I'm not sure I would even say it is less prestigious - I think the nature of "prestige" has changed - it's far more multi-faceted now - most luxury brands today are quite pluralistic rather than market-specific. Take a Brand like Louis Vuitton, once only bought by relatively wealthy people as a very Conservative symbol of pedigree and taste. Today however, Vuitton is a fashion brand and some of the designs on offer would hardly appeal to most of their traditional clientèle (see below) - the quality hasn't changed and they still offer their superb traditional traveling luggage but they have expanded the brand to appeal to a much wider clientèle. The tastes of the people in the luxury market are more diverse than ever, this is probably due to the huge increase in the numbers of newly-wealthy individuals who often have quite different tastes to those of people who have had a more "cultivated" upbringing. In other words, people who were born into a life of privilege often have a different appreciation of luxury because they have a better understanding of the subtle social codes of the elite. The thing is, as I have learned in life, rich people aren't just people with a lot of money - they are not some generic group that all have the same tastes and lifestyles - like everybody else, some wealthy people have exceptionally fine taste and spend their fortunes on high-culture and wonderful things, while others have absolutely no concept of greatness and squander their money on tasteless garbage.

On the LV handbag below: Paris Hilton might be able to get away with it, but Princess Diana wouldn't have been seen dead with it (sorry that was a bad pun.)

You have great brand awareness Rob and I echo your sentiments that money doesn't buy good taste. But let's get back to issue at hand here, primarily that of Mr Trout's assertion that, in a nutshell, model diversification has led to dilution of the Mercedes Benz brand cachet.

Whilst Mr. Trout has a far more illustrious career and resumé than I, one has to at least enquire: is the model expansion within the MB stable solely responsible for Mercedes' "brand schizophrenia"? Even if your answer is a resounding yes, I'd go further to ask, well so what of it? In an industry driven by such rapidly changing market forces, aren't MB vindicated in their model expansion drive? Shouldn't they be lauded for having the vision to change? If other manufacturers such as VW took steps to move their brands upmarket then surely it's an obvious counter-tactic for MB to introduce smaller, downmarket models?

This is the 21st century and car design has evolved massively from the early nineties. The introduction of upmarket SUVs and versatile people movers have really altered people's perceptions of what constitutes value in a car.
Renault asks "Isn't Space the Ultimate Luxury?" Quite, to a family of 5 a Renault Espace is eminently more "luxurious" than an S-Klasse for example. Enter the crossover concept, because the boundaries of convenience and luxury are becoming ever more blurred.

Very very good point Roberto...as usual.

I think I actually prefer the more accessible image the company has now as opposed to the elitist one of the past. I remember a time where you would walk into a Mercedes show room in Australia, and the sales personal would literally look down their noses at you as if to question whether you could afford the car or not. A**holes.

BTW, that bag is F**gly.

Guys, I have a few questions for you, and I would like you to answer them. OK?

1. What the Mercedes-Benz brand stands for (emphasis on today vs. in the past) - what is/was an identity of MB brand?

2. If a difference in MB brand identity has occured, why did that happen? Could it be a product diversification a cause for that, or not?

3. What the other prestigous brands stand for, IYO? Name it specifically for Audi, BMW, Porsche, Bentley, Rolls-Royce, Maybach, Jaguar, Cadillac, Ferrari, Masserati, Buggati, Lamborghini, Lexus and Infinity. Do these brands have an identity / personality at all, or not?

I bet you'll have a lot of troubles to give proper answers, because brand shizophrenia is much present! Not only at MB.

Well, I don't know, Tine.
I'm quite sure that BMW stands for RWD (and RWD AWD) Driver's Car. Sheer Driving Pleasure seems to be quite well for a motto, well as long as you don't load the trunck.
Rolls Royce - the ultimate passanger car.
Ferrari, the ultimate passional (super) sport car.
And so on.
The problem with MB seems to be this "everything to everyone" witch doesn't translate in anything particulary special.
But expansion is a must for just about every premium brand.

Exactly! Product range expansion isn't a bad thing per se, if done correctly. And that's the catch: MB have done the expansion with products which haven't been compatible with brand virtues / values / identity.

BMW, on the other hand, have done a product expansion and keep brand identity / value untouched. All the new product are still "ultimate driving machines" and offer "sheer driving pleasure": BMW brand in every case assures that BMW branded vehicles are the best or one of the best handling and agile vehicles in their class, and are fun to drive.

I think it pretty much stands for what it always stood for, precision engineering, highest quality, and prestige - those values have not changed but market forces have played a big part in how Mercedes has been re-structuring itself over the past decade - this has been quite disruptive to the whole company and some in the industry have taken great delight in seeing the brand struggling a bit in recent times - long term, I think Mercedes will have to get used to sharing the spotlight with BMW and Audi - I think they are all pretty much on a par with each other as far as quality goes these days.

I don't think it is solely product diversification, the fact is both BMW and Audi are producing extremely competitive cars that take on Mercedes and beat it in some areas - as far as brand image goes, Mercedes is still the brand that people associate with German quality - it is still the biggest bourgeois status symbol.
PORSCHE
I have always had a special fondness for Porsche. It is an outstanding brand - IMO they still build the best cars in Germany. In spite of Porsche's foray into the SUV market, they have remained true to their traditional values. Porsche is a less emotional brand than Ferrari - their brand image is more academic, more intellectual and pragmatic - just like their cars - this is why Porsche is so strong - it is a brand that knows precisely what it represents.

FERRARI
Whereas Porsche is about technology and cold, hard engineering from a level-headed perspective, Ferrari is about passion and the artistry of high speed, the aestheticism of engineering - it is very Italian in that way. Ferraris are of course high-tech, but that is not their raison d'être (unlike Porsche), a Ferrari is an object of passion first and foremost. Their brand image is so strong - I can't imagine them ever building an SUV or limousine - that would just be wrong.

LAMBORGHINI
Only the Italians could create such a car as a Lamborghini (the old ones at least) - the outrageousness of them is something that only an Italian could see any logic in. Visibility and practicality are of absolutely no concern to a Lamborghini fanatic. The new Lamborghinis are technically better than ever, but I can't help feeling that some of the old magic has been lost under Audi. Somehow, even a gentle influence of German logic seems to have softened the whole image of Lamborghini - don't get me wrong, the Murcielago is a wonderful car, but it just doesn't have that Italian spark of "genius bordering on insanity" that the old cars had - that is now the preserve of Pagani.

ROLLS-ROYCE
The venerable old lady, few other brands are as powerfully evocative as Rolls-Royce. When I think of what Rolls-Royce means, the picture I have in mind is of a 1920's aristocratic Englishwomen being driven in her Phantom II to a London atelier to have a fitting for a party dress in time for "the season". But in these politically correct and less sophisticated times, the traditional Rolls-Royce image is an anachronism, with all it's connotations of breeding and class distinction. Today's Rolls-Royce buyer, is far more likely to have aspired to owning one rather than inheriting the means to do so. In the past, owning a Rolls-Royce was something one was born to - they were a symbol of high-birth. Today, Rolls-Royce is a symbol of success - an aspirational object rather than an symbol of class elitism.

BUGATTI
As much as I admire the Veyron, to me you simply cannot resurrect history (as DCX are finding out with Maybach). The rarefied world Ettore Bugatti lived in was far more elegant and dignified than anything that exists today - a world of connoisseurs, craftsmanship, and art. The Bugattis built in Molsheim in the 1920's and 30's were the products of passion, exquisite taste and most of all, love. Ettore Bugatti was a man of his time and his vehicles were the ultimate automotive expression of high-culture in their time. Sadly today, this context simply cannot be recreated - far too much has changed. The new Bugattis may be great cars - but the originals are something extraordinarily rare, they are objects of true greatness - the pure expression of engineering as art.

Nice points Tine and IE and I'm not going to disagree altogether with you either...

I've been giving this subject a lot of thought and I'm still no nearer any cut and dried substantiated facts. As IE puts it, model expansion is a necessary evil for any premium manufacturer - especially down market to counter the threat of traditionally mass market manufacturers' premium aspirations (i.e. VWAG, Toyota, Ford etc...)

Case in point:
All of a sardine, the world's benchmark for premium compact saloons, the BMW 3er, had a ton of new competitors: 190E/C-Class, Audi A4, Lexus IS, Jag X-Type, Alfa 156 and so on... but hang on, that's not the full extent of the competition! Enter the premium hatchback segment and instantly BMW had whole new threat to contend with. The Golf IV and Audi A3 especially were directly responsible for usurping sales from BMW in the lower end of the market. I'm a prime example of such consumerism and so too are many of my friends... We bought premium hatchbacks over 318i and 320i's simply because the hatches made for better value than the slightly more expensive 3er. What we lost in terms of handling dynamics, we more than made up for in terms of price, build quality, performance and versatility.

Now, this was precisely the reason that BMW chose to introduce the 1 series: to counter the threat from a segment below. To support your point regarding staying true to BMW brand values, Tine, the new 1 series was every bit the BMW it ought to be, rear-wheel drive and sheer BMW driving pleasure. But whilst BMW's core identity was left intact, the sad reality of the 1 series is that it is a flawed hatchback that realistically only appeals to blinkered badge snobs. Compared with its competitors, the 1er is small, cramped, space inefficient and ultimately, not as versatile. Sure, it handles like a dream but don't BMW realise that a premium hatch has to be a great all-rounder? It's a car for the young, upwardly mobile family with maybe one or two small kids. Try putting a pram in the boot of a 1er, try putting a toddler into a car seat (that back door appeture is so small that any attempt is a frustrating exercise) and then take your family away for a weekend. I'd rather try this in a 5-door Golf or A3. I will be very, very surprised if the 1er sustains current sales because there are better premium hatches out there and they're not rear-wheel drive. So, in short, BMW brand values retained intact albeit with a compromised product; +1 for the brand analysts, -1 for the consumer. At least Mercedes Benz tried to fob their version off as a sports coupé bereft of any traditional hatchback virtue pretence.

What about BMW's SUV dabblings? Are they true to core brand values? Sure, they might be the best handling cars in their class (actually, they're not) but still, they are just SUV's with a high centre of gravity and raised ground clearance with none of the formidable road holding of their road-car cousins. A 5er Touring will blitz an X5 in the twisties. But, hang on you all exclaim: the X5 is an SUV! No, it's not. BMW call it an "SAV" for Sports Activity Vehicle (heaven knows what kind of sports activity one is meant to get up to in an X3/5) meaning that one shouldn't expect too much of them off the beaten track. Again, brand integrity safeguarded by an ultimately compromised concept. At least you can do some decent off-roading in an ML - and don't give me that "yeah but an X5 handles better on the road and that's where 90% will remain", if that's the case then why bother offer it in the first place. Oh wait, I remember - to compete with the ML.

I haven't got it in for BMW. Those of you who know me, know that I hold them in the highest regard - where merit is due...

Back on topic, now poor old Mercedes Benz' brand gets a pasting from Mr Trout and he puts this down to model diversification. Yes, I'll concede that the diversification may be the root cause, but then it's also a very real necessity. Building ML's in Alabama and A-Class elk test roll overs might be directly attributable to the introduction of diversified models but the problems arising from an unreliable OEM wiring harness from a trusted supplier has nothing to do with the aforementioned course of action.
Mercedes Benz has the reputation just a short while back of building unimpeachable cars that were widely regarded as the best in the world. What Mercedes did, Mercedes did best and to a large extent they do still make some beautifully put together cars. But this is a new millenium and the market forces that act on car companies are stronger and more varied than ever. Mercedes Benz might've just carried on doing what they did in the past but then would they still be here today? Perhaps, as a wholly owned subsidiary of Hyundai Motor Corp.

The best thing about mistakes is that you learn from them, and Mercedes is learning fast. Right now, they're struggling, but they'll turn the tide.

To summarise:
1. Mr Trout's assertion that brand schizophrenia is the root cause for Mercedes' identity woes is stating the obvious without acknowledging the necessity for such practice.
2. There's more to Mercedes' woes than just model diversity.
3. Other manufacturers may have introduced diversified models that retain core brand identity but those models are invariably compromised as products within the segments they compete.

Stunning, thought-provoking post martinbo.

M

Excellent points martinbo.