Mercedes-Benz is starting to solve its confusing portfolio. Reuters reports that Mercedes is to drop the EQ product brand.
The Mercedes-Benz portfolio is confusing as I detailed in a previous post in Oct 2021. One of the most striking examples of bad portfolio branding and execution is the Mercedes-EQ product branding for all-electric cars.
“EQS by Mercedes-EQ”
There is so much wrong with that sentence. The car EQS is a model by Mercedes-Benz, not by the Mercedes-EQ model family. And of course, in the Mercedes-Benz context, there is no need to repeat the company brand at all.
A much better solution would have been “New era: the EQ line for all-electric”.
Mercedes-Benz took (I guess) the internal organizational division between Gasoline and EV very seriously and launched an entirely new line of cars, even though in terms of actual car type/categories (SUV, limousine etc) the electric cars are the same as the combustion engine car brothers and sisters.
The combustion engine B on the left, the electric on the right. Same category, same design but a different name.
A much better solution would have been to just use the EQ moniker to indicate the EV variant, similar to the fully descriptive “Plug-in Hybrid” to indicate the hybrid variant.
The removal of EQ as a complete product line might take some time:
“The decision is based on Chief Executive Ola Kaellenius’ focus on electric-only cars, making the EQ brand redundant as Mercedes turns away from the combustion engine, Handelsblatt cited the sources as saying.”
In other words: Mercedes-Benz is not really intending to provide portfolio clarity or remove the EQ as a separate line. The company is simply replacing all combustion engine cars with fully electric cars.
The executed Switch Strategy does not come without risk. It is all about the ‘old’ gasoline car brands versus the ‘new’ electric car brands in a category shift. To compete in electric, Mercedes-Benz will need to be more convincing in the buyer’s mind than the perceived leader in electric. This means that when a consumer is in the market for an electric luxury SUV, the Tesla Model X has the leadership perception in terms of technology over the Mercedes-Benz GLC EQ.
Mercedes-Benz could have followed the Conquer Strategy, usually the safest and cleanest route to execute the company’s transition into a new category.
Read more about the Conquer and Switch Strategy in the book Win With What – the first category-led growth book for anyone who wants their business to thrive and survive.
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