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Marketing: The BMW 7 series
1. The Marketing Mix
The BMW 7 series was launched in 2001, and gained a reputation as being targeted at the ‘yuppie’ market (Kiley and Stead, 2006). However, BMW has since adapted its marketing mix to target the affluent AB social classes, with online advertising campaigns using high-impact images and designs to display the enhanced style and comfort offered by the 7 series (New Media Age, 2005).
BMW designs and controls the operating systems and software in each of its global distribution centres. As a result, all BMW dealers are connected to the company’s main offices, and can electronically submit their orders to BMW’s computer system via the BMW intranet. The majority of parts are shipped or freighted from BMW’s German factories to the distribution centres, where radio-frequency (RF) systems are used to scan the parts and then sort and transport them to the appropriate part of the centre (Kempfer, 2006). When they arrive at this centre, they are scanned again and the location is stored in the computer systems, so they are immediately available for sale. As such, all orders are processed using the RF system: the computer immediately knows where the required parts are stored and how to obtain them. This means orders can be filled quickly and conveniently for BMW’s demanding customers, enabling the company to produce custom built cars to fill customer demand.
BMW has previously competed with other prestigious brands, such as Mercedes-Benz, on price, producing similar cars with similar specifications, but using lower pricing to attract price conscious customers (Abbott, 1992). Indeed, the Department of Trade and Industry in the UK has recently demonstrated that branding and pricing are the key elements for successful consumer targeting by automotive manufacturers (Works Management, 2006). Indeed, the DTI reported that BMW are ahead of their competitors in terms of branding and pricing, with the company successfully targeting consumers wanting a prestigious brand at a reasonable price. This strategy is in line with the company’s stated aims of making their brand appeal to mainstream consumers, and not just the ‘yuppies’, who are often perceived as having excessive disposable income to spend on items such as cars (Kiley and Stead, 2006).
The marketing campaign for the 7 series has been integrate to show BMW maintaining its traditional, prestigious, status; whilst also moving in a new, more contemporary direction. This was initiated by the initial adverts, which had the tagline: “The new BMW 7 Series. A new way to drive” (Watts, 2002), demonstrating that, whilst the car is still a BMW, it is a new and more modern type of BMW. The marketing campaign also used the criticism levelled at the rear of the car, which was highlighted by critics as being particularly ugly; claiming that moving the brand in this new direction is risky, but standing still is even more so (Kiley and Stead, 2006). Finally, the campaign used BMW’s Leipzig auto plant, which was designed by a renowned architect, and produced the stylish Art Car racing vehicles; to demonstrate BMW’s new design and style.
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Different marketing Segments and Contexts
Selling services is different, as there is usually no direct tangible output. For example, when a consumer buys a car, the transaction is legally concluded when they take possession of the car. However, when selling a service, such as insurance, the consumer only receives a document detailing the policy they have bought, and the promise of the selling company to act in a certain way in the future. In the case of insurance, the company promises to reimburse the consumer for any cost incurred due to specific events mentioned in the policy (Trading Standards Central, 2007) As a result, the marketing mix for services goes beyond the traditional four Ps of Product, Price, Promotion and Place, and extend to People, Process and Physical Evidence (Kotler, 2002). The people are the people selling and providing the service, such as call centre staff or salespeople; the process is the method by which the company provides the service, i.e. the contact number for insurance claims, and the way the customer is reimbursed; and the physical evidence is used to show positive results from the service, i.e. customer testimonials or statistics.
The most important difference between selling to consumers and selling to businesses, is that individuals, and groups of individuals, within companies often have significant budgets and the ability to influence their spending. As such, relationship marketing becomes more important and economical as a way to ensure that businesses retain their customers in the long term. Also, in businesses where marketing is done through channels, the channels themselves become customers, and tailoring these channels to the businesses they serve takes on even greater importance (Wyner, 2004).
France is an ideal example of a distinctive foreign market, where the small houses, with lower storage capacities, mean the French shop for goods more frequently. As a result, French consumers spend more time shopping than most other countries, and this is when they are most likely to notice and try new products and services. However, word of mouth and image are much less important to French consumers, who are much more individualistic that their British and American counterparts (Green and Langeard, 1975). This makes it harder to target French consumers with large scale promotion activities.
If BMW decided to focus on selling luxury cars in France, it would need to move away from the focus on brand image, and move towards focusing on the cars features and how they could serve the French consumers. The product could benefit from an increased focus on the degree to which it can be customised for individual needs; however the price will likely need to be adjusted to cope for the uncertain economic climate in France (Datamonitor, 2007). Promotions would need to focus on the tangible benefits from the car rather than what the car says about its owners, however it would need to be careful not to obtain a ‘snobbish’ image (Gree and Langeard, 1975). Finally, the place to promote the car would be in the main shopping areas, as here is where the French make most of their buying decisions.
- Abbott, R. (1992) BMW’s Plurality over Mercedes. Fortune; Vol. 125, Issue 10, p. 13.
- Datamonitor (2007) New Cars in France. Datamonitor Industry Profile. Oct 2006.
- Green, R. T. and Langeard, E. (1975) A Cross-National Comparison of Consumer Habits and Innovator Characteristics. Journal of Marketing; Vol. 39, Issue 3, p. 34-41.
- Kempfer, L. M. (2006) Sheer Distribution Pleasure. Material Handling Management; Vol. 61, Issue 7, p. 36-37.
- Kiley, D. and Stead, D. (2006) Giving Yuppies The Heave-Ho. Business Week; Issue 3984, p. 13.
- Kotler, P. (2002) Marketing Management. Prentice Hall.
- New Media Age (2005) BMW uses high-impact ads for 7 series to reach AB audience. 28th April 2005, p. 3.
- Trading Standards Central (2007) www.tradingstandards.gov.uk Accessed 12th September 2007.
- Watts, J. (2002) WCRS reinforces BMW’s design theme. Campaign (UK); March 2002, Issue 10, p. 10.
- Works Management (2006) Top quality, top value. July 2006, Vol. 59, Issue 7, p. 8.
- Wyner, G. A. (2004) The Journey to Marketing Effectiveness. Marketing Management; Vol. 13, Issue 2, p. 8-9.
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