Marketing plan on BMW
Purpose of the Marketing Plan. Organization Mission Statement. The main strategies employed by BMW. Sales volume of automobiles. New records set for revenues and earnings. Current models of BMW. Product life cycle. Engagement in Celebrity Endorsement.
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1. Purpose and Mission
1.1 Purpose of the Marketing Plan
1.2 Organization Mission Statement
1.3 BMW Strategies
2. Situational Analysis
2.1 Internal environment
2.1.4 Channel Members
2.2 External environment
2.3 Financial Codition
2.4 Summary (SWOT analysis)
3. Marketing Programs
3.1 Target Markets
3.2 Product (PLC, BCG)
4. Conclusions and Recommendations
Part 1: Purpose and Mission
1.1 Purpose of the Marketing Plan
Purpose 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.
In 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.
Given 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
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 the world's most respected automakers, renowned for crafting luxury cars that offer superior levels of driving enjoyment.
Founded 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.
It 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.
The 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.
By 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.
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 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.
Long-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.
1.3 BMW Strategies
One 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'.
BMW 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.
The detailed view on Strategies is as follows:
1) Well-Executed Strategies
BMW is 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.
2) Image of Prestige
Part of 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.
Branding is 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.
4) Flexibility for the Customer
The BMW 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.
Differentiation is 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.
3. Personnel - companies can gain a strong competitive advantage through having better-trained people.
4. Channel - companies can achieve competitive advantage through the way they design their distribution channels' coverage, expertise, and performance.
5. 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.
The 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.
Part 2: Situational Analysis
2.1 Internal Environment
After a 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.
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.
1 Series: Audi A3, Volkswagen Golf, Alfa Romeo 147,
3 Series: Audi A4, Jaguar X-Type, Mercedes C-Class, Lexus IS200,
5 Series: Audi A7, Mercedes E-Class, Saab 9-5, Jaguar XF, 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, Porshe Cayenne, 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.
Now let 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.
The 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.
1) Well Known Brand
2) Status Symbol
4) A lot of add on options
1) Import Parts
2) Repair Costs
3) Change in currency; price fluctuation
4) Ecological/gas friendly
1) Globally recognized brand
2) Established brand
1) Tariffs on shipping
2) Competitive Car Industry
3) Rising fuel costs
4) Severe economic downturn
5) The BMW 535 X-drive
The 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.
1) Well Known Brand
2) Status Symbol
4) A lot of add on options
1) Import Parts
2) Repair Costs
3) Change in currency; price fluctuation
4) Ecological/gas friendly
1) Increased media attention on Audi through NY Yankees baseball sponsorship
2) Globally recognized brand
3) Established brand
1) Tariffs on shipping
2) Competitive Car Industry
3) Rising fuel costs
4) Severe economic downturn
5) The BMW 535 X-drive
Audi 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.
BMW 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.
The 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.
In 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.”
BMW 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.
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.
2.1.4 Channel Members
Channel Members 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.
In order 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.
2.2 External environment
BMW is a vast organization and thus a vast majority of external factors affect the running of the company which are discussed below.
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.
This 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.
The recent 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.
The 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.
The EU 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.
Technology has 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..
BMW 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.
Recently 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.
2.3 Financial Condition
The 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.
Sales 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.
Sales volume of automobiles*
The 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.
Financial 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 %.
New records set for revenues and earnings
Group revenues 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.
The 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 %).
Motorcycle 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 %).
The 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)
5) Well Known Brand
6) Status Symbol
8) A lot of add-on options
5) Import Parts
6) Repair Costs
7) Change in currency; price fluctuation
8) Ecological/gas friendly
4) Increased media attention on Olympics
5) Increased media attention on BMW Championships
6) Globally recognized brand
7) Established brand
6) Tariffs on shipping
7) Competitive Car Industry
8) Rising fuel costs
9) Severe economic downturn
For 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.
1. Strong marketing strategy.
2. Customers recognize the strong brand name of BMW Group Company.
3. Strong brand image i.e. BMW, MINI Cooper and Rolls Royce.
4. 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.
2. 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.
3. Not a mass-market company like Toyota and their volumes are small.
1. There is an opportunity for BMW Group to increase further innovation and technology in their cars due to increasing competition in car industry.
2. BMW Group should also look to make new collaboration with other car manufacturers i.e. introducing new brands.
3. BMW Group should also look to produce cheaper cars by new innovation and technology.
4. Expansion of the BMW Group in Asia Pacific, Asia, Africa and Australia.
1. Recession which has affected businesses in every part of the world.
2. To maintain the same level of innovation and performance.
3. The growing competition in the automobile industry i.e. competitors of BMW Group include Mercedes, Audi, Jaguar, Ford, Lexus.
4. The earnings of the BMW Group are Dollar dominated, so the increasing strength of Euro is another threat for the company.
Once 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.
BMW 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.
Part 3: Marketing Programs
3.1 Target Markets
The 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.
Singles 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.).
Income $125,000 per year or more
Marital status Any
Household size Any
Education Bachelor degree and higher
Occupation Manager or professional, technology specialist
Geographic North America, Asia, & much of Europe
Select the Possible Segment and Niche
Young Digerati: 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.
Income Producing Assets:
Presence of Kids:
Lifestyle: Full time employee, full time dad. Very active lifestyle
Activities: often attends sporting events, opera and theater, business parties, networking events. Active in community and church, coaches kids sports
Interests: 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.
Rate of usage: Drive everywhere… to work, the kids' schools and sports, groceries, church, dinner, parties, date night, short family trips.
User Status: Powerful, important, upper-class, demands respect, someone to know
Technological orientation: 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.
Price 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.
3.2. Product (PLC, BCG)
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.
Current models of BMW:
The 1 Series, originally launched in 2004, is BMW's smallest car. Currently available are the second generation hatchback (F20) and first generation coupe/convertible (E82/E88). The 3 Series, a compact executive car manufactured since model year 1975, is currently in its sixth generation (F30); models include the sport sedan (F30), and fourth generation station wagon (F30), and convertible (E93), and theGran Turismo. In 2014, the 4 Series has been released and replaced the 3 Series Coupe and Convertible. The 5 Series is a mid-sizeexecutive car, available in sedan (F10) and station wagon (F11) forms. The 5 Series Gran Turismo (F07), which debuted in 2010, created a segment between station wagons and crossover SUV.
BMW's full-size flagship executive sedan is the 7 Series. Typically, BMW introduces many of their innovations first in the 7 Series, such as the iDrive system. The 7 Series Hydrogen, having one of the world's first hydrogen fueled internal combustion engines, is fueled by liquid hydrogen and emits only clean water vapor. The latest generation (F01) debuted in 2009. Based on the 5 Series' platform, the 6 Series is BMW's grand touring luxury sport coupe/convertible (F12/F13). A 2-seater roadster and coupe which succeeded the Z3, the Z4 has been sold since 2002.
The X3 (F25), BMW's second crossover SUV (called SAV or "Sports Activity Vehicle" by BMW) debuted in 2010 and replaced the X3 (E83), which was based on the E46 3 Series' platform, and had been in production since 2003. Marketed in Europe as an off-roader, it benefits from BMW's xDrive all-wheel drive system. The all-wheel drive X5 (E53) was BMW's first crossover SUV (SAV), based on the 5 Series, and is a mid-size luxury SUV (SAV) sold by BMW since 2000. A 4-seat crossover SUV released by BMW in December 2007, the X6 is marketed as a "Sports Activity Coupe" (SAC) by BMW. The X1 extends the BMW Sports Activity Series model lineup.
In 2013, the company announced that it was to launch its first fully electric car range. This would begin with the launch of the BMW i3 in the second quarter of 2014.
· 1 Series (F20) (2011-present) 5-door Hatchback
· 1 Series (F21) (2011-present) 3-door Hatchback
· 2 Series (F22) (2014-present) Coupe and convertible
· BMW 2 Series Active Tourer (F45) (2014-present) Compact MPV
· 3 Series (F30) (2012-present) Sedan and wagon
· 4 Series (F32/F33/F36) (2014-present) Coupe and convertible
· 5 Series (F10) (2009-present) Sedan and wagon
· 6 Series (F12) (2010-present) Coupe, convertible, Gran Coupe
· 7 Series (F01) (2008-present) Sedan
· 3 Series Gran Turismo (2013-present) Progressive Activity Sedan
· 5 Series Gran Turismo (2009-present) Progressive Activity Sedan
· BMW i3 (2014-present) Electric vehicle
· BMW i8 (2014-present) Hybrid sports car
· X1 (E84) (2009-present) Compact Crossover SUV/Sports Activity Vehicle (SAV)
· X3 (F25) (2010-present) Compact Crossover SUV/Sports Activity Vehicle (SAV)
· BMW X4 (F26) (2014-present Sports Activity Coupe
· X5 (F15) (2014-present) Mid-Size Crossover SUV/Sports Activity Vehicle (SAV)
· X6 (F16) (2014-present) Sports Activity Coupe
· Z4 (E89) (2009-present) Sports Roadster
M-series models (fifth column in the table): based on the 3 Series, the M3 defined an entirely new market for BMW: a race-ready production vehicle. Since its debut, the M3 is heralded in enthusiast circles, in large part due to its unique geometry and award winning engines. The newest V8-powered platform became available the autumn of 2007 in Europe, and second quarter of 2008 for the U.S. in coupe (E92), and later the cabriolet (E93), and sedan (E90) variants. Based on the 5 Series, the M5 is the M division's V10-powered version of the E60 5 Series. The M6 is the M division's version of the 6 Series, and shares its drive-train with the M5. The Z4 M, or M Couple/M Roadster, is the M division's version of the Z4. The X5M is the M division's version of the X5, and the X6M is the M division's version of the X6. Both the X5M and X6M share the same V8 twin scroll twin turbo.
BMW Motorrad produced 82,631 motorcycles in 2009, compared with 104,220 in 2008, a fall of 20.7% The most popular model is theR1200GS and its sibling R1200GS Adventure, which sold 24,467 units - accounting for 28% of BMW's annual production. Current production includes a variety of shaft, chain, and belt driven models, with engines from 650 cc to 1,649 cc; and models designed for off-road, dual-purpose, sport, and touring activities.
In 2008, BMW introduced the DOHC Boxer HP2 Sport, and entered the serious off-road competition motorcycle market with the release of the BMW G450X motorcycle.
BMW Motorrad motorcycles are categorized into product families, and each family is assigned a different letter prefix. The current families are:
· C series - Maxi-scooters called Urban Mobility Vehicles by BMW
· F series - parallel-twin engines of 798 cc capacity, featuring either chain or belt drive. Models are F650GS,F700GS, F800GS, F800R,F800S, F800GT and F800ST.
· G series - single-cylinder engines of 449 to 652 cc capacity featuring chain drive. Models are G450X (now discontinued), G650GS, G650 Sertгo, G650 Xmoto, G650 Xchallenge and G650 Xcountry. The 450 cc engines are manufactured by Kymco in Taiwan. The 2009 and 2010 650 cc engine parts were manufactured by Rotax in Austria, with the engine being assembled by Loncin Holdings, Ltdin China.
· R series - twin-cylinder boxer engines of 1,170 cc capacity featuring shaft drive. Models are R1200GS, R1200R, R1200RT, R1200S and R nineT.
· K series - four-cylinder engines of 1,157 to 1,649 cc capacity featuring shaft drive. Models are K1200LT, K1300GT, K1300R and K1300S. In 2011, BMW Motorrad launched the six-cylinder 1,649 cc K1600GT and K1600GTL.
· S1000RR - sport bike with transverse-mounted, 999 cc inline-four engine.
Like all vehicles produced by the BMW Group, the 2014 bicycle collection meets top standards in quality and design. The design of this new third-generation frame gives the bicycle's functional geometric shape a stylish and dynamic look. The signature feature of the bikes in the collection is the “bull neck” on the front of the top tube. The frame is reminiscent of a motorbike, tracing the outline of the tank. Another enhancement is the third generation bikes' seamless design. The welding lines are smooth and all cables run inside the frame.
The 2014 collection is not just innovative in terms of its design, it also includes a range of new technical features. Alongside innovations by BMW itself, the new models are fitted with components by top manufacturers like Shimano and Suntour. The hydroformed frame is robust and light, guaranteeing optimal efficiency by ensuring maximum power transfer with minimum effort.
The new bike collection includes the BMW Cruise Bike, a new sporty version of the M Bike, the Cruise e-bike, and the comfortable and functional all-rounder, the BMW Trekking Bike.
Key Product features in the marketing mix of BMW
· Luxury segment
· High Quality products
· Excellent brand pull
· Good service
BMW has a number of successful and unsuccessful cars within their automobiles section. The most famous and long running is the BMW 3 series. Since 1975 when it was first launched, it has been produced in six different generations and in no fewer than five different body styles. It is BMW's best-selling model, accounting for around 30% of the BMW brand's annual total sales.
To analyze the portfolio of cars that BMW has to offer in the world, the best way is to use the Boston Consulting Group Matrix.
According to this matrix business and its products can be classified as high or low according to their industry growth rate and relative market share.
BMW BCG matrix shows that Star product for the company is the BMW 3 series and the 4 series. The new BMW 3 series is highly successful in the world market. Its market share growing from 15% to 28% in 2014(High Market Share). This market segment in which 3 series belongs to is the major segment of the world luxury car industry (High market growth).
The Cash cows are the evergreen products of BMW, the 5 series and the X series. The 5 series accounting for the major chunk of the BMW world revenue approx 30% (High Market Share). However the market which this car belongs to does not show signs of growing.
Finally the Dog is the 6 series, which has failed to achieve the targets for which it was produced. The reason being that their competitor's car like the Porsche 911 is much better in performance and design in comparison with the BMW 6 series.
Product life cycle
BMW 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.
If 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.
In 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.
BMW 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.
2012 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 more than push strategy
· Top of the mind positioning 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 .
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 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.
For 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.
Effective public relations need to play an integral part in BMW marketing strategy. It is important for BMW to maintain regular contact with all organisational stakeholders with the use of various marketing communication channels. Specifically, communication channels used in public relations include, but not limited to online press releases, annual reports, speeches, and seminars.
As part of their corporate social responsibility initiatives BMW management is also recommended to increase the level of its association with local charities in the countries.
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.
Celebrity 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.
To outrun 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.
BMW e-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”.
The 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.
BMW Films Campaign
The 2001 “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).
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.
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