Audit Report on Brand - "BMW"

1. PPROJECTROJECT RREPORTEPORT
ON
SubjectSubject
Brand ManagementBrand Management
Supervised BySupervised By
Dr. Reshma NasreenDr. Reshma Nasreen
Submitted BySubmitted By
Azharuddin KhanAzharuddin Khan
MBA (Pharmaceutical Management)
Semester: 1st
, Batch: 2009-11
Department of Management Studies
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2. Jamia Hamdard, New DelhiJamia Hamdard, New Delhi
ContentsContents
 Brand Inventory
 History………………………………………………………3
 BMW Group………………………………………………..4
 BMW India………………………………………………….4
 Brand Width………………………………………………..5
 Brand Portfolio…………………………………………….6
 Product Attributes………………………………………...7
 Marketing Strategies……………………………………...7
 Brand Exploratory
 Mental Map.………………………………………………...8
 Customer based Brand Equity…………………………9
 CBBE Pyramid…………………………………………….10
 Recommendations…………………………………………..11
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3. Brand Inventory
HISTORY:
Bayerische Motoren Werke AG (BMW) is a German manufacturer of automobiles,
motorcycles, and aircraft engines. Based in Munich, Germany, the company is the leading
auto exporter in Europe. The English translation of the company's name is Bavarian Motor
Works.
The company traces its origins to 1913, when a Bavarian named Karl Rapp began an
aircraft-engine shop in Munich named Rapp Motoren Werke. In 1917 Rapp resigned and
the company, led by Austrian engineer Franz-Josef Popp, changed its name to Bayerische
Motoren Werke. That same year chief engineer Max Friz designed the company's first
aircraft engine, the six-cylinder Type IIIa, which created strong demand for BMW engines.
When the 1919 Treaty of Versailles prohibited German companies from producing aircraft
and aircraft engines, BMW switched to making air brakes for railway cars. In 1923 Friz
developed the company's first motorcycle, the R32, a model that held world speed records
for motorcycles during most of the 1930s.
In 1928 the company entered the automobile business by acquiring Fahrzeugwerke
Eisenach (Eisenach Vehicle Factory), a maker of small cars based in Eisenach, Germany.
In the 1930s BMW began producing a line of larger touring cars and sports cars, introducing
its highly successful model-the 328 sports car-in 1936.
After World War II ended in 1945, Allied forces dismantled the company's main
factories. BMW made kitchen and garden equipment before introducing a new, inexpensive
motorcycle to the German market in 1948. The company's return to auto production in the
1950s resulted in poor sales. In the 1960s the company turned its fortunes around by
focusing on sports sedans and compact touring cars, and it began to compete with
Mercedes-Benz in the luxury-car markets of Europe and the United States. BMW's U.S.
sales peaked in 1986 but then dropped steeply, partly due to competition from two new
luxury cars-Lexus, made by Toyota Motor Corporation, and Infiniti, made by Nissan Motor
Co., Ltd. The 1989 collapse of the Berlin Wall led to a boom in car sales in Europe, and in
1992 BMW outsold Mercedes-Benz in Europe for the first time.
In 1990 BMW formed a joint venture with the British aerospace company Rolls-Royce
PLC to produce aircraft engines for business jets. In 1992 BMW broke ground for a major
automobile plant in Spartanburg, South Carolina, its first automobile plant in the United
States. In 1994 BMW acquired 80 percent of the Rover Group-a British manufacturer of
small cars, luxury cars, and Land Rover sport-utility vehicles-from British Aerospace PLC.
The $1.2 billion acquisition brought the company into new markets.
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4. The BMW Group:
With the three brands, BMW, MINI and Rolls-Royce
Motor Cars, the BMW Group has its sights set firmly on the
premium sector of the international automobile market. To
achieve its aims, the company knows how to deploy its
strengths with an efficiency that is unmatched in the
automotive industry. From research and development to sales
and marketing, BMW Group is committed to the very highest
in quality for all its products and services. The company's
success to date is proof of this strategy's correctness. The
strategic objective is clearly defined: The BMW Group is the
leading provider of premium products and premium services
for individual mobility.
(BMW Headquarter at Munich,
Germany)
Overseas subsidiaries
o South Africa
o United States
o India
o China
o Canada
o Austria
BMW India
Headquartered in Gurgaon (National Capital Region) BMW India is a 100%
subsidiary of the BMW Group. The initial investment in India is 1.1 billion Indian
Rupees.
The wide range of BMW in India include the establishment of a production plant in
Chennai (Tamil Nadu) and development of a dealer organisation across major
metropolitan centres of the country.
On 29 March 2007, BMW India officially opened its production plant in
Chennai. The BMW Plant Chennai produces the BMW 3 Series and BMW 5 Series
Sedans in petrol and diesel variants and has a capacity to produce 3000 units per
year on a single shift basis.
Presently, 12 dealers represent BMW in the Indian market; Bird Automotive
(Gurgaon, NCR), Deutschen Motoren (New Delhi); Navnit Motors (Mumbai), Infinity
Cars (South Mumbai); Krishna Automobiles (Chandigarh); Navnit Motors (Bangalore),
Delta Motors (Hyderabad), Kun Exclusive (Chennai), Bavaria Motors (Pune), OSL
Prestige (Kolkata), Parsoli Motors (Ahmedabad) and Platino Classic (Kochi) . Owing to
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5. an exuberant growth potential, BMW is hopeful of multiplying its annual sales
volume and has already chalked out an extensive dealer strategy to support its
plans.
BMW India will further strengthen the dealer network by stepping into Phase
II, by expanding into the markets of Ludhiana, Bhubaneshwar, Jaipur and
Coimbatore, by the end of 2009.
BMW dealerships presently display the BMW 3 Series (325i, 320i and 320d,
320d Highline) and BMW 5 Series (525i, 530i, 520d, 530d and 530d Highline) that
are produced at the BMW Plant Chennai. BMW dealerships also display the BMW 6
Series (650i Coupé and 650i Convertible), BMW 7 Series (750Li), BMW X3 (X3
xDrive25i, X3 xDrive20d) and the BMW X5 (X5 xDrive48i and X5 xDrive30d) which
are available in the country as CBU’s (completely built-up units). The BMW M3
coupé, BMW M3 Convertible, BMW M5, BMW M6 Coupé, BMW M6 Convertible, BMW
6 Series Individual and BMW 7 Series Individual can also be ordered at BMW India
dealerships.
BMW India has also established an International Purchasing Office (IPO) at its
Headquarters in Gurgaon. The IPO will focus on the development of exports from
India to the BMW Group International Production Network and there work towards
increasing the sourcing share from India over the next years. The activities include
the identification and assessment of potential suppliers taking into account BMW’s
requirements for quality, technology and logistics. The IPO will explore procurement
of production material (components) as well as IT and Engineering Services.
BMW Financial Services.
BMW India has partnered with Bajaj Allianz General Insurance for offering
motor insurance and with ICICI Bank to offer customized financial solutions and
ORIX Auto Infrastructure Services Limited for leasing services for its customers. These
products and services are offered through the BMW Financial Services.
Brand width
BMW: Since its inception, the BMW brand has stood for one thing: sheer driving pleasure. Sporting and dynamic
performance combine with peerless design and exclusive quality, resulting in the unique appeal of BMW automobiles.
Website: www.bmw.com
MINI: The MINI brand is refreshingly different: extroverted, spontaneous and in every respect something out of the
ordinary. Ideal for a society that was young, unconventional and ready for change, the MINI Classic became a cult vehicle
in the sixties and seventies. Since then the brand has lost none of its youthful charm. MINI is part of a lifestyle that is
cosmopolitan and confident, ready for everything.
Website: www.MINI.com
Rolls-Royce: Rolls-Royce Motor Cars Limited has been part of the BMW
Group since January 1, 2003. Rolls-Royce is one of the most fascinating and
well-known brands in the world, the luxury motor car par excellence. For over
100 years, motor cars of the Rolls-Royce brand have stood for truly outstanding
engineering, quality and reliability.
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6. Website: www.rolls-roycemotorcars.com
Motorcycles: Premium is the key word for BMW Group motorcycles as well. The group has enjoyed great success with
their strategy: to develop and build the best motorcycles, set standards with regard to technology, environmental protection and
safety, and provide outstanding customer service in the pre- and after-sales phases.
Website: www.bmw-motorrad.com
BMW Brand Portfolio
1Series
Three-door Five-door Coupé Convertible
3Series 6Series
Sedan Touring Coupe Convertible Sedan ActiveHybrid 7
5Series 7Series
Sedan Touring Gran Turismo Coupé Convertible
X Series Z4 Series
X1 X3 X5 X6 ActiveHybrid X6 Z4 Roadster
M Series
M3 Sedan M3 Coupé M3 Convertible M5 Sedan M5 Touring M6 Coupé
M6 Convertible X5 M X6 M
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7. PRODUCT RELATED ATTRIBUTES:
• Stylish peerless design
• German engineering
• Performance
• Luxury
• Reliability
• Comfort
• Speed
• Safety
• Exclusive quality
• Well-established brands
Marketing Strategies
COMMUNICATION, PRICING AND DISTRIBUTION:
Most of the BMW communication takes place through print media in magazines and
newspapers. This is supported by communication through TV advertisements and point of
sales promotion. Now a days a good company has a state of the art web portal, BMW
websites are highly informative, interactive and a pleasure to watch. One can get any
amount of detailed information regarding the prices, features, retailers, and support services
etc. There are company specified retailers and distributors throughout the world who are in
constant touch with the parent and comply implicitly. Dealers also have round the clock
servicing and repair. BMW also has a used car portal where one can choose and buy
his/her appropriate model.
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8. Brand Exploratory
Customer knowledge: BMW has successfully leveraged its history and tradition of
excellence along with innovation to become the most famous and recognized carmaker in
the world. Typical consumer brand associations for BMW might be “heritage”, “stylish”,
“luxurious”, “powerful”, “elegant”, “performance” and “fuel efficient” to an extent.
Sources of brand equity: The BMW name, one of the oldest in the history of car makers,
is no doubt is an important source of brand equity. But being a German car is also a key
source of brand equity. The symbol with white and blue partitioned circle is a known symbol
all over the world. The fact that it’s a German engineered car adds a ton to its brand equity.
Germans are the best engineers in the whole world. BMW has a Brand Ambassador named
as Maria Ilieva, who is a Bulgarian Singer and Producer, recognized as a most successful
female vocal artist.
Sponsorships: BMW has been engaged in motorsport activities since the dawn of the first
BMW motorcycle. It is currently sponsoring:
• Formula BMW - A Junior racing Formula category.
• Kumho BMW Championship - A BMW-exclusive championship run in the United
Kingdom.
Games:
Formula One - BMW has won 19 Grands Prix as an engine supplier. In July 2009, BMW
announced that it would withdraw from Formula One at the end of the 2009 season.
Touring car racing - BMW has a long and successful history in touring car racing.
Motorcycle Rally - BMW motorcycles have won Paris Dakar Rally 6 times.
Philanthropy: The company is a charter member of the U.S. Environmental Protection
Agency's (EPA) National Environmental Achievement Track, which recognizes companies
for their environmental stewardship and performance. It is also a member of the South
Carolina Environmental Excellence Program and is on the Dow Jones Sustainability Group
Index, which rates environmentally friendly companies. BMW has taken measures to reduce
the impact the company has on the environment. It is trying to design less-polluting cars by
making existing models more efficient, as well as developing environmentally friendly fuels
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9. for future vehicles. Possibilities include: electric power, hybrid power (combustion, engines
and electric motors) hydrogen engines.
BMW offers 49 models with EU5/6 emissions norm and nearly 20 models with CO2
output less than 140 g/km, which puts it on the lowest tax group and therefore could provide
the future owner with eco-bonus offered from some European states.
At brand level, too, BMW does better than its main competitors in the premium
segment by significantly more than half a liter of fuel consumption with an average level of
160 g CO2/km. The vehicles of the next best competitor have a CO2 emissions level of 16
grams more than the models of the brand BMW, with the next competitor after this at a level
which is as much as 28 g higher than the brand BMW - equal to a whole liter of diesel.
Between 2006 and 2008, the brand BMW achieved a reduction in fuel consumption of 16%,
more than doubling the reduction attained by the next best premium segment competitor. At
the same, BMW vehicles are still well ahead of their competitors in terms of average engine
output
BMW Mental Map
(BMW mental map)
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Luxury
Image
Stylish
Powerful
Heritage
Efficient
Performance
BMW

10. The customer based brand equity pyramid (CBBE):
The BMW customer based brand equity is equally strong on the left and right hand
sides. It is also strong from bottom to top, enjoying the highest brand awareness of a
carmaker as well as high repeat purchase rates and customer loyalty. To a certain extent
BMW has successfully focused on both the superior product attributes and the imagery
associated with owning and driving a BMW.
Points of parity
German automaker, Quality engineering, Durable, Stylish & sleek designs,
Attractive
Points of difference
History and heritage, Characteristic Symbol, Number of variants, Luxury
with Performance efficiency
CBBE Pyramid
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11. 2.12
RESONANCE
SALIENCE
JUDGMENTS FEELINGS
PERFORMANCE IMAGERY
4. RELATIONSHIPS =
What about you and
me?
3. RESPONSE =
What about you?
2. MEANING
=
What are you?
1. IDENTITY
=
Who are you?
CBBE Pyramid attributes
Resonance: Top notch quality and comfort: high loyalty, high repeat purchase,
Judgment: State of the art technology and quality: world class cars, innovation and
design, clever design, simple to operate.
Feelings: Social approval and self respect, environment concern.
Performance: Exceptional Customer service, good resale value, less maintenance, less
polluting, superb on road performance.
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12. Imagery: Historical and classic image: since 1916, associated with racing events
and Rallies.
Salience: High awareness: German marvel, best in the class, excellent finish.
Recommendations:
Competition: There is a sudden increase in competition from the other car manufacturers
in all the segments. Mercedes is the prime competitor then there are others like Volvo,
Honda , Toyota, Volkswagen etc. The competitors are launching new products everyday to
have a greater pie of the market share as well as the customer mind. The trends and
scenarios are constantly changing in the consumer market. The silver generation with a
demand for mobility and financial strength needs something which appeals to them. The
lifestyles have changed. There must be individualization and differentiation between
lifestyles and products. BMW must keep this in mind and develop products. For instance,
BMW can attract middle and moderate culture families by launching more fuel efficient and
less priced variants.
Technology: Market needs products with excellent networking but simple interaction.
Customer’s environmental sensitivity is increasing. Environment is becoming a competition
factor. Nevertheless BMW takes necessary steps towards environment protection and
development but the need of hour is to develop vehicles powered with renewable sources of
energy. E.g. BMW has Hybrid cars but they are not much efficient as Honda’s Hybrid cars.
Product differentiation must be done through technology and emotion and a clear
product and a brand image. BMW must extend product leadership especially regarding
design, driving experience and quality.
BMW must specifically address image generators and developing loyal, long term
customer relations. BMW must connect to the women consumer too. BMW has MINI brand
but there is a huge untapped female consumer market which is still untouched. BMW can
design and develop products exclusively for this segment.
Merchandising: Company can sell t-shirts, mugs, apparels of BMW logo in order to build a
strong brand equity. Company can also appoint Entertainment Celebrities (with respect to
locality or region basis) to strengthen brand equity.
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