Effects of Marketing and Non-Marketing Signals on Automotive Brand Quality

The provided assignment is a study on the effects of marketing-and nonmarketing-controlled signals on perceptions of automotive brand quality. The document includes references to various academic papers and studies, including case studies from BMW and Volkswagen. It also touches upon customer relationship management and its role in improving customer satisfaction. The summary of the assignment provides specific details about the research, methodology, and findings related to the effects of marketing-and nonmarketing-controlled signals on automotive brand quality.

Running head: PRINCIPLES & PRACTICE OF MARKETING
Principles and Practice of Marketing
[BMW, UK]
Name of the student:
Name of the university:
Author note:

1PRINCIPLES & PRACTICE OF MARKETING
Table of Contents
Background report:..........................................................................................................................3
1.0 Introduction:..............................................................................................................................5
1.2 Background on BMW:...........................................................................................................5
2.0 Question 1-Key terms and definitions:......................................................................................6
2.1 What is Customer Relationship Management (CRM)?.........................................................6
2.2 What is Market orientation?..................................................................................................6
2.3 What is Customer centric?.....................................................................................................7
3.0 Question 1- Customer Relationship Management (CRM) techniques......................................7
3.1 Range of CRM techniques.....................................................................................................7
3.2 Range of CRM techniques for BMW and its effectiveness...................................................8
3.2 .1 State the CRM technique...............................................................................................8
Benchmarking-........................................................................................................................9
4.0 Question 1- Recommendations to improve current CRM techniques.....................................10
5.0 Question 2- Promotional Mix techniques................................................................................11
5.1 Key terms and definition.....................................................................................................11
5.2 Promotional mix techniques used by BMW........................................................................11
5.3 Evaluation of the current promotional mix techniques used...............................................14
5.4 Suggestions for other promotional mix strategies which could be used.............................14
ATL (above the line) and BTL (below the line)-..................................................................14

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AIDA-....................................................................................................................................15
6.0 Conclusion...............................................................................................................................16
References:....................................................................................................................................17

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Background report:
The study covers an analysis made on the CRM (customer relationship management)
techniques used by world renowned BMW. It also highlights the different techniques which
BMW uses as promotional techniques. BMW had needed CRM which could empower them to
enhance the advancement of their products, and especially underpins the focus on specific
customers. When hoping to change their CRM, BMW were centered on finding a product which
could enable them to advertise their new ActiveE machine. By focusing on customers and
attracting them to test drive the ActiveE machine, they had gone a mile and had left a quite a
good impression on customers. BMW consolidated this with online networking CRM which
associated their more extensive group of viewers to the test drives which further helped the
vehicle to reach to a bigger customer base.
The fact just shows that BMW had successfully integrated their CRM with the marketing
network and were able to influence a quite a lot of customers. They were able to study the core
sentiments of their target customers. Searching for other client related advertising tools, BMW
centered upon specific zones in their existing data collection to consider those. For example, they
preferred addressing the budgetary cost of collecting data of potential customer’s information,
and furthermore cut back expenses on the time needed to process the data.
2012 saw BMW positioned as the world's most legitimate organization by Forbes.com.
Criteria incorporated 'individuals' keenness to purchase, prescribe and to work for' the
organization. Unusually, the appropriate responses were driven 60% by perception of the
organization, and 40% by perception of the organization's authentic products. It is realizable that
to assemble positive brand recognition, it takes years and the same has happened with BMW.

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BMW has been advancing itself with the most stunning TV ads, print commercial, out of home
promotion and now through web based publicizing. The aforesaid fact regarding the advertising
capability is evident in a fact that 60% of customers had responded just because of advertisement
techniques. In other words, they had been encouraged to create such perceptions. It just speaks of
the advertising capability that BMW Company possesses.
On a general scale, the automotive Company has acquired a position in customer’s mind.
Such connectivity has helped BMW to attract a healthy customer base. Fans are not just limited
to common customers but it has also extended to iconic cricketer like Sachin Tendulkar who
himself is a biggest fan and admirer of BMW cars. On a similar note, Darren Sammy the West
Indies cricket team captain was also being roped as their brand ambassadors.
This just proves one thing that BMW as an automotive company had been able to attract
customers in most cases. It has also efficiently handled the participation of iconic celebrities.
There are always areas for improvement; however, BMW might not need a large rectification in
regards to promotional techniques.

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1.0 Introduction:
The study is aimed at analyzing the effectiveness of CRM (customer relationship
management) and promotional strategies used in BMW which is one of the rarest automobile
manufacturers in the world. They are headquartered at Munich and are mainly focused on
customers those who look for luxury cars (Expert Market 2018). It covers two questions of
which one question is focused on analyzing the CRM techniques used in BMW. Another
question is based on analyzing the promotional strategies used in the BMW Company. The study
also recommends few things in regards to CRM techniques and promotional mix for BMW, so
that, competitive strategies could be enhanced.
1.2 Background on BMW:
The Company uses the various kinds of contemporary techniques of promotional mix. Some of
the techniques are as listed below (Akdeniz, Calantone and Voorhees 2014):
- Advertising
- Sales promotions
- Internet marketing
- Search Engine Marketing
- Online Advertisements
- Social networks

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As mentioned, the BMW Company uses the various kinds of modern promotional
techniques; however, there are always areas for improvement which is also why competition is
redefined after every innovation to the promotional strategy.
2.0 Question 1-Key terms and definitions:
2.1 What is Customer Relationship Management (CRM)?
CRM normally refers to a CRM framework, software which assists with contact
administration, sales management, workflow processes, and more (Navimipour and Soltani
2016).
CRM (customer relationship management) is a planned programming for different
purposes like reinforcing the association with customers and furthermore making improvements
to products. Many organizations across the globe have now enhanced spotlight on promoting
exercises that helps to form a decent association with clients. However, it depends entirely on
how effective the planning is being made to facilitate all the process related with its
implementation (Baran and Galka 2016). For example, it is necessary to track the operation
failure of CRM, so that, downtime could be noted. This is necessary to avoid any unnecessary
payment being made to the vendor (Baran and Galka 2016).
2.2 What is Market orientation?
Market orientation is a plan of action that spotlights on conveying items outlined in
accordance to client wants, needs, and fundamentals, in addition to product orientation (Wirtz
and Lovelock 2017).

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This means manufacturing products and services in accordance to the needs, wants, and
demands of target customers. This can be best practiced with the help of CRM (Tseng 2016). For
example, CRM (customer relationship management) can be used to store data of existing and
new customers. The data of existing customers can help to identify several factors which
customers have considered at the time of purchasing. The data of existing customers in a similar
way can be utilized to identify the different other factors that customers consider and also the
change in trends. Data collection in this way is a real help for meeting the needs and expectations
of customers (Tseng 2016).
2.3 What is Customer centric?
Customer centric is a method for working with customers to facilitate a positive
interaction at the time of purchase keeping in mind the end goal to drive repeat business,
customer loyalty and benefits (Thakur and Workman 2016).
This is another strategy to facilitate an interaction to customer, so that, they feel valued
and builds up a temptation to return for another purchase. Customer loyalty depends much on the
repeat values. For example, CRM can be used to study the factors that customers have largely
considered at the time of purchase. In a similar way, BMW can identify what their existing
customers look for and the expectations of new customers from the company. In this way, they
can improve their business strategies in future.
3.0 Question 1- Customer Relationship Management (CRM) techniques
3.1 Range of CRM techniques
Few of the CRM techniques are as listed below (Expert Market. 2018):

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- Construct an inclusive screening of “customer journey” map
- Targets customers all the way through custom-built offers
- Helps produce Loyalty programs
- Personalizing the communications
- Helps review performances
CRM provides various techniques which can be used for different purposes. It can be used to
track down the customer journey map, so that, such factors could be considered during the
manufacturing process. The data stored in the CRM is very helpful and can be studied to
construct strategies which could help to attain customer loyalty, review the performance and
enhancing the communication level (Expert Market. 2018).
3.2 Range of CRM techniques for BMW and its effectiveness
3.2 .1 State the CRM technique
BMW has gone a step further and had used CRM for smart product promotions. It
appears as if the strategy is exclusive only to BMW. They have used CRM to identify the
decision-making factors of the target customers. This is also why they were able to identify the
business for luxury cars (Thakur and Workman 2016). The reliance on CRM for various
purposes like identifying the existing customer’s needs the other areas where it could get
potential customers and others.
BMW had teamed up with Legacy Lifestyle to produce luxury loyalty scheme. The
scheme provides a control to the vehicle owner, so that, customers are also able to track their

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BMW vehicle for checking records like maintenance reports and others (Expert Market 2018).
The scheme did not only bring customer close to the brand but, it actually helped people to grow
with trust in their chosen brand.
The scheme looked good as it enabled vehicle owners to track their automobile’s
maintenance and financing. This is due to the fact customers could relate to their selected brand
and stayed with them with the same level of trust. Vehicle owners were able to register to the
online portal through their vehicle ID number. This had also allowed an owner-to-owner chat
facility where vehicle owners could post their query and get the necessary solution (Baran and
Galka 2016). The BMW Company had integrated social media with CRM to attract more
customers, especially from rural areas while they had provided a test drive of ActiveE machine.
The strategy was aimed at reaching to a larger audience, especially in rural areas. They had the
success that they had looked for (Tseng 2016).
They have also been different in regards to establishing relations with new customers.
They had focused on cost involved in collecting the data and the cut back price required for
processing the data as well. They had required a CRM package with which the BMW Company
could do much of their tasks (Hassan et al. 2015). The extensive efforts which they had paid to
designing such a CRM package had finally paid off. The CRM package has helped BMW to
know its customers, their demands, expectations of new customers, and customer loyalty. CRM
was being used in BMW Company to facilitate customer centric works (Expert Market 2018).
Benchmarking-
In the automotive section, the sales have grown up which is clearly evident in the 2016-
17 annual reports for BMW. There was an increment of 5.3% in the sales figure of BMW cars

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(Bmwgroup.com 2018). On the other hand, Volkswagen’s Audi was ahead of BMW in terms of
sales figure. They stood at an increment of 8.2% than the previous year which is far much better
than BMW (Volkswagenag.com 2018).
The sales figure just suggests that the CRM techniques of BMW are less superior to the
Volkswagen.
4.0 Question 1- Recommendations to improve current CRM techniques.
The sales have fallen for BMW and in 2016; the sales were behind to two biggest competitors in
UK Ford and Volkswagen (Kumar et al. 2016). One of the possible reasons that have been
identified is the attraction which is missing. Ford and Volkswagen were being more preferred by
customers (Kumar et al. 2016). It appears that the efficiency level of BMW’s CRM (customer
relationship management) has been hammered. Following is the list of recommendations which
may be effective in doing the repair if at all there is a problem with the CRM’s efficiency:
 Automated synchronization with calendar is needed, so that, useful activities like client
related meetings are updated. This will also help to keep the database updated in CRM
 Keeping the CRM up-to-date as this is necessary to prevent any communication related
failure
 A cloud-based CRM should also be implemented, so that, senior executives and
managers at different branch locations across the globe could easily access to data. In this
way, they would also remain updated with the updating CRM
 R&D (research & development) needs an improvement, so that, necessary changes for
CRM could be realized. This will only let them realize what amount of changes they need
to the existing CRM or what more features they need now

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5.0 Question 2- Promotional Mix techniques
5.1 Key terms and definition
Promotional Mix can be understood as an appropriate mixing of promotional techniques.
There are various techniques available; however, all techniques may or may not be appropriate
for a product or a brand (Rancati, Gordini and Capatina 2016). For example, luxury and high-
end cars are advertised normally with popular celebrities.
5.2 Promotional mix techniques used by BMW
There are various kinds of promotional mix techniques that contemporary firms use to
make an introductory presentation of a new product’s launch or creating some news in media.
Few of the modes are like advertising through TV, hoardings, daily newspapers and magazines.
This also includes PR activities, online marketing, personal selling trade show and others.
BMW Company uses the various kinds of promotional mix techniques like media & print
advertising, sales promotions, internet marketing, online marketing communications like search
engine marketing, online advertisements and social networks (Akdeniz, Calantone and Voorhees
2014).
Advertising:
They make advertisement using media and print advertising extensively to convey their
message to the target customers. However, they select the choice for specific media and print
platform based on the interest level of its target customers (Kumar et al. 2016). In recent few
years, the shift has been much towards the mobile media advertising and has emerged as an

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effective advertising platform for them. They had used WeChat which is one of the popular
messaging apps in China (Kumar et al. 2016).
Sales promotions:
The company believes in organizing sales promotion on few occasions, probably to
attract a healthy customer base. They offer short-term incentives to salesperson during such
occasions. It also provides loyalty programs in major markets like North America. The company
offers a USD500, USD1, 000 or USD1, 500 to repeat purchasers (Rancati, Gordini and Capatina
2016).
They had also integrated social media with the CRM to have a better relationship
between the brand and its customers. This was a distinguished move from BMW as they had
reached to a different level by exploring opportunities with the help of CRM. (Ryan 2016). They
had also relied on pull strategy than the push. They with this strategy had intended to attract
customers through mass media promotions, advertisements, sales promotions and word-of-mouth
recommendations (Kumar et al. 2016).
BMW internet marketing:
The primary platform for internet advertisement was the official website of BMW. They
had focused on designing contents, so that, it covers every single point like product details,
offering several buying options to customers, interacting with customers, the location of online
stores and promoting the core values of the company (Akdeniz, Calantone and Voorhees 2014).
The website also features the language compatibility option. Customers can get a variety of
resources on its official website. They can get information through of brochures, online
magazines, and e-newsletters available at the official website. Interestingly, the website is

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innovative in a sense that it delivers the products details and other news in the form of
downloadable online video games, screensavers, widgets, wallpapers and other applications
promoting the brand values (Akdeniz, Calantone and Voorhees 2014).
Online marketing communications:
Following is the list of online marketing strategies that BMW adopts:
Search Engine Marketing-
To maintain healthy website traffic, BMW uses paid search marketing where they are
able to post ads. They use BING and Yahoo as their paid search marketing to advertise their
important contents. On just typing few keywords, the customer will be able to know much about
BMW. They additionally use search engine optimization (SEO) to make its contents evidently
visible to customers (Duffett 2017).
Online Advertisements-
Online advertisement channels are another strategy that BMW uses to exhibit interactive
advertisements like banners, pop-ups, shoshkeles, skyscrapers, and interstitials. They do it
through mobile applications and chosen third-party sites (Elena 2016).
Social networks-
The company also uses the various social media platforms like Facebook, YouTube and
Twitter to connect with a larger audience and present them the desired contents. These platforms
are very popular and are good ways to reach to thousands of customers in a very less time. The
desired contents include the latest news relating to the launch of a new product or other

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important information. They also use it to promote their core values, so that, users could connect
to it (Navimipour and Soltani 2016).
5.3 Evaluation of the current promotional mix techniques used
The strategies that BMW had used to promote the product are good; however, they have
lagged to consider few very potential marketing modes. One of such is viral marketing and had
been used by most other automobile companies like Toyota, Volkswagen, and Honda. BMW has
yet to realize the importance of viral marketing (Wirtz and Lovelock 2017). They also need to
take care of the website content design, so that; it could look attractive to customers.
On the other hand, they seemed to have delivered a correct set of actions with television
commercials and print & online advertisement (Duffett 2017). They were also good in using
television ads and have bettered all other automobile companies. They have also done well with
pull factor and have used three strategies for it like advertisements, sales promotions and media
promotions. The word-of-mouth has also worked in favor of the company. Additionally, they had
also utilized the internet marketing in an appropriate way. The website looks innovative and
provides contents that are both informative and engaging also (Sarstedt et al. 2017).
5.4 Suggestions for other promotional mix strategies which could be used
ATL (above the line) and BTL (below the line)-
BMW should also further its promotional strategies in regards to ‘ATL (above the line)’
and ‘BTL (below the line)’ marketing modes. ATL means aiming wider audience and also
focusing on building the brand (Ryan 2016). BMW has been using it; however, there are always
place for improvement not just for points that are yet to be covered but, it is rather because other

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brands have done it comparatively better. Hence, BMW needs to work on ATL to make an
improved impact on customers.
BTL (below the line), on the other hand, is a different concept. This strategy is used to
focus on specific audience who are categorized based on different factors that also involves
communication as well. It enables audience to establish communication with the brand (Ryan
2016). BMW has been using the different BTL strategies like direct mail marketing, sponsorship,
and others. However, improvements are required. This is for a fact that competitor companies
have been following the same strategies. The real difference would be in how they execute the
various types of promotional modes.
AIDA-
AIDA is a construction of four principles that contemporary companies follow. The four
principles are Attention, Interest, Desire or Decision and Action. It is often believed that if any
one of the four principles of AIDA is missed, this will produce serious destruction (Duffett
2017). BMW has been active in grabbing attention of both the mass and the specific audience.
However, there is a continuous need for enhancing the capability of a firm which could offer
superior interactive experience to its audience through attractive promotional strategies.
The next stage of AIDA is to hold the interest level of both the mass and the target
audience. This can be done by accomplishing the commitment (Duffett 2017). BMW has been
doing it effectively which is the reason they have been named the best brand for automobile
manufacturing in 2012 (Elena 2016). However, the competition for the best crown will continue
and for the reason, BMW will require not to only maintain the same streak, but to even move
further with some additional skills.

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Desire is the next principle of AIDA. Nevertheless, customers those who can afford it,
have the desire to buy the different models of BMW. However, they will be needed to maintain
the same expertise and to add more feathers in it. The last principle of AIDA is an action which
means making up the sales (Elena 2016). BMW as a company has been able to leave an impact
on its target audience; however, they need further strategies to be firmly positioned in the
market.
6.0 Conclusion
To conclude, BMW is one of the few automobile companies which have successfully
promoted its brand value at the global level. They have been using the CRM effectively;
however, they should consider the few suggestions as described in the recommendation section.
They have also been effective in using promotional techniques; however, there is a need to make
a few improvement in the existing techniques, so that, competitiveness could be enhanced.
Additionally, there are also the needs of adopting viral marketing for marketing communication
which other automobile companies have considered.

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