Mercedes-Benz Daimler AG, the Maker of Mercedes-Benz Automobiles, Is Planning to to Launch

question 28

Multiple Choice

Mercedes-Benz
Daimler AG, the maker of Mercedes-Benz automobiles, is planning to launch a new line of downsized luxury vehicles in the United States by 2012. Daimler has experienced a recent drop in global sales attributed to its product mix that focuses on larger luxury automobiles. With increasing fuel prices and stricter U.S. fuel-economy standards coming down the pipeline, Daimler doesn't want to be left behind. Daimler is behind its competition, though. Its German rivals, Audi and BMW, have been relatively successful in the U.S. BMW"s Mini Cooper, demanding as much as $34,000, has already driven away with some of Daimler's potential sales. While Daimler already offers the Smart car in the U.S., the new offerings will not be going after the same consumers.
-Refer to Mercedes-Benz. Which positioning base will Daimler be using if the company emphasizes the type of people who buy Mercedes-Benz automobiles in its promotional efforts?

• A) product user
• B) emotion
• C) price and quality
• D) attribute
• E) use or application

---

Definitions:

Required Rate

The minimum return that investors expect to earn when they invest in a project, often used as the discount rate in capital budgeting.

Straight-line Depreciation

A method for dispersing the cost of a physical asset across its useful life in even annual allocations.

Discounted Payback

A capital budgeting method used to determine the profitability of an investment by calculating the time it takes for the present value of cash flows to cover the initial investment cost.

Annual Cash Flows

The total amount of money being transferred in and out of a business, considered on a yearly basis.