Price
The pricing strategy that has been used by BMW for the 3-series is
competition-orientated pricing. I have come to this conclusion because
of the information that I have collected and from the BMW website. It
shows that all other competitor in the 3-series market is based around
the same price. This sis because the car industry is large and
production cost are not so important and creating the largest profit
is not as necessary as it would be for a smaller company.
This table shows how BMW compare with other competitions in the same
market;
2000
2001
Audi
43168
54037
BMW
67676
81720
Honda
68718
63459
Jaguar
14832
21904
Mercedes
63754
76458
Rover
103663
97202
Toyota
83621
98153
Volkswagen
155657
172848
Volvo
36943
40014
Total
638032
705795
Others
1583615
1752973
TIV
2221647
2458768
In 2001 BMW sold 81,720 cars in the UK. This gives a UK market share
of 3.32%
Year
Total Markets
BMW
UK Market Share
1980
1514087
13450
0.89
1981
1484622
17086
1.15
1982
1555027
22977
1.48
1983
1791699
25178
1.41
1984
1749650
25785
1.47
1985
1832405
33448
1.83
1986
1882474
35898
1.91
1987
2013693
37525
1.86
1988
2215574
42761
1.93
1989
2300844
48915
2.13
1990
2008934
43004
2.14
1991
1592326
38707
2.43
1992
1593601
40672
2.55
1993
1778426
40921
2.30
1994
1910933
45574
2.38
1995
1945366
55034
2.83
1996
2025450
56840
2.81
1997
2170700
63700
2.93
1998
2247400
64200
2.86
1999
2197615
70932
3.23
2000
2221647
67679
3.05
2001
2458768
81720
3.32
This table shows the growing awareness and profit that BMW are
gradually building up.
The consumer questionnaires that I sent out and got back, I found that
80 people found the 3-series over priced, 70 said it was reasonable
and only 20 people said it was under priced. (See graph at the back)
I also found out that if BMW lower the price of the 3-series that
52.5% of the people that I asked would buy one or buy another BMW
3-series.
Product
From the questionnaires that I sent out I found out a lot about what
people like and even dislike about the product. I found that the BMW
3-series is preferred by males more than females. The socio economic
group that is aim at for the 3-sreies is upper class and more middle
class working family.
3 series
Exec / Manager -
large company
17.5
Retired
16.1
Company Director
10.2
Professional - employed
13.3
Owner - small business
10.3
Owner - large business
4.6
This shows tables that executive and mangers of large companies are
the most likely to own a BMW 3-series.
My questionnaire showed that the thing that attracts people the most
about the 3-series is its bodywork with 140 people, then it is the
badge and then the engine. This shows that the BMW badge image is
worth a lot to the success of the BMW cars. The price seems to be the
limiting factor to the 3-sreies with 90 people saying that was the
most dislikeable factor. The 3-sereis seemed to attract the younger
market age over the whole range of BMW's, ...
This is a preview of the whole essay
the most likely to own a BMW 3-series.
My questionnaire showed that the thing that attracts people the most
about the 3-series is its bodywork with 140 people, then it is the
badge and then the engine. This shows that the BMW badge image is
worth a lot to the success of the BMW cars. The price seems to be the
limiting factor to the 3-sreies with 90 people saying that was the
most dislikeable factor. The 3-sereis seemed to attract the younger
market age over the whole range of BMW's, the average age being 41.5
years old the X5 and Z3 have now taken the younger age market leaving
the 3-series attracting the 45 years olds upwards.
Product quality is very important to BMW and very car that is built
has to go through a quality control system. Quality is clearly linked
to reliability and safety. Where design innovation is developed and
manufactured to consistent standards. This adherence to specifications
enables the company to meet customer expectations and maintain its
position in the market place.
The BMW 3-series is located in the maturity section of the product
life cycle.
[image002.jpg]
At this stage in a products life cycle it is at its peak in its chosen
market. This is where the product has the largest market share that it
will hold. I think that the BMW 3-series is in this section of its
life cycle is because of the fact that it was launched in 1999 there
has been 10 models, the BMW 3-series at the moment has the largest
market share that it has ever had. To extend the 3-series product life
cycle extension strategy will be used such as changing the body work
to make the car more attractive to potential customers.
The BMW 3-series is a cash cow in the Boston Matrix;
[image004.jpg]
The 3-series is a cash cow because it is in a market with slow growth
and the 3-series hold a large share of the market. The 3-series
produces a very large amount of profit for the business this money
will be used to promote the Z3 as it needs more promotion.
Place
BMW is one of the most successful vehicle manufactures in the world,
although by no means the largest. Most of BMW's manufacturing plants
are located in Germany, but BMW AG has extended their plants to South
Africa, the USA and other countries. The vehicles produced by theses
plants are sold by around 4,400 dealers in over 100 countries. In many
of these countries the vehicles are distributed by independent
importers and in Malaysia, Thailand, Indoneasia the Philippines,
Egypt, Vietnam and Mexico, vehicles are assembled in completely
knocked down form to avoid import restrictions.
In key markets, BMW has set up its own subsidiaries to support the
dealer network. There are 21 subsidiaries and they account for 90% of
all new BMW sold outside Germany. BMW Great Britain Ltd is the second
largest selling subsidiary behind the USA. New and used BMW are sold
through a network of 156 authorised dealers throughout the UK.
BMW used level one distribution this is where it comes from the
manufactures to independent dealers who then sell to the consumers.
[image006.jpg]
The channel that BMW use is called Exclusive this is because there are
only the amounts of BMW that are ordered are built. This makes the BMW
cars are speciality goods. The channels are chosen on the price of the
product the cars being expensive makes it an exclusive product and
door to door selling is not an option this mean people need to find a
dealer of BMW cars to buy an BMW.
[image008.jpg]
Promotion
The promotion of the BMW 3-series has been well researched and the BMW
brand has been built on there four core values: Technology, Quality,
performance and Exclusivity. BMW have used the same advertising agency
since 1979 it is called WCRS. BMW have over the years have always
focused entirely on the cars.
BMW use a broad range of media to advertise the 3-serieson such as;
TV
Branding campaigns and new car launches.
Radio
Branding campaigns; the year 2002 was the first time that BMW national
advertised on the radio, this was used for the new 3-series model that
was launched in Hamburg.
Press
Colour press for example; vogue, lifestyle, motoring publications and
broadsheet weekend colour supplements were used to promote the BMW
image and the cars.
The national press were used as well as some regional publication this
was a world wide media that BMW used to promote the new BMW 3-series.
Outdoor campaigns
A high impact, high awareness medium used mainly for the branding and
new car launches
Online advertising
On selected 3^rd party sites which can delver to a different sector of
the market that BMW may not have reached before. In addition to higher
profile national advertising also the dealers of BMW run their own
advertising campaigns through local media such as; local press, radio
and bus advertisements.
A recent advertising campaign that BMW ran was when they launched the
new convertible BMW 3-series they used almost the same advertising
idea that they used four the coupe. They promoted the convertible on
its performance and on how it looks. The launched campaign adopted and
integrated approach across all chosen forms of communication:
· National press
· National 96 sheet posters
· The internet
· Dealership point-of-sales
· Dealership launch invitations
The campaign has been very successful and so far proved highly
effective in raising public awareness and boosting national sales.
Another way BMW has promoted there cars are in the James bond films
they has promoted BMW in 4 of the films. There has been a 5-series,
BMW motorcycle Z3 roadster and the police in golden eye drove BMW
3-series. This however has not promoted the BMW car brand in the way
which BMW was hoping for this has in the case of the Z3 dented the
brand image.
Advertising and promotion in the UK has had a lot of success, much of
current company success has stemmed from the development of the
consistent marketing policy. BMW use the `market niche' strategy. This
is where the BMW brand is focused one small market area where the car
will appeal the most to the consumers in that chosen market area. This
strategy is usually very lucrative and it is for BMW.
Advertisements can generally fall into two categories:
· Informative advertisements - informative advertisements
attempt to purely let the consumer know the availability of the
product, its function and purpose and to inform the consumers about
the characteristics of the product (e.g. Government information
films).
· Persuasive advertisements - persuasive advertisements attempt
to get the consumers to purchase the product, by emphasising certain
aspects of the marketing mix (e.g. the taste, style and moving
images). Another category of advertising is `corporate advertising',
where the business advertises its name and image, rather than any of
its product range.
Market research
BMW have a very large and extensive market research department they
have found that;
BMW regularly undertake research into their customers, occupations and
hobbies. The information is used across all areas of the business,
from the design and development of the cars themselves to ensuring
that advertising and marketing activity is most accurately targeted.
The average age of a BMW driver across all Series in 2001 was 48.8
years. Increasing by over one year from 2000. On average, the BMW 7
Series appeals to older drivers whilst the 3 Series appeals to the
slightly younger age range.
Average for all series of BMW's and at the different years;
3 series
5 series
7 series
Z3
Compact
X5
1998
41.5
45.4
49.6
45.8
49.5
1999
43
46.4
51.7
45.5
45.3
2000
45.5
48.4
53.4
43.9
45.4
2001
46.7
49.0
51.7
45.6
51.0
44.9
[image009.gif]
The occupation of the BMW consumers were that in 2001 the BMW Compact
has been most popular with retired drivers and least popular amongst
company directors. The 7 Series continues to be the choice of owners
of large businesses with most Company Directors choosing a BMW opting
to drive the 5 Series.
Data for BMW Customer Occupations from 1999 - 2001
3 series
5 series
7 series
Z3
Compact
X5
Exec / Manager -
large company
17.5
16.3
5.9
12.9
8.0
11.9
Retired
16.1
9.4
4.4
8.9
44.0
10.2
Company Director
10.2
29.3
26.3
8.3
0
15.2
Professional - employed
13.3
7.5
0
8.0
12.0
8.0
Owner - small business
10.3
13.9
24.0
10.3
4.0
19.8
Owner - large business
4.6
12.9
29.9
6.0
8.0
20.2
[image011.jpg]
The research is extensive to the fact that they found out many of the
consumers hobbies and related them to the car that they had brought.
Watching football or rugby continues to be the most likely hobby of
the BMW 7 Series driver, whilst more customers choosing to drive the
BMW Z3 state their hobby as gardening than any other group of driver.
What hobbies BMW consumers have;
3 series
5 series
7 series
Z3
Compact
X5
Football / Rugby - Spectator
24.4
31.6
32.5
18.4
20.8
18.9
Touring / Travel / Caravan / Hols
14.2
15.3
18.2
25.6
12.5
7.9
Walking / Hiking / Hill Climbing
18.7
16.9
11.2
9.1
20.8
13.9
Keep-fit / Jogging / Aerobics
11.0
8.4
4.0
16.2
16.7
14.4
Golf - Spectator
10.9
21.3
18.2
4.3
12.5
11.9
Golf - Participation
11.2
20.1
26.2
9.1
12.5
22.3
Gardening
16.5
15.4
2.4
26.3
16.7
7.0
Reading
14.5
11.0
4.0
19.9
12.5
7.9
Cooking / Food & Wine / Dining out
8.1
9.5
18.2
23.4
4.2
9.8
Friends / Family / Entertaining
9.2
7.1
2.4
5.6
20.8
11.7
Motor Sports / Motor Racing Spectator
6.0
5.8
6.4
12.4
0
11.3
Music / Opera / Choral Singing
9.1
7.6
14.3
10.3
4.2
10.4
Theatre / Acting / Cinema / Recitation
6.3
6.8
4.0
11.0
8.3
8.4
Football / Rugby - Participation
5.3
5.4
4.0
2.0
0
2.9
DIY / Painting / Decorating / woodwork
8.5
6.2
0
8.7
4.2
2.5
Driving / Cars / Car Care
4.8
3.9
0
9.5
4.2
8.4
Swimming / Diving - Participation
2.8
2.1
0
4.5
4.2
1.5
This is the market percentages for the sale of all BMW's in the
different countries. Its shows that Germany is where the most BMW's
are sold with Japan not far behind. France is where the least BMW's
are sold.
[image012.gif]
