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The marketing concept at BMW.

Extracts from this essay...

Introduction

Company Profile BMW (Bayerische Motoren Werke Aktiengesellschaft) was founded in 1916 and has been publicly traded since 1969. The company produces, and markets, a varied range of higher end sporty cars and motorcycles. BMW has also manufactured the first passenger car running on hydrogen ready for common use, although the production figures are limited by the lack of a respective filling station net. In addition to cars and motorcycles, BMW operates an aircraft engine division under the brand name of Rolls Royce. The company has worldwide subsidiaries and manufacturing plants in Germany, Austria, the UK, the USA, Mexico, Brazil, South Africa, Egypt, Thailand, Malaysia, Indonesia, the Philippines and Vietnam. The company also operates its own financing company, which offers financing for vehicles. Automobiles accounted for 78% of 2003 revenues; vehicle finance leasing 18%; motorcycles 3% and other 1%. Introduction The marketing concept is a management plan that views all marketing components as part of a total system that requires effective planning, organization, leadership and control. It is based on the importance of customers to a firm, and states that: All company policies and activities should be aimed at satisfying customer needs. One could hypothesis that in order to conduct successful marketing program organizations must be able to answer the following questions: 1. What type of business is BMW in (manufacturing, merchandising or service)? 2. What is the nature of its product(s) or service(s)? 3. What market segments do BMW intend to serve? (Describe the age, sex, income level and life-style characteristics of each market segment.) 4. What strategies does BMW use to attract and keep customers? * Product * Price * Place * Promotion 5. What is BMW's unique selling proposition (USP)? 6. Who are BMW's competition, and what they do to control their share of the market? This report would answer all the questions mentioned above in the context of BMW's marketing policy.

Middle

It is clear from the time scale chart above, that BMW has staggered the lifecycles of three products. These are the 3, 5, and 7 Series saloons. This staggering not only helps to ensure a more constant income, but also allows for the development of replacement products, such as the imminent replacement of the 7 Series. BMW has also been expanding its portfolio recently and this can be seen by the presence of some new product launches in the last few years. The Mini being the most recent, and the Mini Cooper convertible still to be launched. In order to classify BMWs products, an analysis of the portfolio is needed. The first formulated, and most simple is the Boston Consulting Group Growth-Share Matrix. The Boston Matrix shown over the page consists of four quadrants derived from Market Growth rate and Market Share. BMW has a fairly settled portfolio of products. Each product is more a family of slightly different models, varying by specification. The BMW 3 Series is placed within a very crowded sector of the automobile industry; the 'Luxury small saloon'. The 5 and 7 Series are larger and more expensive saloons than the 3 series, and are placed within slightly less volatile sectors of the market. The 3 Series is positioned just below the Star, in the Cash Cow quadrant in the matrix. The current 3 Series model is a market leader in a mature market sector. Its high market share leads to a high cash flow rate, and its position in a mature market means that investment supports in areas such a product and process development is low. The 5 series too, is comfortably positioned as a Cash Cow. It is a mature product, placed and sold in a less volatile market than the 3 series. This means that the 3 and 5 series family of products have extremely high profitability, due to their high level of sales, and the low level of expenditure needed to maintain the sales levels.

Conclusion

As the adverts tell us all, a BMW is 'The Ultimate Driving Machine'. The Mini is also a brand. The Mini brand is built on personality, eccentricity, and being British. BMW cannot just re-badge, re-engineer and re-sell the brand as the 'BMW Mini'. The very appeal of the Mini brand would be lost. Conclusions The BMW Group is a broad scope of investigation, its widespread distribution of production plants and the supreme after service besides the one-up technology, the future for BMW Group is very optimistic. As a car producer, the BMW Group has to be ware and be wise to the current situation of car market. At recent day, cars are becoming one of the most primary transports in the society; this condition indicates that the car market will become more furious. As long as the prevalence of private cars, car sales are increasing sharply, this could be good or be bad for the BMW Group. The BMW Group can gain more profit from the increasing sales if it produces its cars with high quality and good service constantly, people will be loyal to the BMW and wish to purchase its cars even though there is various different brand cars can be chosen. A good reputation is the principle of business. Otherwise, if the BMW Group fails to be high quality of its cars but produce overfull cars, it may harm its prestige and affect its stock control. Moreover, the BMW cars are considered as the high-class cars, most products are applied to rich people but not the poor people. If it can produce some normal car that can apply to the middle-class people, its market share can be expanded. On the other hand, its accessories and hardware of cars are expensive for maintenance, which can reduce the desire of people purchasing its cars. In conclusion, the BMW Group has an efficient management and high standard production; its future depends on the external environment and internal activities. The potential opportunities are not just from outside environment but also the internal factors. 1 www.bmweducation.co.uk/statistics 2 see fig1 3 www.bmweduction.co.uk/companyfacts/competitors/fact1.shtm 4 www.bmw.co.uk/models 5 www.bmweducation.co.uk/companyfacts/fact13.shtm

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