The Global Business Strategy Of Bmw Group Marketing Essay
|✅ Paper Type: Free Essay||✅ Subject: Marketing|
|✅ Wordcount: 3205 words||✅ Published: 1st Jan 2015|
The motor industry always is the most famous industry in the worldwide, because the development of global economy increasingly lead to human cannot live without cars. As a result, the demand of the market brings more intense competition in the industry.
Meanwhile, the Bayerische Motoren Werke Aktiengesellschaft (BMW AG) is a renowned motorcar and motorcycle company in the world. The major products positioning of BMW is premium segments of cars in the global motor market. Its main competitor is Daimler Motor Company with the famous brand called Mercedes-Benz which also concentrates on the same market segment.
The overview of BMW Group
The origin of BMW Group
Bayerische Motoren Werke Aktiengesellschaft (BMW) is a German motorcar, motorcycle and engine manufacturer which was founded in 1917 by the first chairman Franz Josef Popp. It is headquartered in Munich, Germany. BMW’s history can trace its roots back to 1916. Gustav Otto established the Bayerische Flugzeug-Werke AG (BFW) which was the Predecessor of BMW in 1916. In 1917, BFW renamed to BMW and also converted into a public limited company (AG) in next year 1918. During the First World War, as a quartermaster supply manufacturer, BMW established a large factory, which near the military airport in the outskirts of Munich. It continued to manufacture military aircraft engines for the military until 1918. In 1922, BMW merged BFW and became the BMW AG which we are familiar with today. However, when people trace the history of the company, the company’s official statement is based on the founding data of BFW factory 7, March, 1916, as the birthday of BMW.
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In the start-up phase, BMW has focused on the development and production of aircraft engines. BMW’s blue and white flag is a symbol of the rotation of the propeller, the portrayal of this is the company’s early history. In 1923, the advent of the first BMW motorcycle has been produced by the company. Five years later, in 1928, BMW acquired the Eisenach car factory began producing cars. After integration of resources, BMW AG launched the first car which named Dixi 3/15. At the same time, BMW started its own legendary in the automotive industry and created several masterpieces in the history of its car manufacturers which appeared to the market. These products continue to inspire strong feelings and people’s desire to create an excellence reputation of BMW AG as a car manufacturer. From 1916 to 2013 by the first day of an aircraft engine manufacturer developed into a company of premium motorcar and motorcycle-oriented, that BMW was ranked the top twenty motor company of the world. Its process of development is similar to Japanese Daihatsu Motor Company.
The current status of the BMW Group
Nowadays, BMW Group not only produce its own brand BMW’s motor car, but also owns and produces the brand of MINI and owns a subsidiary which named Rolls-Royce Motor Cars. In the aspect of motorcycle production, there is a motorcycle brand is now known as BMW Motorrad which continue to produce the High performance motorcycle for BMW group. What is more, it also provides financial services, include the relationship of customer and supply chain management.
BMW has always been based on a premium brand which is the foundation of business success. There are three brands in BMW Group including BMW, MINI and Rolls-Royce. These brands aim at the premium market in each segment from small cars to top luxury sedans. BMW Group has become the only manufacturer which focuses on high-end cars and motorcycles in the world.
In present, BMW Group which has 24 production facilities and assembly plants in 14 countries and its business network across 120 countries around the world. Meanwhile, there are 12 Research and Development (R&D) plants in 5 countries around the world by BMW. On the one hand, there are several series under the brand of BMW, such as 1, 3, 5, 7, Z and M series. It also has productions of MINI and Rolls-Royce. On the other hand, there are having C, F and R Series under the BMW Motorrad in terms of motorcycle production. Currently, BMW AG continues to thrive, but not without setbacks.
BMW AG has always been known for its emphasis on technological innovation and continues to set new standards for high-performance luxury car. At the same time, BMW Group company attaches great importance to the safety and environmental issues. The company has earned a reputation for its performance of active safety and passive safety; include Fully Integrated Road Safety Technology (F.I.R.S.T.).
The global business strategy of BMW Group
Mercedes-Benz’s success factors are based on its history and accumulation of experience. Audi’s success is because the classic brand revival. Compare with other brands, the brand strategy is the key point to the success of BMW. BMW gives a special significance for its own brand through the implementation of brand strategy.
Unlike Mercedes-Benz has a long history, BMW been originally a manufacture aircraft engine for the German air force. In the 1960s, it was the smallest car company in Germany. BMW rose in the world since the 1980s. But at that time, Mercedes-Benz as the market leader of the traditional premium luxury motorcar stick to the luxury car market in the world with the accumulation of traditional brand image and market advantages, which pose some significant obstacles to the market penetration of BMW luxury car series. Deeply influenced by the high technology of German, the manufactured technology of BMW can also compete with Mercedes-Benz. But, more efforts need to be spared to its value and brands compared with Benz. There are some negative effects to BMW’s brand. At that time, forming a good brand image is a big challenge for BMW.
The global marketing strategies of BMW Group
The BMW Group is committed to produce the outstanding and distinctive products. It also tries to gain the maximum market share in the luxury car market around the world. Through unremitting efforts for years, BMW Group has created an excellent international brand image in the world. However, the creation of a well-known brand image of the world does not mean that it can be marketed in some particular market successfully. In order to satisfy the different requirements of the different local markets, BMW Group decided to adopt a centralized and unified brand strategy which be carried out by different country. It is the marketing strategy system which called global branding and localised marketing. The following are the different marketing strategies taken by BMW Group in three major markets, including European, American and Asian markets.
Localised marketing in the European market
BMW AG is an export-oriented motor company in German. There are 70% of its production is exported. The orders of exports mainly concentrated in the highly industrialized countries, such as the European Union countries, Japan and the United States. 1st January, 1993 is the date which marked the formation of European market integration. After that, most of car manufacturers have adjusted their sales network of the European Economic Community (EEC) market.
On the surface, the description of the company’s customer structure information seems to indicate that the company’s target groups are similar. Those customers who choose BMW are basically with higher education. They are either in high positions or free professional. Both of them are the high-income people. However, these things are not as simple as this situation. Although the existing target markets of BMW Group concentrated in the industrialized countries, there also are a number of European countries with relatively developed agriculture industry in its target market. In these countries, people’s lifestyles are different with the disparity of living standards. In terms of gross domestic product (GDP) per capita, the difference between the rich and poor regions is more than five times. Thus, there is no same preferences and purchasing power of consumers in Europe. The Management Act of EEC integration came into effect on 1st January, 1993, but the personality characteristics of the people will not be erased, it also will not let the different nationalities eliminate the difference in spirit. In view of this, BMW Group should implement the marketing strategy which can be adapted to the local market.
The demand of European customers
The first step in the formation of the marketing strategy is Conducting market research. Market research task is to determine the ideal positioning of BMW in Europe. The ultimate aim of the in-depth study of the differences between the different countries is to identify the language issues and acceptable brand features from these countries by organizing a series of group discussions. Finally, BMW Group found out that some important situation would not be understood without these problems happened. For instance, some purchasers who are from Dutch and Italy expect cars have its own special factors, but they hold totally different opinions about those factors.
There are several requirements all over the Europe when customers consider to purchase a car, such as reliability, safety, quality and advanced technology. BMW Group refer to these requirements as the basic requirements of company. On the one hand, in the initial stages of the purchase decision, those motorcar products that be deemed to inconformity with above requirements will be eliminated from the list of purchasers option. On the other hand, it is considered to be an excellent car if comply with above requirements in all European countries.
After the above-mentioned basic research, the next step is to choose the type of car for the special requirements of the country, also the country’s climatic conditions should be considered together. In the Netherlands, the attractiveness of the car depends on the quality of its internal, such as excellent internal configuration. In contrast, due to the concept of Austrian Drivers are stronger than any other country, Austrians prefer to drive a car which can show their self-confidence. In Italy, people hope that the vehicles are able to comply with the personal style of the driver. Italian have high requirements for their cars which including its design, aesthetics standard and the engine performance. Therefore it can shows that the Italians’ car pursuit are totally different from other countries. In view of the basic requirements is coincident when people purchasing a car in all European countries. Take some European countries for example, if a car be approved is excellent by French, it also have same opinion from Austrian and Dutch. Obviously, there is just a little difference that is the specific expectations of the car due to the different point of view from different countries. Therefore, BMW Group believe that it is a problem of communication ultimately if the motor products to be successfully marketed in many European countries.
BMW Group deeply know that it need to pay more attention to the customers rather than the vehicles. Even though these customers might have some common view of the motorcar in terms of the same nation. But for individually, every customer wants to show their personal style is totally different. It is in this sense, these people are constituted the target audiences in the market segment of BMW who are from different countries and hold the similar requirements. The scale and characteristics of the various types of customers have been mastered by BMW Group. Also, on the core target market of the BMW’s brand which can be determined according to the blueprint of enterprise strategy. BMW Group are most interested in different types of its products could be sold in some particular countries. On the one hand, there are some types of motorcar and motorcycle enthusiasts has a large proportion in each country, such as it has a large proportion of the sporty performance car drivers and normal car lovers in Italy, France, the Netherlands and Austria. Thus, the strategy of global branding have the direct attractiveness for above two types of enthusiasts. On the other hand, according to the composition of different motorists from different countries. There are many motorists who come from different countries support a certain conception in the different thought. Such as there about seventy percent of traditional drivers in France currently, but only ten percent in Italy in this situation. Obviously, the important thing is the marketing strategy which called localised marketing.
The research by BMW Group found out that the drivers of BMW’s products are always have several same requirements, including the superior design, excellent driving performance, modern technology and unique personality. These BMW’s drivers from different countries have views in common that is the original idea for BMW Group’s global strategy.
Application of the results of market research in Europe
The result of market research provide a strong basis for the marketing strategy which called global branding and localised marketing. In addition, BMW Group Company could find the best strategic direction through the organic combination of positioning criteria. The positioning principles and the research result are essential when BMW use a modern way to rebuild its international positioning. The previous method was unilateral consider the characteristics of technical capability and the advancement. The new method is extend to embrace some personal characteristics such as emotional factors, aesthetic value, sophisticated ideas and distinctive personality. It is broke through the emphasis on technology and sporty style, as the BMW traditional image. Thereby it is greatly increasing the pathway of expansion its brand.
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The formation and implementation of BMW’s new brand strategy is built on the basis of the scientific market research. The results of market research provide a solid foundation for the relationships between the brand and products, brand and communication as well as products and environment. Meanwhile, it also solve the marketing problems between the BMW Group’s headquarter and local branch companies. Thus, the strategy of global branding and localised marketing as a best method which can improve the strategic position of the brand and strengthen the company’s competitiveness greatly. In addition to the European market, BMW Group has achieved considerable success in which this method is used in North American market and Japanese market.
To gain the US market by innovation advertising
The progress of BMW Group was not smooth when it enter the American market. Early as 1974 years ago, the first BMW branch company has been established in the United States. But its popularity has been low, even many local consumers mistakenly believe that BMW is the product of the United Kingdom at that moment. However, during 1974 to 1978, BMW cars has become the famous brand cars which could represent the customers’ identity and social status through its smart advertising campaign in United States. In the late 1980s, United States appeared a new marketing environment of low-price revolution, at the same time the Japanese premium motorcar brand was began to seize the American market share with BMW. BMW maintained and enhanced its brand position through its advertising strategy. Therefore, the advertising of BMW is smart method in the marketing warfare of expansion international emerging market.
Advertising positioning: from comfortable to driving
In 1974, in order to expand the potential market of BMW cars in the United States, BMW Company has invested heavily in United States to establish their own sales channels, and carried out a large number of advertising campaigns simultaneously. In the same year, Ammirati Puris Lintas advertising company won the contracts worth of nine hundred thousand States dollars when it participated in the BMW advertising bidding. At that time, there are a large number of competitors in the North American motor market, such as Cadillac b brand car with the sales of over one millions, 90000 vehicles sales of the Lincoln Motor Company as well as Mercedes-Benz with sales of 40000 vehicles. If BMW want to be successful in the North American market, it must seize the market share from these competitors.
In order to test the brand image of BMW in the minds of consumers, Ammirati Puris Lintas advertising company conducted a survey in the western United States. It is a picture shows that a BMW car was parked with a Cadillac car and a Lincoln car together by Ammirati Puris Lintas to test the people reaction in the survey. The survey results shows that almost all of them had no favourable impression for the brand of BMW because their own car have some advanced equipment which does not provide in BMW’s cars, such as power windows, leather seat and chrome-plated body. Due to BMW did not have a successful strategy of brand promotion, the excellent driving performance and elaborate interior design of BMW didn’t attract the attention of people.
Faced with above situation, the Ammirati Puris Lintas is decided that positioned the target market for the post-war new young generation.
Compared with those old people who got used to buy Cadillac, the new generation desire a new brand to show their values. The values are including their personality, pursuits and preferences. BMW’s excellent driving performance and elaborate interior design coincided with the consumer psychology of the post-war new generation, who have the enthusiasm and pursuit of stimulate. Therefore, BMW competed with other motorcar companies through taken the advantages of its driving performance rather than simply in the power windows, leather seats and chrome car body in the new market.
Tagline “The Ultimate Driving Machine.”
In 1970s, BMW of North America start used the tagline “The Ultimate Driving Machine” which created by Ammirati Puris Lintas advertising agency company. This tagline shows that being a real premium car must have excellent driving performance and also emphasizes the unique selling point of BMW. The advertising theme and positioning achieved great success because the tagline highlights the differences and advantages of the BMW and attracted the new generation with the extremely vitality.
English essay: http://www.ukessays.com/essays/marketing/company-overview-and-market-analysis-of-bmw-marketing-essay.php
Ammirati Puris Avrutick Inc.: http://adage.com/article/adage-encyclopedia/ammirati-puris-lintas/98315/
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