Mercedes-Benz: Not Just a Car Brand

Franscois Bezuidenhout says:

I've personally always been a cult follower of the Mercedes brand. I'm not too sure about an established transportation brand moving into other domains. For example I still struggle to see the value of a Porche laptop or a Nestle water.

My personal experience in branding research and trends have proven time and again that brand extensions should be carefully thought through and then perhaps launched under the same umbrella but with another more appropriate brand name.

Brand cults take years to become established and can be diluted within one season. Hence my cautious approach to welcome any seemingly irrelevant extension for the Merc brand.  

May 10, 2010 05:48 AM #

P Ramakrishnan says:

Yes and No.

Yes Mercedes is a cult brand and it can be extended. Extended to closely relevant products.
It can't be taken to very extreme limits. Because totally unrelated extensions could, like Mr Bezuidenhout stated, dilute the strong equity.

No. Blindly trying to ride on the established brand image of Mercedes into completely unrelated areas might ruin the brand image which took years to build.

Perhaps what Mercedes could do is to float a separate and independent outfit that would specialize in niche designing. This outfit certainly can cash in on the strength of Mercedes equity by associating with it. I guess it requires very careful and delicate handling both entities.

May 10, 2010 09:24 AM #

Julien Anderson says:

What about having an extension name of the major brand.  This way the extension name will be new, but it will be associated with the same old trustworthy/reputation which is linked to the old and familiar major brand!  

May 10, 2010 02:27 PM #

Alex Greig says:

What a load of misguided nonsense, a complete violation of one of the fundamental laws of marketing - I couldn't put it any better than the following post;

www.novell.com/.../if-microsoft-made-cars-lesson-evils-brand-extension

May 11, 2010 12:52 AM #

Franscois Bezuidenhout says:

I totally agree with Alex (and by extension Ries and Trout).

It makes one wonder if mr Wagener has done proper case studies of brand perception and reception before making this news statement. How much money will now go into wasted advertising and rebranding irrelevant products and services before MB realizes that there are other ways of making money except a non-difinitive brand extension?

I guess the reason I'm a bit upset about this apparent lack of thought and German precision in research is that I too see myself as a cult follower of the Benz brand but am now a bit disillusioned with their lack of vision and branding leadership.

May 11, 2010 01:44 AM #

P Ramakrishnan says:

Brand vs Line extension

I respond to the comments made by Mr. Alex Greig on observations of others (including this writer).

In the first place, writing in such serious forums demands certain amount of decency and social etiquette. I find Mr Greig completely lacks in this.

Secondly it appears either he has not fully understood the original story or lacks fundamental knowledge in marketing and brand management. The story clearly states the company is embarking on a brand extension and not line or product extension. To help Mr Greig let me give some definitions on both.

Line extensions consist of introducing additional items in the same product category under the same brand name , such as new flavors, forms, color, added ingredients, package sizes etc. For example Lux soap comes in different variants like Lux Crystal Shine, Lux International etc. So when Lux comes with a new variant, it is a line extension.

Brand extension happens when a company uses its existing brand name to launch products in other categories. For example, Woodlands which is a shoe brand extends itself to readymades and accessories.  (Courtesy: Marketing Practice)


The story states  “The company has just launched "Mercedes-Benz Style," a design division that will be broad in its scope.”  Obliviously it is a brand extension and where does his argument on line/product extension come into play.

Mr Greig could read the following post for some enlightenment.

Healthy and gentlemanly debate is absolutely welcome Mr Greig.

May 11, 2010 02:23 AM #

Lorne McMillan says:

Interesting debate.  My view is that Alex Greig's 'if Microsoft made cars' example is plainly nonsense, but the MB Style story is not.  However, we know that luxury auto brands have been trying to do this for years: Porsche Design make all sorts of things, Bentley do clothing (heck, all auto brands do clothing), Jaguar experimented with a retail store some years ago.  None of this seems to really spark the imagination or reflect significantly on the main auto brands concerned, I've never seen any evidence of meaningful equity increments from these peripheral activities, but it has led to a few interesting products over the years.  
But there's a big difference between a company putting its logo on polo shirts and that company starting a design group.  MB make great cars, let's see what they come up with.  Some of the greatest auto brands started off making other things and moved into cars later (Jaguar, Honda, Peugeot for example), so who knows where this may take the brand?

May 11, 2010 02:47 PM #