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Mercedes Beyond the Showroom

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“The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones) but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business. The reason they defined their industry incorrectly was that they were railroad oriented instead of transportation oriented; they were product oriented instead of customer oriented.”—Theodore Levitt, “Marketing Myopia,” Harvard Business Review, July-August 1960

Levitt’s observation comes to mind as it seems that automotive companies may have to think of themselves outside the context of building cars and trucks.



Some say that they have to become “mobility” companies. Which may be true. They may have to offer more in the way of transportation, be it bicycles, motorcycles, or even jets, all offered or being developed by what are otherwise considered to be “car” companies.

One OEM is really doing an extensive job in redefining itself as something other than just a manufacturer of cars. Mercedes-Benz is, certainly, continuing, perhaps more zealously than ever, to produce fine automobiles.

But it has also established car2go, a car-sharing service, which has launched in Austin, Texas, no doubt hoping that some of the SXSW magic rubs off on its effort.

It more recently established “Boost by Mercedes-Benz” in Palo Alto, California, a “youth transportation system.”

This is the brainchild of Business Innovation at Mercedes-Benz Research & Development North America. Speaking of what they do, Rasheq Zarif, senior manager of the Business Innovation Team, said, “One of our goals in Business Innovation is to change the way people think about transportation.”

In the case of Boost, parents in the Palo Alto area can reserve rides for their kids on the company’s website. The to-and-from locations are specified, as is a time window. Sprinter vans are then used for the transportation. Through wireless and GPS technology the parents can know the status of the trip.

Chances are, there aren’t going to be more Sprinters sold via Boost. There may be a boost in the sales of smart fortwos, the cars used for car2go.

But more importantly, people—at least in Austin and Palo Alto—will begin to think of Mercedes as more than just a “car” company.

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