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BMW Marketing strategy

By
Sanmith Shetty

BMW (Bayerische Motoren Werke)


Bayerische Motoren Werke AG (BMW), (English:

Bavarian Motor Works) is a German automobile, motorcycle and engine manufacturing company .

BMW was originally founded in 1916, by Franz Josef Popp.


Its current tagline has changed from The Ultimate Driving machine to Sheer Driving Pleasure &BMW- Joy of Driving

BMW

BMW history
In 1913 in Munich,Germany,Karl Friedrich Rapp established the Rapp-motorenwerke. to manufacture Aircraft Engines.

In 1916
During First World War Company secured contract to manufacture aircraft for Austria-Hungarian army.

In 1917
In 1917 Rapp needed additional financing to complete this contract . The partnership with Camillo Castiglioni. The new partnership company named as Bayerische Motoren Werke Gmbh The company soon get into difficulty due to over expansion. Sell it to Australian industrialist,Franz joseph Popp,in 1917

In 1918
Bayersche Motoren Werke manufactured its first aircraft engine. It reached upto an altitude of 5000 metres in 29 minutes, creating a world record.

In 1919
Treaty of versailles banned Germany from producing Aircraft. The company shift to manufacture Railway brakes.

In 1922
1922, Bayerische flugzeugwerke AG. Manufacturer of small aircraft merged with BMW to form BMW AG.

In 1923
BMW started manufacturing Motorcycle R32500 cc Bike designed by Max Friz. Company started producing car in late 1920s.

From late 1920s to 1950s


In 1928-BMW setup a car manufacturing unit in Eisenach region of Germany. There they manufacture DIXI cars and sold under their name. By early 1930 they started designing their own cars. And introduced many successful carrs like 327 saloon and 328 roadster

Saloon 327 & Roadster 328

Cont
During second world war BMW again concentrated on manufacturing of aircraft engines and motorcycles for German army At the end of war they were heavily bombed . During 1950s BMW tried to enter in premium segment market but failed.

Late 1950s to 1990s


In1959 launched BMW 700 of sporty exterior which was the main selling point. They launched other models based on BMW 700 and won many competitions.

Cont
In1961 BMW launched another successful model BMW 1500 With powerful sporty sedan with its front disk brake and four wheel independent.

Cont
In 1970 BMW moved its headquater to Munich. The building looks like the four cylinder of cars.

Cont
From 1970s to 1990 they focussed on exports markets. Like US ,south Africa, Australia, Asia, Japan, Austria and Bavaria. In1992 BMW outsold the Mercedes for the first time in europe. company became the first european car maket to operate in US market.

Cont
In1994 BMW attempt to enter in mass market by bringing British Car m/c MG Rover. The purchase gave the company ownership of many successful brands like Mini, Land Rover, and Triumph etc. But some of the models were clashing with the BMWs model

From 2000 to 2005


In 2000 BMW sold the MG Rover to Phoneix consortium for a nominal 10. Mini and Triumph Hold by the BMW and Land Rover and Range Rover sold to Ford. In Early 2000 BMW launched its 1-series and 6-series. For launching this car model company faced many criticism.

1-Series & 6-Series

Cont
In 2004 company added three 3 car brandsBMW, Mini, and Rolls Royce In 24 cities,12 Countries on 4 different continents. Company employed 70,000 people Customer deliveries increases from 1.2 millions unit. Revenue in 2004=US $ 60.47 billions Profit=US $ 3.03 billions.

Rolls Royace & Mini

Operation Strategy Model

The Mass Customization


What is Mass Customization ??
Meeting particular customers need on a large scale. Basically combining the concepts of mass production with customization.

Contd..
Drivers of the Idea :
One of the criticisms against B.M.W. Was that most of its cars looked alike. As a maker of luxury cars it had to deliver value to its customers. In older system customer had to do away with whatever limited options they had. Total customer satisfaction became the new buzzword.

Impact on Operations strategy


As a result of customization program there was a stocking more in showrooms. COSP Customer oriented sales and production. Production process was defined by the car ordered by the customer. This was supplemented by the online ordering system launched by the company.

Some interesting facts


There were 1032 options available within the B.M.W. product range. The B.M.W. & series alone offered 1017 variations. The B.M.W. X-5 sports utility vehicle had 1000 bumper variations, 4000 instrument panel choices.

The Insiders
Advance planning was the key reason for the excellent management for BMWs supply chain management. B.M.W. had a very efficient ERP solutions provided by SAP. It connected the supply chain management very well. Once the data entered it reached automatically to the production areas.

BMW India
BMW officially entered the Indian market in 2005, headquartered in Gurgaon & a manufacturing unit in Chennai. Within two years of entering the Indian passenger car market in 2007, BMW toppled rival Mercedes-Benz to become the numero uno luxury car maker of the country. In 2010, the company recorded a 73 per cent growth in sales volume, maintaining its leadership position in the category.

Marketing strategy in India


Instead of having a huge advertising spend, BMW has developed more touch points where people can have a personal connect with the brand. For example, if you walk into a BMW dealership today, you will see that the place is sophisticated and you will be treated in a certain way.

Marketing strategy in India


Innovative marketing activities that have built BMW brand in India that have helped it to get close to the customer are like:
professional golf tournaments wine tasting sessions events with fashion designers

BMW have also spent a lot of time creating a unique spirit within the company which have emotionally connected people within the organisation has made a huge contribution to its success.

Marketing strategy in India


In 2010, BMW launched its financing arm in India to service the credit needs of retail customers, fleet owners and dealers. India is a strong financing market and 80 per cent of the cars that we sell are financed. The financing option plays a very crucial part in the buying process further helping in increased customer satisfaction & relationship leading to improved bran experience.

Marketing strategy in India


BMW does not have company owned dealerships, but retail partners. BMW states that- it is wrong to assume that a company that is very strong in design and manufacturing of premium cars should also be the best in selling those cars. Selling a premium car requires a good network. Hence, the fundamental belief at BMW is to leave the selling to the retail people who have a local connect. BMW call them the local heroes.

Marketing strategy in India


BMW has one-global-brand-approach and that is their strength. Every localisation would weaken this fundamental positioning of the brand. Therefore they follow the one-global-brand-approach. But, these are minor changes to guarantee that products are running without any fault. For e.g.: BMW has minor adaptations for the Indian road and weather conditions. These include- a higher suspension as ground clearance in India is low, and different intake filters as the air in the country is more polluted.

Marketing strategy in India


BMW believes that when you enter a new market, the business does not start with entry models. Therefore, as per their experience they built a premium image for the brand through the high-end models, in the Indian market which has a relatively small target group. Henceforth in an effort to bring a new set of consumers on board, luxury car maker BMW recently launched its least expensive name-plate -- the BMW X1, which they consider an important part of their product strategy & a perfect car for the Indian market since it is SUV (sport utility vehicle) style - has the ground clearance. Leading to building an brand image in this segment of car buyers & capturing a larger market share.

Marketing strategy in India


BMW to increase its brand equity by entering the used car market. As per BMW the used-car business does not dilute your brand; it tends to do the opposite. BMW is to run the used-car business in a professional way, as in turn it will help increase value for its customer as the resale value goes up. It will allow a new set of people to experience the brand for the first time, and eventually they might buy a new car. BMW are developing premium-used car operation centres, where cars will be sold out of the dealerships. These will not be sold out of the parking lot or the basement, but out of a 100-per cent dedicated floor in the showroom. It will have a great atmosphere - with the same standard as a new car dealership.

Marketing strategy in India


BMWs essence has been, is and will always be driving pleasure An unwritten law at BMW is that everyone who comes to work at the company has to love driving and has to know that driving pleasure is what the company is all about. Everyone in engineering, development, purchasing, controlling and manufacturing has to be focused on driving performance. The BMW identity is tied to the experience of driving the machine. Details like the feeling of the steering wheel, instrument panel lighting, the suspension and reaction of the engine ensure each BMW feels the same as the last. BMW believes strongly in the importance of product consistency.