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INSTITUTE OF MANAGEMENT AND DEVELOPMENT

PROJECT REPORT ON

MERCEDES-BENZ
(MBA+PGPM) 3RD SEMESTER

SUBMITTED TOPROF. VINOD JANGID

SUBMITTED BYSAHIL GUPTA BATCH -32

INTRODUCTION OF THE COMPANY


Mercedes-Benz is excellence materialized. Now, the company is known among the worlds top manufacturers, when talking about cars. Everything about MercedesBenz is high-end, and no other car company can compare to all that MercedesBenz has accomplished, if you look at all the luxury cars, trucks, vans, buses, and its part in the motor car world. Two men Gottlieb Daimler and Karl Benz, started Mercedes Benz during the 1880's. It was them who came up with vehicle powered by internal combustion engine. An interesting fact about these two originators is that they had no idea about each other. Their work was closely related, and they both lived in Southwest Germany, but they didnt know each other. And this is just the beginning of Mercedes-Benz history. According to the Mercedes-Benz history, Daimler and Benz never met at all. They worked separately, Daimler concentrating on his successful racing cars at Unterturkheim. Because Daimlers cars were so successful, a dealer from Austria named Emil Jellinek got the cars into races and won more often than not. The cars were named after Mercedes his daughter. Jellinek, because he was very impressed with the cars, made a large order from Daimler and his business partner and friend Wilhelm Maybach. It was agreed that Jellinek could modify some of the designs, and that he could name the car Mercedes. Because of his great faith in the cars, a large portion of what he had went towards investing on the company. The name change warded off legal problems, because companies overseas already bought the rights to Daimlers name and also to his designs. Even now there are high-end Daimler cars being made and sold in England. If the named hadnt been changed to Mercedes, there would have been a lot of things to straighten out. Good thing the change took place. There were hopes to have American-built Mercedes factory, but the factory that used to be a piano factory got burned down, losing the prospect place of the NY Mercedes-Benz factory, and thus losing the hopes to have a branch of the worldclass manufacturer in America. At first, Daimler and Benz the originators of the luxury car werent in the same company. In fact, they were definitely rivals when it came to the world companies. But due to the pressure brought on by the hard times during the 1920s, the two companies had to work together, merging into one company that soon progressed into the Mercedes-Benz that you know today.

PRODUCT MIX
Product mix is one of the strategic tools that constitute the 4Ps in the Marketing mix. Once you have chosen a target market, you must try to attract customers to your target market, and you will achieve this by adopting a right marketing mix, which will appeal to customers in your chosen target market. This brief introduces to you the four main ingredients of the product mix, one or all of which may be the best fit for your marketing strategy . These are:

Range Quality Brand Packaging

Range This may be wide or narrow depending on how you perceive the requirements of your customers, and how many market segments the company wishes to target. Many car companies will offer a wide range of cars in their products in order to target different market segments. e.g Mercedes C180: the target market is the would be Mercedes owner who wants a Mercedes but is on a lower income and can only just afford the cheapest model. e.g Mercedes 500 SL :- the target market is the higher income type customer who is looking for style and can afford to pay. Quality Although most customers would request high quality products if asked, the actual quality of the product may be high or low depending on the income levels in your target market, the nature of competition and how much your customer is prepared to pay.

If you are selling high quality products such as a the Rolex watch, your may target the high-income customer who can afford to pay a premium for superior product quality. Brand Branding is a way of giving identification to your company and its goods and services. Branding is actually a very general term covering brand names, designs and trademarks, which you may use to distinguish one product mix from another. The benefits of having a strong product brand are as follows:

It allows your company to charge a premium price for the product. They promote customer loyalty and are associated with a particular image. Branding may lead to ready acceptance by wholesalers and retailers. It gives you an opportunity to include other in the brand range which piggy back on the articles already known to the customer on the back of existing brands. Your company may also introduce new flavors, shapes and sizes for its branded goods. Eg Mars bars. This is known as brand extension.

Packaging Packaging is used at a basic level to safeguard the product mix as follows:

The design color of contents of the packaging can attract potential buyers. It reinforces the brand image and point of sale attention of the buyer. It may create a competitive advantage for your product by having its packaging in a unique shape Packaging should be as small in space as possible to save on warehouse and retail space, as well as distribution costs. The packaging can also promote an environmentally friendly image by being reusable or by being made of recycled paper.

After sales service: This will include guarantees, warrantees, and after sales service.

FINANCIAL ANALYSIS
After the prior year had been severely impacted by the financial and economic crisis, earnings in all divisions developed much more positively than had been anticipated at the beginning of 2010. This was due not only to the general market recovery, but in particular to the attractive product range as well as efficiency gains that were implemented. There was an opposing effect on EBIT from increased research and development expenditure. Special items affecting earnings in the years 2009 and 2010 are listed in the table on page 12 and in the descriptions of the individual divisions. The positive development of EBIT led to a significant improvement in net profit to 4,674 million in 2010 (2009: net loss of 2,644 million). Earnings per share improved accordingly to 4.28 (2009: loss per share of 2.63). After Daimler decided not to pay a dividend last year, more than 40% of the Groups net profit attributable to Daimler shareholders is now to be distributed. On this basis, the Board of Management and the Supervisory Board have decided to recommend to the shareholders for their approval at the Annual Meeting to be held on April 13, 2011 that a dividend of 1.85 per share be paid out. The total dividend payout will then amount to 1,971 million.

Daimler sold a total of 1.9 million vehicles in 2010. The level of the prior year, which had been very low due to the global economic and financial crisis, was thus surpassed by 22%. Group revenue increased by 24% to 97.8 billion; adjusted for exchange-rate effects, there was an increase of 19%. Daimler Investor Relations, www.daimler.com/investors The Page 3 free cash flow of the industrial business increased by a significant 2.7 billion to 5.4 billion. Compared with the prior year, the net liquidity of the industrial business grew by 4.7 billion to 11.9 billion. The size of the workforce increased slightly due to stronger demand. As of December 31, 2010, the Group employed 260,100 people worldwide (2009: 256,407). Of that total, 164,026 were employed in Germany (2009: 162,565). The number of apprentices was 8,841 (2009: 9,151). In view of the Groups positive economic development in the year 2010, Daimlers Board of Management and General Employee Council have agreed that the special efforts made by the workforce in 2010 will be rewarded with a high performance participation bonus of 3,150 per entitled employee of Daimler AG. In the anniversary year of the invention of the automobile, each employee worldwide will also receive a special bonus of up to 1,000, depending on his or her length of time at the Group.

DEMAND ANALYSIS OF MERCEDES


The Mercedes-Benz CLS Class is performing extremely well a little over one year after its international market debut. More than 50,000 units of the four-door coupe have been delivered worldwide since the vehicles sales launch in October 2004. In Australia, the popularity of the CLS-Class has followed suite with over 500 vehicles delivered since its Australian debut in June this year, well above initial expectations. The CLS is based on a unique vehicle concept that for the first time combines the elegance and dynamism of a coupe with the comfort and practicality of a sedan. This one-of-a-kind synthesis in the CLS-Class provides a clear additional value in comparison to other coupes. The positive response to the CLS Class worldwide and in Australia highlights the companys role as a trendsetter in the development of new vehicle concepts and illustrates the success of the Mercedes-Benz product strategy, said Horst von Sanden, managing director responsible for Mercedes Car Group in Australia. Demand for the four-door coupe is particularly high in the U.S., where 13,600 customers have opted to purchase the CLS since the model was launched there in January 2005. The second largest market for the CLS is Germany, which accounts for more than 20 percent of global sales.

FOREIGN INVESTMENT
Foreign direct investment (FDI) or foreign investment refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.[1]. It is the sum of equity capital, reinvestment of earnings, other longterm capital, and short-term capital as shown in the balance of payments. It usually involves participation inmanagement, joint-venture, transfer of technology and expertise. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative) and "stock of foreign direct investment", which is the cumulative number for a given period. Direct investment excludes investment through purchase of shares.[2] FDI is one example of international factor movement. Starting from a baseline of less than USD 1 billion in 1990, a recent UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010-2012. As per the data, the sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, the US and the UK were among the leading sources of FDI. FDI for 2009-10 at USD 25.88 billion was lower by five per cent from USD 27.33 billion in the previous fiscal. Foreign direct investment in August dipped by about 60 per cent to aprox. USD 34 billion, the lowest in 2010 fiscal, industry department data released showed. [6]In the first two months of 2010-11 fiscal,FDI inflow into India was at an all-time high of $7.78 billion up 77% from $4.4 billion during the corresponding period in the previous year. FDI provides an inflow of foreign capital and funds, in addition to an increase in the transfer of skills, technology, and job opportunities.[citation needed] Many of the Four Asian Tigers benefited from investment abroad.[citation needed] A recent metaanalysis of the effects of foreign direct investment on local firms in developing and transition countries suggest that foreign investment robustly increases local productivity growth.[7] The Commitment to Development Index ranks the "development-friendliness" of rich country investment policies.

PRICING STATEGIES
Competition-based pricing Cost-plus pricing Creaming or skimming Limit pricing Market-oriented pricing Penetration pricing Price discrimination Premium pricing Predatory pricing Contribution margin-based pricing Psychological pricing Dynamic pricing Price leadership Target pricing absorption pricing High-low pricing Premium Decoy pricing Marginal-cost pricing Value Based pricing Pay what you want pricing Freemium pricing

GDP
Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living. GDP can be determined in three ways, all of which should, in principle, give the same result. They are the product (or output) approach, the income approach, and the expenditure approach. The most direct of the three is the product approach, which sums the outputs of every class of enterprise to arrive at the total. The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes.[4] Example: the expenditure method: GDP = private consumption + gross investment + government spending + (exports imports), or Note: "Gross" means that GDP measures production regardless of the various uses to which that production can be put. Production can be used for immediate consumption, for investment in new fixed assets or inventories, or for replacing depreciated fixed assets. "Domestic" means that GDP measures production that takes place within the country's borders. In the expenditure-method equation given above, the exportsminus-imports term is necessary in order to null out expenditures on things not produced in the country (imports) and add in things produced but not sold in the country (exports).

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