BMW Marketing Mix
BMW, the renowned premium vehicle brand, was founded in 1916 as BFW or (Bayerische Flugzeugwerke, AG). In 1917, it became BMW G.m.b.H. and finally BMW AG in 1918. Today, it is among the most successful vehicle makers of the world. The brand has retained continuous focus upon innovation. It invests a huge sum each year in research and development. The BMW group includes BMW AG and all of its direct and indirect subsidiaries. BMW AG is responsible for managing the entire group. Its business is divided into three main segments that include automotive, motorcycles and financial services. It is a global brand that operates across more than 150 countries. All brands BMW owns focus on the premium customer segment. The company owns three of the most famous premium vehicle brands in the entire industry including BMW, Rolls Royce and Mini Cooper.
You will read in detail about these three brands in the products mix segment of this marketing mix analysis. BMW is also among the most successful makers of premium motorcycles. The brand has maintained an exclusive focus on customers’ tastes and convenience. The result has been impressive growth in popularity and customer loyalty. BMW is among the industry leaders in the automobile industry. Among its top priorities for the near future are electrified cars and sustainability. The company wants to offer its customers around the world a safer and better driving experience.
Target Market & Positioning:
BMW cars belong to a distinct class of themselves. When you think of a BMW ride, you do not imagine just a car but an entire riding experience that is a mix of adventure and pure luxury. It is how BMW has positioned itself; as the ride for the adventurous and the passionate. Its slogan “sheer driving pleasure” also reflects the same positioning strategy.
BMW targets mainly young customers. Its target market includes the young and affluent customers in the 25-45 age group. The company places a clear focus on design just as much as performance and safety. Its cars are for tech-savvy, risk-taking, and style-loving consumers. The automobile brand has a sporty image and targets young customers with a fast-moving lifestyle. Apart from being a luxurious drive, BMW is also a style icon. BMW riders are cool, creative, adventurous, innovative, and class conscious. The company is pushing the line of luxury and innovation to bring mobility products for those who want only the best in class.
Read more about BMW, its products, placement, pricing, and promotional strategy in this marketing mix.
The business of BMW is divided into three main segments including cars, motorcycles and finance. Apart from BMW, it also owns Mini Cooper and Rolls Royce brands. Its products cater to the premium vehicle market. Mini Cooper is a distinct riding experience in the small car segment. Rolls Royce has maintained a strong, one century old tradition in the ultra luxury car segment. BMW in itself is one of the smartest car brands available on the planet. The name itself is considered synonymous to driving pleasure. In the motorcycles segment too, the brand offers an extraordinary premium experience. BMW offers motorcycles in the Sport, Tour, Roadster, Heritage, Adventure and Urban Mobility segments.
Apart from that, BMW Motorrad offers equipment to make riding safe and comfortable for motorcycle owners. BMW is one of the most desirable car and motorcycle brands of the world. In 2017, across all segments apart from Rolls Royce, the brand enjoyed higher sales. The focus of BMW is now on electrification. The sales of electrified cars produced by BMW is now increasing. Last year, it delivered 103,080 cars with electrified drivetrains to customers. The company has raised its sales target for the year 2018 to 140,000 vehicles. It aims to have more than half a million BMWs and Minis flying on the roads by the end of year 2019.
BMW has set a clear roadmap for itself to 2025. It plans to electrify all its brands gradually. BMW plans to bring a battery electric MINI by 2019 and first fully electric model from the core BMW brand, the X3 by 2020. iNEXT, BMW’s new technology flagship, will follow in 2021.
Other important areas of focus for BMW are car sharing and autonomous driving. It decided to open its campus outside Munich to autonomous driving in 2018. It is working with Intel and Mobileye for the development of autonomous driving technology. A large number of famous companies from around the world are joining forces with BMW on its shared platform. However, security of customers and their privacy (security of personal data) is a major priority in this area. Its ‘Connected Drive’ service that is designed to keep the drivers in control of everything inside and outside their vehicles has got more than 10 million BMW vehicles connected. BMW’s premium car sharing service called ‘Drive Now’, which it acquired during early 2018 has more than a million customers in 13 cities. Drive Now is the favourite service of a large number of families and business travellers around the world. Its ‘ReachNow service’ is available in US as well as China through local partnership.
BMW has brought a large range of premium models to the market. In the below tables you can learn about the variants and their sales volume for 2016 and 2017.
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BMW is a global brand with operations in more than 150 countries.
Production Network of BMW:
BMW is headquartered at Munich. Its production network had 31 locations in 14 countries as of 2017. It includes 19 BMW Group plants, five joint ventures, four partner plants and three contract production plants. The 19 BMW Group plants include 13 automobile and engine plants, two BMW motorcycle plants, three sites for component production, pressed parts and tools and one supply centre. Apart from its 31 production and assembly plants, BMW has 16 research and development locations worldwide. It also has 43 Sales subsidiaries and Financial Services locations worldwide. (annual report, 2017.)
Sales & Service Network of BMW:
BMW has dealerships of each of its brands in several countries around the world. It has a global dealership which includes 3,400 BMW, 1,580 MINI and 140 Rolls-Royce dealerships. BMW Group’s branches and authorised dealerships handle sales in Germany. Outside of Germany, subsidiary companies and some independent import companies handle sales. At more than 1500 locations, BMWi dealership and agency network covers sales and service. BMW motorcycles sell in more than 90 countries. More than 1200 dealerships and importers sell BMW motorcycles in these countries. In more than 19 countries BMW provides financial services under the ‘Alphabet’ banner. The worldwide sales, service and financial network of BMW plays a strong role in maintaining its global presence and providing services to its customers. Customer service has grown highly important in the 21st century and how a brand offers after sales services affects its image and reputation.
BMW is a premium brand that follows a premium pricing strategy. It competes with the other premium car brands like Audi, Aston Martin, Mercedez Benz & Volvo. The premium pricing strategy of the brand supports its premium image. However, BMW invests in technology and has brought a large range of cars, SUVs and small MINI cars to the market. These cars are attractive in look and are also loaded with technology. Most of the cars by BMW are priced in the $35,000 – $100,000 range.
Rolls Royce cars are made for the ultra Luxury segment. Apart from their luxurious looks, these cars too have the best in class technology. All BMW cars from BMW to MINI and Rolls Royce are just as appealing as they are luxurious. The Rolls Royce cars are priced much higher than average BMW cars at above $300,000.
Pricing strategy of a brand has a major effect on its marketing too. BMW’s pricing strategy is related to its premium image. It appeals to the premium customer segment. The purchasing power of the middle class and the upper middle class has grown post recession. This has led to growth in sales of luxury vehicles and SUVs. However, premium pricing can sometimes become an obstacle to sales. RollS Royce sales fell this year. BMW AG on the other hand recorded better sales. Product innovation and marketing also play an important role in mitigating the negative effect premium prices can have on a brand’s sales. Sales of the BMW and MINI cars have grown continuously during the last four years despite the premium pricing strategy of BMW group.
Marketing and promotions are now a critical part of every vehicle brand’s sales strategy. BMW’s selling expenses include sales, marketing and advertising expenses. In 2017, total selling expenses of BMW reached 6.2 Billion Euros which was at 6 Billion the previous year. BMW uses several channels for the promotion of its brand and products including traditional and digital channels. Its strong image as a global player and a luxury brand also plays an important role in the marketing of the brand. Its famous slogan ‘Sheer Driving Pleasure’ indicates the distinct experience that BMW has created for its customers. BMW’s marketing strategy includes video marketing, print advertising as well as other forms of advertising and promotions including motor shows, print advertising and sponsorships. BMW has built a distinct image as a vehicle brand. It featured on Fortune’s world’s most admired companies list again in 2018 at 19th position and it is on the top among the vehicle brands. In 2017, BMW was at 21st position on the same list. As a responsible vehicle brand, BMW has achieved several more awards. Overall, level of recognition of the vehicle company is very high. Known as the favourite drive of the rich and the spoilt, BMW makes hearts thump with its brilliant models. The BMW logo is easily discernible among the crowd of brands in the vehicle industry.
It is a famous brand and including its own website, its products are discussed on the internet on media and vehicle blogs too. New releases by BMW, MINI or Rolls Royce attract a lot of media buzz. In the U.S., it sponsors and supports a wide range of educational, civic and cultural programs. It also supports several charity and not for profit organizations as a part of its social responsibility program. Social media is now an important channel of marketing for BMW. The company uses videos heavily as apart of its marketing strategy. It has uploaded around 850 videos to YouTube which include educational and promotional videos. BMW has maintained an active presence on the other social media channels too including Twitter and Facebook. The company uses these channels for promotions and customer engagement. Social media has supported the marketing efforts of several brands strongly. Its growing use worldwide has brought businesses closer to their audience. BMW is using it proactively to stay connected with its global audience.
BMW is a famous global brand of vehicles with sales and operations across more than 150 countries. Its financial performance during the previous several years has remained strong. Revenue of BMW went up to €98.3 Billion in 2017 rising from €94.2 Billion in 2016. In the recent years, BMW has grown its focus on electrification. It is continuously expanding its fleet of electric cars and has ambitious plans for the period of 2018-2025. As a luxury vehicle brand, BMW has acquired immense popularity. The number of competitors in the market is high. BMW has to spend heavily on R&D as well as marketing and sales. For its customers, BMW has brought a luxurious driving experience. It is continuously innovating to make these vehicles safer and more convenient for its customers. Moreover, BMW is focusing on making its premium ride sharing services a success in key markets across the globe. The future of mobility rests on technological innovation. From automated riding to AI for higher interconnectedness, several things will make the battle all the more intense for vehicle brands. However, BMW has got a strong production, sales as well as R&D network and several other major strengths too. Based on these factors, ride might remain easier for the auto-brand in the future.
- BMW Annual Report 2017