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    Bmw marketing Bmw marketing Document Transcript

    • [1] UNIVERSITY OFBRADFORD ADVANCED DIPLOMA IN BUSINESS MANAGEMENT MODULE ASSIGNMENT MARKETING MANAGEMENT LECTURER: Mr. Roland Kiew Huizhong bei
    • [2] CONTENTS1. Executive Summary & Overview of company2. Early history3. STP Strategy4. Markets of BMW5. Marketing mix6. Conclusion7. Recommendation8. Refrences
    • [3] OVERVIEW OF THE COMPANY & EXECUTIVE SUMMARYThis marketing report aims to examine and explain the marketing strategies of BMW , Inthis report I will be focusing on:THE COMPANYITS HISTORY & PROUCTSSTP STRATEGYBMW’S MARKETSMARKETING MIX ANALYSISGallery Selection BMW 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 theworlds most respected automakers, renowned for crafting luxury cars and SUVs that offersuperior levels of driving enjoyment.Founded in Munich, the company began in the early 1910s as an aircraft manufacturer.BMWs current logo, designed to represent white propeller blades against a blue sky,reflects these origins; its blue-and-white color scheme also references Bavarias blue-and-white checkered flag.It wasnt until 1928 that production began on the first BMW automobile, the Dixi. The carproved tremendously popular, and its success helped the manufacturer weather the
    • [4]Depression. BMWs best-known pre-World War II vehicle was the Type 328 roadster, asupple two-seater that racked up over 120 victories on the motorsport circuit between1936 and 1940. Postwar BMW cars maintained this tradition, winning several racing,rallying and hill climb victories.The early 1950s saw the launch of the BMW 501, a roomy, voluptuous sedan that wasresplendent with all of the hopefulness of that era. It was soon followed by the 502 whichwas powered by the worlds first light-alloy V8, foreshadowing BMWs ongoingcommitment to developing new technology. The best-selling BMW of that decade was theIsetta, 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 507sports car which had an alloy body and used the 502s V8 for propulsion. In the 1960s,BMW sales strengthened significantly, thanks in part to the immense popularity of the1500, a sporty family sedan.By the 1970s, BMW was establishing itself as a full-fledged car company. It was a pioneerfor many emerging technologies, including turbocharging and advanced vehicle electronics.
    • [5]This was also the period when BMW of North America was established and consumers, whocoveted both sports and luxury cars, became loyal "Bimmer" owners. The 70s also saw thebirth of BMWs three-tier sport sedan range consisting of the 3 Series, 5 Series and 7 Seriescars and the creation of its performance M division.More 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 toinclude Mini and Rolls-Royce. BMW also continues to build motorcycles, something it hasdone since the 1920s.The automakers famous advertising slogan describes each of its vehicles as "the ultimatedriving machine," and its not mere hyperbole. Over the past couple of decades, BMWshave 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 carsand spacious SUVs offered, BMWs model roster is diverse. But its luxury vehicles all share acommon characteristic: the ability to make drivers feel gloriously connected to the road.EARLY HISTORY BMW Group, headquartered in Munich, Germany, is one of the mostsuccessful multi brand premium automobile manufacturers in the world. The companymanufactures, distributes and sells passenger cars (including Sedans, Coupes, andConvertibles etc) and motorcycles. BMW operates three business segments namely:Automobiles, Motorcycles and Financial Services. BMW is the parent company of the Miniand Rolls-Royce car brands, and, formerly, Rover (car)/Rover. The companys slogans inEnglish are "The Ultimate Driving Machine" and "Sheer Driving Pleasure". The companyproduces, and markets, a varied range of a higher end sporty cars and motorcycles. BMWhas also manufactured the first passenger car running on hydrogen ready for common use,although the production figures are limited by the lack of a respective filling station net. Inaddition to cars and motorcycles, BMW operates an aircraft engine division under the brandname of Rolls Royce.The company has worldwide subsidiaries and manufacturing plants in Germany, Austria, theUK, the USA, Mexico, Brazil, South Africa, Egypt, Thailand, Malaysia, Indonesia, thePhilippines and Vietnam. BMW Group comprises of many segments within its vastportfolio, but I would be only concentrating on Automobiles. BMW group is focused onfabricating a variety of tangible products, and also the group has many intangible financialservices. The BMW Group’s automotive which I am more interested in this easy isportioning of their portfolio consists of the three premium brands: BMW, MINI, and Rolls-
    • [6]Royce of which I would be more only looking at BMW and would also demonstrate theirmarketing. BMW is supported by 11 different model series which are: BMW C1, BMW 1series, BMW 3 series, BMW 5 series, BMW 6 series, and BMW 7 series, BMW X 3, BMWX 5, BMW X 6 and the BMW Z4, BMW M5, BMW M6, and BMW Z4 MWell I agree with the below statement which is being provided by BMW group which statesthat the BMW offers emotional product to the customers this could be seen or felt with theircurrent marketing strategies also with their SWOT analysis, PLC and as well as Researchand Development."We offer our customers emotional products, which through the strengthof the brand and the substance of the product fulfil the customer’s wish for individualisationand differentiations”. BMW’s mission statement is clearly defined as “To be the most successful premiummanufacturer in the industry”, (Reference- www.bmw.co.uk). The main reason of BMW’ssuccess is recognized by the development of a steady marketing policy. The company hasbuilt its brand and continues to focus on the following core values which is shown in thebelow figure. BMW has always maintained this core values since the company’s inception.In addition to the message of these values, we can see it in advertising campaigns ontelevision, press, magazine, trade fairs, motor shows, etc. We can also find companyexplicitly expresses one or more of these values in all BMW advertisements. However, wecan also point out that BMW also bank’s on the sensitively to the environment, which we
    • [7]can see with the current advertising strategies of the company. BMW has always used adifferentiated strategy, this means that they aim on specific automobile markets. Thismarkets suit different people within the specific segmentation. The markets that BMWwould normally or likes to target are Sports Convertibles (Z3, 3 series, and new Z4),Executive (3 series, 5 series), Super Executive (7 series), Touring / Estate (3 series, 5 series),Super sports (M series), and 4X4 (X5). Let have a look at BMW competitor analysis wherewe can find BMW is a provider of premium cars and primarily serves for customer as if lifetime experience for them. BMW ensures to have full satisfaction to their customers.Moreover, also we can find out the competitors as their segmented markets. List of fewBMW Group’s series lines and brand names has to market specific competitors.1 Series: Audi A3, Volkswagen Golf, Alfa Romeo 147,3 Series: Audi A4, Jaguar X-Type, Mercedes C-Class, Lexus IS200,5 Series: Audi A6, Mercedes E-Class, Saab 9-5, Jaguar S-Type, Volvo S80,6 Series: Jaguar XK, Maserati 4200, Porsche 911,7 Series: Audi A8 and S8, Jaguar XJ series, Lexus LS400, Mercedes S-Class,X3: Land Rover Freelander, X5: Range Rover, Mercedes M-Class, Volvo XC90, PorsheCayenne, VW Touareg, Acura MDX, Lexus GX 470,Z4: Porsche Boxster, Audi TT, Chrysler Sebring Convertible, Toyota Camry Solara,M Range: M3 Coupe - Mercedes C55, Audi RS4, M5 - Mercedes E55, Audi RS6,MINI: Mercedes A Class, Peugeot 206 H/B, Volkswagen Polo, GTI, Golf, Renault Clio,Ford Focus RS, Vauxhall Corsa and Toyota Yaris,Rolls-Royce Phantom: Mercedes Maybach, Bentley Arnage.BMW still remains the world’s most successful premium car brand with 11, 85,088 unitssold in 2006 which beat the record of 2005 by 5.2% level increase in the sales. Major Keymarkets for BMW group have approx. 68% sales in Italy, USA and Germany these threecountries as in comparison to other countries. Furthermore, below in figures it shows tobreak down of sales figure for different segment in BMW cars
    • [8]
    • [9]This philosophy, which runs through every BMW car, has been communicated through anumber of TV and print ads. The brand image has been built up by press advertisements, andmore recently through different television commercials. Throughout this campaign, BMWhas remained consistent to its beliefs of focusing on the substance of the cars themselves.
    • [10] STP STRATEGY SEGMENTATION, TARGET MARKET, POSITIONINGBMW uses three steps to targeting which are market segmentation, target choice; productpositioning. Let’s see how BMW uses segmentation to identify specific buyingcharacteristics. To find more information BMW looks at the geographic, demographic,behavioural, socioeconomic, and beneficial characteristics of society which helps them totarget the market more effective. Geographically, the main markets for BMW where they aredoing more than 65% of sales are Europe & North America as these areas are both heavilyindustrialised locations which results into residents are financially positioned to buy uppermarket cars as they capita income is more. The demographics of people who are able topurchase a BMW are men and women aged 30 – 50 years old. Behaviourally these peoplehave a successful image in their mind before buying the car; they also like to want a cleanmodern look or sports look, and the feel good factor of an established dealer network. Thebenefits required by these people are superiority, performance, reliability & quality.The image that BMW has managed achieved over the years is to position its self on thecustomers mind is superiority, performance, technologically advanced, quality automobile
    • [11]producer. The market where BMW is position them is highly competitive. Reason being forthe competitive is the number of other automobile manufacturers that produce cars of asimilar quality, price, and image. The main manufacturers that BMW compete with are asdiscussed before to name a few are Mercedes, Jaguar, Audi, Ford, Range Rover, Porsche,and etc. Most of these are blue chip manufacturers use differentiated strategies to producelarge ranges of cars and has similar product life cycle which BMW follows. The difference isthat each of these companies relies on different brand images to sell their cars. E.g. Jaguar isseen as a luxury, reliable and quality producer that BMW does but on the other hand AlfaRomeo is renowned for being stylish and performance breed but unreliable car as per theresearch. The positioning of these companies and their brands has been built up over manyyears but BMW has impressed their mark upon the public in a positive way with the help ofgood public relation and innovative advertising campaigning. This has lead to continuingsales growth throughout the international car markets.When we talk about Brand Recognition BMW is an instantly recognized brand name that hasa reputation for its age-old tradition of quality. Also many of us identify its logo from adistance during travelling in cities, highways, etc. Unlike other lesser known luxury carmanufacturers, this brand recognition allows BMW to redirect its resources from expensiveadvertising campaigns in a highly competitive market. The market in which BMW operateshas being seen as good and loyal customers.MARKETS OF BMWThe main markets for BMW automobiles have been in Europe, the USA, Japan and thePacific region, with the markets of Germany and the US accounting for almost half the totalcar sales. Important markets have also been the fast-growing UK, and the Italian, French andJapanese markets. Sales in the USA market have been particularly successful, as they grewby over 8 per cent on the previous year to 277,000, becoming the biggest market for thegroup and overtaking the Lexus brand for the first time. At the end of 2003, the outlook for2004 by group management and industry observers was upbeat. This view was supported bythe successful launch of the new 5-series, the consolidation in Europe and Asia of the BMWZ4, the introduction of the BMW X3. The new BMW 1 Series and the BMW 6 Seriescabriolet were launched early in 2004. By far the most successful models were the MINI, the3-series and the 5-series, but the other models were also in significant demand. In theChinese markets there was growing demand for the higher end models of the range,specifically for 7-series and 5-series.Exhibit 4 shows the details of automobile deliveries in 2003.
    • [12]Exhibit 4: Automobiles delivered by the BMW Group in 2003 (1000 units) 1200 1000 800 600 400 200 0 I s X5 W Z4 s s s e IN rie rie rie rie yc BM M W W ive Ro Se Se Se BM BM el 7 5 3 ls lD W W W l Ro BM BM BM ta ToIn 2002, Helmut Panke, a nuclear physicist, had become the new Groups CEO, and started astrategy of internal growth through market and product development. In 2003, BMW wasplanning to launch a new model every three months through to 2005, providing a range ofpremium automobiles that ranged from the Mini to the Rolls Royce. The aim was to raisesales by 40 per cent a year for the next five years, and to achieve sales of 1.4 millionvehicles. Mercedes-Benz would then become number two producer of premium cars, andBMWs long term ambition of being number one would be finally realized.Exhibit 5: BMW’s top ten markets 300 250 200 150 100 50 0 na y n ce n m A ly UK a an pa ai ric US Ita iu an i Sp Ch m Ja lg Af Fr Be er S G
    • [13]To achieve the targets it had set itself, the company was pushing hard in the US and Asianmarkets to find buyers for the high-end models that they had found difficult to sell in the flatsaturated European market. Difficulties in dealing with labor cost control in the Europeanpolitical climate had also led BMW to expand its production facilities in the US, where theSpartanburg plant was not running at full potential, and China where a well qualified laborforce cost much less than in the West. It was an ambitious plan that if successful, as well asgiving the group greater prominence and profitability would also effectively cure theproblem of vulnerability to acquisition. If H. Panke was mulling over any of these concerns,he did not show it at the Annual Accounts of Press Conference on 17 March 2004, when hesaid:We offer our customers emotional products, which, through the strength of the brand and thesubstance of the product, fulfill the customers wish for individualization and differentiation.The BMW Group will never build boring products. THE MARKETING MIXLets considered within the marketing mix can be put under four headings, often referred toas the 4 Ps: Products; Promotions; Price; Place. Mix is an important term because eachelement of a plan cannot be considered in isolation. There is limited time and resources anddecisions in one area will likely have an impact elsewhere. 1. Product : The 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. The present models are: • BMW 3 Series – Sedan, Coupe, Convertible, Touring, Compact • BMW 5 Series – Sedan, Touring • BMW 6 Series – Coupe, Convertible
    • [14]• BMW 7 Series – Sedan• BMW Z4 – Roadster• BMW X3 – SUV• BMW X5 – SUV• BMW M –Convertible, CoupeEach product goes through what is known as a life cycle process. When exploring whatmix is best suited to the product, we need to consider where in the life-cycle yourproducts lie which is shown in the below figure and then depending decide if there isneed to make changes in the product and re-launch.Although it is attractive to have all the products within a portfolio at the peak of theirsales at the same time, this does create problems. BMW knows the importance of makingsure that not all of its products are at maturity at once, as this might result in the productsbeginning to decline at the same time normally the life cycle has a particular year whenthe car lunches and after certain years it on matured level where the company has to getsomething new in that series to lunch where customers can enjoy the product to the fullestand with few new features in the car. For example BMW X5 launched at 2000 and thencompany lunched the higher or new version of X5 in 2006, for 3 series its 7 yearslifecycle and for 7 series is 7-years only for the 1’st model life cycle was for 9years. It isclear that BMW has spread over a period of time the lifecycles of three products. Theseare the 3, 5, and 7 Series saloons. This PLC system not only helps to ensure a moreconstant income, but also allows for the development of replacement products on aconsistent basis.BMW has also been expanding its portfolio recently and this can be seen
    • [15]by the presence of some new product launches in the last few years. The above productsare all fairly settled. Many of them have been being manufactured for many years nowwith several re-designs and re-launches2. Price : BMW price ranges are from approximately £16,000 to £60,000 plus. There are many factors that can affect their car prices such as engine size, motor sport versions, etc. Let’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.3. Placement : BMW use superior market Dealerships & Imports for non-dealer networked countries they have four car manufacturing plants in the UK. There are more than 156 dealers in the UK who are franchised to sell BMW cars, additionally 148 dealers are franchised to sell Minis. 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. `Pattern of distribution for BMW is shown below in the diagram which is followed by the company: - Manufacturer >>>>> Dealers  >>>>> Consumers4. Promotion : 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
    • [16] Slogans Used Time Frame 1.Positioned itself as the 1. Established itself over time brand with the unique from its introduction in the US benefit of ‘a luxury car that market in 1974 (the First Great provides an exhilarating Opportunity) driving experience with 2. Ran for 15 years – Overall advertising. brand – focus on prestige 2. The Ultimate Driving 3. Focus on the 7 Series Machine 4. Focus on the 3 Series 3. The New 7 Series: Designed for Peace of 5. New strategy with a focus on Mind, Not Just Peace and brand & product, franchise, and Quiet organization. 4. BMW core values at more attainable price5. BMW – The Smart ChoiceBMW association is the ‘James Bond’ films from 1983, 1994, 1997 and 1999. E.g. In ‘TheWorld 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 helpedBMW to position its Car and the brand in front of vast audience across global also this alsoindicated that the car was fast, more technologically advanced and had created an image inmind of future customers that have best quality, safety, they are different from others. WithBMW viral Marketing started developing BMW Films was the driving force of BMWssuccessful interactive marketing campaign, the "Ultimate Driving Machine" (ref- Hespos,2002). In 2001, BMW released film called "The Hire", a series few feature-quality shortfilms for the Internet to support the release of new vehicles during launch. Each short film
    • [17]featured a central character called The Driver who "helped people through difficultcircumstances using deft driving skills-in a prominent BMW" (ref- Hespos, 2002). BMWFilms series the promotional campaign consisted of TV spots that which showed trailers, andprint and online advertising. "BMW Films was a non-traditional concept to show consumerswhat makes a BMW a BMW" (Ref- Hespos, 2002). But it was much successful concept itincreased the BMW sales in 2001 by 12.5% as compared to 2000. "During the 1’st fourmonth of the promotion, the films were viewed more than 11 million times, initially drawingmore visits than the site could handle" (Ref-http://www.pmalink.org/awards/reggie/2002reggiewinners3.asp, 3 October 2005). The shortfilms were recommended by 94%. It proved to be so immensely popular that BMWproduced a free DVD of the series, which included extra features (ref -Hespos, 2002). Withthis kind of massive promotional activities BMW was able to achieve in mind of costumerswish of for individualisation and emotional product as these promotional activitiessomewhere or other make costumers feel like that.THE FOUR C’S 1. Customer solution : BMW strives hard to find out what their customers needs are and works hard towards fulfilling them .They believe that it is important to satisfy customer needs to keep customers happy and satisfied 2. Customer cost: BMW also realizes that all the costs taken to design their cars are also to be included in the cost of the car. They have retailers selling their cars in different regions/countries at different prices based on the acceptable customer cost for that region. 3. Convenience: BMW doesn’t have online purchase systems but due to the high price of their products BUT they have an online test drive appointment system for the 7 series using which doesn’t need to go to the store to test drive the car, hence making it more convenient. 4. Communication : BMW has 24hour hotline numbers to help in communication with the company exclusively for certain model customers.They have a website for online communication . They believe in listening to customers when they are “with” you.
    • [18]CONCLUSIONIt has taken a lot of referencing and researching for me to write this report and I have learnt alot from this report too ,I started off with very littler knowledge about this topic and workedmy way through the assignment and I would conclude that BMW is a very powerful name inthe automobile industry due to its reputation of providing high quality products and services.BMW, an individual actor, has yearly shown strong financial results and has retained itsmarket shares .This becomes of interest to study more profoundly, in order to find the factorsbehind a successful company and a strong brand. Purpose: The purpose of this thesis is toanalyse the development of BMW during the past five years. Not only are the financialstatements taken into consideration. In addition, a comparison to competitors and the marketsituation is also made .The thesis is based on the assumption that BMW is the mostsuccessful automotive manufacturer in the premium segment. Methodology: In the study of BMW both primary and secondary data are used. The primarydata consists of an interview and secondary data is collected from annual reports. Results andConclusion: BMW is a well known and highly valued brand and has high diversity in theproduct portfolio. BMW possesses high internal competence and the company develop alarge part of the car by themselves. The emerging markets in South East Asia , Russia,Eastern Europe and South America have shown evident growth developments. Eminentproduction, transportation and raw material costs have both dampened margins and affectedthe buying power of consumers likewise as high oil prices.RECOMMENDATIONSMost of the people argue that there is always a chance to learn new thing or no matter. Howbig is the company and how successful they are companies needed to think about the futureand make few plans for them? For the future marketing strategies, I would like torecommend few points. The BMW cars are considered to be as the luxury cars, of whichmost products are applied to rich people but not the poor people. Can enter the market withSmall ‘Lifestyle’ Car which can apply to the middle-class people, its market share can beexpanded. On the other hand, its accessories and parts of cars are expensive for maintenance,which can reduce the desire of people purchasing its cars. In addition, for this can get fewnew models in BMW Mini this could help then to target few different segments and also cantarget females, Middle-class or upper middle class people. BMW can also create goodrelationship with female buyers theyneed to do more of promotional strategies to attract more of female consumers with like oflimited edition specially for females in their existing models or for new models in thisedition just by giving few simples thing which females like in the car for example- pink
    • [19]colour, soft-toys, trendy seat covers, etc. Furthermore, The Asia Pacific region is becomingincreasingly crucial to global automotive sales. Although it has been overshadowed byChinas rapid growth in recent years, emerging markets is set for steady growth where BMWis already there but needs to concentrate more and needs to adaptive marketing strategies toget success out there. These markets are going to be huge as there is more population inthese countries as in comparison to US and UK market. In addition, BMW needs to comewith few more BMW Films interactive marketing campaigns, the "Ultimate DrivingMachine". 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 companyportrayed itself how they want to be in front of customers.ReferencesHespos, T. (2002) “BMW Films: The Ultimate Marketing Scheme, retrieved October 3,2005, from http://www.imediaconnection.com/content/546.aspGiardina, C. and Lehane, S. (2002) "The Driver Returns," retrieved October 3, 2005, fromhttp://www.dtvprofessional.com/2002/12_dec/features/bmw_returns.htm (2002) "BMW Films," retrieved October 3, 2005, fromhttp://www.pmalink.org/awards/reggie/2002reggiewinners3.aspwww.bmweducation.co.uk/company historywww.bmw.co.uk/modelswww.bmw.co.uk/prices www.bmweducation.co.uk/companyfacts.shtmwww.bmweducation.co.uk/statistics http://www.brandchannel.com/features_profile.asp?pr_id=171 http://www.15digitalmarketing.co.uk/articles/2006/01/21/mobile-marketing-look-before-you-leap/ http://www.bmw.co.uk/bmwuk/modelselector/0,,1156___sit-bmwuk,00.html#Kotler, P. and Armstrong, G., (1989) Principles of Marketing, Prentice-Hall InternationalEdition.David Jobber, Principles and Practice of Marketing 5’th Edition www.just-auto.comhttp://www.supercarworld.com/cgi-bin/overview.cgi?BMW