Product Paper
BMW X5 vs. Mercedes-Benz ML350
4/23/2014
MKTG 3832 – Dr. Shirley Mai
Catherine Guy and Yachi Noel
Catherine Guy and Yachi Noel
The products we chose to compare are the 2014 BMW X5 SUV and the 2014 Mercedes ML350
SUV. These products are upper end, midsized vehicles. The target markets are older established
persons like bank executives or younger persons with well-paid jobs. They tend to have
additional competitors with the Lexus, Audi, and Infiniti SUVs. The Mercedes ML350 ranges
from a base price of $47,790 to a fully loaded price of $61,015. The Mercedes ML350 has a
seating capacity of 5, a trunk capacity of 80.3 cubic feet, a 7-speed automatic transmission, a
3.5L V-6 engine, power of 302 @ 6,000 rpm, city fuel economy of 17 mpg, and highway fuel
economy of 22 mpg. The exterior dimensions are overall height 70.7 inches, overall length
189.1 inches, overall width 84.3 inches, wheelbase 114.8 inches, and curb weight 4,751 lbs. The
interior dimensions are front headroom 38.9 inches, front legroom 40.3 inches, front shoulder
room 58.5 inches, rear headroom 38.5 inches, rear legroom 38.4 inches, rear shoulder room 58.4
inches, and trunk capacity 38.2 cu ft. with the seats up and 80.3 cu ft. with the rear seats folded.
The ML350 is distributed to Mercedes dealerships all over the world by transit from the
manufacturing plants via semi-trucks. Some of the dealerships in North Carolina are Hendrick
Motors of Charlotte, Mercedes-Benz of Northlake, Skyland Automotive, Inc., Mercedes-Benz of
Greensboro, Mercedes-Benz of Cary, and Mercedes-Benz of Winston Salem. The type of
distribution used for this vehicle is exclusive distribution. This product is exclusively carried by
a select group of dealerships and they only carry this product. It is considered a luxury vehicle.
Mercedes-Benz is a well-established brand and they are continuously under pressure to separate
their product from the competitors. They are always spending to make their products better and
keep them ahead of the competition. Mercedes-Benz will promote their product via television
with ads demonstrating why their vehicle is top notch and what makes it stand out from the
competition. They will also advertise in magazines and newspapers, show their promotions via
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the internet, and occasionally you may see a billboard with a local dealership’s information and a
picture of one of their vehicles on it. Personal selling is used at the dealerships when the trained
salespeople try and convince consumers to buy their product. These salespeople are trained to
distinguish their product from the competitors and are given the in and out of the product they
are promoting.
The BMW X5 is a German engineered, South Carolina built SUV. It has similar performance
space of the, also German built SUV, Mercedes M-Class. It has 300-horsepower, 3.0-liter, twinturbo, in-line six-cylinder engine is the base engine, good for 0-60 mph times of about 6.2
seconds. The BMW X5 can seat up to seven passengers. The second row of seats can be split for
more flexibility. Third row seating is optional. Aside from seating options, there is also a pretty
lengthy selection of safety options as well. Just to name a few, some of these features include full
range camera radar cruise control, traffic jam assistance, and lane departure warnings to alert
driver of pedestrians and oncoming cars. The X5 is based priced at $53,000 dollars. But of
course with the dictionary length of add-ons this price and top anywhere near $70,000. Any color
other than flat white or black is an upcharge, along with a rear view camera, leather seats and allwheel drive. The X5 falls under exclusive distribution. Just like the Mercedes, the X5 is sent to a
select group of dealerships. These include Hendrick BMW of Charlotte, Leith BMW of Durham,
and Performance BMW of Chapel Hill. Since this is considered a luxury vehicle, its target
market is middle aged, well paid executives. Like many other vehicles you will find
advertisements of the X5 in centerfolds of magazines, television commercials, opening ads of
YouTube videos, and sometimes even radio commercial ads. The following link is an example
of a typical BMW commercial: http://www.youtube.com/watch?v=pXuYfki6goM . This
commercial specifically emphasizes the spacious two door trunk. Other than those loyal BMW
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customers, sales have a lot to do with personal selling. I think that’s with any vehicle. A lot of
the decision to buy depends heavily on the salesperson’s ability to convince and persuade. Some
of the of the BMW X5 are ofther SUVs made by brands like Audi, Acura, and Buick.
The product life cycle is very similar with both the ML350 as well as the X5. There are little to
determine what the customer wants and needs in newer models. The development stage is costly
for the company because no income is being received and there are no sales. The introduction
phase is demonstrated by the new models being made available to the public. This is where sales
may be low and risks are high and profits are low. The product requires high volumes of
promotion in this phase. The growth phase is demonstrated when the new model becomes
popular with the consumer. Sales begin to rise and growth could be slow or fast. Advertising is
still used a lot in this phase. The maturity phase is when the consumer is satisfied and the
product is well established. The product is accepted and growth begins to slow. In this phase it
is common for the product to begin to have pressure from competitors and the company will
begin to spend in order to defend the product from the other markets. The saturation stage is at
the end of the maturity phase and no further growth is possible. Little or no advertising is used
and sales level off. The decline stage is when sales fall due to changes in the consumer and
choices available from competitors. The ML350 is in the maturity phase of the Product Life
Cycle.
SWOT ANALYSIS
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Internal
Strengths
External
Weaknesses Opportunities
Threats
Mercedes-Benz has a
The car market is in a
Similar products are more
Competitors have a
reputation for
condition of over supply
expensive and Mercedes-
similar product and
innovation and their
so Mercedes-Benz needs
Benz has loyal customers.
there is a competing
dealerships are located
to be sure their vehicle is
in larger cities which
what consumers want
mean higher traffic
and if there is a
areas.
downturn in the car
dealership close by
market, as we have
already seen, the
company could
experience over capacity
of vehicles and
workforce
BMW has been able to
Being a luxury good
A lot of room for expansion.
High elasticity and
establish a loyal
means something that is
Use of brand identity to
substitutions.
customer base.
mostly wanted and not
gain customers.
Large number of
They also have a very
needed. Sales depended
well distinguished
on state of economy and
brand.
employment.
It’s one of the more
affordable of luxury
vehicles.
Excellent advertisement.
competitors.
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