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Mercedez-benz sent a new message to U.S. consumers when it introduced its American-made sport-utility vehicle, the M-class last year. The product introduction became a symbol of the culture shift taking place within the ranks of the old German luxury carmaker.


The SUV was just one of a bevy of cars Mercedes sent to market as an offering of gutsier products and lower prices targeting a more youthful clientele.

The challenge started last month, when Mercedes-Benz began putting the SUV into European dealer showrooms. The goal is to take the M-class global, and with it the updated brand image that it symbolizes.

Print ads are running in newspapers and as spreads in magazines all over Europe. The ad appearing in magazines shows the M-Class traveling over rocky terrain with a pack of wolves and office buildings in the background.

The headline is "One breakdown and you miss your dinner. Even worse, you might become dinner." The tagline is "The M-class. A true off-roader. A true Mercedes."

The intent of the campaign is to hit on the same concepts using different creative in each of the markets.

Still, Mercedes is holding back the reins on advertising the vehicle because of fears its new plant in Alabama won't be able to meet worldwide demand initially.

The introduction was quick and painless in the U.S.

As Mercedes-Benz of North America began to beat the promotional drums and run the TV spots for the ML320's fall 1997 debut, it was already posting a banner year.

Sales of several Mercedes models had been running high all year. That gave the company a certain tailwind to roll out the sport-ute in an atmosphere of success.

But in the early days of the ML320 project, success was hardly a foregone conclusion.


The question from inside and outside the company: How might brand equity be diluted by introducing a vehicle that is not a car, that is priced close to that of the mass-selling Jeep Grand Cherokee, and that is intended to draw a whole new -- and younger -- customer base into the Mercedes family.

The answer became clear as customers literally crowded Mercedes-Benz showrooms to put their names on waiting lists for the SUV. Mercedes realized customers wanted more of its products, not more of its exclusivity.

Now the question is not so much how can Mercedes-Benz cautiously roll out its new brand identity in France, South Africa, Japan and Yemen -- it is how fast can the company deliver the vehicles.

"The expectation is very high. We've been getting orders from markets that haven't seen the vehicle yet," says M-class Product Manager Reinhard Muenster in Stuttgart.

"The M-class is part of a new aspect for the Mercedes brand overall."


Mercedes intended from the beginning to position the new sport-utility as a "world car," exporting about half of the U.S. factory's 65,000 units of annual production to more than 100 markets.

But the brand impact of that rollout is considerable. Mercedes-Benz must ensure that virtually every auto market in the world positions its new product the same way with the same message.

"In each market, the vehicle is covered by the same umbrella marketing plan," Mr. Muenster explains. "But in each market, a slightly different approach will be necessary."

Early in the project, Mercedes planned for two tactics (later abandoned) to sell the vehicle around the world -- one for how to market it and the other for how to manage distribution.

First, Mercedes envisioned using one lead agency to manage the sport-utility's global message. Lowe & Partners/SMS, New York, originally was to have developed an integrated worldwide marketing communications program for the vehicle. Mercedes dropped that plan, however.

The local sales and distribution units themselves will decide how to price and position the M-class under the direction of the global marketing office to be relocated from Alabama to Stuttgart. The central office will actually guide each market to ensure sure it adheres to the global market concept.


In France and Italy, where consumers are more attentive to fuel-consumption issues, Mercedes will pitch the sport-ute's diesel engine option. In the U.K., where the M-class must do battle with the long-established and locally built Range Rover, Mercedes must pitch the SUV's ruggedness and mud-crawling ability.

In Germany, where there was actually a small market for Mercedes' old sport-utility, Gelaendewagen, Mercedes will hit on the company's heritage as a producer of fearless off-roaders.

When it comes to pricing, the individual sales companies have certain restrictions. They must adhere to the automaker's desire to go after the heart of the sport-utility segment -- not the luxury end of it. Within the European Community markets, Mercedes also must take care to keep its prices relatively consistent.

The company also recently dropped its plan of directing the world marketing and distribution efforts from inside the Alabama factory. Mercedes decided it made more sense to integrate M-class sales and marketing into the rest of its Stuttgart organization.

The issue now for Mercedes-Benz is managing a world-scale market launch. By the end of this year, the truck is expected to makes its debut in virtually every global auto market, in both left-hand and right-hand-drive versions.

The U.S. surprised Mercedes by wanting more than it was prepared to deliver. Distribution could be problematic if European customers react the way U.S. customers did.

Mr. Muenster says there is no contingency plan to delay any market launches if demand exceeds output. Mercedes is keen to ensure that Western European markets get the vehicle about the same time.

In the U.S., the product's highest-volume market, Lowe & Partners/SMS, New York, created TV spots specifically for the M-class. Few other markets will have a volume big enough to warrant dedicated TV advertising, Mr. Muenster says.

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