Executive Summary

In this report a marketing plan is formed for BMW Automobiles in UK, the report starts off with a short introduction to marketing and the company. BMW is a leader in the premium luxury car market in the UK; the company has shown increasing sales in the last two years and has almost 10% of the UK car market share. The reason for this success is the diverse range of cars that BMW has to offer. It consists of the BMW brand, Mini and the Rolls Royce. However all three of them are successful products of BMW Automobiles and are discussed in this report; more focus is given to the BMW brand. The reason so far for the success of the company is their accomplishment in the company‟s core strategy, product development. BMW over the years have created cars and successfully launched them into markets, but times are changing now as competitors like Mercedes are getting into new markets and trying to win new consumers. BMW has to counter such moves by sticking to its core strategy yet entering new markets. This is the way the company is going to achieve its mission of becoming the the world leading provider of premium products and premium services for individual mobility by 2020.

Introduction to Marketing
Marketing is something that affects every one of us every waking moment of our lives; it is the management process for identifying, anticipating and satisfying customer requirements profitably (Chartered Institute of Marketing)

Introduction to the Company
BMW (Bavarian motor works) is a German automobile, motor cycle and engine manufacturing company which was founded in 1917. The majority of the stake within the company is owned by strategic investors from all over the world. BMW is mainly seen as a premium luxury cars manufacturer targeting the rich and upper class society.

Corporate Objectives:
Corporate Objectives are simply what the business wants to achieve, they are those that relate to the business as a whole. They are usually set by the top management of the business and they provide the focus for setting more detailed objectives for the main functional activities of the business. BMW‟s corporate objectives are also simple and clear, they want to achieve a earning before interest and tax margin of 8% in 2012, which is similar to the one they achieved in 2011. Moreover the company wants to achieve a return on equity ratio of 18% in the financial year 2012 (source BMW blog). The other long term aims of the company are to have efficient dynamics in all cars by 2020 and to be the world leading provider of premium products and premium services

(Daily mail) The second major factor regarding BMW economical climate is that of rising oil prices. as the country is facing is facing its first double dip recession since 1975 so it is likely that these rising profits will come to a fall. it has also created a positive image in the minds of its customers by reducing the carbon foot prints which is created on the environment. which can be best. .( BMW BLOG) Economical: The recent financial crisis has had a huge impact on all businesses throughout the UK.3 Billion Euros. This greener image is also being made prominent by the new engine technology called the Efficient Dynamics. the latter is also the mission statement of the company. This has led to BMW launching its first car running on hydrogen in 2007. although this has raised the manufacturing costs for BMW. understood by using the PEST analysis. last month a barrel of crude oil had soared up to $122. This has had an immediate impact on BMW‟s automobile industry. which produced very less Co2 emissions. The pressure of governments for greener technologies and environmental friendly cars has led BMW to invest in such technologies. consumer purchasing power has fallen significantly this is the reason why in 2008 BMW had a profit before tax of 351 million Euros whereas in 2011 the profits have increased to 7.5% when comparing the 2010 and 2011 financial statements.for individual mobility by 2020. recent studies have shown that 22% of the overall Co2 emissions have been caused by road transport of which 92% are from cars. However it is worth mentioning that profits for BMW automobiles has increased by 75% in comparison with 2010. which BMW launched recently. BMW is a vast organization and thus a vast majority of external factors affect the running of the company which are discussed below Political: In the recent past the UK and EU laws have recognized the fact that the car industry is a major contributor to the emission of Co2 in the environment. This has raised the cost of sales for the company as it has risen by 9. (BMW Annual Report) Marketing Audit Macro Environment (PESTEL) The macro environmental factors of an organization are the external and the non controllable aspects of an organization. (Annual report 2012).( Annual Report 2012) However In the UK the recession is still growing stronger.

(The World in 2012) Social Hofstede (1980) defines culture as the collective programming of the mind which distinguishes the members of one human group from another. The breakdown of this increase shows that the population is shifting towards more life expectancy and thus to an older generation. the typewriter has ceased to exist. which emits zero emission and Mercedes equipped one side of the car with sheets of LEDs that show streaming images captured by a Canon 5D Mark II camera attached to the other side of the car. . this is the reason why many economist and financial analysis predict a fall in sales for luxury items in 2012. The UK population is expected to be increase by 8 million by the year 2029 when in comparison to 2012. Internal Marketing Audit The micro environment can be best described as the environment that is most closely linked to the organization (Grocutt 2004) The internal environment of an organization can be best understood by using the Porter five forces model. (News. however the technological revolutions of the last 100 years have also led to the demise of various industries. the BMW efficient dynamics is doing well in the markets but the organization should always be ready for change and one step ahead of its competitors. Discovery 2012). business and marketing over the centuries. This shift will cause BMW to ponder upon its green technologies as the consumer will likely prefer a greener environment. Recently Mercedes Benz launched an advert of its invisible car. The car blends into the background. Although the car will not go in production until 2014 but his promotional campaign has caught attention of consumers throughout the world. BMW has to constantly look after these changing environments. BMW should critically analyze this situation and improve its efficient dynamics and hydrogen fuelled cars to respond to this technological advancement.Lower interest rates in the UK are significantly affecting the consumer‟s savings which is going to have an impact on BMW as the less the consumers will have to spend the lesser the sales for BMW. For e. making it nearly invisible.g. (Market Oracle) Technological Technology has driven many aspects of societal development.

Threat of New Entrants. On average a BMW car cost 50% of its market retail price.Low The Automobile industry requires high amount of capital expenditure for a new organization to enter the market. moreover supplier switching cost is high. Threat of Substitute Products. However people now have become health conscious and some consumers may in fact find walking more beneficial for their health and just taking public transport to get to work. One of the fiercest rivals for BMW in the UK is . Bargaining Power of Customers. Secondly BMW follows Just in time production so good relations with suppliers are very important for the company.High The automobile industry is one of the most competitive industries.Medium BMW customers are loyal to the brand. the reason being that the industry has low market growth rate. (Guardian 2009) Bargaining power of suppliers. BMW has a strong foothold in the market and is unlikely that it would be worried about new entrants to the market as BMW holds both tacit and explicit knowledge of the market which no new organization would gain early. the ones who are using the BMW cars shall not be willing to switch to competitors as they are used to the drive and comfort of BMW.High The reason that supplier power is high because BMW relies on quality products from its suppliers making BMW so valuable.Medium Individual customers can gather a lot of information about the production price of a BMW and can thus negotiate prices. Competitive Rivalry Within the industry.

accounting for around 30% of the BMW brand's annual total sales (BMW BLOG) To analyze the portfolio of cars that BMW has to offer in the UK. STARS 5 series X Series QUESTION MARKS CASH COWS 3 series 7 series DOGS 6 series . the best way is to use the Boston Consulting Group Matrix. This market segment in which 5 series belongs to is the major segment of the UK luxury car industry (High market growth) . it has been produced in six different generations and in no fewer than five different body styles. The most famous and long running is the BMW 3 series. Moreover the exit cost for car manufacturers are also very high which maintains the competition within the industry. BCG Matrix BMW has a number of successful and unsuccessful cars within their automobiles section. The new BMW 5 series is highly successful in the UK market. Its market share growing from 15% to 28% in 2011(High Market Share).Mercedes and the Volkswagen Group. BMW BCG matrix shows that Star product for the company is the BMW 5 series and the X series. According to this matrix business and its products can be classified as high or low according to their industry growth rate and relative market share. Since 1975 when it was first launched. It is BMW's best-selling model.

The 3 series accounting for the major chunk of the BMW UK revenue approx 30% (High Market Share). the organization and the environment in which it operates. However the market which this car belongs to does not show signs of growing. Weaknesses One of the major weaknesses regarding BMW is that the prices of its cars are too high. Their research has led to the company producing the BMW 320d Efficient Dynamics Edition which is currently powered by a 163 hp four-cylinder diesel engine with an average fuel consumption of just 4.1 liters/100 km and a CO2 emission level of only 109 grams per kilometer. which has failed to achieve the targets for which it was produced. The BMW. The reason being that their competitor‟s car like the Porsche 911 is much better in performance and design in comparison with the BMW 6 series. and moreover the people who own a BMW find it rather expensive to maintain the car due to high maintenance cost . Research and Development BMW spends about 5. Most of its research and development is directed towards environment friendly and efficient cars. for BMW it as below Strengths Diverse Range of Products The BMW automobile sections have a diverse range of cars. (BMW group 2012) BMW has a strong brand image.5% of its revenue on research and development. this is the reason why BMW has become one of the leaders in luxury car industry. Finally the Dog is the 6 series. it is not affordable by the common man. as both of them are internal to the company. the 3 series and the 7 series.The Cash cows are the evergreen products of BMW. For any marketing plan to succeed a SWOT analysis is quite important. It analyses two distinct areas. the main reason behind this success for the company is their core strategy of product development. For any organization to be successful the company has to identify its own strengths and rectify its weaknesses. the mini and the Rolls Royce which BMW acquired in 1998. SWOT Analysis The concept of the SWOT analysis derives from the work of Andrews and others at Harvard University (Andrews 1986). Opportunities and threats are external to the company and necessary steps should be taken to counter these external factors.

weaknesses. For the consumers it‟s an added expenditure and for the company it results in higher cost of sales due to higher transportation costs. what the company can do is to direct most of its research into how to make smaller and more efficient cars for the middle class society as most of the consumers are not able to afford the current premium prices of BMW cars. where the company has been not performing well. it will result in elevated sales in the UK and globally as well. compared to last year Volkswagen had a market share of 17. it can develop the SWOT further through matching and conversion (Groucutt 2004) In the case of BMW the company can match its strengths against its opportunities. where as its main competitors the Volkswagen Group and Porsche have 19. . for example as previously mentioned that BMW spends a huge chunk of its revenues on research. if the situation continues then there is a possibility that the market will be dominated by the group. Moreover the current volatility in the oil and fuel prices has been a problem for both consumers and the BMW group as well.Competitors like Toyota and Mercedes have better and vast production and distribution lines in comparison with BMW Opportunities BMW has set a target market and an image as a luxury car manufacturer. opportunities and threats. The car can accelerate on electricity alone.6% of the market share. Expand into new markets.6%. but in recent times the UK and most of the other countries of the world have been hit by recession. Once an organization has established its strengths. during this time it‟s hard for many consumers to afford BMW luxury cars . so the company can diversify its product lines and introduce new compact or family cars which are affordable by the middle class of society as well. Although BMW directs its funds in researching new technologies for its cars. Over here it can be seen that BMW has countered this threat by its biggest strength which is its diversity and product development. If the company can in some way accomplish this. the company should specially focus on environmental friendly technologies as more and more customers are aware of corporate social responsibility Threats BMW has a 10% market share in the UK auto manufacturer industry. BMW recognizes the threat of volatility in the oil and fuel prices and has thus launched its Active Hybrid 5 car which is better than the previous hybrid cars and has a better fuel-electric consumption than its predecessors. (Car and Driver).

the company wants to become the market leader in premium products and services by the year 2020. As seen from the chart.Marketing Objectives Marketing objectives are: marketing „goals‟ that the business must achieve in order to meet its wider business objectives In order to consider the marketing objectives of BMW it is first preferable to see a pie chart depicting the market share of BMW in the UK in comparison with its competitors. cost.6% of BMW‟s biggest competitor Volkswagen. Differentiation Porter (1985) suggests that there are three fundamental approaches through which an organization can achieve sustainable competitive advantage. differentiation and . According to BMW‟s mission statement. BMW has a 10% market share in comparison with 19. this is the corporate objective of the company and the following marketing strategies will help the company get there.

7 million cars globally in the year 2011.5 % of the global . for e. One of the main centres of BMW product and research development is the Engineering Centre (FIZ) in Munich.369 units. makes the BMW 3 series. Market Development Market development is when companies launch existing products into new markets. BMW already has a rigid product development process in which every manufacturing stage of the product is evaluated and audited and then sent to the other stage of the process. over the years the company has established a strong foothold into the market. quarter.7 million cars 196000 were sold in the UK. Product development is when the company launches new products into existing markets. The company should enter different markets within India. currently The Chennai plant. no hybrid cars are made in India . BMW should take note of this campaign and introduce a better yet competitive alternative to the „Invisible Car‟. BMW unit sales grew 45 per cent in 2011 to 9. The market for BMW in India is growing.Com). and the company even has a plant in Chennai which makes 11000 units annually. out of these 1. One of the BMW‟s upcoming and successful markets is India. sales were at 2. but for the long term success of the company and to become the market leader there is much to me done. Mercedes.focus.g. The company could enter this market as environmental friendly cars attract more customers resulting in elevated revenue for the company. In the case of BMW both market and product developments are suggested for the long term success of the company. Cost leadership and focus strategy are not useful for BMW because neither does BMW make cheap products in which it case it could take up cost leadership nor does the company has a small portfolio of products in which case a focus strategy could have been adopted. (BMW Annual Report 2011). meaning that 11. the BMW 5 series and BMW X1 in petrol and diesel variants while BMW X3 is made in diesel variants. But the thing to notice is that is that BMW is focused on the premium sector of the Indian automobile market. Strategic Objectives BMW sold 1. (AutoInTell News) The organization already researches and then produces one of the finest cars in the world by the use of such centers. this promotional campaign was quite successful as many consumers were fond of such a car with zero carbon emission and a car which is practically invisible to the environment. (The Hindu. Product Development Ansoff (1987) is a portfolio analysis that examines the organizations activities within existing markets and potential markets with current products and new developments. Recently they launched a campaign of the Mercedes „Invisible Car‟. 2012.371 units and in the JanuaryMarch. In regards to sustainable and environmental technology BMW is somewhat behind its competitors. In the context of BMW a differentiation strategy is the most preferable as the organization knows its products and services possess several attributes that are unique in the minds of buyers.

In 2007 BMW launched a clip on the internet about its GINA Light visionary model. is resilient and durable. X5. out of these models the best in running is the BMW 3 series. the car has collected the greatest chunk of revenue for BMW over the years. It shows the sales of the product through their useful life during different stages of their lifecycle. Thus constant and increased improvement into research and development has to be made in order for BMW cars enter into the growth stage of the product life cycle. stretchable water resistant translucent man-made fabric skin – polyurethane-coated Spandex. BMW has to consider and place its products accordingly into the market. X6 and Z4. it is a fabric skinned shape shifting sports car concept built by BMW. promotion and placement. But the thing to consider while keeping these models in mind is the product life cycle. The car is enclosed with flexible. Though the car is not for sale and thus hasn‟t been . if most of the products of the company are going to be in the maturity stage then there will be serious problems for the company as all of them will be going into decline together. X3. Marketing Mix E. Growth. Applying the 4Ps at BMW is as follows: Product Since its inception BMW has remained a product based organization. McCarthy defined the 4Ps as product. The company has three brands. 1 series. price. It resists high or low temperatures. 5 series. Rolls Royce and the Mini. Jerome McCarthy in the 1960‟s developed the mnemonic “4Ps” which has become the most enduring of the marketing mix frameworks (McCarthy 1965). Maturity and Decline. even though the UK BMW market has shown an increase of 17% in comparison with 2010 this percentage has to increase if the company wants to become the leader in the UK automobile market which is currently the Volkswagen Group.com) . 6 series. this is the reason why BMW has such a wide range of products. 7 series. does not swell or shrink and the movement does not slacken or damage the fabric. even though the BMW X3 has high market share but the market which it belongs to does not show signs of growing as previously mentioned in the analysis of the BCG matrix. BMW has realized this and has launched the new version the BMW X3 in 2011 (BMW BLOG). the BMW. X1.sales. If talking about the BMW brand the following is the current portfolio of cars the company has to offer BMW 3 series. ( DesignBoom. If considering the product life cycle against the portfolio of cars that BMW has to offer then it can be said that most of the BMW cars are on the maturity stage. The stages include Introduction. This growth shall be achieved by effective marketing and innovative production.

Most of the BMW pricing strategy is based on competitor prices. however promotion is the part of the overall marketing mix of a company.introduced into the markets and is kept at the Munich museum it has caught the attention of the world when it was premiered in 2007. The BMW 5 series was heavily advertised using outdoor campaigns. BMW markets its product using TV. In the UK. So in effect marketing means to create interest for potential customers in the company‟s products and services. BMW should launch this car in the markets now using outdoor campaign and digital marketing as such mediums should be used for high value impact products. radio. Pricing can have BMW although has high price range for its cars but it is certainly value for money. The price range for BMW cars is 19000 to 80000. On the other hand Promotion happens when a company offers a discount. Promotion Sometimes promotion is confused with marketing. (Stephen Blacker). The BMW Gina can give competition to the Mercedes invisible car as both of them are new and innovative technologies and consumers are willing to pay higher prices for such innovations.g. Price Price is the most important and decisive factor for a consumer in making a decision for buying a product. BMW also uses outdoor campaigns for branding and new car launches. press and online marketing (BMW Education). runs an advertising campaign and links this communication to their value proposition. the BMW 3 series and the Audi A4 which represent the same market are loosely priced the same. the company ran a three-week digital and poster outdoor campaign in London‟s Holland Park Roundabout . For e.

Place plays an important part in the marketing mix as it refers to the ease for the customer in purchasing its products. Recently because of the boost in the number of internet users around the world. the Mercedes Invisible car campaign went viral over the internet when its clip was launched on popular social media websites including YouTube. Mercedes one of the rivals of BMW uses this medium very effectively. BMW should also use such techniques as it proves a very effective method in promoting its wide portfolio of cars. improve internal and external communications. the company will have to make organizational and structural changes as the company is going away from its core strategy of product development and going towards market development by recognizing new markets. As discussed earlier about embedding viral marketing within the BMW marketing strategies. the company will have to use the services of viral marketing experts as they advise well on how to make internet clips famous within social media websites Budgeting Marketing budget is one of the integral parts of a successful marketing plan. In one month of its online campaign it has achieved over 9 million hits on YouTube. Implementation For the above ideas to be implemented by BMW. It is a strategic planning and management system that is used extensively in business and industry to align business activities to the vision and strategy of the organization. It can be delivered by word of mouth or enhanced by the network effects of the internet.and selected premium shopping centers to promote its new BMW 5 series range. BMW sells its cars through a number of showrooms in the UK and as well as from an extensive network of dealers who are provided with far-reaching expertise and knowledge from BMW. viral marketing has become a popular medium of advertisement. BMW realises this but needs to improve onto this aspect by providing excellent customers services and after sales services to their customers. There are four . (Marketing Week). (Kaplan and Norton). (Digital Strategy Consulting) Place Place includes all of the business activities involved in making the product available to target customers. Monitoring and Evaluation One of the best tools to monitor and evaluate a marketing plan is the balanced scorecard approach. effective communication shall be required from the company within the organization and especially outside the organization to the consumers.(BMW Education). If BMW wants to launch the GINA Light Visionary Model in order to compete with the Mercedes Invisible car. and monitor organization performance against strategic goals.

Learning and Growth: This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement.g. . BMW already excel in this as most of BMW customers are loyal to the brand. It is necessary for BMW managers to know well the processes of the company are running and whether they are in line with customer‟s demands.perspectives discussed in the approach which are detailed in the diagram below. at BMW advanced knowledge management systems will have to be put in place for employees and high level managers to exchange knowledge. the GINA light visionary model car should be in l ine with customers demand and requirements. (Balanced Scorecard. Internal Businesses Processes: In order for the marketing plan to succeed. as customer satisfaction should be the top priority for a company. Customer: This is the most important perspective for an organization.org) At BMW all of these perspectives have to be taken in consideration for a successful marketing plan. it is necessary for the shareholders of the business to agree upon the plan as it is their money which is used as capital in the business. As a completer team shall be needed to launch new products and enter new markets. For e.

but market stability in 2012 and further on is unsure because of the volatility in the UK and EU. Currently BMW has recovered from the recession which prevailed in the UK as sales from the past two years have shown gradual increase. this is the principal strength of the company. should have accurate information of the funding required to implement the marketing plans (The Palladium Group) Conclusion BMW has a wide and diverse product portfolio. The shareholders at BMW who are predominantly institutional investors.Financial: BMW Financial services were established in 1992. as GDP growth shall go down by 0.3% in 2012 as predicted by John Micklethwait (The World in 2012). the department supports the marketing efforts of BMW. . This should concern BMW as it is seen as premium and luxury car manufacturer. It is very important for shareholders to have accurate and updated financial information. the company should cut their costs and pass on the lower costs to consumer s in order to achieve the corporate objectives in 2012 . the company should build up on this strength and enter new markets as well. to counter this decline in customer‟s purchasing power.

Car and Driver. The Economist Special Edition. The Palladium Group.autointell-news. BMW introduces Active Hybrid 5 Car. The Hindu. India.3%.com/intelligence/2012/03/video_viral_of_the_week_ merced.designboom. the UK will go down in GDP by 0.thehindu. Jonathan Grocutt: Foundations of Marketing. Auto In Tell news. Retrieved from http://www.aspx?MID=7 (Accessed 4th April 2012) 8. BMW Annual Report.digitalstrategyconsulting.thepalladiumgroup. BMW GINA. (Accessed 7 April 2012) 4.com/european_companies/BMW/bmwengineering/fiz.ece (Accessed 5 April 2012) 6. BMW 5 series outdoor campaign in London. Retrieved from http://www.php (Accessed 8 April 2012) 9.htm ( Accessed 4th April 2012) . BMW BLOG. Retrieved from http://www.com/news/2012-bmw-activehybrid-5-official-photos-and-infonews ( Accessed 6 April 2012).com/business/article3284538. Retrieved from http://www.caranddriver. John Micklethwait. Retrieved from http://www. Retrieved from http://www.com/2011/03/15/bmw-group-annual-report-2010-bmw-aims-tofurther-increase-earnings-in-2011/ (Accessed 5th april 2012) 11. Digital Strategy Consulting.bmwblog. BMW targets 8% return on equity. BMW‟s product development and research centre in Munich.marketingweek.article (Accessed 6 April 2012) 5. retrieved from http://www. BMW in Chennai.uk/bmw-pushes-5-series-in-major-outdoorcampaign/3010116. (Accessed 7 April 2012) 3. Retrieved from http://www.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/investor_relati ons/corporate_events/hauptversammlung/2012/BMW-Annual-Report-2011.com/weblog/cat/16/view/3084/bmw-gina-light-visionary-modelconcept-car. Marketing Week. (2012). Hofstede (1980). retrieved from http://www.pdf (Accessed 5 April 2012) 2. BMW introduces the GINA Light Visionary Model. The World in 2012.References: 1. Mercedes “Invisible Car” campaign goes viral over the internet.co. 10.bmwgroup.html (Accessed 8 April 2012) 7.com/about/hof/Pages/HofViewer. BMW Financial services support BMW Group marketing efforts.

UK facing its first double dip recession since 1975.uk/Article21565.dailymail. Daily Mail.balancedscorecard. Market Oracle. retrieved from http://www.12. retrieved from http://www. Balanced Scorecard as a tool to monitor and evaluate marketing plan.co.org/BSCResources/AbouttheBalancedScorecard/tabid/5 5/Default.html (Accessed 4th April 2012) 13.marketoracle.html (Accessed 5th April 2012) 14 Kaplan and Norton.aspx (Accessed 8th April 2012) .uk/news/article-2067099/Double-dip-recession-Bank-Englandgovernor-tells-Britain-brace-financial-crisis. UK population growth rate till 2030.co. Retrieved from http://www.

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