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Expansion Analysis for BMW

Disclaimer: This work has been submitted by a student. This is not an example of the work written by our professional academic writers. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UK Essays.

Published: Tue, 06 Feb 2018

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 – xÌ…)

(x – xÌ…)²

f(x – xÌ…)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 = xÌ… = = = 35

Variance = = = 66.67

Standard Deviation = δ = = = 8.16

Coefficient of Variation = = = 0.23

b. SUV

Class Interval

x

f

fx

(x – xÌ…)

(x – xÌ…)²

f(x – xÌ…)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 = xÌ… = = = 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 – xÌ…)

(x – xÌ…)²

f(x – xÌ…)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 = xÌ… = = = 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


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