Strategic Marketing Management for BMW: Analysis and Recommendations

This paper provides a critical analysis of BMW's market context and extended marketing mix. It includes segmentation, targeting, and positioning strategies, as well as recommendations for improvement.

Strategic Marketing Management 1
STRATEGIC MARKETING MANAGEMENT
Name
Course
Tutor
University
City
Date

Strategic Marketing Management 2
Strategic Marketing Management
Introduction
Management of strategic marketing involves the engagement in the basic principles for
successful marketing. Strategic marketing administration implements the mission of a company
so that it can get the best out of the existing plans (Foxall, 2014, 3). Researchers argue that
reaching the target customers is easy, as long as the marketer can undertake scalable practices
and create compelling products which can produce meaningful results. Marketers should come
up with a profitable marketing strategy through some activities such as continuous reinvention to
keep them running. Any institution should study innovative and classic strategies so that it can
build enduring brands (Faber, Hernandez-Mendez, and Matthes, 2017, 544). In this paper I will
focus I will focus on an improved product in the market which is BMW. I will provide a critical
analysis of its market context and provide recommendations for the extended marketing mix.
Description of BMW
BMW is one of the Multinational companies in Germany which produces motorcycles
and luxury automobiles. BMW is a company which continuously improves its brands besides
making many inventions. It is because of the changes in the market and so that BMW can keep
up competition in the market. The company is working on mobility through innovations and
product improvements so that it can have a better future (Liebert, 2016, 22). One of the upgrades
by BMW is the shift concerning autonomous driving. BMW sometimes faces technical
challenges, but it offers many opportunities to clients regarding safety, efficiency, safety, and
comfort. BMW has already integrated innovative and exciting possibilities in its new models for
automated driving. BMW continuously improves its products through cooperation between team

Strategic Marketing Management 3
members (Shiu, Bonacina, and Binninger, 2017, 197). BMW believes that improving efficiency
and productivity can help in enhancing flexibility and competition in the production processes.
BMW focusses on adding value while trying to minimize on the level of wastage during
production. In this paper, I will look at the BMW market context, and BMW extended marketing
mix in a more detailed manner.
Critical analysis of the market context
Marketing context analysis involves the evaluation of the environment where an
organization operates. The market context includes both the external and internal environments
in business. In my review on BMW I will look at the critical trends in the market, BMW key
competitors and how they position themselves, current customer behaviors or altitudes in the
market and the opportunities or issues which are relevant to BMW (Hoch et al., 2007, 692).
Through such an analysis, anyone can understand the weaknesses and strengths of BMW
(Wänke, Bohner, and Jurkowitsch, 2007, 172). The main aim of context analysis is to understand
the surrounding and come up with a plan to solve the business challenges.
Key market trends
The production of luxury cars is changing due to the rise in buyers’ purchasing power
and other technological developments (Law, 2017, 3). The level of competition has also
increased in the market because there are many companies which manufacture luxury
automobiles including BMW, Audi AG, Denso Corporation and many others. The global
competitors have attempted to develop various innovations so that they can broaden the products
they offer. A class of wealthy people has also emerged in the market which leads to a shift from

Strategic Marketing Management 4
the used of economy vehicles to luxury vehicles, and this is an excellent opportunity for
organizations which produce luxury automobiles such as BMW.
The level of car ownership has also increased, most customers currently prefer the use of
personalized automobiles, there is an increased preference for vehicles which are
environmentally friendly, Baby boomers have also grown and they value quality, and rise
effective product management strategies are some of the positive changes that have taken part in
the market (Zhang, and Hou, 2017, 244). On the negative side, the price of fuel has continuously
risen, reduction in dealership penetration, and people also continue importing second-hand
automobiles which restraints the market in different ways. In regards to this text, there are three
main trends in the market, one is that the buyers’ purchasing power has increased, most people
currently prefer the use of personalized automobiles, and the market Is very competitive which
forces manufacturers to enhance uniqueness in their products so that can differentiate their
products they are offering.
BMW key competitors and their positioning
At this moment, many Germany automobile manufacturers are coming up with the best
cars. The level of competition has increased with Audi having new brands which include TT and
R8, BMW with X5/X6 M and M3/M4, Porsche with 911 GT3 and CaymanGT4, Volkswagen
with Golf R and GTI and Mercedes has C63 AMG and AMG GT. It is evident that the level of
competition is high with every manufacturer having a great vehicle in all segments. But the most
significant competitor is Mercedes because it produces the best quality vehicles in the entire
world. All the other competitors such as Volkswagen and Audi do not pose great competition to
BMW as Mercedes does.

Strategic Marketing Management 5
Mercedes is a brand of luxury automobiles which is highly celebrated in the entire world.
It was the first automobile to be developed in Germany in the year 1986. As a producer of luxury
vehicles, Mercedes has adopted a strategy for positioning which involves the production of safe
and highly reliable automobiles. The positioning results in a value premium which is relative to
other international competitors (Dominici et al., 2016, 425). Currently, Mercedes offers
exclusive breakthroughs to assist in reducing damages, reduce the extent of injuries in case of
accidents, or, even reduce the possibility of such cases. The company serves to protect its
customers in a way that they cannot even imagine.
Customer altitudes in this market
Attitudes and behaviors displayed by customers can help in determining the demand for a
particular product. These attitudes and behaviors are best known as market psychology (Shank,
and Lyberger, 2014, 244). The response of consumers allows companies to understand the
reasoning of customers on certain things, and how people make decisions. Researchers have
conducted numerous studies on the behavior and attitude of customers towards luxury vehicles.
The amateur buyers of BMW are the retail customers who spend and desire specifically non-
routine consumption. BMW customers seek to test all the new products manufactured by BMW
but not the vehicle itself. BMW customers also differentiate figurative benefits into vital and
unique interests which originate from BMW. These customers can focus on acceleration,
maximum speed, engine strength, and horsepower as crucial factors if they do not regard BMW
unique benefits. Different factors like some customers shape the consumer's behavior towards
BMW for instance, some customers do not have the necessary resources but they can have a
friendly attitude towards a product while others have the required resources, but they lack the

Strategic Marketing Management 6
altitude. BMW served the desired purpose and customers like the products manufactured by this
company hence giving it a competitive advantage.
Relevant issues and opportunities
The company many opportunities and issues which affect its performance but it always
strive to develop a sustainable future for the society and the company itself. The company knows
the problems which affect it and have ways of dealing with these issues. The company develops
an innovative mobility solution which adds value to the society, customers and the company.
Having such a sustainable future can contribute to the success of BMW, and this may lead to
long-term victory for the company. It is important to consider ethical and social issues during
production so that the company can develop a positive relationship with its customers. In this
world cultures and people are considerably connected, companies should, therefore, take social
responsibility for their actions (Wilden, and Gudergan, 2015, 182). The company understands
that having social mobility and intellectual understanding contributes to a competitive advantage
and a healthy society. BMW has many market opportunities including the increase in the demand
for automobiles and the frequency or timely release of new models. With the consideration of
ethical and social factors in production, BMW can take the new opportunities so that it can
compete favorably in the market (Alt, and Iversen, 2017, 23).
Segmentation, Targeting, and Positioning
Segmentation, targeting and positioning (STP) is one of the widely used marketing
strategies in contemporary marketing. Most of the marketing strategies developed in the past
few years focused on the product, but few of them focused on the customers. STP model helps
companies to discover how they can engage customers, and become better marketing

Strategic Marketing Management 7
communicators (Fedorikhin, Park, and Thomson, 2008, 291). Segmentation involves the
identification of different market segments and determining the essential aspects in each section.
Market targeting consists of the evaluation of commercial and potential attractiveness of the
parts (Ellson, 2004, 30). Then product positioning refers to the development of a detailed brand
positioning for the sections selected (Laroche, Bergeron, and Barbaro-Forleo, 2001, 504).
Developing STP can help in enhancing production and communication at different levels.
The bases of segmentation used
It is essential to understand the target market before building a product or a service.
BMW uses segmentation so that it can focus on marketing campaigns and its production.
Through segmentation, the company can focus on a specific segment rather than focusing on the
whole group. The company should have a good understanding of the target market to ensure that
it produces goods which align with the customer needs (Friese, Wänke, and Plessner, 2006, 733).
There are different strategies which are used to divide the market into different segments. The
segmentation helps the manufacturer to focus and serve customers differently, for instance,
BMW produces luxury and economy automobiles to satisfy the different sectors. BMW has
different bases for its segmentation including, demographic, geographic, psychographic and
behavioral factors.
Regarding geographic, BMW has different products which are designed for various
regions. For instance, Rolls-Royce, BMW, and MINI vehicle brands are intended for either
international or domestic markets. Regarding geographic segmentation, the company also
segments the market in regards to density. For instance, BMW is designed for both rural and
urban usage, MINI is designed for city usage, and Roll-Royce is also designed for urban usage.

Strategic Marketing Management 8
The next segmentation is in regards to demographic segmentation; the company divides
the market according to gender, income, occupation, life-cycle stages, and age. Regarding age,
MINI is made for people between the age of twenty-five and forty-five, BMW is for customers
aged between twenty to sixty-five years while a Rolls-Royce is for people who have forty years
and above. According to gender, the company produces MINI, Rolls-Royce, and BMW for both
men and women. Regarding occupation and income, the company produces MINI, Rolls-Royce,
and BMW for professionals or executives and high-income earners respectively. Lastly in the
demographic segmentation, the company charities customers in regards to the life-cycle stage. In
this classification, BMW is made for Full Nest 1, Full Nest III, Empty Nest II, and Solitary
Survivor II among others, MINI is made for Full Nest I, while Rolls-Royce is made Full Nest II,
Empty Nest I and Solitary Survivor I.
The other market segmentation is the psychographic segmentation which involves a
classification in regards to the lifestyle and the social class of the user. In the classification on
lifestyle, the company makes Rolls-Royce for the resigned, MINI for explorers or reformers, and
BMW for aspirer and succeeded. According to social class Rolls-Royce is for the upper level,
MINI is for the middle class while BMW is designed for both the top and the middle class.
Lastly, there is the behavioral segmentation the company classifies customers according
to the benefits sought, the degree of devotion, user status and the personality of the user. By the
user status, the company makes BMW for ex-users, non-users, and regular users, MINI is made
for first-time users and potential users while Rolls-Royce is designed for steady and first-time
users. Regarding personality, BMW is for those who are ambitious and determined; MINI is
made for the easygoing while Rolls-Royce is made for those who are enthusiastic and amiable.

Strategic Marketing Management 9
The next classification is in regards to benefits sought. In this class the organization
makes BMW, and MINI brands are made for those who like seeing their achievements, like
reliability and speed while Rolls-Royce is made who love seeing their accomplishments, like
reliability and those who would like to express their high status. The last classification in
behavioral segmentation is the characterization in regards to the degree of loyalty. In this class,
BMW is made for switchers, softcore and hardcore royals, MINI is for switchers and softcore
royals, while Rolls-Royce is made for only the hardcore royals. The information provided the
different segments developed by BMW so that it can reach a wide range of customers (Shiu,
Bonacina, and Binninger, 2017, 193). However, some of them are prone to changes through
further, targeting, positioning and segmentation.
Profile and persona of the target market
As discussed earlier, BMW has dramatically focused on innovation so that it can become
a successful competitor. The company is also able to realize its potential in the field of mobility
and technology which helps in its continuous development. The company has improved its cars
by installing fully automated parking in their vehicles (Bennett, and Vijaygopal, 2018, 500).
Vehicles with automatic parking help to plan on parking which allows BMW i3 to park
dynamically, safely and independently. The company is working on other improvements to
ensure that their customers feel more comfortable while driving. Another improvement made by
BMW is the development of apps and services which can connect cars, drivers and the
environment. BMW has made numerous enhancements of their products and made sundry
productions so that they can reach their target markets (Pasaoglu et al., 2016, 139). The company

Strategic Marketing Management 10
always evaluates the market potential before it even starts improving on its products so that it
does not make products which are not marketable.
BMW targets people who are between twenty-five to forty years because they are the
people who are most successful. Through its improvements, BMW targets on reaching people
from different countries and ethnic groups so that it can be labeled as an International vehicle or
a luxury vehicle. Through its continuous improvements, the company can get more customers
because most customers would like to feel comfortable while driving (Timmer et al., 2015, 600).
Through the improvements, more customers will become aware of its products, and it can
quickly expand its market to other regions such as Brazil, India, and China. BMW also plans on
developing new mini cars for the people in China, and this will help the company to have an
additional market segment.
The new and improved products of BMW will reach the target customers because they
have the potential to solve the problems they have. For instance, having a car that has automated
parking helps customers to park their vehicles easily because the automobile can identify a
parking space without problems. Developing motors with the aim of targeting China will solve
their needs, and this will increase BMW’s market share in the region (Liu et al., 98). BMW has
also focused on improving the consumption of its products by targeting the young people who
have the potential to buy its products (Thun, 2018, 8). BMW is a very luxurious vehicle which is
full of comfort, and this will make its customers feel comfortable while driving. Customers
should, therefore, buy the new and improved products because they will solve their traveling
problems and increase their comfort while driving.
Extended marketing mix

Strategic Marketing Management 11
An extended marketing mix involves a collection of seven marketing elements which aim
at working together to attain the marketing objectives. The seven components include price,
people, place, product, promotion, physical and process (Rucker, and Galinsky, 2009, 550).
These seven elements are used by businesses to help them in meeting the expectations and needs
of customers (Khan, 2014, 95). These seven elements must work together which possess a
significant challenge to many institutions. Traditionally, there were four features in the
marketing mix the other three were just added in the recent years. In this section, I will at the
traditional marketing mix which comprises of the pricing, promotional strategy, distribution or
channel strategy and the product.
Product
The product is the service or good bought by customers. BMW started with the building
of airplane engines and motorcycles before moving to the production of automobiles. The range
of products produced by BMW is the reason why BMW is so successful even though it is also
involved in other events and sports. The products have a broad market because they look
appealing to many people even those from the lower classes. All the cars produced by BMW
have different aspects because they target different customers (West, Ford, and Ibrahim, 2015,
22). In the early stages of production, BMW used to manufacture rudimentary vehicles but as it
advanced it started advancing on engineering. BMW has quality products, and customers are
always ready to pay any amount to get the luxury vehicles.
Pricing strategy
With the mind positioning and enhanced technology, BMW prices its products at a very
high price. But the prices vary according to the model, extras or the series in which a customer is

Strategic Marketing Management 12
willing to purchase BMW are not made for all the customers, they are only made for those who
have high income because of their superior image and technology. Their general maintenance
and the cost of repairs is also expensive when compared to other vehicles (Avasilcai, and
Galateanu, 2015, 209). The company has however developed new products such as the BMW X1
which are lower in price to target Indian markets. BMW gives its customers some loan deals for
those who would like to spread the cost of the car.
Promotion
Forbes ranked BMW as the most well-known entity in the world. The criteria used to
classify the companies was on the recommendations by customers, willingness to purchase the
product and desire for people to employ the entity. BMW has taken so many years so that it can
create a positive perception of their brands. BMW has continuously promoted itself through print
advertisements, fantastic television adverts, adverts in other countries and even online
advertising. BMW is aware that it must provide quality products to its targeted customers as long
as they are willing to pay the price of quality. The company delivers quality advertisements on
the television so that they can outdo those of their competitors. BMW adverts focus on the
technology used to make the car, the car looks and the engine capacity. BMW advertisements
focus on public perceptions so that it can become more successful.
Distribution or channel strategy
BMW has people who are highly skilled in all areas including in areas such as customer
service to mechanics. BMW has numerous manufacturing plants in the world and a good sales
network for its products. The company chooses a showroom dealer instead of an automobile
distributor because showrooms have fewer margins while distributors require high investments.

Strategic Marketing Management 13
But BMW has stockists and distributors to distribute spare parts at different strategic locations.
BMW does not encourage aggressive distribution because it can lose its image to some extent.
Services marketing mix elements
Process
It involves the stable policies and procedures installed by the company pertaining its
services or products. Practice is one of the essential components of the marketing strategy. Every
customer desires to have a more understanding of the product. They would like to focus on some
crucial things such as the form and shape of the business but not just the product. BMW provides
other services such as maintenance of its products and enhancing customer service to create a
better image to its customers.
People
Any company desires to have the right individuals to give them support in the selling of
services and products. BMW has an excellent people serving customers who provide support for
the expectations of customers. Customers would like to get a high level of satisfaction and quick
response to their orders (Wirtz, and Lovelock, 2016, 5). Researchers argue that knowledgeable
employees add a lot of value to the products offered. The employees at BMW are highly skilled,
and they deliver the best so that customers can feel satisfied.
Physical evidence
Services are things which are intangible during marketing (Lovelock, and Patterson,
2015, 12). Many people depend on the physical cues so that they can analyze a product before
buying. Marketers, therefore, have physical evidence instead of physical cues as a part of their

Strategic Marketing Management 14
service (Camilleri, 2018, 80). For a product like BMW people are used to seeing it as
comfortable and luxurious, and this creates physical evidence that the brands produced are
elegant. The company also has excellent customer service, and this is also physical evidence.
Conclusion
The paper has a lot of essential information on product development and the marketing
mix which can be used by any business as a source of advice. The article also gives a lot of data
on BMW and numerous factors which have contributed to its success. It is evident that the
market is continuously changing and manufacturers have to invest in continuous innovations and
product improvements so that they can compete favorably against their competitors. The
extended marketing mix is something that organizations should use in their operations. For
instance, enhancing promotion can help to increase customer knowledge about the product, and
this improves the product consumption. It is also evident that customers do not only focus on the
product, they are also interested in other issues such as the image of the company. Organizations
should, therefore, build a better picture by creating the desired marketing mix for better
performance.

Strategic Marketing Management 15
References
Alt, J. and Iversen, T., 2017. Inequality, labor market segmentation, and preferences for
redistribution. American Journal of Political Science, 61(1), pp.21-36.
Avasilcai, S. and Galateanu, E., 2015. Innovation through developing consumers communities.
Part II: Digitalizing the innovation processes. In IOP Conference Series: Materials Science and
Engineering (Vol. 95, No. 1, p. 012148). IOP Publishing.
Bennett, R. and Vijaygopal, R., 2018. Consumer attitudes towards electric vehicles: Effects of
product user stereotypes and self-image congruence. European Journal of Marketing, 52(3/4),
pp.499-527.
Camilleri, M.A., 2018. Market Segmentation, Targeting and Positioning. In Travel Marketing,
Tourism Economics and the Airline Product (pp. 69-83). Springer, Cham.
Dominici, G., Roblek, V., Abbate, T. and Tani, M., 2016. Click and drive: Consumer attitude to
product development: Towards future transformations of the driving experience. Business
process management journal, 22(2), pp.420-434.
Ellson, T., 2004. Segmentation, Targeting, and Positioning. In Culture and Positioning as
Determinants of Strategy (pp. 21-34). Palgrave Macmillan, London.
Faber, A., Hernandez-Mendez, A. and Matthes, F., 2017. Towards an Understanding of the
Connected Mobility Ecosystem from a German Perspective. In ICEIS (3) (pp. 543-549).
Fedorikhin, A., Park, C.W. and Thomson, M., 2008. Beyond fit and attitude: The effect of
emotional attachment on consumer responses to brand extensions. Journal of Consumer
Psychology, 18(4), pp.281-291.

Strategic Marketing Management 16
Friese, M., Wänke, M. and Plessner, H., 2006. Implicit consumer preferences and their influence
on product choice. Psychology & Marketing, 23(9), pp.727-740.
Foxall, G., 2014. Strategic Marketing Management (RLE Marketing). Routledge.
Hoch, S., Schweigert, M., Althoff, F. and Rigoll, G., 2007, June. The BMW SURF project: A
contribution to the research on cognitive vehicles. In Intelligent Vehicles Symposium, 2007
IEEE (pp. 692-697). IEEE.
Khan, M.T., 2014. The concept of'marketing mix'and its elements (a conceptual review
paper). International journal of information, business and management, 6(2), p.95.
Laroche, M., Bergeron, J. and Barbaro-Forleo, G., 2001. Targeting consumers who are willing to
pay more for environmentally friendly products. Journal of consumer marketing, 18(6), pp.503-
520.
Law, C.M., 2017. Restructuring the global automobile industry. Routledge.
Liebert, A., 2016. Industry 4.0–the intended impact of Cyber Physical Systems in a Smart
Factory on the daily business processes: A Study on BMW (UK) Manufacturing Limited.
Liu, J., Liao, X., Huang, W. and Liao, X., 2018. Market segmentation: A multiple criteria
approach combining preference analysis and segmentation decision. Omega.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Pasaoglu, G., Harrison, G., Jones, L., Hill, A., Beaudet, A. and Thiel, C., 2016. A system
dynamics based market agent model simulating future powertrain technology transition:
Scenarios in the EU light duty vehicle road transport sector. Technological Forecasting and
Social Change, 104, pp.133-146.

Strategic Marketing Management 17
Rucker, D.D. and Galinsky, A.D., 2009. Conspicuous consumption versus utilitarian ideals: How
different levels of power shape consumer behavior. Journal of Experimental Social
Psychology, 45(3), pp.549-555.
Shank, M.D. and Lyberger, M.R., 2014. Segmentation, targeting, and positioning. In Sports
Marketing (pp. 241-290). Routledge.
Shiu, E., Bonacina, A. and Binninger, F.M., 2017. Innovation Management for Products and
Processes in the Automobile Industry: Example of BMW. In Handbook Of The Management Of
Creativity And Innovation: Theory And Practice (pp. 191-216).
Thun, E., 2018. Innovation at the middle of the pyramid: State policy, market segmentation, and
the Chinese automotive sector. Technovation, 70, pp.7-19.
Timmer, M.P., Dietzenbacher, E., Los, B., Stehrer, R. and De Vries, G.J., 2015. An illustrated
user guide to the world input–output database: the case of global automotive production. Review
of International Economics, 23(3), pp.575-605.
West, D.C., Ford, J. and Ibrahim, E., 2015. Strategic marketing: creating competitive advantage.
Oxford University Press, USA.
Wilden, R. and Gudergan, S.P., 2015. The impact of dynamic capabilities on operational
marketing and technological capabilities: investigating the role of environmental
turbulence. Journal of the Academy of Marketing Science, 43(2), pp.181-199.
Wirtz, J. and Lovelock, C., 2016. Services Marketing: People, Technology. World Scientific
Publishing Company.

Strategic Marketing Management 18
Wänke, M., Bohner, G. and Jurkowitsch, A., 2007. There are many reasons to drive a BMW:
Does imagined ease of argument generation influence attitudes?. Journal of Consumer
Research, 24(2), pp.170-177.
Zhang, Z. and Hou, Y., 2017. The effect of perceived risk on information search for innovative
products and services: the moderating role of innate consumer innovativeness. Journal of
Consumer Marketing, 34(3), pp.241-254.