Folks, Mercedes-Benz has decided to change their retail strategy that aims to offer a comprehensive customer experience when purchasing a Mercedes-Benz passenger car. Mercedes-Benz together with all its retail partners here in Malaysia have entered into a new agreement on key points for the introduction of the agency model in Malaysia. This changes the way how the brand allows its cars to be sold via their dealerships and it will be expected to begin start in September 2023. This is also the first time such a system will be implemented in the South East Asian region also.
The brand with the Three Pointed Star will drive the transformation together with all its retail partners to meet the changed customer needs in the digital era. From what we understand, it now ensures the best customer experience with only one price anywhere you buy throughout Malaysia. i.e, The price is the same throughout Malaysia.
Sagree Sardien, CEO & President, Mercedes-Benz Malaysia said “We are excited to share a major milestone in our mission to strengthen customer loyalty for the Mercedes-Benz brand. Through a close partnership with our esteemed retail partners, we will jointly embark in taking the next step towards revolutionizing our sales model. As the first in the region to implement the agency model for the brand, we are confident that this transformative leap will further enhance our brand's presence and deliver an exceptional customer experience. Together, we look forward to an exciting journey in redefining automotive sales in a highly digital & technological era"
Bettina Plangger, Vice President, Sales & Marketing, Mercedes-Benz Malaysia added, “This progress is driven by changes in customer behavior in the digital age. We want to make it as easy as possible for our customers to interact with us. It doesn’t matter if it’s digital or physical. The agency model supports us in seamlessly connecting all contact points.”
So how it this new Mercedes-Benz passenger Car buying experience? The words from the press release is below:
One price, best customer experience
The new model will empower its customers to a seamless purchasing journey with one best price. Customers will have even more freedom to choose from a national stock, regardless of location or channel. They can conveniently switch between and combine the different contact points, regardless of whether they want to exchange ideas with product experts in its authorized dealership; obtain information and/or conclude the purchase contract online.
Retail partners to continue as brand representatives
Mercedes-Benz's retail partners will maintain their pivotal role as experts and Brand Ambassadors, offering customers a luxurious experience at their retail network. They will play a crucial part in ensuring a seamless customer journey of omni-channel experience, from the initial research phase to the vehicle handover upon purchase.
The new agency model offers its retail partners the opportunity to concentrate even more than before on customers and their support. Customers will continue to benefit from a comprehensive range of services at retail, including vehicle sales, flexible financing options, maintenance and repair services, genuine parts availability and warranty support. This convenient accessibility ensures a holistic ownership experience for customers.
So What Do we think about it?
Well, with this implementation, I think that gone are the days where you go 'bargain hunting' at any authorised Mercedes-Benz dealership here in Malaysia. It now means that if you go to the one at Bukit Tinggi Klang and then to the one at Mutiara Damansara, which are run by two different dealerships you will still get the same price at both dealerships. The stock that are offered are not the ones 'bought by the dealerships as they are cars offered by what is available from Mercedes-Benz Malaysia direct.
The dealerships can concentrate on just selling the Mercedes-Benz experience and all would just be partners in the sales and marketing of the brand from the looks of it. What this allows is a fairer deal in terms of all the dealers involved as in any network of dealers, there will be those that can afford to give more discounts and one that does not do so. If it goes too much one way, one dealer will be throwing prices while the others may complain, or even close shop.
With the control exerted on them, the dealers will have to sell at an authorised price set by their principals and now enter into a price war. They now have to focus on pushing the brand and will be getting the same amount of sales commission between them.
Furthermore, if you are aware, the luxury, or premium market needs to work on exclusivity to keep up to standards. Price throwing may seem nice but in the long run, it actually is of detriment to the brand as it would seem to be a brand living on offers and discounts. Premium brands in all aspects - from luxury handbags to watches are going this way. Take for example handbags from Hermes - there is no way in hell where you can just walk in to a store and buy one with a discount or have one available. You are on a waitlist. If you buy a Rolex, you are on a waitlist and the prices are fixed at the Rolex boutiques. What this does is ensure exclusivity and the class of a brand.
Of course, these are extremes as one can still walk into a Mercedes-Benz dealerships and book one. It is just that prices are now more controlled as is the stock. This is the future folks. Take note as eventually others may follow suit.
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