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
  1. What is BMW’s unique selling proposition (USP)?
  2. 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. Followed by the conclusion on whether the organization practices the marketing concept.


Discussion

“The marketing concept is essential because ultimately the judge of a company’s performance is the customer. Customers decide whether you have satisfied their needs. If you are not meeting those needs, you are operating in a vacuum (a Toyota manager, Japan)”.

“The marketing concept is an excellent idea. Our focus has to be directed toward customer satisfaction, and by customer I mean persons internal and external to the company. If we do not believe in doing this, we should get out of business. It's the reason we exist (a BMW manager, Germany)”.

As suggested by the quotations, managers in different parts of the world value highly the marketing concept. This principle - the organizational focus on understanding and satisfying customer needs in a superior fashion - was advanced as far back as half a century ago as a “guiding philosophy for modern marketing thought and practice” (Barksdale and Darden, 1971, p. 30; Drucker, 1954; Viebranz, 1967).

More recently, the marketing concept and its effect, market orientation, have been broadened to encompass a concern not only with customers but also with competitors and the larger environment in which firms operate. Other dimensions have also been identified, including profitability as a goal and the need for inter-functional coordination (Day, 1994; Kimery and Rinehart, 1998; Kohli and Jaworski, 1993). When applied, this expanded marketing concept is said to lead to superior organizational performance. A growing stream of empirical work supports this view, linking use of the marketing concept with enhanced sales, profits, new product success, product quality, customer satisfaction, and overall business performance (Baker et al., 1999; Caruana et al., 1999; Jaworski and Kohli, 1993; Lichtenthal and Wilson, 1992; Ruekert, 1992).

In order to form an opinion, if BMW practices all the facets of marketing concept one might glimpse on BMW’s core marketing values to begin with. According to Kotler (2003), core values are belief systems that underlie consumer attitudes and behaviors and determine people’s choices and desires over long term. One could argue that the majority of BMW’s success is attributed to the development of a consistent marketing policy, and the ‘market niche’ strategy.

The company has built its brand on four core values, which are:

  • Technology
  • Quality
  • Performance
  • Exclusivity

BMW has maintained these core values since the company’s inception. In addition to the message of these values being portrayed in advertising campaigns, the company explicitly expresses one or more of these values in all BMW advertisements.  However, it is important to point out that BMW also relies on it’s sensitively to the environment, which is clearly seen by how the company’s advertisements evolved in response to economic, environmental and competitive changes.

BMW Targeting

A target market is the  which a particular product is  to. It is often defined by age, gender and/or socio-economic grouping. Targeting strategy is the selection of the customers you wish to service. The decisions involved in targeting strategy include:

  • how many segments to target
  • which segments to target
  • how many products to offer
  • which products to offer in which segments

Targeting can be selective (eg.: , market specialization strategy or ), or extensive (eg.: full coverage, mass marketing, or product specialization).

BMW use a differentiated strategy, this means that they target specific automobile markets. These markets suit different people within the segmentation stratosphere.

The markets that BMW actually target are Sports Convertibles (Z3, 3 series, and new Z4), Executive (3 series, 5 series), Super Executive (7 series), Touring / Estate (3 series, 5 series), Super sports (M series), and 4X4 (X5).

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There are three steps to targeting: , target choice, product .

BMW Segmentation

Market segmentation has always had a very important place in the marketing literature. Besides being one of the ways of operationalizing the marketing concept, market segmentation provides effective guidelines for firms’ marketing strategy development and resource allocation among their diverse product markets. As market segmentation simultaneously addresses the roles of both marketers and customers, the segmentation concept has captured the attention of many scholars and practitioners alike in the field. Accordingly, within the last few years, a number of new developments have emerged in market ...

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