Professional Documents
Culture Documents
BMW MM Project PDF
BMW MM Project PDF
Srilasya G. (11FN-037)
Mudit Gupta (11DM-077)
Vikas Marwaha (11FN-115)
Soumya Ghosh (11DM-156)
Rohit Iyer (11FN-082)
1
Topic
Page No.
1.
Introduction..
2.
3.
BMW in India.........................................
4.
Product Lineup...
5.
6.
7.
12
8.
13
9.
15
10.
Marketing Mix..
20
11.
29
12.
30
13.
Conclusion ..
32
14.
Recommendation.
32
15.
33
16.
34
17.
References......
35
to
11.04
vehicles.
lakh
has
vehicles (April-December
shown
This indicates
growth
optimistic
2008
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.
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.
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.
BMW
6Series
(Sedan
BMW 7-Series
Series (Sedan)
BMW (SUV)
BMW
3-Series
320i
(Petrol)
BMW
3-Series
320d
(Diesel)
BMW
3-Series
325i
(Petrol)
BMW
5-Series
523i
(Petrol)
BMW
5-Series
Series
525i
(Petrol)
BMW
5-Series
525d
(Diesel)
BMW
5-Series
530i
(Petrol)
BMW
6-Series
V8
(Petrol)
BMW
7-Series
730Ld
(Diesel)
BMW
7-Series
740Li
(Petrol)
BMW
Series
7-Series
750Li
(Petrol)
BMW
7-Series
760Li
(Petrol)
BMW
X-5
(SUV)
BMW
X-5
(Diesel)
1. Political:
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.
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 countrys 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.
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.
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.
10
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:
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:
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.
11
Weakness
Opportunities
Threads
Product
development on
core platforms.
Keeping its brand
intact
Fails to appeal
wider range of
people due to
affordability of car.
Number of
millionaries in India
are increasing
rapidly
BMW in
dependently owned
Maintenance cost is
very high
Leverage brand
Image
Environmental
issues
Associated with
highly expensive
products. Not able
to atract vast pool
of middle class
people in India
Dealer base
expansion to teir II
cities
Government
policies are
changing
Extensive
Distribution
Channel
Growing Market
Segment can be
exploited with subbrand model
Implemented a
Strategy which
encompassed
supportive
marketting
program
12
SubstitutionLuxury
Segment.
Low Threat
CompetitionAudi/
Mercedes
Buyer PowerPower
High
options, Few
purchases
Low Threat
High Threat
Medium Threat
New EntrantsLucrative
market
High Threat
13
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.
14
15
S.
Base Type
No.
1
Segmentation
Explanation
Segments
Criteria
Geographic
City
different
needs,
Demographic
Age
Different
age
groups
18 years to 28 years
28 years to 42 years
criteria of selection is
different for different age
42 years to 60 years
more than 60 years
group
Income
Purchasing
20 lacs to 50 lacs
power
capacity.
with
50 lacs to 1 crore
level
luxurious
People
lower
income
cannot
buy
cars.
16
Occupation
plays
important
role
Businessmen,
more
prone
to
Psychographic
Lifestyle
oriented,
Style
customers.
customers
Some
use
these
as
status
luxury cars
Behavioral
Loyalty Status
People
with
low
or None,
Medium,
Strong,
17
S. No.
Base Type
Segmentation
Segments
Target Segment
Metros, Tier 1
Criteria
1
Geographic
City
Demographic
Age
18 years to 28 years
18 years to 28 years
28 years to 42 years
28 years to 42 years
42 years to 60 years
42 years to 60 years
Income
and
20 lacs to 50 lacs
Purchasing
20 lacs to 50 lacs
50 lacs to 1 crore
power
50 lacs to 1 crore
Occupation
Unskilled
worker,
Skilled Businessmen,
Self
Businessmen, employed
Psychographic
Gender
Male, Female
Lifestyle
Usage
oriented,
Male
Style Style oriented, Outlook
Behavioral
Medium,
Performance
oriented.
Strong, None, Medium
other Absolute
car
makers
18
Target Customers
Benefits
Value
Point
Proposition
Parity
of Point of Differentiati
Differen
on Strategy
ce
BMW
Young/Medium
Better
Extensive
luxury
that
product
Distribution,
cars
provides the
Placing
Superior
best
Strategy
Quality
cities
performance
with nce,
performance
style
Superior
and highly
conscious stylish
lifestyle,
product Comparable
prices
, style and
quality
low
cars
and
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
BMW cars
Low Price
High Price
Low Quality
19
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
Exterior Features
Benefits
looks,
Attractive
Design
Interior Features
Moonroof
Panorama roof
Cargo Cover
Comfort
for
the
Driver,
Cargo Net
Cup Holders
car
Brake Assist
situation.
Engine Immobilizer
Front Fog Lights
Head/Curtain Airbag
Internal Emergency Trunk Release
20
Entertainment
iPod Connector
Seats
Leather Seats
Best
quality
seats,
comfort
while driving
Tires and Wheels Alloy Wheels
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 5-Series
Rs. 37,91,967
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
21
Rs. 76,41,238
BMW 6-Series
Rs. 81,29,834
BMW 7-Series
Rs. 84,17,438
BMW M5
Rs. 1,00,50,178
BMW M6
Rs. 1,22,34,451
Price
Demand
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.
22
Retail finance
Advertisement
BMW Studio
Direct
Marketing
Promotion
Association
with leading
fashion
designers
Collaboration
with e-bay
bayonline
promotion
Film
AdvertisingBMW short
films
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 behindd the scenes look at the making of the famous
24
This commercial doesnt 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.
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
26
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
Customers
27
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. Thats 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.
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.
28
300
250
200
150
Series1
100
50
Nov-11
Aug-11
May-11
Feb-11
Nov-10
Aug-10
May-10
Feb-10
Nov-09
Aug-09
May-09
Feb-09
Nov-08
Aug-08
May-08
Feb-08
Nov-07
Aug-07
May-07
Feb-07
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
29
Gender
Female
43%
Monthly Income
more than
1 crore
39%
Male
57%
20 lacs to
50 lacs
20%
50 lacs to 1
crore
32%
less than
20 lacs
9%
More than
60
23%
West
34%
18-28
23%
North
50%
South
16%
42-60
18%
28-42
36%
30
Customer
care
11%
Good Looks
27%
Performance
18%
Best Quality
20%
About the
same
14%
Much better
38%
Somewhat
better
41%
Driving
experience
24%
Somewhat worse
7%
Speed
22%
Brand
25%
Safety
20%
No
32%
Price
17%
Yes
68%
Warranty
16%
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.
31
32
Month
Feb07
Mar07
Apr07
May07
Jun07
Jul-07
Aug07
Sep-07
Oct-07
Nov07
Dec07
Jan-08
Feb08
Mar08
Apr08
May08
Jun08
Jul-08
Aug08
Sep-08
Number of units
sold Month
12
Oct-08
Nov33
08
Dec76
08
88
80
28
62
93
75
109
87
56
Jan-09
Feb09
Mar09
Apr09
May09
Jun09
Jul-09
Aug09
Sep-09
57
Oct-09
Nov90
09
Dec72
09
80
86
101
114
98
Jan-10
Feb10
Mar10
Apr10
May10
Number of units
sold Month
Jun76
10
52
Number of units
sold
188
Jul-10
Aug10
196
Sep-10
187
Oct-10
Nov116
10
Dec109
10
198
79
99
102
44
229
193
204
Jan-11
Feb11
Mar11
Apr11
May11
Jun11
164
Jul-11
Aug11
126
192 Sep-11
236
234 Oct-11
Nov298
11
Dec176
11
298
64
77
96
88
116
156
189
176
305
240
195
163
203
243
289
165
33
34
http://www.bmweducation.co.uk/coFacts/view.asp?docID=61
Hespos, T. (2002) BMW Films: The Ultimate Marketing Scheme, retrieved October 3,
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
Films,"
retrieved
October
3,
(2002)
2005,
"BMW
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 \
35