Assignment

On
“Marketing Plan of BMW”
Automobile Industry
(Four Wheelers)

Team Project
Submitted to- Submitted by-
Dr. Sudhir Rana Team – 9
127- Bitupon Buragohain
128- Charu Kaushik
129- Dheeraj Yadav
153- Sakshi Sethi
171- Simran Sehdev
181- Vittanth Sharma
Section – C

FORTUNE INSTITUTE OF INTERNATIONAL BUSINESS

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Table of Contents
Introduction ............................................................................................................................................. 3
Marketing opportunities .......................................................................................................................... 4
Situational Analysis ................................................................................................................................ 5
Internal Environment .......................................................................................................................... 5
External environment .......................................................................................................................... 8
Marketing Strategies ............................................................................................................................... 9
Objectives ......................................................................................................................................... 11
Target markets .................................................................................................................................. 11
Positioning ........................................................................................................................................ 11
Marketing Mix .................................................................................................................................. 12
BCG Matrix .................................................................................................................................. 12
Product life cycle .......................................................................................................................... 12
4 P’s of marketing mix .................................................................................................................. 14
Financials conditions and strategies of BMW. ..................................................................................... 15
Financial Strategies ........................................................................................................................... 15
Financial Conditions ......................................................................................................................... 17
Problems faced by BMW with solution ................................................................................................ 17
Dashboard for BMW ............................................................................................................................. 18

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Introduction

“BMW is an acronym for Bayerische Motoren Werke AG or, in English, Bavarian Motor
Works. The German-based company, whatever you call it, is one of the most successful
automakers in the world, renowned for making luxury cars that offer superior levels of
driving pleasure.”

“The company was founded in Munich and started as an aircraft manufacturer in the early
1910s. The current logo of BMW, designed to represent white propeller blades against a blue
sky, represents these origins”.

“It wasn't until 1928 that the first BMW car, the Dixi, started production. The car was shown
to be tremendously popular, and its success helped the Depression weather manufacturer. The
Type 328 roadster was BMW's best-known pre-World War II machine, a sleek two-seater
that racked up over 120 victories on the motorsport circuit between 1936 and 1940. BMW
cars from the post-war period maintained this tradition, winning several racing, rallying and
hill climb victories”.

“BMW set up as a full-fledged car company by the 1970s. For many emerging technologies,
including turbocharging and sophisticated electronics with automobiles, it was a visionary.
This was also the time when North America's BMW was set up and buyers, who wanted both
sports and luxury vehicles, were loyal owners of "Bimmer." The' 70s also saw the birth of the
three-tier sport sedan range of BMW consisting of cars from the 3 Series, 5 Series and 7
Series and the creation of its M performance division”.

“The organization has extended its presence internationally more recently. In the latter half of
the 1990s, it opened its first U.S. production plant and extended the brand footprint to include
Mini and Rolls-Royce. BMW continues producing motorcycles as well, something it has
done since the 1920s”.

“The BMW Group is one of the world's most successful car and motorcycle manufacturers
and one of Germany's largest industrial enterprises. The BMW Group has three of the biggest
premium brands in the automotive industry including BMW, MINI and Rolls-Royce. The
automobiles it produces set the highest standards in terms of aesthetics, design, technology

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and performance, a point demonstrated by the leading engineering and innovation role of the
BMW Group. The BMW Group also provides its customers a competitive range of financial
services in addition to its strong position in the motorcycle industry. The Group has also
become a leading provider of premium services for individual mobility in recent years”.

“The cornerstones of our success have long been long-term thinking and responsible action.
Striving for ecological and social sustainability throughout the entire value-added chain,
taking full responsibility for our products and making an unambiguous commitment to
resource conservation are prime goals firmly embedded in our corporate strategy. We have
been among the most successful companies in the automotive industry for many years due to
these efforts”.

“The popular advertising slogan of the automaker describes each of his cars as "the ultimate
driving machine," and it's not just hyperbole. In most of the "over $30,000" classes, BMWs
have become the benchmark of reliability and luxury over the past few decades. BMW's
model roster is diverse, offering family-friendly vehicles, sleek sedans, distinctive coupes,
nimble sports cars and spacious SUVs. Nevertheless, all of its luxury vehicles share a
common feature: the ability to make drivers feel gloriously linked to the lane”. (Jurevicius,
2016)

Marketing opportunities

1. Fuel prices are expected to rise in the near future

“Over the past few years, fuel prices have been low and are expected to rise high in
the near future as a result of supply changes. Low fuel prices increased the demand

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 for large vehicles like pick-up trucks and SUVs. Several businesses have gained from
the low fuel costs, like General Motors, Ford, Chrysler, thanks to their good
availability of SUVs and pickup trucks”.

“On the other hand, BMW has not spent much in expanding its light truck line and
has opted to compete in the narrower range of vehicles. Small vehicle demand always
rises when the price of fuel is high”.

2. Demand for autonomous vehicles

“About 33 companies are currently working on autonomous vehicles.[5] Few of them
are testing their autonomous vehicles on the roads, like Google, Ford and Tesla, and
none of them are marketing such vehicles to the general public. It is difficult to
estimate the exact demand or market value for the autonomous vehicles (it is expected
to be worth US$ 45 billion by 2025), but it seems that autonomous vehicles are the
next' big thing' for the industry, according to the efforts of all the major automakers”.

“The organization will accelerate the advancement of autonomous vehicle technology

and gain the skills required as soon as possible if it is not interested in staying behind
Google, Ford or Tesla in this area”.

3. Weakening euro exchange rate

“Most of the income from BMW comes from countries in the Eurozone, where the
euro is the only currency. The fluctuations in the euro exchange rate therefore have no
effect on the income and profits of the company. However, exchange rates still affect
exports to other countries, and this is where the company benefits from the weak euro
exchange rate against other currencies”.

“Higher euro exchange rate against U.S. dollar makes U.S. citizens cheaper for
BMW's cars. For as long as the euro exchange rate is low against other currencies, the
company could push its exports to the U.S. or other countries”.

4. Timing and frequency of new model releases

“The timing and frequency of new model releases have a significant impact on the
market share of automotive companies. Historically, with only minor changes in
between, new models appeared to have major upgrades every 4 to 5 years. However,
there is an argument to release upgraded models more frequently due to the rising
consumer expectations regarding in-car technology and the industry's competitive
nature. BMW is in a good position to do this”. (Jurevicius, 2016)

Situational Analysis

Internal Environment
Clients

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“After investigation of BMW market, we have divided BMW customers into 2 major
segments: Individuals and Businesses”

 Individuals, “amount for almost half of all customers (45%), are businesspeople of
medium+ and high income. These are people, who work for large companies or
businesses’ owners. These are middle-age people, living in big cities, of high-status,
open-minded, adventurous and young in spirit. These people usually have at least two
cars in the family. Their cars are usually of such models, as X3, X5, X6 and Z4
(usually as the second or the third car in the family)” (Owler).
 Businesses “amount for 20% of BMW’s clients. These are medium- and high-sized
businesses. They prefer to use the cars on company’s name” (Owler).

Competitors

AUDI
“Audi is an international company responsible for developing, manufacturing and
selling luxury vehicles, a leading BMW rival. Founded in 1910, the company is
headquartered in Germany. Across nine nations, the organization has about 11 production
units (Bhasin, 2018)”.
“It has a lot of luxury and comfortable cars displaying good engine performance. Audi
cars are put in a high market role and are wealthy executives and specialists in their main
target groups. With the support of innovative ideas and new technology, the company has
made steady progress over the years (Bhasin, 2018)”.
MERCEDES
“Also a top BMW competitor, Mercedes Benz is an international automotive industry
that was established during the year 1926 and is headquartered in Germany. It is a division of
a German company named Daimler AG. This brand has a strong association with
celebrities and is the most luxury brand in the automotive industry (Bhasin, 2018)”.

“The various products of this brand are automobiles, trucks, buses, internal
combustion engines, and luxury vehicles. The company has its manufacturing facilities in
about six continents and in 26 countries. The brand is always popular for its technological
advancement that starts from the introduction of the internal combustion engine to pre-safe
technology (Bhasin, 2018)”.

“The company has a strong financial position and is a leading brand in the market.
Each and every vehicle that the company produces shows advancement in technology. Their
vehicles are produced with great concern for safety. This brand has a stronghold in the
developing nation (Bhasin, 2018)”.
JAGUAR

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 “Jaguar was founded in 1935 and is headquartered in the United Kingdom, a famous
luxury vehicle brand. It's designed by Jaguar Land Rover. The company produces ultra-
premium cars that are known for their elegance and beauty” (Bhasin, 2018).
“Jaguar cars are expensive and Tata Motors imports them. The designers and
engineers of the company have built a responsive output blend that creates an intense layout
that causes people to stop and look. Jaguar is a popular brand, the company has managed to
stay away from controversies with a strong consumer brand image” (Bhasin, 2018).
VOLVO
“Volvo is a global production company founded in 1927 and headquartered in
Göteborg, Sweden. The main activities are the manufacture, distribution and sale of buses,
trucks and construction equipment; it also provides industrial and marine drive systems”
(Bhasin, 2018).

“Sedan vehicles, sport utility vehicles, marine engines, industrial engines, and
construction equipment are also manufactured by the company. Volvo cars have nearly 2,300
dealers and their vehicles are sold all over the world. Through taking the utmost care with the
materials used in its development, Volvo insists on the quality and durability of vehicles”
(Bhasin, 2018).
LEXUS
“Another major BMW rival, Lexus is a luxury vehicle manufacturing company
headquartered in Nagoya, Japan, which was founded in 1989. The brand is sold
internationally in over 70 countries. Lexus is Japan's biggest premium car retailer and ranks
highest in market value among Japan's global brands” (Bhasin, 2018).

“Current operations are in Belgium, Texas, and Brussels. Lexus cars are synonymous
with a variety of technologies, most of which are state-of - the-art engineering, high-end
styling, impeccable, and extremely smooth driving” (Bhasin, 2018).

Suppliers

“The company said it has collaborated with distributors such as Force Motors, ZF
Hero Chassis, Draexlmaier India, Tenneco Automotive India, Valeo India, Mahle Behr, and
Lear India (IANS, 2015).

"The rate of position at BMW Plant Chennai will increase to about 50 percent with the
introduction of these partnerships," the company said in a statement (IANS, 2015).

According to Robert Frittrang, BMW's Chennai Managing Director planting the new
relationship with Indian auto component suppliers would help the company set even higher
targets not only in performance standards, but also in cost efficiency and added value”
(IANS, 2015).
Channel Members

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 “Channel Leaders will certainly have an impact on how the cars were handled by the
customer centers. Channel participants consist primarily of forms of transportation from
where the car to the sales lot is put together. Thankfully, there really isn't a dealer and the
primary storage facility is situated in front of the public view on each sales lot. In shipping as
well as in customs, there could definitely still be delays. Each car sent to the US is packed
onto a ship and shipped as BMW cars are made overseas. Each car has to go through
customs, which is not a part of the network, but more of a crossing hurdle” (Caly, 2006).
Public
“In order to have the whole image of the trends in the industry, it is necessary to have the
understanding of consumer buying habits, which are as follows: • Ecological issue: as the
Planet is facing serious problems with the Global Warming, Carbon Dioxide Emissions,
Pollution and other environmental problems, it is becoming more and more popular to buy
the products and use the services of green companies.
Cost awareness: many people are not in the race for expensive cars and there is a high
demand for low-priced cars for daily use (especially Asian car producers such as Kia,
Hyundai and Cherry)” (BMW, 2019).

External environment

“BMW is a vast organization and thus a vast majority of external factors affect the
running of the company which are discussed below”.
Political
“BMW Group is influenced by common political pressures, such as new policies, legislation,
and political corruption. Yet BMW Group has an enormous amount of funds, revenue, and
brand image unlike smaller companies. It ensures that it can affect the company's growth
policies (Fru, 2019).

BMW Group is driven worldwide by more than 15 manufacturing companies. Output is

effective, but policies and regulations, such as the end-of-life vehicle recycling system, can
also stop it” (Fru, 2019).

Economical
“Many years ago, for the most reputable company, BMW Group was top of the list. Now
Toyota is actively fighting for the title. Who takes first place depends on valuation between
the two. Back in 2012, the price of BMW rose by 10 percent while the value of Toyota fell by
10 percent (Fru, 2019).
Fluctuations in the global economy also affect the performance, price, and income of BMW.
Similar areas, such as Europe, can have a significant impact on the success of the business.
And the GDP has fluctuated over the past few years. In the coming year, because the
currency is so unpredictable, fluctuations make it difficult for BMW Group to report on
profits and losses” (Fru, 2019).

Social
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“All countries have unique cultural differences in the world. This means the BMW Group
needs to adapt its goods and advertising to suit the customers it serves. It needs adaptation to
each market; not all solutions can yield results using a one-size suit (Fru, 2019).
BMW has worldwide manufacturing companies from China, South Africa, and Austria.
Depending on intense research and development, the company chooses the location of these
plants. It requires understanding not only who the buyers are and why they are purchasing,
but also the political and economic climate” (Fru, 2019).

Technological
“The only way to stand out for any car brand is through creativity and adaptation, with
so much rivalry in the automotive industry. This includes adapting the latest technology to
each car— all from the latest components to entertainment choices such as Bluetooth, WiFi,
and more. Given that BMW is known for its luxury, and customers have come to expect
them, the company can not afford to miss out on these "loisure" choices (Fru, 2019).

BMW Group is also proud of creativity and versatility. Automatic parking, hybrid
vehicles and autonomous driving can be provided for the cars. Autonomous driving, this last
one is a major topic in the automotive industry” (Fru, 2019)

Marketing Strategies

“One of BMW's main strategies is niche marketing. BMW protects its niche position through
engineering, manufacturing and development of advertising campaigns. BMW offers
products and services that differentiate and differentiate between products and competitors.
BMW gained a competitive position in the automotive industry using frontal attacks. The
company conducted limited frontal attacks against specific customers. Another frontal attack
adopted by the company is research and design. The company has invested heavily in the
design and differentiation of products and services. The company has improved the product
and provided innovative features and designs to enhance the value of the product. The
detailed view on Strategies is as follows”:

1. Well-Executed Strategies
“BMW is a company with a good execution strategy. Recognizing its unique features,
the company selected a market and subsequent markets to maximize its potential.
Trading with suppliers and distributors, pricing methods, branding and advertising
strategies are all based on this perception and these choices. The company strictly
manages its distribution network. This control supports brand image and helps with
market segmentation. In each country's market, the position of BMW is different and
the price varies greatly. BMW's relationship with suppliers also reflects the same
rigorous management, with most suppliers maintaining long-term and long-term
relationships with the company. BMW's activities are almost completely concentrated

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 on two products. Both products reflect BMW's competitive advantage”.
(https://www.bmw.com, n.d.)

2. Prestige image
“Part of the company's overall strategy is to promote the product as “reputable”. The
company can build an image of quality, reliability and consumer expectations.
Advertising images can make a big difference to the customer ’s eyes. BMW spent
millions of dollars on advertising, creating the image and reputation of car buyers.

3. Brand promotion
This brand is also an important strategy for BMW. BMW can develop premium
brands. During the development of high-end brands, BMW has continuously evolved
and developed products. The company established a brand academy.

4. Customer flexibility
The BMW Group is optimizing the internal processes to the maximum and customers
want to consider changing the power unit, the color of the ordered car, the interior
trim and special equipment 6 days before the start of assembly. It does not affect the
delivery date of the car.

5. Niche Marketing:
One of BMW's main tactics is niche advertising. Through technology, producing, and
designing advertising campaigns, BMW preserves its niche role. BMW is delivering a
distinctive product and service and has established a differentiation between its
products and the competitors.

6. Frontal attacks
To achieve a competitive position in the automotive industry, BMW used frontal
attacks. A small frontal assault was employed by the company focusing on specific
customers. The frontal attack the company used is by research and design. The
company has invested a great deal of money in the design and differentiation of its
products and services. The company introduced product improvements and offered
innovative features and designs to increase the value of its products”.

7. Differentiation
“Differentiation is a series of meaningful design differences that distinguish a
company's product behaviour from competitor products. The five distinct dimensions
are:
i. Product – Differentiating possibilities from products to physical products vary.
ii. Services-If physical products cannot be easily distinguished, the key to
successful competition is to add valuable services and improve quality.
iii. Personnel – Companies can gain a strong competitive advantage through trained
personnel.

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 iv. Channels – Companies can gain a competitive advantage by designing
distribution channel coverage, expertise, and performance.
v. Image – buyers react differently to company and brand images. An identity
includes a way for a company to identify or identify its company or its products,
but an image is a general perception of a company or its products.
Automakers use a differentiation strategy to distinguish their products from
competitors' products. By introducing engineering and design innovations,
BMW products have gained a reputation. Company advertising campaigns will
enhance this image.” (https://www.bmw.com, n.d.)

Objectives
“The goal of the BMW Group is to build a strong brand image. This goal is the basis for the
success of the BMW Group. The BMW Group firmly believes in maintaining its core values
of technology, innovation, performance, quality, reliability, monopoly and customer
satisfaction. The slogan of the BMW Group company is English. This means "ultimate
driving machine" and "Sheer driving pleasure" and outlines marketing strategy.
The BMW Group strategy is clearly defined by the company.

“Identify potential and drive growth. Understand what we symbolize. Recognize our
strengths and make the most of every opportunity”.

The BMW Group's mission statement is defined as “the most successful premium
manufacturer in the automotive industry”. ("Marketing strategy and pricing strategy of
BMW." UKEssays.com. 11 2018. All Answers Ltd. 12 2019, 2016)

Target markets
BMW's main markets are in Europe, the United States, Japan and the Pacific, with Germany
and the United States accounting for almost half of all automobile sales. Important markets
include the fast-growing UK, Italy, France, and Japan markets.

The BMW Group's target group is people aged 25 to 44 because of its good image. With
these, these people have a clean and modern look. The BMW Group does not target a specific
race or nationality because the BMW Group focuses on labelling as “luxury vehicles” and
“foreign or international vehicles”.

The BMW Group targets customers with a profit of £ 25,000. ("Marketing strategy and
pricing strategy of BMW." UKEssays.com. 11 2018. All Answers Ltd. 12 2019, 2016)

Positioning
The words on the BMW Group website are: “The BMW Group has established itself as the
only performance, quality and technologically advanced manufacturer in the world. BMW's
own market competition is extremely fierce.” ("Marketing strategy and pricing strategy of
BMW." UKEssays.com. 11 2018. All Answers Ltd. 12 2019, 2016)

Most people appreciate BMW's “security” when using it. This gives the BMW Group priority
over competitors in terms of customer satisfaction”.

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Marketing Mix
BCG Matrix
“BCG Matrix BMW has many successful and unsuccessful cars in the automotive sector. The
most famous and longest running is the BMW 3 Series. Since its first introduction in 1975, it
has been produced in 6 different generations and more than 5 different body styles. This is
BMW's best-selling model, accounting for approximately 300 million of BMW brand annual
sales. The best way to analyse BMW's global automotive portfolio is to use the Boston
Consulting Group Matrix.

STARS QUESTION MARKS

3 series
4 series

CASH COWS DOGS

X series 6 series
5 Series Z series

This matrix business can be classified as high or low based on industry growth and relative
market share.

The BMW BCG Matrix shows that the company's star products are the BMW 3 series and 4
series. The new BMW 3 Series is very successful in the global market. In 2014, its market
share increased from 15% to 28% (high market share). This segment of the 3 series is a major
segment of the global luxury car industry (fast growth).

Cash Cow is an evergreen product of BMW, 5 series and X series. The 5 series accounts for
the bulk of BMW's global revenue. 30% (high market share). However, the market to which
automobiles belong does not show signs of growth.
Eventually, the Dog was a 6 series, but failed to meet production goals. The reason is that the
performance and design of competitor cars such as the Porsche 91 1 are much better than the
BMW 6 Series”.

Product life cycle

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“BMW 3 Series, 7 Series, I Series, 5 Series, 6 Series, X1, X3, X5, X6, Z4 of these, the best
run is the BMW 3 Series; Has brought. However, what you need to consider with these
models in mind is the product lifecycle. Shows how products are sold over their useful lives
at various stages of the lifecycle. These stages include adoption, growth, maturity, and
decline.

Comparing the product life cycle and the portfolio of cars that BMW has to offer, most BMW
cars are in the maturity stage and the BMW 3 Series belongs to this market, despite having a
high market share. The signs of growth mentioned in the BCG matrix analysis do not appear
as. BMW recognizes this and in 2011 launched a new version of the BMW 3 Series.

BMW needs to consider and put products on the market accordingly, and if most of the
company's products are in the maturity stage, the company will face serious problems
because all these products will decrease together . Therefore, in order for BMW to enter the
growth stage of the product life cycle, it is necessary to continuously improve research and
development.

In 2007, BMW released a clip on the Internet about the GINA Light vision model, a fabric
conversion sports car concept created by BMW. This car is wrapped in spandex coated with a
soft, stretchy, water-resistant translucent rayon skin polyurethane for elasticity and durability.
It can withstand high or low temperatures and will not expand or contract. Also, exercise will
not cause the fabric to loosen or be damaged. Although this car is not for sale, it has not been
introduced to the market and remains in the Munich Museum, but it gained worldwide
attention when it first opened in 2007”.
“BMW needs to bring this car to market using outdoor sports and digital marketing. This
medium is used for high value impact products. BMW Gina can bring competition to

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Mercedes stealth cars. Both are new and innovative technologies, and consumers are willing
to pay higher prices for such innovations.

4 P’s of marketing mix

4 P marketing, i.e. products, prices, promotions, places, is called marketing mix. In addition,
the marketing mix is used to further study BMW's marketing strategy.
1. Product:
The BMW Group wants to give products an efficient and dynamic appearance. The
main focus of the BMW Group is product innovation and development.
The latest version of the BMW Group includes the BMW 1 Series, 3 Series, 5 Series,
6 Series, 7 Series, BMW Z4-Roadster and more. The latest version of MINI includes
"MINI Countryman".
Recently, the BMW Group has begun production of small cars. This shows the
company's innovative structure. Also, due to intensifying competition in the
automotive industry, the BMW Group had to devise several new and innovative
vehicles to compete with competitors. In 2009, the BMW Group was selected as a
“Greenest Advanced Manufacturer” on the Clean Green Cars website and won a fuel
savings in the 2009 Fleet News Award.

2. Price:
The price of the BMW Group is based on a differentiated strategy. This means you
will be charged an additional premium fee. The price differences are due to the
different engine sizes, gears, fuel consumption and sports versions of each car.
a) BMW pricing strategy:
The pricing strategy adopted by the BMW Group is based on several
important trends. The most important trend of BMW is called “Premium”.
BMW's high-end trends have led to market polarization. This trend caused
consumer demand for perceived quality and paid higher prices.

3. Promotion:
The BMW Group uses a variety of slogans and advertisements to promote its
products. WCRS is an advertising agency of the BMW Group since 1979. The
company has invested heavily in fields such as movies that purchase cars”. The movie
“The world is not enough”. James Bond drove the new Z8 before the new car was
launched and used MINI Cooper with the Austin Powers 3 Gold membership. These
advertising technologies helped the BMW Group promote cars. The BMW Group
advertises cars with slogans such as “Ultimate Driving Machine” and “Pure Driving
Fun”.

4. Place and distribution:

The website of BMW Group regarding Placement and Distribution say that “BMW
have 156 dealers in the UK who are franchised to sell BMW cars, additionally 148

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 dealers are franchised to sell MINI Cooper. Worldwide BMW operate in 100 different
countries with over 4.400 dealers which are authorized to sell both new and used cars,
parts and after sales service products”. ("Marketing strategy and pricing strategy of
BMW." UKEssays.com. 11 2018. All Answers Ltd. 12 2019, 2016)

Financials conditions and strategies of BMW.

Financial Strategies
The main financial strategies of BMW in the history were as follows:

1. Recapturing the luxury crown:

“BMW lost to Mercedes-Benz in luxury sales competition in the United
States, Europe and the world, felt frustrated in areas ranging from electric cars to
autonomous driving and felt overtaken by Germany's biggest rival BMW announced
the launch of the biggest new model and refurbished model in the history of the brand.
Last year, BMW not only lags behind Mercedes-Benz in global sales for more than a
decade, but the 2016 profit margin also hit a record low in six years. Last year,
BMW's global shipments increased by more than 5% to 20,000 units, which is less
than half of 11% of nearly 2.1 million sales of Mercedes Benz. In addition to
increasing SUVs and regaining US titles, the Financial Times points out that it is once
again determined to become Europe's best-selling premium brand. It must exceed
Volkswagen-owned Audi, whose annual sales in Europe increased from 739,537 to
803,520. Earlier this month, BMW (which also owns the Mini and Rolls-Royce
brands) announced overall results that were below market expectations, with
operating profit falling below analysts' estimated EUR 9.82 billion, down 2.2% to
EUR 93.9 billion have become. Mr Kruger said Tuesday that there is a “set of
standards that define first place”, including “profitability, appeal, innovation,
leadership”. (Buss, 2017)

2. Low key approach:

BMW's innovative products on display at this week's Geneva International
Motor Show include modified interiors, which are long-running 5 Series and 4 Series
Coupe travel versions with upgraded interiors. Surprise car lovers However, the
emphasis on popular models rather than preparing new models emphasizes CEO
Harald Krueger's strategy, which focuses on generating cash rather than luxury car
maker Buzz. Accelerate the transition to expensive electric and self-driving cars. In
response to a question from Bloomberg, Kruger said: “We are transforming BMW
from a car manufacturer to a technology company and a mobility service provider.
This transition has a strict focus on our customers. “ His modest approach was based
in Munich 10 years ago. In contrast to Norbert Reithofer, the predecessor who drove
the car, the manufacturer is a pioneer of i3 and i8 electric cars, but the demand is
disappointing, which is also Volkswagen AG, BMW's larger rival in Germany

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 Contrary to Daimler, the parent company of Mercedes-Benz, both actively plan to
develop battery-powered models”.. (Behrmann, 2017)

3. Plan to launch I-Next in 2021:

“BMW is actively developing an electric mobility plan, and iNext is one of the
future models of BMW's i division and is only responsible to produce electric
vehicles.
A German luxury car manufacturer prototyped the iNext EV prototype before
mass production, suggesting a 700 km range on a single charge. BMW Sales and
Marketing Director Ian Robertson says iNext will be a competitor to Tesla's Model 3
($ 35,000). iNext belongs to two different market segments, but prices are similar and
competitive. However, as German automakers claim, BMW iNext will be on the
market by 2021. Automakers have unveiled prototype images of production processes
close to the brand series at the BMW Research and Innovation Center pilot plant.
“Preparing an all-electric vehicle for mass production is an exciting but challenging
task. By the time production begins, as many as 100 BMW iNEXT prototypes. The
plant uses a series of new innovations to further streamline and accelerate the process.
“BMW iNext will begin mass production at the Dingolfing plant in 2021. This is said
to be a technical flagship for electric cars. One of them will be the all-electric SUV
iX3, and automakers will also introduce the BMW i4. (Editor, 2019)

4. More investment in Research and development:

BMW spent 5.16 billion euros on research and development, accounting for
5.5% of revenue. BMW then stated that plans to invest at a higher rate in the next two
years. If costs increase, the company expects profits and revenues to “slightly
increase” in 2017, and the profit margin of the car will remain in the range of 8% to
10%.
BMW rose 2.8% in Frankfurt to 84.77 euros. In addition to the 40 new
models, BMW also plans to add its advantageous luxury car products to complement
the finest 7 series sedan. Krueger said the goal was to challenge Mercedes and make
BMW “the most powerful brand in this segment, which will significantly increase
sales and revenue here by 2020”.
“Margins are more important than sales races,” said CFO Nicholas Peter.
BMW's worldwide delivery last year was 5.2 million, less than Mercedes, 2 million
units, 11% of Mercedes. Sell 20.8 million cars and become a competitor”.
(Behrmann, BMW to launch 40 new, upgraded models in 2 years to challenge
mercedes benz, 2017)

5. Unveil of 40 new vehicles including X2 compact SUV & X7 crossover:

“After losing the Mercedes-Benz sales championship, BMW plans to roll out
new models and upgrade the biggest in history to fight back luxury car manufacturers.
Munich-based manufacturers will introduce 40 variations over the next two years,
including new X2 compact off-road vehicles and full-size X7 SUVs. CEO Harald
Krueger is trying to recover growth in 2016 after the company's profit margin fell to
its lowest level in six years, lagging Mercedes for the first time in more than ten years.

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 After Kruger, who took office in 2015, left the gate, his aggressive tone showed a
turn. The modified 7 series sedan could not challenge the Mercedes S-Class, but the 5
series redesign was very careful. Krueger plans to release iNext in autonomous
driving in 2021 with a focus on profitability over sales, conserving resources for the
costly transition to the era of autonomous driving electric vehicles”.. (Behrmann,
BMW to launch 40 new, upgraded models in 2 years to challenge mercedes benz,
2017)

Financial Conditions
“The BMW Group experienced the best year of its history in 2013 with a total of 1,668,982
BMW, MINI and Rolls-Royce brand vehicles sold (+ 14.2%). More. This performance keeps
the BMW Group in a leading position in the high-end segment of the global automotive
market. All three car brand sales grew dynamically, and each brand reached record levels.
Sales of only BMW brand vehicles increased 12.8% to 1,380,384 units. A total of 285,060
MINI brands were handed over to new owners (+ 21.7%). Rolls-Royce sold 3,538 units,
setting a new record, up 30.5% year-on-year. Despite unfavorable market conditions, the
motorcycle market still performed very well. During the reporting period, 113,572
motorcycles from BMW and Husqvarna were delivered to customers. Compared to 2010, it
increased by 3.1%. The financial services business also contributed greatly to the success of
the BMW Group. By the end of the year, a total of 3,592,093 contracts were signed with
dealers and retail customers, and the segment recorded growth of 12.6%. The financial
services sector was also very strong, with revenue up 5.4% to $ 17.51 billion. In terms of
revenue, this segment's EBIT profit increased 46.8% to $ 1,763 million, and pre-tax profit
increased 47.4% to $ 1790”. (popovych, n.d.)

Problems faced by BMW with solution

DIFFERENTIATION
“BMW is now forced for manufacturing unique products at a particular region and this should be with
the tastes and fickle needs of consumers. Hence new advanced technologies have been adopted by
BMW to increase engineering and the quality of the models. The BMW’S 2002 ensured
differentiation was achieved”.
GLOBALIZATION
“Reviewing policies to improve the ratio of profitable to unprofitable customers which tends to run
20:80. Developing a global view of the brand and the buyers’ portfolio will reveal uncharted regions
for expansion. And the use of existing plants in suitable locations to manufacture or assemble vehicles
maintaining the quality of the BMW brand will greatly cut operational start-up costs”.
INNOVATION AND PRODUCT VARIETY
“The use of technologically announced Intel Xeon processor 5500 series helps BMW Group to
balance hardware, energy and application licensing costs, while also increasing its performance. This
allows for new applications to be run, prototypes can be virtually created and tested virtually, Dr.
Burkhard Goeschel, member of BMW board explains key areas of innovation incorporated in product

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development, this key areas include, Connected Drive which allows for an innovative and
comprehensive concept networking the car, the driver, and the surrounding world, by-wire technology
and iDrive control, all these concepts are available in the new BMW 7 series”.
SUBSTITUTE PRODUCTS
“BMW prioritizes quality and product differentiation such that for its targeted premium market the
BMW standards remain top and the car is still prestigious”.
ENVIRONMENTAL CHALLENGES
“To combat this BMW along with other motor companies have tried to use some of the emerging
technologies to make money, lower costs and ultimately help in reducing pollution. BMW have
incorporated this mentality in manufacturing of three lines of their cars, the new BMW 7series and the
greatly awaited z4 are all projected to embrace these environmentally friendly features, in future
innovation of electric cars and alternative fuel sources are being considered”.
(https://www.bmwgroup.com/en/company/compliance.html#ace-2139722355, n.d.)
(https://www.ukessays.com/essays/marketing/problems-facing-bmw-company-marketing-essay.php,
n.d.)

Dashboard for BMW

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