Target, Positioning, and Marketing Mix at Bmw

Target, Positioning, and Marketing Mix at BMW BMW is one of the world’s largest luxury car companies and it is easy to understand why. Not only does this premium auto brand have a high resale value, but strong brand loyalty and an even bigger profit margin than mass-produced cars (Holloway, 2002). This in turn enables the premium maker to spend more on research and development into the minds of its target market to make better, more advanced cars with a powerful brand image. BMW is a German automobile, motorcycle and engine manufacturing company, which owns and produces the Mini brand, and is the parent company of Rolls-Royce Motor Cars. BMW is well known for its sporty, yet sophisticated image which has been built up since the 1970’s with many motor sports victories, and its BMW Group’s worldwide mission statement, â€Å"To be the most successful premium manufacturer in the industry† (http://www. bmwgroup. com). The majority of BMW’s success is attributed to the development of a consistent marketing policy, the ‘market niche’ strategy. The company has built is brand on four core values, which are technology, quality, performance, and exclusivity, whereas BMW has traditionally positioned its brand to be perceived as the leader in performance (Arnold, n. d. ). In fact, the BMW group and all BMW models are all about performance on the road and inside the plant in which they are manufactured. The fundamental core benefits for BMW customers are reliability, durability, and style. People who buy BMW are also paying for the engineering and quality, not for breakdowns (Arnold, n. d. . Buyers normally expect certain qualities in their cars when they purchase at BMW. Brand associations of German luxury brands like BMW include powerful, high-quality, fast, pricy, luxurious, classy, and sleek (Holloway, 2002). BMW owners usually purchase because they know they can rely on its solid background of high-quality vehicles, and superior performance, but they also know they are getting a vehicle that looks sporty, classy, and expensi ve at the same time. Technology plays a huge role in the difference between BMW and its competitors. BMW has combined its superior quality product with that of technology to enhance BMW service experience for its customers. In fact, research by Wanke, Bohner, and Jurkowitsch, (1997) suggest that BMW’s Augmented Reality has created the bridge and extends the real world by adding virtual information to assist BMW Service staff in their highly demanding technical work. Using augmented reality, a BMW mechanic receives additional three-dimensional information on the engine he/she is repairing. For example, augmented reality can be used to help in diagnosing and solving the fault in and engine (Horatiu, 2009). Apart from the real environment, technicians can see virtually animated components, the tools to be used and hear instruction on each of the working steps through headphones integrated inside the goggles (Horatiu, 2009). Next stands the exclusivity of BMW’s potential product and the ideas’ genesis come up with. BMW now makes cars using resources that would otherwise be wasted by putting them to good use. For instance, the Landfill Gas-to-Energy Project at BMW used to reduce its reliance on natural gas and better utilizes the previously untapped methane, which is a byproduct of decomposing trash and can have harmful effects on air quality. By turning this methane into energy, the plant has reduced carbon dioxide emissions equivalent to removing 61,000 automobiles from the U. S highways each year (Arnold, n. d. ). Today, 63 percent of the plant’s total energy is derived from landfill gas (Arnold, n. d. ). Not only that, this project has three core benefits, it reduces the amount of harmful greenhouse gases released into the air, allows BMW to use a wasted energy source by transforming the methane gas produced from the nearby Palmetto Landfill into electricity to heat for the plant, and it saves a lot of money for the company as a whole (Arnold, n. . ). BMW is now the first auto company in the world to use green energy to fuel its painting facility. Furthermore, since its inception, the project has been expanded to utilize landfill gas to fuel 23 oven burners in the paint shops at BMW and supply indirect heat to these areas (Arnold, n. d. ). In addition, marketers have classified BMW products as specialty goods be cause they have a unique characteristic or brand identification for which a sufficient number of buyers are willing to make a special purchasing effort (Kotler & Keller, 2009). Consumers who purchase BMW’s are willing to go to great lengths and travel afar to buy one. In fact, BMW is a product that stands above the rest requiring very little if any comparison to other brands as buyers already know exactly what they are looking for when in search of this particular type of vehicle (Holloway, 2002). Thus consumers that purchase BMW’s are investment buyers and often have upscale purchasing habits. And it is this reason that BMW, unlike many other marketers, has stopped emphasizing demographics such as targeting customers based on age and income, and tarted targeting based on mind-set and lifestyle. BMW marketers understand that their customers are concerned about status, and so this is what they focus their attention on. When advertising BMW marketers have focused on the specifics of the BWM and emphasis are often placed on the fact that BMW is continuously managing its cars performance quality through time, and research (Boudette, 2005). It cons istently strives to improve its products and for years has produced high returns and market shares for this very reason. Ideally, BMW’s positioning has been maintained over such a long period of time because the company possesses and develops an incredible competitive advantage. In terms of price, BMW’s mid-range vehicles start around $29,400 up to the most prestigious and luxurious vehicles priced around $130,000 (Boudette, 2005). Additionally, every new BMW is covered by a limited warranty for defects in materials or workmanship for the first four years or 50,000 miles, whichever comes first. BMW also offers a rust protection program for 2006 and newer models, which provides a 12-year limited rust perforation protection without mileage limitations (http://www. bmwgroup. com). Additional accessories and services offered by BMW include iDrive, Real Time Traffic Information, BMW Roadside Assistance, and BMW assist all the more reasons why consumers choose BMW. iDrive links BMW vehicles’ with communications, navigation and entertainment functions allowing owners to make calls, listen to music, plot routes and find places to stop along the way, with just one controller all at the same time. Real Time Traffic takes owners down shorter and faster routes, preventing them from getting stuck in traffic. It identifies traffic accidents and delays in real time and continuously updates the service 24 hours a day, 7 days a week, while smaller markets report only during normal commuting hours (http://www. bmwgroup. com). BMW Roadside Assistance is a feature most BMW owners find comforting because if they are traveling and get a flat, run out of gas, or need a tow BMW will send someone out immediately to assist no matter where the customer is located. BMW owners are covered in all 50 states, in Canada and Puerto Rico, even if someone else is driving the vehicle. These services are offered 24 hours, 365 days a year, at no additional cost, and without any mileage restrictions (http://www. bmwgroup. com). BMW assist, on the other hand, works as a sense of security, and is there for BMW customer’s safety. It is a convenient service that adds peace of mind for BMW owners, and is suitably equipped in 2007 and later models. BMW assist is part of the Ultimate Service at BMW, and is included at no additional cost for up to 4 years. This service connects owners to a response specialist that can help with almost everything, from an emergency situation to directions and traffic information by just a push of a button (http://www. bmwgroup. com). At BMW distribution is about the use of consistent standards of quality, safety, and processes at all locations. They guarantee worldwide premium products made by BMW Group as well as the careful use of resources being the guiding principle behind all production and planning. Its living structure is what enables it to react flexibly to customer demands and market requirements and conditions throughout the world (Ludwig, n. ). This is why they have such flexibility in models, as well as their ability to build additional numbers of certain models in other plants, if necessary. BMW gives its consumers exactly what they want building models with options customized to fit the individual consumer (Ludwig, n. d). As a result, the company’s dealerships keep very few cars on the lot. Instead, BMW offers intimate showrooms where customers can view cars and place orders with individual custom options that they select (Ludwig, n. d). After the car has been selected and the customer has chosen their individual custom features, BMW directs its manufacturing plant to produce the car and deliver it within a matter of days. Logistically speaking, when it comes to BMW and the channel of information, it means using CRM to strengthen communications with its dealers and make it as easy as possible for potential customers to get all the buyer information they need (Ludwig, n. d). BMW group also uses e-commerce strategies as a means to explore the market for effective business. The group introduced an ordering system in 1998 which gives dealers the option of showing customers their desired car on the screen and confirming the delivery date on the spot. Through the use of this system, the time frame when the vehicle can be built with the desired fitting is configured within a few seconds and is reserved in the production process immediately (Ludwig, n. d). Furthermore, the manufacturing logistics department at BMW has such outstanding internal processes to such a level that when changes accord due to customers’ wishes regarding issues as omplicated as engine capacity to something as small as the color of the upholstery it can be immediately communicated, and in most cases resolved prior to shipment of the vehicle. Moreover, the company has adopted a consistent advertising strategy. In addition to the message of its values being portrayed in advertising campaigns, the company explicitly expresses one or more of these values in all BMW advertisements (J ones, 2010). Its design philosophy also runs through every BMW advertisement communicated through TV and print ads. Its brand imaged has been built up by using over 300 different types of color press advertisements, as well as 64 different types of television commercials (Jones, 2010). BMW ads are always consistent and focus on the substance of the cars themselves. However, it is important to point out that BMW also relies on its sensitivity to the environment, which is clearly seen by how the company’s advertisements evolved in response to economic, environmental and competitive changes. In addition, since the competition started to imitate BMW’s adverting messages of outstanding quality, BMW decided to come up with a more unique way to reach its target audience. The company did so by hiring Fallon Worldwide, an advertisement agency, to come up with new campaigns. Now BMW uses guerilla public relations campaigning as a means to drive sales. Its diverse promotion tactics include seeding news of the BMW Films at key Internet entertainment rumor sites and radio DJ programs in 20 key metro markets, and BMW manufacturers use web mostly to drive its brand (Jones, 2010). In fact, BMW takes the phrase â€Å"beyond the banner† seriously. In its ads for the BMW Compact, the car drives out of the banner ad and around the sides of the browser window, to show how it loves corners. BMW’s online strategy in the UK is highly-brand drive, with clickthrough considered to be a side benefit (Jones, 2010). Not only that, BMW uses traditional banner ads, with pull-down menus, Superstitials, transitional ads which appear between pages, sponsorship and dynamic html ads like the one mentioned previously to promote its brand message and to drive the benefit of ownership in terms of the driving experience (Jones, 2010). Superstitials are highly interactive, non-banner ads that can be any size on the computer screen and up to 100k in file size. They can feature animation, sound graphics capable of effectively conveying integrated advertising messages while protecting its Web site’s performance (Jones, 2010). BMW utilizes this form of advertisement to achieve multiple goals, including branding, direct marketing, commerce and entertainment. In conclusion, as a worldwide organization, BMW Group has a long and established heritage of manufacturing premium products and holding true to its four core values of technology, quality, performance, and exclusivity. Today, BMW is one of the most respected companies and recognizable brands in the world. This is due to the fact that the BMW Group continues its leading position in the premium segments of the domestic and international automobile markets. The BMW Group has long pursued the objective of continuously and permanently increasing its company value and has done so by playing an active role in both shaping internal economic success factors as well as corporate citizenship in society as a means to gain and retain loyal customers. References Arnold, P. V. (n. d. ). BMW: The ultimate reliability machine. Retrieved March 2, 2011, from http://www. reliableplant. com/Read/5197/bmw-reliability Boudette, N. E. (2005). BMW’s Push to Broaden Line Hits Some Bumps in the Road. The Wall Street Journal. Retrieved March 3, 2011, from http://www. bimmerfest. com/forums/showthread. php? t=83762 Holloway, N. (2002). The best-driven brand. Forbes. com Inc. Retrieved March 01, 2011, from http://www. forbes. com/global/2002/0722/024. html Horatiu, B. (2009). BMW Augmented Reality. BMWBLOG News. Retrieved March 02, 2011, from http://www. bmwblog. com/2009/09/03/bmw-augmented-reality/ Jones, J. (2010). Driving Success Digitally. Response, 19(1) 30-35. Retrieved March 7, 2011, from EBSCOhost Direct database. Kotler, P. , & Keller, K. L. (2009). Marketing Management. Upper Saddle River, NJ:Prentice Hall. Ludwig, C. (n. d). Standing atop the Welt of BMW’s vehicle distribution. Automotive Logistics. Retrieved March 5, 2011, from EBSCOhost Direct database. Wanke, M. , Bohner, G. , & Jurkowitsch, A. (1997). There Are Many Reasons to Drive a BMW: Does Imagined Ease of Argument Generation Influence Attitudes? Journal of Consumer Research, 24(2) 170-177. Retrieved March 6, 2011, from EBSCOhost Direct database.