Marketing plan on BMW
Contents
1. Purpose and Mission
.1 Purpose of the Marketing Plan
.2 Organization Mission Statement
.3 BMW Strategies
. Situational Analysis
.1 Internal environment
.1.1 Clients
.1.2 Competitors
.1.3 Suppliers
.1.4 Channel Members
.1.5 Public
.2 External environment
.2.1 Political
.2.2 Economical
.2.3 Social
.2.4 Technological
.3 Financial Codition
.4 Summary (SWOT analysis)
. Marketing Programs
.1 Target Markets
.2 Product (PLC, BCG)
.3 Promotion
.4 Distribution
.5 Pricing
. Conclusions and Recommendations
.1 Concusions
.2 Recommendations
Part 1: Purpose and Mission
.1 Purpose of the Marketing Plan
of this project is to provide the basic information about the
company BMW, analyze the contemporary situation, its place in the world
automotive market, identify its marketing strategy, determine the company’s
objectives and define the basic components of marketing mix.addition, this plan
was produced to review the industry and BMW’s share in it, continue the growth
of existing product and revenues and give some recommendations and my vision to
the future.information is useful for analyzing the automotive industry,
research of advantages and disadvantages of BMW production, elimination of
these problems and setting the targets to be achieved in the next year.
1.2 Organization Mission Statement
is an acronym for Bayerische Motoren Werke AG or, in English,
Bavarian Motor Works. Whatever you call it, the German-based company is one of
the world's most respected automakers, renowned for crafting luxury cars that
offer superior levels of driving enjoyment.in Munich, the company began in the
early 1910s as an aircraft manufacturer. BMW's current logo, designed to
represent white propeller blades against a blue sky, reflects these origins;
its blue-and-white color scheme also references Bavaria's blue-and-white
checkered flag.wasn't until 1928 that production began on the first BMW
automobile, the Dixi. The car proved tremendously popular, and its success
helped the manufacturer weather the Depression. BMW's best-known pre-World War
II vehicle was the Type 328 roadster, a supple two-seater that racked up over
120 victories on the motorsport circuit between 1936 and 1940. Postwar BMW cars
maintained this tradition, winning several racing, rallying and hill climb
victories.early 1950s saw the launch of the BMW 501, a roomy, voluptuous sedan
that was resplendent with all of the hopefulness of that era. It was soon
followed by the 502 which was powered by the world's first light-alloy V8,
foreshadowing BMW's ongoing commitment to developing new technology. The
best-selling BMW of that decade was the Isetta, a petite two-seat
"microcar" typically powered by a 12- or 13-horsepower engine. The
mid-'50s also saw the debut of the limited production and breathtakingly
beautiful 507 sports car which had an alloy body and used the 502's V8 for
propulsion. In the 1960s, BMW sales strengthened significantly, thanks in part
to the immense popularity of the 1500, a sporty family sedan.the 1970s, BMW was
establishing itself as a full-fledged car company. It was a pioneer for many
emerging technologies, including turbocharging and advanced vehicle
electronics. This was also the period when BMW of North America was established
and consumers, who coveted both sports and luxury cars, became loyal
"Bimmer" owners. The '70s also saw the birth of BMW's three-tier
sport sedan range consisting of the 3 Series, 5 Series and 7 Series cars and
the creation of its performance M division.recently, the company has been
expanding its reach worldwide. It opened its first U.S. manufacturing plant in
the latter half of the 1990s and has expanded its brand empire to include Mini
and Rolls-Royce. BMW also continues to build motorcycles, something it has done
since the 1920s.
The BMW Group is one of the most successful makers of cars
and motorcycles worldwide and among the largest industrial companies in
Germany. With BMW, MINI and Rolls-Royce, the BMW Group owns three of the
strongest premium brands in the automotive industry. The vehicles it
manufactures set the highest standards in terms of aesthetics, dynamics,
technology and quality, a fact borne out by the BMW Group’s leading position in
engineering and innovation. In addition to its strong position in the
motorcycles market, the BMW Group also offers its customers a successful range
of financial services. In recent years, the Group has also established itself
as a leading provider of premium services for individual mobility.
term thinking and responsible action have long been the
cornerstones of our success. Striving for ecological and social sustainability
along the entire value added chain, taking full responsibility for our products
and giving an unequivocal commitment to preserving resources are prime
objectives firmly embedded in our corporate strategy. Thanks to these
endeavours, we have been among the most sustainable companies in the automobile
industry for many years.
The automaker's famous advertising slogan describes each of its
vehicles as "the ultimate driving machine," and it's not mere
hyperbole. Over the past couple of decades, BMWs have become the standard for
performance and luxury in most of the "over $30,000" segments. With
family-friendly wagons, crisp sedans, distinctive coupes, nimble sports cars
and spacious SUVs offered, BMW's model roster is diverse. But its luxury
vehicles all share a common characteristic: the ability to make drivers feel
gloriously connected to the road.
.1.
1.3 BMW Strategies
of the main strategies employed by BMW is niche marketing.
BMW protects its niche position by engineering, manufacturing, and developing
advertisement campaigns. BMW offers a distinctive product and service and it
developed differentiation between its products and the competitors’.used
frontal attacks in order to gain a competitive position in the automobile
industry. The company employed a limited frontal attack, which focuses on
specific customers. Another frontal attack that was employed by the company is
through research and design. The company invested large amount of money in
designing and differentiating its products and services. The company introduced
improvements on the products and offered innovative features and designs in
order to enhance the value of its products.detailed view on Strategies is as
follows:
) Well-Executed Strategiesis a company with
well-executed strategies. The company recognizes its distinct capabilities and
chooses the market and subsequently markets, which realized its full potential.
Its dealings with its suppliers and distributors, its pricing approach, its
branding and advertising strategies, are all built around that recognition and
these choices. The company maintains a tight control over its distribution
network. This control supports the brand image and aids market segmentation.
BMW cars are positioned differently and priced very differently in the various
national markets. The same tight control is reflected in BMW’s relationships
with suppliers, who mostly have continuing long associations with the company.
BMW’s activities are focused almost exclusively on two product ranges -
high-performance saloon cars and motorbikes - which reflect its competitive
strengths.
) Image of Prestigeof the company’s overall strategy
is to market its products as ‘prestigious’. The company was able to develop an
image of quality, reliability and consumer aspiration. Advertising images can
create strong differentiation in the customer’s eyes. BMW has spent millions of
dollars on advertising to create an image of performance and prestige for the
automobile buyer.
) Brandingis also an important strategy of BMW. BMW
was able to develop premium brands. In the development of premium brands, BMW
subjects its products in a process of continuous evolution and development. The
company established a Brand Academy.
) Flexibility for the CustomerBMW Group has optimized
its internal processes to such extent that wishes expressed by the customer to
modify the power unit, the color, upholstery and special equipment of the car
he has ordered may be taken into account just six days prior to the start of
assembly - without any affection on the delivery date of the car.
) Differentiationis the act of designing a set of
meaningful differences to distinguish the company’s offering from competitor’s
offerings. The five dimensions of Differentiation are:
1. Product - physical products vary in their potential
for differentiation.
2. Services - when the physical product cannot be
differentiated easily, the key to competitive success nay lie in adding valued
services and improving quality.
. Personnel - companies can gain a strong competitive
advantage through having better-trained people.
. Channel - companies can achieve competitive
advantage through the way they design their distribution channels’ coverage,
expertise, and performance.
. Image - buyers respond differently to company and
brand images. Identity comprises the ways that a company aims to identify or
position itself or its products, whereas image is the way the public perceives
the company or its products.automobile manufacturer uses differentiation
strategies to differentiate its products from its competitors’. By introducing
innovations in engineering and design, the products of BMW gained an image of
prestige. This image is strengthened by the company’ advertisement campaigns.
2: Situational Analysis
2.1 Internal Environment
2.1.1 Clientsa careful investigation of BMW market we have
divided BMW customers into 3 major segments: Individuals, Businesses and
Government (which includes Police, Administration and Army).
· Individuals, amount for almost half
of all customers (45%), are businesspeople of medium+ and high income (starting
from 2,500 Euros). These are people, who work for large companies or
businesses’ owners. These are middle-age people, living in big cities, of
high-status, open-minded, adventurous and young in spirit. These people usually
have at least two cars in the family. Their cars are usually of such models, as
5, 6, X3, X5, X6 and Z4 (usually as the second or the third car in the family).
· Businesses amount for 20% of BMW’s
clients. These are medium- and high-sized businesses with a year’s revenue of
more than 2,000,000 Euros. They prefer to use the cars in a leasing form (and
then lease new ones). Their cars are 5 and 7 models.
· Government: administration amount for
27% of the clients. All governmental staff that have cars with drivers (BMW
7-series); and governmental staff of middle level which use 5-series.
· Government: army amount for 1%. These
are generals who have cars (7-series) with drivers.
· Government: police amount for 7% of
the customers: Special Forces of police, who work in order to perform
high-speed pursuits and catch very fast criminals. Their cars are BMW 5-series,
preferably starting with 3.5-liter gasoline engines.
2.1.1.
2.1.2 Competitors
BMW Group is the leading premium car manufacturer in the
world. In recent years BMW Group has been closely marked by its competitors.
List of few BMW Group’s series lines and brand names has to market specific
competitors.
Series: Audi A3, Volkswagen Golf, Alfa Romeo 147,
Series: Audi A4, Jaguar X-Type, Mercedes C-Class, Lexus
IS200,
Series: Audi A7, Mercedes E-Class, Saab 9-5, Jaguar XF, Volvo
S80,
Series: Jaguar XK, Maserati 4200, Porsche 911,
Series: Audi A8 and S8, Jaguar XJ series, Lexus LS400,
Mercedes S-Class,: Land Rover Freelander, X5: Range Rover, Mercedes M-Class,
Volvo XC90, Porshe Cayenne, VW Touareg, Acura MDX, Lexus GX 470,: Porsche
Boxster, Audi TT, Chrysler Sebring Convertible, Toyota Camry Solara,Range: M3
Coupe - Mercedes C55, Audi RS4, M5 - Mercedes E55, Audi RS6,: Mercedes A Class,
Peugeot 206 H/B, Volkswagen Polo, GTI, Golf, Renault Clio, Ford Focus RS,
Vauxhall Corsa and Toyota Yaris,Royce Phantom: Mercedes Maybach, Bentley
Arnage.’ analysislet us compare BMW with its most specific competitors in the
sphere of business class automobiles. For this, we have chosen the BMW 535i X
Drive (The BMW 5 Series), Audi A7 and Jaguar XF.5-Series is available in
rear-wheel drive or all-wheel drive (X drive). The BMW 535i X Drive has 300
horsepower 3.0-liter 6-cylinder engine. It gets 14 l/100 km in the city and 11
l/100 km on the highway. The price is near $86,000.
XF
Strengths 1) Well Known Brand 2) Status Symbol 3) Quality 4) A lot of add on
options
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Weaknesses 1) Import Parts 2) Repair Costs 3) Change in
currency; price fluctuation 4) Ecological/gas friendly
|
Opportunities 1) Globally recognized brand 2) Established
brand
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Jaguar XF runs about $1800 cheaper, base price. It gets 17
l/100 km in the city (3 more than BWM) and 12 l/100 km on the highway (2 more
than BMW). BMW is obviously the GREEN CHOICE, which gives us an upper hand on
the competition.
A7
Strengths 1) Well Known Brand 2) Status Symbol 3) Quality 4) A lot of add on
options
|
Weaknesses 1) Import Parts 2) Repair Costs 3) Change in
currency; price fluctuation 4) Ecological/gas friendly
|
Opportunities 1) Increased media attention on Audi through NY
Yankees baseball sponsorship 2) Globally recognized brand 3) Established brand
|
Threats 1) Tariffs on shipping 2) Competitive Car Industry
3) Rising fuel costs 4) Severe economic downturn 5) The BMW 535 X-drive
|
A7 costs $4,400 more on average at the base price. It gets 15
l/100 km in the city (1 more than BWM) and 11 l/100 km on the highway (the same
as BMW). BMW is still slightly more fuel-efficient and saves money for
fuel.lacks slightly with horsepower, in comparison to its biggest competitors.
BMW 535 x-drive has 300 horsepower which is a very powerful car. Audi’s A7 has
310 horsepower which really isn’t noticeable. Jaguar, however, has 385
horsepower which is significantly more. That is also what is causing the Jaguar
to get poor mileage. Our eye on the market leads us to believe our customers
want a fast car, one that can pass other cars quickly when desired, but that is
also eco-friendly and safe for traveling with the whole family.BMW and the
Jaguar seat 5 persons where the Audi only seats 4. BMW also provides more
comfort space overall than the competition. This means that our car, the BMW,
is designed to fit you and your family comfortably. Further, Jaguar beats BMW
and Audi in the matter of having some additional standard equipment including a
DVD player and a navigation system. We offer those items as upgrades. Moreover,
BMW happens to weigh more, but has better fuel economy. In addition, our BMW is
shorter in length and is also narrower in width so it makes it easier to park,
especially in smaller parking spaces. This will also help protect/prevent your
car from others’ unintentional door dings and butt bumps. All the other
equipment listed are pretty much standard between all 3 cars.this situation BMW
Group has to maintain a strategy in which BMW Group has advantage over its
competitors in the long run: “to provide quality products and services to
customers by charging an extra premium showing high production costs.”Group
should look for ways of improving their supply chain management. By doing this
they can reduce the costs of their cars and could gain more advantage over
their competitors.
2.1.3 Suppliers
Suppliers could directly influence our marketing strategy in
a number of ways. First of all, if there is a shortage of raw materials, our
suppliers might be unable to produce the items we buy from them to add to the
car. Perhaps it is the plastic molding for the trim of the bumpers. There is no
way we would ever sell a car that was not 100% built and we would not heavily
and financially promote car sales if we couldn’t keep up with demand. We would
have to delay the introduction of the strategy a few weeks or months so that
our suppliers could catch up. Supply management might want to consider alternatives.
There could be a worker strike that seizes production. Tornados, tsunamis,
earthquakes, and the breakout of war could also impact production.
.1.4 Channel MembersMembers could certainly impact the way
the customer centers receive the cars. Channel members mainly consist of
transportation forms from where the car is put together to the sales lot.
Luckily, there is not really a distributorship and the primary storage facility
is located on each sales lot in front of public view. There could certainly still
be delays in shipping as well as at customs. Since BMW cars are made overseas,
each car sent to the US gets loaded onto a ship and transported. Each car must
go through customs, which is not a channel member but more of a hurdle to
cross. Inclement weather, natural disasters, war, a truck-jacking, and
breakdowns could also impact the delivery dates of the cars to the sales lots.
Unfortunately, it would be too late to postpone the strategy implementation if
many of these issues occurred. Plus, some of these issues may only impact one
sales lot or just a small portion of their inventory for a limited time.
.1.5 Publicorder to have the whole image of the trends in
the industry, it is necessary to have the understanding of consumer buying
habits, which are as follows:
· Ecological issue: as the Planet is
facing serious problems with the Global Warming, Carbon Dioxide Emissions,
Pollution and other environmental problems, it is becoming more and more
popular to buy the products and use the services of green companies.
· Price consciousness: many people are
not in the race for expensive cars and there is a great demand on low-priced
cars for everyday use (particularly of Asian automobile producers, like Kia,
Hyundai, and Cherry).
· Innovation: people enjoy it to use
cutting-edge technologies in a car, such as Wi-Fi, TV connection,
entertainment, autopilot system and so on.
· Tendency to use small cars, because
of their mobility, which is extremely relevant in big cities.
.2 External environment
is a vast organization and thus a vast majority of external
factors affect the running of the company which are discussed below.
2.2.1 Political
In the recent past the EU laws have recognized the fact that
the car industry is a major contributor to the emission of CO2 in the
environment, recent studies have shown that 22% of the overall CO2 emissions
have been caused by road transport of which 92% are from cars. This has had an
immediate impact on BMW’s automobile industry. The pressure of governments for greener
technologies and environmental friendly cars has led BMW to invest in such
technologies, although this has raised the manufacturing costs for BMW, it has
also created a positive image in the minds of its customers by reducing the
carbon foot prints which is created on the environment.has led to BMW launching
its first car running on hydrogen in 2007, which produced very less CO2 emissions. This greener image is
also being made prominent by the new engine technology called the Efficient
Dynamics, which BMW launched recently.
.2.2 Economicalrecent financial crisis has had a huge
impact on all businesses throughout the EU, consumer purchasing power has
fallen significantly this is the reason why in 2008 BMW had a profit before tax
of 351 million Euros whereas in 2011 the profits have increased to 7.3 Billion
Euros.second major factor regarding BMW economical climate is that of rising
oil prices, last month a barrel of crude oil had soared up to $122. This has
raised the cost of sales for the company as it has risen by 9.5% when comparing
the 2010 and 2011 financial statements. However it is worth mentioning that
profits for BMW automobiles has increased by 75% in comparison with 2010.
.2.3 SocialEU population is expected to be increase by 100-200 million by the year 2029
when in comparison to 2012. The breakdown of this increase shows that the
population is shifting towards more life expectancy and thus to an older
generation. This shift will cause BMW to ponder upon its green technologies as
the consumer will likely prefer a greener environment.
.2.4 Technologicalhas driven many aspects of social
development, business and marketing over the centuries, however the
technological revolutions of the last 100 years have also led to the demise of
various industries..has to constantly look after these changing environments,
the BMW efficient dynamics is doing well in the markets but the organization
should always be ready for change and one step ahead of its
competitors.Mercedes Benz launched an advert of its invisible car, which emits
zero emission and Mercedes equipped one side of the car with sheets of LEDs
that show streaming images captured by a Canon 5D Mark II camera attached to
the other side of the car. The car blends into the background, making it nearly
invisible. Although the car will not go in production until 2014 but his
promotional campaign has caught attention of consumers throughout the world.
BMW should critically analyze this situation and improve its efficient dynamics
and hydrogen fuelled cars to respond to this technological advancement.
.3 Financial Condition
BMW Group experienced the best year of its corporate history
in 2013, selling 1,668,982 BMW, MINI and Rolls-Royce brand cars (+ 14.2 %);
this was more than ever before in an annual period. With this performance, the
BMW Group retains the pole position in the premium segment of the world’s car
markets.volumes grew dynamically for all three car brands, each of them
recording their best levels ever. Sales of BMW brand cars alone rose by 12.8 %
to 1,380,384 units. A total of 285,060 units of the MINI brand were handed over
to their new owners (+ 21.7 %). At 3,538 units, Rolls-Royce set a new sales
volume record, posting an increase of 30.5 % on the previous year.
volume
of automobiles*
Motorcycles segment put in another
highly stable performance despite persistently unfavourable market conditions.
In total, we handed over 113,572 BMW and Husqvarna brand motorcycles to
customers during the year under report, 3.1 % more than in 2010.Services
business also made an important contribution to the success of the BMW Group.
With a portfolio of 3,592,093 contracts in place with dealers and retail
customers at the end of the year, the segment recorded growth of 12.6 %.records
set for revenues and earningsrevenues and earnings broke all existing records
on the back of dynamic car sales volume growth and flourishing financial
services business. Revenues in 2013 totalled € 68,821 million, 13.8 % higher
than in the previous year. Earnings were also strong, with profit before
financial result (EBIT) up by 56.9 % to € 8,018 million and profit before tax
up by 52.1% to € 7,383 million.Automotive segment recorded a 16.8 % increase in
revenues to € 63,229 million, with EBIT soaring to €7,477 million (+ 71.7 %)
and segment profit before tax reaching € 6,823 million (+ 75.5 %).segment
revenues grew by 10.1 % to € 1,436 million on the back of good sales volume
performance. EBIT fell by 36.6 % to € 45 million, primarily due to restructuring
measures taken at the level of Husqvarna. These measures also caused segment
profit before tax to drop to € 41 million (- 36.9 %).
Financial Services segment also performed extremely well,
posting a 5.4 % increase in revenues to € 17,510 million. In earnings terms,
segment EBIT rose by 46.8 % to € 1,763 million and segment profit before tax by
47.4 % to € 1,790 million.
2.4
Summary (SWOT analysis)
Strengths 5) Well Known Brand 6) Status Symbol 7) Quality 8) A lot of add-on
options
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Weaknesses 5) Import Parts 6) Repair Costs 7) Change in
currency; price fluctuation 8) Ecological/gas friendly
|
Opportunities 4) Increased media attention on Olympics 5) Increased media
attention on BMW Championships 6) Globally recognized brand 7) Established brand
|
Threats 6) Tariffs on shipping 7) Competitive Car Industry
8) Rising fuel costs 9) Severe economic downturn
|
any organization to be successful the company has to identify
its own strengths and rectify its weaknesses, as both of them are internal to
the company. Opportunities and threats are external to the company and
necessary steps should be taken to counter these external factors. For any
marketing plan to succeed a SWOT analysis is quite important, for BMW it is
below.
Strengths:
. Strong
marketing strategy.
. Customers
recognize the strong brand name of BMW Group Company.
. Strong
brand image i.e. BMW, MINI Cooper and Rolls Royce.
. Every
2 to 3 years BMW introduces its new version of cars i.e. constant innovation
and technology.:
1. There is an increasing number of duplicate spare parts of
BMW and MINI Cooper.
. The manufacturing costs of BMW cars are very high as
compared to its competitors. This is also a reason for high pricing of BMW
cars.
. Not a mass-market company like Toyota and their volumes are
small.
Opportunities:
1. There is an opportunity for BMW Group to increase
further innovation and technology in their cars due to increasing competition
in car industry.
. BMW Group should also look to make new collaboration
with other car manufacturers i.e. introducing new brands.
. BMW Group should also look to produce cheaper cars
by new innovation and technology.
. Expansion of the BMW Group in Asia Pacific, Asia,
Africa and Australia.
Threats:
1. Recession which has affected businesses in every part
of the world.
. To maintain the same level of innovation and
performance.
. The growing competition in the automobile industry
i.e. competitors of BMW Group include Mercedes, Audi, Jaguar, Ford, Lexus.
. The earnings of the BMW Group are Dollar dominated,
so the increasing strength of Euro is another threat for the company.an
organization has established its strengths, weaknesses, opportunities and
threats, it can develop the SWOT further through matching and conversion.
In the case of BMW the company can match its strengths
against its opportunities, for example as previously mentioned that BMW spends
a huge chunk of its revenues on research, what the company can do is to direct
most of its research into how to make smaller and more efficient cars for the
middle class society as most of the consumers are not able to afford the
current premium prices of BMW cars. If the company can in some way accomplish
this, it will result in elevated sales in the EU and globally as
well.recognizes the threat of volatility in the oil and fuel prices and has
thus launched its Active Hybrid 5 car which is better than the previous hybrid
cars and has a better fuel-electric consumption than its predecessors. The car
can accelerate on electricity alone. Over here it can be seen that BMW has
countered this threat by its biggest strength which is its diversity and
product development.
3: Marketing Programs
.1 Target Markets
main markets for BMW automobiles have been in Europe, the
USA, Japan and the Pacific region, with the markets of Germany and the US accounting
for almost half the total car sales. Important markets have also been the
fast-growing UK, and the Italian, French and Japanese markets.who want this car should
make approx. $125,000 per year based on a 5-year loan. He or she should spend
up to 15% of income covering transportation costs (car loan, fuel, maintenance,
etc.). $125,000 per year or morestatus Anysize Any
Bachelor degree and higher 30-45 Any Any Manager
or professional, technology specialist North America, Asia, &
much of Europethe Possible Segment and NicheDigerati: We have decided to select
the Young Digerati as our target market for several reasons. First of all, they
are wealthy enough to afford the BMW of all series. Also, they care about
technology, and the BMW is very technologically advanced. Furthermore, they
care about image and status, and the car is a hip, trendy status symbol.
Lastly, we want to get customers while they are young, so they will become
lifelong BMW customers. Hopefully, the Young Digerati will purchase pricier BMW
cars like the 6 Series and 7 Series as they age.
Urbanicity: Urban Income: Wealthy Income Producing
Assets: High Age Ranges: 25-44 Presence of Kids: Family Mix Homeownership:
Mix, Owners Employment Levels: Management Education Levels: Graduate Plus
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variables: Full time employee, full time dad. Very active
lifestyle: often attends sporting events, opera and theater, business parties,
networking events. Active in community and church, coaches kids sports:
Driving, Reading, stock trading, attending plays and sporting events, watching
CNBC and ESPN, exercising often, eating at fine restaurants, and drinking only
the best import red wine.variablesof usage: Drive everywhere… to work, the
kids’ schools and sports, groceries, church, dinner, parties, date night, short
family trips.Status: Powerful, important, upper-class, demands respect, someone
to knoworientation: customers will want the best… a BMW. BMW will offer the
best; most advanced technology in cars including increased fuel economy,
collision impact safety devices, seat comfort design with heating and cooling,
music and sound, engine and sound, transmission shifting and options, and
hundreds of extra accessories that could make their car fit their every
need.sensitivity: Not the cheapest car line, but not our most expensive car
line either. Our customers are willing to pay more for perceived personal
status. They want status, prestige, luxury, reliability, and everything else
that is associated with our brand.
.2. Product (PLC, BCG)
most important element in the marketing mix is the company’s
product because this provides the useful requirements required by customers.
For example: a car that does not start in the morning will not be liked by
consumers. Marketing managers develop their products into brands that help to
create a single position in the minds of customers.
models of BMW:
The 1 Series <#"815491.files/image005.gif">
3 series, 7 series, 1 series, 5 series, 6 series, X1, X3, X5, X6 and
Z4, out of these models the best in running is the BMW 3 series; the car has
collected the greatest chunk of revenue for BMW over the years. But the thing
to consider while keeping these models in mind is the product life cycle. It
shows the sales of the product through their useful life during different
stages of their lifecycle. The stages include Introduction, Growth, Maturity
and Decline.considering the product life cycle against the portfolio of cars
that BMW has to offer then it can be said that most of the BMW cars are on the
maturity stage, even though the BMW 3 Series has high market
share but the market which it belongs to does not show signs of growing as
previously mentioned in the analysis of the BCG matrix. BMW has realized this
and has launched the new version the BMW 3 Series in
2011.
BMW has to consider and place its products accordingly into the market,
if most of the products of the company are going to be in the maturity stage
then there will be serious problems for the company as all of them will be
going into decline together. Thus constant and increased improvement into
research and development has to be made in order for BMW cars enter into the
growth stage of the product life cycle.2007 BMW launched a clip on the internet
about its GINA Light visionary model, it is a fabric skinned shape shifting
sports car concept built by BMW. The car is enclosed with flexible, stretchable
water resistant translucent man-made fabric skin - polyurethane-coated Spandex,
is resilient and durable. It resists high or low temperatures, does not swell
or shrink and the movement does not slacken or damage the fabric. Though the
car is not for sale and thus hasn’t been introduced into the markets and is
kept at the Munich museum it has caught the attention of the world when it was
premiered in 2007.should launch this car in the markets now using outdoor
campaign and digital marketing as such mediums should be used for high value
impact products. The BMW Gina can give competition to the Mercedes invisible
car as both of them are new and innovative technologies and consumers are
willing to pay higher prices for such innovations.
.3. Promotion
saw BMW ranked as the world’s most reputable company by Forbes.com.
Criteria included ‘people’s willingness to buy, recommend and to work for’ the
company. Interestingly, the answers were driven 60% by perception of the
company, and 40% by perception of the company’s actual products. We marketers
know that to build a positive brand perception, it takes years and the same has
happened with BMW. BMW has been promoting itself with the most amazing
television commercials, print advertisement, out of home advertisement and now
through online advertising.
Key promotional features in the
marketing mix of BMW:
· Strong brand pull due to
excellent marketing over the years
· Company relies on pull strategy
<http://www.marketing91.com/strategy/> more than push strategy
· Top of the mind positioning
<http://www.marketing91.com/21-companies-top-brand-positioning-sector/>in
automobile brands
BMW has always focused entirely on their cars with same
advertising company, WCRS being the used since 1979. A broad range of advertising
is used by this agency such as television for branding campaigns and new car
launches, the press with Tabloid weekend colour supplements, regional
publications and magazines, Outdoor campaigns, Sales literature, brochures,
etc. Advertising Campaigns/Slogans used by the company in the past .
Slogans Used
|
Time Frame
|
1.Positioned itself as the brand
with the unique benefit of ‘a luxury car that provides an exhilarating
driving experience with advertising. 2. The Ultimate Driving Machine 3. The
New 7 Series: Designed for Peace of Mind, Not Just Peace and Quiet 4. BMW
core values at more attainable price5. BMW - The Smart Choice
|
1. Established itself over time
from its introduction in the US market in 1974 (the First Great Opportunity)
2. Ran for 15 years - Overall brand - focus on prestige 3. Focus on the 7
Series 4. Focus on the 3 Series 5. New strategy with a focus on brand &
product, franchise, and organization.
|
BMW association is the ‘James Bond’ films from 1983, 1994,
1997 and 1999. E.g. In ‘The World in not Enough’ James Bond drove the new Z8
before the car had been launched and in ‘Austin Powers 3 - Goldmember’ the Mini
Cooper was used. This kind of move has helped BMW to position its Car and the
brand in front of vast audience across global also this also indicated that the
car was fast, more technologically advanced and had created an image in mind of
future customers that have best quality, safety, they are different from
others.
Sales Promotion
Sales promotion involves offering
short-term incentives for potential customers to commit to the purchase of
products and services. BMW Group is recommended to use sales promotion in the
world market in an occasional manner in order to increase the levels of
revenues for short-term perspectives.example, 100th anniversary of BMW on March
7, 2013 was specified as an appropriate
occasion to announce 10% sales promotion for all BMW models. However, it is
important to note that BMW needs to engage in sales promotions in the world
market only in an occasional manner, no more than once a year, because using
sales promotion more frequently may cause depreciation of BMW premium brand
value.
Moreover, BMW management can initiate
the development of identity magazine of the BMW Group which can cover the
latest trends and news in local and global automobile industry and at the same
time serve as an effective channel to communicate the marketing message to the target
customer segment.
Engagement in Celebrity Endorsement
BMW can engage in celebrity
endorsement by attracting celebrities that are respected by the majority of BMW
target customer segment. Real-life examples of celebrity endorsements in
automobile manufacturing industry include singer Heidi Klum associating herself
with Volkswagen Beetle, Australian pop-singer Kylie Minogue advertising
StreetKA, Victoria Bekcham associating herself with Range Rover, Uma Thurman
serving as the face of Range Rover etc.endorsements can be done in relation to
BMW brand in general, or in relation to specific car models within BMW
portfolio. Effective engagement in celebrity endorsement can offer BMW the
advantages of increasing the levels of credibility, enhancing the level of
brand recall, enhancing the appeal of BMW brand to the masses, and others.
BMW E-Marketingoutrun its competition, BMW has incorporated
the internet to its overall marketing strategies. Because about 85% of its
customers conduct internet research before purchasing, BMW has invested on
internet through website, online applications and television, and social
networks to conduct e-marketing. BMW uses internet for online advertising,
marketing public relations, promotions, direct marketing and improving customer
relations. With its establishment on internet, BMW provides its customers with
rich marketing information quickly, on-time and at low costs through
e-newsletters, e-magazines, online broadcast, emails and text
messages.networkse-marketing strategy incorporates social networks such as
Facebook, Twitter and Youtube due to the potential of reaching a great number
of people at relatively low cost. BMW uses social networks as they allow
multimedia and interactive communication with a large number of consumers enabling
to conduct viral, communal and influenced marketing campaigns. Additionally,
the company uses the platforms for satisfied customers to easily recommend
their products to others and also as a medium to conduct customer-product
conversations and brand blogging. The official BMW Facebook page has 13,396,064
likes and more than 100 thousand followers on Twitter. With such a great number
of fans compared to its competitors, BMW is able to deliver its advertisements
to a large number of people at an instant and easily draw them to its websites
at a relatively low cost.
“Story of Joy” campaign
BMW’s 2010 “Story of Joy” advertising campaign
was intended to attract customers who were
not necessarily driving
enthusiasts as the “Ultimate Driving Machine”.campaign associated social
networks, dedicated website , games and interactive ads, collectively
integrated with traditional marketing channels. An industry-specific
intelligent social media listening tool was used to determine the impact of the
campaign; and was noted that the brand conversations by females had increased
by 20% signaling a definite demographic shift (J.D.Power, 2010). The impact of
the campaign was easily understood through internet compare to traditional
channels due to the rich user information such as age, gender and location. The
overall joy campaign was very successful resulting in a rapid recovery of
company net profit.Films Campaign2001 “BMW Films” promotional campaign through online short films
was designed explicitly to direct consumers to the BMW Films website. Web
visitors were required to registration in order to watch the films, hence BMW
was able to both spread the message and obtain consumer information. The
campaign was supported by TV adverts, prints, billboards and online advertisement
that all directed to the same BMW Films website thus collectively increase
traffic. The campaign results were historical to the automotive industries at
that time with more than 10 million views, 2 million registrations with 60%
opting to receive more information, all at a cost of around only $1.20 per
person (Hespos, 2002).. Additionally, 94% of the registrants recommended films
to others which resulted in a viral campaign and website traffic increase by
55% to 214,000 unique visitors compared to the weekly 138,000 enabling BMW to
increase yearly sales by 12.5% in 2002 and later reported to have reached 74%
(Pareek, 2009; Strauss, et al., 2006).
.4 Distribution
marketing product life cycle
Distribution includes all of the business activities involved in making
the product available to target customers. BMW sells its cars through a number
of showrooms in each country and as well as from an extensive network of
dealers who are provided with far-reaching expertise and knowledge from BMW. B
sales services to their customers.
There are more than 16 dealers in Ukraine who are franchised
to sell BMW cars. Worldwide BMW operate in more than 100 different countries
with approximately 4,000 plus dealers which are authorised to sell both new and
used cars, parts and after sales service products.of distribution for BMW is
shown below in the diagram which is followed by the company: Manufacturer à Dealers à Consumers.flow
performance of channel member:performs mostly in Promotion, Negotiation,
Financing, and Risking, and Payment - as these are the most important parts of
the business.is mostly involved in Physical possession, Negotiation, Risking as
it deals with warehousing and transporting the cars and Ordering, as it needs
to deal with customers directly.' performance is in Physical possession,
Ownership, Promotion. Financing, and Payment, as it is the customer who makes
the whole system working.
cost added by each member is as follows:
Dealers
|
15-18%
|
BMW
|
82-85%
|
Channel for segmentsorder to satisfy various customers needs,
BMW uses the following channels.make orders through the web site and in dealer
offices.as well make their orders in dealers but they also can order the cars
directly from BMW manufactures.Structures, obviously, order cars from BMW
manufactures.dealers in Ukraine:
• AWT Bavaria (Lepse) - Kiev
• AWT Bavaria (Parus) - Kiev
• AWT Bavaria (Podol) - Kiev
• AWT Bavaria - Dnepropetrovsk
• AFZ Bavaria - Zaporizhia
• Car-Alliance - Poltava
• Emerald Motors - Odessa
• Impulse - Donetsk
• Bavaria Motors - Kharkiv
• Avtodel - Simferopil
• Christina - Lviv
• Aria Motors - Lviv
• M AUTO - Mikolaiv
• Car Alliance - Kremenchug
• Automobile House "Victoria" - Lugansk
• Bayern Zahid - Khmelnitsky
• Valerie M - Rivne
• Center Kherson - Khersonthe Ukrainian market BMW uses only
exclusive distribution. This type of distribution is usually seen with high end
and luxury products, which is absolutely suitable for BMW cars.structure of an
exclusive distribution favors both the manufacturer and the distributor: All
dealers receive cars and auto accessories without mark up, they have unlimited
dealer agreement and are provided with all necessary corporate identity
elements. The headquarters on the other hand have complete market coverage and
a total control over the quality of front office, which is especially important
for luxury products.Customer Segments are covered: those customers who are
aware of the BMW products are able to buy very easily what they are intended to
buy; those who don’t know what they need but want to buy some BMW car, receive
high quality consultancy so that they can make a decision whether to buy a car
and choose the specific package that absolutely suits the customers’
needs.order to communicate to those potential customers who don’t have the
intention of purchasing BMW, the company uses TV, Internet, wire advertising,
product placement and screening short films dedicated to BMW cars, so that
potential customers become interested in this brand.
.5 Pricing
prices of BMW Group are based on a differentiated strategy.
This means that they charge extra for premium quality. This difference in
prices is due to each cars different engine size, gear levels, fuel
consumption, sports version.’s take an example of the pricing strategy that has
been used by BMW for the 3-series is competition-orientated pricing. Most of
the Research shows that all other competitor such as VW, Audi, Alfa Romeo and
etc. in the 3-series market is based around the same price. This is because the
car industry is large and production costs are not so important and creating
the largest profit is not as necessary as it would be for a smaller
company.could be either dynamic or negotiated pricing depending on the sales
person. Dynamic because the car can fluctuate between prices or negotiated
because the buyer and seller can come up with a reasonable price for both
parties.based pricingis definitely a value-based product brand. Cost can be an
issue if it is priced unrealistically against the cars of close competition,
but overall most of our customers are not concerned with price as a
contribution factor. BMWs are luxury cars and are elastic expenses. But when
the economy is weak, our car becomes a hot pick as a secondary choice for BMW
customers who buy the higher luxury cars. BMW customers are not only purchasing
their car due to legroom, high technology, and comfort nor just for the reasons
of high horsepower and great fuel mileage. They are buying BMW’s because of the
brand name and the quality and reliability the brand name stands for.Pricing
. Customers: Since it is perceived as a luxury
automobile, BMW customers are willing to pay around $60,000 for a 5-Series.
However, if BMW decided to increase the price of the 5-Series to $90,000, the
company would most likely lose some customers because $90,000 is beyond the
acceptable range for that type of product. For $90,000, BMW customers expect to buy the larger 7 Series.
2. Competitors: Regarding the BMW 5 Series, its main
competitors are the Audi A6 and the Mercedes-Benz E-Class. As a result, BMW
must ensure that the 5 Series has a similar price.
. Legal, Regulatory, and Ethical Concerns: In addition
to applicable laws and regulations, BMW should consider the ethical dilemmas in
pricing. For instance, what are BMW’s ethical responsibilities regarding full
disclosure of prices for upkeep, updates, or replacement parts?Pricing
. Product Strategy: If sales of the Audi A6 increase
dramatically, BMW could lower the price of the 5-Series to defend its market
share.Pricinguses segment pricing in their pricing strategy by offering
programs for recent college graduates. With a recent degree or diploma and a
letter from a current or future employer, graduates that qualify can receive
the best pricing and financial offers that BMW has. This is particularly good
for the demographic chosen because of their young age. Many may have already
graduated from college, but many more may be going to law school or going back
to get their Masters. BMW wants to hook a younger market so they can be
life-long customers. By helping graduates, they are making that possible.offers
several different discounts depending on what and how the customer is
purchasing. For example, in a lease, BMW offers a $1,500 dollar credit and a
reduced interest rate of 2.9% for 36 months. Leasing, especially starting out,
is a good idea for a young person like those in the target demographic. BMW
offers discounts because, to a buyer, it is enticing. A good deal has the
potential to persuade a customer to choose BMW over, say, Mercedes-Benz.
4: Conclusions and Recommendations
.1 Concusions
has taken a lot of referencing and researching for me to
write this report and I have learnt a lot from this report too, I started off with very little
knowledge about this topic and worked my way through the assignment and I would
conclude that BMW is a very powerful name in the automobile industry due to its
reputation of providing high quality products and services.Group is the leading
premium car manufacturer and seller in the world. The sales of BMW Group are
rising day by day. But one great threat for BMW Group is the increasing
competition in the automobile market. BMW Group has got fiercing competitors
like Audi, Mercedes-Benz being the two nearest to BMW Group in competition in
the premium car industry.Group is now trying to target the emerging markets of
the world. The sales of BMW Group in different markets of the world tell that
the European and the US markets are the best markets for BMW Group in terms of
sales. In recent years, however, the Chinese market has been a great attraction
for the BMW Group and sales have been increasing every month for the BMW
Group.the end it may be said that the BMW Group distinguishes from its
customers by its great advertising and marketing campaigns and mostly by their
great brand image. The innovation of the company, diversification in new
markets, technological advancement and customer satisfaction are the key to BMW
success in the luxury car market.latest TV-Ad of BMW Group is a great
description of BMW Group as an automobile leader in which they say, “we just
don’t make cars, we make joy”. BMW Group should also remain careful to the
changing trends in demographics, society, thinking of people and remain a
diversified company.
.2 Recommendations
of the people argue that there is always a chance to learn
new thing or no matter. How big is the company and how successful they are
companies needed to think about the future and make few plans for them? For the
future marketing strategies, I would like to recommend few points.BMW cars are
considered to be as the luxury cars, of which most products are applied to rich
people but not the poor people. BMW can enter the market with Small ‘Lifestyle’
Car which can apply to the middle-class people, its market share can be
expanded.the other hand, its accessories and parts of cars are expensive for
maintenance, which can reduce the desire of people purchasing its
cars.addition, for this can get few new models in BMW Mini this could help then
to target few different segments and also can target females, Middle-class or
upper middle class people. BMW can also create good relationship with female
buyers, they need to do more of promotional strategies to attract more of
female consumers in their existing models or for new models in this edition
just by giving few simples thing which females like in the car, for example-
pink colour, soft-toys, trendy seat covers, etc., The Asia Pacific region is
becoming increasingly crucial to global automotive sales. Although it has been
overshadowed by China's rapid growth in recent years, emerging markets is set
for steady growth where BMW is already there but needs to concentrate more and
needs to adaptive marketing strategies to get success out there. These markets
are going to be huge as there is more population in these countries as in
comparison to US and UK market.addition, BMW needs to come with few more BMW
Films interactive marketing campaigns, the "Ultimate Driving
Machine". As it is had very successful and showed good promise in it for
the selling point. These kinds of advertising are creating very good brand
value for the company and company portrayed itself how they want to be in front
of customers.
1. BMW Annual Report 2013.
2. Hespos, T.
(2002) “BMW Films: The Ultimate Marketing Scheme, retrieved October 3, 2005,
from <http://www.imediaconnection.com/content/546.asp>
. BMW BLOG,
BMW targets 8% return on equity, Retrieved from
<http://www.bmwblog.com/2011/03/15/bmw-group-annual-report-2010-bmw-aims-to-further-increase-earnings-in-2011/>
. Article.
Supply Chain Management of BMW. Management
Paradise, online community
. <http://www.managementparadise.com/forums/elements-logistics/211402-supply-chain-management-bmw.html>
. International BMW
website
. <http://www.bmw.com/>
. Bavarian Auto Group
website
. <http://www.bag-eg.com/>