Report on BMW: External Influences and Marketing Communication Mix

This report provides a comprehensive analysis of BMW's business environment, focusing on both internal and external factors. It begins with an executive summary highlighting the importance of adapting to changing customer needs and external influences. The introduction outlines the report's structure, which includes two main tasks. Task 1 delves into the external and internal environments of BMW, utilizing PESTEL and SWOT analyses to assess political, economic, social, technological, legal, and environmental factors. The report examines how these factors influence BMW's operations and strategic decisions, considering aspects like political stability, economic fluctuations, social trends, technological advancements, legal regulations, and environmental concerns. Task 2 focuses on the marketing communication mix and its relevance to BMW, although the provided text does not contain the content for this task. The report concludes by summarizing the key findings and implications of the analysis, offering insights into BMW's strengths, weaknesses, opportunities, and threats within its competitive landscape. The report also relates the SWOT and PESTEL analysis to the business environment.

Contemporary Development in
Business & Management

EXECUTIVE SUMMARY
The interface of the external and internal environments is of great importance. Mostly the
company can influence their internal environment but they are less influence by their external
environments because they are risky but they provide growth opportunities and development to
the business of the company. They have to adjust to the changing customers' needs and they have
to deal with the decline of the workforce on the labour market. This report is based on BMW
company, it is founded in 1916 by Karl Rapp. It operates its business internationally in various
country of the world. In this report, primary external influences are explained which influence
the business of the company. The analysis of marketing communication mix are also explained
that how it influence policies and decision making of BMW.

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Table of Contents
EXECUTIVE SUMMARY .........................................................................................................2
INTRODUCTION ..........................................................................................................................4
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................8
CONCLUSION ..........................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Due to increase in competition, companies are required to do modifications in their
business operations. It supports firms to adapt themselves according to requirements and demand
of consumers. For doing contemporary development, it is required by companies to take
consideration in those elements which affect their function. This report is being divided in two
tasks in which first task is about making discussion related to external and internal environment.
Second task based on the theme of marketing communication mix and analysing the relevance of
BMW. BMW AG is a German multinational company and this company is founded in 1916 by
Karl Rapp. It produces auto-mobiles and motorcycles and also produces aircraft engines and
operates its business in various countries of the world such as Brazil, China, India, South Africa,
the UK and the US (Bybee, 2013).
TASK 1
Introduction
Business environment is the sum total of all external and internal factors that influence a
business. A business converts its inputs into outputs in order to make or earn profit. External
factors have an impact towards the organisation indirectly on the business of the company and
refer to the environment. In this task discussing about organisational tools such as PESTEL
analysis, SWOT analysis and relationship with business environmental and business like micro
and macro environment (Schoenherr, 2012).
Main body
PESTEL analysis
BMW operate its business internationally and there are various factors which affect the
business of this organisation. The company operates its business in external environment because
there are competition and also there are various opportunities to grow business. In this
environment it can find out its competitors and threats and the organisation can make designed
strategies, techniques and policies according them so that the business can achieve its growth in
that kind of environment. A PESTAL analysis is an important tool to understand external
environmental factor which influence BMW company business. According to this analysis the
external environment is divided into some forces (Chawla and Derr, 2012).

Political force influence BMW when the government of Germany make change in the
laws, regulation and legislations of the country. They play an important role in the industry of
auto-mobiles and help in creating barriers for the foreign companies which will eventually
impact business of company negatively. Political factor has vast influence on BMW and
spending power of consumers and other business. It operate its business worldwide so have a
large production network and the backbone for the growth in the global market. Recycling also
proves to be vital political factors which can affect the manufacturing process of the company.
For this the political stability creates impact positively for the organisation otherwise the
investments will cause to risk (De Massis and Kotlar, 2014). Tax policy, trade or tariff controls
and environmental or consumer protection legislation are impacted the compacted and for
solving these problems company reacted by producing auto-mobiles of at least 85% recyclable
and up to 95% recoverable. This factor is important for the company because it make change in
EU legislation related to end of life vehicle recycling and increase the level of political stability
in emerging country.
Economical force- this factor is basically related to economic growth or decline, interest
rates, exchange and inflation rates, wage rates, minimum wage, working hour and credit
availability. Economic factor impact the performance of BMW positively and negatively. This
company operate its business internationally and the currency exchange rate play an important in
the company or directly effect on BMW reported revenue. The home market currency and host
market currency affect the GDP fluctuation. Inflation rate is another factor which influences the
company's economy; the company increase the price of the vehicles in regular manner in order to
address to increase inflection. Brexit has an important effect on BMW because the pound is
unpredictable at the present time cause of the UK leaving the EU. With this BMW can increase
the price if its products and earn profit. Transporting cost and fuel cost also affect the
organisation's economy (Lan and et. al., 2014).
Social force, this factor include the changes in cultures and demographic change,
population growth rate, age distribution, global warming and the taste or preferences of the
consumers. The culture of the countries can also effect the business of the company and it
consists the culture of the country such as values, attitudes, needs and beliefs or life style of the
people. The status of the consumers also affects the business of the company(Denk, Kaufmann
and Roesch, 2012). A family person buy a car according his family, it will not much focus on the

cost of the product as compare to a manger and this impact the business positively in the context
of manger. Environmental issues and awareness also affect the the company's business, if BMW
used a good quality engine which is not harmful for the environment than it create a positive
effect on the company. The importance of this factor is that it change family patterns and change
consumer attitudes towards savings and spending (Hammer, 2015).
Technology force is also affect the business of BMW. This company invest in qualified
technologies in order to maintain their comparative advantages. BMW show its technological
advances by Formula 1 car which has the very newest technology concerning engines, safety and
performance skills. BMW is miles ahead in terms of technology from others. By providing better
technological package in its cars such as X1,X3,X6, Z4 and i3, it give various important product
to the customers (DesJardins and McCall, 2014). This organisation gives the consumer advanced
real time traffic in formation, enhanced USB, Bluetooth plus Smartphone integration, BMW
online, BMW apps, remote services, by built in navigation system with touchpad, voice
command and a head up display. In its products they provide technology of side view cameras,
automatic high beams, parking sensors, anti lock braking system that allows to keep control of
the car without danger driving at high speed. These technologies is one of the strongest point for
the success of BMW's business and help in developing their cars to be more efficient in every
way. This factor is important because it increase the levels of popularity of green technologies
and provide realization of concept of driverless car.
Legal force, this factor is basically related to health and safety, advertising standards,
consumer’s rights and laws, product labelling and product safety. In this factor, it is clear that
companies need to know and aware in about that what is not legal in order to trade successfully.
In BMW, it influences the business environment of the company positively and negatively.
BMW service specialist inspect all safety relevant components using a 12-point checklist with
crash tests, braking system, lighting to steering or tyres and this affect its business positively and
helpful in the growth of company. This company provide guarantee in its vehicle so that the
customer can understand that they are in good hands. This factor is not only applicable in context
of company or customers, also help their employees to balance their work and family life and
safeguard their health by providing them various kind of insurance policies with their salary
(Grant and Berg, 2012). This help in the success of the business of the organisation. This force is
important because it make changes in employee health and safety rules and regulations or

patients and copyrights in relation to innovation on auto devices or functionalities (Gustafson,
2012).
Environmental force- BMW group operate its business without harming the
environment and nature or for doing this work, they appointed environmental officer world wide
where they manufacture their products. They are reducing resource consumption and avoiding
waste which is beneficial for the company's growth. They are manufacturing a full electric car
which allows to save a lot of money and more environmental friendly cause of low CO2.
Changes in the customer’s needs or demands and tastes or preferences towards use of more eco-
friendly cars, hybrid cars, and fuel cell cars also affect positively and negatively (Ellison and
Boyd, 2013). For example, an eclectic car which is manufactured by the company, is liked by the
customers because it is eco-friendly and impacted the company positively. With the major
climate changing due to global warming and others, it can affect production of the business
negatively (Eskerod and Huemann, 2013). It is important because it make change in waste
management practices.
SWOT analysis
This analysis is used by the company to know the strengths, weakness, opportunities and
threats in external environment for the growth of the company. SWOT analysis of BMW is as
following:
Strengths Weakness

 BMW is one of the valuable brand and
have good brand image in customers
mind.
 Use of latest technology such as
competence in hybrid and electronic
cars.
 Using good promotional channels that
emotionally connect customers with
the products.
 Have highly skilled labour and
employees that produces product
according the consumers needs.
 Lack of training and development
program.
 BMW use skimming pricing strategy
because of high status branding so there
are lack of customers.
 Changes in customers needs or taste and
preferences so can be a weakness for
the company.
 Poor automotive brand portfolio with
little product differentiation is a
weakness of BMW (Eskerod and
Huemann, 2013).
Opportunities Threats
 Demand for autonomous vehicles is an
opportunity for the company.
 Company operate its business in
different countries so diversification is
an opportunity for the organisation.
 BMW can use new technology and
create opportunities for expend its
business (Ellison and Boyd, 2013).
 There are various competitors in the
market which can be a barrier and threat
for the business of BMW.
 Rising or increment in fuel prices is
threat for the company.
 Recession is a treat for BMW because it
cut costs and reduce the labour force
that lead a downfall in company's
quality and sales.
Relationship of SWOT and PESTEL analysis with business environment
Business environment basically are those internal and external factors that affect the
micro and macro business environment of an organisation. In BMW, company follow all the
regulations and laws of the government that is related to political and legal factor and create a
positive image in the mind of its international customer that is the strength of the company. By
using new and latest technologies and various promotional channels, BMW fulfil consumers
needs and provide satisfaction and provide opportunities by doing innovation in the products.
Technical innovation is related to technical factor that is the strength of the company. Recession

is related to economic factor and weakness of the company because it lead downfall in quality
and sales of the company cause of cut cost and reduce labour force. Change in or downfall in
economic condition of the company can be a threat for the company (DesJardins and McCall,
2014).
Conclusion
In this task it has been concluded about the business environment and those factors that
affect the business environment of the company. Analytical tools as PPESTEL analysis and
SWOT analysis is also explained including all internal and external factors. Interrelationship of
SWOT and PESTEL analysis is defined in context of business environment.
TASK 2
Introduction
Marketing communication mix is the specific mix of advertising, personal selling, sales
promotion, public relation and direct marketing. In this task, the elements or factors of marketing
communication mix are explained which analyse the relevance to BMW and how they influence
the policies and decision making of the organisation. The evaluation of the effectiveness of
marketing communication mix on BMW are also explained (Bybee, 2013).
Main body
(1)Marketing communication mix
It is made by the contribution of two words marketing and communication mix.
Marketing is a broad topic which is used by the company or its products to targeted customers.
The marketing communication mix is the specific mix of advertising, direct marketing, personal
selling, public relation and sales promotion.
BMW Company use various elements of marketing communication mix such as media and print
advertisement, sales promotions, public relations, events and experience and direct marketing.
The organisation uses these tools to communicate its marketing message to representatives of the
target customer segment. There are five marketing communication mix such as advertising,
public relations, sales promotion, direct selling and personal selling which influence the policies
and decision making of the organisation (Grant and Berg, 2012).
Advertising, it is an important tool for the promotion of the products. There are various
channels which are used by the company to promote its business such as newspaper, radio, TV,
social media and others. BMW use print and media advertisement tool to communicate its

marketing message towards its customers. The company use various policies such as HR policy,
CSR policy and management policy. The advertisement affects all these policies positively and
negatively such as during the employees recruitment it use advertising channel. For organising
training and development program or CSR activities it use many promotional channels and they
affect these policies positively. But some time advertisement affect the policies and decision
making of the company negatively such as some private information and strategies share through
advertising that affect the business. These channels improve the image of the company and
aware the customers towards the products of BMW (Gustafson, 2012).
Sources: Marketing communication mix,(2018).
Public relation, it is a two way communication between an organisation and its
customers or effects the business of the organisation positively when company manage its
policies in context of employees as well as customers. If the company use better HR policy
within the organisation such as providing training to its employees time to time when they need
for it, it is good for the company growth. When the company do not make good management
policy for the business and company, it creates negative impact on the business of the
organisation. Decision making of the company is also affected by public relations, if the
company make better relation with its customers, there are not any problem generates within the
company and the management of the company can do good decision making process for the
Illustration
: Marketing communication mix

profit and the growth of the business. Customer loyalty also helpful for it (Chawla and Derr,
2012).
Personal selling, it is an most effective tool for building buyers and their preferences,
actions and convictions. Personal interaction help in knowing the customers needs and feedbacks
or adjustments and this influence the policies and decision making of BMW. For example if the
company provide training within its HR policy to its employees for manufacturing a new car. If
the product is liked by the customers then it influence the organisation's business positively (De
Massis and Kotlar, 2014). The negative feedback and perception of the customers affect the
companies decision making negatively. By this tools company get direct feedback from its
consumers and make policies according them which is beneficial for solving the problems and
threats and designing the policies (Hammer, 2015).
Direct marketing, there are various functions such as telephone marketing, direct mail,
online marketing etc. This influence the customers positively of negatively if the company make
good policies which are favourable for the customers and channels which are used for this kind
of marketing or provide right information to the customers. Direct marketing effect the business
of BMW positively and companies mainly used e-mail marketing and make innovation
according the customers interests and feedback (Lan and et. al., 2014). These feedbacks and
interests affect the policies and decision making process regarding to solve the problems of the
company positively. Direct marketing affect the decision making because it is a direct selling
process when customers needs do not match with the product it affect the company's decision
making.
Sales promotion, it is applied by BMW as a part of its marketing strategy in an
occasional manner. The company offers occasional seasonal sales promotion campaigns. This
company various customers loyalty programs in major markets as a part of its sales promotion
strategy. For example, in North America, the company offers repeat purchasers a USD500,
USD1000 or USD1500 and the loyalty depending on the model of the vehicle which influence
the policies and decision making of the company positively.
(2)Evaluation of the effectiveness of the organisation's repose
It is very important and decisive to evaluate the effectiveness of any business activity so
does to evaluate the effectiveness of marketing communication elements (Wilton, 2012). There
are many ways to measure the effectiveness advertising, personal selling and others elements of