a while, to tightens each dealers relationship and relationship of
dealers and Daimler Thailand’s staff.
Sales service
• Sales manager meeting at Daimler Crysler head quarter every month, to inform new
promotion/ads campaign also to let every dealer’s sales management plans goes on the same
direction
• Reward for 30 top sales person and 5 sales manager that generate most revenue to go to
Germany trip without any costs.
Mechanic
• MBCC (Mercedes-Benz Competence Centre) new program of recruiting mechanic staffs for
company. MB Thailand joined with Samutprakan Technical College seeks for students that are
interested and trained them, they also provide wages for the students.
• STAR Assist training, a service program that provide customers 24 hrs assistant for any car
problem
• Specialized mechanists training for head mechanic of every dealer, to get information up to
date
37. Process
Service Parts
Service Work& Maintenance
• Pool of experts, qualified and specializes in
servicing vehicle at a fair price
Genuine Parts
•Produced precisely according to specifications,
can rely on spare parts being genuine
My Service
• Let you choose service appointment and options
of your choice and is most convenient to you
Accessories and Collection
•Offers individual, stylish and special accessories,
provided to suit the needs of every individual
Dealer Search
• Offers wide range of additional services and are
always willing to help
Genuine Engine Oil
• Lubricates, reduce wear-and-tear and helps to
protect the environment and it is perfectly
aligned to your vehicle
Service 24 hour – “Star Assist”
• Comprehensive assistance available24 hours a
day
• Operator fluent in both Thai and English
Proven Exclusivity
• Trading services for pre-owned cars, carrying
same standards worldwide, also including a 2
years warranty
38. Physical Environment
• Mercedes Benz showrooms’ environments are very
exclusive, modern, with high technological equipment, which give a
prestigious and luxurious feeling.
• The colors used in showroom are metallic colors such as black and
gray.
• The showrooms from authorized dealers look nicer in term of
physical looks of the showroom, professional salesperson, and also
provide full service.
• Food and beverages are provided
• Magazines relating automobile
39. BMW Strategy
• BSI 6 years warranty or 100,000 km, free maintenance
• Implemented a different marketing mix to sell cars to different
socioeconomic segments, especially on premium segments.
• They does not compromise and cater to any other segment in the market.
Its global marketing strategy underscores the selected premium target
market only
• Promotes on hybrid energy, give them eco friendly image
• Environment friendly production, improve efficient use of material
and recycling policy
40. Recommendations
Customers’ benefits
Second car purchase benefits
• Provide benefits for second car purchases from the same authorized
dealer, it would help strengthen the relationship of customers and the
authorized dealer
• Leads to more frequent communication (trading information about new
cars as well as probing them into buying)
• The benefits given for second car purchase would be in terms of
insurance, from assuring the car from 3 years to 5 years for both cars upon
the second purchase.
41. Recommendations
Customer Relationship Management
The advantages in retaining current customer
• Create positive word of mouth
• Increase brand loyalty and equity
• Create emotional benefits and make customers feel superior when
purchasing from authorized dealer
Can by implemented by
• Lounge- providing lounges in high- end department stores that only
Mercedes Benz drivers buying exclusively from authorized dealer can
enter, by showing a member cards. Similarly to Siam Paragon
Lounge, Wisdom Lounge
• Activity- create value adding activities to promote a close
community, which would later benefit in a larger customer base that
supports purchasing from authorized dealer
Eg. Private parties for past purchasers of Mercedes inviting Public Figures and
Press
42. Recommendations
Maintaining Relationship with Dealers
• Specify contract to prevent authorized dealer to convert to
grey dealers
• Currently, the average period in positioning as a authorized
dealer is 2 years
• Longer contract with the authorized dealer
• Help in sharing the renovation cost
• Shorten period of time in importing new car models to
compete with the grey dealers