Marketing Plan for the BMW Motors Company - Case Study Example

Marketing plan for the BMW Motors Company Introduction BMW is the leading company in the production of cars. The company’s head office is located in Germany and it branches is all over the world. The company has managed to expand its business due to its strong brand name and the quality vehicles which it manufactures (Lomax 2007, p. 398) Brief marketing audit The brief marketing audit of BMW Motors Company will be based on the situational analysis (as shown in the SWOT analysis section below) of the company especially on the weaknesses and threats which affect the company in one way or another. The marketing plan for BMW aims at creating a better brand equity which will improve the image of the company and focus on customer satisfaction as the major goal of the company. In addition, the marketing plan will be focusing on creating relationship marketing program so as to benefit from the loyal customers who are offering referrals to the company. However, the status of the company has been somewhat unstable because of the increasing number of competitors which are offering their cars at cheap prices as compared to BMW Motor Company. The company focuses on the high priced vehicle so as to indicate high quality cars being offered in the company (Lomax, 2007, p 398). SWOT analysis To carry out situational analysis of the BMW Motor Company, the management should carry out a SWOT analysis so that they can identify the major weaknesses, strength, opportunities and threats of the company. SWOT analysis is a powerful tool used when carrying out marketing plan for the company. This tool can be used to identify internal and external factors of a company. The internal factors comprises of the strengths and weaknesses of the company. These factors can be control since there are within the control of the company. They include marketing, organizing of the employees, controlling of finances and manufacturing of company’s products while the external factors comprises of opportunities and threats. These factors are beyond the company’s control. Some of these factors include the prevailing economic situation, surrounding business environment, changes in social and lifestyle of consumers in targeted market and technological advances which affect the taste and preference of the customers. Strengths The key strength of the company is high sales which have been experienced for long time. This has made it possible for the company to take its time in carrying out research and development. This has been beneficial to the company since the management is in a position to identify the market condition of different countries and the prevailing laws and regulations in those countries. Secondly are the economies of scales. Due to this, BMW has created strong relationship with the customers. The company manufactures different kinds of vehicle to suit the interest of all classes of the customers in the market. Besides, the company has a strong brand name which has not only improves the image of the company but also influence many customers to leave their competitors. The company has been in a position to hold a higher market share across the world due to it constant production of high quality vehicles in the market. Other marketing strategies which the company uses when carrying out it business is relationship marketing. This has help the company to be positioned itself well in the market and enable it to get to know its customers well, there purchasing behaviours and there needs and wants. Opportunity The main opportunity for BMW is the advancement in technology; the company is able to receive many orders from the customers through the internet. This has increased the company’s business and also increases the sales of the company. Furthermore, the company has been utilizing internet as their major means of advertising its products in the market. Lastly, the company has been enjoying dealing with corporate customers who are willing to pay premium prices since they are looking for quality products which are been offered by BMW (Kerin, 2009, p 327). Weaknesses The main weaknesses of BMW is the global operation, managing international business is more challenging because they have to comply with laws and regulation of different countries which varies. In addition, the implementations of legislation which are legally accepted in Germany, for example, might differ with legally accepted legislation in the US. Such varying legislation is quite expensive for the company to maintain and can lead to poor management in the company. Lastly, the company has never been addressing effectively the shareholders needs in the company. This has arisen due to the global nature of the company. Operating rules which govern factors such as shareholders bonus issue and other rights of the shareholders differs in countries. This has strained the management of the BMW and thus affecting its normal operation in the market. Threats The main threat in the BMW Motor Company and the entire motor industry is the high growing rate of competition in the industry. The company is facing tough competitors in the market especially from Chinese competitors which are not only producing counterfeit cars but also selling them cheaply. Chinese companies are taking advantage of the customers’ sensitivity in terms of prices and also the elasticity of demand in this industry. The buying process and customers behaviours in this market are complex because it involves spending huge amount of money and customers are not willing to spend their money in low quality vehicle which will not last. As a result, the company has spent a lot in marketing trying to influence the customers to purchase it products in the market. Lastly, the company was hard-hit by the recent world recession which lowers the company’s performances and it profitability. Besides, the strict rules and conditions in different countries has been a threat to the business of the company. Some of the countries restrict the transfer of currencies across their borders making it difficult for the company to manage it business effectively (Kerin, 2009, p 327). An analysis of consumer purchase process The purchasing process of consumers in every organization such as BMW or any other motor industry is complex because customers undergo several processes before making their decision on whether to buy or not buy. In brief, customers purchasing behavior in this segment is as follows. The first step in buying process is the need recognition. This arises whenever a company introduces a new model in the company. Furthermore, the customers will only think of buying a car whenever the need arises. This need can be cause by various factors such as availability of extra money or due to the influence from friend and age groups. The next step after need recognition is the information search. At this stage the customer is looking for more information concerning the product he is planning to purchase. They can obtain this information through friends, relatives, and even family members. Some can just work around doing window shopping and asking question about the product so that they can get to know more about the product they intend to buy. This is a very important stage especially when buying a product which is expensive. BMW sell very expensive cars so as to indicate the quality of there products and thus making the clients to undergo long buying process before they come up a solution on whether or not to buy. The third step is where the company is loosing many customers. Many customers will want to compare alternative which are available before purchasing a car. The main factor they consider when evaluating alternative is the price. Customers look for companies which offer their vehicles at a cheaper price. After this step the customer will then make a decision on which car to buy. They will only consider some few factors such as terms of sale, the policy governing the sale of the car and may be the experience he might have gone through with such a car before. Finally, the customer will undergo the post purchase behaviour. The customer will experienced the performance of the car and compare it with how he had expected the car to perform. The management of the BMW should be careful on how they handle the satisfaction or dissatisfactions of the customer. The advantage of following post purchase behaviour is that the management will be in a position to control the consumer value perception, consumer communication and ensure repeat purchase behaviour (Kerin, 2009, p 327) Segmentation BMW Motor Company has segmented it market facing on many factors such as behavioral, demographic, psychographic and geographical segmentation. The management of the company has segmented its market using the above strategies so as to attend all the customers and satisfied them completely. For example the company segmented it market demographically so that they can allocate the expensive cars to the customers who are financially stable, they also use this strategy so that they can defend it market effectively since they will be in a position to attend its customers in a personalized manner and satisfied them effectively. In addition the company had segmented it market geographically to ensure that they complied with the regulations which differs from region to region. The company serve international market and for that reason the management had consider using geographical segmentation so that the diverse interest of the customers from different geographical area are effectively achieved (Ward's Reports Inc, 2005, p 60) Because of the application of the above segmentation strategies, the company has improved its popularity among the customers in the market and also has managed to stay ahead of competitors in the market. Besides, the management of the company has been able to study customers’ behaviour and the purchasing process of its customers so as to developed effective promotions which are more appealing to the customers. Targeting BMW as targeted on the appropriate customers who are capable and willing to pay premium prices for the cars offered by the company. Due to this, the company has benefit in the following ways. First, the company has benefited since the promotions has been directed to the potential customers in the market. By segmenting and targeting the right market segment the marketing department will be in a position to design the appropriate message which will be appealing to the customers in the market. Targeting will also help the company to create a positive image and focused on a specific market segment which will concentrate on achieving the needs of the customers. Besides, the marketing campaign will be cost-and time-efficient avoid using excess resources unnecessarily. Such strategy will help the company stand out from other competitors and become the preferred. Positioning Positioning is very important because they will influence the customers to buy products from the company. BMW can position its products by using price, promotion, advertising and channel of distribution. The management of the company should consider the following strategies when positioning its products in the market. Some of these strategies include the designing of light vehicles, efficient in its performance and stability of the car. Secondly, the company can positioned its cars by introducing features which are attractive to the customers. This can comprised cars which are automatic i.e. cars which can be drive with out the use of a gear. Lastly, the company can positioned itself by considering its competitors in the market i.e. the company will positioned itself in the market by proofing that it model is superior than Mercedes in performance and the expected durability of the car. Marketing mix (4Ps) The marketing mix or the 4Ps are the marketing concepts which stand for product, price, place and promotion. This marketing concept is very important because it assist the company to position itself well in the market. Besides, these concepts can be used as a marketing strategy in fighting competitors in the market. For example, BMW has used these strategies as follows. Price BMW Motor Company priced their cars highly so as to indicate the quality of the vehicle they sell in the market. This strategy is very important as it will help the company to be identified as the leading in terms of the quality and durability. Product The company can improve it product by packaging them in appropriate manner and offering guarantee for a certain length of time. For the cars, the company can give a guarantee of three months in which they will repair the car incase it break down provided the problem is not caused by negligence. Place This normally associates with channel of distributions that ensures that the customers in the market are supplied with the appropriate products and in the right time. Promotion These are the kind of promotional tools used by the company to promote their products. Some of the promotional tools used by the company involved the use of internet, advertising, public relations and TV. These will help in popularizing the company’s product in the market. Bibliography Ward's Reports, Inc, 2005. Ward's automotive yearbook. Ward's Communications. (4). 56-61 Kerin, R. A. 2009. Marketing. McGraw-Hill/Irwin (7). 325-329 Lomax, W. 2007. Marketing: A Brief Introduction. Cengage Learning EMEA. (3) pp 396-401 Read More