FRANKFURT - Mercedes-Benz dealers are expanding their US-style 'relationship marketing' program through town-center based retail outlets called Spots.
Spots have already opened in Rome, Milan, Naples, Bologna and eight other prestige Italian locations. Two more are expected to open soon in Florence and Busto Arsizio. Three new Spots have also opened in Stuttgart - at the airport, a multiplex cinema, and the Stella musical center close to DaimlerChrysler's corporate headquarters.
According to Mercedes-Benz Italia President Jochen Prange, the aim is 'to bring the three-pointed star into the town centers where young people work, shop and socialize.'
The Spots sell as many as 500 individual items branded with the Mercedes-Benz star - from lapel pins and watches, to toys and cigarette lighters. There's usually an A-class on show as well.
DaimlerChrysler executives say the A-class needs an original sales and marketing strategy. The A-class's target group of younger buyers may not want to visit established Mercedes-Benz dealerships or upmarket retail outlets.
Reactions to the project, which has been running for a year, have been positive.
'We seem to have managed to bridge the gap to those people, most of them young, who are fascinated by the Mercedes star but who do not - as yet - drive a Mercedes-Benz,' said Prange. 'More than 250,000 people have visited our Spots over the past year. But only 15 percent already own one of our vehicles. Our turnover on accessories has been about $3 million.
The Stuttgart Spots belong to Mercedes-Benz's main Stuttgart dealer, which operates several sites in the area. It costs about $1.2 million to set up a typical Mercedes-Benz Spot - usually too much for a single dealer, especially since not every customer contact is converted into a decision to buy a car.
From the start, the idea has been for several Mercedes-Benz partners in any one region to run a Spot together. They divide the profits from the sale of accessories according to the size of their shareholding.
As an incentive to join the Spot scheme, dealers are given a 2.5 percent higher margin on the sale of an A-class - 16 percent instead of the usual 13.5 percent. Although it is difficult to assess how many sales have been made as a result of the Spot program, 35,000 people have been added to the Mercedes-Benz customer database.
The Spot concept has another advantage. By becoming inter-dependent in the sale of accessories, co-operating partners are less likely to start price wars with each other. Close links between a group of outlets could also lead to sales network rationalization.
This is about to happen in Milan, Prange said. Three dealers and the local Mercedes-Benz retail outlet will be moving together under one roof in January. With more than 5,000 new vehicle sales each year, the operation will represent about one-tenth of Mercedes-Benz's total sales in Italy.