Jatiya Kabi Kazi Nazrul Islam University

Trishal, Mymensingh.

Assignment
On
Market Strategies & Segmentation of BMW

Course Title: Legal & Ethical Issues in HRM

Course Code: HRM -510

Submitted To:
Mahmudul Hasan Pias,
Lecturer,
Dept. of Human Resource Management,
Jatiya Kabi Kazi Nazrul Islam University.

Submitted By:
Group-4
Session: MBA 2019-20
Dept. of Human Resource Management
Jatiya Kabi Kazi Nazrul Islam University.

Submission Date: 01-12-2021

 List of our group Members

Serial No. Name ID Marks

01 Md. Hasanuzzaman (Group Leader) 201327534

02 Monirul Kadir Tushar 201327531

03 Hasibul Islam Hijbi 201327532

04 Nusrat Jahan 201327533

05 MD. Kawser Khan 201327535

06 Rima Khanam 201327536

07 Tapon Chandra Sarker 201327537

08 MD. Ruhul Amin 201327538

09 MD. Abu Obida Rifat 201327539

10 Abu Sayem 201327540

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 Table of Contents
Executive Summary ........................................................................................................................ 4
Background of BMW ...................................................................................................................... 5
Brand Image and Motto of BMW ................................................................................................... 6
Customer Segmentation of BMW ................................................................................................... 7
Why Work for BMW? .................................................................................................................... 8
Current Business Strategy of BMW ............................................................................................... 9
BMW Marketing Strategy & Marketing Mix (4Ps) ........................................................................ 9
BMW Product Strategy ............................................................................................................... 9
BMW Price/Pricing Strategy .................................................................................................... 10
BMW Place & Distribution Strategy ........................................................................................ 11
BMW Promotion & Advertising Strategy ................................................................................. 11
SWOT Analysis of BMW ............................................................................................................. 12
Strengths ................................................................................................................................... 12
Weaknesses ............................................................................................................................... 12
Opportunities............................................................................................................................. 12
Threats....................................................................................................................................... 12
BMW for Emerging Markets ........................................................................................................ 12
Future Strategy of BMW Group ................................................................................................... 13
Recommendations ......................................................................................................................... 14
Conclusions ................................................................................................................................... 15

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Executive Summary
BMW is the leading premium car manufacturer in the world. This assignment focuses on the
current business strategy BMW adopts and the future strategy of BMW. Business strategy has
been defined by Johnson, Scholes & Whittington in their book “Exploring Corporate Strategy”
as “a strategy that is concerned with how a business competes successfully in a particular market.
It concerns strategic decisions about choice of products, meeting needs of customers, gaining
advantage over competitors, exploiting or creating new opportunities etc.”
We are also researching on the marketing and pricing strategies of BMW. Also on the markets
BMW targeted and how BMW as an automobile industry faced the recession period. The
marketing strategy of BMW Group will include their segmentation, target markets, marketing
mix and by using SWOT analysis, the author will describe the advantages and benefits it is
delivering to its customers and also its disadvantages. The pricing strategy of BMW will also be
described. BMW adopts a differentiated strategy so the author will describe how it affects the
prices of BMW cars.

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Background of BMW
BMW (Bayerische Motoren Werke) in English (Bavarian Motor Works) is the leading car
manufacturer and seller in the world. The company operates its business through the following
segments: Automobiles, Motorcycles, Financial Services, and Other Entities. The Automobiles
segment develops, manufactures, assembles, and sells cars and off-road vehicles, under the
following brands: BMW, MINI and Rolls-Royce, as well as spare parts and accessories. The
Motorcycles segment develops, produces, assembles, and markets BMW and Husqvarna brand
motorcycles, as well as spare parts and accessories. The Financial Services segment includes car
leasing, fleet business, retail customer and dealer financing, customer deposit business, and
insurance activities. The Other Entities segment is comprised of holding, operating, and group
financing companies. Bayerische Motoren Werke was founded on March 6, 1916 and is
headquartered in Munich, Germany. “
BMW sets trends in production technology and sustainability as an innovation leader with an
intelligent material mix, a technological shift towards digitalization and resource-efficient
production. At the same time, flexibility and continuous optimization of value chains ensure
competitiveness. The BMW Group sets trends in production technology and sustainability as an
innovation leader with an intelligent material mix, a technological shift towards digitalization
and resource-efficient production. At the same time, flexibility and continuous optimization of
value chains ensure competitiveness.
Automobiles are marketed under the brands BMW, Mini and Rolls-Royce, and motorcycles are
marketed under the brand BMW Motorrad. In 2017, BMW was the world's fourteenth-largest
producer of motor vehicles, with 2,279,503 vehicles produced. The company has significant
motorsport history, especially in touring cars, Formula 1, sports cars and the Isle of Man TT.
BMW employs more than 1 million employees in more than 40 countries. BMW Group has
worldwide subsidiaries and manufacturing plants in Germany, the UK, the USA, Egypt, China,
South Africa, Brazil, South Africa etc.

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Brand Image and Motto of BMW
Branding is the process of giving a meaning to specific organization, company, products or
services by creating and shaping a brand in consumers’ minds. It is a strategy designed by
organizations to help people to quickly identify and experience their brand, and give them a
reason to choose their products over the competition’s, by clarifying what this particular brand is
and is not.

BMW’s iconic logo has been a hot discussion topic for

decades. And all because of a publicity stunt. Learn
what the BMW emblem really means, how it came to
be – and how the brand’s transformation is reflected in
the new BMW logo. The brands of BMW Group
include BMW, MINI Cooper and Rolls Royce. The
three brands speak for themselves and are of
superlative excellence. All of them have great
innovation ability and the customers really feel
pleasure in driving.
The first key to the meaning of the BMW logo are its
colors: white and blue are the colors of the State of
Bavaria in Germany, home of BMW. A 1929 BMW ad
depicts the BMW emblem, complete with the four
colored quadrants, in a spinning airplane propeller. The
interpretation that the BMW logo represents a propeller
has endured ever since.
“BMW becomes a relationship brand. The new
communication logo radiates openness and clarity,” explains, Senior Vice President Customer &
Brand BMW. “With this new transparent variant, we want to invite our customers more than
ever to become part of the BMW world. In addition, our new brand design is geared to the
challenges and opportunities of Digitization for brands. With visual restraint and graphic We are
equipping ourselves flexibly for the wide variety of contact points in communication at which
BMW will show its presence online and offline in the future. The additional communication logo
symbolizes the significance and relevance of the brand for mobility and driving pleasure in the
future.”
The BMW slogan “Sheer Driving Pleasure” has evolved over the years from various brand
claims in German. The term “Pleasure” first appeared in the 1930s in BMW ads. It was later
expanded to “Sheer Driving Pleasure.” The three-word claim was officially adopted in 1972,
and, with a few exceptions, is used around the world to advertise BMW vehicles. 2003, Rolls
Royce became a part of BMW Group and is the most fascinating and popular brand among
customers, “the luxury motor car par excellence”.

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Customer Segmentation of BMW
BMW generally uses a mono-segment marketing position that appeals to a single customer
segment of relatively wealthy individuals. Most of the automobile lineup which BMW offers
consists of luxury vehicles, and even its Series is priced at the higher end of the mid-range
sedans. The company simply does not offer budget vehicles that may be appealing to individuals
and households with income below the upper-middle class. Despite this, BMW most likely uses
a post-hoc segmentation approach which analyzes marketing data after sales to determine its
customer clusters and category management. Segmentation is based on consumer preferences,
which consists of product evaluation.

BMW is famous for its series, the BMW 3 series, the BMW 5 series, and the BMW 7 series.
For the BMW 3 series, one would imagine, the customer would be a 30-35-year-old, young
professional working at, say, a private equity firm. He/she still hasn’t made it big but is
ambitious.

Similarly, for the other extreme, the BMW 7 series, one would assume the customer to be a
CEO or an old, senior management person, most likely a man. He is 55 – 65 probably retired or
is in his final years of professional life, he has made it big and the car signifies his achievements.

We drew this image to tell you what is the BMW Market Segmentation like for its three series
of cars. This should give you a sense of understanding that and will now help you understand the
BMW Marketing strategy even better.

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Without much thinking, it will be clear that they weren’t targeting the BMW 7 series segment.
Those movies are too violent for their liking and do not fall into the taste of movies which that
generation would like to watch.

The target segment definitely isn’t the 40-55-year-old BMW 5 series owners as well. They have
a family and the content is too graphic to be seen with kids and family. There could be a certain
level of argument about the target being the BMW 3 series owners. But a few of you would
begin to realize that the target wasn’t even them.

Almost all of the people had one opinion in common about the company. they all a feel a feeling
of safety and comfort while driving a BMW car. Also the unique brands of BMW and its
performance and quality were also the reasons why they preferred BMW cars over other
premium car manufacturers like Mercedes, Audi, Ford, and Lexus etc.

Why Work for BMW?

BMW offers a variety of cars that may fulfill the distinct needs of its consumers. Each of the car
types it offers such as sedans, SUVs, or roadsters all have several vehicles in the series which
gradually increase in price and feature offering. BMW actually segments the premium market by
finding a balance between purchasing behaviors and marketing mix and responding
appropriately to value and consumer trends. However, the brand does not compromise and cater
to most segments but adopts a marketing strategy that focuses primarily on a premium target
market.

The primary consumers of BMW vehicles are men aged 25-40 with higher levels of income. This
segmentation works for BMW as it attempts to maintain its status as a luxury car manufacturer.
With BMW combining luxurious superiority with performance and reliability, the company
positions itself to appeal to upper-class customers that will appreciate the masterpiece and
symbolic nature of its highly technological automobiles. Therefore, BMW establishes a
particular value to its product which is reflected in both pricing and marketing strategy.
There is a quotation on the website of the BMW, which says that “the image that BMW Group
has positioned itself in exclusivity, performance, quality, technologically advanced producer in
the world. The markets BMW position themselves are very competitive”. Most of the people
value “a feeling of safety” while using BMW, which positions BMW Group ahead of its
competitors in customer satisfaction.

BMW targets people who are aged between 25 and 40 because these people have a successful
image. By, these people have a clean modern look and a feel good factor. BMW focuses on
being labeled as a “luxury car” and “a foreign or international car”, so BMW does not look to
target one ethnicity or citizenship. The aim of BMW Group is to target customers that have an
income of 25,000 Pounds. BMW has a strategy of targeting their customers by using
segmentation. Geographically, BMW targets the areas that are more industrialized like Europe,
North America, some parts of Asia and Africa, China and South Africa. More than 70% of sales
of BMW cars are recorded in Europe and North America.

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Current Business Strategy of BMW
The business strategy of BMW is based on having a powerful brand image. This strategy forms
the foundation of the success of the BMW. BMW believes in maintain core values as
technology, innovation, performance, quality, reliability, exclusivity and customer satisfaction.
The company slogans of BMW in English “The Ultimate Driving Machine” and “Sheer Driving
Pleasure” give us an overview of the marketing strategy it adopts.

The strategy of BMW is clearly defined on the homepage of the company. “Identify potential
and encouraging growth. Knowing what we represent. Recognizing where our strengths lie and
making the best use of every opportunity. Goals we have attained are in essence the point of
departure for new challenges”.
BMW mission statement is defined as “to be the most successful premium manufacturer in the
car industry”.

BMW Marketing Strategy & Marketing Mix (4Ps)

Marketing Strategy of BMW analyses the brand with the marketing mix framework which
covers the 4Ps (Product, Price, Place, Promotion). There are several marketing strategies like
product innovation, pricing approach, promotion planning etc. These business strategies, based
on BMW marketing mix, help the brand succeed. BMW marketing strategy helps the
brand/company to position itself competitively in the market and achieve its business goals &
objectives. Let us start the BMW Marketing Strategy & Mix to understand its product, pricing,
advertising & distribution strategies:
BMW Product Strategy

The product strategy and mix in BMW marketing strategy can be explained as follows:
BMW Group is primarily focused on manufacturing high
luxury two-wheel and four-wheel automobiles for the
global markets. These products are manufactured at certain
specific facilities across the globe, based on specific needs
of each segment. Some of the products offer high level of
personalization to its customers, while majority of the
products are standard across continents. The four-wheeler
automobile of BMW has always been associated with the
luxury and high end segment of products. This has been a
constant effort of the company to be considered
“Premium” by the customers. The products in the BMW
marketing mix are premium sedans, SUVs and sports cars, which offer style, performance and a
status symbol.
The products undergo a continuous process of technological advancement to be of strong
competition in the markets. The company earlier relied on luxury and style as its unique features.

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However, over the years, the importance of reliability, safety and efficiency in BMW's product
strategy has become quite evident in the product offerings. Advancement in engineering and
technology has been well embraced by the BMW Group, and most of the products rightly project
the same. The company also has a manufacturing unit for motorcycles and bicycles for certain
markets. These products are generally categorized as the ‘niche’ market products.
Overall, the company gives high importance to safety and luxury standards of its products. Also,
innovative and fresh products are introduced at regular time intervals according to the changing
needs of the customers. Recently, BMW also entered the electric and hybrid motor vehicle
segment with the introduction of a new model, the BMW i8.
BMW Price/Pricing Strategy

Below is the pricing strategy in BMW marketing strategy:

BMW Group has always been a premium player in the market, offering high end luxury
automobiles which are considered a status symbol. The products are all priced at a ‘premium’
compared to its rivals in the category. The BMW-associated brands like Mini Cooper and Rolls-
Royce also convey the same pricing strategy of the company. These brands are priced a bit
higher that the standard BMW product range.
BMW establishes a luxury pricing to classify itself into the “Desirable” segment of the market.
This pricing strategy in its marketing mix also ensures that the brand does not get diluted, or the
positioning of the brand become unclear. Continuing this marketing strategy is the pricing of the
spares and after-sales service costs of BMW automobiles. These are also priced a bit higher than
other contemporary brands. However, BMW has adopted a dynamic pricing strategy on its entry
level vehicles for newer markets, (India, Brazil) where it offers a competitive price for its smaller
models. The new 3-Series vehicles from BMW have been priced at an attractive price of 25 Lacs
INR. This is a lucrative figure, enabling buyers to imagine a possibility of owning a luxury
segment vehicle. Apart from this, BMW has gone one step further to increase sales, by
introducing financial services to its customers. Overall, however, the pricing has been clear to
attract the premium and niche markets of automobiles.
However, BMW has adopted a dynamic pricing strategy on its entry level vehicles for newer
markets, (India, Brazil) where it offers a competitive price for its smaller models. The new 3-
Series vehicles from BMW have been priced at an attractive price of 25 Lacs INR. This is a
lucrative figure, enabling buyers to imagine a possibility of owning a luxury segment vehicle.
Apart from this, BMW has gone one step further to increase sales, by introducing financial
services to its customers. Overall, however, the pricing has been clear to attract the premium and
niche markets of automobiles.

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BMW Place & Distribution Strategy

Following is the distribution strategy in the BMW marketing mix:

BMW being a world-renowned vehicle manufacturer, it has spread its manufacturing facilities to
many cities. The first facility was located at Bavaria, Munich. However, with gaining newer
customers across the globe, the company has now set up massive production facilities to cater to
such huge volumes. Apart from its manufacturing, BMW marketing mix place strategy covers its
global reach to company dealerships and even other premium car sellers
Presently, BMW has manufacturing facilities in over 10 countries, together producing more than
2430000 vehicles (2015 figures). BMW has setup its manufacturing facilities in many smaller
and emerging markets recently. This has helped the company to expand its market to many
smaller countries as well. Many of the manufacturing units cater to the local requirements and
export considerable volumes to nearby countries.

BMW Promotion & Advertising Strategy

The promotional and advertising strategy in the BMW marketing strategy is as follows:
BMW has been a world-renowned brand for over half a century. The company has been a strong
advertiser of its products and other offerings. The promotional strategy as a part of its marketing
mix focuses on aggressive advertising using media channels like TV, online ads, billboards, print
ads etc so that it can create a continuous brand awareness. BMW has been a close sponsor for
various rally racing events and other sports events. The company also promotes many celebrated
sports teams and rally racers. BMW has been a constant participant in various international rally
races for a long time. They have been a successful team at the F1 races on numerous occasions.
Apart from the F1, BMW has also been a strong contender at the Superbike racing category.
Since the beginning of its motorcycle manufacturing in 1923, the company has been actively
participating in various racing events. Apart from the participation, the company has been a
major organizer of such event globally. These events have led to BMW being recognized as a
fast and reliable automobile over the years. Moreover, due to the huge fan following of such
racing events across the globe, BMW has found an effective way to reach out to newer markets.
Apart from these sponsorships, BMW has also found an innovative method of promotions. The
‘April Fools’ pranks by BMW every year have been well accepted by the world, making it
another strong marketing promotion event for BMW. Hence, this conclude the BMW marketing
mix.

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SWOT Analysis of BMW
A SWOT analysis will be used to see the various Strengths, Weaknesses, Opportunities and
Threats of the BMW Group.
Strengths
 Strong marketing strategy.
 Customers recognize the strong brand name of BMW Group Company.
 Strong brand image i.e. BMW, MINI Cooper and Rolls Royce.
 Every 2 to 3 years BMW introduces its new version of cars i.e. constant innovation and
technology.
Weaknesses
 There is an increasing number of duplicate spare parts of BMW and MINI Cooper.
 The manufacturing costs of BMW cars are very high as compared to its competitors. This
is also a reason for high pricing of BMW cars.
 Not a mass market company like Toyota and their volumes are small.
Opportunities
 There is an opportunity for BMW Group to increase further innovation and technology in
their cars due to increasing competition in car industry.
 BMW Group should also look to make new collaboration with other car manufacturers
i.e. introducing new brands.
 BMW Group should also look to produce cheaper cars by new innovation and
technology.
 Expansion of the BMW Group in Asia Pacific, Asia, Africa and Australia.

Threats
 Recession which has affected businesses in every part of the world.
 To maintain the same level of innovation and performance.
 The growing competition in the automobile industry i.e. competitors of BMW Group
include Mercedes, Audi, Jaguar, Ford, Lexus.
 The earnings of the BMW Group are Dollar dominated, so the increasing strength of
Euro is another threat for the company.

BMW for Emerging Markets

BMW is expanding itself in emerging markets like China, Brazil and India. The CEO of BMW
Group, Norbert Reithofer has emphasized his strategy of expansion in emerging and developing
markets. In January 2010, BMW had sold 20,000 cars only in the Chinese market, a rise of 122
percent from previous month’s sales. In the Reithofer strategy for emerging markets, he
emphasized on targeting a double-digit growth in the Chinese market for 2010. This can be
achieved by expansion of BMW manufacturing plants in China and introducing new innovative
cars like introducing small and mini cars for the Chinese people.

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Another growing market for BMW Group is the Indian market. BMW Group is aiming to
become the number one position for the luxury cars in India. Mercedes-Benz is the leading
luxury car manufacturer in the Indian market and BMW Group is completing head to head with
Mercedes. BMW sold a total of 2,305 units in the first eight months of 2009. BMW Group sales
in the Indian market come from the company’s two luxury models i.e. the 3-series and 5-series.
BMW Group is aiming at a sale of more than 3,000 units in 2010 in the Indian market which the
company can accomplish by targeting middle class people of the Indian community.
The Brazilian market has been a growing market in the last decade for most of the automobile
manufacturers especially for BMW Group. The BMW Group strategy for Brazilian market is to
make joint ventures with other leading car manufacturers in Brazil like the Chrysler Group. In
doing so, BMW Group can expand itself in the Brazilian market as being the premium seller and
manufacturer of cars.
Almost all of the people had one opinion in common about the company. they all a feel a feeling
of safety and comfort while driving a BMW car. Also the unique brands of BMW and its
performance and quality were also the reasons why they preferred BMW cars over other
premium car manufacturers like Mercedes, Audi, Ford, and Lexus etc.

Future Strategy of BMW Group

In September 2007, BMW Group announced their new strategic direction. By 2020, BMW
Group intends to further strengthen the position of the company by increasing volume of sales to
more than two million units per annum.
This target of BMW Group of increasing its volume of production up to 2 million units per
annum can be achieved by expanding BMW cars to new markets. Like some markets in the
Asian countries such as Pakistan & Bangladesh where the potential for growth is great and also
in African countries like more different cars in the South African market and Nigeria who is
probably in the top petrol manufacturers in the world. Another expansion for BMW Group can
be in the Australian market which is a developed and industrialized economy. But the BMW cars
are not used that much as compared to other developed economies.
The mission statement of BMW Group is clearly defined: “the BMW Group is the world’s
leading provider of premium products and premium services for individual mobility”. Another
important point in the mission statement was that “BMW Group will invest substantially in
future technologies, new vehicle concepts and pioneering drive systems”.
The BMW Group’s new strategy which has been given the name of Number ONE is aimed at
profitability and increasing value over the long term. The mission statement of the BMW Group
also included the elements in order to achieve the strategy.
 Striving in order to reach a leading position in attractive markets.
 Focusing on securing a competitive share of the automotive market segments.
 Working in order to improve the company’s efficiency and cut costs in operations.

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Recommendations
The future strategic position of BMW Group is based on maximizing the profits of the company
and to remain the premium luxury car manufacturer by looking into new areas of automobile
industry.
In order to maximize profits of the company, BMW Group will have to reduce costs. The
mission statement of the BMW Group says that the company is trying to reduce costs by
reducing the number of employees and by reducing costs on Research & Development.
The author’s point is to maximize the profits of the company; BMW Group should look to
reduce the manufacturing costs of its cars. The company should not look to reduce costs on
Research & Development.
Audi Company has a future strategy that focuses on more investment in Research &
Development to look into new areas of the automobile industry.
According to the author, BMW Group should also spend more investment on Research &
Development, and with new innovation and technology, find ways of decreasing the
manufacturing costs of the car. This reduction in costs can be done by doing more effective
Supply Chain Management.
A positive aspect of BMW Group’s future strategy is investment in emission reduction
technologies. BMW Group is aware of the environmental hazards that are taking place in the
world and investment in this area will lead to a greater number of customers for the company.
In future strategy, BMW Group should also look to make collaboration with other major car
manufacturers in order to remain the leader in the automobile industry and further enhance its
brand image.
BMW Group can further widen their strategy and look to add smaller cars like MINI Cooper and
increase volumes of smaller cars that are cheaper in price to the bigger cars.

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Conclusions
BMW is the leading premium car manufacturer and seller in the world. The sales of BMW are
rising day by day. But one great threat for BMW is the increasing competition in the automobile
market. BMW has got piercing competitors like Audi, Mercedes-Benz being the two nearest to
BMW in competition in the premium car industry.
BMW is now trying to target the emerging markets of the world. The sales of BMW in different
markets of the world tell that the European and the US markets are the best markets for BMW in
terms of sales. In recent years, however, the Chinese market has been a great attraction for the
BMW and sales have been increasing every month for the BMW.
In the end it may be said that the BMW distinguishes from its customers by its great advertising
and marketing campaigns and mostly by their great brand image. The innovation of the
company, diversification in new markets, technological advancement and customer satisfaction
are the key to BMW success in the luxury car market.
The latest TV-Ad of BMW is a great description of BMW as an automobile leader in which they
say, “we just don’t make cars, we make joy”. BMW should also remain careful to the changing
trends in demographics, society, and thinking of people and remain a diversified company.

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