bmw cars

04/07/23BMW’s Innovation strategies

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“The truth is that innovation is a key element for BMW’s success in the premium market and one of the key motivations to buy a

BMW”

----- BMW Group

Made BY - NITIN


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BMW MODELS VIDEO


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Background NoteBMW founded as Aero-engine manufacturing company in 1917

Motorcycle and passengers cars

Restrictions b/o world war

Series of acquisitions & joint venture

First motorcycle model BMW R32 in 1923


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Followed by…..

Dixi (1929) 315/1 (1934) 319/1 (1934)


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..success in international racing events b/o lightweight construction, outstanding aerodynamics, high performance and elegance…. Company prestige crossed Germany

BMW 238 sports in 1936


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Until 1950s BMW concentrated on limited no. of models and focus on other parts of EuropeBMW 507 Roadster

Powerful 3.5 lt., 8-cylinder and lightweight metal engine….

huge success in automobile world


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Rainy Days……

In 1950’s despite sustained effort to emerge as manufacturer of prestigious vehicle faced bankruptcy on account of decline in motorcycle marketWith the help of an industrial financer, Herbert Quandt BMW was able to thwart takeover bid by MercedesQuandt exercised majority of BMW’s shares and initiated restructuring exercise to bring company back on trackBMW 700, a small car, came as the much needed boost and BMW regained its position in the market


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As part of restructuring initiative, BMW focused on sports sedan leading to the launch of its first of ‘New Range’ BMW’s in 1961Greater emphasis on advertising & sales support, combined with improving engineering and performance related aspects.During 1970’s and 1980’s BMW expanded its operation in the USA Asia and Australia… cars got perceived as more stylish brand than other German brands like Volkswagen and Mercedes and became serious competitors to these brands in the premium car business.In 1989 BMW appointed Karl Gerlinger (master marketer) to lead marketing division in the USASales in the USA 1991…53,000 units. in 1992…. 66,000 unitsAnnounced to set up new plant outside Germany … Spartanburg, South Carolina (US) in 1992In 1992 succeeded in outselling Mercedes in GermanyAcquired “ROVER” in 1994, production capacity increased by 3% to 503,526 units in 1995


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In 1995 introduced BMW 5 Series and Z3 Roadster as well

Positioned as elegance dynamic performance and safety


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BMW enter into small and medium size car categories with “The compact”1997 BMW 316g Compact and 518g touring version - first European natural gas car manufacture.

BMW Diversification (1990’s)

BMW financial service Bavaria Wirtschaftsagentur &Softlab

Bavaria Lloyd Reicburo BETEK Bar-und Energietechnik

Kontron Electronic


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BMW 1992 BMW 1998

Revenue £ 15.97 billion £ 32.28 billion

Net profit £116 million £ 462 million

In 1997 BMW ranked 69th among Fortune Global 500 companies

FIZ (Munich) LITZBMW R&D Hub: PATYO (California) BMW Designwork & Oxnard Testing Facility (California)


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One Sausage Three Different Length

BMW 3 Series

Focused on product efficiencies, constant generate new product/components ideas, launched new upgraded product


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The Result

By 2002 BMW significantly decreased the ‘time-to-market’ new products and linked its revenue to the introduction of leading-edge productFocus on strengthening its position as market leader in the premium segment Adopted product offensive strategy, increased R&D expenditure by 53%, reduced time b/w idea generation and product development, complaints came down drastically, i-Drive technology, Active SteeringRevenue in 2002 $49.5 billion (9.9% increase compare to 2001), profit $2.36 billion (8.3% increase compare to 2001)


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The result


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The result…..


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The Result…..

$29,400

$75,600


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Source: - http://www.businessweek.com/magazine/content/03_23/b3836005_mz044.htm


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Marketing Mix

Product

BMW 3Series : Sedan, Coupe, Convertible, Touring, CompactBMW 5Series : Sedan, TouringBMW 6Series : Coupe, ConvertibleBMW 7Series : SedanBMW Z4 : RoadsterBMW X3BMW X5BMW M : SedanMini OneMini Cooper


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Price

BMW price range are from £ 16,000 to £ 60,000

Place

Globally


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Promotion

Same advertising company WCSR since 1979James Bond film -

The World Is Not Enough (Z8 before its launch) Austin Power 3-Goldmember -( Mini cooper)

“VIRAL MARKETING”

BMW Films (e.g.. ‘The Hire’ - increased sales by 12.5% in 2001 compare to 2000

Marketing campaign ‘The Ultimate Driving Machine’Golden Eye: BMW Z 3Tomorrow Never Dies: BMW 750iL, R1200 Motorbike


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segmentation

Geographic Region GloballyDensity of area Urban

DemographicAge-above 30Income-$ 25,000 and above annuallyOccupational-professional, Businessmen

PsychologicalPersonality Extrovert, Novelty seekerLearning involvement highPerception low riskAttitude positive


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PsychographicLifestyle segmentation ---status seeker

SociocultureSocial class ---middle upper and upper

BehavioralBenefit ---safety, elegance, technologyLoyalty status --- mediumReadiness stage ---aware, interested


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Positioning

AttributeImage

Differentiation

Image


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SWOT ANALYSIS

STRENGTH

Diverse ranges of Products - BMW, MINI and Rolls-Royce Strong Cash Flow Position Increase turnover and trading profit Strong Balance Sheet World's leading Premium Quality Automobile Manufacturer Brand Awareness Human resources Capabilities to turn resources into advantages


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WEAKNESSES

Perception of High Prices Customer disinterest Environmental issues: Pollutions Buyer sophistication and knowledge Substitute products or technologies


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OPPORTUNITIES

New Products Market shift to globalization Innovation & Alliances Customers demand change to more comfortable and relevantly cheap cars Diversification New Technologies in Automobiles


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THREATS

New & existing competition Volatility in Price of Fuel New legislations Consequences of the oil crisis Economic recession Market shift to globalization Far-East Automobile companies expansion Extremely high competition for customers and resources


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Need -------- Acquired Need) Ego need (Self Esteem, Prestige, Status)

Goals -------- Product Specific Goal

Motivation ------- Emotional Motive (Pride, Status)

Personality -------- Superego, Compliant/Aggressive Individual

Personality trait -------- Low dogmatic

Social character --------- Other-directed

Optimum stimulus level -------- High Variety/Novelty Seeking Exploratory Purchase Behavior


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Cognitive Personality ----- Low NC

Brand Personality ----- Sophistication

Makeup of self-image ------ Ideal Social Self Image

Learning ------ Cognitive

Level of involvement ------- very high (Extensive Buying)

Stimulus Discrimination ------

Made BY - NITIN

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