BMW Marketing Management: A Comprehensive Analysis

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MARKETING MANAGEMENT
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Executive summary
This research is going to focus on the various aspects of marketing management of BMW. It will
tend to highlight various things about BMW and its marketing strategy through which BMW is
recognizing them as the premium car selling company. The research will shed light on the
background of the company and other marketing essentials. This will be followed by a
conclusive statement for better understanding of the key highlights of the research.
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Table of Contents
Introduction......................................................................................................................................4
Issue 1..............................................................................................................................................4
Issue 2..............................................................................................................................................6
Issue 3..............................................................................................................................................9
Issue 4 Developing marketing strategy..........................................................................................10
Issue 5 Developing marketing tactics............................................................................................12
Conclusion.....................................................................................................................................14
Reference.......................................................................................................................................15
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Introduction
Any product or strategy cannot proceed for growth until it is known to everyone. The consumers
for whom the product has been designed should have a complete knowledge about the do’s and
don’ts of that product (Faust et al., 1992). Marketing management is the process of developing
strategies by means of which a product or service is introduced and promoted to the potential
customers. It is a set of actions that helps to find effective ways to achieve predetermined
marketing goals through the process of discovering, defining and meeting the needs of the
customers (Kotler et al., 2016). Based on this concept, in this assignment, we are analyzing
BMW group as an organization and its operating environment from marketing prospective.
Issue 1
BMW (Bayerische Motoren Werke) is a German multinational company founded in 1916 in
Munich, Bavaria and is the world’s leading producer of premium automobiles and motorcycles.
It acquired Rover Group in 1994 and Rolls Royace in 2003. It has sold 21.2% cars in Germany,
24.5% in USA and 24% to the rest of Europe accounting for about 13, 41,048 cars worldwide
(Jun and Park, 2016). BMW is an exclusive automobile brand having a symbol of quality, highly
advanced technology and high performance. The slogan of the company is it is the ultimate
driving machine with sheer pleasure of driving. The mission statement of BMW is, it is the
world's leading producer and provider of premium products services for individual satisfaction.
A typical customer is someone in mid thirties excelling in his career and has a taste for
aspirational products with superiority, performance, reliability and quality (Bmw.com. 2019).
The luxury, comfort and performance during driving justify its tagline and goal statement. It
provides elite driving experiences and the most innovated models for a consumer to rely upon
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even with closed eyes. The marketing process deals with analyzing situations, defining
appropriate strategy and mixes which promotes sales. It is based on situational analysis which
catches attention of target audiences who belong to segment A of the society by satisfying
changing customer needs. It has a global presence with subsidiaries in over 100 countries with
3000 dealerships increasing its worldwide sales by 11.32%. BMW is the world's twelfth largest
producer of vehicles in the world (Hwee, 2015).The reason for choosing BMW Group as an
organization in this assignment is its brand name and the production of the most superior quality
innovative and uniquely designed classy cars in the world. Having automobiles and motorcycles
even in the ultra premium segment, it is pretty much pocket friendly as far as luxury car is
concerned. The products offered by BMW automobiles are the 1 Series with 3-door and 5-door
hatchback body styles; Series 2 consisting of Active Tourer and Grand Tourer, later Series 3, 4,
5, 6, 7, 8 is introduced. The X, I and M models are popular among the buyers. Also motorcycles
with anti lock brakes, electronic stability and anti skid technology are liked by the consumers.
Formula 1 racing cars and sports cars are the most innovated products offered by BMW (Lee et
al., 2015). Touring cars are also manufactured as a premium product for specific consumers. The
company deals with suppliers and distributors and maintains strict control over its distribution
network. This control supports the brand image and promotes market segmentation. To market
its products as prestigious, the company develops an image of quality and reliability. BMW has
spent billions of dollars on advertising to create strong differentiation in the eyes of the
customers. It has also created a good image of the performance of the automobiles and prestige
of the buyers. It creates premium brands by making its products to go through a process of
continuous innovation, development and evolution and follows a strategy of differentiation to
compete with its competitors in the global market. The brand name of the products offered has
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attracted the consumers to purchase the products irrespective of its price. They purchase such
products to show off as a status symbol to others. Because of its brand name and prestigious
symbol, people belonging to the highest rung of the social ladder tend to buy them. BMW targets
the niche segment of the society as they are the people for whom the product will be affordable
and they will appreciate the product as well (Katsikeas et al., 2016).
Issue 2
The 5C’s for the organization can be analyzed as follows:
 Company –The strengths of BMW are; they not only have car market but also good
market for motorcycle, aircraft and marine engines. They put emphasis to make
sophisticated car models with unique design and high mileage. BMW enjoys a reputation
in the global automotive industry and makes it as reputable business at a global level. This
has made BMW a huge brand name not just by attracting consumers, but also by a highly
trained workforce (Avery and Bergsteiner, 2015). They recruit the most skilful and
efficient workers for their cars and product designs. Continuous innovation, development
and branding have made it lovable for consumers. It has a range of diversified products
which run on alternative energy resources targeting even the developing markets of the
world. The weaknesses are; sometimes the cars are recalled as they are not made
according to governmental guidelines and without prior research and development. Even
the younger generations are likely to spend money on electrical appliances rather than
saving for a premium car. The brand portfolio is weak as it relies on only few products.
The performance of such cars is very poor in the Asian markets. Also the wages of the
workers are too high and the cost of raw materials used in production is sky reaching
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leading to the increase in the price of the products. There is opportunity for improvement
by increasing product portfolio, making strategic alliances, understanding the changing
nature of consumer needs and combating competition from peers by new strategies. Rising
fuel cost attracts the consumers towards BMW fuel efficient models and hybrid and
hydrogen cars because it helps them to cut down their fuel expenses and contribute
towards a pollution free environment (Simms and Trott, 2017). It has threats from stiff
competitors like Audi, Mercedes and also the price being high all segments of the society
cannot be targeted. Rising prices of fuels are also becoming a threat for the organization.
Growing prices of raw materials and high salary of its skilled workers makes it expensive.
 Customers – The Company is serving the customers belonging to the niche segment of the
society as it is highly profitable for them. The consumers are the people belonging to the
segment A of the society who have a special preference for posh cars because of its brand
value. The high involvement products have less price sensitivity and high loyalty towards
their brand, whereas, the low involvement products have lower brand loyalty with high
price sensitivity.
 Collaborators – It includes both upstream and downstream supply chain partners. The
bargaining power, flexibility of supply chain and revenue sharing are analyzed by each
supplier at every step. The distribution of products to dealers and consumers are done
efficiently, if the collaborators are able to meet the demand by increased advertising. The
franchise system is also practiced by the organization which is also efficient in dealing
with its consumers. The suppliers deliver the products and manage delivery and service
gaps by minimizing strong bargaining power and high market expenditure (Johansson
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and Martinsson, 2016). They also prevent theft of patent, copyrights and other intellectual
property rights and takes decisions analyzing such diversifications.
 Competitors – The main competitors of BMW are Audi, Mercedes, Jaguar, Volvo, Lexus,
Skoda and Range Rovers. Each and every competitor is coming up with new and
advanced models in the market which is getting better day by day. Some features are
better than the others which are provoking the consumers to choose them over BMW.
New threats for BMW are Honda, Hyundai and Toyota who are also in the line of
producing new, innovative and posh products similar to BMW.
 Context – The other factors which affect the organization are the political factors where
the environmental regulations and policies for a pollution free environment are
hampering the car selling and production as limit has been imposed on CO2 or Co3
emissions. Also taxes and duties imposed by domestic and foreign countries hamper
selling. The technological factors also hamper the organization as many consumers
demand too much advanced technology which includes very high cost and in turn it
increases the cost price of the cars. It is also not possible every time to follow the eco
friendly guidelines. The legal factors affect production as environmental guidelines and
measures create a tagline to go for go-green vehicles (Wallner et al., 2018). Many
countries have strict norms and global level impacts thereby having no demand for BMW
cars. Economic factors include reduction in euro rates and downward movement of
market trends which affect the industry as this organization is spread all over the world.
The cultural factors depend on variation in purchasing power due to diversified taste of
the consumers which affect the sales. Also awareness about eco friendly automobiles and
harmful emission resistant cars are posing a threat to the sales of the organization.
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Issue 3
It can be observed that BMW uses artificial intelligence and big data analytics to collect
information from the market. This helps them to conduct market research so that they are able to
design their cars in accordance to the taste and preference of the customers. After collecting the
necessary information, big data is applied which drives everything they are doing in terms of
designing, engineering, sales and customer support. Thus, supporting the customers helps them
to increase the sales and to understand the various dynamics of competition that prevails in the
market. According to Lindgreen and Di Benedetto, (2018) which states that BMW is very much
confident that the future cars will be more technology savvy which will not rely on the human
drivers. This analytics is helping them to stay ahead of the competitors with the aim to achieve
full autonomy by the end of 2021. This autonomy is regarded as the level 5 autonomy which is
being defined by the US transport department where the cars will not require any human input
and can operate on its own despite any condition on the road.
The partnership with Intel has also helped them to develop a thing called Mobileye through
which information related to its competitors and how the context of doing business is changing
with technology can be easily ascertained by them. Through this, they have reduced the errors
that human eye could make in terms of collecting valuable information which will allow them to
make super quality products and offer it to the customers. Further, Mobileye will also help in
collecting information from various online platforms with advanced image recognition so that
customers could easily classify the images of the various products that BMW is offering to the
customers. Thus, through the help of this, BMW could eventually gather more data about their
preference and taste so as to modify the products in an effective manner (Järvinen and Taiminen,
2016).
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Location analytics is another way of collecting information where a collaborator plays an
important role. This is simply done with the help of undergoing partnership with the location
data service provider. These data providers help in educating the customers about the self driving
cars and eradicate the threats that are being imposed by the rivals. Further, data is also gathered
using the onboard cameras, machine data and GPS information.
Järvinen and Taiminen, (2016) stats about the fact that BMW has undergone a tremendous plan
which is helping them to lead the market. This is done with the help of undergoing partnership
with the ParkMobile. This is a special type of service which is offering the BMW car users to
make mobile payment for availing the parking service. This is quite visible across the US
market. Thus, it is allowing the car owners to find parking spaces before they set off. Therefore,
this kind of service will also provide BMW with vital information about the sales figures and the
number of cars that are running on the streets.
Issue 4 Developing marketing strategy
The target market for BMW can be the Australian market as the automotive market of Australia
has evolved strongly and is considered as the integral part of the economy. The market is very
much labor intensive where the labors have good skills and the customers make good demands
of premium cars. BMW have broken the Australian markets into smaller zones like the Brisbane,
Melbourne, Sydney and Queensland (Bagozzi et al., 2018). This is helping them to understand
the specific needs of the different market and offer different class of products in accordance to
the need of the customers. Further, BMW also breaks the markets into various segments through
which specifications can be made easily. For instance, whenever they enter a new market they
tend to target the older men or women who likes to have super quality luxury products. The age
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range falls between 35- 50 years. Therefore, the Australian market offers good lucrative offers
for a company like BMW for producing products of higher caliber. In return, BMW is fulfilling
the desires of the customer by providing them with super quality cars they wish for. Further, the
higher rate of disposable income is also helping in the cause of BMW as the desire rates of
customers are increasing to capture the automotive market of Australia.
BMW creates value proposition with the help of creating and designing their products by
keeping in mind about the needs and preference of the target market i.e. Australian automotive
market. For this, market profiling is done where the needs of the customers are outlined through
the help of differentiating between the needs of the target market and various segments that the
market offers (Bagozzi et al., 2018). For instance, they target the older men and women with
higher disposable income. This income in return adds more value to their product as the sales
tend to increase and their demand also increases to have a luxury car. Further, more value is
being added when BMW offers the products to the higher class of people who buy BMW
products in order to maintain their social status. This is because of their desire to have luxury
cars and this desire certainly adds to the value proposition of BMW. Thus, it is very unlike of
customers residing in rural areas to buy luxury cars. Hence, BMW only offers their products to
the people residing in major cities who would add value to their product offering (Chonko and
Hunt, 2018).
BMW positions them as the only brand that would offer premium luxury quality cars to the
Australia buyers. For this, they have developed several marketing programs so that the customers
could easily make a point of difference with other premium car selling company with that of
BMW. The basis of difference ranges from price to performance.
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Issue 5 Developing marketing tactics
The marketing mix for BMW is stated below:
Product
The product offered by BMW comprises of premium automobiles for the Australian market.
These ranges from BMW MINI to other luxury cars. These products are readily accepted by the
people of Australia which is backed by fourteen research and development wing for supporting
the product development. These wings help in the development of the cars which will be
accepted by the customers easily (Shaw, 2016).
Price
The price of the BMW cars are set according to the features that the cars tend to offers. They are
not set in accordance of the affordability nature of the buyers since the care of premium quality.
Further, it also depends on the series of the car which BMW is ready to launch in the market.
However, some cars are low priced so as to attract the lower strata of the society. Further, the
maintenance costs of the cars are bit high as well.
Place
BMW have developed their own outlets and own output units which can produce and assemble
cars around 5000 units. The spare parts are of the cars are readily available across the various
cities of Australia so that the customers does not faces any kind of harassments. Moreover, they
are planning to provide dealership opportunities also.
Promotion
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