Despite Record U.S. Sales, Automaker Still Trails Luxury Rivals

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DETROIT ( -- Mercedes-Benz, the fourth-ranked luxury auto brand, is looking to stake its claim for being obsessive about technology, safety and engineering in its marketing for the new 2007 S-Class in an effort to distinguish its brand from rivals Lexus and BMW.
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The S-Class ad blitz combines brand and product advertising with a "left-brand-right-brain" approach in direct mail, TV spots and print ads that blend the car’s emotional heritage with a more rational presentation of its technology.

Intellect and emotion
“The exact place Mercedes-Benz needs to be is a balance of intellect and emotion,” said Scott Keogh, general manager-marketing communications, Mercedes-Benz, noting that the brand retains high scores from consumers for engineering and safety.

Even though Mercedes-Benz reported record U.S. sales last year of 224,269 units, it still trailed Toyota Motor Sales USA’s Lexus, BMW North America's BMW and General Motor Corp.'s Cadillac.

“What makes us different from Lexus and others is we have the heritage and authenticity,” Mr. Keogh said. Mercedes-Benz USA CEO Paul Hatala, who has been overseeing marketing at the brand since Mercedes USA Vice President of Marketing Michelle Cervantez left to head marketing at Hyundai Motor America five months ago, said, “It’s time to revisit some of that ground we’ve owned and had.”

The ad blitz for the 2007 S-Class includes three TV spots from Omnicom Group’s Merkley & Partners, New York, that break this week on national cable and spot broadcast networks. The local TV buys include the upcoming Winter Olympics on NBC and Academy Awards broadcast on ABC, with a national buy during the NCAA basketball tournament in March on CBS.

In the TV brand spot, a robotic voice details the behind-the-scene processes Mercedes-Benz goes through for every model it builds: “Weld them. Dip them. Test them. Build them. Wreck them ...” the narrator pronounces.

Small newspaper campaigns
Mercedes-Benz is starting what it calls a “fractional campaign” in newspapers about the technical aspects of S-Class and the brand. Each small ad will focus on a single feature that aims to show it off “like a piece of jewelry." In one ad, a single car seat is shown with the headline “The world’s most beautiful seat.” Another ad shows an air bag carrying the headline “An airbag for Mensa.” There will be a many as 60 print executions this year.

Mercedes said it is moving from lifestyle Web sites to third-party auto shopping sites to better reach in-market buyers. Carol Goll, general manager-brand experience marketing at the automaker, said Mercedes-Benz generates roughly 40,000 buyer leads monthly from online sources -- half from its own and half from independent car-buying site such as and That’s why the sedan’s online buy starts in February on those two sites and those of auto-buff books through March. Critical Mas, Calgary, handles the online effort.

The automaker launched a micro site for S-Class in December and has since gotten 110,000 unique visitors, Ms. Goll said. Seven hundred of those visitors opted in for more information about the car; 350 asked to be contacted by a dealer.

The brand will get exposure in other ways too. The $85,400 car will be driven by Meryl Streep in this summer’s “The Devil Wears Prada” for which Mercedes-Benz will do special screenings but no other advertising.

Velvet box direct-mailer
And in the past week, Mercedes-Benz sent out a high-end direct-mailer in a velvet box to 300,000 S-Class prospects themed “A great leader always makes a lasting impression." It was preceded by a “holiday card” mailer about the redone model to 100,000 current and former owners of the car. Omnicom’s Rapp Collins, New York, handles that work.

The high-end model is a low-volume seller. Mercedes said it sold 16,036 S-Class sedans last year in the U.S. vs. 20,460 units in 2004. Sales often dip during the last year of an outgoing version.

In the first 10 months of 2005, S-Class received only $67,000 in measured media backing compared to $2.8 million in the same 2004 period, according to TNS Media Intelligence. Meanwhile in the same time frame, total Mercedes-Benz spending dropped 20% to $109 million, TNS figures show.

Mr. Keogh said spending behind the S-Class launch is “substantial,” but he declined to reveal specifics.

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