BMW A CASE STUDY

BMW A CASE STUDY

Bayerische Motoren Werke AG(BMW), (English: Bavarian Motor Works) is a German automobile, motorcycle and engine manufacturing companyFounded in 1916 by Franz Josef Popp.Headquartered in Munich,Bavaria,Germany.One of the best selling luxury automakers in the world.The first car which BMW successfully produced was theDixi based on theAustin 7.

BMW-(BEYERISCHE MOTOREN WERKE)

CONTD..Current Tagline has changed from The Ultimate Driving Machine to Sheer Driving Pleasure & BMW-The Joy of Driving.

MODELS AT GLANCE

B WORLD WIDE SALESYearBMWMINIRolls-RoyceMotorcycle20091,068,770216,5381,002100,35820101,224,280234,1752,711110,11320111,380,384285,0603,538113,57220121,540,085301,5253,575117,10920131,655,138305,0303,630115,21520141,811,719302,1834,063123,495

Serves the customers based on their needs.Sells to those consumers who have high standards for quality and luxury as their products are built on these attributes.BMW has managed its global marketing strategy by integrating the emotional marketing perspective which interchanges synergistically to maintain its leadership presence in the automaker industry

MARKETING STRATEGY

CONTD..The company continue to focus on research,innovation and reach out to specific segment groups years after year.BMW has used several advertising means for promoting their products. This includes television for branding campaigns, new car launches, publications and magazines, outdoor campaigns, brochures, internet etc.

BMW has categorized its market segment in 3 series that is comprised of three different engine sections; this helps people to differentiate as each engine has a different price.The company has used Demographic market segmentation where they allow the customers to make a purchase decision based on their demands.BMW is mostly favored by men of age over 35 whose income level is usually more than $75.000.The companys retail stores are mostly located in areas where the majority of the consumers live in the upper class region. This is how BMW execute its geographic segmentation

MARKET SEGMENTATION

BMW TARGETINGBMW use a differentiated strategy, this means that they targetspecific automobile markets. These markets suit different peoplewithin the segmentation stratosphere.

BMW Group uses mono-segment type of positioning and accordingly, the company makes an appeal to a single customer segment.

The market positioning is always meant for the upper affluent class. For instance, the Mercedes Benz SL Class Roadster. SL is positioned as a sports car icon which originated since 6o years. Another model of Mercedes Benz, Smart For Two Coup is focused on the lifestyle and environment.

CONTD..BMWS Most luxurious car ,targeted a group called upper conservatives adding comfort and luxury to these cars to attract the customers.BMW launched the X5 by targeting upper liberals who demanded bigger cars for their active lifestyles and growing families, Thus BMW created a high performance luxury SUV.BMW Created the lower priced 1 series and X3 SUV to target the modern mainstream who had earlier avoided BMWs because of their premium cost.It then launched the convertibles and roadsters to target post-moderns a high-income group that continues to attract attention with more flamboyant cars.BMW continues to reach out other segment groups years after year

BMW SEGMENTATION,TARGETING AND POSITIONING FOR DIFFERENT GROUPS

Type of segmentationSegmentation criteriaBMW Group target segmentBMWMINIRolls-RoyceGeog-raphicRegionDomestic/internationalDomestic/internationalDomestic/internationalDensityUrban/ruralUrbanUrbanDemog-raphicAge20-6525-4540+GenderMales & FemalesMales & FemalesMales & FemalesLife-cycle stageBachelor Stage/Newly MarriedCouplesFull Nest IFull Nest IIFull Nest IIIEmpty Nest IEmpty Nest IISolitary Survivor ISolitary Survivor IIBachelor StageNewly MarriedCouplesFull Nest IFull Nest IIFull Nest IIIEmpty Nest IEmpty Nest IISolitary Survivor ISolitary Survivor IIIncomeHighHighHighOccupa-tionProfessionals & executivesProfessionals & executivesProfessionals & executivesBehavi-oralDegree of loyaltyHard core loyalsSoft core loyalsSwitchersSoft core loyalsSwitchersHard core loyalsBenefits soughtReliability Sense of achievementSpeedReliabilitySense of achievementSpeedReliabilitySense of achievementExpression of high statusPersona-lityDetermined and ambitiousEasygoingDetermined and ambitiousUser statusnon-usersregular users,ex-userspotential users, first-time usersfirst-time users regular usersPsychographicSocial classMiddle classUpper classMiddle classUpper classLifestyle[1]AspirerSucceederExplorerReformerResigned

What are the pros and cons to BMWs Selective target marketing?

PROS:Better focus on customer needs and develop customized products.Heavy engineering and robust models.Extremely responsive service support.Better relationship with customers.

CONS:Lots of research and efforts lead to pulling up the prices.Sales dipped during recession.Cars only for the ones who could afford, ignored the low income groups of the society.Limited profit options.High risk of failure of a model.

What has the firm done well over the years?The company has created different alternative for its customers in doing so it has benefited and increased its production over the years.The company also designed a way to celebrate its success with its loyal customers and tries to be innovative and look into new segments of possible clients.Upgrading the cars as per the market trends over the years and bringing out something new to attract consumers away from competitors.

Where could it improve?

In order to make improvement, the company should widen its target group where market is bigger with more opportunities like developing countries.

They should also focus on other sections of the society as well who cant afford such high priced cars.

BMWS Sales slipped during the worldwide recession in 2008 and 2009.Is its Segmentation strategy too selective? Why or why not?

BMWS selective strategy for segmentation was the reason for slip in sales during the world wide recession.

BMW targeted mainly the growing market of baby boomers and professional yuppies, with recession their incomes dropped, so is BMWs sales.

The earning to saving of this segment depended on the volatility of the market. So does their spending on capacity on the luxury brands.

Although, During the recession, everybody struggled. So to blame BMW for their strategy that had made them so successful in the first place would not be fair

CONCLUSIONIn June 2012, BMW was listed as the #1 most reputable company in the world by Forbes.com.Its selective marketing strategy and continuous research and innovation has contributed towards its growth.In future it should focus more on their sales in developing countries and using artificial intelligence and intuitive technology as a part of their innovation and development to outstand all its competitors. CHANGES ARE AFOOT AT BMW

DISCLAIMERCreated by Trijya Saini, College of Technology, Pantnagar during a marketing internship by Prof. Sameer Mathur,IIM Lucknow