INTRODUCTION

Background Information

Internationalisation has been the order of the day for most big companies in the world.  Companies in almost all industries are internationalising today and one of such is the automobile industry. Mercedes for instance is one of the companies in the automobile industries that has internationalised widely to almost all countries in the world. Mercedes or Mercedes-Benz, as sometimes referred to, is a German automobile company headquartered in Stuttgart and known for its manufacturer of luxury cars, Coaches, Trucks and buses (Yao & Schwarz, 2017). Mercedes Benz was founded in 1926 by Karl Benz and Gottlieb Daimler and for the 90 years in which it has been operational, it has internationalised from just serving the German market to its current worldwide operational status (McDermott, 2014). Viewed from certain perspective, it can easily be assumed that Mercedes Benz’s elegant brand is behind its efficiency in internationalisation. For instance, in 2014 alone Mercedes registered a growth of 18% and was ranked among the fastest growing top brands (Yao & Schwarz, 2017). This growth was somehow linked to the company slogan “the best or nothing”. This leads to the question: How influential is the Mercedes Benz’s brand in the company’s internationalisation? This study will serve to provide an answer to this question.

Study Aims and Objectives

The aim of this study is to assess the role of brand reputation in Mercedes’ internationalisation. To ensure that this aim is adequately explored a number of objectives have been formulated to guide the study. These objectives are as follows:

1. To critically examine the relationship between brand image and consumer purchase of Mercedes in China market
2. To critically examine the relationship between brand identity and consumer purchase of Mercedes in China market
3. To examine whether perceptions of luxury influences consumer purchase of the Mercedes brand reputation in China market

Research Questions

Based on these objectives, the study questions that arise are

1. How does the brand image of Mercedes influence consumer purchase of the brand in China market?
2. What is the association between brand identity and consumer purchase of the brand in China market?
3. How does the consumer perceptions of luxury influence consumer purchase of the Mercedes brand reputation in China market?

These research questions are feasible for this research and these will be successfully answered through empirical research where a survey will be conducted and customers of Mercedes will be targeted as the sample for the primary research.

LITERATURE REVIEW

According to Marinova, Nummela and Larimo (2017), internationalisation as a topic has received notable coverage. This section serves to discuss the theories as well as past studies that have touched on this field of research.

Theoretical Framework: Eclectic Paradigm

This study will be premised on the theory of Eclectic Paradigm. Eclectic Paradigm or the OLI-Model is an economic theory brought forward by John Dunning in 1979 (Dunning, 1980). This theory posits that any business transaction in a market is argued as worth only if the cost of the transaction is comparatively higher that the internal costs (Arnett &Madhavaram, 2012). That is to say, a business transaction is only worth if it stands to be profitable. As such, a company’s operations / entry into any market is only worth if it stands to remit some profit to the company.  In operating in international markets, what is important is the ability of the customers to purchase from the firm. The reputation of the brand can impact significantly on the performance of the firm in these markets based on how consumers perceive and interact with the brand.

 

Past Studies

So much has been touched on this topic going by the past studies. Past studies have outlined a number of factors as being helpful with foreign market entry and survival. Some of these points include (a) brand reputation, (b) customer preference (c) psychological satisfaction that comes with brand

Brand Reputation

It is argued that brand reputation can be a facilitator in internationalisation. That is to say, it can ease a company’s entry into new markets. Using IKEA as an example, the company’s brand reputation has been acknowledged for its easy entry into the Indian market which is one of its biggest markets now (Ehsan Ullah, Karlsson & Dada Olanrewaju, 2016). IKEA is a Swedish company well known for its reputa