Professional Documents
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Target Markets
The customers targeted by BMW are from upper middle class or upper class
social group who are in midst of their career and may be in the age group 30-35
years. Also their products can be affordable only by financially well-sounded
people. And on getting associated with BMW these people have a feel of pride
and prestige and also as a way to show off their wealth.
Geographics
Though BMW is a German company, it has a global manufacturing network
beyond Europe. It is significantly expanding in U.S market and the company has
setup their manufacturing operations in China and recently in Brazil and Mexico.
Apart from this, there are CKD operations in India, Egypt, Indonesia, Thailand and
Malaysia. In Russia, BMW is partnered with Avtotor in manufacturing. So in total,
the company has 30 production locations in 14 countries worldwide.
Demographics
The BMW owners are equally male and female. The average income of the
customers have slightly dropped to mid-forties. This makes BMW the favourite of
youth in the luxury car market. The so customers typically own their own home
and have at least a degree from a college. A large amount of new BMW owners
are traders and entrepreneurs who succeeded in their business. It can be
concluded that the median household for a BMW owner is around $175,000 per
annum. But this accounts for only new BMW owners, and there are individuals
who won a used BMW and the median household income will be lower in that
case because the used cars are more affordable. Regardless new or used, all these
individuals take care and pride in possessing a luxury vehicle.
Behaviour Factors
Those who are attracted to BMW as a status symbol and a way to show their
financial affluence to the society.
Those who are in seek of the performance and overall driving quality offered the
luxury cars.
Those who have strong like towards its design, the advanced features and
technology offered by such cars.
Consumers seeking the safety options offered by the BMW cars.
2.2.1 Strengths
One of the most valuable automotive brand in the world.
Revenue streams are geographically diversified.
Successful partnership in China with Brilliance Auto Group.
Perfect Engineering and great fantastic driving experience.
Competency in electric and hybrid cars.
Clear and defined strategies to meet the future trends and challenges.
2.2.2 Weaknesses
Cars recalled due to airbag concerns.
Few strategic alliances with other companies.
Increasing debt level of BMW Group.
2.2.3 Opportunities
Rise in fuel prices in the near future.
The demand for autonomous vehicles.
Weakening euro exchange rates.
The frequency and timing of new model launches.
2.2.4 Threats
Rising competition in the global automotive market.
Rise in cost due to increasing government regulations.
U.S automotive market may slow down or even decline.
2.3 Competition
BMW’s traditional and prominent rivals are Mercedes Benz and Audi.
Mercedes has never beaten BMW in the sales game. BMW has a clear
advantage over any other brands in terms of handling and performance.
Audi’s used to be really fast and luxurious but has just started to come out
with some really impressive handling cars. Apart from the traditional rivals,
the non-traditional competitors are really becoming dangerous for BMW.
The Jaguar came out with XF which really shook the 5-series segment of
BMW. Other major competitors to BMW in the global level are Alfa-Romeo
and Cadillac.
Cars:
1. Sedans and Station Wagons – 1 Series, 3 Series, 5 Series & 7 Series.
2. Coupes and Convertibles – 2 Series, 4 Series & 6 Series
3. Each of the series has its own SUV model and they are – X1, X2, X3, X4, X5
& X6.
4. Some of the series offer Grand Tour (GT) Crossovers and they are – 3
Series GT, 4 Series GT, 5 Series GT & 6 Series GT.
5. M Range (High-performance cars offered under different series) – M3
Sedan, M4 Coupe, M5 sedan, X5 M, X6 M.
6. Electric/ Hybrid Range – i3 hatchback, i8 Sports Sedan
Motorbikes:
Following are the motorbikes offered by BMW under different segments.
1. Sport – S 1000 RR, R 1200 RS
2. Roadster – G 310 R, R 1200 R, S 1000 R
3. Heritage – R nineT Racer, R nineT, R nineT Scrambler
4. Adventure – G 310 GS, R 1200 GS Adventure, R 1200 GS, S 1000 XR
5. Tour – K 1600 B, K 1600 GTL, R 1200 RT
3.1 Mission
The BMW’s mission statement is “The BMW Group is the world’s leading
provider of premium products and premium services for individual
mobility”. The BMW brand itself stands for the “Sheer driving pleasure” and
thus concentrates on sporting and dynamic performance combined with
excellent design and exclusive quality.
3.5 Positioning
The BMW have a mono-segment type of positioning and the company
makes an appeal to the single customer segment. Or in other terms, the
BMW’s product portfolio only comprises of vehicles at premium level which
are expensive. And the company does not have any budget vehicles in its
product range to target consumers with smaller budget.
3.6 Strategies
BMW’s major strategy will be concentrating on the customer-client intimacy
and offering best-in-class features at competitive pricing.
After evaluating the competition from all fronts, BMW has pursued three
major strategic objectives.
1. Increased Product Variety, where each customer can have a unique car.
2. More frequent product releases.
3. Quality improvement of newly launched products.
3.7 Marketing Program
Pricing
BMW will offer attractive, value-based and affordable pricing.
Distribution
The distribution will aim at setting up dealerships and locations at
easily accessible areas by the clients.
Promotion
The promotion activities will be based on personal selling for affluent
clients, experience based, where customers will be given facilities to
drive and test different products, word-of-mouth. Also, the internet
and social media will be highly leveraged.
Product/Service
BMW’s key product features will be the Luxury segment, High quality
products, Excellent brand pull and Good service.
Customer/Client
BMW will ensure to follow responsiveness, integrity and mutual
cooperation and respect in client relationship with focus on developing
a long term and rewarding relationship with its clients thus assuring
their loyalty towards the BMW brands.
4.0 Financials
BMW estimates that its profit before tax in 2018 will be at least equal to
10.65 billion euros ($13.1 billion). Also a high upfront of investments will be
made in the years 2018-2020. This will include investment in model
offensive, the locations worldwide and in future technologies, such as
electrification and autonomous driving. All these factors will affect the
earning momentum of BMW in the coming years.
5.0 Controls
BMW will be very closely monitoring the following areas.
Revenue
Expenses
Client/Consumer feedback
New clients acquired
Research and Development of new products
Client retention rate
5.1 Implementation
BMW’s plan implementation will be based on a detailed activity-wise
execution schedule, specifying key activities, deadlines for completion,
responsibility and budget appropriately, wherever required.
Worst-Case Risks
Split in the top management or board of directors due in
difference in interest or opinion.
Actions can be taken by the banks due to high debt liability.
Change in market trend from performance luxury vehicles to
comfort luxury vehicles, resulting in a mega trend, thus leading to fall
in global sales of BMW.