January 10, 2014

With Devilishly Clever TV Ad, Mercedes Retains Brand Status While Varying Offerings

During last year’s Super Bowl, Mercedes-Benz aired a commercial simultaneously announcing its presence at a new price point and drawing enough smiles to rank among the big game’s best ads. The spot featured actor Willem Defoe as Satan, trying to lure a starry-eyed young man into selling his soul for the automobile maker’s new CLA model.

Defoe gives the prospective customer a glimpse of what his life could be like with the car: a vision that includes walking the red carpet with model Kate Upton and partying with R&B star Usher as the Rolling Stones’ “Sympathy for the Devil” blares in the background. As the ad draws to a close, however, the car’s $29,900 price tag is revealed, and the man realizes he doesn’t need any help from the Prince of Darkness to own a luxury automobile. He can afford it himself.

In 2013, Mercedes-Benz unseated BMW as the top-selling luxury automobile brand in the U.S., increasing sales by 14 percent largely due to the popularity of the CLA. The company sold 14,113 of the new model between the time it went on sale in late September and the close of the year. Predictably, BMW and Audi are now rolling out cheaper models as well, hoping to replicate its competitor’s success jumping into a market historically dominated by models like the Ford Taurus and Chrysler 300.

Audi will present the A3 sedan at the North American International Auto Show in Detroit next week. The A3 will be available in the spring of 2014 and, not surprisingly, will start at $29,900, just like the CLA. 

Initially, both Mercedes-Benz executives and industry experts were concerned that offering a less expensive model would diminish the brand’s image and hurt sales of the company’s other models, particularly the C-Class, positioned at a slightly higher price point. The CLA, however, seems to have had the opposite effect.

“I might have been worried about CLA cannibalizing C-Class, but quite to the contrary, it fueled C-Class sales,” said Steve Cannon, head of Mercedes-Benz USA. “Just because we’re moving to a new price point doesn’t mean we’re diluting. It just means we’re opening up the brand.” 

The company’s Super Bowl commercial was the public’s introduction to the CLA, a perfect occasion for a product launch, as the 108.7 million people who watched the game dwarfed viewership of any other single event during the year. What made the commercial so brilliant was that it did not stray from the company’s luxury image but still found a way to appeal to the mainstream consumer looking for something more affordable. That branding model can be used in almost any industry for companies that have traditionally catered to the high end of the market but are looking to expand their addressable market.   

Considering Mercedes’ success with last year’s Super Bowl commercial, it would certainly be no shock if Audi or BMW did tried to pump up its less costly models during the big game, which will be played at MetLife Stadium in New Jersey on Feb. 2. But to rival the popularity of last year’s ad, let alone the subsequent boom to Mercedes’ bottom line, these automobile makers might need some help from above—or below.      

Edited by Justin Reynolds

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