Executive Summary

Strategic Management plans are not directed towards the profitability of the organization. All
these plans which are in context of the improvement of the functioning of the organization are
considered as the Strategic Management (Kaplan & Norton, 2008).

Bavarian Motor Works (BMW), is the German automobile and engine manufacturer, the
company was founded in the year 1917 and is among the oldest in the automobile industry. In
terms of the ownership and stake holding, the majority of the stake in the company is owned by
strategic investors from different part of the world. The market segment occupied by BMW, is
primarily of the luxury car segment, which includes the buyers from Rich and upper class
segment.

Bayerische Motoren Worke AG, the company formally known as BMW, is among the top 3
luxury car manufacturer globally (Ciferri, 2013). The other competitors are Audi, Mercedes-
Benz and Porsche. These companies are among the top selling luxury car brands. BMW has in its
kitty the brands like Mini and Rolls Royce. Wherein MINI is the ultra-premium hatch back car,
and Rolls Royce falls in the category of Ultra luxurious cars.

Among the luxury car manufacturers, BMW have their own customer base, having the customer
who are loyal to the brand. BMW have established it-self as the brand that provide luxury,
comfort, space and latest technology with its products. However competition is still neck to neck
and other competing car makers are up there with their products, service and quality. To have the
product presence felt, BMW always needed to have a detailed marketing strategy in place, which
can; analyze and explain the vision of the company, can provide the clear mission statement, able
to handle the issues, can take care of the internal operational management and strategic objective.

BMW is considered and appreciated for its amazing work environment and excellent corporate
structure. As a brand BMW has an identity of producing the premium cars that are being offered
to the premium segment of the market along with the honesty of the organization, which helps to
attract millions of customer all across the globe. The company has always pushed to sustain the
identity and mark they have created, over the years by producing best in the class products and
new innovations. They have wide variety in terms of the product lineup, where in premium
customers can select the automobile of their choice, this has done by keeping a closer look at the
organizational vision and at the same time understanding the market trends and expectations,
which is done by doing the Strategic marketing plan (Chaffey et al., 2006).

The understanding of the strategic marketing analysis of BMW will help in establishing the real
reasons behind the best marketing performance. Marketing analysis will also helps to understand
which factors has the major impact on the performance of the business, these factors can be
advertising, promotion or customer loyalty (Klein, 2007). However the actual success of the
marketing strategy can be understood by analyzing the external factors like- Performance in the
global market, study of the competitors, business economics and demographic trends.

Besides that, it is also the point of consideration to understand how much money the company
has spent over the period of time in marketing activities like, advertising or brand promotion
(Hitt, 2012), will there be any effect of financial changes on revenue generation and profit
margin of company, these all factors can be understood properly by studying the marketing mix
of the BMW. The first and foremost factor of analyzing the marketing strategy is to understand
the 4ps of marketing which can be defined as Price, promotion, product and place (Kotler, 2003).
BMW being the global brand, have presence in almost all the countries across the globe,
however every country have their own business regulations and while expanding the business
political scenarios are also taken in to consideration, there are situations when BMW has faced
legal issues, where the country or location is going through any political unrest and company
wanted to break into that particular market. In such a scenario it is must to understand how
BMW has planned their marketing strategy, as their major market share is in the western
countries. It becomes the point of consideration how BMW have made the marketing strategy
and product placement in these countries that customer can feel connected with the company,
and if they want to have the firsthand experience of the vehicle, they are there for the taking
without any delay. As a part of the marketing strategy analysis, it is also needed to understand
that how BMW has worked on setting up their manufacturing, storing and warehouse facilities in
most of the high volume countries, and from there, how they plan and execute exports to the
neighboring location to cater the demands.

The report also focuses on the competitor analysis with the help of Marketing Mix and SWOT
analysis. The competitor analysis will further supports in understanding the competitive
advantages of BMW over their primary and secondary competitors. Marketing analysis helped to
identify the resources and process which are needed to be put in place to have the edge over
competitors (Brad and Brad, 2015). These resources and process can be either tangible or
intangible. Wherein tangible resources are explained like the raw material that company needed
for the product development, future machine requirement. Intangible resources are the inclusion
of finances, implementation of latest technology into the business and manufacturing, maintain
the supplier network and keeping the organization reputation at the mark.

The report has also focused on the product information provided by the BMW, which has
showcased how their marketing strategy is focused and how they keep track of all latest market
trends and future market expectations. There are several examples on technological innovations
that has been implemented by BMW in their vehicles, which has helped them to stay ahead of
their competitors.

The report also focuses on the Opportunities and threats BMW is having in the market, they are
part of the external factor that affect the marketing strategy of BMW. These external factors also
focuses on the competitor analysis, to understand what advantages and disadvantages BMW has
in the market over the competitors. The competitor analysis in the report have relied heavily on
environment of competition, industrial environment and Socio economic factors in different
regions. The report has also tried to explain the factor of the competitor analysis which can help
BMW to become successful as an organization in luxury car segment, and how they needed to
plan their marketing strategy in a way that it can cater the requirement of new opportunities in
the emerging market, along with generating new territories for revenue generation.

The report has done a extensive emphasis on competition and how it can always be a threat for
any organization be it small or big, irrespective of the product domain the company deals in.
Marketing analysis of BMW explains that it is the job of the marketing team to plan the strategy
by doing the competitor analysis, market analysis and customer segmentation (Kew and
Stredwick, 2010). All these factors have a major impact in preparing a threat assessment plan,
which can become helpful for the future growth of the company.
Alternate Marketing Strategy

Engineering excellence of BMW has been with them from the time they used to build the aircraft
engines along with having the reputation of engineering German companies have (Shaw,2004),
which is to produce rare and exclusive products in its range.

BMW deals in premium luxury car segment, where they competes with brands like Mercedes,
Audi, Porsche and Acura. Historically the price of luxury cars is always put on the higher side,
because of the number of factors like- technology used in the car, comfort provided to the driver
and passengers, safety and functional capacity of the vehicle. There are cases when the company
has designed the completely hand crafted models, especially for their brand Rolls Royce, which
is an ultra-luxury car segment. In addition to that, BMW also has a premium hatchback in its
pocket, i.e. Mini cooper, which has increased the market outreach of BMW as a company. By
having Rolls Royce and Mini cooper as an alternate brand, BMW can cater large segment of
customer, where small car lovers can go for Mini cooper which comes with ultra-luxury features,
amazing interior, latest technology and BMW’s trust.

Company understand the automobile they are manufacturing are for a particular segment, who
does not refrain from spending money, as they prefer luxury over price. So having the vehicle on
higher price range does not affect the individuality of the product. Though when comparing the
price with other luxury car makers, BMW is on higher side of the price range for most of its
products, though they market their product in such a way where they can justify the price range,
and that is accepted by the buyer.

The pricing strategy designed by the BMW, is in such a way that it attracts the customer from
both the segment, the high income group and middle income group. The features like, state of the
art interior, and usage of latest technology, are the interest point for the high spending people,
whereas on road performance and reliable customer service, interest the middle range customers.

Innovation is one of the key factor in the success story of BMW, they always trying to do
something new, which is also visible in their organizational structure where company encourages
“creative error” if a worker failed; to encourage innovation (n.a, 2006). That is the reason BMW
is among the very first Luxury car brands to jump into the Electronic car segment with their E-
Series.

As With the inception of electric vehicles, BMW is focusing on promoting them in a way, which
also showcase the power their cars is having along with the minimal environmental damage.
Their promotional campaigns are more focused on relationship building with the prospective and
current customer, at the same time showcasing the brand value. Company never refrain from
spending on their marketing campaigns and it is the part of the job of their marketing team, to
prepare a promotion plan that has the maximum reachability and showcasing the value addition
by the product. These promotion strategies are designed in such a way that they can induce the
customer to buy that product. Like, the promotion campaign designed for their latest electric
vehicles, which showcases the best in the class look cars are having along with the best on-road
performance (Weihrich & Cannice, 2010)

Recommendation of Specific Strategies

Though the major of BMW as always been the high end luxury cars, even in the hatchback
segment, where they have premium luxury hatchback Mini Cooper. They company can try to
have a foothold in the budget segment, with more affordable options. Again the emphasis is on
the fact that the primary business objective and plan is Luxury cars for high end or upper class
customer, who has the spending power.

But the brand image BMW has built in those business years, there is a kind of blind faith on the
Brand and people identify the vehicle with their logo. So if BMW though or try to enter in the
affordable segment then their products will be accepted with open arms.

There are number of customers who wants to own a BMW but can’t afford it, because of high
price range, but if company can plan something like this for affordable segment, then it can
instantly become a huge success.

Another segment which BMW can really excel is by expanding their Buy back option. As of
now BMW offer this service of buy-back in very few countries with some stiff terms and
condition, which are not favorable to every customer.
With the expansion and enhancement of buy-back plan, BMW can increase their customer base
very dramatically, as there are many people who refrain themselves from buying a expensive
vehicle, because of their resale value, considering the scenario when they needed to sell out their
old BMW, and can’t get a fair price. As of now BMW is providing this assured buy-back clause
in very few countries and on limited product line. If the option of buy-back is implemented on all
the products available inline, then the customer can rest assured from the fact that their vehicle
can be purchase back by the company on the genuine price, when they want to sell it.

As BMW is known for its innovation and usage of technology in their vehicle, BMW can
extensively focus on developing the case, which can run on alternate fuel, which can help the
environment, this will also suffice the social responsibility of the company. Along with that
BMW can also implement the idea of driverless car, as it is going to be the future. With the
investment on driverless car, BMW can stay ahead in the competition and they can have an edge
over their competitors, in the luxury car segment.

Concluding Remarks

The reason behind this exemplary success is the way BMW has planned their marketing strategy,
they always try to make customer feel that, by buying a BMW car they have invested their
money, in luxury, quality, durability, safety, efficiency and performance. BMW is having the
tagline of “Ultimate Driving Machine”, that was added almost 35 years back, which reflect the
behavior of customer when they purchase a BMW vehicle. This helps to create the bonding
between the Car maker and the consumers that was showcased in the marketing analysis of
BMW, in the SWOT analysis and Porters model.

This analysis of marketing strategy has made it clear that, BMW is well aware of their customer
requirements, which keeps on changing time to time, and they also try to focus on creating a
marketplace for more consumer centric products. Like the case of electric vehicle. There are
number of customers who are getting aware of the environmental changes and the effect of
automobile emission on environment. Understanding the requirement of these customers, BMW
has developed and launched two of its product in the E-vehicle segment, without compromising
on the product performance. BMW fully understand that to be successful in the market they
needed to understand the customer needs and have to act according to that proactively
Marketing strategy analysis, also explained the brand strategy of BMW, which helps in
maintaining the exclusivity of the brand. In terms of branding, BMW has a clear focus, their only
target market in the luxury car segment, they have never tried to compete in every segment of car
manufacturing. That has helped them to stay apart from the mass manufacturers.

BMW has never get into the competition with the mass manufacturers or with the affordable
segment which is high –volume, mid-price segment vehicles, BMW has built a distinctive brand
image in the international market, which is a sign of successful marketing strategy by only
dealing in high-value and high-volume, considering the customer segment.

BMW is having the global presence they are having foothold in almost 150 countries and
number is keep on growing. The marketing strategies are planned in such a way that it should not
become an issue with compliance, designed by the local government. BMW focuses on having
all the boxes checked before they enter any new territory, and this can be materialized because of
their successful marketing strategy.

The marketing Plan of BMW, has created the blueprint of the strength and weaknesses of BM,
which were majorly considered as the internal segment of the organization and related to the
organizational process and structure. BMW is one of the first to use and implement the new
technology in their automobiles which gives the customer the feel of being appreciated.

The marketing strategy analysis also explain the limitation and weaknesses of the brand, wherein
they have the option of competing all the automobile manufacturer in the 360 degree segment.
Though it might not fit in the legacy BMW is carrying with them, but it can bring in more
customer to the company, who might jump to some high end vehicle once getting used to of the
quality and performance provided by BMW.

Though BMW is a successful luxury car brand, but to maintain that image, legacy and market
share, BMW needed to keep on diversifying their product line, either by introduction of e-series
vehicle (creating environment friendly vehicle) or by working on driverless cars. BMW is one of
the best luxury car brands, and it would be an amazing experience to see their future
performance, when market start shifting towards wither on electric vehicle or on alternate fuel.
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