Marketing Strategy Report: Analyzing BMW's UK Market Performance

This report provides a comprehensive analysis of BMW's marketing strategy, focusing on its UK operations. It begins with an introduction outlining the importance of marketing strategies in the automotive industry and provides an executive summary. The report then delves into a detailed external analysis using the PESTLE framework, examining political, economic, socio-cultural, technological, environmental, and legal factors influencing BMW's market performance. An internal analysis is conducted through SWOT analysis, identifying the company's strengths, weaknesses, opportunities, and threats. The report also includes a competitive analysis, comparing BMW's performance with competitors like Audi and Toyota, and discusses the current marketing strategy employed by BMW. The report analyzes financial data, including revenue and operating profit, to assess BMW's market position and growth. The analysis highlights BMW's core competencies, brand image, and the impact of market trends and economic factors on the company's strategies.

MARKETING
STRATEGY

TABLE OF CONTENTS
INTRODUCTION............................................................................................................................1
EXECUTIVE SUMMARY................................................................................................................1
TASK 1.............................................................................................................................................1
TASK 2.............................................................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategies framed for designing marketing plan regarding retailing, brand management
and positioning of company's image are a fundamental part of management. Strategies framed
for following principles of marketing are designed after detailed research of prevailing market
situation is carried out for applying elements of market mix. This aspect of management deals
basically with planning actions to sell specific category products and services.BMW is largest
leading car Business Company operating on global basis. The report includes a brief explanation
on number of marketing oriented approaches followed by BMW through efficiently carrying out
situational analysis for gaining competitive advantage within car manufacturing industry (Bertho
and et.al., 2012). Importance of gaining understanding of concept of targeting, positioning and
segmentation and its respective impact on overall performance in market have been highlighted
in the report. The cited company has attained positive brand image in international market for
determining organizational objectives and goals to sustain prominent position in the market by
laying emphasis on delivering maximum customer satisfaction. BMW is renowned for its sporty,
sophisticated and luxury image that has built up since long back.
EXECUTIVE SUMMARY
Bayerische Motoron Werke (BMW) is a prominent company of auto mobile industry
having German orientation. BMW has a unique brand image worldwide in dealing with
manufacturing of German luxury vehicle, motorcycle and engine. It has a wide range of number
of luxury cars designed by including unique set of features that are admired by millions of
customers all over the globe. The current assignment focuses on BMW’s UK operations and
examines and analyzes its internal and external marketing conditions through different tools such
as PESTLE & SWOT. Business activities of cited company have extended to acquire higher
market share in Malaysia, Indonesia, Egypt, France, Russia, etc. Successful journey of BMW
since its establishment till date can be accredited to long track record of customers belonging to
luxurious class of society having immense liking for purchasing products of companies that have
a higher goodwill image. Customers thereby do not hesitate in paying higher charges for gaining
royalty by making purchase deals with BMW. Focus on elements of marketing mix has enabled
the organization to maintain the standards of flexibility for making required alterations in
strategies designed for sustaining secured position in number of regional markets (Ferrell and
Hartline, 2012).
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TASK 1
External analysis
PESTLE is an abbreviation used to determine Political, Economical, Social,
Technological, Legal and Environmental factors. These are the factors prevailing within external
environment of respective industry within which an organization would be working. BMW has a
wide list of interrelationship with diversified industrial environment of different markets having
verifying geographical locations. However, with expanding business activities on UK basis
PESTLE analysis has undergone alteration regarding variants that added demographic, ethics and
intercultural factors within the scope of this fundamental concept of external audit. It is therefore
recognized as PESTEL, DESTEP and STEEPLE too (Baker, 2014).
Environment scanning and auditing is carried out by BMW on continuous basis as it
requires up to date and latest information on emerging trends and considerable impact. Detailed
understanding of major factors of versatile industrial environment have been considered by cited
company by aligning with dynamic approach for accepting opportunities as well as threats to
sustain with current financial stability. Each of these factors impacting decisions on marketing
strategies have been explained below in brief:
 Political: Governmental bodies of respective region intervene by taking major decisions
on tax policies, labour laws or trade restrictions. BMW has considered impact of political
authorities in different economies to design most appropriate strategic structures aligning
with political trends. Different regions are thereby governed and managed by respective
regulatory body. For example, employee relation laws are strictly followed in UK by
cited company.
 Economical: BMW has considered impact of exchange rates, economic growth, interest
rate and inflation rate of different economies of which it is a part. Business activities are
carried out after detailed analysis of impact of these elements is studied to alter strategic
policies accordingly (Solomon, 2014).
 Socio-cultural: Diversified cultural environment is formed of different ideologies, values
and assumptions followed by people having belief in respective cultural origin. Customer
satisfaction and loyalty is attained by BMW on account of addressing diversified taste
and preference of its customers. Colour preferences are majorly influenced by cultural
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factors. For e.g., dislike for black colour is observed on account of negative beliefs for
purchasing cars of black colours (Varadarajan, 2010).
 Technological: Number of decisions require consideration of factors impacting change
in research and development activity on account of emerging incentives of technology.
Alignment with changing technological trends is maintained by BMW as it is operating
within technology oriented industry. Designing new structures and engines must be done
in accordance with latest technology to keep competitive advantage against rivals BMW
has started designing plug-in electric vehicles to contribute in preservation of
environment and has fulfilled its obligations as a part of corporate social responsibility .
 Environmental: Most important aspect to be considered by companies dealing in auto
mobiles is with respect to maintaining standards for preservation of global environment
as a precaution against global warming (Dudovskiy, 2016). Rapid destruction in quality
of environment has become a serious issue of concern for political authorities. BMW
thereby designs auto mobile structures that are eco friendly to ensure minimum release
of harmful elements such as carbon dioxide constituents. Economic Commission for
Europe evaluates performance of member countries in preserving environment. BMW
has participated in various environmental campaigns to increase awareness against
global warming.
 Legal: Legal factors have a major impact on overall organizational decision. BMW is
required to follow standardised policies regarding employee relation, health and safety
laws, anti discrimination laws, etc. As per right to information Act framed by various
political authorities, BMW has made sincere attempts for displaying details about
products offered to customers. Buyers are provided with in depth detail regarding usage
and features of various auto mobile models by investing considerably in maintaining
communication with wide number of customers (Ataman, Van Heerde and Mela, 2010).
Internal analysis
Organizational audit carried out to study internal factors that are within the control of
organization. SWOT analysis is an abbreviation used to determine Strengths, Weaknesses,
Threats and Opportunities. There exists a direct relationship between organization's objectives
and decisions taken after required internal evaluation is done. Strengths signify core competence
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Scanning of internal factors with consideration to scenario of BMW has been carried out through
SWOT analysis.
Strength
 BMW has attained core competence in
integrating emotional aspects and
personal likings of customers with its
unique products.
 Skilled and efficient workforce of cited
company have executed immense
efforts to bring out innovation
production plans for providing a defeat
to major rivals (Bhasin, 2016).
 Long term thinking and responsible
actions has enabled the cited firm to
sustain prominent position in
international market.
Weaknesses
 Limited brands are associated with
BMW. It has become difficult for the
firm to maintain competitive advantage
with ease. Competitors such as
Mercedes have acquired longer term
image unlike BMW. Moreover, BMW
is not able to bring innovation in
brands.
 Economic crises impact adversely on
overall performance on account of
premium price strategy. Moreover, it
has not adopted with medium pricing
strategy (Kirtiş and Karahan, 2011).
Opportunities
 BMW is basically producing premium
cars, however it can expand its scope of
operations by producing medium range
cars and motor cycle to attract medium
class customers.
 Participating in local and international
events in future will enable the cited
firm to create a better bond with
customers and increase customer
loyalty (Slater, Hult, and Olson, 2010).
Threats
 Economic crises increase in various
regional markets will create a tough
competition for BMW as sales rate are
threatened to decrease.
 Competitors and new entrants are
making continuous attempts to follow
unique designing strategy of BMW.
Threats are likely to increase as similar
products will be available to customers
at comparatively decreased rate
Mercedes has exploited benefits of
promotional campaigns to attract
potential customers.
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 Preferences, likes and dislikes of
customers are highly influenced by
market trends. BMW might need to
frame new policies for aligning with
changing trends which would require
increased investment in analysing
market condition.
Competitive strength
International marketing concept has integrated various economies for promoting business
at global level. Employers are in continuous attempt to build a strong image among target
customers. BMW has therefore built up diversified portfolio including range of brands such as
BMW X3, X5 and X6. Number of competitors companies such as Audi, Mercedes Benz and
Volkswagen has established their image as unique service providing in auto mobile sector. BMW
is famous for providing unique auto mobile models that deliver sheer and ultimate driving
experience. Each of these companies has unique selling propositions designed by experts to
retain individual identity among customers. Huge investment is made by BMW group in
researching and analyzing customer preference and likings to design models that deliver ultimate
driving experience. Criteria and standards included within marketing plan are framed for
sustaining leading position all over the world. Core competence and royal brand image of BMW
has retained long track record since its establishment. None of the competitors have been
successful in pulling current market share of cited car manufacturing company. Unique selling
proposition concept is followed sincerely within automobile industry. These companies lay
emphasis on targeting and positioning for selling products to selected customer groups, thereby
retaining competitive advantage against those companies that manufacture economic range
models. BMW has attained around 43% of total market share in luxury car segment (Wu, C.S.,
Lin and Lee, 2010).
Comparison between recent performance of BMW and AUDI
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Growth rate in terms of total revenue for BMW and AUDI is mentioned below:
Year BMW (in millions) AUDI
2014-2015 80,401 70,442
2015-2016 92,175 90,170
Above mentioned comparision between BMW and AUDI states that Unique Selling
Performance of BMW can be accredited for better growth rate as compared to AUDI. As per the
presented table, it can be seen that in 2015, BMW sales was reported to 80401m jumped to
92175 in the year 2016. Increased turnover is a sign of growth in demand, number of customers
and high sales that indicates that BMW performed well this year. However, if we look at the
Audi’s performance than it can be noticed that in the year 2014, its sales was reported to 70442m
shows a high jump in the next year 2016 to 90170m. Sudden and high percentage growth by 28%
clearly demonstrates that Audit brought significant growth in their performance. Quality
products, innovative & unique features, affordable prices, best design and stylish cars in variety
of colours, better control over cost & use of latest machinery in production may be the reason
behind high performance this year.
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Taking into account the presented table, it can be seen that although Toyota performed
excellent by having a operating profit of 18.2 euro billion but still, if we look at its operating
profit ratio than it is founded lower to 9.6% lower than that of BMW to 11.3%. It indicates that
BMW performed better and generate high %age return on their total revenues.
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Looking to the graph presented above, it can be seen that BMW’s OPM shows a declined
trend after the second quarter of 2014. However, Porsche’s OPM got improved at the end of the
quarter and higher than that of BMW is a sign of greater operating margin and indicates that
Porsche performed better than BMW by having more operating profit.
Current marketing strategy of BMW
Marketing strategy that deals with defining how a company operates successfully within
particular market is designed after analysis and research work is conducted for applying elements
of marketing mix in most efficient manner. BMW is following market orientation wherein
emphasis are laid on designing strategies considering fundamentals of marketing. List of
approaches are followed for taking decisions that provide flexibility to align with emerging
market trends. Following strategies are followed by BMW Group:
Strategic decisions with respect to product: Unique models are designed to develop strong brand
image. Foundation for success story of BMW is laid upon core values and assumptions used for
designing features of range of models that differentiates itself from strong competitors (Moogan,
2011).
 Strategic decisions with respect to pricing: Premium pricing strategy is followed by
BMW to sustain unique identification among royal members of society. Opportunities are
exploited to make best use of core strengths and thereby obtain higher profit margins.
Pricing policies focus on selling products to limited customers and obtain higher profits
rather than focusing on designing structures for medium or lower level customers.
 Strategic decisions with respect to competitive advantage: Decisions for achieving core
advantage against competition are based on concept of ultimate driving machine and
sheer driving pleasure.
Fundamentals of marketing such as targeting, positioning and segmentation are
considered for taking important decisions. Moreover, expansion strategy can be accredited for
expanded business activities in developing countries such as India, Brazil and China. BMW has
recently established manufacturing plant in China for introducing small and mini cars in Chinese
market wherein increased liking for sporty and attractive cars have been considered as an
opportunity to gain maximum share holding. Joint venture deals have been made by BMW
Group with various leading car manufacturers in Brazil. For example, joint venture between
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BMW Group and Chrysler Group lead to promotion of brand image of these companies
(Lamberti and Noci, 2010).
TASK 2
Segmentation, Targeting, Positioning
Three stage process involving analyzing customers needs for achieving objectives and
goals is considered as fundamental aspect of marketing strategy importantly to be followed by
companies operating in international market. It basically provides a selection among list of
customers existing within different markets by evaluating which customer segment should be
targeted. In automobile industry some customers demand higher level of safety while others are
ready to sacrifice some features against speed demand. Segmentation, target and positioning are
basic approaches for different kind of marketing.
BMW Segmentation
Segmentation recognized a specific buying characteristics among middle and lower class
of society. This was attained by considering various aspects such as geographic, demographic,
behavioural, socio economic and other characteristics of economic class of customers.
Geographically, main markets identified for promoting sales of x series model included list of
developing countries specially. These countries have higher scope for business expansion.
Buyers of all age groups can be appreciated to buy these models. Behaviourally this segment of
customers have a liking to build successful image and want a modern look as characteristic
feature of their dream car. X series models must be promoted to provide exclusivity,
performance, reliability and quality to customers (Slater, Hult and Olson, 2010).
BMW target customers
BMW Group has made constant attempts for applying differentiated strategy which
means that it targets specific customer market for designing appropriate models. Different
markets are recognized on the basis of common characteristics and behaviour of customers on
overall basis. Marketing efforts and respective merchandise is aimed towards pulling customers
that have minimum or basic standard of living. Target market of BMW Group is divided into
different groups. Transparency has been attained with diversified customer range including
customers who have comparatively lower purchasing power. Target market policies must be
clear enough to define needs and preference of respective customer group. Understanding of
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customers need is a key to success for any business. BMW has satisfied needs of diversified
class of customers having different cultural origin.
BMW position
Implementation of target policies is achieved through effective positioning of brand
image among customers. Positioning has enabled BMW Group to sustain competitive advantage.
Emphasis must be laid upon providing reliable services to customers at comparatively low cost
as an alignment with segmentation and target market strategies. Efforts made by company for
gaining customer attention are paid off at this stage. Extent of achievement of objectives can be
determined through evaluation campaign carried for highlighting customer recommendation and
beliefs with respect to specific organization. One of the most beneficial attribute to be achieved
by BMW Company is that it X series sales will enable itself to continue making required profits
when premium cars will be less preferred by customers during crisis situation. For gaining
positive positioning among lower level customer group, efficiency is somehow sacrified to
provide products at lower cost. Thus, it can be included here that BMW group is operationally
efficient car manufacturing company. Medium class customers are thereby not overlooked
against premium class customers (Morgan, Katsikeas and Vorhies, 2012).
Recommended objectives and goals
Objectives for X1 and X6 models
 Increase dealer network: BMW can exploit benefits of international marketing by
expanding relationship with leading and experienced dealers operating at different
geographical locations. These dealers are experts within specific local market and have a
wide list of contacts with potential buyers.
 Easier access to test drives: Potential customers must be attracted by providing quality
experience through test driving. Customers must be highly informed by communicating
them with unique characteristic features of X1 and X6 model.
 Better showcase: Customers can be attracted by applying presentable methods. The cited
company can showcase its models at locations that pull maximum attention of young
generation. Models must be showcased in international events and exhibitions.
 Alignment of production with market demand: Customers must be provided with
sufficient surety as to consideration of likings and aspirations for designing models such
as X1 and X6 (Chaffey and Ellis-Chadwick, 2012).
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 Expand market beyond current locations: Before expanding business operations in
different locations research must be taken to analyse potential growth.
 Faster response to test drive request: Customers develop an image at very early stage
when they have first experience of service. Quality of services in customers mindset get
developed on the basis of response gained. Customers who are likely to purchase these
models must be contacted before customers themselves approach the company.
 Decrease waiting period for delivery: Delivery period must be accurate in providing final
access to ownership to customers in minimum time. Keeping customers waiting for
longer duration creates a negative impact through word of mouth.
 Enhancement in internet market: Internet marketing has provided list of benefits for
expanding overall customer holding. Overseas deals can be made by effectively applying
strategies for internet marketing. Customers have shown increased preference for making
deals through internet marketing. Special blogs and pages must be developed on various
websites to invite request for test drives (Moogan, 2011).
 Latest means of promotion: None of the promotional means must be left unused. Each of
the approach of promotional measures have certain level of influence on customers for
pulling their interest. Characteristic features of X1 and X6 models must be communicated
through various means of advertisement and sponsorship campaigns.
 Exploiting traditional means of advertising: Benefits of traditional means of advertising
must not be overlooked over modern means of promotion. Attractive pamphlets and
booklets must be distributed at public libraries, educational institutions, public
organizations, public events, etc.
Recommended marketing strategies based on application of marketing mix for BMW
Marketing experts and professionals are hired by BMW Group for managing marketing
activities by effective application of marketing mix. Products and related elements are
recognized and studies in detail for designing most appropriate and suitable marketing strategies.
Integration of various elements is done in proportionate manner to frame strategies regarding
product, price, place, promotion, people, process and physical environment (Lamberti and Noci,
2010).
Product strategies: Each of products are designed uniquely that has enabled the cited
company to remain a part of most admired segment. X1 and X6 models must provide unique
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experience of driving to appeal people in influencing manner. Maximum possible profits must be
targeted to be gained from sales of these models to middle class of society.
Pricing strategies: X1 model of BMW group is designed specially as low priced cars
that starts at minimum rate. Sufficient financial assistance must be provided to customers
through loan deals and repayment methods.
Place strategies: Efficient and skilled staff must be recruited to manage mechanics as
well as customer helpline staff. They must be loyal enough for maintaining company’s image to
attract maximum prospects (Kirtiş and Karahan, 2011).
Promotion strategies: Sufficient funds must be kept for taking part in esteemed events
such as bike racing, touring cars and rally cars for promoting image of x1 and x6 models. Car
enthusiasts who regularly review these cars on internet and television must be addressed along
with providing testimonials about how great it would feel to drive X series models.
People relation strategies: Policies framed for selling and distribution of X series
models must prove to be beneficial for customers too. They must have a feeling that cited
company has considered the importance of protection of interest of customers. On the other
hand, employees must be motivated to contribute in increase of sales rate of X series models
(Wu, Lin and Lee, 2010).
Process strategies: Series of activities are required to be carried out by BMW Group.
These activities must promote overall process in effective manner.
Physical evidence strategies: Extra ordinary pick up power and fantastic speed of X
series of BMW model must provide a promise of safety and accuracy to potential customers to
convert them into current customer. These elements must serve as physical evidence to wide
scope of customers.
CONCLUSION
It can be hereby stated that BMW Group has attained tremendous success by providing
quality experience to its customers for car driving. Customers are considered as King and
providing satisfaction is thus important. Word of mouth advertising through customers proved to
be more effective than various promotional measures taken by rival companies. Moreover,
Unique Selling Performance of BMW has positioned its image better as compared to Lexus and
Range Rover. Application of marketing elements after undertaking situational analysis has
positioned unique brand image of cited company. Customers are provided with 24 hours service
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facility to maintain transparency along with higher level of satisfaction delivered against
premium price charged. BMW has now achieved leading position in advanced engineering too.
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