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marketing strategies of BMW and Mercedes-Benz .

Extracts from this document...

Introduction

Introduction Project Brief This report is to analyse and compare the marketing strategies of BMW and Mercedes-Benz . Both companies are renowned market leaders in supplying automobiles. The pair have a history of providing innovative cars for the past century. Over the years with the improvement of technology BMW and Mercedes-Benz have met customer needs by producing the most inspiring and well developed cars of their times. The BMW Group concentrates on selected premium segments in the automobile market. This means that they specialise in providing a high quality product and in return they can achieve higher revenues per vehicle sold. In contrast Mercedes-Benz which also provide to the premium segment of the market have concreted their name in history as manufacturers of luxury cars, have opened their doors to a range of more dynamic models targeting the slightly younger market. This study aims to examine the marketing strategies of these two individual companies who both aim to deliver a similar yet unique product. Brief Overview BMW On 21st July 1917, Rapp-Motorenwerke is renamed Bayerische Motoren Werke, (BMW) GmbH. Due to the ongoing war the company at the time the company grew quickly. With further expansion in mind, BMW decide to build a new plant next to the Oberwiesenfeld airfield in Munich, concentrating at the time on building aircraft engines for army planes until 1918. After the War BMW struggles to stay independent and is saved by nimble, BMW 700. it carries an engine of a motorbike and was given the name 'lion- hearted weasel'. It becomes extremely popular amongst the car buying public. After 1923 the new era of car development and engages with new products and fresh ideas. However success being short lived by BMW due to the Second World War after which a three year ban was imposed any production activities. BMW struggling to get a 'foothold' in the market later released the Isetta 250, a recognised success in the mini car era of the mid 1950's. ...read more.

Middle

MERCEDES: In comparison to the BMW 3 Series the Mercedes C Class is also known as a small luxury saloon presenting elegance. It is also positioned just below the Star, in the Cash Cow quadrant in the matrix. However the C Class is not a market leader anymore due to the fact that it had to change the image of the C Class. C Class had to change its image due to change in consumers demands to a smaller, loving and energetic car. The Mercedes E Class is also a Cash Cow and a mature product just like the BMW 5 Series. The E representing Elegance is certainly doing the job by producing a high level of sales. The ultimate however has to be the S Class. A car that represents pure luxury, comfort, elegance, performance and class. The S Class is a 'Star' and a market leader. MARKET SEGMENTATION AND TARGETING Both BMW and Mercedes-Benz, with their premium vehicles and luxury brands, target wealthy consumers. However, since both brands have a well thought-out marketing mix, the wealthy consumers can be further divided into more specific groups. The first group includes those people who buy an automobile simply for the aesthetic, as opposed to the practical, value. For example, most buyers of the BMW M5 series sports cars do not purchase the car simply because it is powerful; they are also concerned with the overall design of the car. These are people who usually do not have children, or are single. They are usually middle-aged, as opposed to being in their early twenties or late fifties, or older. The second group includes those who want practicality in their vehicles, but also want luxury and comfort. These are people who usually have families that include children, and are therefore just as concerned with safety and reliability as with the look of the car. These people usually purchase the luxury sedans or station wagons. ...read more.

Conclusion

(138th) Mercedes M-Class (139th) Peugeot 307 (140th) Renault Laguna (141st) Renault Espace (142nd) Would you buy this car again? Top 10 who said 'Yes, I'd buy this car again!' Jaguar XJ (100%) Honda S2000 (99%) Subaru Forester (99%) Honda Jazz (98%) Skoda Fabia (98%) Skoda Octavia (97%) Seat Toledo (97%) Honda CR-V (96%) BMW 5-Series (96%) BMW Z3 (96%) Taken from www.bbc.co.uk/topgear website under the car survey link Another area which both companies may want to look is the cost of maintaining their cars. Many customers that can afford to buy a BMW or Mercedes-Benz, be it brand new or second hand, may not necessarily be able to afford to maintain the car. The labour charge that is incurred by both these companies is around the �90 per hour, which is about three times more than if you were to go to a private mechanic. The labour charge does not include parts which are added on top. Some parts have to be specially ordered from Germany as authorised dealers do not carry all the parts, this means that the customer will have to wait until the part is shipped over to have their vehicle repaired. Therefore both companies may want to look at maybe reducing their labour charges, as this may attract less wealthy customers to the range. In the Topgear survey (shown above), the Mercedes-Benz M-class may have done so poorly in the reliability section because it did not have a proper target audience, it was not targeted at the wealthy customers nor the poorer customers, and therefore the wealthier customer may have expected more from the car than it delivered, and the poorer customers may not have been able to afford to maintain the car as Mercedes-Benz cars ought to be maintained. The two companies should also look into carrying all the parts, even if its one or two of the less 'popular' parts that are required, this would mean that customers would have their vehicles repaired back to them sooner. ...read more.

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