Background and decisions of BMW

BMW Company Background

BMW cluster, headquartered in Munich, Germany, is one of the mainly victorious multi kind finest motor manufacturers in the globe. BMW is a German motor; motorbike and appliance manufacturers founded in 1916 and have been widely trade since 1969. The company’s slogan in English is “The Ultimate Driving Machine” and Sheer Driving Pleasure”. The original German slogan is “fraud am Fahren,” which translates to “joy in Driving” in English. The corporation produce, and market, a pied choice of senior end active cars and motorcycles. It is also own and make the tiny product and is the parent business of Roll-Royce vehicle Cars. BMW is known for its performance and luxury vehicles. BMW has a global presence with group subsidiaries in 41 countries and over 3000 dealerships and local importers in over 100 countries. BMW is a progressive company with salad of 1.2 million automobile and 101,000 motorbikes in 2008 generating revenue of 53.2 billion euros. It has a combined global workforce of 100,000 employees. In addition to cars and motorcycle, BMW operates an aircraft engine division under the brand name of Rolls Royce. The BMW group also has a strong market position in the motorcycle sector and operates successfully in the area of financial services. The Company operates its own financing company, which offers financing for vehicles. Automobiles accounted for 78% of 2000 revenues; vehicle finance leasing, 18%; motorcycles, 3% and other, 1%. UK is the third major souk and second main making base for the BMW group universal, and the only state where BMW group’s three brands – BMW, TINY and Roll-Royce vehicle Cars – are represent {See Appendix-1}

Chapter 1

1.1 What is marketing

Marketing is a communal course by which person and group acquire what they want and want during creating, offering, and liberally exchanging goods and services of worth with former. (Kotler, 1991)

1.2 Marketing concept

The marketing concept of BMW holds that the type to attaining organisational task consists of organism more victorious than competitors in integrating marketing activities toward formative and rewarding the needs and requirements of target markets.{See Appendix-2}

The marketing concepts of BMW are as follow.

• Marketing focuses on the satisfaction of customer needs, wants and requirement.
• The philosophy of marketing needs to be owned by everyone from within the organisation.
• Future needs have to be identified and anticipated.
• There is normally a focus up on profit ability, especially in the corporate sector. However, as public sector organisations and non-profit organisations adopt the concept of marketing, which might not be the case as usual.
• More recent definitions recognize the influence of marketing upon society.

1.3 Marketing process of BMW

Marketing process of BMW are as follows

• Under the marketing concept, BMW company find a way to discover unfulfilled customer needs and bring to market product that satisfy those needs. A model can be created to design the process using a targeted sequence of steps:
• The customer and market are analysed to identify opportunities.
• The market strategy is formulated to yield a value position.
• Tactical decisions regarding marketing strategy are made
• The marketing plan is implemented and the result is carefully monitored.
• The marketing course aim to distribute enlarged success in company through better marketing tactic and marketing plan increase. A better marketing progression provide a number of benefits, with more free time, higher visibility, stronger worker skills sets, easier management, reduced duplication of effort, and increased individual and team rewards, and overall, less headaches. This process in turn creates a marketing organisation that’s more reliable, more responsible, with budget.

The next paragraph will lay emphases on the advantage of BMW marketing.

1. 4 Benefits of marketing

The benefit of marketing is that it enables company to exploit their budding and achieve the punter at the correct time. A right loom to promotion involve sympathetic the client and their require identify the genuine wants of the market. It is forever vital to appreciate bazaar wants, quite than to effort to “power” persons to purchase yours goods and services because you reflect they are enhanced than something else accessible. If the purchaser doesn’t think they will not vend to them. It is as simple as that.

A good advertising approach is base on the spot on level of explore in to a market’s path and its key company. They have to spot precisely where your commerce strength fit into its souk, and how it will thrive inside it.

Chapter 2

Internal and corporate analysis in terms of strength, weaknesses, opportunities and threats (SWOT) will assist in gaining an understanding of where BMW is currently in term of strength and where improvement is required with in the business and what outside environment threats it may face as well as what new opportunities are available to the company in the short and medium term. This image of internal analysis which are as follow. {See Appendix-3}

The Table below is a demonstrate of the BMW{See Table Appendix-1}

2.3. Macro environment

The major external and uncontrollable factors that influence an organisation decision making and affect its performance and strategies are as follows.

2.3.1 Political factors

Laws and regulations had affected the automobile industry as a whole. {See Appendix-4}

These laws generally revolved around the environment norms that were to be fulfilled by any car industry. Thus the car manufacturers had to take care of the environmental issues during manufacturing of cars.

European Commission proposed binding rules to cut CO2 emission on new cars to 130 gms/km

2.3.1.1 Example

According to my research 2005 BMW achieved only 40% of their emission target but today BMW groups with its efficient dynamics programme achieved a reduction of average fuel consumption and CO2 rating by 10.2% and has made a greatest progress in terms of efficiency of all car makers in the European automobile market in the year 2008. Extracting maximum driving pleasure from every drop of fuel; is the aim of BMW Efficient dynamics.

2.3.2 Economic Factors

Economic factors relate to the exchange rates, economic growth globally and the business setting prevailing in the industry. Following are the economic factors which has affected the automobile industry.

• Economic Downturn.
• Increase in the cost of oil

2.3.2.1 Example

Rapid increase in the fuel prices is affecting the demand and the buying power of customer. According to BBC News which crude oil prices at 22 year high, motorists are paying out up to £1 a litre at the pumps. Moreover according to Automobile Association research showed that in June 2008, litre of unleaded petrol had achieved an average national price of 118.2 pence per litre, while diesel cost 131.6 pence per litre. He also claimed that the annual coast to the motorist of keeping a car worth between £13,000 and £20,000 on the road now stood at £4,112. The impact of this price hike on the drivers of the UK is 28 million cars are clear and it shows how the increase in oil price is affecting the car industry as a whole. In order to cope up with the present situation and existing demand for more fuel cars, BMW efficient dynamic programme which aims at reducing consumption is proved to be successful.

2.3.3 Social environment factors

Social factors include the changes in cultures and demographics globally a part from change in the buying pattern and capacity of the customer. Increasing population also has an effect on the car industry.

2.3.3.1 Example

According to the Mintel data, UK population will reach 64 million people by 2013. The strongest growth will be witnessed among the age group 25-34, 45-54 and over 65 age groups. Out of these two age brackets, the 25-34 age groups will be a potential key age group for the used car market where the highest proportion of demand is accounted for by younger adults. The age group 45-54 is a key age group for new and used car demand. Moreover during recession consumers spending priorities also changes and they are doing cost cutting on many areas of their expenditure. But the purchase of a new or second hand car has been one of the few areas to show an increase as a spending priority in 2009. This may increase the demand for the cars in the near future and car industry including BMW will again get a positive response from the existing and new customers.

2.3.4 Technical environment Factors

With every spin of time technology is also changing which also reflects the consumers buying patterns. Nowadays, people are more concerned with the new and latest technology. In order to cope up with the current demands, BMW efficient dynamic technology tries to stay one step ahead. BMW has launched an I Drive in its all new cars. BMW is also spending a huge amount of money on its research and development department in order to innovate latest techniques like BMW car 2-x communication in their AMULETT project with the aim of improving pedestrian safety and thus creating a more competitive image in the car market.

2.3.5 Legal Environment Factors.

Restrictions and strict pollution norms set up in European market and health and safety rules on all cars by (EURO NCAP) is affecting the whole motor industry. The European New Car Assessment Programmed (Euro NCAP) is a European car safety, performance assessment programmed. Euro NCAP publishes safety reports on new cars, and award ‘star ratings’ based on the performance of the vehicles in a variety of crash tests, including front, side and pole impact, and impact with pedestrians. The entire car manufacturing companies including BMW has to abide by these legal rules and regulations.

2..3.6 Environment Factors

With the increasing effect of awareness of global warming and greenhouse effect, people are more diverted towards the use of more eco-friendly cars, hybrid and fuel cars. With the change in consumer taste and preferences the automotive industry has to be more focussed on the changing demand and patterns of the consumers. In order to cope up with the changing behaviour of the consumer, BMW is working on managing resources efficiently and eliminating or recycling all forms of waste wherever possible and thus moving to the hybrid cars. BMW group was the first car manufacturer in the world to create a vehicle Recycling Network.

Chapter 3

3.1 Market segmentation

BMW had worn three ladders to targeting which is advertising segmentation, target option, creation position.(See Appendix-5)

BMW use segmentation to spot exact trade description. To find additional information BMW at

• Geographic segmentation.
• Demographic behavioural
• Psychographic Segmentation
• Behavioural Segmentation

3.1.1 Geographical segmentation

Geographic segmentation calls for dividing the souk into different geographical element such as nations, regions, states, countries, cities, or neighbourhoods. A business can choose to work in one or a few geographical areas, or to function in all areas but pay notice to geographical differences in requests and requirements.

3.1.1.1 Example

Let’s take a Pakistan and UK BMW market. In Pakistan most of people live in low level society they can’t effort BMW. But in UK people live in high Statius society they could effort BMW.

3.1.2 Demographics behavioural

The demographics of those who are bright to purchase a BMW are men and women aged 30-50 lifetime old. Behaviourally these folks have a winning picture in their brain facing trade cars. They also estimated to wish a faultless current look or activity look, and the sense fine factors of a recognized trader system. The benefits are required by these folks are dominance, act, dependability & excellence.

3.1.3 Psychographic Segmentation

BMW Psychographic segmentation divides buyers into different groups based on social class, existence, or character characteristics. One forward-looking grocery store found that segmenting its self-service assembles goods by lifestyle had a big repay:

3.1.4 Behavioural Segmentation

Behavioural segmentation divides buyers into groups based on their information, manner, employ, or reply to a creation. Many marketers consider that performance variables are the best starting tip for structure market segments.

3.2 Targeting

BMW have the target new customer group that are not primarily targeted by BMW yet. But are interested in the brand and have high buying potential in BMW’s products currently or in the near future. These groups include students and women, with students becoming part of the target market with the start of their careers, and women providing sales opportunities due to increasingly higher level of completed education as well as higher paid jobs compared to a decade ago.

3.3 Positioning

The position of these company and their brand has been build up over numerous lifetime but BMW has dazed their blot winning the community in an optimistic way with the help of superior community relative and pioneering publicity agitation. This has led to rolling sales expansion throughout the global car market.

Chapter 4

4.1 The Marketing Mix.

Marketing mix is the combination of marketing activities that an organisation engages in so as to best meet the needs of its targeted market. Traditionally the market mix consisted of 7’P’s.

Marketing mix can be put under seven headings, often referred to as the seven ‘P’s.

{See Appendix-6}

• Products
• Promotion
• Price
• Place
• Physical evidence
• Public
• purchase

4.1.1 Product

The generally central constituent in the selling is the company’s produce because this affords the positive desires required by patrons. For example a car that does not start in the Moring will be like by clients. Marketing manager expand their creation into brand that assist to make a single place in the brain of clients. The current models are {See Table Appendix-2}

4.1.1.1 Lifecycle of BMW

Each creation goes during what is known as a life cycle procedure. When explore what combine is best matched to the creation. We need to deem where in the life cycle sightsee goods lie which is revealed in the below shape and then depending choose if there is want to make transform in the produce and re-launch. {See Appendix-7}

4.1.1.2 Example

BMW X5 launched at 2000 and then corporation lunched the senior or new description of X5 in 2006, for 3 series its 7 years lifecycle and for 7 years only for the 1st model lifecycle of three merchandise. These are the 3, 5 and 7 Series Saloons. This PLC scheme not only helps to ensure more steady profits, but also allow for the growth of substitute produce on a steady base. BMW has also been growing its selection of late and this can be seen by the company of some new product launch in the last few years. The above goods are all moderately established. Many of them have been creature affected for many years now with some redesigns and re-launches.

4.1.2 Price.

BMW cost variety is from about £16,000 to £60,000 minus. There are many factor that can influence their car price such as mechanism size, vehicle activity account etc.

4.1.2.1 Example

Price such as mechanism dimension has been used by BMW for the 3- series is opposition leaning price. Most of the investigate show that all other competitor such as VW, Audi, and Alfa Romeo etc. in the 3 Series manufacture price sore not so vital and create the main revenue is not as required as it would be for a lesser business.{See Table Appendix-3}

4.1.3 Placement.

BMW use better market dealership and significant for non merchant network countries they have four car developed vegetation in the UK. There are additional than 156 dealers in the UK who are franchise to retail BMW cars, moreover 148 dealers are franchised to sell Minis. Universal BMW work in more than 100 dissimilar countries with about 4,000 plus dealers which are authorised to retail both new and second-hand cars, parts and after sales service goods.

Pattern of allocation for BMW is shown below in the drawing which followed by the business

Producer >>>>>Dealers>>>>>>Customers

4.1.4 Promotion

BMW has forever focused completely on their cars with same promotion business, WCRS being the worn since 1979. A broad variety of publicity is used by this organization such as TV for branding campaign and new carriage launches, the press with sensationalist weekend dye addition, regional publication and magazines, outside campaign, sales fiction, fliers etc. publicity Campaigns/Slogans used by the corporation in the past.

4.1.4.1 Example

According to my research in 1983, 1994, 1997 and 1999 when James bond used in every movies BMW car, James Bond movie “The Catcher”

4.1.5 Physical Evidence

Physical Evidence is the element of the BMW company mix which allows the customer again to create decision on the establishment.

4.1.6 Public

A necessary ingredient to BMW company condition is the use of fitting workers and people. Recruiting the right workforce and training them appropriately in the company is essential if the establishment wants to attain a form of competitive advantage.

4.1.7 Purchaser

Refers to the systems used to assist the establishment in deliver the service. An efficient service that replaces old credit cards will further customer faithfulness and poise in the company

Chapter 5

5.1. Buyer behaviour

Customer trade performance is the production of how person or domestic customers behave or the choice creation on business any merchandise or services. Customer trade activities is a significant part of promotion, which studies the reason of why, when where, what and how the customers are behave on their trade decision. customer purchaser actions depends on dissimilar types of marketing (product place, price, promotion, physical evidence, public, purchase) and other stimulus ( Economic, Technological, Political and Cultural) these factors in fluencies the customer black box to make response for creation choice about selecting goods, brand option, price etc.

Cultural, social, individual and mental these four factors have great power on customer buyer performance. Person wants, insight, values, performance erudite from culture, relations other institution. Social factor consists of a person’s orientation collection relations, friend’s organisations. Private factor is incorporated age of lifecycle, financial circumstances, vocation, qualities and other individual kind power buyer choice course. Different mental factors like inspiration, perception, attitude, conviction have pressure on customer export conclusion.

5.1.1 Example

Driving with friend A- class which in turns affects attitude towards BMW Mercedes and change behaviour in purchasing an automobile. Attitude is not constant and change over time since they are result they are experience. A car crash might change the attitude towards the brand and one might decide to exclude BMW Mercedes as an option buying a car.

Chapter 6

6.1 Marketing mix

BMW is considered with a single purpose in mind: to augment the joy of driving. BMW engineers have high priorities of providing more exhilaration, more comfort, and pretty driving safety. The target market of BMW is typically the upper middle class with the average takings of about 150,000 dollars a year. Two thirds BMW owners were male, married, and did not have children. In most recent times, the target market has had a focus on the middle aged but continues to have a wide choice of target market from ages 25-35 years old.

The BMW Group has unstated about the recent economic attitude of the United States and other countries as well. They have taken ladder to help by opening kindling and expanding to create jobs.

6.2 Consumer market

Consumer markets deal with final customer. Each customer buys the product for their direct scarification and has no other intended use for it

6.2.1 Example

The market for magazine is consumer market- the customer doesn’t resell the magazine and buys it for their own enjoyment.

6.3 Business market

Business market is an online marketplace that matches business buyers with franchisors and business opportunities {See Table Appendix-4}

6.5 Domestic market

The market for goods and services in the country where the company is based.

6.5.1 International market

International marketing is the application of marketing orientation and marketing capabilities to international. {see appendix 6.5.1} ( muhlbacher, Helmuth, Dahringer 2006)

6.5.2 Compression Domestic and International market {See Table Appendix-5}

Chapter 7

Conclusion

It has taken a lot of referencing and researching for me to write this report and I have learnt a lot from this report, I started off with very little knowledge about this topic and worked my way

Through the assignment and I would conclude that BMW is a very powerful name in the automobile industry due to its reputation of providing high quality products and services. BMW and person actor has yearly shown burly monetary results and has reserved its market shares. This become of curiosity to study more greatly, in direct to find the factor last a unbeaten concern and burly product. Scrutiny the progress of BMW through the past five years. Not only are the monetary account taken into reflection that BMW is the most flourishing vehicle producer in top sector. BMW is a well known and greatly cherished brand and has high miscellany in the merchandise range. BMW possesses high inner aptitude and the corporation develop a big part of the car by themselves. The rising market in South East Asia, Russia Eastern Europe and South America has shown obvious swelling growth. Produce, transport and raw fabric outlay have both dampened margins and affected the export power of customers like as lofty oil price.