bmw mm project

A Project Report on BMW Super Luxury Cars

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BMW- The Ultimate Driving Machine

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An insight into luxury car brand

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Prepared By: Group 5

1. Srilasya G. (11FN-037)

2. Mudit Gupta (11DM-077)

3. Vikas Marwaha (11FN-115)

4. Soumya Ghosh (11DM-156)

5. Rohit Iyer (11FN-082)


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S.No. Topic Page No.

1. Introduction………………………………………………………….. 3

2. Luxury Car Market in India…………….………………………...... 4

3. BMW in India…………………………......................................... 6

4. Product Lineup…………………………………………………..…. 7

5. BMW India and Competition Product Mapping….……………..... 8

6. PESTEL Analysis of BMW …………………………………………. 8

7. SWOT Analysis of BMW……………….…………………………… 12

8. Porter five forces analysis…………………………………………… 13

9. Segmentation, Targeting and positioning strategy for BMW in India… 15

10. Marketing Mix………………………..………………………………… 20

11. BCG Matrix and PLC for BMW 3 Series in India………………………

29

12. Survey Questions and Responses………………………………………. 30

13. Conclusion …………………………………………………………….. 32

14. Recommendation………………………………………………………. 32

15. Exhibit 1: BMW 3 Series monthly sales data………………………… 33

16. Exhibit 2: BMW Advertisement- Joy is life………………………….

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17. References……………………………………………………………......

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1. Introduction

BMW is an acronym for Bayerische Motoren Werke AG--or, in English, Bavarian Motor Works.

Whatever you call it, the German-based company is one of the world's most respected

automakers, renowned for crafting luxury cars and SUVs that offer superior levels of driving

enjoyment.

Founded in Munich, the company began in the early 1910s as an aircraft manufacturer. BMW's

current logo, designed to represent white propeller blades against a blue sky, reflects these

origins; its blue-and-white color scheme also references Bavaria's blue-and-white checkered flag.

It wasn't until 1928 that production began on the first BMW automobile, the Dixi. The car

proved tremendously popular, and its success helped the manufacturer weather the Depression.

BMW's best-known pre-World War II vehicle was the Type 328 roadster, a supple two-seater

that racked up over 120 victories on the motorsport circuit between 1936 and 1940. Postwar

BMW cars maintained this tradition, winning several racing, rallying and hill climb victories

The early 1950s saw the launch of the BMW 501, a roomy, voluptuous sedan that was

resplendent with all of the hopefulness of that era. It was soon followed by the 502 which was

powered by the world's first light-alloy V8, foreshadowing BMW's ongoing commitment to

developing new technology. The best-selling BMW of that decade was the Isetta, a petite two-

seat "microcar" typically powered by a 12- or 13-horsepower engine. The mid-'50s also saw the

debut of the limited production and breathtakingly beautiful 507 sports car which had an alloy

body and used the 502's V8 for propulsion. In the 1960s, BMW sales strengthened significantly,

thanks in part to the immense popularity of the 1500, a sporty family sedan. By the 1970s, BMW

was establishing itself as a full-fledged car company.

It was a pioneer for many emerging technologies, including turbo charging and advanced vehicle

electronics. This was also the period when BMW of North America was established and

consumers, who coveted both sports and luxury cars, became loyal "Bimmer" owners. The '70s

also saw the birth of BMW's three-tier sport sedan range consisting of the 3 Series, 5 Series and

7 Series cars and the creation of its performance M division. More recently, the company has

been expanding its reach worldwide. It opened its first U.S. manufacturing plant in the latter half


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of the 1990s and has expanded its brand empire to include Mini and Rolls-Royce. BMW also

continues to build motorcycles, something it has done since the 1920s.

The automaker's famous advertising slogan describes each of its vehicles as "the ultimate driving

machine," and it's not mere hyperbole. Over the past couple of decades, BMWs have become the

standard for performance and luxury in most of the "over $30,000" segments. With family-

friendly wagons, crisp sedans, distinctive coupes, nimble sports cars and spacious SUVs offered,

BMW's model roster is diverse. But its luxury vehicles all share a common characteristic: the

ability to make drivers feel gloriously connected to the road.

2. Luxury Car Market in India

A luxury car is a luxuriously styled automobile which is designed to give satisfaction and

comfort to its owner. A luxury car typically has carrying capacity of 6 passengers. The luxury

cars in the Indian market are very expensive, with price tags that start from 20 lakh. Hence,

luxury cars can only be afforded by the people who belong to the high income group and there

are a lot of such takers in the Indian automobile market.

The recent growth in the luxury car market in India is much more than mere market dynamics in

a particular car segment. It is a reflection of the changing lifestyle of the affluent class in

the country. In India, the luxury car segment (Average Price 25-30 Lakh) has been growing at

an average rate of 20% or above during recent years; it seems to be least affected by the

global financial crisis. During worst recession period when world was facing low market

demand trends, Indian luxury car segment grew at 23% to 6,671 vehicles according to the

Society of Indian Automobile Manufacturers (SIAM) despite a 0.5% decline in passenger

car sales, to 11.04 lakh vehicles (April-December 2008 Report). But financial year

ended March 2010 has shown growth of automotive sector up by 25% to 15.26

lakh vehicles. This indicates optimistic sign of recovery of sector. While the

Indian auto industry is expected to grow at 17% to 19% on an average, sales of luxury

and super-luxury cars are expected to grow exponentially.


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Luxury car segment accounts only for 3-4% of total car sales in India. But what lures the

international majors is the fact that this segment is growing at 25%-plus (2009 sales), much

higher than 15-17% growth registered by the small passenger car segment over the past few

years. This growth of luxury car sales is driven majorly by increased wealth-creation within

average Indian population and the desire of individuals to join the millionaire-club by

flaunting their wealth.

2.1 Luxury car majors in India

Mercedes-Benz, BMW and Audi put together have around 85% market share. The German

car brand Mercedes-Benz had first-mover advantage as it had started operations in India in

1995 and there was no direct competition in this category. So, it remained ‘Numero

Uno’ luxury car brand in India for more than a decade. But, market dynamics have

changed significantly after the entry of BMW in 2006 followed by Audi in 2007.


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The overall market share of luxury cars has been reorganized due to the new

entrants. This has resulted in new equations being forged amongst the various players, driven

primarily by a rapidly swelling millionaire-club having diversified choices and preferences. In

2006, BMW had 9% market share which has now grown to 42%, catapulting BMW as the

number one luxury brand in terms of sales. Audi which started its operations in 2007 has had the

fastest growth-rate amongst the three and has now captured 20% of the luxury car market. So,

the Indian luxury car market is favorable for new entrants who are capable of grabbing the

untapped opportunities by following the customer-oriented approach and having ability to

induce demand by innovation at each level of marketing mix.

3. BMW in India

BMW entered the Indian car market in the year 2006 with the launch of its first BMW model.

The company established a sales subsidiary in Gurgaon in 2006 to develop its dealer network. In

2007, BMW set up its first state of the art manufacturing unit in Chennai. The company's India

based manufacturing units cater to the local markets. Currently BMW has a network of 25

dealers across the country and plans to increase it up to 40 by the end of 2012 mostly in Tier II

cities. The company imports most of its critical components from its overseas supply base; with

only 10 per cent content sourced from the domestic market, which includes seats, leather and

door-panels.


4. Product Lineup

The BMW lineup consists of highly elegant and exot

series and 7 series to be hybrid cars made exclusively to meet the needs of highly executive

people and officials from very sound professional backgrounds. These cars are simple yet elegant

and have many accessories that make them unique in all terms. In addition to this, there is an

SUV known as the X3. The M series in BMW is made exclusively in sports related to cars. This

product line of BMW is loved by many car lovers for the sporty looks as well as the classi

engine.

Cars from Bmw in India

BMW 3-Series

(Sedan)

BMW

3-Series 320i

(Petrol)

BMW

3-Series 320d

(Diesel)

BMW

3-Series 325i

(Petrol)

BMW 5

BMW

5-Series 523i

(Petrol)

BMW

5-Series 525i

(Petrol)

Project Report on BMW Super Luxury Cars

The BMW lineup consists of highly elegant and exotic cars including the 1 series, 3 series, 5



ies that make them unique in all terms. In addition to this, there is an


product line of BMW is loved by many car lovers for the sporty looks as well as the classi


BMW 5-Series (Sedan)

BMW

Series 525i

(Petrol)

BMW

5-Series 525d

(Diesel)

BMW

5-Series 530i

(Petrol)

BMW

6-

Series

(Sedan)

BMW

6-Series V8

(Petrol)

BMW 7-Series (Sedan)

BMW

7-Series 730Ld

(Diesel)

BMW

7-Series 740Li

(Petrol)

BMW

7-Series 750Li

(Petrol)


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ic cars including the 1 series, 3 series, 5



ies that make them unique in all terms. In addition to this, there is an


product line of BMW is loved by many car lovers for the sporty looks as well as the classic


Series (Sedan)

Series

BMW

7-Series 760Li

(Petrol)

BMW (SUV)

BMW

X-5 (SUV)

BMW

X-5 (Diesel)


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5. BMW India and Competition Product Mapping

6. PESTEL Analysis of BMW:

1. Political:

• Land allocation policies: Land-use conversion is time consuming and becoming

complex. It directly affects BMW, which is planning to increase its production capacity

of Chennai plant.

• Taxation: The government may reduce taxes on smaller, fuel-efficient cars while raising

them on older, oil-thirsty vehicles. BMW is directly affected because selection of their

vehicles have a high performance petrol engine, which means customers will think twice

when buying one

• The consumer protection act: The consumer protection act makes it illegal for BMW to

provide cars in a dangerous form. Therefore BMW needs to make sure that all their cars

are thoroughly checked and awarded that they are safe before the on set of purchase in a

dealer showroom.

• Local politics: Local politics plays a big role in land and property acquisition.


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2. Economical:

• Inflation: Due to inflation the cost of production increases rapidly due increase in cost

of required raw materials, labor etc, thereby increasing price of cars and decreasing its

demand.

• Economic Growth: Due to economic slowdown GDP rate of India is falling and

because of which the purchasing power a country’s people is decreasing and they tend to

save more money. This can affect sales of BMW.

• Efficiency of free market: In India the auto sector is open to all, hence it is fiercely

competitive. More and more automobile manufacturers are entering the luxury car

segment. Luxury car manufacturers like BMW find it difficult to capture and maintain a

profitable market share.

• Quality of infrastructure: Due to the lack of proper infrastructure like roads, petrol

pumps, distribution ports and commercial property most car manufacturers have to

confine their operations mainly to the urban and metro areas. The above constraints

cause problems for expansion plans and also increase distribution cost.

• Interest Rates: A high rate of interest causes difficulty in raising capital for expansion

and growth of business since it is costly to borrow money. This may in turn slow down

the growth of the venture.

• Exchange Rates: The exchange rates of a country affect the demand and feasibility of

importing goods and exporting goods

3. Socio-Cultural Factors:

• Young Consumer: India being one of the youngest countries in the world has

significant presence of youth. This offer a big opportunity for BMW. These young

people have grown up with internet and are exposed to better living standards. Also,

they start making money at an early age. These young people who consider spending

more money for performance and quality.

• Availability of Easy Credit: Presence of car loans has increased the purchasing power

of the customers.


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• Growing Urbanization: Growing urbanization is converting the people from net saver

to net spenders.

• Awareness level: Due to the rise of social media network tools and other mass

communication tools awareness level is increasing. Because of these, tools offers and

scheme of the BMW can reach the customers very fast.

• Aspiration: Due to the westernization of Indian culture, consumer behavior is

changing. Like now consumers are now more interested in stylish products than they

were 10 years ago. Also, it is changing the aspiration value of the customers and

offering an opportunity in front of BMW to catch the opportunity.

• Unemployment: This is one of the most important factors that affect economy

adversely. Due to weak global economic conditions, investment banks are recruiting

lesser number of people and firing extra staff. Because of this, the demand for luxury

cars decreases which further decreases demand for producing such goods, as people tend

to save money and cut back on spending.

• Increase in no. of working women: Because of increase in the work force of women,

the characteristic and composition of the potential buyers of BMW is changing.

4. Technological Factors:

• Supply Chain Management: Over the years supply chain has been strengthened by

incorporating technology. It has made possible high participation of the manufacturer

and dealers in the market flow of cars.

• Demand Forecasting: Soft wares are available for demand forecasting, merchandising

and seasonality management which if effectively used can change fortunes.

• Data Mining: There has been a great surge in data mining activities for better

understanding of market demand patterns and consumer buying behavior to arm

themselves with the best offerings.

• Customer Support Activities: Better customer support and grievance addressing has

been possible due to EDI (Electronic Data Interface), QR (Quick Response) and ECR

(Efficient Consumer Response) systems.


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• Strategy Building: BMW can incorporate decision making tools at various levels to

build the best strategy by collecting and collating data from various sources.

• Going Online: Effective online activities can be used for building customer relations,

advertisement & promotion, customer support and brand building.

5. Environmental Factors:

• Customer awareness towards environment: Customers are becoming more aware

towards environment. By demonstrating concern towards environment, BMW can

generate good will.

• Environmental policies: Environmental policies are becoming more stringent than

before. By reducing the carbon emission and designing more efficient cars, BMW can

get benefit from government.

• Global warming: More and more people and getting aware about the issue of global

warming. BMW can provide superior and eco friendly design like electric cars, cars

using bio fuels to generate goodwill and acceptance.

6. Legal Factors:

• Custom Duties: Customs duties are levied on import of parts in India.

• Prolonged Judicial Process: For settling property disputes, it consumes lot of time.

• Labor Laws: The rigidity in labor laws has led companies to increasingly resort to

outsourcing and contracting of labour. Labor strikes are quite frequent now. Since

BMW plans to expand its existing capacity, rigid labor laws can adversely affect it.


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7. SWOT Analysis of BMW:

SWOT Analysis-BMW India

Strengths:

Product development on core platforms. Keeping its brand intact

BMW in dependently owned

Focus on Being the best

Extensive Distribution Channel

Implemented a Strategy which encompassed supportive marketting program

Weakness

Fails to appeal wider range of people due to affordability of car.

Maintenance cost is very high

Associated with highly expensive products. Not able to atract vast pool of middle class people in India

Opportunities

Number of millionaries in India are increasing rapidly

Leverage brand Image

Dealer base expansion to teir II cities

Growing Market Segment can be exploited with sub-brand model

Threads

Increasing oil prices

Environmental issues

Government policies are changing


8. Porter five forces analysis

Porter five forces analysis is done for strategy

1. Threat of new competition

Luxury car segment is very attractive segment which is growing at high rate even during

economic slowdown. By giving higher returns this segment is attracting new firms like Audi.

Audi has already acquired 20 % market share within just past two years.

Supplier Power-

Control across supply chain

Low Threat


Porter five forces analysis is done for strategy formulation for BMW.


By giving higher returns this segment is attracting new firms like Audi.

d 20 % market share within just past two years. Also,

Competition-

Audi/ Mercedes

High Threat

Substitution-

Luxury Segment.

Low Threat

Buyer Power

High options, Few

purchases

Medium Threat

New Entrants-

Lucrative market

High Threat


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By giving higher returns this segment is attracting new firms like Audi.

Also, the capital and

Buyer Power-

High options, Few

purchases

Medium Threat


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expertise needed to setup an auto or parts manufacturing facility will not be a deterrent for world

class auto manufacturer like Audi.

Given India's luxury markets incredible growth forecasts, infrastructure progress (especially new

and better roads), and ever-expanding financing options to residents, the market is attractive.

Thus, the threat of new entrants is high.

2. Threat of substitute products or services

India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very real

and obvious threats to lower segment auto manufacturers. But for car makers in luxury segment,

there will not be significant thread from these products.

3. The bargaining power of buyers/customers

Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers

selling in India (including ultra high-end such as Lamborghini). Because of plethora of choices,

bargaining power of buyers is increasing. However, since BMW is in the ultra high end segment,

the demand in that segment is generally price inelastic.

4. The amount of rivalry among competitors

Fierce competition among the major car players can be witnessed in the Indian Car industry. The

constant changes in the existing car models with regard to design, innovation, technology, and

colors, have led to a fiercely competitive market. Now that technology and innovation are not

alien concepts for Indian car makers, Indian cars are becoming increasingly sleek, stylish, and

luxurious. Almost all the major luxury car manufacturers are planning to expand in India.

5. The amount of bargaining power suppliers have

BMW imports most of its parts from Germany and manufactures the remaining parts at its

Chennai manufacturing plant. Because of this the thread from bargaining power of the suppliers

is low for BMW. Apart from it BMW also has an exclusive dealership chain which has helped it

to control the entire supply chain effectively. Thus the thread from suppliers is low for BMW.


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9. Segmentation, Targeting and Positioning of BMW in India

9.1 Segmentation strategy for BMW in India:

A. Segmentation of car market

Budget Car Segment

Over 60 % of the market

Preferred price range below Rs. 2.2 lakhs

Compact Car Segment

Around 15 % of the market

Preferred price range: between Rs. 3 lakhs and Rs. 4.5 lakhs

Family Car Segment

Around 10 % of the market

Preferred price range: between Rs. 4 lakhs and Rs. 5 lakhs

Premium Car Segment

Real world-class car and people who are ready to pay for it

Preferred price range: flexible but around Rs. 6 lakhs is acceptable price.

Super Luxury Saloon

A tiny segment

BMW mainly sells this segment of the market.


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B. Segmentation of Customers

S.

No.

Base Type Segmentation

Criteria

Explanation Segments

1 Geographic City Different tier of cities

have different needs,

buying patterns, culture

and other differences. For

example cities with high

income and population

density are more suitable

for luxury car maker like

BMW

Tier 1, Tier2, Tier3, Metros

2 Demographic Age Different age groups

have requirements from a

car. Pattern of usage and

criteria of selection is

different for different age

group

• less than 18 years

• 18 years to 28 years



• more than 60 years

Income and

Purchasing

power

Different income levels

have different spending

capacity. People with

lower income level

cannot buy luxurious

cars.

• Earning less than 20 lacs

• 20 lacs to 50 lacs

• 50 lacs to 1 crore

• More than 1 crore


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Occupation Occupation plays an

important role in

choosing luxury products

due to time constraints

and timing variations of

work.

Unskilled worker, Skilled

worker, Petty traders, Shop

owners, Businessmen,

Industrialists, Self employed

Gender Buying patterns vary a

lot between male and

female. Generally male

are more prone to

purchase sports car

Male,Female

3 Psychographic Lifestyle Within the high income

bracket, we can further

divide by buying pattern

of customers. Some

customers use these

luxury cars as status

symbols, some use them

as utility vehicles, and

some use them for long

distance drives.

Usage oriented, Style

oriented, Outlook oriented,

Performance oriented.

4 Behavioral Loyalty Status People with low or

medium loyalty for other

luxury cars are more

prone to switch to BMW.

None, Medium, Strong,

Absolute


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9.2 Targeting

S. No. Base Type Segmentation

Criteria

Segments Target Segment

1 Geographic City Tier 1, Tier2, Tier3, Metros Metros, Tier 1

2 Demographic Age • less than 18 years




• more than 60 years




Income and

Purchasing

power

• Less than 20 lacs







Occupation Unskilled worker, Skilled

worker, Petty traders, Shop

owners, Businessmen,

Industrialists, Self employed

Businessmen,

Industrialists, Self

employed

Gender Male, Female Male

3 Psychographic Lifestyle Usage oriented, Style

oriented, Outlook oriented,

Performance oriented.

Style oriented, Outlook

oriented, Performance

oriented.

4 Behavioral Loyalty Status

for other

luxury car

makers

None, Medium, Strong,

Absolute

None, Medium


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9.3 Positioning

Taglines used by BMW: ‘Ultimate Driving Machine.’

Product Target Customers Benefits Value

Proposition

Point of

Parity

Point of

Differen

ce

Differentiati

on Strategy

BMW

luxury

cars

Young/Medium

age group male in

high income group

in metros and tier 1

cities with

performance and

style conscious

lifestyle, low

loyalty status for

other cars and

white collar jobs.

Superior

Quality,

High

Performa

nce,

highly

stylish

A product

that

provides the

best

performance

, style and

quality

Comparable

prices

Better

product

Placing

Strategy

Extensive

Distribution,

Superior

Quality

Positioning Statement: To young working male customers in high income group, who are

conscious about style, performance and quality, BMW is the best quality, performance car. With

BMW, you can make driving a fun and luxury a way of living.

Positioning Diagram for BMW: High Quality

Low Price High Price

Low Quality

BMW cars


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10. Marketing Mix:

Based on the target customer and positioning of the product, marketing mix is decided for the

target customers.

10.1 Product:

BMW provides dynamic, sporty, innovative and aesthetic brand to the target customers. The

product design ensures the superior performance, features and quality. Main features of BMW

cars are:

Features Special Design Features Benefits

Exterior Features • Halogen headlights with complex

surface lenses

• Luxury trim: alloy & leather on

shifter, wood/woodgrain on doors and

wood/woodgrain on dashboard

• Moonroof

• Panorama roof

Superior looks, Attractive

Design

Interior Features • Cargo Cover

• Cargo Net

• Cup Holders

• Leather-Wrapped Steering Wheel

• Premium Interior Trim

Comfort for the Driver,

Superior ambience inside the

car

Safety • Brake Assist

• Child Safety Seat Anchors

• Driver Air Bag

• Engine Immobilizer

• Front Fog Lights

• Head/Curtain Airbag

• Internal Emergency Trunk Release

Safety of passenger by design

itself, assistance in emergency

situation.


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• Passenger Air Bag

• Rear Airbag

• Stability Control

• Tire Pressure Monitoring System

Sound and

Entertainment

• Compact Disc MP3 Capable

• Compact Disc Player

• iPod Connector

Makes driving a fun, provides

luxurious environment

Seats • Leather Seats

Best quality seats, comfort

while driving

Tires and Wheels

• Alloy Wheels Robust tires, enables driving on

rough roads.

These all features are designed for target group

10.2 Price

The pricing Strategy for BMW can be understood by determining the price demand sensitivity.

The demand for the luxury cars are generally price insensitive. However, the pricing for various

models of BMW shows that some models of BMW are price sensitive since they cater upper

middle class customers.

BMW X1 Rs. 22,61,879

BMW 3-Series Rs. 24,63,678


BMW X3 Rs. 41,39,233

BMW X5 Rs. 55,25,867

BMW Z4 Rs. 62,51,563

BMW 5-Series GT Rs. 65,66,659

BMW X6 Rs. 69,69,227


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BMW M3 Rs. 76,41,238



BMW M5 Rs. 1,00,50,178

BMW M6 Rs. 1,22,34,451

Thus from the above curve it is clear that most of the models of BMW lies in the higher price

band (above 40 lacs) and they are mostly in the region of demand inelasticity with price. It is

because of this, BMW always focuses on quality and performance rather than price. It customers

are willing to pay more for superior quality.

Pri

ce

Demand

Price - demand elasticity for BMW

For Price Range above 40

lacs, demand is mostly in elastice.

Models in this price range: BMW

X3/X5/Z4/BMW 5 series GT/

BMW X6/M3/ M5/M6/ BMW

series 6/ series 7

For Price Range

between 20 lacs to

40 lacs, demand can

be elastic. Models in

this price range:

BMW X1/ BMW 3

series/ 5 series


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10.2.1 The pricing strategy

Premium pricing

Most of the luxury car makers follow Premium pricing strategy in which they keep the price of a

product high in order to encourage favorable perceptions among buyers, based solely on the

price

Competition oriented pricing

However within the lower price band segment they follow competition oriented pricing. For

example: The Volvo S60 D5 price in India is Rs 37 lakhs, BMW 320D is at Rs 35.7 lakhs and

Mercedes C220 CDI price in India is Rs 33.2 lakhs

BMW Financial Services

BMW Financial Services India operates as a Non-Banking Finance Company (NBFC) in India to

offer solutions for Retail Financing for BMW customers and multi make customers, Financing

for Fleet owners and Commercial Financing for BMW Dealerships and multi make dealerships.

BMW Financial Services India offers Insurance solutions to its customers through its

cooperation partner. BMW Financial Services has been successfully operating in India as a part

of BMW India with its three business lines:

• Retail finance

• Commercial finance for the BMW India Dealerships

• Insurance solutions through cooperation partners for BMW customers.

Packages and options for customers

BMW also provide add on feature options for customers. This helps the customers to add the

features based of his/ her price range.

Pricing strategy for BMW X1

With its aggressive price tag, the BMW X1 (22.4 lacs) will not only target customers from

luxury car manufacturers like Mercedes and Audi, but also find buyers in consumers who are

looking to upgrade from a Toyota Fortuner or a Hyundai Santa Fe, which are available at lower

price tags.


10.3 Promotion

1. Advertisements:

For very many years, BMW branding centered around “Drive“, and the manufacturer proudly

promoted itself as the ‘Ultimate Driving Machine.’

This tagline became synonymous with BMW, but since 2008 it began to shift its emphasis on to

“Joy“. It provides a ‘behind the scenes look at the making of the famous

BMW Golf Cupengaging

customers/ dealers

Association with leading

fashiondesigners

BMW Art Cars exhibition

BMW Studio


very many years, BMW branding centered around “Drive“, and the manufacturer proudly

promoted itself as the ‘Ultimate Driving Machine.’


d the scenes look at the making of the famous

Promotion

Advertisement

The BMW Club of India

Direct Marketing

Collaboration with e-bay

online promotion

Film Advertising-BMW short

films

BMW Golf Cup-engaging

customers/ dealers


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very many years, BMW branding centered around “Drive“, and the manufacturer proudly


Direct Marketing

Collaboration bay-

promotion


25

‘Joy is BMW‘commercial –

This commercial doesn’t aim to promote individual vehicles, instead it tells potential consumers

the story of the whole brand.

The viewer feels as though being part of this community must be a very positive and magical

experience as it appears to make everyone involved extremely happy.

The BMW Club of India

BMW provides facilities and luxurious lifestyle to its customers by providing facilities like

BMW club of India. The BMW Club of India is a not-for-profit organization whose activities are

funded primarily through membership fees. The BMW Club is arranges a wide variety of social,


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technical and driving events, including autocross, high-performance driver's education, rallies,

club racing and owner education on topics such as mechanical repair, automotive maintenance

and collecting vintage vehicles.

BMW has already roped in stars like SRK, Gul Panag for promotion of The BMW Club of India

Direct Marketing Strategy

BMW is one prominent user of the direct marketing strategy. It has employed this style of

advertising to boost its brand position.

BMW spends huge some of money on direct marketing which the hope of having a massive

impact on future sales.BMW sponsors online podcasts to get its branding across as well as it

invests in email marketing.

BMW also uses software for Data cleansing to improve the quality of its distribution lists so that

the right people with in-date addresses are targeted.

Collaboration with e-bay

In May 2011, eBay Advertising and BMW announced a new advertising campaign to support the

leading car maker’s first venture into e-commerce. The campaign employed a variety of different

targeting techniques to provide relevant advertising to users and drive sales conversions for

BMW, including:

• Category targeting: High impact brand advertising on the eBay Motors homepage

• Keyword targeting: eBay shoppers searching for ‘BMW’ or relevant searches of automotive

parts and accessories were served BMW branded adverts to direct them to the BMW store

• Behavioral targeting: raised the awareness of the BMW store by targeting shoppers who

have already visited the Vehicle Parts & Accessories category on eBay and fit the target

demographics of BMW car owners

• Re-targeting: advertisements served to eBay shoppers who had already visited the

BMW.co.uk website and re-engage with users who showed an interest in BMW

Film Advertising

BMW is one of the prominent users of film advertising where they are combining the ideas of

producing a series of short films and using the Internet in an advertising campaign. BMW


27

assembles a cast of A-list directors and actors, and develops scripts within the basic framework

of having a central character that helps people through difficult circumstances using deft driving

skills—in a BMW. Thus, the car becomes the star.

Other Innovative marketing activities

• BMW Golf Cup International organized golf tournament across ten cities – Kolkata, Bangalore,

Chennai, Hyderabad, Delhi, Chandigarh, Pune, Mumbai, Ahmedabad and Gurgaon. It invited its

customers, prospects and opinion leaders to take part in this tournament and provided the right

mix for an exclusive social interaction.

• Formal dining and wine tasting events at leading BMW dealerships across India.

• Communication of the rich heritage of BMW Eras through association with leading fashion

designers and events such as the India Couture Week.

• Indulging customers in lifestyle events such as Culinary Workshops and Art Exhibitions at

the BMW Studi.

• The BMW Art Cars exhibition that was held at the Jahangir Art Gallery in Mumbai.

• Conceptualized the BMW Studio on Janpath as a venue where our customers can indulge with

the brand in an exclusive environment.

10.4 Placement

Chennai Manufacturing/Assembling

plant Dealers Across the country Customers


28

BMW India uses exclusive distribution strategy which involves limiting distribution to a single

outlet. Since BMW cars are highly priced it requires the dealers to place much detail in its sell.

BMW knows that top down approach doesn't really work in such kind of selling. Also, for

deciding location within a city, they select an area where the buying potential is present like

upcoming areas and established areas. So, based on the perceived demand they set up their

dealers.

BMW does not have company owned dealerships, but retail partners. BMW focuses more on its

core values of manufacturing of premium cars and leave the selling to the retail people who have

a local connect.

Dealership in India

BMW India is the pioneer in bringing luxurious dealerships to India. BMW India has set a

decisive course by setting up BMW dealerships of international standards across the country.

BMW India has also set very high standards in service quality and customer care. BMW knows

the importance of dealership in sales generation. That’s why they select the dealers based on

criteria like:

• Dealer location ensures that the potential customers get the best of strategic advantages.

• The ambiance and the customer service should be such that the customer feel welcome at

the car dealers place.

• Build up the reputation and contribute towards the growth of the company's market share.

• Should act as a catalyst to promote the sales

By end of 2012, BMW India will aggressively expand its dealer network by increasing the

number of outlets to 40 across major metropolitan centers and emerging markets in India (from

the present 25 outlets).

Currently, BMW India is present at 19 cities in the Indian market; New Delhi, Mumbai,

Gurgaon, Indore, Chandigarh, Bangalore, Hyderabad, Chennai, Pune, Kolkata, Bhumneshwar,

Ahmadabad, Surat, Kochi, Coimbatore, Jaipur, Raipur, Goa, Ludhiana.


29

11. BCG Matrix and PLC for BMW 3 Series in India

To plot the PLC for BMW 3 series, monthly sales of BMW 3 series were used.

From the above curve it can be observed the BMW 3 series is more or less entering the maturity

phase from the growth phase. Based on PLC we can plot the BCG matrix for BMW 3 Series.

Relative Market Share

High Stars Question

Mark

Market Growth

Rate BMW 3 Series Dogs

Cash Cows

Low

High Low

0

50

100

150

200

250

300

350

Fe

b-0

7

Ma

y-0

7

Au

g-0

7

No

v-0

7

Fe

b-0

8

Ma

y-0

8

Au

g-0

8

No

v-0

8

Fe

b-0

9

Ma

y-0

9

Au

g-0

9

No

v-0

9

Fe

b-1

0

Ma

y-1

0

Au

g-1

0

No

v-1

0

Fe

b-1

1

Ma

y-1

1

Au

g-1

1

No

v-1

1

Nu

mb

er

of

un

its

sold

BMW 3 Series Monthly Sales

Series1


30

12. Survey Questions and Responses

� A total of 8 questions

� 4 personal details questions

� 4 questions on Buying Preferences

� Sample Size: 44

� Surveying method: Online Form Filling

� Surveying Period:

• First Entry – 10th Jan’12 – 22:00hrs

• Last Entry – 14th Jan’12 – 23:55hrs

� About the surveyed:

Male

57%

Female

43%

Gender

20 lacs to

50 lacs

20%

50 lacs to 1

crore

32%

less than

20 lacs

9%

more than

1 crore

39%

Monthly Income

North

50%

South

16%

West

34%

Which Region you belong to?

18-28

23%

28-42

36%

42-60

18%

More than

60

23%

Age Group you belong to?


31

� About their buying preferences:

� Analysis of Survey Results

• Key points from the survey about the customers:

• Majority of Indian Customers still believe cars as a status symbol.\

• While purchasing a luxury car, people are more concerned with brands, speed and safety

rather than price and warranty.

• Majority of the users of BMW are satisfied from its performance and consider it superior

from other brands.

• Before purchasing new car like BMW, majority of people are concerned with good looks and

driving experience.

Good Looks

27%

Driving

experience

24%

Best Quality

20%

Performance

18%

Customer

care

11%

Rate of the following attributes that (might

have)enticed you to try the BMW (initially)?

About the

same

14%

Somewhat

better

41%

Somewhat worse

7%

Much better

38%

Compared to other cars that are available, would you

say that BMW is:

Brand

25%

Price

17%

Warranty

16%

Safety

20%

Speed

22%

What concerns you the most when

buying a car?

Yes

68%

No

32%

Are Cars Still Status Symbols?


32

13. Conclusion

BMW has clearly established strong brand identity and equity, and the series 3 has become a

leader in the mid level luxury performance segment. BMW is associated with premium

performance, high class luxury and unquestionable quality. BMW has now established itself in

the Indian market and it has now ample opportunities to build on its strong brand equity. Indian

luxury car segment is poised to grow at a high rate and BMW is in a good position to leverage

that; however in order to tap that market, BMW shouldn’t dilute its brand.

14. Recommendation

� BMW should continue to build on its strong brand as well as prestige of series model.

� The company should continue to produce clever advertisement and place the

advertisements across all mediums, especially on the internet.

� BMW should invest in fuel efficient technologies for their performance lines. Although

their cars are very stylish, there are many cars performing better than them in terms of

fuel efficiency.

� Company should leverage advanced IT tools and technologies in the field of product

promotion, new product development and distribution network.

� BMW should try to capture female customer base as the number of working women in

India is rising rapidly.

� Company should maintain its strong brand and shouldn’t dilute its brand by selling sub

standard brands at lower prices.

� BMWs accessories and parts of cars are expensive for maintenance, which can reduce the

desire of people purchasing its cars. Therefore they should try to increase the availability

of its parts at lower prices.


33

15. Exhibit 1: BMW 3 Series monthly sales data

Month

Number of units

sold Month

Number of units

sold Month

Number of units

sold

Feb-

07 12

Oct-08 76

Jun-

10 188

Mar-

07 33

Nov-

08 52

Jul-10 196

Apr-

07 76

Dec-

08 79

Aug-

10 229

May-

07 88

Jan-09 99

Sep-10 187

Jun-

07 80

Feb-

09 102

Oct-10 198

Jul-07 28

Mar-

09 116

Nov-

10 193

Aug-

07 62

Apr-

09 109

Dec-

10 204

Sep-07 93

May-

09 44

Jan-11 164

Oct-07 75

Jun-

09 64 Feb-

11 176

Nov-

07 109

Jul-09 77

Mar-

11 305

Dec-

07 87

Aug-

09 96

Apr-

11 240

Jan-08 56

Sep-09 88

May-

11 195

Feb-

08 57

Oct-09 116

Jun-

11 163

Mar-

08 90

Nov-

09 156

Jul-11 126

Apr-

08 72

Dec-

09 189

Aug-

11 203

May-

08 80

Jan-10 192 Sep-11 236

Jun-

08 86

Feb-

10 234 Oct-11 298

Jul-08 101

Mar-

10 298 Nov-

11 243

Aug-

08 114

Apr-

10 176 Dec-

11 289

Sep-08 98

May-

10 165


34

16. Exhibit 2: BMW Advertisement- Joy is life


35

17. References

• http://www.bmweducation.co.uk/coFacts/view.asp?docID=61

• Hespos, T. (2002) “BMW Films: The Ultimate Marketing Scheme, retrieved October 3,

• 2005, from http://www.imediaconnection.com/content/546.asp

• Giardina, C. and Lehane, S. (2002) "The Driver Returns," retrieved October 3, 2005, from

http://www.dtvprofessional.com/2002/12_dec/features/bmw_returns.htm (2002) "BMW

Films," retrieved October 3, 2005, from

http://www.pmalink.org/awards/reggie/2002reggiewinners3.asp

• www.bmweducation.co.uk/company history

• www.bmw.co.uk/models

• www.bmw.co.uk/prices www.bmweducation.co.uk/companyfacts.shtm

• www.bmweducation.co.uk/statistics \

• Kotler, P. and Armstrong, G., (1989) Principles of Marketing, Prentice-Hall International

Edition.

• David Jobber, Principles and Practice of Marketing 5’th Edition www.just-auto.com

http://www.supercarworld.com/cgi-bin/overview.cgi?BMW

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