Mercedes’ Steve Cannon On Repositioning A Luxury Brand During The Recession

«The recession has been good for us,» says , ‘s of marketing, only half kidding. While this quintessential luxury brand faced a more challenging environment, Mercedes still managed to emerge from the recession with renewed momentum, launching five new models and building share of market, as it is looking to its 14th consecutive year of sales growth in 2011.

Cannon, a West Point graduate and a former Army Ranger,  points out that the recession «made our business better» because it forces Mercedes to take a hard look at every facet of their operations. So coming out of the economic slowdown, or, as he terms it,  »Going through that crucible of fire,» the company became stronger and better.

I asked Steve what was the key to maintaining Mercedes’ sales momentum. «We realized early on that our traditional positioning as a luxury product needed to be redefined,» he said. Mercedes-Benz’s luxury positioning is different that that of or BMW, which is a bit more frivolous, or just about fun. «Our position was more like a seal of approval; in the sense that when you own a Mercedes, you’ve arrived. «

But the recession meant that people were seeking authenticity and meaningful values beyond the luxury badge. «So we created advertising that focused on the engineering and innovation aspects, and on core issues like «safety,» «design,» and «performance,» all of which are part of Mercedes’ heritage and part of its equity.»

The core target consumers of Mercedes is , and the average age of the owner is 50. But as he thinks about «today,» Cannon also has to think about «tomorrow,» and he describes it as «Building bridges to Gen-Y. » To my surprise, Steve said that the differences between Boomers and Gen-Y are not that big, since the younger group «likes heritage legacy as well.»

To make sure that he is on top of development with Gen-Y, Cannon created GenBenz, a restricted chat, which he uses as a sort of sounding board for ideas and information. He is also ramping up his social-media activity. At the last Super Bowl, during which Mercedes ran a TV spot for the first time, the company sponsored the world’s first tweet-fueled race, engaging a broad audience with a reach of almost 11 million.

The key to Mercedes’ success is that it remains true to its essence. It has a set of values that are not only aspirational, but authentic too. And that gives it a timeless appeal that no other can match.

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