Print Email Download Reference This Send to Kindle Reddit This
submit to reddit

Business decision making

1. Prepare and implement a plan for the collection of primary and secondary data for assessing an area of business of your choice.

a. Develop and use a questionnaire and justify its design for a particular purpose.

1.1 Research Topic

General Area of interest: - Expansion & Diversification of Business.

Specific sub area of interest: -BMW's expansion in car segment in Mumbai, India.

More specific topic of interest: - Which type of car segment should BMW expand their business in Mumbai, India.

Research Topic - BMW's expansion in particular car market segment.

1.1.1 Background

BMW entered the Indian market in the year 2006 after their arch rival Mercedes-Benz. Both the German luxury car makers have the maximum market share in the luxury car market segment. Recently Audi has entered their market and is giving both the automobile companies a tough competition. BMW is able to overtake Mercedes-Benz in terms of sales and has been at the top of the luxury car market segment in India since the last four years. Audi is capturing the market segment rapidly with its new cars. So in order to remain at the top of the luxury car segment BMW as to react according to the change in trend and bring out new models to beat its competitors and block the entry of new competitors like Nissan, Porsche, Volkswagen, etc in their market segment.

BMW has its sales subsidiary in Gurgaon, Delhi to develop its dealer network in India. BMW has established 14 dealers all over India. Mumbai is one of the largest cities of luxury car market segment in India. The SIAM (Society of Indian Automobile Manufactures) has reported that BMW's sales have grown by 12.76% to 1,020 units in July, 2009. The report also says that BMW has increased its sales by 43% to 3,000 units in 2010. BMW has future plans on increasing their dealership in eight more cities of India. BMW's management team can understand the taste of the Indian consumers based on the research conducted in Mumbai, India. Mumbai being the economic capital of India had the largest number of buyers of luxury cars in India. BMW had opened its first assembly center in Chennai in 2007 by seeing the potential growth in Indian market. BMW is really caution about its product launch in Indian markets because they just don't want to sell cars based on their brand value, but they wish to create better brand value by serving their customers with luxury cars with top of the line features, amazing performance and competing prices. BMW had surprised all its rivals by launching Rolls Royce cars in Indian market after studying the economic growth in India. But they still haven't launched the cars of brand Mini because Indian customers are not ready for expensive small cars. BMW has always tried to make their cars on the basis of an idea of being practical and contemporary which has helped them succeed in luxury car segment in India. The firm has also made cars which are fuel efficient and eco-friendly (working on hybrid technology) has boosted their brand value and has helped them find many new customers.

http://automobiles.mapsofindia.com/cars/bmw/

1.1.2 Aim for the Research Project

The Aim for the research topic is to find out in which market segment should BMW make expansions (produce new models) in Mumbai.

1.1.3 Objectives

The objectives for my research are to gather primary information for the research through Descriptive or Survey Research Design with the help of a questionnaire, secondary information via the staffs of the car companies and through companies sites, and conclude by research analysis and present it as a report to the BMW's management team.

1.2Research

Leedy (1985) defines research as the manner in which we attempt to solve problems in a systematic effort to push back the frontiers of human ignorance or to confirm the validity of the solution to problems others have presumably resolved.

1.2.1 Research Design

Research Design is defined as a framework or blueprint for conducting a marketing research project. It specifies the details of the procedure necessary for attaining the information needed to structure and/or solve marketing research problems.

http://destinydawnmarie.blogspot.com/2007/05/research-design.html

1.2.2 Type of Research Design Chosen

Descriptive or Survey Research Design is used for the research as it attempts to describe and explain conditions of the present by using many subjects and questionnaires to fully describe a phenomenon. Survey research design /survey methodology is one of the most popular for dissertation research.

http://www.dissertation-statistics.com/research-designs.html

1.2.3 Primary & Secondary Research

The methods used for primary research is Descriptive or Survey Research Design method by which qualitative data is collected through questionnaires. The questionnaire is filled by 100 people visiting the showrooms of BMW, Audi & Mercedes-Benz and the data collected is analyzed and a conclusion is made. The questionnaire is designed to know the preference of the type of car segment people prefer to buy. Secondary data is collected from the showroom managers, balance sheet of companies and from the company's site. Using both primary and secondary research a conclusion is drawn and presented in form of a report to the BMW management.

1.2.4 Network Diagram

The network diagram is used to show how the market research is carried out and data is analyzed and generated into a report for the management of BMW.

Activities

Preceding Activities

Duration (days)

A. Outline a questionnaire

None

2 Days

B. Print the questionnaire

A

1 Day

C. Make the people fill the questionnaire

B

5 Days

D. Collect the primary data

C

2 Days

E. Analyze primary data

D

1 Day

F. Collect Secondary data

Can be started with A

2 Days

G. Analyze Secondary data

F

3 Days

H. Prepare Report

G and E

1 Day

I. Use PD & SD for suggestion making

H

1 Day

PD = Primary Data, SD = Secondary Data

Diagram 1: Network Diagram

1.3.1 Questionnaire for Primary Research

What type of cars do you like?

Name-___________________________________________________________________

Tick mark the options

Gender-    Male { }  Female{ }

Do you enjoy driving a car?

Yes { } No { }

How many cars do you own?

1 { } 2 { } 3 { } 4 { } 5 { } 6 { } 7 { } 8 { }

Age Group: Specify in Number & Tick the option accordingly:_____ Years

20-30 { } 30-40 { } 40-50 { } 50-60 { }

What type of car do you prefer?

Sedan { } SUV { } Sports Car { }

What is the price range of the car would u prefer to buy (00,000 Rupees)? Specify particular amount in Rs. and tick the option accordingly: ­­­_____ Rs.

20-40 { } 40-60 { } 60-80 { }     80-100 { }

** All the Information given by you will be used in a research. Your identity will never be disclosed. Thank you for your time and for being a part of this survey.

1.3.2 Analysis of the Questionnaire

The first question was asked to determine the ratio of gender of 100 people who had been a part of this survey. The result showed that out of the population of 100 the ratio of Men: Women were 7:3. The number of female who came to the showroom was 30 and the number of male was 70.

Gender: Male = 70 People Female = 30 People

Diagram 2: Gender

The second question is a general question asked to check how much the Indian people prefer to drive their car. The data collected showed that 95% of the people prefer driving their cars and 5% of the people do not drive their cars.

People who like driving their car (Yes) = 95   People who don't drive their car (No) = 5

Diagram 3: People Who Prefer Driving Their Car

The third was based on how many cars each one owned who was surveyed. The data collected showed that 1 car was owned by 15 % people, 2 cars were owned by 10% people, 3 cars are owned by 25% people, 4 cars are owned by 10% people, 5 cars owned by 15% people, 6 cars owned by 15% people, 7 cars owned by 5% people, and 8 cars owned by 5% people.

Number of cars owned:

1=15 people  2=10 people  3=25people  4=10 people  5=15 people  6=15 people  7=5 people  8= 5 people

Diagram 4: Number of Cars Owned

The fourth and fifth questions were asked to gather the information for the company to check the preference of what type of car the people who were surveyed preferred. The data collected was tabulated according to the age group.

Age Group of People Surveyed and their Preference for the Type of Car

Type of Car

Age Group

Sedan

SUV

Sports Car

Class Interval

20-30

15

5

10

30-40

20

15

6

40-50

5

10

3

50-60

5

5

1

45

35

20

Diagram 5: Preference of Type of Car of People of Different Age Group

The sixth question was asked to see what price range the Indian customers prefer when they plan to buy a car.

Price range of cars (00,000 Rupees) 20-40 = 25 people 40-60 = 40 people 60-80 = 25 people 80-100 = 10 people             

Diagram 6: Price Range of cars (00,000 Rs)

The data collected showed the price range preferred by the Indian customers. The data showed that 25% people preferred car in the range 20-40 (00,000 Rs.), 40% people preferred car in the range 40-60 (00,000 Rs.), 25% people preferred car in the range 60-80 (00,000 Rs.), and 10% people preferred car in the range 80-100 (00,000 Rs. This data is also essential as this will help the company to make cars according to the taste of their customers.

2. Create information for decision making by summarising data using representative values, and use the results to draw valid and useful conclusions in a business context.

a. Analyse the data collected in Task 1 using measures of dispersion, and use to assess an area of business of your choice.

b. Use quartiles, percentiles and correlation coefficient, and use these to draw useful conclusions in a business context.

2.1 Quartile, Quartile Range and Quartile Deviation

a. Sedan

Class Interval (Age)

  Frequency

   Cumulative Frequency

20-30

15

15

30-40

20

35

40-50

5

40

50-60

5

45

Total

45

Quartiles

Nth Value = = 45

Q1 =

Q2 = 

Q3 =

Quartile Range

QR = Q3 - Q1 = 39 - 18 = 21 years

Quartile Deviation

QD = = 10.5 years

b. SUV

Class Interval (Age)

  Frequency

   Cumulative Frequency

20-30

5

5

30-40

15

20

40-50

10

30

50-60

5

35

Total

35

Quartiles

Nth Value = = 35

Q1 = 

Q2 =

Q3 =

Quartile Range

QR = Q3 - Q1 = 47 - 32 = 15 years

Quartile Deviation

QD = = 7.5 years

c. Sports Car

Class Interval (Age)

  Frequency

   Cumulative Frequency

20-30

10

10

30-40

6

6

40-50

3

3

50-60

1

1

Total

20

Quartiles

Nth Value = = 20

Q1 =

Q2 =

Q3 =

Quartile Range

QR = Q3 - Q1 = 38 - 18 = 20 years

Quartile Deviation

QD = = 10 years

2.2 Mean, Variance, Standard Deviation & Coefficient of Correlation

a. Sedan

Class Interval

x

f

fx

(x - x̅)

(x - x̅)²

f(x - x̅)²

20 - 30

25

15

375

-10

100

1500

30 - 40

35

20

700

0

0

0

40 - 50

45

5

225

10

100

500

50 - 60

55

5

275

20

200

1000

45

1575

3000

Mean = x̅ = = = 35

Variance = = = 66.67

Standard Deviation = δ = = = 8.16

Coefficient of Variation = = = 0.23

b. SUV

Class Interval

x

f

fx

(x - x̅)

(x - x̅)²

f(x - x̅)²

20 - 30

25

5

125

-14

196

980

30 - 40

35

15

525

-4

16

240

40 - 50

45

10

450

6

36

360

50 - 60

55

5

275

16

256

1280

35

1375

2860

Mean = x̅ = = = 39.28 = 39 (approx.)

Variance = = = 81.71

Standard Deviation = δ = = = 9.04

Coefficient of Variation = = = 0.23

c. Sports Car

Class Interval

x

f

fx

(x - x̅)

(x - x̅)²

f(x - x̅)²

20 - 30

25

10

250

-7.5

56.25

562.5

30 - 40

35

6

210

2.5

6.25

37.5

40 - 50

45

3

135

12.5

156.25

468.75

50 - 60

55

1

55

22.5

506.25

506.25

20

650

1575

Mean = x̅ = = = 32.5

Variance = = = 78.75

Standard Deviation = δ = = = 8.87

Coefficient of Variation = = = 0.27

2.3 Coefficient of Correlation of Pricing and Age Group

Sedan Car

No. of People

Age Group (X)

Pricing Range (Y)

XY

1

21

25

525

441

625

2

22

30

660

484

900

3

22

30

660

484

900

4

23

35

805

529

1225

5

24

40

960

576

1600

6

24

40

960

576

1600

7

24

100

2400

576

10000

8

25

80

2000

625

6400

9

25

95

2375

625

9025

10

27

45

1215

729

2025

11

28

35

980

784

1225

12

28

95

2660

784

9025

13

29

50

1450

841

2500

14

29

50

1450

841

2500

15

29

35

1015

841

1225

16

30

40

1200

900

1600

17

31

55

1705

961

3025

18

32

65

2080

1024

4225

19

32

75

2400

1024

5625

20

32

55

1760

1024

3025

21

32

40

1280

1024

1600

22

33

45

1485

1089

2025

23

34

70

2380

1156

4900

24

34

80

2720

1156

6400

25

35

100

3500

1225

10000

26

35

75

2625

1225

5625

27

36

35

1260

1296

1225

28

36

25

900

1296

625

29

36

65

2340

1296

4225

30

37

60

2220

1369

3600

31

37

70

2590

1369

4900

32

37

85

3145

1369

7225

33

38

95

3610

1444

9025

34

38

55

2090

1444

3025

35

39

70

2730

1521

4900

36

40

65

2600

1600

4225

37

40

25

1000

1600

625

38

41

30

1230

1681

900

39

44

40

1760

1936

1600

40

48

50

2400

2304

2500

41

52

55

2860

2704

3025

42

55

85

4675

3025

7225

43

56

95

5320

3136

9025

44

58

60

3480

3364

3600

45

59

40

2360

3481

1600

Total

1567

2590

91820

58779

171900

Correlation Coefficient = r =

r =

r =

r = = = 0.16625701 = 0.17 (approx.)

SUV

No. of People

Age Group (X)

Pricing Range (Y)

XY

1

21

35

735

441

1225

2

23

45

1035

529

2025

3

27

45

1215

729

2025

4

27

55

1485

729

3025

5

29

65

1885

841

4225

6

31

75

2325

961

5625

7

31

70

2170

961

4900

8

32

80

2560

1024

6400

9

32

85

2720

1024

7225

10

35

35

1225

1225

1225

11

35

45

1575

1225

2025

12

36

50

1800

1296

2500

13

36

60

2160

1296

3600

14

37

45

1665

1369

2025

15

37

55

2035

1369

3025

16

38

60

2280

1444

3600

17

38

60

2280

1444

3600

18

38

65

2470

1444

4225

19

39

40

1560

1521

1600

20

39

60

2340

1521

3600

21

40

80

3200

1600

6400

22

41

90

3690

1681

8100

23

43

100

4300

1849

10000

24

43

45

1935

1849

2025

25

44

50

2200

1936

2500

26

45

70

3150

2025

4900

27

45

75

3375

2025

5625

28

47

85

3995

2209

7225

29

47

85

3995

2209

7225

30

48

25

1200

2304

625

31

51

35

1785

2601

1225

32

55

50

2750

3025

2500

33

55

50

2750

3025

2500

34

57

60

3420

3249

3600

35

59

85

5015

3481

7225

Total

1381

2115

84280

57461

139375

Correlation Coefficient = r = 

r = = 0.141265802 = 0.14 (approx.)

Sports Car

No. of People

Age Group (X)

Pricing Range (Y)

XY

1

21

65

1365

441

4225

2

23

60

1380

529

3600

3

24

75

1800

576

5625

4

24

85

2040

576

7225

5

25

75

1875

625

5625

6

27

55

1485

729

3025

7

28

60

1680

784

3600

8

28

80

2240

784

6400

9

29

90

2610

841

8100

10

29

100

2900

841

10000

11

31

75

2325

961

5625

12

32

55

1760

1024

3025

13

35

70

2450

1225

4900

14

36

80

2880

1296

6400

15

37

75

2775

1369

5625

16

39

75

2925

1521

5625

17

41

60

2460

1681

3600

18

43

65

2795

1849

4225

19

45

75

3375

2025

5625

20

52

80

4160

2704

6400

Total

649

1455

47280

22381

108475

Correlation Coefficient = r =

r = = 0.035049038 = 0.04(approx.)

2.3 Conclusion

3. Use data from the case study ‘Generico Inc' given and analyse and produce information in appropriate formats for decision making by the organisation.

3.1 Report on Proposed New Marketing Strategies for Generico Inc

To: Stephen Daniels, V.P. of Marketing of Generico Inc

From: MR. AB

Status: Confidential

Date: 1st May, 2011

Ι INTRODUCTION AND TERMS OF REERENCES

This report is based on the new Marketing Strategies discussed by the author to improve the marketing of products of Generico Inc. This report gives a detailed analysis of the marketing strategies which the V.P. of Marketing of Generico Inc. can use to make key business decisions to improve the marketing of their products. This report shows how the firm can implement the new business strategies with their current strategies and help improve marketing field for the company.

ΙΙ METHOD

The following methods for collecting data were used:

  1. Gather information from its customers (major manufacturers of electronic products) since Generico Inc.'s target market is demand driven.
  2. Gather information from Consultancy Firms who can predict the market growth of the electronic assembly machine's market and suggest new market strategies to survive the stiff competition.
  3. Gather information from foreign customers to develop products as per their need.

ΙΙΙ FINDINGS

The data collected from various sources was analyzed and accordingly new marketing strategies were drawn by the author:

  1. The firm conducted a meeting every month with its customers to gather the necessary information to develop product design which is addressing quality (as manifested in accuracy, simplicity, speed, and reliability), innovation, service (second to none by Generico field service engineers, not outside contractors), and price.
  2. The information collected from the Constancy Firms gave the firm the option to tap new markets and customers with their innovative ‘state of an art design' machines.
  3. The information collected from Consultancy Firms and from the customers provided the firm with the information on how to cut down marketing and other costs to survive in a competitive market.
  4. The information from the Consultancy Firm can help the firm to have foreign collaboration which will help them develop new markets and new products to improve marketing strategies.

ΙV CONCLUSION

The report thus concludes that Generico Inc. can gather data through many sources (Primary & Secondary) and can be used by the V.P. of marketing department and plan out new marketing strategies. The information is collected through a range of sources like consultancy firms, customers and collaboration partners. This report will help the V.P. in his decision making as appropriate analyzed information is provided to him through this report by the author. The new strategies will help the company to develop new markets and new products for their future strategies to improve marketing.

3.2 Comparative study of Marketing and Net Sales

Month

Net Sales (X)

Marketing Cost (Y)

1

$0

$5,618

2

$0

$9,934

3

$0

$9,934

4

$0

$9,934

5

$0

$22,883

6

$0

$31,516

7

$40,000

$35,833

8

$40,000

$35,833

9

$80,000

$40,150

10

$120,000

$48,783

11

$200,000

$48,783

12

$200,000

$61,734

13

$240,000

$70,367

14

$360,000

$70,367

15

$400,000

$74,683

16

$480,000

$79,000

17

$560,000

$79,650

18

$680,000

$95,223

19

$760,000

$95,223

20

$800,000

$104,576

21

$880,000

$109,253

22

$920,000

$113,930

23

$1,000,000

$123,283

24

$1,080,000

$95,283

Coefficient Correlation = 0.93904689

Year

Annual Net Sale (X)

Annual Marketing Cost (Y)

1

$680,000

$360,933

2

$8,160,000

$1,135,840

3

$18,400,000

$2,651,580

4

$36,200,000

$3,913,440

5

$54,000,000

$4,906,940

Coefficient Correlation = 0.982742218

Seeing the net sale and marketing cost figures it is clear that the company is making more of net sales by marketing its products effectively. The coefficient correlation figure is close to one so both the factors are closely related. Marketing cost being an operational cost has helped the firm to increase their net sales every year. The net sales figure of the company has seen a good growth percentage by increasing the marketing cost every year. Therefore to increase net sales the company has to invest in marketing heavily to see future growth. Therefore the company has to develop new marketing strategies to achieve growth every year.

4. Use appropriate software to generate information that will contribute to making decisions at operational, tactical and strategic levels in an organisation. Give specific examples

Highly successful financial year 2010 for the BMW Group.

With the global economic and financial crisis now coming to an end, the global economy found itself well on the road to recovery in 2010. Against this background, international car markets also stabilised to a large extent. Demand for premium vehicles grew strongly, particularly in Asia and to a slightly lesser degree in the USA. The BMW Group benefited from these developments and strengthened its role as a leading provider in the premium car segment with a range of new and attractive models. The situation on international capital markets also continued to ease generally in 2010, and thus had a positive impact on our Financial Services business.

With the economy recovering on a broad footing, we were able to record a sharp rise in the number of cars sold. Sales volume growth gathered even more momentum during the second half of the year. In total we sold 1,461,166 BMW, MINI and Rolls-Royce cars worldwide during the year under report (+13.6%), and thus achieved one of the best sales volume performances in the history of the Group.

Our Motorcycles business performed well in 2010 despite continuing unfavourable market conditions. A total of 110,113 BMW and Husqvarna brand motorcycles was sold worldwide, 9.7% up on the previous year's figure.

The Financial Services segment also made an important contribution to the success of the BMW Group and 3,190,353 credit financing and lease contracts were in place with dealers and retail customers at 31 December 2010 (+3.4%).

Updated March 15, 2011

http://geschaeftsbericht.bmwgroup.com/2010/gb/en/facts-and-figures-2010/management-report/review-of-the-financial-year.html

German luxury car maker BMW today said it hopes to clock over 2.7% growth in 2011 sales to over 15 lakh vehicles globally, including a 'good double-digit growth' in India, where it sold 6,246 units in 2010.

The company, which reported 19.3% increase in revenue to euro 60.47 billion in 2010 and a net profit of euro 3,234 million, however, said putting up a full-fledged plant in India is a long way to go as volumes are still low.

"We sold 1.46 million vehicles globally in 2010 and plan to sell more cars in 2011 than before - significantly more than 1.5 million. We aim to reach new record sales with all three brands, BMW, Mini and Rolls-Royce," BMW Chairman Norbert Reithofer told reporters here.

He said the company had sold 1.22 million BMW vehicles 2.3 lakh Mini and 2,711 units of Rolls-Royce in 2010 recording 14.6%, 8.1% and 170.6% growth respectively over the previous year.

Germany, US, China and UK were the key markets for the auto major, even as the company recorded "dynamic" growth in many smaller markets such as Brazil, Russia, India, South Korea and Turkey.

Commenting on sales target in India, BMW Director (Marketing) Ian Robertson said the company would look at high double-digit growth for the current year.

To keep pace with that, the company has accordingly increased its Chennai assembly plant capacity to 10,000 units per annum from 8,000 earlier.

We think India has reached to a position where market would be developed very quickly. Now, there is a good momentum. The Indian economy is also in a good shape," he said, adding "demand is very strong and we see a good double-digit growth in the Indian market for the current year".

Asked if that would prompt the company to set up a manufacturing base in India on the lines of Brazil, where BMW is actively considering setting up a manufacturing facility after recording good sales in the last two years, he said, "We need to have an economy of scale. At the moment, Indian market is relatively small compared to the global scale. I think it is too early to say. The market is still very low".

Robertson, however, added that in the next two-three years "we can see some growth and next could see some development on the plant".

As a practice, BMW first sets up an assembly plant in a potential market and depending on the feedback of that market, it upgrades to a full-fledged manufacturing plant.

BMW also plans to double its dealership network in India by the end of 2012, he added.

BMW India announced on Monday that it has maintained its lead in the luxury car market for the second year in a row. In 2010, the German carmaker sold 427 units more than compatriot automaker Mercedes-Benz.

The company's total sales rose 73 per cent in the year to 6,246 units, largely on the strong sales of its sedans — 3 series sales doubled in the year to 2,432 units and the 5 series sold 2,403 units. With other popular models such as the 7 series saloon and X5 SUV selling 535 and 228 units, respectively, the company held on to a 40 per cent share of the segment. In 2009, BMW sold 3,619 units — 369 units more than Mercedes-Benz.

Last month, BMW also launched its cheapest model in India — the X1 crossover at a starting price of Rs 22 lakh. With rival Mercedes-Benz's product prices starting at a higher Rs 27.75 lakh (C-Class), BMW hopes that the X1 would help it retain pole position this year. The company, which entered India in 2007, currently assembles the X1, 3 and 5 series sedans at its Chennai plant.

Mercedes-Benz India sold 5,819 units in 2010, registering a higher growth over BMW in the year at 80 per cent. The largest volumes were garnered by the E-Class (2,490 units) and C-Class (2,070 units) sedans, while the SUV range of M-Class, GL-Class and R-Class sold 523 units in total. Mercedes-Benz assembles the C, E and S class sedans in India.

The third German competitor in the segment — Volkswagen group company Audi — came third on sales of 3,003 units in 2010. With sales rising 81 per cent in 2010, Audi India expects more than 50 per cent growth in 2011. The company is also expected to launch the new A6 and A8 L (extended wheelbase) sedans this year.

Luxury car market

“In the last two years, the growth has been phenomenal. With rising income levels, the age group of customers buying luxury cars has significantly come down to around 40-45 years from 50-55 years. It is important to now have a large portfolio and offer more cars at entry prices to build the brand and volumes,” said Mr Abdul Majeed, Auto Practice Leader, PwC.

The overall luxury car market grew around 60 per cent this year to more than 15,000 units. To further boost growth in the world's second fastest growing auto market, players such as Mercedes-Benz, BMW and Audi are now rapidly expanding their network to smaller cities, starting a financial services arm and expanding their used car business


More from UK Essays