PPROJECTROJECT R REPORTEPORT

ON

SubjectSubjectBrand ManagementBrand Management

Supervised BySupervised ByDr. Reshma NasreenDr. Reshma Nasreen

Submitted BySubmitted ByAzharuddin KhanAzharuddin Khan

MBA (Pharmaceutical Management)Semester: 1st, Batch: 2009-11

Department of Management Studies

Jamia Hamdard, New DelhiJamia Hamdard, New Delhi1 | P a g e

ContentsContents

Brand Inventory

History………………………………………………………3

BMW Group………………………………………………..4

BMW India………………………………………………….4

Brand Width………………………………………………..5

Brand Portfolio…………………………………………….6

Product Attributes………………………………………...7

Marketing Strategies……………………………………...7

Brand Exploratory

Mental Map.………………………………………………...8

Customer based Brand Equity…………………………9

CBBE Pyramid…………………………………………….10

Recommendations…………………………………………..11

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Brand Inventory

HISTORY:

Bayerische Motoren Werke AG (BMW) is a German manufacturer of automobiles, motorcycles, and aircraft engines. Based in Munich, Germany, the company is the leading auto exporter in Europe. The English translation of the company's name is Bavarian Motor Works.

The company traces its origins to 1913, when a Bavarian named Karl Rapp began an aircraft-engine shop in Munich named Rapp Motoren Werke. In 1917 Rapp resigned and the company, led by Austrian engineer Franz-Josef Popp, changed its name to Bayerische Motoren Werke. That same year chief engineer Max Friz designed the company's first aircraft engine, the six-cylinder Type IIIa, which created strong demand for BMW engines. When the 1919 Treaty of Versailles prohibited German companies from producing aircraft and aircraft engines, BMW switched to making air brakes for railway cars. In 1923 Friz developed the company's first motorcycle, the R32, a model that held world speed records for motorcycles during most of the 1930s.

In 1928 the company entered the automobile business by acquiring Fahrzeugwerke Eisenach (Eisenach Vehicle Factory), a maker of small cars based in Eisenach, Germany. In the 1930s BMW began producing a line of larger touring cars and sports cars, introducing its highly successful model-the 328 sports car-in 1936.

    After World War II ended in 1945, Allied forces dismantled the company's main factories. BMW made kitchen and garden equipment before introducing a new, inexpensive motorcycle to the German market in 1948. The company's return to auto production in the 1950s resulted in poor sales. In the 1960s the company turned its fortunes around by focusing on sports sedans and compact touring cars, and it began to compete with Mercedes-Benz in the luxury-car markets of Europe and the United States. BMW's U.S. sales peaked in 1986 but then dropped steeply, partly due to competition from two new luxury cars-Lexus, made by Toyota Motor Corporation, and Infiniti, made by Nissan Motor Co., Ltd. The 1989 collapse of the Berlin Wall led to a boom in car sales in Europe, and in 1992 BMW outsold Mercedes-Benz in Europe for the first time.

In 1990 BMW formed a joint venture with the British aerospace company Rolls-Royce PLC to produce aircraft engines for business jets. In 1992 BMW broke ground for a major automobile plant in Spartanburg, South Carolina, its first automobile plant in the United States. In 1994 BMW acquired 80 percent of the Rover Group-a British manufacturer of small cars, luxury cars, and Land Rover sport-utility vehicles-from British Aerospace PLC. The $1.2 billion acquisition brought the company into new markets.

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The BMW Group:

With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set firmly on the premium sector of the international automobile market. To achieve its aims, the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry. From research and development to sales and marketing, BMW Group is committed to the very highest in quality for all its products and services. The company's success to date is proof of this strategy's correctness. The strategic objective is clearly defined: The BMW Group is the leading provider of premium products and premium services for individual mobility.

(BMW Headquarter at Munich,

Germany)

Overseas subsidiaries

o South Africa o United States o India o China o Canada o Austria

BMW IndiaHeadquartered in Gurgaon (National Capital Region) BMW India is a 100%

subsidiary of the BMW Group. The initial investment in India is 1.1 billion Indian Rupees.The wide range of BMW in India include the establishment of a production plant in Chennai (Tamil Nadu) and development of a dealer organisation across major metropolitan centres of the country.

On 29 March 2007, BMW India officially opened its production plant in Chennai. The BMW Plant Chennai produces the BMW 3 Series and BMW 5 Series Sedans in petrol and diesel variants and has a capacity to produce 3000 units per year on a single shift basis.

Presently, 12 dealers represent BMW in the Indian market; Bird Automotive (Gurgaon, NCR), Deutschen Motoren (New Delhi); Navnit Motors (Mumbai), Infinity Cars (South Mumbai); Krishna Automobiles (Chandigarh); Navnit Motors (Bangalore), Delta Motors (Hyderabad), Kun Exclusive (Chennai), Bavaria Motors (Pune), OSL Prestige (Kolkata), Parsoli Motors (Ahmedabad) and Platino Classic (Kochi) . Owing to an exuberant growth potential, BMW is hopeful of multiplying

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its annual sales volume and has already chalked out an extensive dealer strategy to support its plans.

BMW India will further strengthen the dealer network by stepping into Phase II, by expanding into the markets of Ludhiana, Bhubaneshwar, Jaipur and Coimbatore, by the end of 2009.

BMW dealerships presently display the BMW 3 Series (325i, 320i and 320d, 320d Highline) and BMW 5 Series (525i, 530i, 520d, 530d and 530d Highline) that are produced at the BMW Plant Chennai. BMW dealerships also display the BMW 6 Series (650i Coupé and 650i Convertible), BMW 7 Series (750Li), BMW X3 (X3 xDrive25i, X3 xDrive20d) and the BMW X5 (X5 xDrive48i and X5 xDrive30d) which are available in the country as CBU’s (completely built-up units). The BMW M3 coupé, BMW M3 Convertible, BMW M5, BMW M6 Coupé, BMW M6 Convertible, BMW 6 Series Individual and BMW 7 Series Individual can also be ordered at BMW India dealerships.

BMW India has also established an International Purchasing Office (IPO) at its Headquarters in Gurgaon. The IPO will focus on the development of exports from India to the BMW Group International Production Network and there work towards increasing the sourcing share from India over the next years. The activities include the identification and assessment of potential suppliers taking into account BMW’s requirements for quality, technology and logistics. The IPO will explore procurement of production material (components) as well as IT and Engineering Services.

BMW Financial Services.BMW India has partnered with Bajaj Allianz General Insurance for offering

motor insurance and with ICICI Bank to offer customized financial solutions and ORIX Auto Infrastructure Services Limited for leasing services for its customers. These products and services are offered through the BMW Financial Services.

Brand width

BMW: Since its inception, the BMW brand has stood for one thing: sheer driving pleasure. Sporting and dynamic performance combine with peerless design and exclusive quality, resulting in the unique appeal of BMW automobiles. Website: www.bmw.com

MINI: The MINI brand is refreshingly different: extroverted, spontaneous and in every respect something out of the ordinary. Ideal for a society that was young, unconventional and ready for change, the MINI Classic became a cult vehicle in the sixties and seventies. Since then the brand has lost none of its youthful charm. MINI is part of a lifestyle that is cosmopolitan and confident, ready for everything.Website: www.MINI.com

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Rolls-Royce: Rolls-Royce Motor Cars Limited has been part of the BMW Group since January 1, 2003. Rolls-Royce is one of the most fascinating and well-known brands in the world, the luxury motor car par excellence. For over 100 years, motor cars of the Rolls-Royce brand have stood for truly outstanding engineering, quality and reliability.Website: www.rolls-roycemotorcars.com

Motorcycles: Premium is the key word for BMW Group motorcycles as well. The group has enjoyed great success with their strategy: to develop and build the best motorcycles, set standards with regard to technology, environmental protection and safety, and provide outstanding customer service in the pre- and after-sales phases.Website: www.bmw-motorrad.com

BMW Brand Portfolio

1Series

Three-door Five-door Coupé Convertible

3Series 6Series

Sedan Touring Coupe Convertible  Sedan ActiveHybrid 7

5Series 7Series

Sedan Touring Gran Turismo Coupé Convertible 

X Series Z4 Series

X1 X3 X5 X6 ActiveHybrid X6  Z4 Roadster

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M Series

M3 Sedan M3 Coupé M3 Convertible M5 Sedan M5 Touring M6 Coupé

M6 Convertible X5 M X6 M

PRODUCT RELATED ATTRIBUTES:Stylish peerless designGerman engineeringPerformanceLuxuryReliabilityComfortSpeedSafety Exclusive quality Well-established brands

Marketing Strategies

COMMUNICATION, PRICING AND DISTRIBUTION:

Most of the BMW communication takes place through print media in magazines and newspapers. This is supported by communication through TV advertisements and point of sales promotion. Now a days a good company has a state of the art web portal, BMW websites are highly informative, interactive and a pleasure to watch. One can get any amount of detailed information regarding the prices, features, retailers, and support services etc. There are company specified retailers and distributors throughout the world who are in constant touch with the parent and comply implicitly. Dealers also have round the clock servicing and repair. BMW also has a used car portal where one can choose and buy his/her appropriate model.

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Brand Exploratory

Customer knowledge: BMW has successfully leveraged its history and tradition of excellence along with innovation to become the most famous and recognized carmaker in the world. Typical consumer brand associations for BMW might be “heritage”, “stylish”, “luxurious”, “powerful”, “elegant”, “performance” and “fuel efficient” to an extent.

Sources of brand equity: The BMW name, one of the oldest in the history of car makers, is no doubt is an important source of brand equity. But being a German car is also a key source of brand equity. The symbol with white and blue partitioned circle is a known symbol all over the world. The fact that it’s a German engineered car adds a ton to its brand equity. Germans are the best engineers in the whole world. BMW has a Brand Ambassador named as Maria Ilieva, who is a Bulgarian Singer and Producer, recognized as a most successful female vocal artist.

Sponsorships: BMW has been engaged in motorsport activities since the dawn of the first BMW motorcycle. It is currently sponsoring:

Formula BMW - A Junior racing Formula category. Kumho BMW Championship - A BMW-exclusive championship run in the United

Kingdom.

Games: Formula One - BMW has won 19 Grands Prix as an engine supplier. In July 2009, BMW announced that it would withdraw from Formula One at the end of the 2009 season.Touring car racing - BMW has a long and successful history in touring car racing.Motorcycle Rally - BMW motorcycles have won Paris Dakar Rally 6 times.

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Philanthropy: The company is a charter member of the U.S. Environmental Protection Agency's (EPA) National Environmental Achievement Track, which recognizes companies for their environmental stewardship and performance. It is also a member of the South Carolina Environmental Excellence Program and is on the Dow Jones Sustainability Group Index, which rates environmentally friendly companies. BMW has taken measures to reduce the impact the company has on the environment. It is trying to design less-polluting cars by making existing models more efficient, as well as developing environmentally friendly fuels for future vehicles. Possibilities include: electric power, hybrid power (combustion, engines and electric motors) hydrogen engines.

BMW offers 49 models with EU5/6 emissions norm and nearly 20 models with CO2 output less than 140 g/km, which puts it on the lowest tax group and therefore could provide the future owner with eco-bonus offered from some European states.

At brand level, too, BMW does better than its main competitors in the premium segment by significantly more than half a liter of fuel consumption with an average level of 160 g CO2/km. The vehicles of the next best competitor have a CO2 emissions level of 16 grams more than the models of the brand BMW, with the next competitor after this at a level which is as much as 28 g higher than the brand BMW - equal to a whole liter of diesel. Between 2006 and 2008, the brand BMW achieved a reduction in fuel consumption of 16%, more than doubling the reduction attained by the next best premium segment competitor. At the same, BMW vehicles are still well ahead of their competitors in terms of average engine output

BMW Mental Map

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(BMW mental map)

The customer based brand equity pyramid (CBBE):

The BMW customer based brand equity is equally strong on the left and right hand sides. It is also strong from bottom to top, enjoying the highest brand awareness of a carmaker as well as high repeat purchase rates and customer loyalty. To a certain extent BMW has successfully focused on both the superior product attributes and the imagery associated with owning and driving a BMW.

Points of parityGerman automaker, Quality engineering, Durable, Stylish & sleek designs, Attractive

Points of differenceHistory and heritage, Characteristic Symbol, Number of variants, Luxury with Performance efficiency

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Luxury Image

Stylish

Powerful

Heritage

Efficient

Performance

BMW

CBBE Pyramid

CBBE Pyramid attributes

Resonance: Top notch quality and comfort: high loyalty, high repeat purchase,

Judgment: State of the art technology and quality: world class cars, innovation and design, clever design, simple to operate.

Feelings: Social approval and self respect, environment concern.

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Performance: Exceptional Customer service, good resale value, less maintenance, less polluting, superb on road performance.

Imagery: Historical and classic image: since 1916, associated with racing events and Rallies.

Salience: High awareness: German marvel, best in the class, excellent finish.

Recommendations:

Competition: There is a sudden increase in competition from the other car manufacturers in all the segments. Mercedes is the prime competitor then there are others like Volvo, Honda , Toyota, Volkswagen etc. The competitors are launching new products everyday to have a greater pie of the market share as well as the customer mind. The trends and scenarios are constantly changing in the consumer market. The silver generation with a demand for mobility and financial strength needs something which appeals to them. The lifestyles have changed. There must be individualization and differentiation between lifestyles and products. BMW must keep this in mind and develop products. For instance, BMW can attract middle and moderate culture families by launching more fuel efficient and less priced variants.

Technology: Market needs products with excellent networking but simple interaction. Customer’s environmental sensitivity is increasing. Environment is becoming a competition factor. Nevertheless BMW takes necessary steps towards environment protection and development but the need of hour is to develop vehicles powered with renewable sources of energy. E.g. BMW has Hybrid cars but they are not much efficient as Honda’s Hybrid cars.

Product differentiation must be done through technology and emotion and a clear product and a brand image. BMW must extend product leadership especially regarding design, driving experience and quality.

BMW must specifically address image generators and developing loyal, long term customer relations. BMW must connect to the women consumer too. BMW has MINI brand but there is a huge untapped female consumer market which is still untouched. BMW can design and develop products exclusively for this segment.

Merchandising: Company can sell t-shirts, mugs, apparels of BMW logo in order to build a strong brand equity. Company can also appoint Entertainment Celebrities (with respect to locality or region basis) to strengthen brand equity.

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