POSITIONING STRATEGY OF AUTOMOBILE BRAND "smart" ON THE
SERBIAN MARKET THROUGH ALTERNATIVE COMMUNICATIONAL
FORMS
1 2 3
Branka Novcic , Jelena Vucinic , Dušan Tadic
1
Faculty of organizational sciences, novcicb@fon.rs
2
Mercedes-Benz Serbia, jelena.vucinic@daimler.com
3
Faculty of organizational sciences, tadicd@gmail
Abstract: Dynamic way of living in big cities all over the world, lack of time, and need for economical
solutions, have all created potential automobile buyers with refined wishes and needs. As an answer to the
market demand, car manufacturers have designed small, economical, and attractive city cars.
This case study presents a practical example of a leading car manufacturer in the world, Daimler company,
and its innovative brand “smart”. Authors of this case study present implementation of positioning strategy of
a new car brand on the Serbian market.
Focus of the case study is on designing innovative methods for introducing to and educating buyers about
new concept of the small city car. Due to specific characteristics of a target market, the company opted for
usage of alternative communication forms in order to attract target buyers. The case study particularly
emphasizes representing new communication forms, given through connecting “smart” brand with the
established Serbian designers, participating in lifestyle events and happenings, as well as through promoting
cars in places where potential buyers meet.
Key terms: automobile industry, SMART, lifestyle buyer, alternative communication forms
On January 11th 2010 in Belgrade, Ms Jelena Vucinic, a product manager of brand „smart“ that belongs to
the company Mercedes-Benz Serbia and Montenegro, a daughter company of Daimler AG, has created a
periodical operating report showing the sales results of “smart” cars on the Serbian market for 2009. Ms
Vucinic was not pleased with the results. The past year has been difficult for everyone due to the crisis, but
she somehow felt that it may be the case that some innovations regarding the market approach are
necessary. What first came to her mind was to ask young people how they see „smart“ brand.
Positioning strategy should be changed and alternative communication forms should be considered – was
the conclusion made based upon numerous interviews Dusan Tadic, has conducted with the young. Dusan
Tadic presented these findings to Ms Vucinic over the phone. Ms Vucinic hang up the phone and started
thinking about alternative communication forms as a way to achieve goals and to successfully position the
brand on the Serbian market.
After numerous meetings and interviews, her final conclusion was somewhat modest: "I don’t think we
should entirely focus on alternative communication forms as the only way for positioning the smart brand on
the Serbian market. It would be good to keep the original positioning strategies and to up build them with
alternative communication forms."
1. INTRODUCTION
The way of living, modern trends and lack of time have all forced car manufacturers to design car models
that could meet the needs of a modern man. Market research has established that population in urban
environment all over the world has similar daily problems, reflecting in impossibility to complete all daily
chores with losing as less time as possible, to be mobile, and to own a car that spends less fuel and is easy
for parking. The visionary team from Mercedes-Benz has recognized these issues in the 1970s and has
started their work on developing small city car. Today, this concept is well-known as “smart” brand, one of
the leading brands in premium segment of mini cars class.
The Mercedes-Benz Serbia is a daughter company of Daimler-Benz which has been present on the Serbian
market since early 2003. Recognizing world trends and problems of urban environment which Serbian
citizens face with, the company Mercedes-Benz Serbia and Montenegro has introduced smart brand to the
Serbian market in March 2009.
Bad economic situation, originally set off by global economic crisis, forced the company Mercedes-Benz
Serbia and Montenegro to adapt the initial positioning strategy for a new brand on the Serbian market to the
conditions and consumers’ demands. As a result of the adaption to the new situation, in early 2010 the
company has adopted new positioning strategy and new way of communicating with target audience.
This case study presents a practical example of a leading car manufacturer in the world, Daimler company,
and its innovative brand “smart”. Authors of this case study present implementation of positioning strategy of
a new car brand on the Serbian market.
2. THE COMPANY DAIMLER AG
Daimler AG, with the headquarters in Stuttgart, and manufacturing programme of Mercedes-Benz passenger
cars, Daimler trucks, Daimler financial services, Mercedes-Benz transporters, and Daimler buses, is the
world leader in manufacturing passenger cars and the greatest world manufacturer of commercial vehicles.
Daimler financial services sector offers a wide range of financial services, including financing, leasing,
insurance and fleet management. Daimler sells its products in almost all the countries in the world and has
production facilities on five continents. Founders of the company, Gottlieb Daimler and Carl Benz, continued
to write the car history by creating new inventions, starting from the first car in 1886. As car industry
pioneers, Daimler AG gladly accepts commitment to conduct socially and environmentally responsible
business and to create future safe and sustainable progress in advanced technologies and high quality
products. The current portfolio includes the most valuable car brands, Mercedes-Benz, as well as smart,
Maybach, Freightliner, Sterling, Western Star, Mitsubishi Fuso, Setra, Orion, and Thomas Built Buses. The
company is present on Frankfurt, New York, and Stuttgart stock exchange (the index DAI). In 2007, the
group sold 2.1 million of vehicles and hired 270,000 employees. The revenue was 99.4 bn Euros and EBIT in
the amount of 8.7 bn. Daimler is a car group dedicated to perfection in providing services, with aim to
achieve sustainable growth and to be leader in profitability in its industry.
3. COOPERATION BETWEEN SWATCH AND DAIMLER
The first stage of smart brand development dates 35 years back, to be more precise dates back to the early
1970s. Mercedes-Benz started working on design study for the car of the future in 2000. Research and
futuristic development always played an important role within the company. This approach requires creative
people who know what direction the future of traffic would take, who have sense of trends and are
imaginative. Successful researcher’s work focusing on future results has brought to many innovations that
the company used for its design study and for designing future research on cars for mass production. In
accordance with tradition, visionaries employed at Mercedes-Benz are at least ten years ahead of their time.
The project of compact cars was two decades ahead of the time when it was created. This highly visionary
project was fastened by the oil crisis that even resulted in forbidding driving in Europe in 1973. Based on that
experience and estimation of the future turnover growth, engineers and designers working for Mercedes-
Benz project team have established the need for particularly economical and compact car for the future.
With aim to preserve mobility in urban environment, the project team had already developed some specific
ideas – two-seat vehicle 2.5m long with wheelbase of 1.7m – the future smart car. However, in the beginning
the visionary concept of small cars had not been accepted. This could not be assigned to spatial problem, as
it could have been expected, but to the safety issue of a car such as this one.
In 1994, the Swatch Group declared setting up of MCC, a partnership made with the German car
manufacturer Mercedes–Benz, in order to produce two-seated car, an ecological city car which would later
on become known as Smart. By applying their knowledge from the field of microelectronics, Swatch set up
strategies referring to the product design and marketing, whereas Mercedes-Benz took care of mechanics,
comfort, safety and quality.
In 1997, the board consisting from managers from both companies met to discuss production start. The car,
today known as smart fortwo has originally been introduced to the public at Frankfurt International Motor
Show in 1997. At the same time, brand “smart” from companies Daimler Chrysler – Daimler-Benz had its
own debut. The project was late and the budget had to be extended. All considered the project to be great,
but they knew they could not launch it onto the market. Some technical changes had to be introduced, and
the financial analysis showed completely different product. In November 1998, only a few weeks after
launching Smart, Swatch Group sold all of its shares to Mercedes. In the period from October 1998, when
Smart was released to sales and end of March 1999, Daimler-Chrysler has sold 30.000 smart cars in
Europe, and analysis showed that the number has increased to 80.000 by the end of 1999. Starting from
1998, the buyers have opted for this unique car – in total 770.256 smart fortwo cars has been produced
between 1997 and 2006.
4. SMART CAR CONCEPT
Highly compact and innovative with attitude of a very self-confident individual - smart city coupe radically
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demolishes conventional concept of a car of the 20 century. In its own way, this two-seater has answered
many demands such as individual mobility, etc. This car takes little space, has low fuel consumption, and it
emits the minimal CO2 amounts. Apart from that it can transport two persons and their luggage to desired
destination – safely and comfortably. Never before has the production of a smallest volume car possible
been so cleverly designed to the smallest details.
The numerous challenges have shown as problems of today not tomorrow. Since April 2007, the second
generation of smart fortwo has reached the market – with even more innovations. No other company has
such an experience in this car category as the Daimler. This experience is a part of more than 120 years
long history in car industry that the company has started writing since 1886. The company also has
abundance of constructive solutions for the problem of personal mobility.
The history of the smart is short but multi-faceted. The smart city coupe with gasoline engine came onto the
market in 1998, the diesel-engined version in 1999. The smart cabrio complemented the model lineup at a
later stage. It was followed by the smart roadster, the smart roadster-coupe and the smart forfour – all of
them history today. This is because the brand is now fully concentrating on the archetype of the smart – as
the perfect response to a large number of pressing mobility issues. Smart fortwo has long ago become
famous in many cities all over the world. German weekly magazine "Die Zeit", has coined a phrase "urban
icon" for this concept of cars that set new standards in innovative mobility, which includes systematic
inclusion of new technical characteristics and design that visually sets out structural details. The second
generation of smart fortwo clearly continues with tradition of its predecessor, as well as fascinating story
about smart brand.
5. TARGET SEGMENTS OF SMART BRAND
Table 1 provides description of target segments for smart brand with characteristics that define it when it
comes to global market, and which are accepted on the Serbian market as well.
Table 1: Target segments for smart brand on global and local markets
Well-established players Urban trend-setters Liberal elite Popular
- golden youth - aspiration for - high education and high - young and younger
professional success, incomes adults
- highly qualified and financially social acknowledgement
stable and high living standard - self-confident, open and - try to succeed and have
tolerant fun
- live mostly in urban areas - ambitious in long-term,
but relaxed in everyday life - led by desire for -
- want to enjoy life in every success and results entrepreneurial/dealership-
sense - enjoy comfortable achieved like mentality
- spend time mostly in trendy consumer lifestyle
- experts and good - high mobility
places (cafes, restaurants, - see current changes as leaders
clubs) new possibilities - need to express and
- conscientious about prove themselves
- go to the gyms and wellness - spend money on social status
centres travelling, cars, clothes - trans-aggressive
and real-estates - ready to use privileges behaviour, but traditional
- have lots of friends that they have, but role models in private lives
- active, urban lifestyle - active social life revitalizing objects
materialistically;
- great interest for the latest interested in fashion and
fashion trends (as consumers) design
- want to estimate their
individuality
6. INTRODUCING SMART BRAND TO THE SERBIAN MARKET
In March 2009, the company Mercedes-Benz Serbia has launched new smart brand onto the Serbian
market. The opportunity for this launch was the biggest annual happening when it comes to passenger’s cars
in Serbia – Belgrade International Motor Show. Positioning strategy of smart brand is established upon four
key advantages this model has in comparison to the other cars: functionality, dimensions, unique concept,
and individuality. Communication strategy was based on emphasizing smart brand as the best option to buy
in premium segment and emphasizing vehicles as the shortest one in the world, with price of a basic model
ranging from 9.990 Euros. Communication message relied on the following elements: urban lifestyle,
functionality, eco aspect of the car, and the car being an adequate solution for traffic jams.
Picture 1: Launching smart brand on International Motor Show 2009 in Belgrade
Given that Serbian market had almost no idea about smart brand, Mercedes-Benz Serbia and Montenegro
used help and experience from the neighbouring countries Italy and Greece. Italy being the country with the
biggest smart brand fun club and Greece as the market with the greatest increase in sales. For the purpose
of launching smart brand on the Serbian market, a special event Italy & Greece Meet Serbia was organized
during the Belgrade International Motor Show.
Picture 2: Special event Italy & Greece Meets Serbia
After successful launching of the brand on the Serbian market, the company continued with promo activities
with aim to introduce the brand to consumers and to raise brand-conscience. Apart from presenting the
brand on Belgrade International Motor Show, the company provided some printed promo material that
helped consumer to get informed on model characteristics, with focus on dimensions and fuel consumption.
After the motor show, the company started working on redecorating a part of salon of Mercedes-Benz in
Belgrade. They have completely adapted that part to the visual requirements of smart brand. That is the only
sales point and showroom in Serbia. In 2009, smart brand was successfully promoted on Museum Night,
Wedding Fair, Science Fair, Golf course Beograd, and Motor Show in Novi Sad.
7. TROUBLE IN PARADISE
The global economic crisis has hit all segments of economy and left the biggest mark on car industry seen
globally. Great number of manufacturers has made an important decision to sell a part or the whole portfolios
of products and in such a way to try to make up for the losses. The company Mercedes-Benz Serbia and
Montenegro has also felt the effects of world economic crisis. They reflected in decreased sales of all car
brands that belong to this company, including the smart brand. Given that smart brand belongs to the
category of premium products, with high prices and that is identified as the second car, the economic crisis
had impact on the sale of the car. Analysis of the given results, market trends, and economic situation in
Serbia in 2009, management of Mercedes-Benz Serbia and Montenegro established that it was necessary to
drastically change the approach to the market and to try to motivate consumers in some other way. In early
2010, as an answer to the given problem and set goals, the first new communication strategy was adopted.
The strategy implied communication through alternative channels. It was also decided that, for the purpose
of decreasing promotional costs, it was necessary to go from above the line promotional activities to the
below the line ones and in such a way to try and reach the goals set by smart brand.
8. ALTERNATIVE COMMUNICATION STRATEGY
8.1 Supermarket concept store, car exhibited (product placement)
Promotional activities regarding new communication platform adopted for smart brand started with exhibiting
the car in the Supermarket, the capital’s concept store which serves as a place where urban population and
artists meet.
Picture 3: Product placement of “smart” brand – Supermarket concept store Belgrade
For the next period promotional activities will increase through different interactive contents with buyers
following the spirit of smart brand. During the Belgrade Design Week 2010, smart was displayed in the lobby
of the conference, and potential buyer – one of the target groups on the Serbian market, designers, had a
chance to get familiar with smart brand.
Picture 4: Promotion of smart brand at Belgrade Design Week 2010
The aim is clear focus on innovative ideas, two-way communication with young and active urban people,
encouraging people to participate in creating idea and conscience, as well as the brand story. This would
lead to innovative approach that could be named alternative product placement and it would explain the
notion that vehicle “comes to the buyer”, and that the sale point has been dislocated from the showroom and
usual places in which it is expected to see and watch a vehicle.
9. CONCLUSION
The year in which smart brand has been launched on the Serbian market turned out to be a turbulent one for
many reasons. In the year marked by great economic crisis, factors influencing recorded results are
numerous. Smart brand was introduced to the Serbian market in a very uncertain moment. However, that
served as an incentive to think differently, to direct the thoughts to ATL affects which did not produce
adequate effects.
Given that brand allows the move as such – the decision to turn to alternative communication models, and
alternative product placement was made, because it was believed it would enable the choice of clients in a
more proactive way.
9. LITERATURE
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[1] Daimler AG (2010), „Company“, taken on: April 10 from http://www.daimler.com/company
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[2] Mercedes-Benz Serbia (2009), „Together we make the star shine!“, taken on: April 15 from
http://www.mercedes-
benz.rs/content/serbia/mpc/mpc_serbia_website/rsng/home_mpc/passengercars/home/key_customer/yo
ur_opinion.html
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[3] Smart brand (2010), „Smart story“, taken on: April 9 from http://www.smart.com/is-
bin/INTERSHOP.enfinity/WFS/mpc-uk-content-Site/-/-/-/Default-Home
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[4] Smart Serbia (2009), „Smart world“, taken on: April 11 from http://rs.smart.com/smart-svet-
doga%C4%91aji-sponzorstva/51fe665f-e03c-59e5-a649-8ab643658639